Political MoJo

Medicare Fiasco

| Thu Jan. 19, 2006 7:11 PM EST

The Los Angeles Times' Michael Hiltzik, among others, notices that the implementation of the Bush administration's new Medicare bill has been completely and utterly disastrous. As in, people are being denied access to much-needed drugs. And so on. The worst part of the story, however, is that the administration had been warned about these potential pitfalls for about a year now, but never got around to correcting them… See also Kaiser's comprehensive summary of the problems with the new legislation here.

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Google refusing to hand over records to White House

| Thu Jan. 19, 2006 4:45 PM EST

The Bush administration, in an attempt to revive an Internet child protection law struck down by the U.S. Supreme Court, has asked a federal judge to order Google to turn over some material from its databases. Google, when issued a subpoena for the material last year, refused to turn it over.

The subpoena includes a request for one million random Web addresses and records of all Google searches from any one-week period. Google has refused to comply because of concerns over the privacy rights of its search engine users and concerns over protection of its trade secrets.

The Supreme Court, in striking down the Child Online Protection Act, said that its reach was too broad and may indeed prevent some adults from accessing legal pornography sites. The court then gave the government a choice between developing a narrower law or defending the Constitutionality of the one struck down.

Bush Does Health Care

| Thu Jan. 19, 2006 4:25 PM EST

According to the AP, it looks like President Bush will go after health care in his State of the Union address to Congress on January 1st, and propose to expand "health savings accounts." A few months ago, Jonathan Cohn wrote a long article on the problems with HSA's in the New Republic, which is very much worth reading.

The basic problem here is pretty clear: Any health care plan with a high deductible that allows a person to save $2,000 a year, tax-free, in a bank account to pay for out-of-pocket costs is going to attract a lot of very healthy people (who can save the money) and very few less-healthy people. But if all the extremely healthy people start fleeing from traditional insurance en masse, that means premiums will shoot up for everyone else. (South Africa tried to experiment with HSAs and ended up with a lot of similar problems.)

Basically, HSAs are a "clever" idea in theory, and no doubt a lot of economists are enamored of some of their features—like the fact that they promote "cost saving" by deterring patients from going to the doctor "too often"—but it's not even close to a serious attempt to fix the United States' dysfunctional health care system.

GOP Unveils "Lobbying Reform"

| Wed Jan. 18, 2006 3:15 PM EST

Apparently the Republican Party is scrambling today to offer a series of "lobbying reform measures" intended to make it look like the GOP can clean up Congress. As Harry Reid says, "It's like asking John Gotti to do what he can to clean up organized crime." Already the Washington Post has discovered one loophole amidst Hastert's proposals—under the "reforms," lobbyists will now also have to donate a campaign contribution whenever they pay for a member of Congress to travel somewhere.

It's doubtful any of this will do any good. If Hastert and the rest of the GOP had wanted to pass "lobbying reform" a year ago, when Jack Abramoff was just starting to make headlines, nothing would have stopped them. Instead the House briefly changed the rules to allow Tom DeLay to retain his post as Majority Leader if he was indicted (after enough outcry, the rule was eventually dropped). No, lobbyists are a minor issue. The real problem here is that Congress is dominated by Republicans who depend on corruption for campaign cash and reward their corporate donors by passing bad policy that hurts everyone else. Exhibit A: the disastrous Medicare drug bill. No amount of minor rule changes or quaint little bans on certain types of airfare will change that fundamental dynamic; only elections can do that.

MORE: Paul Begala and James Carville have an interesting, and radical, proposal for campaign finance reform (to "Abramoff-proof politics") in the latest Washington Monthly.

Assisted Suicide and Executive Power

| Wed Jan. 18, 2006 2:17 PM EST

Orin Kerr noticed this paragraph in Justice Kennedy's majority opinion in Gonzales v. Oregon, the Oregon assisted-suicide case decided yesterday, which ruled against Ashcroft and Gonzales' attempts to restrict Oregon's assisted-suicide laws by prosecuting doctors involved:

[T]he Attorney General claims extraordinary authority. If the Attorney General's argument were correct, his power . . . would be unrestrained. It would be anomalous for Congress to have so painstakingly described the Attorney General's limited authority . . . but to have given him, just by implication, authority [over] an entire class of activity . . . .
Kennedy's not a big fan of executive overreach, it would seem. He also adds: "The statutory terms. . . do not call on the Attorney General, or any other Executive official, to make an independent assessment of the meaning of federal law." But that's just the power the Bush administration has been claiming for itself over the past four years, especially with the president's long series of "signing statements," tacked on to bills as "independent assessment[s] of the meaning of federal law." Right now, it seems, only Justices Scalia, Thomas, and Roberts are sympathetic to this argument—and one presumes we can add Samuel Alito if and when Congress confirms him.

Clueless in Africa

| Tue Jan. 17, 2006 11:37 PM EST

While touring Africa and defending her husband's use of international AIDS funds to market abstinence, First Lady Laura Bush said: "I'm always a little bit irritated when I hear the criticism of abstinence, because abstinence is absolutely 100% effective in eradicating a sexually transmitted disease."

She went on to say: "In many countries where girls feel obligated to comply with the wishes of men, girls need to know that abstinence is a choice."

We cannot even get middle-class American girls to understand that abstinence is a choice, yet Bush is suggesting that girls whose only source of income involves having sex, and women whose husbands have never heard of equality in marriage just say no. Many young girls are forced to marry their husbands, and part of that obligation is sex; many other girls are forced into prostituion. A popular belief in Africa, especially South Africa, is that having sex with a virgin cures AIDS, and the men who opt for this "treatment" are not asking the virgins' permission.

The Bush administration has already endangered the lives of thousands of women and girls by restricting the counseling and educational activities of family planning clinics. Laura Bush's advice to African girls truly adds insult to injury.

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War with Iran?

| Tue Jan. 17, 2006 6:45 PM EST

Over the weekend, Atrios among others wondered whether the Bush administration was going to gear up for an attack on Iran—if not for the purpose of actually doing something about Iran, which seems unlikely, then at least for the purpose of putting the Democratic Party in a corner. Atrios is probably right to say that thinking about this in terms of actual policies—i.e., "What should the U.S. do about Iran?"—is fairly useless and thinking about this in terms of politics is the only reasonable way to go. But there are more than enough clever folks out there spending all their time pondering how the Democrats can "outflank" the Bush administration, so I'll stick with policy talk, I guess.

The Trouble With 'Guest Workers'

| Tue Jan. 17, 2006 4:45 PM EST

Nathan Newman links to a new report by the Drum Major Institute noting that the easiest way to deal with the economic problems from illegal immigration is simply to give immigrants more rights, rather than trying—unsuccessfully—to immigrants from entering the country:

As long as a cheaper and more compliant pool of immigrant labor is available, employers are all too willing to take advantage of the situation to keep their labor costs down and are less willing to hire U.S.-born workers if they demand better wages and working conditions. So, U.S.-born workers are left to either accept the same diminished wages and degraded working conditions as immigrants living under threat of deportation or be shut out of whole industries where employers hire predominantly undocumented immigrants.

The solution is to eliminate the second-class labor market in this two-tiered system and allow immigrants and U.S.-born workers to compete on an even playing field by guaranteeing immigrants—including undocumented workers—equal labor rights and making sure that employers cannot use deportation as a coercive tool in the labor market.In theory, that's right. Immigrants end up "dragging down" wages and working conditions for other workers precisely when, as is the case now, businesses are given free rein to abuse "guest workers" who can't speak out for fear of being deported. Now in practice, it's debatable whether immigrants actually take jobs from native workers or pull down wages in predominantly native industries—there's certainly decent evidence that immigrants do the jobs no native worker will accept, as the saying goes.

But the larger point here is a good one, and it's exactly why any humane immigration policy, ideally, should allow immigration but discontinue "guest worker" policies. At best, guest worker programs don't work—immigrants who want to stay in the country after their allotted time expires simply slip away and become "illegal" residents—and at worst they create a large underclass of indentured servants who can't change jobs or protest their often-dismal working conditions for fear of being kicked out of the country.

SWAT Teams Everywhere

| Thu Jan. 12, 2006 9:35 PM EST

Are SWAT teams and other forms of "paramilitary" policing becoming much too common in the United States? I ask because in Slate today, Daniel Engber writes as an aside that "By the mid-1990s, more than 80 percent of American cities had active teams, as did more than half of all law enforcement agencies in the country with more than 50 officers." He links to a 1997 study by Peter Kraska, who found that the number of SWAT teams in America has not only risen dramatically since the 1980s, but that they've been used much more frequently:

No Corporate Oversight Necessary?

| Thu Jan. 12, 2006 7:02 PM EST

As short overviews of the problems with corporate governance in America go, you could do worse than Clive Crook's piece in this month's Atlantic. But after pointing out that shareholder oversight is often ridiculously lax, that many mangers and CEOs have had carte blanche to loot and pillage the companies they're supposed to be running, and that the "division of capitalism's spoils has become more lopsided in recent years," Crook strangely argues that we shouldn't worry too much:

Beyond [Sarbanes-Oxley], what [should be done]? "First, do no harm" is a good rule. Modern American capitalism has charges to answer, but it is best to keep a sense of proportion. The U.S. economy remains the most productive—and by almost any measure the most successful—in the world. …. America's economic pre-eminence must have something to do with its distinctive business model, the very model many people now question—which in different ways continues to reward success more generously and punish failure more brutally… than the milder systems to be found in, for instance, Europe and Japan.
And then says "it all comes down to traditional values," whatever that means. No major reforms necessary. The system that produced Enron and Tyco basically works and we should leave it in place.

But it's doubtful that "leaving well enough alone" is the best option. We don't even need to get into "business model" comparisons with Europe and Japan. (These things tend to go back and forth anyway—in the 1980s, it seemed like the bank-centered system of financing business as seen in, say, Germany, was the better model; nowadays the Anglo-Saxon "stock-market centered" model is held in higher regard. Perhaps in a few years the pendulum will swing back again. Who knows?) It's far more instructive to compare companies within the United States.

A 2003 Harvard University/Wharton School paper entitled "Corporate Governance and Equity Prices" ranked 1,500 companies in terms of management power, sorting firms into a Democracy Portfolio (firms in which shareholder rights were strongest) and a Dictatorship Portfolio (firms in which managers were subject to less oversight). Shockingly—or not—the democratic firms outperformed the dictatorship firms by 8.5 percentage points per year throughout the 1990s.

If you believe that's a good thing, then stronger corporate governance doesn't just make things "nicer" or "fairer" and stick it to "greedy" CEOs—it actually makes better economic sense in many cases. It's hard to believe, as Crook suggests, that "lower standards of corporate governance" is the price we simply must pay for high productivity growth in the United States. The two can go together.

Now obviously from a left-liberal perspective, reform is never as easy as simply making sure that shareholders—or the mutual funds that vote most of the proxies today—are exercising oversight. This country also went through a "shareholder revolution" in the 1980s, driven in part by public funds like CalPERS, that forced managers to focus heavily on short-term profit maximization, and what we got was a wave of useless mergers and endless "restructuring"—laying off workers, busting unions, slashing wages—that may or may not actually boost profits (it's surprisingly hard to tell) but is certainly a nightmare for everyone else. (Fun tidbit: A British Medical Journal study found that those workers who survived major "restructuring" campaigns vastly increased their risk of cardiovascular disease.) But it seems like somewhere along the line a decent balance can be struck, and we're almost certainly not at that point right now.