New York Times economic columnist David Leonhardt seems to do a Jekyl and Hyde routine, alternating insightful analysis with painful renditions of the conventional wisdom. Mr. Hyde is out in all his glory today. First, he talks about the solution to the Social Security crisis (while correctly noting that Medicare poses a much bigger problem). Well, who told him that it's a problem? Yes, the projections show that we will have to do something in the next 40 years to change the program to fully fund projected benefits. But, it really isn't that hard to sit down and make up modest shortfalls, the Greenspan commission figured out a solution in less than a year back in 1983. There is no obvious reason that we can't put off these decisions for 20 or 30 years when we have a better idea of what the future looks like, After all, the country does have real problems today. Second, he goes through the story about health care costs requiring restrictions on expnesive drugs and procedures. In a world of big thinking we might ask why the drugs and procedures are expensive? The answer in most cases is government patent monopolies. In the absence of patent monopolies, Wal-Mart could be selling almost all drugs for $4 per prescription. The same applies to many medical procedures. In the 21st century, there are better ways to finance innovation than patent monopolies, a relic of feudal guild system. Third, we have the discussion of global warming and the prospect of higher gas taxes or higher mileage standards. These are both reasonable measures, but is pay-by-the-mile auto insurance too bold to be considered by NYT columnists? Finally, we have the possibility of an immigration policy that is designed to put downward pressure on the wages of highly paid professionals like doctors and lawyers instead of depressing the wages of less-educated workers, like the current immigration policy. This policy is now being advocated by Harvard Professor Benjamin Friedman, which just goes to show that if you say something long enough, someone important will think of the same idea. (Okay, I give Leonhardt credit for noting this one.) Anyhow, we could hope for bolder ideas in a column that takes politicians to task for their lack of boldness.
--Dean Baker
