Informed Speculation

I’ve been pretty okay with the results of the midterm elections (clearly, the Republicans deserved to lose) and I’m more than willing to give the Democrats a chance, but that doesn’t mean turning a blind eye to ideas that are blatantly wrong. Writing in Reason, Katherine Mangu-Ward isolates ten big mistakes we can expect the Democrats to at least try to implement. I’m focusing on two: first, the inexplicable hostility to free trade:

Don’t expect any more progress on free trade. If Congress had remained in Republican hands, they probably wouldn’t have done much to make libertarians happy, but doing a little bit more to free up trade is one thing that an unpopular, lame duck Congress and its president might have managed to pull off. Instead, Permanent Normal Trade relations with Vietnam have stalled and bilateral trade agreements with Peru and Colombia are in trouble.

The anti-trade TomPaine.com is taking victory laps already: “Even before being hit by electoral losses, Bush administration allies had intended to sneak several trade agreements through Congress during the lame duck session. This hasn’t gone as smoothly as they had planned. When President Bush visited Vietnam the week before Thanksgiving, he hoped to bring with him news of Congressional approval of Permanent Normal Trade Relations with that country—a measure that would have served as a stepping stone to a free trade deal and an endorsement of Vietnam’s entry into the WTO. It didn’t happen. The bill failed to secure the two-thirds majority it needed to pass, with many emboldened Democrats rallying to defeat it. The New York Times declared that the vote, which was supposed to be an easy victory, instead signaled ‘a deep disappointment and embarrassment for the White House.’”

Next, an explanation of why the seemingly benign suggestion that Medicare be allowed to negotiate lower drug prices is a colossal blunder:

“Fixing” the prescription drug benefit. When the Republicans passed Medicare part D, I—like many libertarians—despaired of the GOP. The only thing worse than a massive new entitlement ushered in by Republicans? A passel of aggressive Democrats promising to “fix it.” By allowing Medicare to negotiate for lower drug prices with pharmaceutical companies and permitting more importation of pre-price controlled drugs from Canada, Democrats will add another command-and-control component to our already monstrosity of a health care system.

There’s the old familiar song and dance about how if you decrease Big Pharma’s prospective profits on new drugs, they will (reasonably) retaliate with less spending on research and development. According to the author of a new study from the Manhattan Institute: “Prices would be driven down by over 35 percent by 2025. The cumulative decline in drug R&D for 2007-2025 would be about $196 billion in year 2005 dollars, or $10.3 billion per year. Because R&D costs for new medicines are about $1 billion, the loss would be about 196 new drugs.”

But to really understand the havoc a Democratic “fix” could wreak, warily eyeball the Department of Veterans Affairs, which already negotiates for its drugs and has been cited by Democrats as a model for Medicare. At the VA, prices for drugs are very low. But one way that the VA keeps overall prices down is by making it tough to get new, expensive drugs. Their formulary includes about 1400 drugs, and they refuse to consider a drug for inclusion until it has been on the market for three years. Compare that with the 4,300 drugs currently listed at (the privately negotiated) Part D formularies. Right now, a third of VA seniors say they would rather be on Part D. If Dems have their way, at least these vets won’t have to bother with the paperwork for switching.

There’s a reason why conservatives and liberarians view government as a thing to be wary of: of course, the people who work for governments are, for the most part, sincere in their desire to serve the public good. But bureaucracies ultimately serve themselves; the most powerful bureaucrat is the one who controls the most bodies and budget.

One thing the Democrats will NOT do is live up to their campaign pledge to implement the recommendations of the 9/11 commission, as Nancy Reneges reports:

Incoming House Speaker Nancy Pelosi is about to break a pre-election pledge with record speed. And this time, it’s one of the cornerstone promises of the Democrats’ victorious campaign to retake control of Congress.

Both before and after Election Day, Pelosi and top Democratic leaders vowed to implement all 41 recommendations of the 9/11 Commission headed by former Gov. Tom Kean and former Rep. Lee Hamilton.

Indeed, Pelosi and House Majority Leader-elect Steny Hoyer publicly vowed to enact the panel’s full agenda within the “first 100 legislative hours” after the new Congress is sworn in on Jan. 4.

But that, The Washington Post now reports, ain’t gonna happen.

Pelosi and Hoyer already have decided to take a pass on the one recommendation that the commission, in its final report, labeled “the most difficult and important” – one without which “the American people will not get the security they want and need.”

And it’s all thanks to petty politics – and, in particular, the drive to protect certain members’ turf.

The recommendation in question?

The one demanding a comprehensive overhaul of Congress – to give the House and Senate intelligence committees the right not only to oversee the nation’s intel agencies, but also to control their purse strings and help shape policy.

This seems reasonable: As Kean himself said, “The person who controls your budget is the one you listen to.”

But that would mean stripping the Armed Services and Appropriations committees of a good deal of their power – and the incoming chairmen and members aren’t about to let that happen. Especially Rep. John Murtha, who – despite backing from Pelosi – lost out to Hoyer in the race for majority leader and who is set to chair Appropriations.

What are Democrats proposing?

Why, a commission of their own, says The Washington Post, to “look at the issue and produce recommendations” somewhere down the line.

Pathetic…