We Win, You Lose

It is wonderful news that America's enemy, Muammar Gaddafi, has been overthrown and killed.  He murdered hundreds of Americans, in the bombing of Pan Am 103 and other terrorist acts.

It is very unfortunate, and much to President Reagan's discredit, that we didn't overthrow Gaddafi in the 1980s when he was engaged in multiple attacks on Americans.  Reagan's bombing of Libya in 1986, in retaliation for Gaddafi's terrorist attack at a Berlin disco that killed American servicemen, didn't go far enough.  By hurting Gaddafi, but not killing him or ending his regime, it allowed Gaddafi to bide his time to strike back at America - which he did with the Pan Am 103 bombing in December 1988 that killed 270 people, most of whom were Americans returning home for Christmas.

For those who questioned America's national interest in removing Gaddafi, it is this:  an enemy of ours who kills Americans must suffer the ultimate consequence - so that others are deterred in the first place from attacking Americans in the future.

Tragically, much of our foreign policy does not allow us to achieve this deterrence, willing to sweep attacks on America under the rug out of fear of escalating a situation into an international crisis.

It is hard to argue with success, and Barack Obama deserves credit for playing a role in Gaddafi's demise. But Obama was willing to let the Libyan rebels go to the brink of annihilation before being dragged into intervening, and by waiting so long it turned an easier task into a much harder one.

Moreover, it raises profound concerns over how often, and to what degree, will Obama take our national security to the edge of success or failure again - such as in dealing with Iran's nuclear weapons program.

Miscalculating the point of no return in overthrowing Gaddafi is one thing; doing so regarding the destruction of Iran's nuclear program would be catastrophic for America.

Unintended but Predictable Consequences

Obama and the Democrats are shocked and furious that Bank of America wants to charge customers a monthly fee for using a debit card, now that the Dodd-Frank financial services legislation reduced the fees retailers pay to banks for debit cards.

So now bank customers can pay for debit card usage directly when retailers did before. While retailers in principle should lower prices to reflect lower costs, that may not happen.

This is a terrible deal for consumers, all due to the predictable consequences of Dodd-Frank.

Was increasing consumer costs so Wal-Mart could have lower costs the change voters had in mind when they voted for Obama? No, but it is what they've gotten.

Two Down

Mitt Romney and Newt Gingrich have both recently demonstrated why they are unfit to be the Republican presidential nominee in 2012.

Romney defended legislation he supported when governor of Massachusetts that vastly expanded the state's role in healthcare in Massachusetts, including mandating that state residents have health insurance and creating panels to oversee healthcare. If it sounds like ObamaCare, that's because it shares many similarities. Romney says he doesn't support ObamaCare, since it should be up to each state to impose Massachusetts-style controls. As if the loss of freedom is OK if a state does it but terrible if the federal government does.

Gingrich decided to lambast Paul Ryan's thoughtful plan to allow Medicare to survive its pending bankruptcy with reforms as "right wing social engineering". Ryan proposed allowing seniors who are currently under the age of 55 to buy insurance with a $15,000 subsidy by the government, giving seniors the ability to have a higher quality and/or more cost effective insurance then they currently have. Instead, Gingrich thinks the individual mandate to purchase health insurance is a good thing.

Gingrich's comments are already being used by Democrats to attack Republicans.

Romney and Gingrich have greatly undermined Republican opposition to the Democrats' efforts socialize healthcare. Since ObamaCare is such a fundamental issue in the 2012 campaign, Republicans have to look elsewhere for their nominee.

The Syrian Treatment

An American diplomat was recently hooded, roughed up, and detained by Syrian security agents.

In a different era, such behavior would be considered an act of war and America would respond accordingly. But in such a world, the prospect of America's response would have deterred Syria from engaging in this thuggish behavior to begin with.

Gaia Isn't Happy

In many schools, Earth Day means students will be inundated with the importance of environment. It can often take on a religious-like devotion to the cause.

But you never hear on Earth Day the full reality of humanity's relationship with nature, such as the devastating tornadoes that recently killed hundreds in the South, the earthquake and tsunami that killed over 14,000 people in Japan, and the hurricane that killed over 300,000 people in Haiti. Or why the 2004 tsunami in less industrialized Indonesia killed over 200,000 people, while in heavily industrialized Japan, the death toll was over 90% lower.

We need an Industrialization Day to celebrate the achievements of the industrial revolution, which so dramatically improved the material terms of the human condition. Your life may depend on it.

We Win, They Lose

One of my first thoughts of hearing the wonderful news that Osama Bin Laden was killed by American special forces in a spectacular raid into Pakistan was a comment by Ronald Reagan. Reagan was asked his vision of how the Cold War with the Soviet Union would end, and Reagan replied, "We win, they lose."

While Bid Laden's death is not synonymous with victory in the war on terrorism, it certainly is an important piece: America lives and thrives, while one of our leading enemies is dead. That is the lesson we want all of America's enemies to fear, so as to prevent them from being our enemies in the first place.

Another thought that quickly came to mind was the contrast in the success of this mission with the abysmal failure of the 1980 effort to rescue the American hostages held by Iran. 30 years of an American military build up led by Ronald Reagan, which provided the capacity and confidence to gain operational experience from successful war fighting and special operations activities, have honed our military's skills today to a degree that dwarfs the capabilities of the U.S. military in 1980.

Lastly, the extraordinary skill and bravery of America's warriors is remarkable, and for which we should be very grateful. Without men such as these, we could not enjoy the quality of life we take for granted in America.

Real Healthcare Reform

Imagine there was a healthcare innovation that resulted in a 14% decrease in costs in the first year of its implementation while preserving patient choice (unlike socialist healthcare policies in Canada and in Europe that achieve lower costs through government controls, limits, and rationing of healthcare spending).

Given the intense public debate over healthcare spending, you would think this was a major news event, and that healthcare reformers would be excited to discuss this remarkable result.

Well, there is such an innovation. A few weeks ago, the Rand Corporation published a study of high deductible health insurance plans, which showed that healthcare spending by first year members was 14% lower than members in traditional health insurance plans.

If such a result could be obtained across all healthcare spending in the United States, the savings in 2010 would have been over $350 billion. Federal and state budget deficits would be reduced significantly as Medicare and Medicaid spending decreased. And all based on individual choices rather than government fiat.

How can this be?

High deductible insurance plans increase the incentives for consumers to be prudent in spending money on healthcare, since the consumer has greater out-of-pocket costs before health insurance kicks in. But the greater out-of-pocket costs doesn't mean the consumer loses out relative to traditional health plans, since these plans can be combined with a health savings account (HSA), where an employer makes a contribution to an account which pays for out-of-pocket healthcare spending, and amounts which aren't spent are kept by the employee.

As an example, imagine a traditional health plan costs the employer and employee $18,000 in premiums and has no deductible (the $0 deductible is not the norm today, but makes for an easier comparison - the point remains valid with more typical deductibles of $500 or $1,000).

Let's say a high deductible plan, with a $10,000 deductible, costs $8,000 - and the employer contributes $10,000 to a HSA to pay out-of-pocket costs. And let's also assume that the two insurance plans have the same co-pay for amounts above the deductible.

What's happened here is that the the $18,000 premium for the traditional health insurance plan has been split into two components in a high deductible plan combined with an HSA: the same $18,000 now funds the HSA to pay for out-of-pocket costs and pays the insurance premium to cover healthcare spending above the deductible.

If the employee has health costs greater than $10,000, the employee's net cost is the same for the two plans. But for health costs less than $10,000, the employee comes out ahead with the high deductible plan, since he can keep the unspent money in the HSA. And since the employee can keep the unspent money, he has an incentive to be prudent in spending money on healthcare if his spending for the year turns out to be below the deductible amount.

This is a long of saying that incentives matter, which is one of the truisms of economic life. People respond to incentives, and traditional employer-provided health insurance, Medicare, and Medicaid have little or no incentives for the consumer to incur less healthcare costs since a third party is paying almost all of the incremental costs.

The Rand study also showed that consumers in high deductible plans used fewer preventive services - even though by law high deductible plans have no deductible on preventive treatments like vaccines. Such consumers presumably didn't know that the cost for preventive treatments wouldn't come out of their pocket; this issue can be rectified with efforts to promote awareness of their new plans terms.

It is important to point out that Democrats have fought the introduction, and then expansion, of HSAs. Republicans for years tried to get HSAs into law, which the Democrats opposed.

Since Rand's study is entirely predictable, based on the premise that people respond to incentives, why would the Democrats oppose HSAs and the cost savings they would bring? They did so because HSAs would be effective in reducing health care costs through individual choice and market mechanisms - instead, the Democrats prefer to promote the idea there is a healthcare crisis which can only be solved by increasing government's role in healthcare, such as ObamaCare.

Unserious About the Budget

The negotiations over the budget compromise reached this week between Republicans and Democrats in Washington demonstrate the depths of Democrats' attachment to enormous levels of government spending.

Notwithstanding that the 2011 federal budget deficit is estimated to be a staggering $1.6 trillion, Obama's original budget called for an increase in government "discretionary" spending. After facing determined Republican efforts to cut spending this year, Obama and the Democrats came out for holding "discretionary" spending flat - that's right, in the face of a $1.6 trillion deficit, the Democrats proposed no reductions in spending.

The final compromise seems (I say "seems" because there is some debate that some of the cuts are recissions of spending authority that may not have been spent anyway, so the actual reduction may be less than the announced $39 billion) to cut spending by about $39 billion, or a cut of a little more than 2% of the budget deficit and 1% of government spending. That's it. Mountains of deficit spending, and Democratic opposition held the reduction to 2% of the deficit.

Look at the debate over funding the Corporation for Public Broadcasting ("CPB"), which gets over $400 million a year from the federal government. Government funding for the CPB started in the 1960s under the stated goal of promoting alternative programming to the dominance of the three broadcast networks. Well, there is so much alternative programming today - think of the hundreds of channels available on cable and satellite TV, plus the ability to stream entertainment from the internet - that the ostensible reason for the CPB no longer exists. Moreover, there is little doubt that devoted viewers and advocates of public TV would increase their donations to make up any funding shortfall if the government ended its subsidies to public broadcasting.

If a government with a $1.6 trillion deficit can't eliminate spending on the CPB, we are not being serious about the fiscal crisis facing the nation.

But the Democrats went to the mat to defend the CPB subsidies. They probably worry that Democratic fundraisers and activists, who fund so much of the left's political and social agenda, would divert some of their contributions toward public broadcasting and away from electing Democrats.

Look for the Union Label

The Democrats' response to the efforts of Wisconsin Governor Scott Walker's effort to reduce collective bargaining rights for state and local government employees in Wisconsin has been educational.

If it weren't obvious before, we see just how beholden the Democratic party is to public unions for support. From fleeing the state to prevent a quorum to prevent the elected representatives of Wisconsin from completing their jobs, to comparing Governor Walker to Hitler, the Democrats and their supporters have engaged in political warfare to preserve union power in Wisconsin. You would only do this if such power was important to you.

Denying a quorum from being present is an abuse of legislative rules from a time when communications were slow and traveling from a legislator's home to the capital took a long time. Mandating a minimum quorum to vote on a bill therefore was an attempt to prevent members from being denied an opportunity to participate in voting on a bill.

Some have compared denying quorum to the filibuster in the U.S. Senate, whose purpose is to give the minority certain rights if they feel passionately about an issue, but that is a wrong analogy. Requiring a quorum is to allow legislators the time to get to the capital for a legislative session, or to prevent a majority from calling the legislature into session at a time or location that is difficult for the minority to attend and hence tipping the scales in the majority's advantage by denying the minority from being able to participate in the vote.

With modern communication and travel, such concerns are not relevant and could be satisfied with appropriate advance notice provisions to hold a legislative session. Instead, the Wisconsin Democrats used the quorum rules to prevent the legislature from operating, even though they had plenty of time to attend the legislative session.

The language directed at Governor Walker, such as comparing him to Hitler or Hosni Mubarak, is deeply offensive on many levels. Political debates that turn into name-calling don't advance the public's knowledge of the issues and in fact, suggest the name-caller can't advance facts or logic to make his case, so he uses invective instead.

Moreover, after so much commentary about having a civil tone of political discourse in the country after the shooting of the Democratic Representative Gabrielle Giffords in Arizona in January, we now see clearly that such comments were made for an attempted partisan advantage, and not for heartfelt convictions. Many of the commentators or politicians who implicitly or explicitly criticized the Tea Party or Republicans for falsely claiming their rhetoric had anything to do with the Giffords' shooting either have been silent while abusive language has been heaped on Governor Walker or have engaged in such rhetoric themselves. This further undermines the political culture in this country.

We also have learned that union thugs will direct their anger to the people in the public an large. Unions having now turned their attention to Wisconsin businesses, having sent a letter to Wisconsin business owners saying that if you don't actively support union efforts against Governor Walker, the unions will engage in boycotts of your business.

Interestingly, Wisconsin Democrats conceded to the benefit reductions in the new law, but wouldn't agree to the provisions that allowed state workers to opt out of the union or having the right to not have their union dues used for political donations. Why engage in all-out political warfare if the employee benefit issue was off the table?

Because the real issue is union power and campaign contributions to Democrats. As reported in the Wall Street Journal, when Indiana passed a similar law a few years ago, less than 10% of union members continued paying union dues. And without those dues, union leaders lose their own jobs, have to reduce their compensation to reflect diminished union financial resources, and reduce political campaign contributions which go overwhelmingly to Democrats.

And THIS loss of union money, more than the false right to be in a government union, is why the Democrats and their union allies are up in arms about the events in Wisconsin.

Machine Madness

This column by Sam Kazman in the Wall Street Journal discusses the impact of government regulations that mandate energy and water efficiency standards for washing machines. Due to these regulations, top loading washing machines clean clothes much less effectively than previously. Front loading washing machines generally provide superior cleaning, at a significant cost increase.

This raises the question: if energy and water efficiency were such desirable attributes of washing machines even if cleaning quality is reduced, than consumers could choose such models. And other consumers, who don't want to trade off efficiency for cleaning quality, could choose other models. Such is how matters operate in a free society.

The very fact that the government decided to promulgate such standards, rather than leave the choice to each of us individually, is because it feared many would prefer cleaning quality to energy/water efficiency. And because many people wouldn't make the "correct"choice, the government had to make the decision for us.

Just one more example of our nanny state at work, limiting our freedom.

Military Preparedness

Secretary of Defense Robert Gates has made various comments on why the United States can safely maintain a smaller navy and why we don't need to buy more F-22 fighters, the most advanced fighter plan in the world.

Regarding the U.S. Navy, Gates has said:

"It is important to remember that, as much as the U.S. battle fleet has shrunk since the end of the Cold War, the rest of the world's navies have shrunk even more. So, in relative terms, the U.S. Navy is as strong as it has ever been."

The problem is, the United States hasn't fought a significant naval battle since World War II, yet a powerful navy is critical to our national security. The reason is geography: we are (fortunately) far from many of the places in the world where wars and conflicts occur, and we need a powerful navy to project power from the Continental United States to up to 10,000 miles away.

As example, the United States has shrunk its aircraft carrier fleet from 15 to 11, and with a number of ships out of commission at any one time for refit and maintenance, we have not yet been able to deploy a carrier to the Mediterranean in case it is needed in action against Libya. Such a carrier is not relevant for defeating Libya's navy, but could be critical if we enforced a no-fly zone or provided tactical air support to the rebels.

Likewise, Gates has said we don't need more of the very expensive F-22 fighters.

But one of the problems in enforcing a no-fly zone over Libya is that our military feels it needs to suppress Libyan air defense before allowing our F-15, F-16, or F-18 fighters to patrol over Libya. In reality, such air defense suppression could be done, but no doubt the Obama administration is wringing its hands because more of the enemy might be killed while taking out their air defenses.

However, another option could exist. The Wall Street Journal quotes a former top Pentagon official, who said:

"You could put a squadron of F-22s in southern Italy and it could operate inside Gadhafi's airspace with impunity" due to its stealth, the higher altitude at which it flies, and speed.

So even against a weak military like Libya, we could find great political and military advantage by using the F-22.

The Libyan situation is exposing real weaknesses in America's military preparedness. It is a profoundly disturbing fact.

Either Or

The Obama administration's policy toward the Libyan revolution is a study in inconsistency. We have taken acts consistent with waging war against Gadhafi's regime, such as freezing $32 billion in assets, while at the same time being unwilling to help the rebellion succeed.

Half measures are dangerous because they risk hurting America no matter how the situation turns out. If Gadhafi maintains his grip on power, he will remember how we turned on his regime by freezing assets. And if the rebellion succeeds, we won't get the same credit with the rebels as if he were more forthcoming in our help.

While there are risks that a new government in Libya won't be friendly toward the United States or that terrorists could find a new haven if instability reigns in the country, there are two important reasons for America to support the rebellion with military assistance if requested in addition to the desire we have to see a tyrant deposed.

First, it is important to remember that Gadhafi waged war against the United States throughout the 1980's through terrorism, culminating in blowing up Pam Am 103 in 1988 and killing 270 people, primarily Americans. Let's not confuse ourselves that he didn't fight us in a conventional way, with armies, navies, or air forces clashing, and thus it doesn't somehow count as waging war. Precisely because Libya couldn't fight the United States in a conventional military battle, Gadhafi battled us in a way best suited to their capabilities.

It would have been ideal if the United States had removed Gadhafi from power in the 1980's, and the Reagan and first Bush administrations deserve deep criticism for not doing so. But it is better late than never that America's enemies suffer the consequences for killing Americans and waging war against us, and since the opportunity uniquely presents itself to ally ourselves with the rebels to destroy Gadhafi's regime, we should do so.

The second reason is that if we don't help the rebels, we will be sending a terrible signal to potential revolutionaries in countries, such as Iran, where regime change may be critical to making America safer. If Gadhafi's assaults on his people succeeds and he maintains his grip on power, tyrants in other countries will see that the regimes in Egypt and Tunisia were overthrown when their militaries didn't ruthlessly suppress their revolutions, while the Libyan regime protected itself by unleashing its military on the rebels.

It is time for Barack Obama to protect America's interests and deliver a decisive blow to Gadhafi, one of our leading enemies the past 30 years.

A Vast Right-Wing Conspiracy

Economists from the Organisation for Economic Cooperation and Development (OECD) published a study that said property taxes are the best way to raise additional tax revenues since its effects on economic growth are less than other ways to increase taxes. The study concluded that increasing income and employment taxes are the worst way to raise taxes due to its negative impact on economic growth.

This is consistent with the supply-side revolution in tax and economic policies that Ronald Reagan unleashed almost 30 years ago, and keeping tax rates on income low is one of the important ways we can get the economy growing again.

Interestingly, the OECD is a Paris-based organization that works on economic and public policy issues. It is an established member of the many international organizations that influence policy. As such, it is no bastion of conservative thinking. The fact that such a group published a study extolling the virtues of a "regressive" property tax and depicting the problems of a "progressive" income tax illustrates how accepted it is by economists that higher income taxes reduce economic growth.

Where's the Reciprocity?

Pakistan continues to detain in police custody Raymond Davis, an American subject to diplomatic immunity, after Davis shot and killed two armed assailants. Pakistani police say the attackers robbed others earlier.

By all accounts, Davis was acting in self-defense and should be released on that basis alone. Moreover, all diplomats are immune to prosecution for crimes committed in their host country, to avoid being used as a hostage. While Davis did nothing wrong, he should also be released immediately given his diplomatic immunity.

If the situation were reversed, and America was detaining a foreign national who was subject to diplomatic immunity, it would be a major news story in this country. The left and its media friends would denounce America, and you would hear about why America needs to live up to its international obligations so its diplomats can receive commensurate treatment in their host countries.

But there is no outrage by the left when America is on the receiving end of abusive treatment.

Why Egypt and Tunisia?

The recent events in Middle East, most prominently in Tunisia and Egypt, portend many changes for the troubled region. But one of the remarkable facts about these revolutions is that the countries with the largest demonstrations are not directed against the most repressive regimes in the region.

We can use the information that Freedom House publishes with its annual ratings of political rights and civil liberties for every country in the world, and that the Heritage Foundation produces with its ranking of nations based on economic freedom to assess this.

Let's look at five countries, three of whom have experienced recent large scale demonstrations (Tunisia, Egypt, and Jordan) and two that haven't (Syria and Iran). Freedom House rates all five countries as Not Free, but its numerical scores differentiate between them. Egypt and Jordan have better ratings than Syria, Iran, and Tunisia.

For economic freedom, the Heritage Foundation rates Jordan 38th in the world, which is better than many countries we associate with as having a high degree of freedom (such as Israel and Iceland); Egypt and Tunisia rate in the middle of the pack at 96th and 100th, respectively; while Syria (140th) and Iran (171st) rate near the bottom.

You would think that Iran and Syria would be more logical candidates for domestic-driven regime change, given their more repressive policies. But it is their very repression that makes it difficult for domestic groups to succeed in toppling these regimes. In 2009, Iran experienced large scale demonstrations after rigging elections to allow President Ahmadinejad to win. But consistent with its brutal nature, the regime employed its vast powers against demonstrators, killing, torturing, and imprisoning so many that the demonstrations ended.

In 1982, Syria destroyed the city of Hama where the Muslim Brotherhood staged an uprising. Tens of thousands of Syrians were killed when the Syrian military turned its artillery, tanks, and planes against its own city, destroying the Muslim Brotherhood's efforts in Syria. Such brutality acts as a powerful deterrent to future demonstrations and uprisings.

President Hosni Mubarak of Egypt and President Ben Ali of Tunisia have employed oppressive tactics against its citizens for years, and certainly are no friends of freedom. But Ali was, and Mubarak to date has been, reluctant to turn the full power of their military forces against their own citizens to maintain their grip on power. While this doesn't make them "good guys", they are certainly less evil than the dictators in Iran and Syria.

Moreover, the modest degree of freedom people have experienced in Egypt, Tunisia, and Jordan make them want to have more. They see the quality of life through media and the Internet that is possible in other countries, and this emboldens that to take risks to change their government. At the most extreme, the people of North Korea are so isolated from the rest of the world, it isn't clear how well they know how awful the regime they suffer under is.

Given Egypt's size, geographic position, and leadership role in the Arab world, there is both risk and opportunity with an end to the Mubarak regime. The risk is that the Muslim Brotherhood, the Islamic group that has stayed relatively quiet in Egypt due to Mubarak's brutal policies, is able to secure political power and turn Egypt away from its relationships with the United States and Israel. The opportunity lies in the possibility that non-Islamic groups can lead a future Egyptian government and extend the scope of freedom in the Middle East.

Free Lunches Aren't So Free

General Motors announced that it is withdrawing its application to borrow $14.4 billion in loans from the federal government.

The loans are part of the government's $25 billion program to lend money at below-market interest rates to auto companies to subsidize their investment in more fuel-efficient cars.

But GM has decided that there is a price to pay for government handouts, since many car buyers have shunned bailed out GM and Chrysler, preferring to buy cars from Ford which didn't take government money.

While it may be optimistic to believe that GM's example will deter others from seeking bailouts in the future, it is good to see that the stigma from government bailouts will make others think twice before pursuing them again.

True Colors

Facing a dire fiscal crisis, the Camden, NJ government laid off half its police force and one-third its fire department. The city sought to cut pay to avoid or minimize layoffs, and the unions preferred to see many of its members lose their job so the remaining members could have higher pay.

The people of Camden will be the ones who suffer, losing the protections provided by greater numbers of police officers and firemen.

Newark, NJ faced a similar situation, where 167 police officers lost their jobs after the police union wouldn't agree to wage and benefit concessions.

This terrible outcomes highlight the obvious, but often overlooked, incentive that taxpayers have: taxpayers should want the most services for their tax dollars, which implies that, in the efforts to balance government budgets, taxpayers should strongly prefer to see reductions in government employees all-in compensation than layoffs which reduce the quality of government services provided.

This is exactly analogous to how most people view other goods and services they purchase, whether they try to pay less while getting good quality. Most people have bought items on sale, at discount stores, or bargained for a better price such as buying a car. Directly or indirectly, such a focus on getting a good deal serves to reduce the income of someone in the chain of supplying the good or service.

Whether a car salesman who gets a lower commission because you negotiate a lower price on the car you purchase, or lower revenues to the retailer which puts downward pressure on wages when you buy clothes on sale, most people try to get a better deal when they spend their money even if the impact leads to lower wages for someone else.

As taxpayers, we need to have the same mindset, and recognize how normal and natural it is to do so. Otherwise, looming disasters such as will afflict Camden and Newark will become commonplace.

He Told You So

I have long believed that the environmental movement reflects the anti-capitalist, anti-industrial agenda of the left.

Don't take my word for it. Patrick Moore, one of the founding members of Greenpeace, confirms this. Quoting from a recent column he wrote:

"To a considerable extent the environmental movement was hijacked by political and social activists who learned to use green language to cloak agendas that had more to do with anti-capitalism and anti-globalization than with science or ecology. I remember visiting our Toronto office in 1985 and being surprised at how many of the new recruits were sporting army fatigues and rebel berets in support of the Sandinistas."

So the next time the environmental movement expounds its views, recognize that it often reflects an agenda far different from "clean water and air".

A Modest Proposal

As I have discussed in previous columns on the health insurance market, one of the profound problems afflicting healthcare insurance is that many patients have an incentive to overuse healthcare services since the patient often faces reduced, or in some cases little or no, costs as compared to the full cost of the treatment.

Studies show that a high percentage of a person's lifetime use of healthcare services occurs in the last six months of life, as often very expensive healthcare treatments are employed to address severe health problems. If a person faces little cost for potential life-extending treatment, many will naturally want to the treatment. If Medicare has to pay hundreds of thousands of dollars, for treatment that perhaps extends your life by a month or two, you will be tempted to incur such costs and treatment if your out-of-pocket is a small fraction of the total.

Medicare has an unfunded liability of an estimated $60 trillion, dwarfing the nation's national debt. This liability measures how much more money it will cost the federal government to pay Medicare expenses than it will receive in Medicare taxes.

Suffice to say, the nation cannot afford a $60 trillion liability. The unstated significance of ObamaCare is to cut government spending on healthcare by controlling the healthcare marketplace. Many countries with socialized medicine spend a smaller fraction of their economic output on healthcare - not because they are efficient, but because they simply provide fewer expensive healthcare treatments. The use of waiting lists to delay surgery and denying introduction of new drugs and medical devices are some of the ways these countries reduce healthcare spending.

Sooner or later, America needs to change its healthcare system to either socialized model, such as the path ObamaCare would take us, or a model consistent with freedom and individual rights, where the patient bears a greater portion of the cost of treatment so they have an incentive to economize on spending.

One step in this direction would be to continue Medicare and Medicaid's practice of paying exorbitant costs for healthcare - but then charging those costs above a certain threshold to a person's estate. If a person is poor, they will little or no estate so they will experience little or no change in their financial position from this proposal. But for middle and upper income Americans, they will have to seriously consider whether the cost of expensive treatment is worth paying the price in terms of leaving less money to their children and grandchildren.

The Education Market

The Wall Street Journal discusses the problems that the Harlem Day Charter School has had. Unlike many charter schools, it has lagging student test scores compared the population from which it draws.

Its charter is up for renewal this year, and the school's Chairman of the Board admits it won't be renewed due to their failures. Instead, the school has proposed that another successful charter school organization, Democracy Prep Public Schools, take over the school and have the charter renewed under their leadership.

While defenders of the status quo in education will use Harlem Day's failures as evidence against charter schools - notwithstanding the strong overall performance of charter schools - in fact their failure and resulting risk of being closed demonstrates another advantage charter schools have over regular public schools: they can be closed for failure due to the need to have their charter renewed every five years.

If public schools faced such a fate, they would be motivated to take even radical steps to avoid closure - and there are few things more radical than Harlem Day's proposal for its administration to be replaced by a new organization.

The result would be improved education for children in failing schools.

The Real Storm

The Wall Street Journal reports that a federal prosecutor is investigating claims by a New York City councilman that sanitation supervisors and workers engaged in a work slowdown during the efforts to remove snow from streets during last week's snow storm.

New York City has reduced sanitation department employment levels to address its budget deficit, so there is certainly motive. And if there is evidence of such a slow down, it highlights the abusive power of public unions and the lopsided power government employees have relative to their government employer.