Publishing Institution: The Cato Institute / Journal:

501. Reforming Medical Malpractice Liability through Contract

Author:: Michael F. Cannon
Publication Date:: 11-2010
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: This paper discusses the medical malpractice "crisis" and the potential of contract liability to reduce overall malpractice costs as well as improve the quality of and access to care. First, the paper describes the current medical malpractice liability "system" and some of the more common reforms offered. It then discusses the economic rationale of allowing patients and providers to agree in advance of treatment on how the patient will be compensated in the event of simple negligence on the part of providers, explaining how contract liability may offer improvements in the areas of costs, patient preferences, the pursuit of more efficient liability rules, and quality of care. The paper then critiques select objections to contract liability – those based on the superior bargaining power of providers, the lack of information available to patients, and possible reductions in quality – and forwards possible limitations on the right to contract that may allay such concerns.
Topic:: Health, Law, and Health Care Policy
Political Geography:: United States

502. Has the Fed Been a Failure?

Author:: George A. Selgin, Lawrence H. White, and William D. Lastrapes
Publication Date:: 11-2010
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: As the one-hundredth anniversary of the 1913 Federal Reserve Act approaches, we assess whether the nation's experiment with the Federal Reserve has been a success or a failure. Drawing on a wide range of recent empirical research, we find the following: (1) The Fed's full history (1914 to present) has been characterized by more rather than fewer symptoms of monetary and macroeconomic instability than the decades leading to the Fed's establishment. (2) While the Fed's performance has undoubtedly improved since World War II, even its postwar performance has not clearly surpassed that of its undoubtedly flawed predecessor, the National Banking system, before World War I. (3) Some proposed alternative arrangements might plausibly do better than the Fed as presently constituted. We conclude that the need for a systematic exploration of alternatives to the established monetary system is as pressing today as it was a century ago.
Topic:: Civil Society, Government, and Markets
Political Geography:: United States

503. Do Vouchers and Tax Credits Increase Private School Regulation?

Author:: Andrew J. Coulson
Publication Date:: 10-2010
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: School voucher and education tax credit programs have proliferated in the United States over the past two decades. Advocates have argued that they will enable families to become active consumers in a free and competitive education marketplace, but some fear that these programs may in fact bring with them a heavy regulatory burden that could stifle market forces. Until now, there has been no systematic, empirical investigation of that concern. The present paper aims to shed light on the issue by quantifying the regulations imposed on private schools both within and outside school choice programs, and then analyzing them with descriptive statistics and regression analyses. The results are tested for robustness to alternative ways of quantifying private school regulation, and to alternative regression models, and the question of causality is addressed. The study concludes that vouchers, but not tax credits, impose a substantial and statistically significant additional regulatory burden on participating private schools.
Topic:: Education, Government, and Markets
Political Geography:: United States

504. Does the Doctor Need a Boss?

Author:: Michael F. Cannon and Arnold Kling
Publication Date:: 01-2009
Content Type:: Policy Brief
Institution:: The Cato Institute
Abstract:: The traditional model of medical delivery, in which the doctor is trained, respected, and compensated as an independent craftsman, is anachronistic. When a patient has multiple ailments, there is no longer a simple doctor patient or doctor-patient-specialist relationship. Instead, there are multiple specialists who have an impact on the patient, each with a set of interdependencies and difficult coordination issues that increase exponentially with the number of ailments involved.
Topic:: Economics, Health, and Human Welfare
Political Geography:: United States

505. Bailout or Bankruptcy?

Author:: Jeffrey A. Miron
Publication Date:: 01-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: At the end of September 2007, the U.S. economy had experienced 24 consecutive quarters of positive GDP growth, at an average annual rate of 2.73 percent. The S 500 Index stood at roughly 1,500, having rebounded over 600 points from its low point in 2003. Unemployment was below 5 percent, and inflation was low and stable.
Topic:: Democratization, Economics, International Trade and Finance, Markets, and Privatization
Political Geography:: United States

506. Origins of the Financial Market Crisis of 2008

Author:: Anna J. Schwartz
Publication Date:: 01-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: I begin by describing the factors that contributed to the financial market crisis of 2008. I end by proposing policies that could have prevented the baleful effects that produced the crisis.
Topic:: Democratization, Economics, International Trade and Finance, Markets, Privatization, and Financial Crisis
Political Geography:: United States

507. Reflections on the Financial Crisis

Author:: Allan H. Meltzer
Publication Date:: 01-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: I am going to make several unrelated points, and then I am going to discuss how we got into this financial crisis and some needed changes to reduce the risk of future crises.
Topic:: Democratization, Economics, International Trade and Finance, Markets, Privatization, and Financial Crisis
Political Geography:: United States

508. Monetary Policy and Asset Prices Revisited

Author:: Donald L. Kohn
Publication Date:: 01-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: We are in the midst of a global financial crisis that is now weighing heavily on economies around the world. Although the outlook remains extremely uncertain, both the fragility of the financial system and the weakness in real activity seem likely to persist for a while. To promote maximum sustainable economic growth and price stability, the Federal Reserve has responded to this crisis by easing monetary policy markedly, and we have greatly expanded our liquidity facilities to keep credit flowing when private lenders have become reluctant or unable to do so. Other central banks have also cut policy rates significantly and expanded their lending. In addition, the federal government and governments around the world have taken extraordinary actions to strengthen financial systems to preserve the ability of households and businesses to borrow and spend.
Topic:: Democratization, Economics, International Trade and Finance, Markets, and Privatization
Political Geography:: United States

509. Asset Prices and Monetary Policy

Author:: Otmar Issing
Publication Date:: 01-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: Beyond dealing with the immediate problems, any crisis raises questions of why and how we got there and what lessons should be drawn to avoid a repetition of past developments—without laying the ground for a new disaster. This line of inquiry also applies to the current crisis in financial markets. Even during the heaviest turbulence a discussion has started on obvious deficits in the system of regulation and supervision and on badly needed improvements. In this article, I concentrate on monetary policy but that does not mean regulatory measures are irrelevant in this context, quite the opposite.
Topic:: Democratization, Economics, International Trade and Finance, Markets, and Privatization
Political Geography:: United States

510. What Lessons Can We Learn from the Boom and Turmoil?

Author:: Jeffrey M. Lacker
Publication Date:: 01-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: The current financial crisis undoubtedly will inspire a great deal of research in the years ahead, and it may take some time before anything like a professional consensus emerges on causes and consequences. After all, it took several decades to document the causes of the Great Depression, and recent research continues to provide new perspectives. Nonetheless, I believe the central questions that are likely to occupy researchers are plainly in view, and some tentative lessons have emerged already. And in any event, legislators are not likely to await the fruits of future scholarship.
Topic:: Democratization, Economics, International Trade and Finance, Markets, Privatization, and Financial Crisis
Political Geography:: United States

511. Financial Innovation, Regulation, and Reform

Author:: Charles W. Calomiris
Publication Date:: 01-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: Financial innovations often respond to regulation by sidestepping regulatory restrictions that would otherwise limit activities in which people wish to engage. Securitization of loans (e.g., credit card receivables, or subprime residential mortgages) is often portrayed, correctly, as having arisen in part as a means of “arbitraging” regulatory capital requirements by booking assets off the balance sheets of regulated banks. Originators of the loans were able to maintain lower equity capital against those loans than they otherwise would have needed to maintain if the loans had been placed on their balance sheet.
Topic:: Democratization, Economics, International Trade and Finance, Markets, and Privatization
Political Geography:: United States

512. Bad Rules Produce Bad Outcomes: Underlying Public-Policy Causes of the U.S. Financial Crisis

Author:: Bert Ely
Publication Date:: 01-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: The current global financial crisis is the worst economic crisis since the Great Depression, with no end in sight. Already, much political finger pointing has occurred, with most of those fingers pointed at supposedly greedy bankers, investors, and hedge-fund managers as well as the financial deregulation of recent decades. Governments everywhere are rushing to enact new regulatory protections to pre- vent another crisis of this magnitude. Yet if history is any guide, these new regulations will set up the global economy for yet another financial crisis, perhaps worse than the present one, or create regulatory straitjackets that will greatly impede economic growth.
Topic:: Democratization, Economics, International Trade and Finance, Markets, and Privatization
Political Geography:: United States

513. Federal Reserve Policy and the Housing Bubble

Author:: Lawrence H. White
Publication Date:: 01-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: The U.S. housing bubble and the fallout from its bursting are not the results of a laissez-faire monetary and financial system. They happened in an unanchored government fiat monetary system with a restricted financial system.
Topic:: Democratization, Economics, International Trade and Finance, Markets, and Privatization
Political Geography:: United States

514. The Case for Policy Sustainability

Author:: Wolfgang Münchau
Publication Date:: 01-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: Should we worry about moral hazard while the house is burning? The discussion about economic policy is full of biblical metaphors, the language of water and floods, and of fire extinction during crises. Metaphors, even when not mixed, are often obstacles to the clarity of thought. That is clearly the case with the metaphor of moral hazard in trying to understand the current financial crisis. Instead of focusing on moral hazard, I prefer to use the concept of policy sustainability to argue that sustainable monetary, fiscal, and regulatory policies are essential for lasting prosperity.
Topic:: Democratization, Economics, International Trade and Finance, Markets, and Privatization
Political Geography:: United States

515. Moral Hazard in the Policy Response to the 2008 Financial Market Meltdown

Author:: Andrew A. Samwick
Publication Date:: 01-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: The Cato Institute is the ideal place to draw lessons from the sub- prime crisis. The organization's mission focuses on the interaction of public policies with free markets and limited government. Even the most ardent believer in free markets must fully understand that individual liberty implies neither the nonexistence nor the indifference of government to economic affairs. Individuals live in freedom and peace when public policies are crafted in accordance with well-established rules and implemented with an eye toward effectiveness, not expansion. In the halls of government, we need sobriety and vigilance rather than apathy or empire building.
Topic:: Democratization, Economics, International Trade and Finance, Markets, and Privatization
Political Geography:: United States

516. Moral Hazard and the Financial Crisis

Author:: Kevin Dowd
Publication Date:: 01-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: There is no denying that the current financial crisis has delivered a major seismic shock to the policy landscape. In country after country, we see governments panicked into knee-jerk responses and throwing their policy manuals overboard: bailouts and nationalizations on an unprecedented scale, fiscal prudence thrown to the winds, and the return of no-holds-barred Keynesianism. Lurid stories of the excesses of “free” competition—of greedy bankers walking away with hundreds of millions whilst taxpayers bail their institutions out, of competitive pressure to pay stratospheric bonuses and the like—are grist to the mill of those who tell us that “free markets have failed” and that what we need now is bigger government. To quote just one writer out of many others saying much the same, “the pendulum will swing—and should swing—towards an enhanced role for government in saving the market system from its excesses and inadequacies” (Summers 2008). Free markets have been tried and failed, so the argument goes, now we need more regulation and more active macroeconomic management.
Topic:: Democratization, Economics, International Trade and Finance, Markets, and Privatization
Political Geography:: United States

517. Money and the Present Crisis

Author:: Gerald P. O'Driscoll Jr.
Publication Date:: 01-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: We remain in an economic crisis and financial crisis, one that Gary Gorton has named “The Panic of 2007” (Gorton 2008). The thesis of this article is that monetary policy has played a pivotal role. Under Alan Greenspan and now Ben Bernanke, the Fed has conducted monetary policy so as to foster moral hazard among investors, notably in housing (O'Driscoll 2008a). More generally, the crisis is the product of a “perfect storm” of misguided policy. Policies to encourage affordable housing fostered the growth of subprime lending and complex financial products to finance that lending. Regardless of the desirability of the social goal, the financial super- structure depended on housing prices never falling. Housing prices do fall sometimes, and did so decisively beginning in 2007 (Gorton 2008: 50).
Topic:: Democratization, Economics, International Trade and Finance, Markets, and Privatization
Political Geography:: United States, Europe, and New Zealand

518. Interest-Rate Targeting during the Great Moderation: A Reappraisal

Author:: Roger W. Garrison
Publication Date:: 01-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: In the era that has come to be known as the “Great Moderation” (dating from the mid-1980s), the Federal Reserve's policy committee (the Federal Open Market Committee or FOMC) pursued what has to be called a “learning-by-doing” strategy. The data that counted as relevant feedback—the unemployment rate and the inflation rate—seemed all along to be suggesting that the Fed was doing the right things. Even when the Fed lowered the Fed funds target to 1 per- cent in June 2003 and held it there for nearly a year, the economy appeared to be on an even keel and U.S. interest rates were in line with those in other countries. The historically low interest rates were attributed not to excessive monetary ease in the United States but to a worldwide increase in savings.
Topic:: Democratization, Economics, International Trade and Finance, Markets, and Privatization
Political Geography:: United States

519. The Way Forward: Incentives, Not Regulations

Author:: William Poole
Publication Date:: 01-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: Most of the world today is concentrating not on the way forward after the crisis, but the way out of the crisis. This concentration brings the very real danger that steps taken now will cause problems later. The most obvious danger, perhaps, is that enormous government spending, here and abroad, will increase outstanding debt to a degree that will increase temptation to attempt to finance government budget deficits through inflation. Moral hazard is the less obvious, but perhaps more serious, problem we will face.
Topic:: Democratization, Economics, International Trade and Finance, Markets, and Privatization
Political Geography:: United States

520. After War: The Political Economy of Exporting Democracy

Author:: Christopher J. Coyne
Publication Date:: 01-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: Christopher Coyne's book seeks to contribute to an understanding of the “precise mechanisms and contexts that contribute to or prevent” successful efforts to “export liberal democracy” by means of “military occupation and reconstruction” (p. 7). Even if this were the only accomplishment of this fine book, it would represent one of the most important contributions to the field of political economy in recent decades. However, Coyne does more. He draws from economics to produce a full-fledged framework for analyzing the economic, political, and social effects of all reconstruction efforts. He also questions the long-standing view that reconstruction requires, or even benefits from, a suspension of the principles of liberty, free association, and free market.
Topic:: Democratization, Economics, International Trade and Finance, Markets, and Privatization
Political Geography:: United States

521. Capitalism at Work: Business, Government, and Energy; Book 1 of Political Capitalism (A Trilogy)

Author:: Robert L. Bradley Jr.
Publication Date:: 01-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: Robert L. Bradley Jr., for many years had to balance loyalty to his employer, Enron, with his belief in Austrian economics. With the collapse of Enron came the opportunity to resolve the conflict in favor of Austrian economics. Bradley chose to undertake the slow development that would produce a definitive study rather than an instant bestseller. He ultimately decided to produce a three-volume treatment. The first of these, the book under review here, deals with two overriding conceptual issues relevant to the Enron collapse and their implications to Enron and earlier debacles. The first is what is the essence of free-market economics and whether the Enron experience undermines the case for free markets. The other is the invalidity of resource pessimism. Later volumes will deal with similar problems such as the Insull holding-company collapse in the Great Depression and then a concluding volume on Enron itself.
Topic:: Democratization, Economics, International Trade and Finance, Markets, and Privatization
Political Geography:: United States

522. On the Contrary: Leading the Opposition in a Democratic South Africa

Author:: Tony Leon
Publication Date:: 01-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: On the Contrary is a seamless combination of a memoir of an influential South African politician and a well-researched modern history of his country. The author was the leader of the liberal Democratic Alliance, the leader of the opposition in Parliament.
Topic:: Democratization, Economics, International Trade and Finance, Markets, and Privatization
Political Geography:: United States and South Africa

523. A Better Way to Generate and Use Comparative-Effectiveness Research

Author:: Michael F. Cannon
Publication Date:: 02-2009
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: President Barack Obama, former U.S. Senate majority leader Tom Daschle, and others propose a new government agency that would evaluate the relative effectiveness of medical treatments. The need for “comparative-effectiveness research” is great. Evidence suggests Americans spend $700 billion annually on medical care that provides no value. Yet patients, providers, and purchasers typically lack the necessary information to distinguish between high- and low-value services.
Topic:: Economics, Government, Health, and Privatization
Political Geography:: United States

524. Health-Status Insurance: How Markets Can Provide Health Security

Author:: John H. Cochrane
Publication Date:: 02-2009
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: None of us has health insurance, really. If you develop a long-term condition such as heart disease or cancer, and if you then lose your job or are divorced, you can lose your health insurance. You now have a preexisting condition, and insurance will be enormously expensive—if it's available at all. Free markets can solve this problem, and provide life-long, portable health security, while enhancing consumer choice and competition. “Heath-status insurance” is the key. If you are diagnosed with a long-term, expensive condition, a health-status insurance policy will give you the resources to pay higher medical insurance premiums. Health-status insurance covers the risk of premium reclassification, just as medical insurance covers the risk of medical expenses. With health-status insurance, you can always obtain medical insurance, no matter how sick you get, with no change in out-of-pocket costs.
Topic:: Economics, Health, Markets, and Privatization
Political Geography:: United States

525. Financial Crisis and Public Policy

Author:: Jagadeesh Gokhale
Publication Date:: 03-2009
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: This Policy Analysis explains the antecedents of the current global financial crisis and critically examines the reasoning behind the U.S. Treasury and Federal Reserve's actions to prop up the financial sector. It argues that recovery from the financial crisis is likely to be slow with or without the government's bailout actions. An oil price spike and a wealth shock in housing initiated the financial crisis. Declines in stock values are intensifying that shock, threatening to deepen the current recession as U.S. consumers and investors cut their expenditures. An offsetting wealth injection from additional risk-bearing investors could initiate a quicker recovery. Thus, supporters of government intervention justify the bailout's debt-financed fund injections—in essence, they want to compel future taxpayers to join the group of today's risk bearing investors.
Topic:: Economics, Globalization, International Trade and Finance, and Markets
Political Geography:: United States

526. NATO at 60: A Hollow Alliance

Author:: Ted Galen Carpenter
Publication Date:: 03-2009
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: As the North Atlantic Treaty Organization celebrates its 60th birthday, there are mounting signs of trouble within the alliance and reasons to doubt the organization's relevance regarding the foreign policy challenges of the 21st century. Several developments contribute to those doubts. Although NATO has added numerous new members during the past decade, most of them possess minuscule military capabilities. Some of them also have murky political systems and contentious relations with neighboring states, including (and most troubling) a nuclear-armed Russia. Thus, NATO's new members are weak, vulnerable, and provocative—an especially dangerous combination for the United States in its role as NATO's leader.
Topic:: Security, Foreign Policy, NATO, International Cooperation, and International Security
Political Geography:: Russia and North Atlantic

527. Pakistan and the Future of U.S. Policy

Author:: Malou Innocent
Publication Date:: 04-2009
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: A spreading Islamic insurgency engulfs the amorphous and ungoverned border between Afghanistan and Pakistan. After initial victories by the United States and the Northern Alliance in autumn 2001, hundreds of Taliban and al Qaeda fighters fled Afghanistan to seek refuge across the border in Pakistan's rugged northwest. Since 2007, the number of ambushes, militant offensives, and targeted assassinations has risen sharply across Afghanistan, while suicide bombers and pro-Taliban insurgents sweep through settled areas of Pakistan at an alarming pace. For better and for worse, Pakistan will remain the fulcrum of U.S. policy in the region—its leaders continue to provide vital counterterrorism cooperation and have received close to $20 billion in assistance from the United States, yet elements associated with its national intelligence agency, Inter-Services Intelligence, covertly assist militant proxy groups destabilizing the region
Topic:: Security, Foreign Policy, International Cooperation, Islam, and War
Political Geography:: Pakistan, Afghanistan, United States, South Asia, and Asia

528. Bright Lines and Bailouts: To Bail or Not To Bail, That Is the Question

Author:: Vern McKinley and Gary Gegenheimer
Publication Date:: 04-2009
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: A financial-institution bailout involves government intervention through a transaction or forbearance targeted to a financial institution or group of financial institutions. The action is preemptive as the financial institution does not fail and go out of business, but remains a going concern, benefiting creditors, shareholders, or counterparties. In the absence of a bailout, the financial institution would either be forced to go through receivership or bankruptcy in the prescribed legal form, or have its role in financial intermediation disrupted.
Topic:: Economics, Government, Political Economy, and Privatization
Political Geography:: United States

529. Obamacare to Come: Seven Bad Ideas for Health Care Reform

Author:: Michael Tanner
Publication Date:: 05-2009
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: President Obama has made it clear that reforming the American health care system will be one of his top priorities. In response, congressional leaders have promised to introduce legislation by this summer, and they hope for an initial vote in the Senate before the Labor Day recess.
Topic:: Government and Health
Political Geography:: United States

530. Broadcast Localism and the Lessons of the Fairness Doctrine

Author:: John Samples
Publication Date:: 05-2009
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: The First Amendment to the U.S. Constitution recognizes a laissez-faire policy toward speech and the press. The Framers of the Bill of Rights worried that the self-interest of politicians fostered suppression of speech. In contrast, some constitutional theorists have argued that the Constitution empowers, rather than restricts, the federal government to manage speech in order to attain the values implicit in the First Amendment.
Topic:: Civil Society and Mass Media
Political Geography:: United States

531. Massachusetts Miracle or Massachusetts Miserable: What the Failure of the "Massachusetts Model" Tells Us about Health Care Reform

Author:: Michael Tanner
Publication Date:: 06-2009
Content Type:: Policy Brief
Institution:: The Cato Institute
Abstract:: When Massachusetts passed its pioneering health care reforms in 2006, critics warned that they would result in a slow but steady spiral downward toward a government-run health care system. Three years later, those predictions appear to be coming true: Although the state has reduced the number of residents without health insurance, 200,000people remain uninsured. Moreover, the increase in the number of insured is primarily due to the state's generous subsidies, not the celebrated individual mandate. Health care costs continue to rise much faster than the national average. Since 2006, total state health care spending has increased by28 percent. Insurance premiums have increased by 8–10 percent per year, nearly double the national average. New regulations and bureaucracy are limiting consumer choice and adding to healthcare costs. Program costs have skyrocketed. Despite tax increases, the program faces huge deficits. The state is considering caps on insurance premiums, cuts in reimbursements to providers, and even the possibility of a “global budget” on health care spending—with its attendant rationing. A shortage of providers, combined with increased demand, is increasing waiting times to see a physician. With the “Massachusetts model” frequently cited as a blueprint for health care reform, it is important to recognize that giving the government greater control over our health care system will have grave consequences for taxpayers, providers, and health care consumers. That is the lesson of the Massachusetts model.
Topic:: Health, Human Welfare, Markets, and Governance
Political Geography:: United States

532. Thinking Clearly about Economic Inequality

Author:: Will Wilkinson
Publication Date:: 07-2009
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: Recent discussions of economic inequality, marked by a lack of clarity and care, have confused the public about the meaning and moral significance of rising income inequality. Income statistics paint a misleading picture of real standards of living and real economic inequality. Several strands of evidence about real standards of living suggest a very different picture of the trends in economic inequality. In any case, the dispersion of incomes at any given time has, at best, a tenuous connection to human welfare or social justice. The pattern of incomes is affected by both morally desirable and undesirable mechanisms. When injustice or wrongdoing increases income inequality, the problem is the original malign cause, not the resulting inequality. Many thinkers mistake national populations for “society” and thereby obscure the real story about the effects of trade and immigration on welfare, equality, and justice. There is little evidence that high levels of income inequality lead down a slippery slope to the destruction of democracy and rule by the rich. The unequal political voice of the poor can be addressed only through policies that actually work to fight poverty and improve education. Income inequality is a dangerous distraction from the real problems: poverty, lack of economic opportunity, and systemic injustice.
Topic:: Democratization, Economics, and Social Stratification

533. Effects of the Financial Crisis on The U.S.-China Economic Relationship

Author:: Eswar S. Prasad
Publication Date:: 08-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: The U.S. and China are two of the dominant economies in the world today and the nature of their relationship has far-reaching implications for the smooth functioning of the global trade and financial systems. These two economies are becoming increasingly integrated with each other through the flows of goods, financial capital, and people. These rising linkages of course now stretch far beyond just trade and finance, to a variety of geopolitical and global security issues. Getting this relationship right is therefore of considerable importance.
Topic:: Financial Crisis
Political Geography:: United States and China

534. Economic Development and Growth: A Survey

Author:: Meir Kohn
Publication Date:: 08-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: The most basic challenge for economics is to understand the nature and causes of economic progress. But what exactly is to be explained? What are the facts? One very striking fact is historical—the rapid acceleration in the rate of economic progress since the early 1800s. Another is geographical—the huge differences in levels of economic progress in different parts of the world today. The questions virtually ask themselves. Why did economic progress accelerate? Why is it not universal? On the whole, these two questions have been addressed by two different specialized fields within economics. Economic history has addressed the question of change over time, and development economics has addressed the question of contemporary differences across countries.
Topic:: Economics
Political Geography:: England

535. Can Latin America Prosper by Reducing the Size of Government?

Author:: Radhames Lizardo and André V. Mollick
Publication Date:: 08-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: This article examines the effect of government consumption on economic growth in 23 Latin American countries over the years 1974–2003. Employing the Armey Curve, we show that the typical Latin American government is spending beyond the optimal point. Using panel data and a fixed effects (FE) model, we find that increases in government consumption lead to unambiguous decreases in economic growth.
Topic:: Government
Political Geography:: China and Latin America

536. The Effects of Corruption on FDI Inflows

Author:: Ali Al-Sadig
Publication Date:: 08-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: The surge in foreign direct investment (FDI) flows during the 1990s has motivated a host of recent studies into their determinants. Recently, the level of corruption in the host country has been introduced as one factor among the determinants of FDI location. From a theoretical viewpoint, corruption—that is, paying bribes to corrupt government bureaucrats to get “favors” such as permits, investment licenses, tax assessments, and police protection—is generally viewed as an additional cost of doing business or a tax on profits. As a result, corruption can be expected to decrease the expected profitability of investment projects. Investors will therefore take the level of corruption in a host country into account in making decisions to invest abroad.
Topic:: Corruption
Political Geography:: United States

537. U.S. Energy Policy and the Presumption of Market Failure

Author:: Peter Z. Grossman
Publication Date:: 08-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: Over the last 35 years, the U.S. government has embarked on several major projects to spur the commercial development of energy technologies intended to substitute for conventional energy resources, especially fossil fuels. Those efforts began with the 1973 energy crisis when President Nixon became the first U.S. leader to announce a plan for energy autarky. Presidents Ford and Carter followed Nixon's “Project Independence” with similar pledges. But beginning with Ford's 1975 energy act, plans for energy independence were tied directly to the development of new, alternative energy technologies. Under President Carter in particular, the federal government embarked on highly publicized, heavily funded efforts at developing new technologies with specific timetables for commercial entry and, in a few cases, a timetable for mass market substitution. Current mandates for ethanol and other biofuels fit this latter objective.
Topic:: Government
Political Geography:: United States

538. How Urban Planners Caused the Housing Bubble

Author:: Randal O'Toole
Publication Date:: 10-2009
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: Everyone agrees that the recent financial crisis started with the deflation of the housing bubble. But what caused the bubble? Answering this question is important both for identifying the best short-term policies and for fixing the credit crisis, as well as for developing long-term policies aimed at preventing another crisis in the future.
Topic:: Economics, Markets, and Financial Crisis
Political Geography:: United States, California, and Georgia

539. Halfway to Where? Answering the Key Questions of Health Care Reform

Author:: Michael Tanner
Publication Date:: 09-2009
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: Although neither the House nor the Senate passed a health care bill by President Obama's August deadline, various pieces of legislation have made it through committee, and they provide a concrete basis for analyzing what the proposed health care reform would and would not do. Looking at the various bills that are moving on Capitol Hill, we can determine the following: Contrary to the Obama administration's repeated assurances, millions of Americans who are happy with their current health insurance will not be able to keep it. As many as 89.5 million people may be dumped into a government-run plan. Some Americans may find themselves forced into a new insurance plan that no longer includes their current doctor. Americans will pay more than $820 billion in additional taxes over the next 10 years, and could see their insurance premiums rise as much as 95 percent. The current health care bills will increase the budget deficit by at least $239 billion over the next 10 years, and far more in the years beyond that. If the new health care entitlement were subject to the same 75-year actuarial standards as Social Security or Medicare, its unfunded liabilities would exceed $9.2 trillion. While the bills contain no direct provisions for rationing care, they nonetheless increase the likelihood of government rationing and interference with how doctors practice medicine. Contrary to assertions of some opponents, the bills contain no provision for euthanasia or mandatory end-of-life counseling. The bills' provisions on abortion coverage are far murkier.
Topic:: Government, Health, Human Welfare, and Markets
Political Geography:: United States and America

540. Would a Stricter Fed Policy and Financial Regulation Have Averted the Financial Crisis?

Author:: Jagadeesh Gokhale and Peter Van Doren
Publication Date:: 10-2009
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: Many commentators have argued that if the Federal Reserve had followed a stricter monetary policy earlier this decade when the housing bubble was forming, and if Congress had not deregulated banking but had imposed tighter financial standards, the housing boom and bust—and the subsequent financial crisis and recession—would have been averted. In this paper, we investigate those claims and dispute them. We are skeptical that economists can detect bubbles in real time through technical means with any degree of unanimity. Even if they could, we doubt the Fed would have altered its policy in the early 21st century, and we suspect that political leaders would have exerted considerable pressure to maintain that policy. Concerning regulation, we find that the banking reform of the late 1990s had little effect on the housing boom and bust, and that the many reform ideas currently proposed would have done little or nothing to avert the crisis.
Topic:: Economics, Government, Markets, and Financial Crisis
Political Geography:: United States

541. Somalia, Redux: A More Hands-Off Approach

Author:: David Axe
Publication Date:: 10-2009
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: The two-decade-old conflict in Somalia has entered a new phase, which presents both a challenge and an opportunity for the United States. The elections of new U.S. and Somali presidents in late 2008 and early 2009 provide an opportunity to reframe U.S.-Somali relations. To best encourage peace in the devastated country, Washington needs a new strategy that takes into account hard-learned lessons from multiple failed U.S. interventions. The old strategy favoring military force and reflexive opposition to all Islamists should give way to one emphasizing regional diplomacy and at least tacit acceptance of a government that is capable of bringing order to Somalia.
Topic:: Conflict Resolution, Islam, Terrorism, and Fragile/Failed State
Political Geography:: Africa, United States, and Somalia

542. Yes, Mr. President: A Free Market Can Fix Health Care

Author:: Michael F. Cannon
Publication Date:: 10-2009
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: In March 2009, President Barack Obama said, “If there is a way of getting this done where we're driving down costs and people are getting health insurance at an affordable rate, and have choice of doctor, have flexibility in terms of their plans, and we could do that entirely through the market, I'd be happy to do it that way.” This paper explains how letting workers control their health care dollars and tearing down regulatory barriers to competition would control costs, expand choice, improve health care quality, and make health coverage more secure.
Topic:: Economics, Health, and Markets
Political Geography:: United States

543. High-Speed Rail Is Not "Interstate 2.0"

Author:: Randal O'Toole
Publication Date:: 09-2009
Content Type:: Policy Brief
Institution:: The Cato Institute
Abstract:: The administration has likened President Obama's high-speed rail plan to President Eisenhower's Interstate Highway System. Yet there are crucial differences between interstate highways and high-speed rail. First, before Congress approved the Interstate Highway System, it had a good idea how much it would cost. In contrast, Congress approved $8 billion for high-speed rail without knowing the total cost, which is likely to be at least $90 billion.
Topic:: Energy Policy, Government, and Infrastructure
Political Geography:: United States

544. All the President's Mandates: Compulsory Health Insurance Is a Government Takeover

Author:: Michael F. Cannon
Publication Date:: 09-2009
Content Type:: Policy Brief
Institution:: The Cato Institute
Abstract:: The most hazardous health reform measure before Congress is not the so-called "public option," but proposals to make health insurance compulsory via an individual or employer mandate. Compulsory health insurance could require nearly 100 million Americans to switch to a more expensive health plan and would therefore violate President Barack Obama's pledge to let people keep their current health insurance. In particular, the legislation before Congress could eliminate many or all health savings account plans. Making health insurance compulsory would also spark an unnecessary fight over abortion and would enable government to ration care to those with private health insurance.
Topic:: Government, Health, and Markets
Political Geography:: United States and America

545. Peter Bauer and the Failure of Foreign Aid

Author:: Andrei Shleifer
Publication Date:: 10-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: Peter Bauer was one of the greatest development economists in history. He was an advocate of property rights protection and free trade before these ideas became commonplace. He appreciated before others did the crucial roles of entrepreneurship and trade in development. He was also one of the earliest opponents of the over-population thesis, recognizing that the poor like the rich should have the right to choose the number of children they have, that many developing countries are underpopulated, and that population growth will anyhow slow down once they become richer. Bauer's writings are remarkable for their deep humanity and commitment to the welfare of the people in the developing world, but without the fake sanctimony that characterizes much of the modern rhetoric.
Topic:: Human Rights
Political Geography:: Eastern Europe and East Asia

546. Economic Development and Growth: A Survey

Author:: Meir Kohn
Publication Date:: 10-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: The most basic challenge for economics is to understand the nature and causes of economic progress. But what exactly is to be explained? What are the facts? One very striking fact is historical—the rapid acceleration in the rate of economic progress since the early 1800s. Another is geographical—the huge differences in levels of economic progress in different parts of the world today. The questions virtually ask themselves. Why did economic progress accelerate? Why is it not universal? On the whole, these two questions have been addressed by two different specialized fields within economics. Economic history has addressed the question of change over time, and development economics has addressed the question of contemporary differences across countries.
Topic:: Economics and War
Political Geography:: England

547. The Effects of Corruption on FDI Inflows

Author:: Ali Al-Sadig
Publication Date:: 10-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: The surge in foreign direct investment (FDI) flows during the 1990s has motivated a host of recent studies into their determinants. Recently, the level of corruption in the host country has been introduced as one factor among the determinants of FDI location. From a theoretical viewpoint, corruption—that is, paying bribes to corrupt government bureaucrats to get “favors” such as permits, investment licenses, tax assessments, and police protection—is generally viewed as an additional cost of doing business or a tax on profits. As a result, corruption can be expected to decrease the expected profitability of investment projects. Investors will therefore take the level of corruption in a host country into account in making decisions to invest abroad.
Topic:: Economics
Political Geography:: United States

548. U.S. Energy Policy and the Presumption of Market Failure

Author:: Peter Z. Grossman
Publication Date:: 10-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: Over the last 35 years, the U.S. government has embarked on several major projects to spur the commercial development of energy technologies intended to substitute for conventional energy resources, especially fossil fuels. Those efforts began with the 1973 energy crisis when President Nixon became the first U.S. leader to announce a plan for energy autarky. Presidents Ford and Carter followed Nixon's “Project Independence” with similar pledges. But beginning with Ford's 1975 energy act, plans for energy independence were tied directly to the development of new, alternative energy technologies. Under President Carter in particular, the federal government embarked on highly publicized, heavily funded efforts at developing new technologies with specific timetables for commercial entry and, in a few cases, a timetable for mass market substitution. Current mandates for ethanol and other biofuels fit this latter objective.
Topic:: Government
Political Geography:: United States

549. The Potential for System-Friendly K– 12 Reform

Author:: John Merrifield
Publication Date:: 10-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: Numerous empirical models connect individual student test scores or average test scores to theoretically plausible policy and socioeconomic variables. Although the models were created to test for the effect of a specific factor like funding levels or teacher training on student performance, the fully specified models also have important implications for the ability of the current K–12 school system to significantly improve its performance. This article examines various student performance models and the potential for system- friendly K–12 reform.
Political Geography:: United States

550. Mandatory Health Insurance: Lessons from Massachusetts

Author:: Craig J. Richardson
Publication Date:: 10-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: What lessons can be learned from the implementation of mandatory health insurance? As the Obama administration contemplates enacting far-reaching health care reforms that increase the role of government, the case of Massachusetts is worth serious study. Massachusetts' three-year experiment with mandatory health insurance (known as Chapter 58 legislation) has been judged by some health economists to be a qualified success, since it reached a primary goal of lowering the number of uninsured in the state (Gruber 2009, Long and Masi 2008). On the other hand, Tanner (2008: 5) argues that previously uninsured citizens signed up for health insurance because it was free or heavily subsidized, not because of the mandate itself. Official state statistics claim the number of uninsured in the state dropped from 11 percent in 2005 to less than 3 percent in 2009 (Massachusetts Health Connector 2009). Tanner (2009) disputes this number and suggests the number is closer to 5 percent, using Urban Institute and Census surveys as evidence. What supporters and foes of mandatory health insurance both seem to agree on is that the number of uninsured has fallen in the state since Chapter 58, and yet there remain between 150,000 and 200,000 uninsured citizens.
Topic:: Health
Political Geography:: United States

551. On the Measurement of Zimbabwe's Hyperinflation

Author:: Steve H. Hanke and Alex K. F. Kwok
Publication Date:: 10-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: Zimbabwe experienced the first hyperinflation of the 21st century. The government terminated the reporting of official inflation statistics, however, prior to the final explosive months of Zimbabwe's hyperinflation. We demonstrate that standard economic theory can be applied to overcome this apparent insurmountable data problem. In consequence, we are able to produce the only reliable record of the second highest inflation in world history.
Political Geography:: Central Asia, Eastern Europe, and Zimbabwe

552. The Ascent of Money: A Financial History of the World

Author:: David Beckworth
Publication Date:: 10-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: The historian Niall Ferguson can never be accused of lacking boldness. Over the past decade he has argued, among other things, that Europe would have been better off had Great Britain stayed out of World War I and allowed Germany to win, that the British empire provided a global public good that benefited the world economy, and that the United States should follow suit today by more actively embracing the demands of empire. He has also been championing the burgeoning field of counterfactual history, a development that many historians consider controversial given its speculative nature.
Topic:: War
Political Geography:: United States, Europe, and Germany

553. Small Change: Money, Political Parties, and Campaign Finance Reform

Author:: R. Sam Garrett
Publication Date:: 10-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: Ray La Raja has written one of the most provocative campaign finance books in recent memory. Small Change causes the reader to struggle with fundamental “truths” about money and politics, to revisit old questions, and to ask new ones. La Raja directly challenges prevailing scholarship—and popular wisdom—concerning the purposes and origins of campaign finance regulation and its effect on political parties. The dual focus on campaign finance and American political parties is arguably the book's greatest strength. (La Raja generally uses the term “regulation” broadly, although his focus is on major changes in law rather than on regulations, such as those issued by the Federal Election Commission. For expediency, this review also uses the term “regulation” to encompass both federal campaign finance law and agency regulations.)
Political Geography:: America

554. The Libertarian Illusion: Ideology, Public Policy, and the Assault on the Common Good

Author:: Jason Kuznicki
Publication Date:: 10-2009
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: It is daunting to review a book claiming that everything you believe is wrong. Fortunately, William Hudson's The Libertarian Illusion also attacks many things that neither I nor very many other libertarians believe. This gives courage for the rest.
Topic:: Government
Political Geography:: California

555. Three Decades of Politics and Failed Policies at HUD

Author:: Tad DeHaven
Publication Date:: 11-2009
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: The U.S. Department of Housing and Urban Development has long been plagued by scandals, mismanagement, and policy failures. Most recently, HUD's subsidies and failed oversight of Fannie Mae and Freddie Mac helped to inflate the housing bubble, which ultimately burst and cascaded into a major financial crisis.
Topic:: Development, Economics, Markets, and Financial Crisis
Political Geography:: United States

556. Bending the Productivity Curve: Why America Leads the World in Medical Innovation

Author:: Glen Whitman and Raymond Raad
Publication Date:: 11-2009
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: The health care issues commonly considered most important today — controlling costs and covering the uninsured — arguably should be regarded as secondary to innovation, inasmuch as a medical treatment must first be invented before its costs can be reduced and its use extended to everyone. To date, however, none of the most influential international comparisons have examined the contributions of various countries to the many advances that have improved the productivity of medicine over time. We hope this paper can help fill that void.
Topic:: Health, Human Welfare, and Markets
Political Geography:: America

557. The Myth of the Compact City: Why Compact Development Is Not the Way to Reduce Carbon Dioxide Emissions

Author:: Randal O'Toole
Publication Date:: 11-2009
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: Proponents of compact development argue that rebuilding American urban areas to higher densities is vital for reducing greenhouse gas emissions. Compact city policies call for reducing driving by housing a higher percentage of people in multi-family and mixed-use developments, reducing the average lot sizes of single-family homes, redesigning streets and neighborhoods to be more pedestrian friendly, concentrating jobs in selected areas, and spending more on mass transit and less on highways.
Topic:: Energy Policy and Governance
Political Geography:: United States and America

558. Fairness 2.0: Media Content Regulation in the 21st Century

Author:: Robert Corn-Revere
Publication Date:: 11-2009
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: Civil libertarians feared that a change of administrations would herald a revived Fairness Doctrine, a policy that previously permitted the government to oversee broadcast news coverage for "balanced views." A return to the Fairness Doctrine, however, now seems unlikely. It is very likely, however, that politicians from both the left and the right will try to extend government control over the media beyond current policies. New rules adopted or proposed by the Federal Communications Commission suggest that the agency may be poised to enforce the most intensive government oversight of broadcast programming in decades—perhaps even in the history of the agency. The FCC voted last year to require each broadcast licensee to file quarterly "enhanced disclosure" reports—highly detailed information regarding its programming and editorial choices. This information will be used by organized groups to file complaints to pressure broadcasters to air programming that the complainants prefer. The FCC is also formulating programming guidelines based on the enhanced disclosure reports purporting to ensure that broadcasters meet local needs. This "broadcast localism" effort may also require broadcasters to appoint local boards to oversee their performance and their editorial decisions. As the FCC seeks to expand regulation of broadcast media, the traditional justification for its authority—spectrum scarcity—has lost credibility, and the agency's new efforts are likely to run afoul of the First Amendment.
Topic:: Civil Society, Mass Media, and Culture
Political Geography:: United States

559. The Citizens' Guide to Transportation Reauthorization

Author:: Randal O'Toole
Publication Date:: 12-2009
Content Type:: Policy Brief
Institution:: The Cato Institute
Abstract:: Sometime in 2010 or 2011, Congress expects to decide how to spend the $250 billion or more of federal gas taxes and other highway user fees that will be collected over the next six years. The process of doing so is called surface transportation reauthorization. A major point of contention in this law is how much of our transportation system should be centrally planned and how much should be built and operated in response to the needs of actual transportation users.
Topic:: Economics and Infrastructure
Political Geography:: United States

560. Crossing Borders, Changing Landscapes: Land-Use Dynamics in the Golden Triangle

Author:: Jefferson Fox
Publication Date:: 11-2009
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: Over the last half-century, public policy has affected land-use practices across the borders linking China, Thailand, and Laos. Political and economic reforms have facilitated labor mobility and a shift in agricultural practices away from staple grains and toward a diverse array of cash crops, rubber being one of the foremost. China has promoted the conversion of forests to rubber agroforestry in southern Yunnan—profitable for farmers, but a concern in terms of biodiversity and long-term viability. In Thailand, the response is at the other end of the spectrum as the government's concerns about land-use practices and watershed management have led to policies that dramatically constrain land-use practices and limit tenure rights. In Laos the future is not yet clear. Government policies provide weak support for both private land ownership and protected areas. In a global environment where national policy has such a dramatic effect on land use and land cover, the factors behind land-use change merit close examination.
Topic:: Agriculture and Economics
Political Geography:: China, Asia, Thailand, Southeast Asia, and Laos

561. A Matter of Trust: Why Congress Should Turn Federal Lands into Fiduciary Trusts

Author:: Randal O'Toole
Publication Date:: 01-2009
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: The Forest Service, Bureau of Land Management, National Park Service, and Fish and Wildlife Service collectivelymanagewell over a quarter of the land in theUnited States.Although everyone agrees that the landsandresourcesmanagedbytheseagencies are exceedingly valuable, the lands collectively cost taxpayers around $7 billion per year.
Topic:: Agriculture, Civil Society, Environment, Government, and Privatization

562. Troubled Neighbor: Mexico's Drug Violence Poses a Threat to the United States

Author:: Ted Galen Carpenter
Publication Date:: 02-2009
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: While U.S. leaders have focused on actual or illusory security threats in distant regions, there is a troubling security problem brewing much closer to home. Violence in Mexico, mostly related to the trade in illegal drugs, has risen sharply in recent years and shows signs of becoming even worse. That violence involves turf fights among the various drug-trafficking organizations as they seek to control access to the lucrative U.S. market. To an increasing extent, the violence also entails fighting between drug traffickers and Mexican military and police forces.
Topic:: Security and Markets
Political Geography:: United States and Mexico

563. Is the Gold Standard Still the Gold Standard among Monetary Systems?

Author:: Lawrence H. White
Publication Date:: 02-2008
Content Type:: Policy Brief
Institution:: The Cato Institute
Abstract:: Critics have raised a number of theoretical and historical objections to the gold standard. Some have called the gold standard a “crazy” idea. The gold standard is not a flawless monetary system. Neither is the fiat money alternative. In light of historical evidence about the comparative magnitude of these flaws, however, the gold standard is a policy option that deserves serious consideration.
Topic:: Economics and Government
Political Geography:: United States

564. WHO's Fooling Who? The World Health Organization's Problematic Ranking of Health Care Systems

Author:: Glen Whitman
Publication Date:: 02-2008
Content Type:: Policy Brief
Institution:: The Cato Institute
Abstract:: The World Health Report 2000, prepared by the World Health Organization, presented performance rankings of 191 nations' health care systems. These rankings have been widely cited in public debates about health care, particularly by those interested in reforming the U.S. health care system to resemble more closely those of other countries. Michael Moore, for instance, famously stated in his film SiCKO that the United States placed only 37th in the WHO report. CNN.com, in verifying Moore's claim, noted that France and Canada both placed in the top 10.
Topic:: Health, Human Welfare, Humanitarian Aid, and International Organization
Political Geography:: United States

565. What to Do about Climate Change

Author:: Indur M. Goklany
Publication Date:: 02-2008
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: The state-of-the-art British-sponsored fasttrack assessment of the global impacts of climate change, a major input to the much-heralded Stern Review on the Economics of Climate Change, indicates that through the year 2100, the contribution of climate change to human health and environmental threats will generally be overshadowed by factors not related to climate change. Hence, climate change is unlikely to be the world's most important environmental problem of the 21st century.
Topic:: International Relations, Climate Change, Environment, and Globalization
Political Geography:: Britain

566. Learning the Right Lessons from Iraq

Author:: Harvey Sapolsky, Christopher Preble, and Benjamin Friedman
Publication Date:: 02-2008
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: Foreign policy experts and policy analysts are misreading the lessons of Iraq. The emerging conventional wisdom holds that success could have been achieved in Iraq with more troops, more cooperation among U.S. government agencies, and better counterinsurgency doctrine. To analysts who share these views, Iraq is not an example of what not to do but of how not to do it. Their policy proposals aim to reform the national security bureaucracy so that we will get it right the next time.
Topic:: International Relations and Oil
Political Geography:: United States, Iraq, and Middle East

567. Cracks in the Foundation: NATO's New Troubles

Author:: Stanley Kober
Publication Date:: 01-2008
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: The North Atlantic Treaty Organization is beginning to fracture. Its members, sharing the triumphalism that underpinned U.S. foreign policy after the Cold War, took on burdens that have proved more difficult than expected. Increasingly, they are failing to meet the challenges confronting them.
Topic:: International Relations, Defense Policy, NATO, and International Organization
Political Geography:: United States

568. Editor's Note

Author:: James A. Dorn
Publication Date:: 03-2008
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: This issue of the Cato Journal features articles that were first presented at the Cato Institute's 25th Annual Monetary Conference, November 14, 2007. The theme of that conference—Monetary Arrangements in the 21st Century—raises important questions about the types of monetary regimes that best protect the value and stability of money while promoting economic freedom.

569. The Fed's Road toward Greater Transparency

Author:: Ben S. Bernanke
Publication Date:: 03-2008
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: Montagu Norman, the governor of the Bank of England from 1921 to 1944, reputedly took as his personal motto, “Never explain, never excuse.” Norman's aphorism exemplified how he and many of his contemporaries viewed the making of monetary policy—as an arcane and esoteric art, best practiced out of public view. Many central bankers of Norman's time (and, indeed, well into the postwar period) believed that a certain mystique attached to their activities and that allowing the public a glimpse of the inner workings would only usurp the prerogatives of insiders and reduce, if not grievously damage, the effectiveness of policy.

570. Renminbi Exchange Rates and Relevant Institutional Factors

Author:: Yi Gang
Publication Date:: 03-2008
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: In recent years, China has experienced rapid social and economic development. Against this backdrop, growing pressure for renminbi appreciation emerged and China's trade surplus and foreign reserves increased rapidly. This article explains the development of the RMB exchange rate by examining productivity growth and institutional factors, such as the transformation of the foreign exchange rate system and legal reforms to strengthen the rule of law.
Political Geography:: China

571. The Future of the Renminbi and Its Impact on the Hong Kong Dollar

Author:: Eddie Yue and Dong He
Publication Date:: 03-2008
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: This article outlines our thoughts on the following three issues. First, will the renminbi become an international currency in the foreseeable future? Second, what does the international use of the renminbi mean for Hong Kong? Third, should the Hong Kong dollar exchange rate be repegged to the renminbi?

572. The Costs and Implications of PBC Sterilization

Author:: John Greenwood
Publication Date:: 03-2008
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: Since China revalued its currency against the U.S. dollar by 2.1 percent in July 2005, from RMB 8.27 per US$ to RMB 8.11, the RMB has appreciated by a further 14 per cent percent to about RMB 6.97 per US$ (as of May 2008). On a trade-weighted basis, however, the currency has appreciated less than half this amount. Using J.P. Morgan's trade-weighted index (broad basis) for the RMB, the currency appreciated just 6.1 percent in nominal terms between August 2005 and May 2008. Although the currency has been very gradually appreciating, the flexibility promised by China's leaders has been more illusory than real, and, more importantly, the underlying international payment imbalances have continued to widen both in absolute terms and as a fraction of GDP.
Political Geography:: China

573. The Role of the Renminbi in the World Economy

Author:: Fred Hu
Publication Date:: 03-2008
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: As China's economy has continued its remarkable expansion and gained an increasingly important role in the global economy, China's currency, the renminbi (RMB), has also captured growing attention from investors and policymakers around the world. In this article, I briefly discuss three significant issues concerning the renminbi—namely, the near-term direction of the exchange rate, the renminbi's convertibility in the medium term, and the currency's international role down the road in the future.
Political Geography:: China

574. Lessons from Monetary and Real Exchange Rate Economics

Author:: Arnold C. Harberger
Publication Date:: 03-2008
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: This article is intended to be a sort of flyover, examining certain key aspects of monetary and real exchange rate economics from a convenient distance. In it I try to avoid getting into technicalities that are interesting mainly to specialists. I focus instead on essentials that are critical to a proper understanding of the economic processes involved, and on a few real-world examples that show the usefulness and relevance of our fundamental theoretical constructs.

575. Monetary Stability, Exchange Rate Regimes, and Capital Controls: What Have We Learned?

Author:: Miranda Xafa
Publication Date:: 03-2008
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: Few topics in macroeconomics are as contentious as capital account liberalization and exchange rate regimes. This article attempts to briefly summarize what we have learned through the turbulent 1990s and the relatively benign 2000s. It is obviously not intended to review the massive literature on these topics, only to distill the main policy conclusions—or at least what I think are the main policy conclusions.

576. The Case for Price Stability with a Flexible Exchange Rate in the New Neoclassical Synthesis

Author:: Marvin Goodfriend
Publication Date:: 03-2008
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: The New Neoclassical Synthesis is a natural starting point for the consideration of welfare-maximizing monetary arrangements in the international context. Alternatively known as the New Keynesian model, this consensus model of monetary policy deserves our attention because it embodies cumulative advances in theory and policy informed by decades of monetary experience from around the world. The consensus model with its prescription for price stability serves today as the foundation for thinking about monetary policy at central banks and universities worldwide.

577. Monetary Policy and the Legacy of Milton Friedman

Author:: Anna J. Schwartz
Publication Date:: 03-2008
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: So many well-deserved tributes have been paid to the memory of Milton Friedman that I propose to pay him tribute in a special way by talking about my long association with him. Before I do so, I note his activities before the 1950s, when we started working together. For the record, Friedman was not a monetarist when our collaboration began.

578. Milton Friedman and the Euro

Author:: Antonio Martino
Publication Date:: 03-2008
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: Milton Friedman did not like the euro. In early 1999 I wrote to him mentioning my daughter Erika's thesis and, in a letter dated March 12, 1999, he wrote back: Erika's thesis on “The Euro and the Dollar” is one of the subjects I have been maintaining a real interest in. As you know, I am very negative about the euro and I am very doubtful about how it will work out. However, I am less pessimistic about it now than I was earlier simply because I never expected that the various countries would display the kind of discipline that was required in order to qualify for the euro. The convergence in inflation rates, interest rates, and so on was greater and more rapid than I would have expected.

579. Friedman: Float or Fix?

Author:: Steve H. Hanke
Publication Date:: 03-2008
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: With the passing of Milton Friedman on November 16, 2006, we lost one of the great champions of free markets. Friedman's obituaries and commentaries on his life's work and enormous influence have invariably mentioned his advocacy of floating exchange rates, leaving the impression that he always favored floating rates. This was not the case.

580. Milton Friedman and the Case against Currency Monopoly

Author:: George Selgin
Publication Date:: 03-2008
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: A longstanding tradition in economics, dating back at least to Adam Smith, looks askance at statutory monopolies, condemning almost all of them as unnecessary barriers to economic progress. Thanks largely to this tradition most of the monopolies present in Smith's day are no longer tolerated. The few exceptions are found mainly in less developed countries, where they remain a cause of impoverishment. Needless to say, economists have also generally opposed the monopolization by fiat of undertakings that were already at least somewhat competitive in Smith's day.

581. The Federal Reserve's Role in the Great Contraction and the Subprime Crisis

Author:: Richard H. Timberlake
Publication Date:: 03-2008
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: Milton Friedman liked to recall that his experience with the Great Depression as a young man living in New York had a major effect on his career decision to study economics. So, we can count at least one good thing that came out of that tragic, unnecessary experience.
Political Geography:: New York

582. Economic Development and the Role of Currency Undervaluation

Author:: Surjit S. Bhalla
Publication Date:: 03-2008
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: This article is concerned with the determinants of economic growth, and, in particular, with the role of policy in directing the pattern of growth in developing economies. Over the years, economists and policymakers have focused primarily on fiscal and exchange rate policy. While the role of fiscal deficits is well understood, the same agreement does not hold with regard to exchange rate policy.

583. Book Review: Freedom from Want: American Liberalism and the Global Economy by Edward Gresser

Author:: Daniel Griswold
Publication Date:: 03-2008
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: Trade policy has become a partisan affair in Washington. Major trade bills in Congress typically pit pro-trade Republicans backed by big business against trade-skeptic Democrats aligned with labor unions. And as the two major parties arm themselves for the 2008 general election, trade policy promises to provide one of the sharper contrasts between them.
Political Geography:: Washington

584. Book Review: The Cult of Statistical Significance: How the Standard Error Costs Us Jobs, Justice, and Lives by Stephen T. Ziliak and Deirdre N. McCloskey

Author:: Peter Van Doren
Publication Date:: 03-2008
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: How do many scientific disciplines estimate and report results? Practitioners estimate regression models or conduct difference-of means tests through experiments. And they report which results are significant and which are not (i.e., different from zero with 95 percent confidence). In this important book, Ziliak and McCloskey have three objectives: to remind us that such research may be mindless, unscientific, and costly; to explicate the intellectual history of significance testing and the struggles among those professors who developed sampling and statistical testing; and to illustrate the correct way to conduct research and praise those few who report their research properly.

585. Book Review: My Grandfather's Son by Clarence Thomas; Supreme Discomfort: The Divided Soul of Clarence Thomas by Kevin Merida and Michael A. Fletcher

Author:: Ilya Shapiro
Publication Date:: 03-2008
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: Whatever you think of his politics or jurisprudence, Clarence Thomas is a remarkable man. Born into desperate poverty in the Jim Crow South and raised by his illiterate grandfather, he would graduate from (and be completely disillusioned by) Yale Law School while battling personal and political demons that would have felled lesser mortals many times over. Now on the Supreme Court bench for over 15 years, Justice Thomas has established himself as a force to be reckoned with, a strong voice who has accepted and transcended his unfortunate notoriety.

586. Book Review: Rumsfeld's Wars: The Arrogance of Power by Dale R. Herspring

Author:: Ionut Popescu
Publication Date:: 03-2008
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: Donald Rumsfeld will go down in history as one of the worst secretaries of defense since the end of World War II. This is the conclusion reached by Dale Herspring, a political science professor at the University of Kansas, in a new book transparently titled Rumsfeld's Wars: The Arrogance of Power. Without much effort to give the former secretary any benefit of the doubt, Herspring blames him directly for causing our military to become “demoralized” and “broken.”

587. Book Review: World War IV: The Long Struggle against Islamofascism by Norman Podhoretz

Author:: Christopher Preble
Publication Date:: 03-2008
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: “9/11 constituted an open declaration of war on the United States and … the war into which it catapulted us was nothing less than another world war.” So says Norman Podhoretz in the opening passage of this alarmist, rambling screed. The enemy is Islamofascism, a “monster with two heads, one religious and the other secular.” This scourge, Podhoretz warns darkly, may be “even more dangerous and difficult to beat” than Nazi Germany or the Soviet Union.
Political Geography:: United States and Soviet Union

588. Executive Pay: Regulation vs. Market Competition

Author:: Ira T. Kay and Steven Van Putten
Publication Date:: 09-2008
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: The economic slowdown and the active political season are generating calls for imposing new regulations on executive pay. The presidential candidates of the two major parties have lashed out at what they perceive to be excessive pay for certain executives or for corporate executives in general.
Topic:: Economics, Government, and Markets

589. Markets vs. Monopolies in Education: A Global Review of the Evidence

Author:: Andrew J. Coulson
Publication Date:: 09-2008
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: Would large-scale, free-market reforms improve educational outcomes for American children? That question cannot be answered by looking at domestic evidence alone. Though innumerable “school choice” programs have been implemented around the United States, none has created a truly free and competitive education marketplace. Existing programs are too small, too restriction laden, or both. To understand how genuine market forces affect school performance, we must cast a wider net, surveying education systems from all over the globe. The present paper undertakes such a review, assessing the results of 25 years of international research comparing market and government provision of education, and explaining why these international experiences are relevant to the United States.
Topic:: Economics, Education, Government, and Markets
Political Geography:: United States

590. A Fork in the Road: Obama, McCain, and Health Care

Author:: Michael Tanner
Publication Date:: 07-2008
Content Type:: Policy Brief
Institution:: The Cato Institute
Abstract:: Healthcare reform will be one of the top issues of the 2008 presidential election. In the face of widespread public demand for changes in the U.S. health care system, both Barack Obama and John McCain have offered detailed proposals for reform.
Topic:: Government, Health, and Politics
Political Geography:: United States

591. The Klein Doctrine: The Rise of Disaster Polemics

Author:: Johan Norberg
Publication Date:: 05-2008
Content Type:: Policy Brief
Institution:: The Cato Institute
Abstract:: Naomi Klein's The Shock Doctrine ;purports to be an exposé of the ruthless nature of free-market capitalism and its chief recent exponent, Milton Friedman. Klein argues that capitalism goes hand in hand with dictatorship and brutality and that dictators and other unscrupulous political figures take advantage of "shocks"-catastrophes real or manufactured-to consolidate their power and implement unpopular market reforms. Klein cites Chile under General Augusto Pinochet, Britain under Margaret Thatcher, China during the Tiananmen Square crisis, and the ongoing war in Iraq as examples of this process.
Topic:: Democratization, Economics, and Markets
Political Geography:: China and Chile

592. Asset Bubbles and Their Consequences

Author:: Gerald P. O'Driscoll Jr.
Publication Date:: 05-2008
Content Type:: Policy Brief
Institution:: The Cato Institute
Abstract:: In the past, the federal government has introduced moral hazard in the banking system through deposit insurance. Banks underpriced risk because of the federal guarantee that backed deposits. After banking crises in the 1980s and 1990s, deposit insurance was put on a sound basis and that source of moral hazard was mitigated. In its place, monetary policy has become a source of moral hazard. In acting to counter the economic effects of declining asset prices, the Federal Reserve has come to be viewed as underwriting risky investments. Policy pronouncements by senior Fed officials have reinforced that perception. These actions and pronouncements are mutually reinforcing and destructive to the operation of financial markets. The current financial crisis began in the subprime housing market and then spread throughout credit markets. The new Fed policy fueled the housing boom. Refusing to accept responsibility for the housing bubble, the Fed's recent actions will likely fuel a new asset bubble. The cumulative effects of recent monetary policy undermine the case for free markets.
Topic:: Economics, Government, and Markets
Political Geography:: United States

593. FASB: Making Financial Statements Mysterious

Author:: T.J. Rodgers
Publication Date:: 08-2008
Content Type:: Policy Brief
Institution:: The Cato Institute
Abstract:: Since the passage of the Sarbanes-Oxley Act in 2002, the Financial Accounting Standards Board has passed rules that it promises will make corporate accounting more transparent. In fact, its revised Generally Accepted Accounting Principles have made it difficult for investors — or even CEOs — to understand a company's financial report.
Topic:: Economics, Government, and Markets
Political Geography:: United States

594. Freddie Mac and Fannie Mae: An Exit Strategy for the Taxpayer

Author:: Arnold Kling
Publication Date:: 09-2008
Content Type:: Policy Brief
Institution:: The Cato Institute
Abstract:: The Fannie Mae-Freddie Mac crisis may have been the most avoidable financial crisis in history. Economists have long complained that the risks posed by the government-sponsored enterprises were large relative to any social benefits.
Topic:: Economics, Government, and Financial Crisis
Political Geography:: United States

595. Rails Won't Save America

Author:: Randal O'Toole
Publication Date:: 10-2008
Content Type:: Policy Brief
Institution:: The Cato Institute
Abstract:: Rising gas prices and concerns about greenhouse gases have stimulated calls to build more rail transit lines in urban areas, increase subsidies to Amtrak, and construct a large-scale intercity high-speed rail system. These megaprojects will cost hundreds of billions of dollars, but they won't save energy or significantly reduce greenhouse gas emissions.
Topic:: Development, Economics, and Government
Political Geography:: United States

596. Does Barack Obama Support Socialized Medicine?

Author:: Michael F. Cannon
Publication Date:: 10-2008
Content Type:: Policy Brief
Institution:: The Cato Institute
Abstract:: Democratic presidential nominee Sen. Barack Obama (IL) has proposed an ambitious plan to restructure America's health care sector. Rather than engage in a detailed critique of Obama's health care plan, many critics prefer to label it "socialized medicine." Is that a fair description of the Obama plan and similar plans? Over the past year, prominent media outlets and respectable think tanks have investigated that question and come to a unanimous answer: no.
Topic:: Economics, Government, Health, and Markets
Political Geography:: United States

597. Learning the Right Lessons from Iraq

Author:: Benjamin H. Friedman, Harvey Sapolsky, and Christopher Preble
Publication Date:: 02-2008
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: Foreign policy experts and policy analysts are misreading the lessons of Iraq. The emerging conventional wisdom holds that success could have been achieved in Iraq with more troops, more cooperation among U.S. government agencies, and better counterinsurgency doctrine. To analysts who share these views, Iraq is not an example of what not to do but of how not to do it. Their policy proposals aim to reform the national security bureaucracy so that we will get it right the next time.
Topic:: Foreign Policy and War
Political Geography:: United States, Iraq, and Middle East

598. Parting with Illusions: Developing a Realistic Approach to Relations with Russia

Author:: Nikolas Gvosdev
Publication Date:: 02-2008
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: A review of America's post-Soviet strategy toward Russia is long overdue. The illusions that once guided policy are now at an end. What is needed is a dispassionate approach to Russia, wherein Americans would neither magnify nor excuse the virtues and vices of the Russian Federation but would accept the following realities: Russia is unlikely to become integrated into the Euro-Atlantic community and is unwilling to adjust its foreign policy priorities accordingly; There is broad-based support within Russia for the direction in which Vladimir Putin has taken the country; Russia has undergone a genuine—if limited— recovery from the collapse of the 1990s; Washington lacks sufficient leverage to compel Russian acquiescence to its policy preferences; and On a number of critical foreign policy issues, there is no clear community of interests that allows for concepts of "selective partnership" to be effective.
Topic:: International Relations and Diplomacy
Political Geography:: Russia, United States, America, Europe, Asia, and Soviet Union

599. Electronic Employment Eligibility Verification: Franz Kafka's Solution to Illegal Immigration

Author:: Jim Harper
Publication Date:: 03-2008
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: In last summer's debate over immigration reform, Congress treated a national electronic employment eligibility verification (EEV) system as a matter of near consensus. Intended to strengthen internal enforcement of the immigration laws, electronic EEV is an Internet-based employee vetting system that the federal government would require every employer to use.
Topic:: Economics, Government, and Politics
Political Geography:: United States

600. The Grass Is Not Always Greener: A Look at National Health Care Systems Around the World

Author:: Michael Tanner
Publication Date:: 03-2008
Content Type:: Working Paper
Institution:: The Cato Institute
Abstract:: Critics of the U.S. health care system frequently point to other countries as models for reform. They point out that many countries spend far less on health care than the United States yet seem to enjoy better health outcomes. The United States should follow the lead of those countries, the critics say, and adopt a government- run, national health care system.
Topic:: Government and Health
Political Geography:: United States and Europe

Search

Search Constraints

Search Results

Refine your search

Topic

Political Geography

Content Type

Journal

Publishing Institution

Author

Publication Year

COLUMBIA UNIVERSITY PRESS