The View from Right Field

“Treat Them Mean, Keep Them Lean” Is Terrible Advice for Any Situation – Political, Economic, or Personal

A week ago, Chris Giles wrote in the Financial Times about the belief, fashionable in both politics and economics, “that companies respond best to a ‘treat them mean, keep them lean’ approach.”¹  Mr. Giles concluded his piece:

“While there are some exceptions, making life difficult for business does not improve corporate performance.  ‘Treat them mean, keep them lean’ is terrible advice for healthy relationships.  It is just as bad in economic policy.”

Which I agreed with in a letter than was published in Tuesday’s FT, making a point I have made before (since FT has a very high paywall, here is the letter, as published):

Is This the Way to Set Up New Social Programs?

As Democrats scramble to come up with a bill of social and climate-related programs that can pass, two big questions seem to dominate.

First, while normally you would think that government should decide what it needs to do and then come up with a way to pay for it, that is not what Democrats are doing.  Rather, they are figuring out how much they want to spend first.  Actually, it’s not how much they want to spend.  It’s what number sounds good politically.  $3.5 trillion was too high for some people.  Joe Manchin said $1.5 trillion was okay, but that’s too low for the progressives.  So they will probably come up with some number in between, though apparently closer to $1.5 trillion than $3.5 trillion.  Still, their first question isn’t what to do; it’s how much to spend. 

National Health Insurance – The Other Kind

When people think of health insurance, they normally think of the insurance that pays their medical bills.  And when they think of national health insurance, they think of a national system that either provides people health care or pays their bills.  England has a National Health Service that does the former.  The United States has Medicare, which does the latter.¹

But I would suggest there is another kind of national health insurance.  The purpose of this kind of national health insurance isn’t to pay bills or provide services.  It is, rather, to make sure there is enough capacity in the health care system so that you can get care when you need it, separate and apart from who pays for it.

Big Changes Coming?

Monday is the Democrats’ self-declared day of decision, the day Democratic leaders in Congress have set as their deadline for passing a huge package of new social programs.  Whether it is going to pass – and/or what’s going to be in it – is unclear, but Monday is supposed to be the day. 

The programs include things that European countries already have, so we should have them, too, we are told.  Of course, Democratic leaders don’t explain that Europeans get these benefits because they, i.e., the middle class, pays more taxes than we pay in the United States.  Joe Biden has said that all these new benefits are “free,” by which he means “free” for the middle (and upper middle) class, because taxes are being raised on corporations and the rich and not the middle (and upper middle) class.

Designing Things For the People Who Use Them

Tim Harford wrote recently about the problems he had interpreting the instructions for a mail-order Covid test.¹  It was, he said, a matter of what behavioral economists call “the curse of knowledge,” i.e., “the difficulty a well-informed person has in fully appreciating the depth of someone else’s ignorance.” 

As Mr. Harford notes, “[a]nyone who has assembled a Lego set can attest that, with enough care, it is possible to provide clear instructions even for complex tasks.”  The problem is that too often people don’t take “enough care.”

Covid and Charging More for Not Getting the Vaccine

Some governmental units and companies are requiring their employees to get a Covid vaccine shot: staff at nursing homes and hospitals; teachers; and more.  Delta Airlines is taking a different approach: they’re adding a $200 monthly surcharge on the cost of health insurance plans for employees who won’t get a shot.¹  The reaction seems to be: that’s a great idea.  After all, if you get Covid and have to go to the hospital, which is a lot more likely if you don’t get a shot, it costs a lot of money. 

I understand the reaction.  We need to get people vaccinated.  Requiring them to get a shot.  Adding a surcharge to an employee’s health insurance premium.  Whatever it takes.  This is a pandemic.

Dreamers – Again

The legal status of “Dreamers,” i.e., children who illegally entered the United States with their parent(s), generally before June, 2007 (though maybe that date would be pushed back by some), is in the news again.  A federal district court in Texas has held that Barack Obama’s Deferred Action for Childhood Arrivals, i.e., Dreamers, program is unlawful and has barred the Biden administration from adding new people to the program.  A good explanation of the decision, by Jonathan Adler, a professor at Case Western Reserve University School of Law, can be found here. 

Several comments¹:

1. Former President Obama tweeted on Saturday that “[i]t’s long past time for Congress to act and give them the protection and certainty they deserve”, which is true.  It is too bad that former President Obama didn’t propose a Dreamers-only law when he was president.  He only wanted to do a comprehensive immigration bill.  After the 2010 election, that was a non-starter, whether for good or ill.  It is possible, however, that a Dreamers-only bill might have gotten enough Republican support to pass.  I don’t know.  But former President Obama didn’t try.  It may have been that there were not enough Democrats willing to pass a Dreamers-only bill.  Maybe there were so many Democrats who wanted a comprehensive immigration bill and were unwilling to break it into parts and vote on the parts individually, that a Dreamers-only wouldn’t have gotten enough Democratic votes to pass, even if some Republicans would have voted for it.  We’ll never know because former President Obama didn’t try.²

2. Also, the Obama administration merely issued an executive order on Dreamers.  It did not pursue t he formal rule-making processes for notice and comment under the Administrative Procedure Act.  I don’t know if that would have made a difference, but they didn’t try, which is unfortunate.  Following the proper procedures and process is always better.

3. If a Dreamers bill passes, it’s got to be the last one.  Ronald Reagan did immigration reform back in the 1980s, which included an amnesty on the basis that we would step up efforts on controlling illegal immigration and that it was a one-time only thing.  If we are going to do it again, and I would happily support a Dreamers-only bill, this has to be the last time – and we have to mean it.

4. Plus, we have to get our immigration system, both legal and illegal, under control.  Things are a disaster now.  I would like to think there are enough people of reasonably good will in Washington to try to do it, but I’m not sure.  It may be that the bases on both sides are so strong, or at least loud, that it is more important to beat the other side than to do something good for the country that might look like a bit of a victory for the other side.
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¹ Prior comments on this subject can be found here and here.
² Donald Trump was pretty much incompetent at governing, there is not much to say about his efforts.

Hunter Biden’s Paintings Tell Us How to Handle Disclosure of Contribution

Joe and Hunter Biden may have solved the problem of how we handle disclosure of contributions to political causes.  For Hunter Biden’s paintings, the Bidens are considering a plan whereby the paintings will be sold by a third-party art gallery.  The art gallery won’t tell Hunter or President Biden – or the public – who buys the paintings or even who bids on them.  Therefore, there is no possibility of corruption or improper influence.

Which seems like the solution to contributions to political causes, too.  California wanted to know the names of contributors to charities, including ones that take political positions, so it could ensure nothing untoward happened.  But the U.S. Supreme Court said no because of concerns about confidentiality and retaliation.  The Bidens may have given us the solution.

“Root Causes” Are Easy. Solutions for Today Are Hard,

When Vice President Kamala Harris went to El Paso last week, she talked a lot about the need to address the “root causes” of illegal immigration

“My trip to Guatemala and Mexico was about addressing the root causes.  The stories that I heard and the interactions that we had today reinforce the nature of those root causes: a lack of economic opportunity; very often violence, corruption, and food insecurity; and basic needs not being met, including a fear of cartels and gang violence.”

Which sounds a lot like how Democrats talk about the increase in crime: We have to deal with the “root causes” of the problem.  And it may be that dealing with these root causes, whether of illegal immigration or crime, will address the problem – ten years from now.  But talking about root causes doesn’t tell you what we need to do to address the problem now.  

Why Are Our Taxes So Messed Up? My Guess Is Spelled C-O-N-G-R-E-S-S

My previous post was about the amount of taxes rich people pay.  Based on leaks of confidential tax info (so much for secrecy of tax returns), the ProPublica website disclosed the absolutely shocking information (shocking to people who don’t pay attention) that rich people don’t pay any more taxes than the law requires.  And if the law lets them take deductions, claim credits, etc., they do it and, thereby, pay less taxes.  ProPublica was shocked.  I’m not.  I think it says more about the tax code – and the people who pass it – than it does about the amount of taxes people pay.

Which brings me to an example of the simplicity and ease¹ of our tax code: the deductions and credits for families and child care.  Before 2021, there were two basic credits: (i) a refundable tax credit of $2,000 for each child, which began to phase out when modified adjusted gross income exceeded $400,000 for a married couple; and (ii) a refundable child care credit of $3,000 per child, up to a maximum of $6,000 for two or more children, with a phaseout beginning at $125,000 for a married couple.