Sunday, March 11, 2012

Open Letter to Rick Santorum

Mr. Santorum, you are correct; Judeo-Christian values were central in the founding of the United States. From the Declaration of Independence, to the individual writings of the founding fathers, this is abundantly clear. In his writings, Tocqueville noted that while the formal separation of church was a vital aspect of the new republic, Christian faith and liberty  "were intimately united" and "reigned in common over the same country." He believed that in the United States, "the safeguard of morality is religion, and morality is the best security of laws, as well as the surest pledge of freedom." And those familiar with American History are aware that the crusade to abolition slavery and expand civil rights were primarily driven by people of faith.

But, for various reasons, I am concerned about your highly religious rhetoric. Nowhere in the writings of the founding fathers do we encounter sentiments that politicians and the state must propagate faith and virtue. They must form and flourish in the womb of civil society, in families, churches and charities. Those who seek to nourish religious sentiments and institutions through the state, will foster the corruption and the dependency of the church. Regarding your focus on contentious social issues; the 10th Amendment dictates that issues like gay marriage and abortion are not the concern of the federal government, rather they are under the jurisdiction of states and communities. Thus, you are fostering the centralization of power that most conservatives criticize President Obama for.

Let your faith continue to guide your private and public decisions, because the constitution grants us freedom of, not freedom from religion. But, be aware that the surest defense of religious liberty is not a strong central government that intervenes in social life, but the system of limited government and federalism established by our constitution. And we ask that you have faith that America's rich Judeo-Christian traditions will continue to flourish without the help of the state and without your campaign rhetoric. G-d and good sense be with you.

Brief Reflection On The Value Of Hypocrisy

A close associate of mine's favorite past time is to gather and gloat over examples of hypocrisy committed by self proclaimed social and religious conservatives. Every time a "family value conservative" or evangelical preacher is caught in an extramarital affair or homosexual dalliance is presented as proof positive of the innate defects of social conservatism and its purveyors. Paradoxically, hypocrisy is a highly undesirable trait for individuals to possess, on a broader social level, it can be viewed as a "necessary evil." To start off with, just because an individual falls short of a professed virtue, either through temptation or insincerity, does not negate its value or utility. For example, just because Al Gore flies around the globe in a private jet, spewing out green house gases, does not undermine the value of his environmental message, it merely casts his personal character into question. And by definition, the only way an individual or society could be free of hypocrisy would be to significantly lower our standards, so that we can ensure that they are met. Take the issue of marital infidelity; I recall a discussion with an Italian client of mine who was amazed that some Americans were concerned with former President Clinton's infidelity, because " when our leaders openly parade their mistresses in public, it barely raises an eyebrow." He went on to state that, "America is filled with hypocrites, because they too cheat on their spouses but simply do not fess up to it." 

This begs the question: would American Society be better off if we purged hypocrisy from our midst by not promoting marital (or any other) standards that many of us fail to live up to? I would respond "no" to that premise, simply because for many people, even the perceived values and behavior of our neighbors can shape our own, even if they sharply differ from the reality that exists behind closed doors. For example, if the members of a community believed that their neighbors all gave to charity, they would be more inclined to do so too, out of fear of gossip and social isolation. But, if out of a distaste for hypocrisy or general indifference, a community ceased extolling certain values and chastising certain vices, the rate of negative behaviors would surely increase. So, in closing, the hypocrisy of private citizens and politicians speak poorly of their character, but not of the values that they fail to live up to. Lowering the bar of acceptable conduct  as a means of eliminating hypocrisy is a juvenile endeavor that erodes the social capital of communities and countries alike.

Sunday, March 4, 2012

Why Was Gaddafi Overthrown?

I will emphatically state that I was never a fan of Muammar Qaddafi or any authoritarian leader, but I was deeply troubled by the American led overthrow of his regime. It is obvious that the rebels were armed and government sites were bombed by NATO troops, not because of the violence it used in suppressing a revolt. By African and Middle-Eastern standards, the Qaddafi regime was not particularly brutal or corrupt and actually had some impressive accomplishments

From 1977 onward, per capita income in the country rose to more than US $11,000, the fifth-highest in Africa,[56] while the Human Development Index became the highest in Africa and greater than that of Saudi Arabia.[57] This was achieved without borrowing any foreign loans, keeping Libya debt-free.

The presence of oil, combined with his unwillingness to follow the lead of the United States and the European Powers is the most probable reason we engineered his removal. And in the end, what did we accomplish? There is nothing that indicates that the fragmented regime of the rebels is any more democratic and popular than Qaddafi's. So far they've harassed and even massacred black Libyans and by overturning the previous ban on polygamy, they've shown an inclination towards Islamic Law. And there is no reason to believe that their enthusiasm for the western powers  is anything more than a transitory phenomena. If the new regime doesn't deliver on its political and economic promises, soon we will get blamed for its failings. All this for the bargain of only $1 billion, paid for by you, the American Tax Payer!

Are You A Right Wing Extremist?

report by the Department of Homeland Security on "right wing extremism" states that it has "no specific information that domestic right-wing terrorists are currently planning acts of violence," but "right-wing extremists may be gaining new recruits by playing on fears about several emergent issues." In other words, they are concerned about the beliefs and not the actions of  law abiding American Citizens. According to the Department of Homeland Security, you may be a "right wing extremist" if you are concerned:

"(about) the loss of US manufacturing capability to China and India." 

"(that) a world government would usurp the sovereignty of the United States and its Constitution, thus infringing upon their liberty." 

"that illegal immigrants were taking away American jobs through their willingness to work at significantly lower wages," 

"(about) restrictive gun laws" 

Even those who are in complete disagreement with the said beliefs should be troubled that the federal government is attempting to paint its non-violent critics as dangerous. And perhaps the most offensive aspect of the report is that we are warned about "disgruntled military veterans." The great irony of this report is that it will be fuel the very anti-government sentiments that the Department of Homeland Security is so concerned about.

Time For Progressives To Make Some Hard Choices

Facing a huge budget short fall, Chicago's Mayor Rahm Emanuel and Governor Quinn announced the closure of 6 city  and 7 state mental health facilities.Mental health activists and concerned citizens are justifiably indignant, because mental health services are already woefully inadequate. And even I, an ardent conservative am troubled by these cuts, because assisting those who are truly incapable of taking care of themselves is a legitimate function of the state. But, given that we are broke, progressives cannot defend their entire policy platform. They will have to make some hard choices in which programs and groups are most deserving of limited funds and which must be slashed. And they will have to implicitly acknowledge the concept of the (more and the less) deserving poor. Should economically unsustainable patterns of single motherhood be subsidized, when countless individuals suffer from untreated mental illness? Can we support lavish benefits for public workers, when basic public services (like schools, roads and the police) are in such a poor state? Progressives who are grounded in fiscal reality will have to consider traditionally conservative questions.

Aldermen unhappy about Emanuel’s mental health clinic closings

Story Image
Alderman Nick Sposato during todays City Council meeting in the Council Chambers at City Hall. Thursday, July 28, 2011 | Brian Jackson~Sun-Times
Updated: October 25, 2011 5:42PM

Chicago aldermen on Tuesday ripped Mayor Rahm Emanuel’s plan to close six mental health clinics, fully fund just two of them and have seven city health clinics partner with federally-qualified health centers.
“We’re leaving many people with nowhere to turn. In the long run, it’s going to be very costly in tax dollars and suffering because people will not get the care they need. They’ll be ending up in emergency rooms and jails,” said Ald. Nick Sposato (36th).
Ald. Walter Burnett (27th) focused on the 53 Health Department employees who stand to lose their jobs in 2012.
“Most of these layoffs are minorities. That’s a big concern,” Burnett said.
Ald. Scott Waguespack (32nd) warned that the consolidation of mental health clinics would force patients to travel long distances “outside their comfort zone” and asked Health Commissioner Bechara Choucair whether he had consulted with Chicago Police about the closing.
When Choucair said he had not, Waguespack pointed to the July 2008 death of Chicago Police Officer Richard Francis.
Francis was answering a disturbance call on a CTA bus when he was shot and killed by a woman with a history of violent seizures who grabbed his gun during a struggle. Just a few days before, the same woman had pulled a knife on one of her daughters.
“We’re putting police officers in a difficult position,” Waguespack said.
Over and over, Choucair insisted that the cuts were carefully considered and that mental health patients would be better served at lower cost to Chicago taxpayers.
“I’m confident we’re enhancing services,” the commissioner said.
Of all the cuts in the mayor’s first budget, the health and library cuts have drawn the most fire during City Council budget hearings.
Emanuel wants to lay off 53 Health Department employees and eliminate 25 vacant positions.
Six of the city’s 12 mental health clinics would be closed, and only two of the remaining six would be fully-funded. The budget also calls for implementing the mayor’s summer plan to have seven city health clinics partner with federally-qualified health centers.
Henry Bayer, executive director of AFSCME Council 31, called the Health Department cuts the most devastating cost-cutting in the mayor’s first budget.
“If you presented this budget to [Republican House Speaker] John Boehner in Congress, he’d pass it in a minute. I hope the City Council won’t,” Bayer said.
“The mayor is cutting into basic services and laying off hundreds of front-line employees who provide those vital services. When we actually see who is being laid off, I suspect it’ll be largely females and minorities.”
Top mayoral aides have insisted that the city was “reinvesting $500,000 in enhanced psychiatry services and care coordination” in the consolidated mental health clinics. That’s a move, they claim that would provide “improved service at a lower cost.”
“The city will maintain services for those most in need — uninsured patients — but provide the services in a more cost-effective manner. The city will actually be able to increase services provided and save $3 million,” Kathleen Strand, a spokesperson for the city’s Office of Budget and Management, said earlier this month.
She noted that all 3,000 uninsured patients would continue to be served by the city.

Ranking Freedom in the 50 States

Very interesting research that ranks freedom in the 50 states. Scores were calculated by quantifying and adding up social and economic (tax and regulatory) freedom. The authors found that low ranking states, such as New York, California and Illinois had experienced a net population outflow and for the most part, higher ranking states, like South Dakota and Idaho were enjoying population inflows. To view a short and informative interview with the authors, click here.

A Healthy Serving of Skepticism in the Obesity Debate

As the rising rate of obesity has cost the nation billions in added health care costs, much needed discussions about healthy eating have become more prevalent. The dominant narrative is that a host of external causes, like "food deserts," "aggressive advertising" and the "high cost of healthy food" are responsible for the widespread and detrimental consumption of junk food. But, unfortunately few Americans, even in the educated classes have approached the official narrative with even a modicum of skepticism and sough to verify its claims. Research have emerged that have cast doubt on many of the claims put forth by government and media figures. For example, in most cases, proximity to a grocery store did not increase consumption of healthy foods and in most consumers can purchase healthy fruits and vegetables at a lower cost than junk food. Anecdotal evidence seems to support the researcher's conclusions, because on every occasion that I visit my neighborhood grocery store, I witness consumers choosing unhealthy, processed foods, over healthy, affordable staples (like lentils, broccoli and tilapia). This is not simply an empty academic debate, because the flawed narrative will lead to flawed policies that will do little to stem the rising tide of obesity.

5 Myths About Healthy Eating

A helping of skepticism about the causes of Americans’ poor eating habits—and the effectiveness of political fixes

 Walk into nearly any supermarket in the United States, and you are immediately confronted with abundance—bok choy, mangos, melons and avocados from across the globe—where a couple of varieties of apples and carrots once struggled to fill shelf space.
But not everyone has easy access to this fruity phantasmagoria. If you’re picking up ingredients for dinner at a gas station or a convenience store, you probably live in what eggheads have taken to calling a “food desert”—an ill-defined concept with powerful policy implications. A commonly cited 2009 statistic from the U.S. Department of Agriculture has 23.5 million Americans living in poor urban and rural areas with limited access to fresh food.
Making those food deserts bloom is a centerpiece of Michelle Obama’s anti-obesity agenda. This January found the first lady smiling for the cameras with Wal-Mart executives in Southeast Washington and declaring herself “more hopeful than ever” as she tours the nation’s produce sections.
But the prevalence of food deserts is almost certainly overstated. Not having a supermarket in your Zip code isn’t the last word in access to healthy food. According to the USDA, 93 percent of “desert” dwellers have access to a car. And farmers markets, often overlooked in surveys of rich and poor neighborhoods alike, have tripled since 1994.
Still, it does seem reasonable that making it easier to buy fresh food would improve what people eat. However, a study published this year in the Archives of Internal Medicine, the first to measure the impact of access to fresh food on diet, followed 5,000 people for over 15 years and found something surprising: Proximity to a grocery store or supermarket doesn’t increase consumption of healthy food. That suggests that a lack of convenient leafy greens isn’t the problem. Dinner menus are the product of subtle and pervasive food cultures, which can’t be tweaked from the East Wing.
The primary beneficiaries of tax incentives and other nudges aimed at abolishing food deserts are big grocery chains, not poor shoppers.
2. Advertising forces people to make unhealthy choices.
Television-bound children, their eyes awhirl with images of Tony the Tiger and his high-fructose friends, haunt the debate about junk-food advertising. And any parent who has ever experienced a 2-year-old’s grocery store meltdown would certainly like to have someone to blame. But the Institute of Medicine, an arm of the National Academy of Sciences, has concluded that “current evidence is not sufficient to arrive at any finding about a causal relationship from television advertising to adiposity [excess weight] among children and youth.” Similar findings hold true for adults.
We don’t need advertisers to tell us that candy is delicious. Humans were big fans of fat and sugar long before the idiot box was invented. We’re programmed to go for the good (bad) stuff. Sure, Kellogg’s and General Mills have big advertising budgets, but they’re nowhere near as powerful as Darwin. Cracking down on advertisers gives politicians a scapegoat, but it doesn’t make kids, or their parents, healthier.
3.  Eating healthy is too expensive.
 A dinner of hot dogs and Devil Dogs is undeniably cheap. But a bowl of beans and rice with a banana on the side is cheaper. A survey by the USDA found that, by weight, bottled watek is cheaper than high-fat, and whole fruit is cheaper than processed sweet snacks. Preparing a big pot of lentils for the week may be not be glamorous, but it’s much cheaper and not much more time-consuming than cooking up frozen pizza or mac and cheese.
The New York Times’ Mark Bittman—no fan of Frito-Lay—writes that the idea that junk food is cheaper than real food is “just plain wrong” and that blaming unhealthy habits on cost is incorrect. People who eat lots of unhealthy food aren’t doing so because they lack cheap, healthy options. Instead, it’s because they like junk food. Making junk food comparatively more pricey by tacking on taxes—a proposal that has been revived many times by Yale’s Kelly Brownell (and recently made into law in Denmark)—mostly means that people will pay more taxes, not eat more kale.
4.  People need more information about what they eat.
It’s hard to argue against rules that give consumers more information. Perhaps for that reason, proposals to require restaurants to jam calorie, fat and other nutrition statistics onto already crowded signs and menus pop up over and over—most recently as part of the health-care reform law—despite the fact that virtually all major fast-food chains already provide such information on handouts and online.
Knowing that a chocolate shake at Shake Shack has 740 calories doesn’t stop me—or the first lady— from ordering one occasionally. We’re not alone: Studies consistently find that menu labeling doesn’t result in healthier choices. recent study from Ghent University in Belgium found that labels made no difference in the consumption patterns of students there, backing up a 2009 New York University study that found no improvement in poor New Yorkers’ eating habits after the introduction of mandatory menu labeling in the Big Apple.
5.  There are too many fast-food restaurants in low-income neighborhoods.
In many urban neighborhoods, it’s easier to get permission to open a sex shop than a Taco Bell, thanks to aggressive policies by local zoning boards. But zoning out fast-food restaurants in cities is a lost cause—they are probably already too thick on the ground for new restrictions to alter the culinary mix. The same study that found no effect on diet from increased access to fruits and vegetables also found that proximity to fast-food restaurants had only a small effect, and it was limited to young, low-income men.
In a commentary accompanying the study, Jonathan E. Fielding and Paul A. Simon of the Los Angeles County Department of Public Health wrote that “policy efforts to reduce access to [junk food], though politically challenging, will likely have a greater impact on reducing the obesity epidemic than efforts focused solely on increasing access to fresh produce and other healthy options.” “Politically challenging” is code for “virtually impossible.”
And for good reason. Eliminating access to fast food and other junk food means taking away choices, something Americans don’t tend to like, even (or perhaps especially) when it’s for their own good.

Successful Strategies in Debt Reduction

If you are interesting in determining what policies hold the greatest potential for reducing America's dangerous federal debt, I highly reading this article from Two Harvard Economists, Alberto Alesina and Silvia Ardagna, studied 107 efforts to lower debt in 21 nations and arrived at a series of fascinating conclusions. They found that “Countries that addressed their budget shortfalls through reduced spending were far more likely to reduce their debt than countries whose budget-balancing strategies depended upon higher taxes" and in most cases the optimal ratio of spending cuts to revenue increases was 85 to 15. We can argue about the exact ratio, but the evidence is clear: nations which based their debt reduction strategies on tax hikes were largely unsuccessful in their efforts . Furthermore, they found that successful debt reduction strategies tended to focus on spending cuts in two areas: social transfers (entitlements) and government wage-bill, or put simply, the size of and compensation received by the public sector work force. Unfortunately I suspect that the majority of voters will continue to be swayed by generic rhetoric such as "the rich are not paying their fair share," rather than look at the hard numbers and experiences of other nations that faced similar challenges. 

Upgrading the U.S.A.

How to fix the country’s debt-to-GDP ratio

This summer, for the first time in history, Standard & Poor’s downgraded the United States from AAA to AA+. Whether or not we think the country deserved it, whether or not S&P holds any credibility, whether or not the move will have long-term consequences, the rating agency’s rationale for the reduction boils down to a legitimate fear: that America will fail to get its financial act together in time.
But how do we put our house in order? Even if lawmakers allow the Bush tax rates to expire at the end of 2012, the debt-to-GDP ratio is still projected to increase dramatically over the next decade. And then the real problems kick in with the explosion of spending on Social Security, Medicare, and Medicaid. You could make the deficit situation look better by refusing to soften the blow of the alternative minimum tax through the types of “patches” that are passed each year, but that is both unlikely and unwise. And it would be very helpful if we got all the savings promised by boosters of the recent health care overhaul, but that too is highly doubtful.
The bottom line is that the debt problem in the United States will not go away as long as we don’t reform Social Security, Medicare, and Medicaid. The coming explosion in entitlement spending will blow apart any possibility  of an equilibrium between revenue (no matter how high marginal tax rates get) and expenditures.
Unfortunately, the debt-limit deal passed this summer failed even to fake a solution. And things can get much worse. S&P has served notice that a further downgrade is likely if more progress is not made at upcoming deficit-reduction meetings to reduce the debt-to-GDP ratio within the next few months. Prior to the debt-limit deal, you may recall, S&P had talked about wanting a long-term plan in place by October. And that means doing precisely what our representatives refused to do over the past seven months: moving decisively off this unsustainable path.  
Thankfully, we are not the first nation to struggle with a dangerous debt-to-GDP ratio, and thankfully, the academic world has already produced great insights into what can be done to help the problem without hurting the economy.
Take Alberto Alesina and Silvia Ardagna, two Harvard economists. In an October 2009 working paper published by the National Bureau of Economic Research, the duo look at 107 efforts to reduce debt in 21 OECD nations between 1970 and 2007. Several countries were successful, among them Austria in 2005, Finland in 2005, and Sweden from 1997 to 2004. Spending cuts, the scholars found, are more effective than tax increases in reducing the ratio of debt to GDP. With successful fiscal adjustments, spending as a share of GDP fell by an average of 2 percent while revenue also fell by half a percentage point. Unsuccessful fiscal-adjustment packages involved smaller spending reductions (only about eight-tenths of a percentage point, on average) and large revenue increases.
Following and building on the work of Alesina and Ardagna, American Enterprise Institute economists Andrew Biggs, Kevin Hassett, and Matthew Jensen published a working paper in December 2010 covering more than 100 instances in which countries took steps to address their budget gaps. They identify successful consolidations as those in which the ratio of debt to potential GDP three years following the first year of the consolidation has declined by at least 4.5 percentage points.
Their conclusion: “Countries that addressed their budget shortfalls through reduced spending were far more likely to reduce their debt than countries whose budget-balancing strategies depended upon higher taxes.” What’s more, “the typical unsuccessful fiscal consolidation consisted of 53 percent tax increases and 47 percent spending cuts. By contrast, the typical successful fiscal consolidation consisted of 85 percent spending cuts.”
Alas: Even (or especially) in a time of crisis, lawmakers are driven more by politics than by good public policy. Countries in fiscal trouble generally got there through years of catering to pro-spending constituencies, be they senior citizens or the military-industrial complex, and their fiscal adjustments tend to make too many of these same mistakes. As a result, failed fiscal consolidations are more the rule than the exception. Eighty percent of the adjustments that Biggs, Hassett, and Jensen studied were failures.
The United States cannot afford to follow this pattern. Those who are not ideologically inclined toward austerity measures should remember that all this research is consistent with the work of the Berkeley economists David and Christina Romer—the same Christina Romer who used to chair Obama’s Council of Economic Advisers. In a paper published in the June 2010 American Economic Review, the Romers show that increasing taxes by 1 percent of GDP for deficit-reduction purposes leads to a 3 percent reduction in GDP. Alesina and Ardagna discuss Romer and Romer’s paper, noting that while their methodology is different enough to make it hard to compare the two results formally, the studies are consistent in their conclusions. 
Finally, Biggs, Hassett, and Jensen look at how successful different kinds of spending cuts are at reducing the debt ratio. Consistent with other studies, they find that winning fiscal consolidations tend to focus spending cuts in two areas: social transfers, which largely means entitlements in the American context, and the government-wage bill, which means the size and pay of the public-sector workforce.
I can’t stress enough the importance of these findings. At a time when many politicians and pundits are calling for a “balanced” solution that features an equal mix of revenue increases and spending cuts to address our debt crisis, we must remember that this path has systematically failed in the past.
It may not be “balanced,” but what works is a package that mostly cuts spending. In the short term, that could mean means-testing Social Security and Medicare, increasing the programs’ eligibility age, and/or block-granting Medicaid. In the longer term, we must rethink the system on a fundamental level. A system that assumes an entitlement due to the simple fact of being American and over 65 cannot be sustained.  
Contributing Editor Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.