Ed Dolan on the case for a universal basic income

Ed Dolan suggests that claims that social safety net programs on average don't disincentivize work much may depend on the current relatively limited coverage of such programs (especially compared to the situation before, say, the Reagan administration and (hopefully soon to be qualified with the word "first") Clinton administration.  He thinks advocates should consider replacing many of these programs with a universal basic income.  There is a lot more one could say about this issue, but I think this is an important point to keep in mind.

Stiglitz likes South African infrastructure investment plans

Since I'm in South Africa this month as a Fellow of the Stellenbosch Institute for Advanced Study (about which more later), I came across this interesting article from a main South African paper, Business Day, about Joseph Stiglitz' involvement in South African economic issues.  According to the article he "voiced strong support for the government’s R840bn infrastructure programme, which he said could create a "virtuous circle" of investment and growth and set SA on the path to a more productive and equal society."  (Link added.) 840 billion rand is 108 billion US dollars at today's rate.  That is roughly 25% of South African nominal GDP as forecast for 2012, but this article, also in Business Day, refers to it as a 20-year rolling program, in which case it is on the order of 1% of GDP annually, depending on the spending profile, future GDP growth, and how the total nominal value of R850bn in planned spending is calculated.  Also interesting is the plan to finance it with mandatory retirement plan savings; while there are probably further details, it sounds on the face of it similar to a social-security type plan.  However it lacks, one suspects, the (rather inappropriate, in my view) feature of US social security as currently (but rather recently, in historic terms) formulated, of being officially described as a trust fund invested entirely in central government securities.  From the second Business Day article cited above:

In the final session of the conference, business leader Bobby Godsell and Zwelinzima Vavi, general secretary of the Congress of South African Trade Unions, both made guarded commitments to this. Mr Godsell said a society-wide discussion was needed on the concept of "a reasonable return" for investment, while Mr Vavi said he backed plans to introduce mandatory savings for all employees.

This sounds like how it should be done.

I have picked up a widespread sense that there is a lot of corruption and siphoning off of funds in the awarding and performance of goverment contracts in South Africa.  Obviously a big infrastructure programme provides big opportunities for more of this, which can of course be damaging economically and perhaps even more, politically; I suspect, and certainly hope, Stiglitz has factored in this aspect of the South African scene, and still thinks the plan worthwhile but it would be interesting to see it addressed directly as it is certainly not a minor issue.

American Enterprise "Institute" finishes destroying its scholarly credibility

The American Enterprise Institute has fired David Frum.  Presumably this is retribution for publishing his views on the passage of the health care bill---though Frum is a conservative, he thinks it a disaster for American conservatives that they refused to deal with the Democrats on healthcare.  Bruce Bartlett now reports that Frum privately told him several months ago that AEI scholars---Bartlett puts the word "scholar" in quotes, but I won't go that far on a blanket basis---"had been ordered not to speak to the media because they agreed with too much of what Obama was trying to do."

I have long viewed a writer's AEI affiliation as grounds for deep skepticism about even a sensible-sounding argument, because of corporate and political meddling of this sort with their supposedly scholarly programs, but the details had faded over time.  The latest news seriously damages the position of any genuine scholars who still work there, putting guys like Roger Scruton, who has done superb work (The Aesthetics of Architecture, and Art and Imagination are among the best things I've encountered by way of recent philosophy of art, and I certainly read Arthur Danto and Richard Wollheim back in the day) in a difficult position.

A spear carrier's view of the 1994 health care reform debacle (DeLong)

I get annoyed by blogs that are mostly just links to other people's stuff... but I had to link this great post from Brad DeLong on his inside view of the 1994 debacle in health care...

I"ve been wondering for the last few weeks or months... why can't Obama be more like LBJ?  Still, everyone has to operate from their own strengths... he may yet pull off health care reform in his own style, and for those who care about the horse-race aspect of this (and I certainly do inasmuch as it affects the Democrats' chances in the next two elections): by now, anything decent (or even apparently decent) by way of a health care bill will be viewed as a victory for Obama.

I'm worried, though, that although there are apparently European models for well-functioning healthcare that don't involve a public option, they involve nongovernmental nonprofit entities, or high levels of regulation.   Such models may be very difficult to replicate in this country where they may be easily co-opted or weakened by the money and influence big insurance can put behind things, and by the continual possibility of politically motivated medldling/sabotage.  Ironically, I fear our politics and culture may make a public option more workable than a semiprivate one.