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Although I sometimes disagree with Jonathan Chait (as in this RBC post), I’ve been a big fan since his days at The New Republic.  He now writes for New York Magazine, which published his remarkably prescient mid-October essay about the fiscal cliff. Directly or indirectly, that essay shaped much of the subsequent public debate on the subject (and inspired one of my own recent NYT columns).

If you don’t know Chait’s work, a good place to start is yesterday’s post about Republican rage at the trillion-dollar platinum coin proposal. If I were the business owner whose argument Chait deconstructs, I’d go immediately into hiding.

If you don’t like this piece—well, there’s no accounting for taste.  But if, like me, you can’t think of anyone whose writings about the recent fiscal wrangling have been more reliably informative and readable, you’ll want to bookmark his NY Magazine archive and read him first thing each morning.

 

Medicare Part D in the Fiscal Cliff negotiations

Want to cut wasteful federal spending? Negotiate drug prices under Medicare Part D.

Republicans are floating three ideas to make cuts to the Affordable Care Act as part of a fiscal deal. Since they’re Republicans, all of the ideas they’re floating are horrible: less money for community health and prevention (because sicker is better), cutting the subsidies (because the middle class needs another financial hit right now) and slicing into the Center for Medicare and Medicaid Innovation (because it’s essential to maintain all of the existing inefficiencies in health-care delivery).

So here’s an alternative. I’m not enough of a health-policy wonk to know exactly how many tens of billions of dollars a year it would save, but the answer is “a bunch.” Allow the government to negotiate with pharmaceutical companies for discounts under Medicare Part D, just as every other large buyer of pharmaceuticals – health insurers and health-care systems – does. The only reason that doesn’t happen now is that Bush the Lesser and some of his Congressional buddies were in the pocket of Big Pharma, and wrote a specific ban on the practice into the law.

What was done by law can be changed by law. The administration of such a program would be complex, but the legislation would be simple, and the savings immediate.

Footnote I agree with commenters a previous post that the fiscal cliff is entirely an artificial, political problem. But that doesn’t make it an imaginary problem.

And there is a genuine underlying fiscal issue. In the short term, we need fiscal stimulus to get the economy back on track. But in the longer term we can’t keep spending more than 20% of GDP in federal programs and taking less than 20% of GDP in federal taxes. There are lots of good places to get revenue (carbon taxes, other pollution taxes, spectrum fees, financial-transactions taxes), and several places to make beneficial cuts, not because we’re “borrowing from China” but because we’re wasting money and in some cases doing active damage: e.g., defense, agriculture, ethanol, water projects. There are also obvious places where we could usefully spend more money (e.g., research, early childhood education, lead removal, paying federal civil servants enough to compete for top talent, replacing regressive state and local taxation). Not urgent, but important.

Convergence of forces

John Boehner has committed the house majority to accept new revenues under the “right conditions”.  The California legislature has a 2/3 D majority in both houses, which means it can actually raise taxes, and the CA electorate that pulled the legs out from under its government a third of a century ago voted to increase taxes.  The presidential candidate who wants to raise taxes on the rich won. The American public evidently views those who take without giving back as morally culpable: when Romney blithely and wrongly tarred half the population with that brush, voters despised him for it.

The “conditions” are now right: I add to the foregoing the occurrence of a climate-change-mediated catastrophe unprecedented in US history, along with a basso continuo ostinato of drought, steady sea-level rise, melting of the arctic sea ice, glacier retreat and all the rest.  What did James Inhofe say about Sandy? This would be an excellent time to do as Bob Frank advises: tax bad things and not good things,  and one of the worst things is the takers who use up the finite capacity of the atmosphere to process CO2 without paying a dime for it.  Everything Romney wants to believe about retirees who paid their social security taxes all their lives (not to mention sales tax this very week) is wrong about them, but right about us: takers and free-riders.  More if you light your house with coal electricity and drive a big car when you don’t have to, less if you bike to work and happen to live where your power comes from a dam or a nuke, but takers, all of us.

Every economist wakes up in the morning with a little prayer that more things should be sold at their real marginal cost, but the survival of an inhabitable planet is being sold way below cost and we’re using up too much of it.  Economists are praying from the right missal here.  Many have a little too much faith in getting this particular price right: properly responding to global warming, even with a atmosphere user fee working its incentive magic throughout human affairs, still requires government to provide things like bike paths and trams.  But the moral case and the technical case for what I prefer to call a “carbon charge” – because that’s what it is, a user charge for services you consume and therefore deny to others – are perfectly aligned.  We’ve wasted two decades hoping for a magic bullet climate policy that requires no heavy lifting by anyone and maybe will make a fortune for an existing interest group: denial? cap and trade? clean coal? biofuels subsidies and mandates?  Understandable hope, but doomed like all magical thinking. If we don’t get the prices right, and we expect the whole economy to flout the law of demand…well, better think about selling that coastal property.

California has been out front with climate policies and would be an excellent place to pilot a carbon charge.  Twenty dollars a ton, increasing at 5% per year for a couple of decades would be not bad. And nationally: unless he can’t read election results, Boehner should find it easy to get a lot of his caucus behind a revenue measure that doesn’t have to be called a tax (my framing is not a quibble or a verbal trick).

 

The tragedy of Mitt Romney: a smart man trying to fit in to the party that loves stupid.

Why is there no Republican who can explain policy as well as Bill Clinton does? Jonathan Bernstein knows the answer: if there were, Republicans wouldn’t want to hear it. And this explains a lot about Romney.

I watched Bill Clinton’s speech last night with my wife, an immigrant who didn’t grow up following American politics. As someone who knows much more about policy than I do, she loved the speech and said, “if only more politicians would explain policy like that!” I doubt many students of American politics would contest my reply: “There’s only one American politician who can explain policy like that.” In particular, the Republicans have nobody who’s even close.

Jonathan Bernstein nails the reasons this is no accident. Read the whole thing, but here’s the kernel:

Granted, political talent could show up for either party. But a Republican these days couldn’t do what Clinton did tonight, because Republican gatekeepers and, probably, Republican audiences don’t want that kind of thing.

It’s not that there are no solid, factual, arguments for the policies Republicans prefer. There certainly are! But a politician who tried to stick to those would be competing with the Glenn Becks of the party, and the Rush Limbaughs, and the Newt Gingriches, and the “facts” that those party leaders constantly trot out. Democrats, to be sure, have to compete with some fringe voices who have a dubious grasp of facts and policy, but for whatever reason those voices are kept on the fringe. That’s just not the case for Republicans.

It’s not always been that way. But that’s how it is now.

And so Paul Ryan gets a reputation as a substantive Republican…while repeating the most nutty myths about budgets and health care reform (yes, a David Obey would or a Henry Waxman will give a very partisan interpretation of contested facts; how often do they just make stuff up?). And so Republicans celebrate the policy ignorance of a Herman Cain or a Sarah Palin. And so Republicans don’t even bother forcing George W. Bush to show he knows anything about policy or government before they nominate him; to the contrary, they argue that he’s a better president because he’s not bogged down by all of that stuff and can better govern from his instincts.

You’re not going to get a Bill Clinton if your party gives no incentives at all for a smart youngster to try to become that sort of politician. Truth is, a Republican who really knew policy well enough to make the arguments Clinton made tonight would have to hide it.

One of Jonathan’s commenters (“swain”) notes that Romney illustrates the thesis perfectly. I’d expand on that. Continue reading “The tragedy of Mitt Romney: a smart man trying to fit in to the party that loves stupid.”

On classroom authority, with special reference to instruction in policy analysis

What authority may I legitimately claim, standing at the head of a classroom with a piece of chalk in my hand, when I teach a course on the methods of policy analysis? One possible answer: the authority to say what counts as a valid argument within that specific discipline of thought.

Mike O’Hare’s essay on the different versions of “authority” created by legitimately held power on the one hand and by knowledge on the other quotes Mark Moore’s undying question to teachers, “By what right do you hold the chalk?” Perhaps that question should be addressed explicitly in the classroom more often than it is, with the instructor making it clear what authority is claimed, and on what basis.

When I teach methods of policy analysis, I start out by quoting the great definition of the term “course” from the Harvard catalogue: “A course is a group of people studying a subject with someone who has studied it before.”  Note, I say, not with “someone who is the world’s ultimate authority on that subject,” or “someone with infallible knowledge of the subject”, but merely “someone who has studied it before.” I then explain that I studied it so much my teachers finally gave me a doctorate to make me stop.  Then comes the hard part.

Policy analysis is about determining which course of action better serves the public interest in some set of circumstances. But of course that is also the subject-matter of actual political contestation, and policy analysts cannot legitimately claim that their opinions – inevitably conditioned by their prejudices, their interests, and the limitations of their knowledge and experience as well as by their analytic skill – ought to become the rule of action in a democracy. That would be true even if – per impossibile – the policy-analytic tradition embraced all of the possibly valid forms of argument about what should be done. It follows that I would be going beyond my rights if I required students to agree, or pretend to agree, with my actual opinions about inequality or pollution control or even crime control.

But – I say to the class – policy analysis is a discipline of thought, the product of a tradition. As the person in the room who has studied that discipline before, I claim the authority to say what, within that tradition, constitutes or does not constitute a valid argument.  Two policy analysts discussing crime may not come to the same conclusion about the optimal level of incarceration, but they will discuss the question in the same way – using, for example, terms such as “optimal” – and that way will be different from the way in which two criminologists or two cultural critics would discuss it. My job, standing there with a piece of chalk in my hand, is to show the students what it would mean to contribute to that policy-analytic conversation.

 

 

 

The New Marijuana Legalization Book is a Model of Public Policy Analysis

Even when I was critiquing it for the authors in draft form, Marijuana Legalization: What Everyone Needs to Know was very good. The final version, which I have just finished devouring, is even better. It’s the best book on cannabis in many years and a fine example of public policy analysis more generally.

I am going to do some posts about the content of the book in coming weeks. But I wanted to recommend the book to everyone in a more general way as an outstanding case study in how to separate scientific facts from public policy prescriptions. As I have written about before, the two are often unhelpfully — even dishonestly — slopped together in public policy analyses. Often the authors of such works don’t realize they are conflating the two, which is why they walk away from public policy disappointments saying “They ignored the science” when what they ought to say is “I’m mad because I didn’t get my way”.

The team that wrote the marijuana legalization book clearly appreciates that their great expertise in the science of drug policy does not give them a special warrant to tell other people how to live. They present the facts calmly and clearly, withholding their personal opinions until the end. And wonderfully, when they do eventually reveal their own policy preferences they label them as personal opinions, not as policies that science has proven must be implemented.

Somewhere, David Hume is smiling. So am I. Well done indeed Jonathan, Angela, Beau and Mark.

More from UVA

In case people don’t get to the bottom of the long comment stream on Jon’s post, William Wulf’s resignation from the faculty at UVA has been getting a lot of attention in certain circles.   I can’t imagine a better illustration of the problem the hard-headed business types on the Board of Visitors are bravely trying to solve, which is the failure of pointyhead intellectuals to get with the Darden Program.

First, Wulf (and Jones)  are very expensive.  For what Virginia is paying them, it could hire a whole batch of adjuncts who could fill many more seats in courses, especially required courses where the students don’t complicate the marketing task by demanding to actually learn anything important.  It could also hire a roomful of hungry assistant professors and post-docs who would publish, in total, lots more pages of research.  Just as there’s no problem finding students to fill seats, there’s no constraint of journals to accept these papers; I get invitations from actual journals I’ve never heard of and no-one reads to write something – anything – all the time. Production is paid bottoms in seats (real or virtual) and word count on paper (real or virtual); they’re easy to measure and the duty of the university is to get as many of each as possible as cheap as it can. Helen Dragas understands this and for some reason Wulf and Jones don’t, and that’s just how it is.

Second, there is no evidence they are providing any service to the university’s overall reputation on core measures: it’s telling that in his letter, Wulf cannot name a single football or men’s basketball starter who was recruited to UVA by himself or Jones, not one!  If they’re not advancing the mission, self-deportation is exactly in order, and their resignation is a badge of honor for the Visitors.

The selfless and courageous behavior of the Board don’t get no respect in quarters I frequent, perhaps because they tried to let their actions speak for them, but I’m happy to say they have now overcome their natural and admirable modesty and put forth a deathless, priceless manifesto of purpose and intentions.

 

Bleg: public policy readings

Looking for nominees for books, articles, and blogs as a reading list for graduating MPP students.

The current graduating class of UCLA Master of Public Policy students – a spectacular bunch, in case any reader is looking to hire smart, serious people – has asked the faculty for a “third-year curriculum”: a reading list of books, articles, and (I would add) blogs that will allow them to continue to learn and grow professionally as they hit the workplace.

Nominees in comments, please. I’ll share the full list when it appears.

Distinguishing Facts and Values in Public Policy Debates

At The Incidental Economist, I write about how the role of scientific evidence in public policy making is often misunderstood and misrepresented. That essay in turn stems from a BMJ article (partly gated) co-authored with Dr. Peter Piot, the founding Director of the UN Office on AIDS, in which we discuss how science is essential to good policy making, but can’t make critical decisions about priorities and morals for us.

It is thus facile to say that public policy makers should just “do what the science says”. Science doesn’t tell us to do anything. As Mark Kleiman once quipped, if your data “suggest” things to do, you should seek psychiatric help. Science is there to give us information, and the rest of how we run society is down to voting, values and political debate, which is at it should be in a democracy.

UPDATE: For a great take on these issues in drug policy, see this post by Alejandro Hope.