Opportunism and the Debate about Deficits and Debt: Why Democrats Should Not Use Republicans' Hypocrisy as a Weapon
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan critiques a frequently-heard argument that is made by Democrats. The argument goes as follows: The Republicans are hypocrites in that they purpose to oppose deficit spending, yet they also support low tax rates on taxpayers whose Adjusted Gross Income is over $250,00o -- a position that will inevitably require deficit spending. Buchanan contends that the Democrats are unwise to make this argument, because it plays into a greater fallacy: that deficit spending, and debt generally, are inherently bad. Buchanan discusses the history that has convinced many Americans that deficits are, by nature, bad; discusses deficits as a leading issue in 2010 electoral debates; considers why Democrats and Progressives are now embracing anti-deficit rhetoric; and argues that their doing so is a grave mistake.
Thursday, December 16, 2010
Financial Fraud, Ponzi Schemes, and Legitimate Economic Policies: Misunderstandings of, and Overreactions to, the Financial Crisis and the Great Recession
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan argues that commentary and reportage on the financial crisis and the recession have, in many cases, led to common and dangerous misunderstandings about what actually occurred, and why. In particular, Buchanan focuses on a number of popular beliefs that he contends are clear fallacies: Debt, he contends, is not inherently bad, and certain policy choices (such as Social Security and monetary policy, including the policy of "Quantitative Easing") have lately been falsely characterized as Ponzi schemes. Buchanan warns that baleful consequences may ensue if Americans continue to opposite needed policy measures based on a misunderstanding of their nature.
Thursday, December 2, 2010
Do Voters Really Care About Deficits? Why They Don't, and Why They Should Be Much More Worried About What Might Be Done in the Name of Deficit Reduction
In the wake of Tuesday's election, FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan argues that -- while many successful Republican candidates took an anti-deficit stance -- that stance is unlikely to have been the true reason for their victories. Buchanan contends that the deficit is likely standing in for other concerns that voters do care about, such as concerns about unemployment and flagging economic growth. Thus, he suggests that victorious candidates should not be too fearful of deficit spending when in office, if the purpose of the spending is a worthy one, and one that is likely to serve purposes that are closer to voters' hearts and pocketbooks.
Thursday, November 4, 2010
The Public's Distrust of Public Employees: An Old Problem Has Become Much Worse in the Great Recession
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan argues that Americans' historic distrust of public employees has now become more intense, and even dangerous, in the recession --- but that, on the facts, this distrust is not merited. Buchanan examines the roots of the public's resentment of public employees, and explains how public employees play an important but often ignored role in stabilizing the economy. Buchanan argues that public employees' services can be -- and in some case, have been -- improved by smart management, and he cites examples. He also notes that there are serious downsides to the privatization of government services, citing problems with civilian contractors for the military and with the attempted privatization of tax collection as prime examples. Buchanan contends that we need to stop scapegoating public employees -- who he says are not responsible, for example, for a dearth of public investments, as some claim.
Monday, October 25, 2010
What Are We Doing Today to Hasten the Next Financial Crisis? The Ticking Time Bomb of Partial and Ill-Conceived Financial Market Reform
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan takes issue with the financial reform that has thus far been enacted in an attempt to prevent future U.S. recessions. Buchanan describes the regulatory reform that responded to the economic crisis that began in 2008; argues that this was the worst possible time to trust regulators, yet that is exactly what we did in the Dodd-Frank legislation; and explains why he is skeptical about substantial further reform occurring before a new financial crisis occurs in the future.
Thursday, October 7, 2010
Extending the Bush Tax Rates for High-Income Earners: The Weakness of the Economic Arguments Explains the Ridiculous Political Posturing
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan considers and rebuts the central arguments in favor of extending the Bush tax cuts for high earners. In particular, Buchanan contends that -- contrary to arguments that were made recently in a letter to Speaker Nancy Pelosi from conservative and swing-district Democrats -- extending the cuts will not (1) provide businesses with greater certainty; (2) alleviate the recession; (3) encourage the rich to create more wealth; or (4) help small businesses.
Thursday, September 16, 2010
Scaring the Kids and Grandkids: Tactics to Scare Younger Americans Into Supporting Unnecessary Changes in Social Security
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan comments on the current controversy over whether to alter Social Security. Buchanan contends that there is no need for Social Security to be an issue at all right now, let alone a major issue. Among other points, he counters the frequently-heard arguments that it would be better to have each generation pay for its own retirement; and that we should be troubled that Social Security is merely a set of IOUs. Buchanan concludes that attempts to scare people in their 20s and 30s into thinking the Social Security system is broken are ill-grounded, and that we would do best to focus on other, more genuine policy priorities.
Thursday, September 2, 2010
Discipline for Government Spending: Mr. Boehner Offers the Germ of a Promising Approach to Budget Reform
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan comments on a recent remark by House Minority Leader John Boehner setting forth a proposed test for federal budget items: whether an item is so vital that we are willing to ask our children and grandchildren to pay for it. Buchanan contends that Boehner's test has a good idea at its core -- the idea that some budget items are worth borrowing to finance, though others are not -- but that the test itself is the wrong one to select. Buchanan also argues that Boehner has been wrong in suggesting, on other occasions, that federal borrowing is inherently a bad thing. Finally, Buchanan suggests that an independent board's capital-budgeting system could importantly improve the way in which our government spends and borrows.
Friday, August 27, 2010
More Good News on Social Security: Reality Collides With Calls to "Fix" the System Sooner Rather than Later
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan argues -- in the wake of the release of last week's annual Trustees' report on Social Security -- that claims that the Social Security system is in trouble, and that there will be nothing left for future generations, are strikingly off-base. In fact, Buchanan concludes that the nation's retirement system is fundamentally healthy. Buchanan explains the key findings in the Trustees' report; cites political motivations as part of the reason for Social Security doomsaying; and explains why there is a clear consensus that future American workers, thanks to additional knowledge and improved technology, will be more productive and will raise living standards for both themselves and retirees. He also compares several predictions about Social Security's future, and concludes that the system is best left alone, for minor tinkering would likely open the way to an unneeded and even harmful re-vamp.
Thursday, August 12, 2010
Fighting the Recession With Deficits: Do Advocates of More Stimulus Spending Need to Prove Their Credibility?
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan comments on the ongoing debate regarding whether legislation authorizing further stimulus spending (including spending to cover unemployment benefits) should be passed. In particular, Buchanan takes issue with the argument -- made, for example, in a recent Washington Post editorial -- that those who advocate short-term stimulus spending lack credibility because they do not also offer a long-term plan to control future deficits. Buchanan contends that these two points should be de-coupled, and that current short-term stimulus proposals ought simply to be assessed on their own merits.
Thursday, July 15, 2010
The Debate Over Unemployment Benefits: Economics is Complicated, Heartlessness is Simple
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan argues that the debate over extending Americans' unemployment benefits, in the midst of the Great Recession, shouldn't be happening at all. Buchanan contends that this issue is a no-brainer, as extending benefits is not only the compassionate thing to do, but also a measure that will predictably increase spending and thus bolster the economy. Buchanan also offers responses to those who oppose an extension of benefits based on the idea that unemployment benefits incentivize people not to work, or the idea that only "permanent" income (not limited-time payments) incentivizes people to spend money. Buchanan argues that neither of these ideas holds water when there are few or no jobs to be found; when benefits are stingy and short-term at best; and when workers have no choice but to spend the benefits they receive, to support their families.
Thursday, July 1, 2010
Drawing Lines for Business Behavior: Lessons from the Rand Paul Controversy and President Obama's Response to the Gulf Disaster
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan makes an interesting connection between two recent controversies involving, respectively, Republican Senate candidate Rand Paul and President Obama. Buchanan contends that analysts -- such as one in the New York Times -- have let Paul off the hook too easily for his controversial remark on "The Rachel Maddow Show," disagreeing with the Civil Rights Act's prohibition on discrimination on the basis of race in the provision of goods and services. Rather than deeming such civil-rights controversies to be mere artifacts of the Sixties, as the Times analyst suggested, Buchanan contends that civil-rights law is alive and well, and that Paul's views on that area of law still matter, even though no one contends that Paul is himself a racist. Buchanan also argues that, at least since the Reagan era, too many Democrats have shared Reagan's and Paul's view that regulating business is inherently bad. He also notes that a reflexive trust in business may well have been one of the forces behind President Obama's much-criticized initial response to the BP oil spill disaster.
Thursday, June 17, 2010
In the Wake of the Gulf Oil Disaster, We Must Conserve Energy, Develop Alternatives, and Revisit the Choice Among Oil, Coal, and Nuclear Energy
What can we learn from the Gulf oil disaster? FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan suggests that there are a number of lessons that this event can teach us, regarding the energy choices we should make. Now, he notes, we know some things we did not know before the disaster: We know that this kind of low-probability event really can happen, and we know what its actual, not just theoretical, costs can be. In addition to reminding us that we need making conservation even more of a priority, Buchanan contends, the Gulf disaster may teach us that of our energy choices, coal is the most attractive. Although the coal option, too, has serious flaws, Buchanan argues, the worst-case scenarios for coal are far less bad than those for oil, which risks more Gulf-like disasters, or for nuclear energy, where another Chernobyl or a terrorist incident, is possible.
Thursday, June 3, 2010
Why New York's (and Other Jurisdictions') Food Regulations Do Not Violate Freedom of Choice: The False Notion That Our Tastes Are of Our Own Making
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan responds to arguments that food regulations such as New York City's -- which both provide information to consumers about food, and seek to change the types of food that are sold in the city -- are an unacceptable incursion on Americans' freedom. Buchanan urges readers, before condemning such regulations, to consider the ways in which our food choices are already far from free -- for instance, we are influenced by eating habits formed when we were young children, surrounded by the results of our culture's deep-seated views on food, and affected by food industry messages that serve the interests of profit, not health, and have contributed to our obesity -- and childhood obesity -- crisis.
Thursday, May 20, 2010
Oil Spills, Mine Disasters, and Everyday Environmental Degradation: The Suddenly Unhidden Costs of Our Standard of Living
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan comments on the lessons we can learn from the Gulf of Mexico oil spill disaster and similar incidents. Buchanan examines the true costs associated with environmental harms, and notes that the spill disaster has brought with it not only new harms, but also new information that must now be taken into account in our decision-making -- for instance, information about flaws in our safety and mitigation technologies. Buchanan also raises the deeper question of whether, as Americans, we have made costly mistakes in our lifestyle choices by refusing to make outlays of money (such as for high-speed trains) that would have been beneficial in the long run, and opting for environmentally-damaging choices such as driving cars and eating copious amounts of meat. He stresses that we need to take into account not just direct costs, but invisible or low-visibility indirect costs as well, in assessing the toll our policy and lifestyle choices take.
Thursday, May 6, 2010
Do Some Americans Pay No Taxes? The Contrived Claims That Everyone Must Help Pay for the Government
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan addresses the argument -- which has been made recently by USA Today's editorial staff and others -- that every American above the poverty level should pay at least some minimal amount of taxes, so that they will have a stake in our system. The argument was triggered by reports that, currently, forty-seven percent of Americans pay no federal income tax. Buchanan responds with a number of points -- including the point that it will be difficult to define the minimal stake that USA Today would require; the point that even those who earn minimum wage and support families must still pay, percentage-wise, the same state sales tax that much wealthier people pay; and the point that the rich benefit disproportionately from some of the services (such as those of our legal system) that taxes fund.
Thursday, April 22, 2010
High Unemployment and Political Extremism: How Much Worse Might Political Conditions Become if the Job Market Remains Depressed?
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan comments on the harms, both direct and indirect, that are being caused by our dire unemployment situation. In particular, Buchanan focuses on the risk that continuing high levels of unemployment could trigger significant social unrest: Could recent incidents be the leading edge of a wave of violence and political extremism in America? Buchanan warns that this potential harm of unemployment should not be ignored simply because it is less easily quantified than unemployment's other costs.
Thursday, April 8, 2010
Social Security Scare-Mongering and Trust Between Generations: There is No Crisis, Either Short-Term or Long-Term
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan takes strong issue with media claims -- including claims made in a front-page New York Times article last week -- of a Social Security crisis. Buchanan contends that, contrary to suggestions that Baby Boomers will exhaust Social Security funds, today's younger workers will definitely be able to count on Social Security when they retire. He accordingly argues that the so-called Social Security "tipping point" is, in reality, a statistical blip.
Thursday, April 1, 2010
Is the IRS the Most Trustworthy Agency in the Country? Even Republicans Seem to Think So
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan defends the Internal Revenue Service in the wake of a number of harsh recent criticisms of the agency. Buchanan argues that actions speak louder than words in this area -- for Republicans and Democrats alike show their trust in the IRS by repeatedly employing the tax system as a way to carry out government policy. Buchanan notes, for example, that President Obama and former President George W. Bush both have employed tax credits as a way of favoring their policy preferences. Buchanan points out, too, that if such policies were, instead, to be implemented using other methods, administrative headaches would doubtless still persist, no matter which method was chosen. Buchanan concludes that eliminating or seriously curtailing the reach of the IRS, as some have proposed, would only mean reinventing a very expensive wheel.
Thursday, March 11, 2010
The Austin Tragedy and the Dangerous Myth of the IRS Out of Control
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan argues that it is unfortunate that the recent Austin, Texas plane attack on an Internal Revenue Service (IRS) building has spurred criticism against the IRS in some quarters. Buchanan notes that the facts show that the IRS -- despite its negative popular image -- is actually a model government agency. He also explains how Nixon-era funding cuts and later-debunked claims made in 1998 Senate Committee hearings led to longstanding misimpressions about the agency and its employees.
Thursday, February 25, 2010
Our Grandchildren as Political Props: What Are Our Real Obligations to Future Generations?
We are told that giving benefits to older Americans today will only hurt our children and grandchildren in the future-- but is this claim, voiced by both the conservative David Brooks and the liberal Al Franken, really true? FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan says that the answer is a strong "No." Buchanan argues that even under the most pessimistic forecasts, future Americans will be far better off than Americans today, with future living standards more than doubling current standards of living, due to heightened productivity. Accordingly, he contends, the real problems facing future generations will concern their polluted environment, not their economic state.
Thursday, February 11, 2010
If We Must Obsess About Budget Deficits, Can We At Least Measure Them Correctly?
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan contends that -- despite what many in the media have been claiming -- governmental budget deficits are not inherently bad. He urges, too, that given the reality that deficits are likely to be unfairly and categorically stigmatized, they should at least be measured correctly. Buchanan explains how the federal deficit is currently measured and why that measure can be misleading, and notes the importance of the interrelationship between state and federal budgets. He contends that the current politics of charge and counter-charge should be replaced by reasoned bipartisanship if we are truly to form a rational, constructive approach to the federal budget. And, most significant of all, Buchanan deems President Obama's new plan to cut spending to address deficits a "shockingly dangerous policy error" -- one recalling a colossal error that was made by FDR in the Great Depression.
Thursday, January 28, 2010
Taxing Wall Street Bonuses: An Imperfect But Necessary Measure
Should the federal government tax Wall Street financiers' bonuses -- including their 2009 bonuses, as well as bonuses they may receive in the future? FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan answers with a strong "Yes." Buchanan contends that the dramatic gap between America's have and have-nots calls for more progressive taxation generally, and argues that taxing Wall Street bonuses is a good start -- for a partial move toward a more progressive tax system is much better than no movement at all. He also argues that the government bailout provides strong additional justification for bonus-taxation proposals, and suggests that claimed fears of an exodus of talent from Wall Street if bonuses are taxed are not convincing.
Thursday, January 14, 2010
Political Power in the Auto Industry: Why Did Congress Protect Car Dealers?
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan comments on an unusual non-spending provision in the omnibus spending bill that the House just passed. The provision states that if General Motors and Chrysler want to stop doing business with any of their dealers, then the dealers may appeal that decision through arbitration. As Buchanan notes, the provision -- if it becomes law -- could prove very significant, as the two auto companies have announced plans to discontinue their business relationships with more than 2,000 dealerships across the country. Buchanan questions the wisdom of the provision, examines the roots of the dealerships' power, and notes other ways in which that power reveals itself -- such as the lack of any real alternative to the notoriously problematic dealership system.
Thursday, December 17, 2009
The Real Damage From Investing Too Little in Higher Education: State Budget Cuts and Federal Responsibilities
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan contends that the federal government should provide support for the states' higher education systems, which have faced massive funding cuts as a result of the recession. Buchanan describes the economic benefits of higher education, and warns that without federal support for state colleges and universities, America will become a permanently poorer country in the near future. He focuses, in particular, on the ominous current situation of California's famed public universities, and on the cautionary tale arising from the Thatcher government's cuts to British higher education in the 1980's, which took a ruinous toll.
Thursday, December 3, 2009
Why the U.S. Government Must Invest in Infrastructure Now, Or Pay A Steep Cost
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan argues that it is imperative for the U.S. to adopt policies that will improve its infrastructure, especially its transportation infrastructure -- in order to preserve the nation's competitiveness, while also making headway in reducing its current troubling levels of unemployment and underemployment. Drawing examples from his own recent travel, Buchanan points out that travel in many other countries compares favorably to travel in the U.S., on a number of different scales. He warns that these kinds of contrasts will affect where businesses locate, where tourists visit, and what the world thinks of America. Buchanan also contends that the past economic stimulus included too few infrastructure projects, and more should be initiated.
Thursday, November 19, 2009
Should Federal Agencies or Courts Protect Consumers in Financial Markets?
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan poses, and suggests an answer to, the following question: When a family’s house is at risk of foreclosure, or when credit debt threatens to push them into bankruptcy, should they be able to turn to an agency whose explicit role is to protect them, or should their only recourse be to fight for their future through the courts? Buchanan explains the limited role that courts can play -- by invoking equitable doctrines or, in one recent case, by discharging a mortgage in bankruptcy after the bank could not prove that it owned the mortgage. In light of this limited role, he contends that, in these areas, agency power should supplement the power of the courts.
Thursday, November 5, 2009
The Proposed Consumer Financial Protection Agency: Enhancing, Not Restricting, Free Markets
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan comments on a frequent objection to President Obama's proposed new agency, the CFPA. The CFPA's mission would be to change the regulatory rules regarding credit cards, mortgages, and other consumer financial transactions. The objection holds that a free market approach, with minimal or no regulation, is superior to regulations such as those the CFPA would provide. But Buchanan responds that this arena is already regulated in important ways-- and must inherently always be subject to regulation. Thus, the only real question here, he contends, is whether the regulations at issue will be pro-financial institution or pro-consumer -- and right now, he says, they are slanted much too far in the institutions' favor.
Thursday, October 22, 2009
Financial Market Reform: Two Goals, No Frills
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan considers two key regulatory goals -- keeping banks small enough that they stay out of the "Too Big to Fail" category, and keeping salaries and bonuses for financial executives and money managers in line with the ideal incentive structure. Regarding bank size, Buchanan points to Japan's example as a cautionary tale, and regarding incentivizing executives, Buchanan notes that research shows that executives may actually be more interested in how much they make relative to others, than in how much they make absolutely. In both areas, Buchanan advocates bright-line rules, rather than flexible standards, so that compliance (or lack of it) is crystal clear.
Thursday, October 8, 2009
Stop Denigrating Government: There is No Economy Without It
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan argues that recent claims that the government should stay out of markets -- such as the market for health insurance -- take an all-or-nothing stance that clashes with reality. Drawing in part upon the work of Professors Liam Murphy and Thomas Nagel, Buchanan suggests that the idea of property -- or markets -- without government to enforce related law is incoherent. Accordingly, he calls for reframing the debate to ask not whether government should intervene in the economy, but simply how it can do so in the most positive possible way.
Thursday, September 24, 2009
Can Capitalists Learn to Love Socialized Medicine?
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan offers an interesting response to those who object to the government's involvement in America's health care system. Buchanan's argument draws upon the study "Retirees at Risk: The Precarious Promise of Post-Employment Health Benefits," by Richard L. Kaplan, Jordan Zucker, & Nicholas J. Powers. Buchanan points out that when employers break promises -- due to bankruptcy or other reasons -- to take care of their employees by providing retirement health care benefits, the government must inevitably step in, rather than leaving workers to suffer. Buchanan suggests that government health care is, in this way, an ally to both workers and employers. He also notes that government health care could be even more of an ally to business, if coverage were to be broadened far beyond situations where employers breach their contracts to provide worker health care, to reach all workers.
Thursday, September 10, 2009
Rationing Health Care: We Have Always Done It, We Do It Now, and We Always Will
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan argues that charges that the Obama health care plan will "ration" care are both accurate and irrelevant to the debate. Buchanan explains how any health care system, like any system that allocates goods and services, must technically ration them. He also argues that the current system of private health insurance not only rations care, but rations it in irrational ways -- for instance, by making some options (such as getting care covered while traveling) so burdensome that insured persons simply eschew them, despite possible risks to their health. Buchanan urges that the debate must move toward a comparison of two systems of rationing -- the one we have now, and the one we might have under Obama's plan -- and away from the loaded and misleading use of the term.
Thursday, August 27, 2009
Can the Public Option in Health Care Reform Be Saved? Should It Be? Part 2
In Part Two of a two-part series of columns, FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan continues his commentary on the ongoing debate over health care reform -- and in particular, the "public option." (If the "public option" proposal becomes law, then Americans will still have the choice among various private insurers, but will also have the choice to opt to get health insurance through a non-profit plan run by the government.) In Part One of this series, Buchanan focused upon the two key arguments in favor of the public option. In this column, Part Two, Buchanan contends that a public insurer would be unlikely to be able to keep its cost down, and that, even if it did so, it would still suffer bruising, misleading, yet likely successful attacks from critics. Buchanan concludes that the Congressional regulation of private health insurers may provide an approach superior to that of the public option.
Friday, August 14, 2009
Can the Public Option in Health Care Reform Be Saved? Should It Be?
In Part One of a two-part series of columns, FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan weighs in on the ongoing debate over health care reform -- and in particular, the "public option." (If the "public option" proposal becomes law, then Americans will still have the choice among various private insurers, but will also have the choice to opt to get health insurance through a non-profit plan run by the government.) Buchanan suggests that the public option may have a fatal flaw, but it's not one of those critics tend to mention. The real problem with the public option, he argues, may be that politicians’ (perhaps deliberate) misunderstanding of the mechanics of public finance will cause them to unfairly attack the public option, and thus undermine public support for it.
Thursday, August 13, 2009
Should Advocates of Single-Payer Health Insurance Oppose the Public Option?
FindLaw guest columnist, Cornell Visiting Scholar, George Washington law professor, and PhD economist Neil Buchanan explains some of the trade-offs involved in the healthcare reform proposals Congress is currently considering. Buchanan focuses especially on the "public option" proposal -- pursuant to which the federal government would create a public health insurance company to compete with private health insurance companies. As Buchanan explains, one theory behind the public option is that it will help keep private insurers' bills and practices in line, since patients who feel mistreated by private insurers could opt out into the public system. But Buchanan cautions that the public option also has a downside: It could incentivize private insurers to test the limits of Congress's proposed regulations aimed at preventing insurers from cherry-picking the healthiest patients and dropping those who become sick -- since patients who are barred at the start, or eventually dropped, could be relegated to the public option, allowing insurers to both save money and save face.
Thursday, July 30, 2009
Everyone Seems to Agree That Budget Deficits are Harmful. Can They All Be Wrong?
FindLaw columnist, George Washington law professor, Cornell Visiting Scholar, and Economics PhD Neil Buchanan argues that budget deficits -- the specter of which is often used by politicians to scare Americans -- can actually be healthy for an economy, especially one that is mired in a recession like ours. Buchanan contends, accordingly, that President Obama should be not put on the political defensive on the ground that his stimulus package contributes to deficit spending. Paralleling deficits with medicine and then with vitamins, Buchanan encourages readers to see their positive side, and notes that while deficit spending run the risk of being tainted by logrolling and pork, it also can be a boon to all if done correctly.
Thursday, July 16, 2009
How is Money Created? Debunking Some Myths About Recent Policies to Stabilize the Financial System and the Economy
FindLaw columnist, George Washington law professor, and Economics PhD Neil Buchanan argues that the now-common charge (made repeatedly in The New York Times) that the Federal Reserve is creating money "out of thin air" -- and that this decision will inexorably cause inflation and even hyper-inflation -- is misguided. Buchanan contends that the real risk is, instead, that the government is not doing enough to address the recession. He also explains why gold-standard proposals would not ultimately defeat the "money out of thin air" concern, even if that concern were valid. Buchanan concludes that the question is much more subtle than the "thin air" claim suggests: It is not about whether the Fed should create money (which it inherently must do), but about how, specifically, it should decide how much money to create.
Thursday, June 18, 2009
Mortgages, Housing, and the American Dream: Do We Really Need to Own Our Homes?
FindLaw columnist, George Washington law professor, and Economics PhD Neil Buchanan argues that the current housing crisis should prompt us all to carefully reconsider the fundamental American assumption that homeownership is superior to renting. Buchanan notes that our legal system offers multiple incentives for homeownership, but asks if those incentives are justified in light of the fact that homeownership leads families to invest virtually all their capital in one place, rather than diversifying investments. Buchanan points out that for many, it is preferable to rent rather than buy; that many homeowners only stay in a given home for a few years anyway; and that homeownership always carries significant risks, which have now been intensified and exposed by the recession.
Thursday, May 28, 2009
The 2009 Social Security Trustees' Report: Good News Behind the Headlines
FindLaw columnist, George Washington law professor, and Economics PhD Neil Buchanan argues that the dire headlines and commentary about Social Security, in the wake of this year's Trustees' report, paint a much bleaker picture than is truly accurate. Buchanan puts the facts and figures regarding Social Security carefully in context, and assuages young people's fears that, by the time they retire, there will be nothing left for them. In fact, he contends, there is no question that their benefits' buying power will exceed that of their grandparents' benefits. Buchanan also warns about conflating the fates and situations of Social Security and Medicare, when the latter is indeed in serious trouble.
Thursday, May 21, 2009
Is it Really So Tough to Be Rich? The New, Brazen, and Completely Dishonest Attack on Progressive Taxation
FindLaw columnist, George Washington law professor, and NYU visiting law professor Neil Buchanan takes strong issue with recent arguments suggesting that America's rich are overtaxed. Buchanan contends that such arguments -- as put forward by such proponents as former Presidential Press Secretary Ari Fleischer, writing in the Wall Street Journal, and the Republican staff of Congress's Joint Economic Committee -- clash with fundamental American notions of fairness, and at times, are presented in a deceptive and misleading manner.
Thursday, April 23, 2007
Shooting From the Hip, or Taking Careful Aim: How Should People Make Decisions? A Review of Malcolm Gladwell's Blink and Steven Levitt and Stephen Dubner's Freakonomics
FindLaw book reviewer, Rutgers law professor, and economist Neil Buchanan weighs in on two bestselling books that tackle -- explicitly or implicitly -- the question of how decisions are best made. Buchanan argues that the surface differences between the quick decisionmaking described in Malcolm Gladwell's Blink, and the numbers-based analysis done in Steven Levitt and Stephen Dubner's Freakonomics, mask a strong commonality between the approaches of the two books.
Friday, Oct. 07, 2005
Under the U.S. Tax System, Do the Rich Really Get Richer? A Review of David Cay Johnston's Perfectly Legal
FindLaw book reviewer and Rutgers tax law professor Neil Buchanan assesses reporter David Cay Johnston's new book, Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich--and Cheat Everybody Else. Buchanan argues that, as Johnston's book illustrates, tax law is an area fraught with myths, misconceptions, and ideological distortions.
Friday, Jun. 11, 2004
Proof Through Repetition and the "Liberal Bias" of the U.S. Media: A Review of Eric Alterman's What Liberal Media?
FindLaw book reviewer and future Rutgers law professor Neil Buchanan assesses Eric Alterman's provocative recent book, What Liberal Media? Drawing on evidence from Iraq war coverage, Buchanan considers whether the media are biased in favor of liberalism, conservatism, money, power, or any or all of the above.
Friday, Jun. 20, 2003
Are Taxes on Dividends Really "Double Taxation," As President Bush Claims? Why the Answer Is No- And Why That is the Wrong Question to Ask, Anyway
FindLaw guest columnist, Rutgers law professor and economics Ph.D. Neil H. Buchanan explores Bush administration claims that taxing dividends constitutes a double taxation. Buchanan points out that what matters is total taxation, not how many times taxation is imposed. Furthermore, he illustrates how taxes on corporate versus individual incomes target different tax bases.
Thursday, Feb. 20, 2003
The Appropriate Limits of Nonpartisanship in a Crisis:
Why The President's Mandate Does Not Cover The Capital Gains Tax Cut And Other Proposals
FindLaw guest columnist, Michigan economics professor and law student Neil Buchanan discusses what the limits on calls for Congressional unity should be. Buchanan argues that while nonpartisanship may make sense on issues truly related to the war on terrorism and the terrorist attacks and their effects, some proposals -- like the capital gains tax cut and Bush's federal judgeship nominations -- are not that type of issue. Indeed, Buchanan contends, a capital gains tax cut will only aggravate the economic slowdown, not remedy it.
Friday, Sep. 21, 2001
The Trillion-Dollar Breach of Contract: Social Security And The American Worker
FindLaw guest columnist, Michigan economics professor and law student Neil Buchanan discusses the findings of President Bush’s commission to evaluate the state of the Social Security system. Buchanan portrays the commission’s recommendation to privatize social security as a breach of what was, in essence, a contract with the public made during the Reagan administration. At that time, Buchanan argues, an agreement was reached between the not-so-rich who pay more in social security tax and the rich who enjoyed years of reduced income taxation. As Buchanan points out, the deal struck was for surpluses from regressive social security taxes to go into the Treasury until the baby boomers started to push social security into the red, at which point additional income tax on the rich would chip in when social security began to run deficits. Buchanan argues that attempts to privatize social security now would represent a $1 trillion breach of this contract with the public.
Thursday, Aug. 30, 2001
Making Microsoft Play Nice?: Why "Conduct Remedies" Won't Work, And A Breakup Should Be Reconsidered
FindLaw guest columnist, Michigan economics professor and law student Neil Buchanan addresses the recent D.C. Circuit Court of Appeals Microsoft ruling, which set aside a district court order to break up Microsoft. He argues that while the D.C. Circuit forbade such "structural remedies" to Microsoft anticompetitive threat, "conduct remedies" may be of little help. Noting Microsoft's track record with conduct remedies, Buchanan posits a possible return to structural remedies in the future of the Microsoft antitrust litigation.
Tuesday, Aug. 07, 2001
The D.C. Circuit's Gift to Microsoft: Judge Jackson And The Appearance Of Partiality
FindLaw guest columnist, Michigan economics professor and law student Neil Buchanan discusses the D.C. Circuits undoing of a district court order to break up Microsoft. As Buchanan notes, the Court of Appeals' stated reason for setting aside the district court's order was District Judge Thomas Penfield Jackson having created an appearance of partiality by making unflattering comments about Microsoft and Bill Gates in the press. Buchanan argues that Judge Jackson should not have been disqualified -- because his comments came after the closing of arguments from both sides, and were based on evidence he saw in the case, not on any predetermined partiality.
Thursday, Jul. 05, 2001
Is Your Vote a Contract with the Government?: Form Over Substance in the Supreme Court's Election Decision
FindLaw guest columnist, Michigan economics professor, and law student Neil Buchanan discusses the concurrence by Chief Justice Rehnquist and Justices Scalia and Thomas in the Bush v. Gore decision. Buchanan argues that the underlying rationale behind the concurrence is a surprising one -- drawn from contract law. The concurrence points out that voters in Florida received specific written instructions that told them to make sure that their votes were marked clearly (that is, without hanging chads and the like). Thus, Buchanan contends, if one sees a vote as a contract with the government, under which one's vote is only counted if the instructions are followed, the concurrence may make some sense. But the problem, he notes, is that it is a mistake to see a vote as a contract with the government in the first place.
Tuesday, Dec. 19, 2000