The Lighthouse^®

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The Lighthouse^® is the weekly email newsletter of the Independent Institute.
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Volume 16, Issue 39: September 30, 2014

1. Bureaucratic Incentives Make Airline Check-in Contest Useless
2. Obamacare Traps Some Workers in Health Plans without Hospital Coverage
3. California Officials Deride Concerns about Bay Bridge Safety
4. Debunking Democracy with James M. Buchanan
5. New Blog Posts
6. Selected News Alerts

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This summer the federal bureaucracy tasked with protecting America’s airports held a contest. Officials with the Transportation Security Administration (TSA) announced that they would award $15,000 to members of the public they believe propose the best ideas for improving air-passenger check-in lines. In an op-ed for the Washington Times, Independent Institute Research Fellow Abigail R. Hall offers reasons to doubt that the contest will significantly improve passenger satisfaction or airline security.

“Unlike for-profit firms, the agency does not face the right incentives,” Hall writes. Instead of promoting a customer-service orientation, the TSA faces strong incentives to try to convince federal budget makers that the agency serves important government objectives but that it needs more money to fully meet them.

“If the TSA were to rapidly improve speed and efficiency,” Hall continues, “this would show the government that the agency could do the same job with fewer resources. Budgets would be cut, and personnel would be released.... The contest won’t change the underlying incentives [the agency] faces.... If we are really looking to increase airport security and reduce air-travel time, we should abolish it.”

Streamlining Airport Security, by Abigail R. Hall (The Washington Times, 9/23/14)

Perfecting Tyranny: Foreign Intervention as Experimentation in State Control, by Christopher J. Coyne and Abigail R. Hall (The Independent Review, Fall 2014)

The Militarization of U.S. Domestic Policing, by Christopher J. Coyne and Abigail R. Hall (The Independent Review, Spring 2013)

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After witnessing a long series of troubles for Obamacare, supporters of the federal healthcare overhaul have been hit with another disappointing surprise: They are learning that some large companies who self-insure can comply with the law’s employer mandate by offering their workers health plans that fail to include coverage for hospital visits, mental health, MRI and CT scans, specialist services, and other benefits. Independent Institute Senior Fellow John C. Goodman believes this revelation contradicts President Obama’s promise that that the healthcare law associated with his name would give workers better—and more affordable—options for obtaining adequate healthcare coverage.

Some large employers have discovered that they can reduce the cost of complying with Obamacare by taking advantage of flaws in the federal “minimum-value” calculator, Goodman explains in Forbes. “For self-insured companies, this means that the benefits [they offer workers] can differ from the essential health benefits included in a standard plan, but the employer plan has to cover at least 60 percent of expected costs under a standard plan.” Not only can qualified employers offer their workers plans that lack coverage for hospital care and other important benefits, the workers who are offered such plans are not eligible to purchase subsidized health plans with more benefits through the Obamacare exchanges.

Whether or not the Department of Health and Human Services will alter the algorithm in its minimum-value calculator, two truths are readily apparent: Obamacare’s supporters are understandably disappointed and surprised that large employers don’t necessarily need to provide generous plans to their workers, and Obamacare’s detractors are justified in claiming that the revelation joins the list of Obamacare’s troubles—including technical problems in the rollout of the online exchanges and complications that caused the Obama administration to postpone key provision of Obamacare.

What Can Employers Do to Reduce the Cost of Obamacare?, by John C. Goodman (Forbes, 9/16/14)

Priceless: Curing the Healthcare Crisis, by John C. Goodman

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The new span of San Francisco–Oakland Bay Bridge, which was opened to traffic last September, should have landed state bureaucrats in hot water: The project’s completion was delayed for a decade, ran into huge cost overruns, and continues to raise serious safety concerns. Independent Institute Policy Fellow K. Lloyd Billingsley wonders why Governor Jerry Brown and other California politicians are sanguine about problems that have riled not only the public, but also top experts who were appointed to look after the public’s best interests.

Caltrans geologist Michael Morgan called for a criminal probe into a possible cover-up of safety problems with the bridge. Caltrans engineer Douglas Coe expressed worries about defective welds—as did fabrication manager Keith Devonport and former quality-assurance manager Nathan Lindell. Even State Senator Mark DeSalnier once called for a criminal investigation of Caltrans bosses who may have “gagged and banished” workers who raised concerns with project managers.

Curiously, Sen. DeSalnier has stopped calling for an investigation; Gov. Brown has dismissed a newspaper series that raised safety concerns (and dished out a vulgar epithet regarding safety allegations); and an American engineer who oversaw welding work for the bridge performed by a foreign contractor has insisted that the bridge is safe. Their attitude toward those who continue to voice safety concerns, Billingsley suggests, is one of smugness: “So all you California taxpayers and motorists, forget the $5 billion in cost overruns, the 10-year delay, and the lingering safety issues,” Billingsley writes. “Instead, just praise the Caltrans team.”

Bridge over Troubled Water?, by K. Lloyd Billingsley (Los Angeles Register, 9/12/14)

Street Smart: Competition, Entrepreneurship, and the Future of Roads, edited by Gabriel Roth

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Among the first questions young people ask upon their political awakening is one that should concern Americans of all ages: Why don’t democratic governments operate the way our civic classes taught us? Perhaps no one of his generation thought more deeply about this question than the economist James M. Buchanan (1919–2013). The late Nobel laureate would have turned 95 years old on October 3, and we’re happy to use the upcoming anniversary of his birth to publicize his legacy. Last winter, The Independent Review published a six-article symposium on Buchanan’s contributions to political economy and classical liberalism—all of which is now available for free on our website. Christopher J. Coyne, one of our journal’s three co-editors, kicks off the discussion with an introduction that traces Buchanan’s development of new tools to help us better understand how a democracy actually works, as distinct from how we wish it would work.

Buchanan referred to his approach as “politics without romance,” yet he was fully invested in the romantic notion that intellectuals could and should inspire the public to imagine a better political community. Symposium contributors Geoffrey Brennan and Michael C. Munger (another co-editor of The Independent Review) make the case that both branches of Buchanan’s thought—his realism and his idealism—grew from the same root: his emphasis on constitutional rules of order and disdain for the rule of elites. Buchanan was also a moralist: He believed that one of the most appealing major features of a free society was its absence of dominion and discrimination in human relationships. Independent Institute Research Fellow Peter Boettke author of Living Economics, suggests that by stressing this benefit, freedom’s friends would help many people overcome their fear that life without Big Government would entail too many responsibilities for them to manage well.

As with many prolific writers, Buchanan wrote so much over the decades that claims of his consistency are open to debate. Independent Institute Research Fellow Randall G. Holcombe, for example, argues that aspects of Buchanan’s constitutional thought might be at odds with individual liberty—particularly Buchanan’s argument for coercing individuals to support collective actions that he believed were necessary to further their own goals. Also, like other prolific scholars, Buchanan left a huge body of work rich in insights that have yet to be fully mined. Niclas Berggren, for example, believes that Buchanan and Tullock’s seminal 1962 book, The Calculus of Consent, has untapped potential to inspire new thinking to advance the cause of liberty. Finally, Hartmut Kliemt concludes the symposium with a look at the logic of Buchanan’s classical liberalism. Buchanan came to his views, Kliemt explains, because he was a communitarian philosopher who discovered the unanimity rule.

(Readers hungry for more discussions of Buchanan’s work can find several more pieces on The Beacon, archived here, as well as a review of volume 1 of Buchanan’s collected work. Also, see Buchanan’s insightful essay, “The Soul of Classical Liberalism,” and a response by Dwight R. Lee, in The Challenge of Liberty: Classical Liberalism Today, edited by Robert Higgs and Carl P. Close.)

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From The Beacon:

From MyGovCost News & Blog:

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