text: Middle Class Political Economist: 2/5/12 - 2/12/12
  Conservatives Refute Butler/Heritage Revisionism
  @gregvarner points me to a new article at Forbes where Avik Roy tries in vain to find a reference to the individual mandate before the Heritage Foundation, specifically Stuart Butler, started publishing research on it in 1989. Citing the same 1989 lecture I did (and Krugman before me) in my last post, Roy concludes:
  Based on my research, I see no contravening evidence to the claim that Stuart Butler and Heritage were the first people to advocate the individual mandate, in the context of a private-sector health-care system.
  Roy is at pains to say that Heritage and Butler are now right to oppose the individual mandate, but nowhere does he give any evidence that they changed their minds on it prior to President Obama's election. Unless he (or Butler) give such evidence, it will be hard to take seriously the claim that the "change of heart" isn't merely political opportunism.
  As I mentioned in my last post, you can't give a lecture on something without previously researching it, and Roy gives an update linking to James Taranto at the Wall Street Journal, who also isn't buying "Butler's claim of unoriginality," and who finds the research piece that preceded the lecture. "A National Health System for America," edited by Butler and Edmund Haislmaier, is a major 140-page research document. Although it is dated on the Heritage website as January 2, 1989, as Taranto says the Washington Post news story about the book states it was released June 1 of that year (which I verified using the Nexis subscription service). What Taranto does not notice is that this document is clearly labeled on its cover "Revised Edition." This could well push the original version and the original research back into 1988 or earlier.
  Not only that, Taranto finds multiple elements of the Affordable Care Act in the research monograph, including its enforcement mechanism.
  To Heritage's credit, it has not scrubbed its website of either the lecture or the research document, but the fact remains that these documents appear to be the ultimate source of the individual mandate. Butler has yet to cite another source or acknowledge that he was working on it in the 1980s, not just the 1990s. As Taranto concludes in Butler's case, "Acknowledging error is a sign of integrity, but you have to be truthful about it." Amen to that.
  Posted by Kenneth Thomas at 12:29:00 AM 0 comments
  Heritage Doubles Down on Individual Mandate Denialism
  As I reported in July, the Heritage Foundation has been bellowing against the Affordable Care Act despite the fact that the critical elements (individual mandate, community rating, and subsidies so everyone can afford insurance) were first proposed by -- the Heritage Foundation!
  In USA Today (via Don Taylor) Stuart Butler, author of the Heritage lecture linked above, says "Don't Blame Heritage for ObamaCare Mandate." He writes:
  What this self-serving narrative omits, as Taylor points out, is any mention of Butler's original proposal, linked above, from October 1989. This is more than three years prior to the Clinton health care legislation he claimed to be opposing. Butler's entire article puts his support of the mandate in "the 1990s," despite the fact that he had to have been conducting research on it prior to lecturing on it in 1989. Indeed, he cites no publication prior to his own where an individual mandate was proposed. That doesn't mean one isn't out there, but he gives us no reason to think there is.
  This is a very strained distinction. I'm not aware of the President or any other supporter of the mandate (I myself would prefer single payer) claiming people are to be forced to buy insurance "for their own good." Just as with Governor Romney's health care reform in Massachusetts, the idea behind the individual mandate remains preventing free riders from not getting insurance until they are sick. That is crucial in making it possible to require insurance companies to insure anyone regardless of pre-existing conditions.
  Taylor's colleague at The Incidental Economist, Aaron Carroll, is even more skeptical than Taylor. Carroll argues that nothing in Butler's article supports the view that the mandate in unconstitutional, least of all the claim that the mandate is "for their own good." He also rejects Butler's claim that the Heritage mandate used carrots while the ACA's uses sticks as "just semantics." Whether you raise taxes and give a credit to those who buy insurance, or don't raise taxes and penalize those who don't buy insurance, the bottom line, Carroll points out, is the same.
  While I guess it is in some way intellectually appealing to see Butler try to explicitly defend his changed position, the fact of the matter is that his defense is entirely bogus. You don't craft a policy in 1989 to defend against a proposal in 1993 by a President who hasn't been elected yet. No, the truth of the matter is that the individual mandate was the conservative approach to expanding health care access right up until the time President Obama advanced it as his own. Then it became both bad policy and unconstitutional, to boot.
  And at night all cats are gray.
  Posted by Kenneth Thomas at 3:15:00 AM 2 comments
  Labels: health care, Heritage Foundation, Massachusetts
  California, Birthplace of TIF, Axes It
  One of the many innovations California has given the country is that it was the first to adopt tax increment financing, or TIF. TIF is an extremely popular local subsidy tool that is funded through the anticipated increase in tax revenues (the "tax increment") resulting from a development project. TIF projects sometimes issue revenue bonds against this expected revenue to finance the project, and in some cases projects are financed on a pay-as-you-go basis as the anticipated revenue materialize over the life of a project.
  On February 1, however, TIF came to an end in California, 60 years after its introduction there, as legislation abolishing the redevelopment agencies that used TIF came into effect. By 2010, there were approximately 425 redevelopment agencies statewide overseeing about $8 billion of tax increment per year. As far as I know, this exceeds TIF in the rest of the country put together.
  How did this happen? When Governor Jerry Brown was elected in 2010, he inherited a state budget deficit of over $20 billion. He decided, as I had recommended for Missouri in 2009, that the huge amount of money going to subsidies and debt service should be returned to state and local governments instead, as a way of paring down the state's deficit. As KABC reported, over $1 billion a year would be returned to school districts, and $500 million annually to local governments.
  The abolition of redevelopment agencies was passed primarily with Democratic votes (Contra Costa Times 3/16/11, via Nexis subscription service), but it had the support of Republican assemblyman Chris Norby of Fullerton, who had been an early critic of the agencies in the 1990s (the 2006 version of his publication, "Redevelopment: The Unknown Government" is here).
  While other states have been spurred by the budget crisis to cut some of their subsidies to business, California has gone the farthest by eliminating tax increment financing. I have argued before that subsidy cuts could offset a large part of state and local budget deficits, and it's heartening to see it happen in the birthplace of TIF. Let's hope we see more of this before the year is out.