Month: May 2009

Universal Coverage And Competition, Ctd

A reader writes:

Though there is some truth to Mankiw's and the excerpted CBO analysis, both neglect a major point: the cost of providing health insurance to retirees. One of the automaker’s chief problems is the cost of retiree health insurance. Because of the dramatic increase in the cost of insurance, and because of longer life expectancies, commitments to provide insurance for retirees has proved far more expensive than expected. While an employer can accurately budget for current employees’ wages and health insurance, there is no way to know what retiree heath expenses will look like 10, 20, 30 years in the future, and for this reason employers and consumers bear these costs whereas retirees do not.

R&D In C&T?

Brooking Institution fellow Mark Muro debates whether the Waxman-Markey Cap & Trade bill will spark innovation:

Waxman and Markey deserve credit given the circumstances for reserving some 16 percent of the cap-and-trade revenue for clean-energy development and deployment. Also welcome is the bill's allocation of 1 percent of cap-and-trade permit revenue for the establishment of eight "Clean Energy Innovation Centers"—regional R&D hubs reminiscent of Brookings' proposals for the creation of a network of energy discovery-innovation institutes (e-DIIs) that can leverage the expertise of universities, national laboratories, industry, venture capital, and others in the transfer of innovative technologies to the marketplace. (The Department of Energy's FY2010 budget makes a similar proposal, as well.)

Yet on balance the innovation investments in the bill remain far too small. According to an analysis by the Breakthrough Institute, the bill would direct just $9 billion annually to technology innovation, assuming an average carbon price of $15 per ton. And it would reserve just $735 million per year for the energy R&D centers. That may sound like a lot compared to the nation's current, anemic efforts, but it pales beside the $20 to $30 billion per year on R&D called for by Brookings (or the $15 billion annually called for by Barack Obama). And it's doubly disappointing given that the cap-and-trade system represents the best potential source for funding game-changing innovation in the face of tight budgets for the foreseeable future.

Iraq Awaits

Girl Outside Shop Adhamiyah

Michael Totten (hit his tip jar) has another fair-minded attempt to assess where Iraq is. On the one hand, it seems clear that al Qaeda has done to itself what it did in Jordan: its very extremism has destroyed its popularity, and so intelligence from the local population has turned against them. The experience of such endless violence has also united some Sunni and Shia. But the pathologies of the culture remain. Money quote from a chat with two American captains:

“Iraq is about to experience a power vacuum,” I said, “when you withdraw from Iraqi cities.”

“Exactly,” he said. “When we leave and transition all of what we do now to the Iraqi security forces, will there be a spike in activity? Absolutely. One hundred percent.”

That stopped me cold. Captain Looney and Captain Boyes are the most optimistic American officers I’ve spoken to recently in Iraq. And they thought the odds of a spike in violence are 100 percent. “You guys are the optimists,” I said. “And yet you think this.”

Guilty Until Proven Innocent

Matt Steinglass asks:

[H]ere’s my main question: what exactly is so hard about getting terrorists convicted in American courts? Under US law, even “providing material aid” to any “terrorist organization” is a felony…[A]re you seriously telling me that the Bush Administration’s torture regime has so thoroughly bolloxed the entirety of the evidence regarding detainees at Gitmo that we can no longer even prove they were doing anything to support any group on the State Department’s list of terrorist organizations? Any such group whose actions have resulted in “the death of any person”? If we can’t prove that about these guys, what are they doing in prison?

Job Lock

Drum comments on Jonathan Gruber's article regarding Americans afraid to leave their jobs because of the healthcare plans:

[Associate Professor of Economics Alison] Wellington estimates that universal health care would…likely increase the share of workers who are self-employed (currently about 10 percent of the workforce) by another 2 percent or more. A system that provides universal access to health insurance coverage, then, is far more likely to promote entrepreneurship than one in which would-be innovators remain tied to corporate cubicles for fear of losing their family’s access to affordable health care.

Attention Michael Steele

Some facts for you:

In the private sector, the wedding industry could grow by more than $16 billion if gay marriage were expanded to all 50 states, according to a 2004 study by Forbes magazine. … Critics suggest that same-sex marriage would create new burdens for companies by expanding the list of employees for whom they would have to offer spousal benefits. But research has indicated that "such coverage only adds about 1 to 2 percent to companies' healthcare costs," according to a 2004 online article for Workforce Management.