In an earlier post, I stated that conservatives who decry federal spending are nevertheless loath to name specific programs they would cut.  One exception is Paul Ryan, whose "Road Map for America's Future" advocates substantial reductions in Medicare and Social Security spending. 

You can read an interview with Ryan in yesterday's NYTimes.  He's from Wisconsin, so he's a cheesehead!

Conservative commentary these days is fixated on U.S. fiscal imbalance and holds that we should address the imbalance with spending cuts, not tax increases.

Missing from most such commentary, however, is specifics about what expenditure to cut (see, e.g., Daniel Henninger's recent WSJ piece).

Conservatives recognize that addressing the debt in a serious way means cutting national defense, Social Security, and Medicare.  But conservatives support high spending on national defense, and they are unwilling, for reasons of political expendiency, to propose reductions in entitlements.

Libertarians also believe we must slash expenditure, but they are happy to name specific cuts.  Libertarians advocate U.S. withdrawal from Iraq and Afghanistan, which would save hundreds of billions of dollars per year, and they endorse major cuts or elimination of Social Security and  Medicare.

The public thus perceives the conservative position as disingenuous, the libertarian position as unelectable.  Take your pick.

In response to concerns that unemployment remains high despite the stimulus, President Obama said this:

"You can argue, rightly, that we haven't made as much progress as we need to make when it comes to spurring job creation." ... "That's part of the reason why I expect Congress to pass additional measures as quickly as possible."

The President's response assumes that the first stimulus worked, just not enough. That is possible, but maybe the Keynesian model that underlies the case for stimulus is just wrong.

Non-Keynesian perspectives suggest that additional spending or poorly designed tax cuts will harm the economy by distorting resource allocation.  More broadly, stabilization policy instills a belief that governments can moderate recessions, which encourages risk-taking and larger booms and busts.  A steady stream of  policy "remedies" creates uncertainty that discourages productive activity.

So maybe the treatment is worse than the disease.

My writings on drug legalization seem to generate a lot of interest from college and high school students (surprise).  Thus, I get many emails from students posing questions about my research, or requesting an intereview, or asking for a reprint.

One hight school student with whom I corresponded recently just sent me the following:

Sorry I never thanked you for talking to me about marijuana legalization. I got my internet privileges taken away for, funnily enough, smoking marijuana. So anyways, thanks.

I wonder if his parents see the humor!

On Monday, my son started the classroom portion of the state-mandated driver's education program.  He views it as a collasal waste of time, especially since it is eating his entire winter break.  In his opinion, the state should just administer an appropriate written test on the material and let students choose how much to prepare.  If they flunk, they study more until they pass (yes, he is a libertarian).

When my daughter took the course a few years ago, she said her class divided into four groups:

Front few rows: ultra nerdy private school kids who took careful notes on everything the teacher said.

Next couple of rows: nerdy public shools kids who sort of paid attention, but not diligently.

Third set of rows: non-nerdy kids of all flavors who paid little attention and played hangman, or texted each other, or read a book, or whatever.

Last set of rows: stoners who were quite obviously high/asleep for most of the classes.

Whenever media stories report a surge of deaths from heroin use, it turns out that more potent heroin has recently arrived in a particular city or town.  For example, a recent L.A. Times headline reads

Black tar moves in, and death follows

and the story goes on to explain that

The death was part of a rash of overdoses, 12 of them fatal, that shook Huntington that fall and winter. All were caused by black-tar heroin, a potent, inexpensive, semi-processed form of the drug that has spread across the United States, driven by the entrepreneurial energy and marketing savvy of immigrants from a tiny farming county in Mexico.

These deaths are due to prohibition.  In a legal market, information about potency would be readily available, so few users would suffer these accidental overdoses.

One argument libertarians offer against government funding for education is that it facilitates thought control, since funding education means defining education.  This problem is particularly accute if funding comes in the form of public schools; it exists but is more easily avoided if funding comes as education vouchers.

Advocates of public schools view this concern as wild exaggeration, but I wonder what they think about a recent decision by the Texas School Board:

Finally, the board considered an amendment to require students to evaluate the contributions of significant Americans. The names proposed included Thurgood Marshall, Billy Graham, Newt Gingrich, William F. Buckley Jr., Hillary Rodham Clinton and Edward Kennedy. All passed muster except Kennedy, who was voted down.

More broadly, as this article explains, Christian Conservatives have become almost a majority of the Texas Board, and they want the public school curriculum to teach that the founding fathers were Christian and intended for the country to be the same.

The power to fund is the power to control.

From Darren McHugh, in the Queens University Department of Economics.  His bottom line:

The net benefit of the Olympic Games is therefore also substantially negative when the estimates of Olympic benefits from this paper are combined with published estimates for event costs.

In other words, the U.S. should be happy that President Obama failed to secure the 2016 summer games for Chicago.

In 2006, Massachusetts enacted a health insurance "reform" that became the blueprint for Obamacare.  Now

Governor Deval Patrick is seeking sweeping authority to review and reject rates charged by hospitals, physician groups, medical imaging centers, and insurers, in a broad new effort to make health care more affordable, particularly for smaller companies and their workers.

The Governor's desire to reduce costs is understandable, since Massachusetts has the highest premiums in the nation.

But the Governor's approach to reducing expenditure is misguided because it will kill the incentive to supply healthcare services in the Commonwealth.  A better approach is to make consumers pay a higher fraction of their health costs, via increased co-pays and deductibles in government insurance and greater taxation of employer-paid premiums.

More than a year after President George W. Bush left office, more Americans continue to blame his administration over any other entity for the nation's economic woes, according to a new poll.

In a New York Times/CBS News survey out Friday, 31 percent of Americans said the Bush administration is at fault for the current state of the economy while only 7 percent pointed their finger at President Obama and his team.

My assessment differs somewhat from this poll's;  I would argue that the following pre-Obama policies played the main role in generating the current mess:

1. The housing policies pursued by HUD, FHA, Fannie, and Freddie.

2. The implicit (almost explicit) guarantees issued by the Fed that it could clean up the housing bubble without much fuss;

3. The growth of expenditure during the Bush administration (Medicare prescription drug coverage, Middle East Wars, pork for everyone).

4. The Wall Street bailouts.

But then I would argue that the following Obama policies have made the recession deeper and longer:

1. Endorsement of the Wall Street bailouts (Obama voted for TARP and appointed a key architect, Tim Geithner, as his Treasury Secretary)

2. The auto bailouts;

3. The fiscal stimulus;

4. Populist ranting at Wall Street over compensation, taxes;

5. Refusal to extend the Bush tax cuts, or repeal the estate tax, or cut taxes rates generally;

6. Pre-occupation with resdistribution over productivity: health care, card check, auction-less cap-and-trade, and continued support for low-income homeownership.

Thus, plenty of blame to go around.

A video by Izzy Santa, of the Cato Institute.

Apparently not:

States suffering through tough times are reaching for a tonic.

Lawmakers in several states with tight control of liquor sales are considering legislation that would shift the job to private industry, saving money and raising revenue.

If these governments are running their stores in a profit-maximizing fashion, they gain nothing by selling them off.

A new Mexico City law goes into effect March 4 that will allow same-sex couples to marry and adopt children, propelling the city to the forefront of the global gay rights movement.

A backlash is attempting to have the law declared unconstitutional.  One argument being made is that Mexico City already has civil unions for same-sex couples.

That argument, however, just raises the issue of whether government should provide marriage at all; it could instead provide civil unions to both same-sex and opposite sex couples, leaving marriage to religious institutions.

The Obama administration will begin a drive this week to expel Pepsi, French fries and Snickers bars from the nation’s schools in hopes of reducing the number of children who get fat during their school years.

I cannot imagine that such efforts will yield results; kids have too many ways to circumvent these restrictions.

Instead, what about health insurance premiums that increase with weight above the "healthy" threshold?

What can you do if you want help committing suicide, but you live in a state (all but Oregon) or country where assisted suicide is illegal?  Travel to Switzerland:

From the start, Mr. Minelli [founder of Dignitas] has kicked up controversy for his willingness to help foreigners die. Most groups in Switzerland don't assist foreigners. Dignitas only helps foreigners. The number of foreigners Dignitas helps each year—132 in 2007, compared to 91 in 2003—has increasingly left the Swiss uncomfortable with the country's growing reputation for "suicide tourism." As of the end of last year, Dignitas had helped a total of 1,046 people to commit suicide.

I do not see a convincing reason for bans on assisted suicide.  Informed consent rules are reasonable, but that seems sufficient to me.

The short answer is, "We don't know."  Why not?  Because existing DEA rules make it virtually impossible to carry about appropriate double-blind trials.

Yet the anecdotal evidence for marijuana's efficacy is stunning; here is one good example:

Even though it's a crisp November day, the flower boxes of Mary Jones's neat little bungalow are overflowing with brightly colored blooms. The bubbly mother of three has her utility vehicle parked in the driveway. Her hair is perfectly coiffed, her blond highlights glimmer in the late-fall sun. She looks like she could be a real-estate broker, and seeing the rock on her manicured finger, I imagine for a moment that her husband is a doctor or a lawyer. Mary would, in fact, be the ideal soccer mom, except that one of her now-grown sons played football, and rather than working in real estate, she grows and sells marijuana.

Read the rest here.  Anecdotes do not prove that marijuana works, but they make a good case for allowing objective scientific evaluation.

The U.S. and Canada, its largest trading partner, reached a preliminary deal to settle what had become an acrimonious dispute over "Buy American" provisions in the U.S. stimulus package.

The deal, if approved, will give companies on both sides of the border access to government procurement contracts at the state and local levels. U.S. Trade Representative Ron Kirk said the increased access for U.S. firms in Canada would be worth billions of dollars in contracts.

Last year's U.S. stimulus package requires that manufactured products used in projects paid for with federal stimulus funds be made in the U.S. While the restrictions were meant to exempt countries like Canada that have existing trade treaties with the U.S. and have signed on to the World Trade Organization's government procurement pact, the Canadian government in the 1990s excluded its provinces and towns from those rules.

Even if this issue gets resolved sensibly, it should never have arisen in the first place.  When the government builds infrastructure, it should do so at minimum cost (quality adjusted).  The Buy America provisions interfere with that objective and risk killing jobs when our trading partners retaliate.

In 2006, Benjamin Koellmann bought a condominium in Miami Beach. By his calculation, it will be about the year 2025 before he can sell his modest home for what he paid. Or maybe 2040.

“People like me are beginning to feel like suckers,” Mr. Koellmann said. “Why not let it go in default and rent a better place for less?”

After three years of plunging real estate values, after the bailouts of the bankers and the revival of their million-dollar bonuses, after the Obama administration’s loan modification plan raised the expectations of many but satisfied only a few, a large group of distressed homeowners is wondering the same thing. ...

In a situation without precedent in the modern era, millions of Americans are in this bleak position. Whether, or how, to help them is one of the biggest questions the Obama administration confronts as it seeks a housing policy that would contribute to the economic recovery.

In my mind the crucial question is whether to help distressed homeowners, and the right answer is no:

1. these homeowners assumed the risk of buying houses; they should accept the consequences;

2. homeowners who default will acquire a bad credit rating, but they will be free of their debt burden.  Instead of putting money into an asset they may never actually own, they can start to accumulate savings.

2. foreclosing on these homeowners does not mean homeownerhip will decline; it means the houses will become available at low prices to others with limited income.  What's wrong with that?

I agree with President Obama; the U.S. Congress should repeal "don’t ask, don’t tell" and eliminate any federal prohibition on gay service.

The usual argument made for excluding gays from the military is that, because of anti-gay sentiment among some non-gay soldiers, the presence of gays might undermine cohesion and discipline. No evidence, however, supports this view; gays have served with minimal problems in numerous countries (e.g., Australia, Canada, Germany, Israel, Italy, United Kingdom, Switzerland). The same arguments made against gays in the military were offered decades ago in the United States to oppose racial integration of the armed forces, yet these forces are now entirely integrated with minorities disproportionally represented.

Whether policy should compel the armed forces to allow gays to serve openly – or just leave the issue to the individual armed forces – is a more subtle question. A decentralized approach might lead to slower change, but it might also produce a less polarizing transition.

In the land of Mahatma Gandhi, Indian gun owners are coming out of the shadows for the first time to mobilize, U.S.-style, against proposed new curbs on bearing arms.

When gunmen attacked 10 sites in Mumbai in November 2008, including two five-star hotels and a train station, Mumbai resident Kumar Verma sat at home glued to the television, feeling outraged and unsafe.

Before the end of December, Verma and his friends had applied for gun licenses. He read up on India's gun laws and joined the Web forum Indians for Guns. When he got his license seven months later, he bought a black, secondhand, snub-nose Smith & Wesson revolver with a walnut grip.

"I feel safe wearing it in my ankle holster every day," said Verma, 27, who runs a family business selling fire-protection systems. "I have a right to self-protection, because random street crime and terrorism have increased. The police cannot be there for everybody all the time. Now I am a believer in the right to keep and bear arms."

Two aspects of this story are especially worth noting.

First, it illustrates how escalating violence can increase the demand for guns; hence, the observation that guns and violence coincide in no way shows that guns cause violence.  This is a standard fallacy committed by advocates of gun controls.

Second, the story suggests that guns benefit owners by making them feel safer.  

If this perception of safety is false, or if it pervents more effective steps to avoid being a target of crime, then this feeling could be counterproductive. 

But neither of those conditions seems likely.  So evaluation of gun control laws must recognize that they reduce the well-being of exactly the people these laws claim to help.