Daily Policy Digest
|The Positive Side of Negative Interest Rates
John Maynard Keynes said, "When my information changes I alter my conclusions. What do you do, sir?" For Keynesians and non-Keynesians alike, it is excellent advice -- essential, in fact -- and it applies in spades to the mounting confusion about negative interest rates. One major point on which Keynes eventually would have had to change his mind was his 1936 comment, long uncontroversial, that "the rate of interest is never negative." By February 2016, one-year government bond yields in 12 out of 15 developed countries were negative. Even five-year bond yields were negative in the majority of these countries, writes David Ranson, an NCPA senior fellow and president of HCWE & Co.
|Health Services Half of GDP Growth
The third estimate of GDP for the first quarter significantly increased the estimate of health spending, such that it comprised one half of GDP growth in the first quarter. Although health services spending accounts for just 12 percent of GDP, these estimates continue to indicate it will grow faster than GDP. There is no slowdown in health services spending, writes NCPA Senior Fellow John R. Graham...
|Disability Overpayments: Low-Hanging Fruit
Congress and the administration lack the political will to reform the Social Security Disability program, which will go bankrupt in 2019. However, the GAO has found that overpayments and improper payments are costing the program billions of dollars a year. Putting a stop to these payments could save the program money without major reforms, writes NCPA Research Associate Laura Wiltshire.
|Labor Unions and the Joint Employer Rule
An expanded interpretation of the "joint employer" rule could cost franchise operators billions of dollars and lost jobs, writes NCPA Senior Fellow Pam Villarreal and Research Associate Laura Wiltshire.
|Why Exxon is not the Problem
NCPA Executive Vice President and General Counsel Jacki Pick’s op-ed in The Washington Times details the Constitutional threat posed by the efforts by attorneys general of several states and territories who have launched a RICO (racketeering)-styled legal inquest to fine -- and potentially even jail -- Exxon-funded scientists and thought leaders whose work casts doubt on the prosecutors' state-sanctioned, politically correct views on climate change.
|The Minimum Wage Debate
For several years now, stagnant wage growth and a sputtering economy have encouraged a movement by labor rights groups and others to raise the minimum wage. Politicians on the left and some on the right have called for an increase in the minimum wage to as high as $15 an hour. Supporters claim that a minimum wage that is more than double the current $7.25 an hour will reduce poverty and inequality with little impact on employment, citing empirical studies that show no adverse effect. Opponents, however, are skeptical. They also cite findings showing that an increase in the minimum wage would increase inequality and do little to alleviate poverty, writes NCPA Senior Fellow Pam Villarreal.
|Frenzy Without a Cause
What have we achieved with all the work towards the common core? In another article in the Summer 2016 edition of Education Next, we see that the state applauded for having the most rigorous application of the common core standards, Rhode Island, is #39 in academic outcomes, writes NCPA Senior Fellow John Merrified. It is already well-established that standards don't yield the demanded outcomes. Can we please focus our energies on something that will matter at least in proportion to political effort; for example, a strong charter law, plus price de-control, or large universal education savings accounts?
|The Fantasy of Single Payer Health Care in the States
In NCPA Senior Fellow John R. Graham's new op-ed in the Washington Examiner, he says individual states are most likely to lead the push for a single-payer health care system. As single-payer advocates focus on the debate at the state level, Graham sees Colorado, Oregon and Hawaii as the most likely to endorse the change but, he adds, it is extremely unlikely that Congress will support a Canadian-type system in the foreseeable future.
|A Bogus Solution for High Drug Costs
Liberal politicians and some lobbyists for pharmacies and drug makers are blaming some high drug prices on the administrators of employee drug plans. Proponents worry that pharmacy benefit managers (PBMs) mark up drug prices well above the PBMs' costs and have suggested that employers and their workers could potentially benefit if PBMs were forced to disclose the wholesale prices they paid for drugs. However, the U.S. Federal Trade Commission (FTC) is concerned that mandating disclosure of wholesale prices will remove a bargaining tool used by some firms to compete with others. The loss of proprietary pricing information could reduce aggressive bargaining or potentially encourage price collusion among manufacturers, writes NCPA Senior Fellow Devon Herrick.
|Transparency Tools Work - But Require Appropriate Incentives
A recent New York Times article blames the slow adoption of online transparency tools on "health care's complexity." Transparency tools are mostly ineffective at reducing health care spending because patients aren't using them. In his Health Alert, NCPA senior fellow, Devon Herrick, argues out that patients will use them if given the appropriate tools, training -- and incentives -- by health plans. He cites the example of an experiment from California which dramatically lower prices and increased hospital competition through cost-sharing incentives.