Thursday, September 30, 2010

Press Briefing

Sep 30, 2010

Reforming Government: Congressional Republicans Haven't Changed & Can't Bring the Change We Need

Grading the Governors - A new Cato Institute report on the fiscal best and worst

Assistant Sec for International Markets and Development Marisa Lago Introductory Comments for Eurofi Panel Discussion of "Prospects of future G-20 discussions and Expected impacts for the EU"

Why Congressional intelligence is an oxymoron

Treasury Deputy Secretary Neal Wolin Written Testimony before the Senate Banking Committee on "Implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act"

McDonald's May Drop Health Plan - the law ripples through the real world

Distrust in U.S. Media Edges Up to Record High

Conservatives: The Bipartisan Fight Against the Obama Tax Hikes

Statement by the President on the House Approval of the James Zadroga 9/11 Health and Compensation Act

In Elizabeth Warren We Trust? - The unaccountable head of the new Consumer Financial Protection Bureau has repeatedly used shoddy data to push policies she favors
By Todd Zywicki
WSJ, Sep 30, 2010

The Obama administration has promised that the Federal Reserve's new Consumer Financial Protection Bureau will be independent from politics, a model of regulatory expertise grounded in sound data and economics. Naming Harvard Law Prof. Elizabeth Warren as de facto agency head undermines both goals.

By appointing another White House czar to avoid Senate confirmation, the administration politicized the powerful new bureaucracy from its birth. And by appointing an individual with a track record of using questionable research to advance policy ends, it has jeopardized the second goal as well.

Consider Ms. Warren's much-ballyhooed study on the alleged link among health problems, medical expenses and personal bankruptcy filings. Published in the February 2005 issue of Health Affairs, the report was timed to head off bipartisan bankruptcy legislation that was enacted later that year. Ms. Warren and her co-authors claimed that "at least" 46% of personal bankruptcy filings in 2001 (the year from they collected the data) were the result of "medical causes," and that this represented a 23-fold increase over 20 years.

Both conclusions are extremely suspect. First, the study provided an implausibly broad definition of "medical bankruptcy"—including any filer who reported uncontrolled gambling, drug or alcohol addiction, or the birth or adoption of a child.

Equally dubious, the authors classified a bankruptcy as having a "major medical cause" if the individual had accumulated more than $1,000 in out-of-pocket medical expenses (uncovered by insurance) over the course of two years prior to filing—regardless of income, and even if the debtor did not cite illness or injury among the reasons for bankruptcy.

In 2001, average per capita out-of-pocket medical expenses were $683. During the two-year period Ms. Warren and her co-authors studied, in other words, Americans spent an average of $1,366 on uninsured medical expenses, or 30% more than their threshold definition of a "major medical cause." There was no larger context for their threshold figure: A debtor with $1,001 in uncovered medical expenses and $50,000 on a Saks card would constitute a "medical bankruptcy" in their study.

The claim of a 23-fold increase in medical bankruptcies was based on a comparison of their 2001 data with Ms. Warren's research in a 1981 study—which appears to count only those who self-reported as having filed bankruptcy for medical reasons. This is a completely different and much narrower definition of "medical bankruptcy" than the one she used 20 years later, and obviously inflates the increase.

In contrast to Ms. Warren's studies, a battery of analysis, including research done by the Department of Justice's Executive Office of the United States Trustee (which oversees the administration of bankruptcy cases), and by Daniel Dranove and Michael Millenson of Northwestern University, concluded that fewer than 20% of bankruptcies are caused by health problems or medical expenses.

Last year Ms. Warren and her co-authors were back with an even more dramatic study, in the American Journal of Medicine, timed to promote President Obama's health-care reform law. Drawing on 2007 filings, the authors concluded that 62% of bankruptcy filings were the result of medical issues and that the odds that a bankruptcy had a medical cause had doubled between just 2001 and 2007. This study was also flawed.

After Congress made it harder for people to skip out on their debts in 2005, the number of bankruptcy filings plummeted. In 2001, the year Ms. Warren used for the first study, there were 1,452,030 personal bankruptcy filings; in 2007 there were 822,590. Even if we are to accept the methodologies of the two studies for the sake of argument, there were 670,838 "medical bankruptcies" in 2001 and 510,828 medical bankruptcies in 2007—a drop of 160,000 per year. Yet Ms. Warren's article nowhere acknowledges that the absolute number of bankruptcies and purported medical bankruptcies declined.

Concerns about Ms. Warren's presentation and interpretation of data have been longstanding. As I wrote in these pages in August 2007, her book "The Two-Income Trap" willfully ignores the obvious in her own data: that spiraling taxes—and not living expenses—were a major cause of middle class financial woes.

Similarly, reports of the Congressional Oversight Panel of the Troubled Asset Relief Program (TARP)—a panel of which she was chair—uniformly treated home foreclosures as the result of bank fraud and the bullying of helpless homeowners. Fraud and bullying there was, but her panel consistently ignored the many foreclosures that have resulted from a homeowner's strategic decision to walk away from a house whose value has fallen below the amount still owed on the mortgage. Economists and housing analysts widely agree that a substantial number of defaults occur for this reason. That reality is largely absent from the TARP panel's reports.

The head of the Consumer Financial Protection Bureau is one of the most powerful bureaucratic positions ever created in the American political system. It can regulate or ban almost every consumer credit product in the country, yet it is beyond Congress's power of the purse because its budget is guaranteed as a percentage of the Fed's annual revenues. Under normal circumstances, the Senate would have the opportunity to ask Ms. Warren to explain the way in which she has sometimes interpreted data in her research before entrusting her with control of the agency.

By doing an end-run around the confirmation process, the Obama administration has eliminated our opportunity to find out. And by installing the head of the agency as an assistant to the president inside the White House, it has insulated her from meaningful congressional oversight.

Mr. Zywicki teaches bankruptcy and contracts at the George Mason University School of Law, and is the co-editor of the University of Chicago's Supreme Court Economic Review.

Update: U.S. Response to Pakistan's Flooding Disaster

Democrats and the Health-Reform Albatross - By making so many misleading claims, the president created an army of opposition

IMF: Global Financial Stability Report

The Protectionist Threat of Another Great Depression

Wednesday, September 29, 2010

Press Briefing

Sep 29, 2010

Bangladesh, 'Basket Case' No More - Pakistan could learn about economic growth and confronting terrorism from its former eastern province

Barack Obama: Defender of State Secrets - The president has launched more leak prosecutions than all his predecessors combined. By Gabriel Schoenfeld
WSJ, Sep 29, 2010

'My administration is committed to creating an unprecedented level of openness in government," Barack Obama pledged to the nation when he took office. Things haven't quite worked out as the president promised.

Consider the fate of leakers of secret information—"whistleblowers" is the celebratory term employed by some in the press—at the hands of the Obama Justice Department. In December 2009, an FBI contract linguist pleaded guilty to passing classified information to a blogger. Shortly thereafter he was sentenced to 20 months in jail. This April, a high-ranking National Security Agency official was charged under the espionage statutes for passing secrets to a reporter at the Baltimore Sun. In August, a State Department contractor was indicted for passing secrets about North Korea to Fox News. On top of all of this, the military has charged a young army intelligence officer with the unauthorized transmission of national defense information. He is widely presumed to be the source of the huge trove of classified document published by WikiLeaks, the infamous online bulletin board for secrets.

Whatever one makes of the merits of any of these cases, the astonishing fact remains that in all of prior American history charges have only been brought in three instances for leaking classified information. In his first 21 months in office, President Obama has launched more such prosecutions than in all preceding administrations combined.

Then we have the Obama administration's invocation of the state secrets privilege in court—a practice for which the Bush administration was roundly criticized by the left. In a series of high-profile terrorism cases, the Justice Department has asked judges to toss out those in which secret information would be disclosed.

Most recently, it has invoked the privilege in a lawsuit filed by the American Civil Liberties Union (ACLU) on behalf of Anwar al-Awlaki, the U.S.-born cleric who resides in Yemen and is implicated in numerous terrorist attacks. "It strains credulity to argue that our laws require the government to disclose to an active, operational terrorist any information about how, when and where we fight terrorism," a Justice Department spokesman commented last week.

George W. Bush was slammed unrelentingly for engaging, in the words of John Podesta—Bill Clinton's former chief of staff and the founder of the liberal Center for American Progress—in a "prolonged assault on open government in the name of national security." These same voices are turning on the Obama administration in tones more plaintive than withering.

There is "real doubt," writes Ken Gude, a national-security expert at Mr. Podesta's think tank, "that the Obama administration will live up to its commitment to usher in a new era of transparency." Already last year, ACLU Executive Director Anthony Romero lamented that Mr. Obama has "disappointingly reneged" on some of his promises to be more open. "This is not change. This is definitely more of the same."

If it is indeed more of the same, it is worth asking why. Mr. Obama has discovered, as much as he may wish it otherwise, that he is a war president. And like his predecessor, he is not only a war president: He is presiding over a particular kind of war in Afghanistan and in the broader war against Islamic terrorists where intelligence is more critical than ever.

The effectiveness of our intelligence tools—from the interrogation of captured enemy combatants to the capabilities of satellite reconnaissance systems—remains overwhelmingly dependent on their clandestine nature. It is not an overstatement to say that secrecy today is one of the most critical tools of national defense.

Leaks of counterterrorism secrets to the press, and disclosure of counterterrorism techniques and procedures in courtrooms, can imperil the war effort. We are thus faced squarely with the abiding tension between liberty and security. The U.S. government, under successive administrations, has been struggling to find the proper balance.

Now that they're going after the Obama administration for its alleged unwarranted secrecy, the carping civil-libertarian critics are acquiring the virtue of consistency. Perhaps they can serve a useful purpose in guarding against government excesses. But one thing's certain: The more voluble they become, the more apparent it also becomes that Mr. Obama is doing the right thing.

Mr. Schoenfeld, a senior fellow at the Hudson Institute and resident scholar at the Witherspoon Institute, is the author of "Necessary Secrets: National Security, the Media, and the Rule of Law" (Norton, 2010).

The President on Our Veterans - Choosing Priorities in Albuquerque

Israeli-Palestinian Peace Talks Are Suspended. So What? - What matters is growth and state-building in the West Bank. Yet the Obama administration is still fixated on settlements.

Multilateral Engagement in Action

Department of Disinformation - Sebelius tells a North Carolina fairy tale

Helping Bangladeshis Achieve Food Security

The Pelosi-Reid Deficits - Blame Congress, not presidents Bush or Obama, for our perilous fiscal situation

U.S. Strongly Condemns Stoning Of Woman in Orakzai, Pakistan

Blaming the Voters - Democrats embrace the Chris Farley school of political motivation

Thinking beyond Kopassus: Why US Security Assistance to Indonesia Needs Recalibrating

The Litigious Legacy of Kelo - Eminent domain abuse and Justice Kennedy

State Dept: Unstinting Resolve

China's Next Leap Forward - The jump from middle-income to rich status is much harder to achieve than the ascent from poverty. But there are plenty of reasons to believe China's growth prospects remain strong.

Tuesday, September 28, 2010

Press Briefing

Sep 28, 2010

The election of 1860—between war and the bitterness of failed compromise - Review of Douglas R. Egerton's "Year of Meteors"

What Ahmadinejad Knows - Iran's president appeals to 9/11 Truthers

Black Colleges Need a New Mission - Once an essential response to racism, they are now academically inferior

A Game of Trade Chicken - Poultry protectionism shows where the U.S. and China are heading

Remarks to 2010 Multinational BMD Conference and Exhibition

What's the Matter With Wall Street? - There are too many traders, bankers and salesmen to support the new level of business. Thanks to Dodd-Frank, the shrinking of finance will continue.

The U.S. Record on Financing for Development in 2009

Low Carbon Fuel Standards: A Threat to Our Most Secure Source of Foreign Oil

Sebelius op-ed: Health Insurers Finally Get Some Oversight - In the past, these companies ran wild with no accountability

ObamaCare's Hotel California - The state moves to impose price controls you can never leave

Monday, September 27, 2010

Press Briefing

Sep 27, 2010

White House Council on Women and Girls’ Friday Highlights

The Regulation Tax Keeps Growing - Blame Washington, not China, for the decline of American manufacturing

White House: Emergency Planning for the Entire Community

The Send Jobs Overseas Act - Ending the deferral of foreign income is another tax on U.S. employment

Curb Corruption or Lose the War - Association with the CIA has given some Afghan officials a sense of impunity, which threatens Gen. Petraeus's hearts-and-minds effort

How to Grow Out of the Deficit - Limiting spending increases to inflation minus 1% would balance the budget in less than a decade

White House - Dodging the Impact of Their Policies "Across the Board"

The Non-Economist's Economist - John Kenneth Galbraith avoided technical jargon and wrote witty prose—too bad he got so much wrong

Saturday, September 25, 2010

Press Briefing

Sep 25, 2010

President Obama Addresses Ministerial Meeting on Sudan

Tax Cuts and Revenue: What We Learned in the 1980s - Supply-siders never argued that all tax cuts pay for themselves. But the evidence is clear that lower rates on high earners do produce more revenue over time.

Where Should the UN Focus Its Peacekeeping Resources, and Why?

Kids 0, Insurance 0 - The first fruits of ObamaCare

NATO-Russia Council Meeting:  Building a Stronger Partnership

The Administration’s De Facto Moratorium on Shallow Water Energy Exploration

President Obama: GOP Leadership Standing up for Outsourcing and Special Interests, Instead of American Workers

Tony Blair in Defense of the West—and the Third Way - 'In today's world, a progressive party that stands essentially for big government is not going to succeed'
By Bret Stephens
The Wall Street Journal, sEP 25, 2010, page A17

New York
Tony Blair believes in "Islamist extremism."

It's U.N. week, and the former British prime minister is in town as the representative of the Quartet—the U.S., Russia, the EU and the U.N.—that aims to broker Mideast peace. We are in his suite at a posh Upper East Side hotel, talking about a passage in his just-published memoir in which he discusses the reach of the radical Islamist "narrative." It's a narrative, he argues, that needs to be "challenged head on."

This prompts me to ask whether he thinks that the widespread reluctance to use the word "Islamist" alongside the word "extremist" is a kind of evasion from reality.

"I think it is, I'm afraid," Mr. Blair answers, deploying the famously elegant diction that used to make for such invidious contrasts in the days when he shared a podium with George W. Bush. By way of explanation, he turns to the recent, aborted attempt by Florida Pastor Terry Jones to burn the Quran.

"I have no difficulty in saying this person is a Christian pastor but I completely and totally disagree with him," he explains. "It's fascinating, though, that when that happens the whole of the Western leadership have to come out and denounce it. . . . Let's say some cleric in some remote part of Pakistan turns up and says, 'I'm going to burn the Bible tomorrow.' What would we all say?"

Mr. Blair has been out of office for more than three years, but he is still sounding the same themes that were the touchstones of his decade in office. He is still faithful to the Third Way school of politics, still believes that government should be for empowerment not entitlement, and is still fighting a rear-guard action against fellow "progressives" who think it ought to be the other way round. But above all, Mr. Blair remains seized by the scope of the challenge posed by radical Islam.

"I think there is a tendency to regard the activities of the extremists who use terrorism and suicide bombings and so on as this small group of people unrelated to the broader [Muslim] community in which they exist," he says. "And I feel that narrative penetrates a lot deeper. And if you can't take that narrative on, you are left in a position where you end up semi-apologizing for your own position in relation to these things. And I think that's dangerous."

The narrative, as Mr. Blair describes it, consists of the view that the West is in cahoots with its client regimes in the Middle East—not just Israel, but also countries like Pakistan, Egypt and the Gulf emirates—to oppress Muslims and denigrate Islam. That narrative has its own subscribers among Western leaders and opinion-makers who believe the right approach is to say, in Mr. Blair's mocking paraphrase, "We kind of understand why you feel like this about us and maybe it's our fault but, you know, let's try and work this out."

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Terry Shoffner

Mr. Blair has little patience with this view: It rubs him wrong not only because he believes the analysis is flawed and the prescription misguided, but also—and here I'm reading between the lines—because it suggests Muslims should be held to a different set of standards and values.

Yes, he says, the Muslim world needs "genuine demonstrations of equality, respect, partnership and so on." That's one reason, he adds, why he puts so much stock in the Israeli-Arab peace process. But Mr. Blair also stresses that what the Muslim world—or at last the modernizing forces within it—need from the West is "for us to be really strong about our own confidence in our position, our own way of life and the values we represent."

Part of that confidence is affirming the rightness of what the U.S., Britain and the rest of the Coalition of the Willing did in Iraq—and what they continue to do in Afghanistan. Regarding the so-called occupation of Iraq, Mr. Blair notes that from the middle of 2003 coalition forces were in the country "with full U.N. authority." The international community followed up with billions in aid to the country. Democratic elections were held; Iraqis indicated the kind of future they wanted for their country.

And then the effort nearly fell apart on account of the unremitting savagery of Baathist holdouts, al Qaeda recruits, and Iranian-backed militias. Mr. Blair would like to know why Iraq's tormentors should be let off the hook while its liberators are vilified. "For us to end up in this situation where people say this is an indication that you should never have gone there, that you should have just let Saddam stay—we really need to think about what we're saying when we're saying that."

Mr. Blair feels the same way about the apportionment of blame in the Israeli-Palestinian conflict. He is confident of the good intentions of both Palestinian President Mahmoud Abbas and Israeli Prime Minister Benjamin Netanyahu (about whom, he adds, he is "absolutely sure [he] would sign a deal"). But he is also mindful of the way Israel is mindlessly castigated in the West, "particularly in Europe," for its every misstep, real or alleged.

"You cannot refuse to accept that Israel has a genuine security problem," he insists. "What does it mean when, the other day, President Obama launches the [Israeli-Palestinian] talks in the White House . . . and Hamas kill those [Israelis], including a pregnant woman and the parents of six children, and then put out a statement saying that this is an heroic act of courage? What does it say of the nature of what we're up against?"

Mr. Blair is equally emphatic about the need to confront Iran, which in his memoir he treats as morally equivalent to al Qaeda. Though he says he agrees with President Obama's approach to the regime—summed up as "here's a hand of friendship and now it's your choice"—he is under no illusions about the threat Iran poses. He is particularly enraged at the role it played in Iraq, including the supply of IEDs to insurgent forces that killed British and American troops. Might things in Iraq have gone better had the coalition confronted Iran's meddling sooner than it did? "I think that's a very, very good question," he replies.

The interview turns to the subject of Tehran's nuclear program. Could an Iran with nuclear weapons be contained, I ask, as it is now so fashionable to argue?

"I wouldn't take that risk," he replies without hesitation. "It is perfectly possible that a nuclear-armed Iran might be contained. But I think it's impossible to guarantee that, and it so drastically changes the balance of power within the region that it's not responsible" to allow it.

I say that sounds like he'd be prepared to countenance military strikes if other options fail.

Mr. Blair hedges for a moment: "When I'm asked this, [I always] default to the traditional line, which is to say I don't think you can take any option off the table."

I press: "But it sounds like you actually mean it."

He comes back more firmly: "I do mean it. . . . The alternative is to say that you are prepared to contemplate [a nuclear Iran], which, by the way, the moment you send that signal makes it a lot more likely to happen. So I think it's perfectly possible that we can avoid the situation. But I think the stronger and clearer we are, the more likely we are to avoid it."

Mr. Blair's tenure in office—begun, as he accurately puts it in his memoir, as a veritable love affair between him and the British electorate—is widely believed to have soured precisely because he holds these foreign policy views and was willing to act on them. Given that the Labour Party in Britain and the Democrats in the U.S. have now turned their back on the Third Way politics that gave Mr. Blair and Bill Clinton their resounding electoral victories, I wonder whether those politics would not have been more in vogue today had it not been for Iraq.

Mr. Blair demurs. "People forget this, but the closest I came to losing my job in a [parliamentary] vote was actually over tuition fees [for university students], and not over Iraq. The most difficult things were . . . introducing private-sector [reforms] into the health-care system, introducing academy schools, the equivalent of charter schools, and law and order."

It's a useful reminder. When Mr. Blair and Gordon Brown first came to office, the New Labour moniker was widely suspected of being a kind of political marketing device rather than representing a real change of heart by a party that had once been a de facto subsidiary of Britain's trade unions. But if Mr. Blair's memoir is anything to go by, he for one was a sincere convert to the New Labour faith. Among other things, it explains his current opposition to high rates of marginal taxation.

"The most important thing is to encourage strong growth, for the economy to create wealth. And I just think this is a very basic point . . . you need tax rates that are competitive with the world in which we live and in which people's hard work and enterprise is rewarded." As for the notion that the purpose of progressive governance is to tax the wealthy and redistribute it to the rest, Mr. Blair urges caution: "The people you end up hitting are not the very wealthy, because in my experience the very wealthy can make their own arrangements."

Mr. Blair is similarly worried about the perils of excessive regulation. While he believes that governments were right to respond to the financial crisis as they initially did, he worries that the recovery runs the risk of regulatory strangulation. "How you stabilize the economy is not the same as how you then get it let out of the crisis and back to strong growth, where you will need the private sector to be enterprising, innovative and able to compete." Nor does he have any patience with the demonization of the financial sector as "the bad guys" in the crisis.

The question arises of how Mr. Blair—a prep school boy and Oxford graduate who came to the Labour Party more from its intellectually Fabian wing than from the trade union movement—came by his views. Partly it's to do with his own father's rise from working-class roots, and partly by the pre-political years he spent as a commercial and industrial-relations lawyer, where he learned that "most people aspire to do better and most people actually want their kids to do better than them—and these are actually great engines of growth and progress."

But he also says his views are informed by traveling to emerging economies such as China. "These are all places where, if we're not careful, they are going to learn the lessons of our development and, funnily enough, they're not going to replicate all those lessons. . . . They will learn from our successes as well as our mistakes. And if we're not careful, they are going to leave us behind."

So much of what Mr. Blair says is so consonant with the political right-of-center that I ask him if he doesn't feel closer to John McCain politically than to Barack Obama. He laughs it off, calling himself a straight "Democrat-Labour" kind of guy. But elsewhere in the interview he offers a political warning to his fellow progressives:

"In today's world, in the 21st century, a progressive party that stands essentially for the state and big government is not going to succeed. Simple as that." I wonder if anyone in the White House is listening.

Pastors For ObamaCare? - If the White House office of faith-based initiatives is going to be used as propaganda unit, it might as well be shut down

State Dept Officials: Remarks to the Press from UN General Assembly

The Democratic Tax Retreat - The economic policies of the last four years are being repudiated

Avoiding the Internet's Black Holes

Well-functioning capital markets are critical for job creation. Congress should ease the burden on companies that go public—and fast

Friday, September 24, 2010

Press Briefing

Sep 24, 2010

Organizing for America: "This is health reform"

Andy Stern Sees the Light on Overseas Profits - The labor icon now supports reducing the double taxation of foreign-earned corporate income

White House Blog - The Congressional Republicans' Pledge: What if the Rubber Hit the Road?

Iran's Defecting Diplomats - Signs that the Green movement is alive, even within the government

The United States in UN Peacekeeping: Strengthening UN Peacekeeping and Conflict Prevention Efforts

Fannie Mae Motors - GM lobbies the government that owns it

2010 FSI Survey on the Implementation of the New Capital Adequacy Framework

The GOP Agenda - Weaknesses aside, Republicans give voters a clear choice

Remarks by President Obama and Premier Wen Jiabao of China before Bilateral Meeting

Inside the Republican Money Machine - This year GOP backers have come close to matching spending by independent Democratic groups

International Alliance Launched to Support Country-Led Progress in Reproductive, Maternal and Newborn Health

Campaign Finance Reform: A Libertarian Primer

USAID and the President's Global Development Policy

How the Woodward saga could make for a Greek tragedy in the White House

Thursday, September 23, 2010

Press Briefing

Sep 23, 2010

Excerpts of President Obama's Remarks to the United Nations General Assembly

Update: U.S. Response to Pakistan's Flooding Disaster

Don't Be Afraid of Frankenfish - Genetically engineered salmon will meet growing demand for protein-rich food without depleting wild fish stocks

Sec Clinton Remarks at UN Secretary General Ban Ki-moon's Millennium Development Goals' Maternal and Child Health Event

Shakedown in the Rain Forest - The attempt to loot Chevron for $27 billion is falling apart

Sec Clinton Remarks at "Inclusive Finance: A Path to the MDGs" Luncheon

Too Little Inflation? - Central bankers who say they want higher prices usually get them

Breakfast With Ahmadinejad

How Seniors Will Pay for ObamaCare - In many areas, Medicare Advantage enrollees will lose about one-third of their health insurance benefits. The cuts will finance new subsidies for younger people.

Obama Administration September Housing Scorecard Shows Continued Advances in Housing Market

Industry Views: IER Testimony for the Hearing on the Global Clean Energy Race

Briefing on the P-5+1 Ministerial Meeting by a Senior Administration Official Via Teleconference

How to Level the Capital Playing Field - The best way to deal with China's exchange-rate policy may be to borrow a page from its monetary playbook

Treasury Sec Tim Geithner Written Testimony House Financial Services Committee - Basel III

Red Tape Rises Again: Cost of Regulation Reaches $1.75 Trillion

Wednesday, September 22, 2010

Press Briefing

Sep 22, 2010

Global Alliance for Clean Cookstoves: The United States Commitment By the Numbers

A Teacher Quality Manifesto - What happens to bright teachers stuck in schools that don't have the right to hire by performance and build a culture of excellence? They quit.

Transforming Distressed Neighborhoods into Neighborhoods of Opportunity

The Carter-Obama Comparisons Grow - Walter Mondale himself sees a parallel

White House: Building a New Foundation

Questions for Mahmoud Ahmadinejad - Do democracy, freedom and human rights have a place in Islamic theology? Is Iran holding two American hikers hostage?

Why They Go Green - A green breakfast to thank Harry Reid

Republicans in Congress Push to End Consumer Protections, Let Wall Street Run Loose

The Real Gulf Disaster - The well is plugged. The moratorium drags on.

State Dept.'s Multilateral Newsletter: Volume 2 - September 17, 2010

Obama, Warren and The Imperial Presidency - The Senate should vote on all senior appointments within 60 days. But the president should give it a chance to vote

Infrastructure Investment in the Long-Term & The Case for a National Infrastructure Bank. By Assistant Secretary Krueger. Testimony Before Senate Banking, Housing and Urban Affairs Committee

Massive Medicare Advantage Cuts

Implementing the National Space Policy: Opportunities and Challenges

More Proof We Can't Stop Poverty By Making It More Comfortable

Tuesday, September 21, 2010

Press Briefing

Sep 21, 2010

The Pentagon Is Serious About Saving Money - Last year we awarded $55 billion in 'competitive' contracts for which only one bid was received

Cap Gains Taxation: Less Means More - A new study suggests a zero cap gains rate could create millions of jobs at a fraction of the cost of the spending stimulus

Fighting Fraud and the Consequences of Defunding the Affordable Care Act

A Tale of Two Recoveries - The state of the economy after a year of 'rebound'

President Obama's Town Hall on the Economy, Business and the Middle Class

The Recession and the Housing Drag - The more the government tries to prevent prices from finding an equilibrium, the longer it will take for the economy to begin growing again

Public-Private Partnership Brings Clean Drinking Water to Flood Victims

Republicans should be grateful tea partiers did not run as third-party candidates and split the antistatist vote

Under Secretary Levey Remarks at the Center for Strategic and International Studies

Don’t Wish Upon an Energy Star to Save the Environment

U.S.-Colombia Action Plan on Racial and Ethnic Equality

Conservatives: The Economic Toll of the Federal President's Tax Hikes

Monday, September 20, 2010

Press Briefing

Sep 20, 2010

Federal President Castigates GOP Leadership for Blocking Fixes for the Citizens United Decision

Barbara Boxer (D., Armenia) - The Democrat trashes an Obama nominee

In "My Nigeria," Peter Cunliffe-Jones traces Nigeria's history since independence and tries to measure the legacy of British rule

Stimulus for Clunkers - A new study charts an economic failure
WSJ, Sep 20, 2010

By now, the only defense Democrats can mount of the Obama stimulus programs is that the economy would have been worse without them. There's no way to disprove this counterfactual, but now we have some empirical evidence other than 9.6% unemployment and 1.6% growth.

To wit, economists Atif Mian of the University of California Berkeley and Amir Sufi of the University of Chicago have examined "cash for clunkers," the $2.85 billion program that subsidized consumers to buy new cars and destroy older ones. Their conclusion: The program "had no long run effect on auto purchases." It did juice sales during its two-month run last summer, by about 360,000 cars, but then it quickly hurt sales by about the same amount, in effect stealing purchases from the future. The program was a wash in a mere seven months.

White House economists might dismiss that finding because their larger goal with cash for clunkers was to stimulate "aggregate demand" in the overall economy. Earlier this year, Christina Romer, the former chairman of the Council of Economic Advisers, wrote that cash for clunkers was an example of "very nearly the best possible countercylical fiscal policy in an economy suffering from temporarily low aggregate demand." The program wasn't sold as a discount for cars people were already planning to buy, but rather to encourage knock-on economic activity such as more consumer spending and job creation.

It's impossible to test what would have happened without cash for clunkers because there's no control group. But Messrs. Mian and Sufi do the next best thing by looking at how clunkers were distributed around the country. Comparing high-clunker areas to low-clunker areas—and thus the areas that were more "stimulated"—allowed them to measure relative economic outcomes.

Lo, Messrs. Mian and Sufi found in their paper for the National Bureau of Economic Research that there was "no noticeable difference" in economic outcomes among the 957 metropolitan areas they studied. They did detect an economic blip in cities where the auto industry is concentrated but note that the rebound can't be disentangled from the Chrysler and GM bailouts.

Messrs. Mian and Sufi caution that their findings "do not warrant the claim that all forms of fiscal stimulus fail to boost long-run economic output" (their emphasis). But if this is the result from the "best possible" stimulus program—per Ms. Romer—the impact of the others must have been awful.

White House Blog - No Excuse for Holding Middle Class Tax Cuts Hostage

New START treaty's China challenge

Hiring More Veterans to Keep Serving America

The Christie Example - New Jersey government workers should have 401(k) plans instead of pensions

U.S. Goals and Priorities at UN General Assembly

'There Is No More Molly' - NYC Mosque it's the only time Barack Obama has ever stood up for anybody's First Amendment rights

Update: U.S. Response to Pakistan's Flooding Disaster

Let Them Eat Tax Hikes - Thirty-one House Democrats signed a letter urging Ms. Pelosi to bring a bill to extend all the tax rate reductions, not just the middle-class cuts

Japan: Lost in Translation? - Why the world's third largest economy has dropped out of the global conversation

The 1099 Stonewall - Harry Reid keeps his majority together - Small business requirements

How the Surge Was Won - America's longest-serving general in Iraq says that when they realized the U.S. presence in their communities was permanent, allies came 'out of the woodwork'

The Republican Answer to George Soros's Money - Steven Law admires how the left organized itself during its wilderness years. Now he's got $50 million to help elect candidates on the right

U.S. Counterterrorism Strategy in Yemen

On Elizabeth Warren - Obama to Senate: Stick that in your advice and consent clause

On 15th Anniversary of the 4th UN Conference on Women, State Department Co-Sponsors Summit to Empower Women Across Asia

Lady Gaga and Liberace: Separated at Birth? - His spangles, her spikes. Hmm. Makes you miss the old days.

State Security, Post-Soviet Style - Closing down independent political life, branding critics as 'extremists.' Review of Andrei Soldatov and Irina Borogan's "The New Nobility"

Sunday, September 19, 2010

Demirgüç: one of the culprits was the duo of Fannie Mae and Freddie Mac

In "Life After the Crisis: Where do we go from here?", World Bank Chief Economist Asli Demirgüç-Kunt says:
[...] while the recent global crisis had multiple causes, one of the culprits was the duo of Fannie Mae and Freddie Mac. U.S. policymakers encouraged these financial institutions to increase the availability of mortgages to borrowers with questionable ability to repay. Subsequent relaxing of standards, the increase in home prices due to a larger pool of “qualified” borrowers, and their eventual default in large numbers during the downturn all added to the severity of the crisis.
I asked her (first comment to her post above):
hi, can you provide references for that part of your post? Stiglitz [2] is very adamant that this is a red herring.

I know that AEI's Peter J. Wallison has persuasively shown arguments putting guilt on the GSEs, the CRA and lawmakers and the Executive [3], but I'd like to see analyses a bit less political and clearly academic about the subject, replying to Stiglitz's comments and his references:
Those that want to believe in the market have struggled to find someone else to whom blame can be shifted. One often heard candidates are government efforts to encourage lending to minorities and underserved communities through the Community Reinvestment Act (CRA) requirements and to increase home ownership through Fannie Mae and Freddie Mac. Default rates on CRA lending are actually lower than on other categories of lending, and CRA lending is just too small, in any case, to have accounted for the magnitude of the problem.14

His reference #14 is a note:
See Canner and Bhutta (2008) and Kroszner (2008).

Those references, in turn, are [4] and [5]. Both Stiglitz's comments and his references are preivous to July 2009, that is a bit old.


[1]  Asli Demirgüç-Kunt: "Life After the Crisis: Where do we go from here?", Sep 17, 2010,

[2]  Joseph Stiglitz: Interpreting the causes of the great recession of 2008. Lecture prepared for the Eighth BIS Annual Conference, Basel, 25–26 June 2009.

[3]  Peter Wallison: "The True Origins of This Financial Crisis", in "Getting the Story Right: The True Origin of the Financial Crisis", AEI Online, Feb 2009,

[4]  Canner, G. and N. Bhutta, “Staff Analysis of the Relationship between the CRA and the Subprime Crisis,” memorandum, Board of Governors of the Federal Reserve System, November 21, 2008.

[5]  Kroszner, R.S., “The Community Reinvestment Act and the Recent Mortgage Crisis,” speech at Confronting Concentrated Poverty Policy Forum, Board of Governors of the Federal Reserve System, Washington, D.C., December 3, 2008.

Thursday, September 16, 2010

Press Briefing

Sep 17, 2010

U.S. Can't Risk Slow START

Wealth and Poverty - How's that inequality thing working out?
WSJ, Sep 17, 2010

If there is a single unifying principle behind the Democratic agenda of the last two years, it is this: Reduce income inequality. So yesterday's annual Census Bureau review of American incomes is a kind of progress report on how this agenda is working out. In a word, our wealth isn't spread any more equitably, though more of us are poor.

The Current Population Survey shows that in 2009 the poverty rate climbed to 14.3% from 13.2% in 2008—the highest since 1994. That figure translates into 43.6 million Americans living below the poverty line, the largest absolute number in the half-century for which comparable data are available. At $49,777, the real median household income fell slightly, though not in a statistically significant way. It declined 1.8% among families and rose 1.6% for individuals.

In a statement yesterday, President Obama attributed these results to the financial panic and recession, and that's true in part. The Census data also overstate the true level of poverty because they don't include noncash government payments like housing subsidies, food stamps, the earned income tax credit or entitlements like Medicaid.

But then Mr. Obama couldn't resist adding that "Even before the recession hit, middle class incomes had been stagnant and the number of people living in poverty in America was unacceptably high, and today's numbers make it clear that our work is just beginning." So to address the rising poverty on his watch, the President wants to plow ahead with the same policies that aren't reducing poverty.

We draw a different lesson, which is the continuing imperative of rapid economic growth. Census Bureau figures over the last 50 years show that poverty falls most rapidly during times of the most sustained growth—the 1960s, 1980s and second half of the 1990s. The poverty rate also fell in the mid-2000s before heading up again when the recession hit. The most important goal of economic policy should be to increase society's overall wealth. This helps the poor and everybody else.

Yet starting with his first budget proposal, Mr. Obama has made clear that his main policy purpose is reducing inequality. As the White House budget scribes put it, "There's nothing wrong with making money, but there is something wrong when we allow the playing field to be tilted so far in the favor of so few. . . . It's a legacy of irresponsibility, and it is our duty to change it."

Thus the 2009 stimulus was assembled around social programs and redistribution, defying even Keynesian precepts about immediate job creation. Among its many other goals, ObamaCare is intended to produce "a leveling" of the "maldistribution of income in America," as Senate Finance Chairman and chief author Max Baucus put it. Even now, amid a mediocre recovery and 9.6% unemployment, the inequality imperative is driving Democrats to insist on a huge tax increase—no matter the impact on growth.

The irony is that, while there has been a modest widening of the income gap in recent decades, the Census (as measured by the "Gini index") shows that inequality has remained mostly unchanged since the early 1990s—regardless of which party is in power. The reasons are many and rooted in larger economic and social forces that can't be fixed with higher taxes and White House social engineering.

More important, this preoccupation with inequality is actively harmful because it leads to economic policies that inhibit growth. That's the real warning in the new Census data. Democrats are succeeding in their goal of punishing business and the wealthy, but to the extent that this has produced anemic growth it is also punishing the poor and middle class.

The moral claim of Obamanomics is that it ensures that everyone pays his "fair share," but its early returns show this agenda is producing more poverty. In their obsession with income shares and how many people have how much wealth, the Obama Democrats are imposing policies that ensure only that there will be less wealth for everyone to spread around.

China's Currency Policies and the U.S.-China Economic Relationship. Sec Timothy F. Geithner

Constitution Day and the Perilous Future: "The federal government, yes, can do most anything in this country."

Is Google a Monopolist? A Debate

China's Real Monetary Problem - Focus on yuan sterilization, not the yuan-dollar rate

The U.S. at the U.N. and Beyond: A World of Transnational Challenges

On Wind Power: : Where’s the Empirical Proof?

NASA Ready to Send Humanoid Robot to Space

The Uninsured Numbers Are Bad, but Obamacare Can Make Them Worse

Press Briefing

Sep 16, 2010

President Obama on Small Business Jobs & Tax Cuts: "We Don't Have Time for Any More Games"

Rooting for Redistribution - Are Americans easily fooled about their real interests? Review of Jacob S. Hacker and Paul Pierson's "Winner-Take-All Politics"

White House - New Plans Underway to Increase Contracts to Small Business

The Case for a 'Repeal Amendment' - Virginia will consider proposing a constitutional amendment that would allow two thirds of the states to repeal a federal law

President Obama's Message to Veterans on Retroactive Pay Due to 'Stop Loss'

Principles for Economic Revival - Our prosperity has faded because policies have moved away from those that have proven to work. Here are the priorities that should guide policy makers as they seek to restore more rapid growth.

Republican Tax Plan Doubles Nation's Deficit in Just Ten Years

Conservatives: The New START Rubberstamp Threat to National Security

Conversations With America: Meeting the Millennium Development Goals

Too Much Progress - D.C. voters give a reform mayor, Fenty, the boot

Update: U.S. Response to Pakistan's Flooding Disaster

It's the Spending, Stupid - A chronic voter 'concern' has now exploded into a broad public movement

Wednesday, September 15, 2010

Press Briefing

Sep 15, 2010

Speech by Assistant Secretary for Financial Institutions Michael S. Barr, Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprise of House Committee on Financial Services

Tax Cuts vs. 'Stimulus': The Evidence Is In - A review of over 200 fiscal adjustments in 21 countries shows that spending discipline and tax cuts are the best ways to spur economic growth

The President's Forum With Young African Leaders

Conservatives: The Obamacare and Obama Tax Hike Double Whammy on Seniors

Ayman al-Zawahiri: Nine Years After the Start of the Crusader Campaign

OVERBLOWN: Windpower on the Firing Line (Part I)

Working To Expand Opportunities in Tajikistan

Federal President's Proposed Oil and Gas Tax Hikes to Cost U.S. Economy 154,000 Jobs in 2011

A Discussion on the New START Treaty

Conservatives: Holding Economic Recovery Hostage

Statement by President Obama on the Small Business Jobs Bill

Obamacare: The Real Price Tag is a Moving Target

Intensifying Diplomacy in the Lead up to the Referenda in Sudan

Short Sales Bans: Shooting the Messenger?

Tuesday, September 14, 2010

Press Briefing

Sep 14, 2010

US-Vietnam Relations

Remote Control: A Blind Man Goes Sailing With Help From Afar

Advancing U.S.-Ukraine Partnership

Europe Reverts to Type - The EU's response to anti-Semitism? "No comment."

Federal President Embraces the 'Pre-emption' Doctrine - Will federal law trump state law when it upsets the trial lawyers?

Jennifer Rubin on the reports that Obama aide Valerie Jarrett is the leading candidate to replace White House Chief of Staff Rahm Emanuel

Can Turkey Defuse Iran's Nuclear Challenge?

Basel's Capital Illusions - The 2008 meltdown was not the result of lax regulation but of abuse of the U.S. financial system by the political class in Washington

Boehner's Tax Bungle

Back Door Card Check - Big Labor's man at the NLRB tries to rewrite labor law by fiat

Update: U.S. Response to Pakistan's Flooding Disaster

Obamanomics Meets Incentives - Why cuts in marginal tax rates increase economic growth, but cash for clunkers merely created a boom and bust cycle in auto sales

Message of Felicitation Amir-ul-Momineen Mullah Mohammad Omar Mujahid, on the Eve of Eid-ul-Fitr

The 1099 Insurrection - The White House fights an effort to ease a burden on small business

Realities of Biopharmaceutical Research & Development

Obamacare vs. the Rule of Law

Monday, September 13, 2010

Press Briefing

Sep 13, 2010

Prez Obama & Gov Kaine: Moving America Forward

To Pressure Iran, Squeeze Russia and China - European governments have joined the international sanctions effort. But Beijing and Moscow aren't going along

White House - Another Government Shutdown?

Darth Boehner - Democrats want voters to fear the GOP leader more than their policies

U.S. Responds to Mudslides, Flooding in Guatemala

Sebelius Has a List - Political thuggery from HHS

The U.S. Needs Its Own Industrial Policy - China's government incubates business with capital and other incentives. So should America's.

The Size of Government and the Choice This Fall - In polls, Americans overwhelmingly prefer small government and low taxes to the alternative. Yet they've been given big government, one program at a time.

China's 'Finlandization' Strategy in the Pacific - Beijing is moving aggressively to counter US power projection in Asia to bring our allies under its sway.

The Afghanistan Study Group Report: An Exercise in Determined Ignorance

Feed-In Tariffs Are Good for Expensive Renewables, But Are They Good for Consumers?

Remarks by the First Lady at September 11th Memorial Service

Don't Expect Much From the R&D Tax Credit - Apple does little of the kind of research that would be eligible. Nor do the thousands of companies that develop applications and accessories for iPhones and iPads.

IMF Working Paper: Bank Capital and Uncertainty

Mr. Obama hit Republicans hard for not passing his $42 billion Small Business Jobs Act

Ambassador-at-Large for Global Women's Issues Melanne Verveer Travels to India and China

Questions for Imam Rauf From an American Muslim - He may not appear to the untrained eye to be an Islamist, but by making Ground Zero an Islamic rather than an American issue he shows his true allegiance

The President's Press Conference: From the Economy to the Middle East and "What This Nation Was Founded On"

The ACLU Is Dismissed - Obama wins one for the Presidency on the state-secrets privilege

Friday, September 10, 2010

Press Briefing

Sep 10, 2010

Strengthening U.S.-Russia Relations

Why We're in for a Long, Hard Economic Slog - Evidence from 14 U.S. recessions shows that the economy doesn't recover until housing recovers

Pakistan Relief Fund Helps Bring Clean Water to Flood Victims

Half-Billion Dollar Schools Can’t Fix American Education

Treasurys and the Danger of Short-Term Debt - More than 60% of U.S. debt is set to mature within the next three years

We'll Always Have Basel - In the fight over bank capital, more is better

From Zombie Banks to Zombie Mortgages? - Japan misallocated capital during its lost decade. How the U.S. can avoid its mistakes

Guiding Principles for Managing Sovereign Risk and High Levels of Public Debt ("The Stockholm Principles")

ObamaCare 'Amnesia' - Long ago, in a political galaxy far, far away, Democrats passed . . .

Brookings: Five Myths About U.S. Exports

President Obama Discovers Incentives - The president's proposed tax cuts for business are a welcome departure from Keynesian stimulus

President Calderón is serious about restoring law and order. Here's how the U.S. can help.

The White House - The Affordable Care Act Did Not Cause Unjust Premium Increases

The Obama Heyday Is Over - With so many Democrats running against the president's agenda in the midterm, change will come in the next Congress, regardless of which party is in control

The White House - Fighting Foreclosures and Strengthening Neighborhoods

Can You Smell What Is He Cooking? - Why the president's new stimulus won't work

Thursday, September 9, 2010

Press Briefing

Sep 09, 2010

In "Origins," Annie Murphy Paul explores current scientific thinking about how our lives are shaped by what happens to us in utero

Dr. Seuss and the Afghan Military - Afghan soldiers and police are plenty intelligent. Literacy will help them become a modern force

The White House Blog - Boehner's Budget Gimmicks: Another Attempt to Hold Middle Class Tax Cuts Hostage

How ObamaCare Guts Medicare - The president's pledge that 'If you like your health plan, you will be able to keep it' clearly does not apply to America's seniors

Joint Statement of Secretaries Geithner and Clinton on the Republic of Korea's Announcement of Sanctions on Iran

The Federal Heath-Care Tease - Minnesota's Governor declines to take the ObamaCare bait

Importance of Investment in the Global Economy

Caricature in Cleveland - You can't restore business confidence by bashing business

Symposium: What Should the Federal Reserve Do Next?

In Guyana, Saying Farewell to the HSV Swift

The health-care overhaul enacted last spring won't significantly change national health spending over the next decade compared with projections before the law was passed - government figures

First Lady Michelle Obama Delivers Call to Action for Improved Childhood Nutrition and Physical Fitness

A President's Class War - Where on the income scale does Mr. Obama divide the country between us and them?

Corruption and Finance: Are Innovative Firms Victims or Perpetrators?

Federal President's Foreign Policy: Neglecting Allies and Appeasing Foes

Update: U.S. Response to Pakistan's Flooding Disaster

Tax Contradictions - Obama says the economy needs a tax cut—and a tax increase

Wednesday, September 8, 2010

Press Briefings

Sep 08, 2010

From Children's Grief, Signs of Growth

Salvation in Small Steps - With the collapse of various ideologies and totalizing nostrums, human rights became ever more important in world affairs. Moyn's "The Last Utopia: Human Rights in History"

Time for Emergency Economic Reform - How about a payroll tax holiday, funded by a federal spending, hiring and pay freeze?

Time for Emergency Economic Reform - How about a payroll tax holiday, funded by a federal spending, hiring and pay freeze?

Our Spontaneous Universe - I have never quite understood the conviction that creation requires a creator

Politics and the Cult of Sentimentality - Wilde said that sentimentality is the desire to have the luxury of emotion without paying for it

New START: Security Through 21st-Century Verification

Conservative: New Start Is Unilateral Disarmament - The treaty's little-noticed limits on conventional weapons systems will reduce our ability to project power around the world

External demand shocks are not historically associated with sharp declines in output growth in Low-Income Countries

'Sword of Damocles' - A welcome White House legal rebuke to the mass climate tort

Are Ethicists More Attentive Daughters and Sons?

Iran's Shadow Games - Now you see a nuclear proliferation threat, now you don't

Wild chimps outwit human hunters

The German Miracle: Another Look - Germany has cut government spending and its economy is growing smartly. It's not the first time that market-friendly policies have led the nation out of crisis.

Nongoloza's Children: Western Cape prison gangs during and after apartheid by Jonny Steinberg

Housing Crisis? Look to Canada for Answers

Greenspan Calls for Repeal of All the Bush Tax Cuts

Orszag: Let’s continue the tax cuts for two years but end them for good in 2013.

Tuesday, September 7, 2010

Press Briefing

Sep 07, 2010

The Right Comparison Between Recoveries

The Hazards Of Doing Good - From Live Aid in the mid-1980s to today, Western attempts to help famine-plagued Ethiopia have had little effect. Peter Gill's "Famine and Foreigners"

Global Shale Gas Initiative: Balancing Energy Security and Environmental Concerns

In Defense of Physician Autonomy - Politicians hurt patients when they make doctors follow bureaucratic algorithms
WSJ, Sep 07, 2010

The auditorium was filled with young, newly minted physicians sitting nervously in white jackets. When the chairman of surgery mounted the stage to address me and my fellow surgical interns, we immediately hushed and gave him our attention. I don't now recall most of what he said, but one remark has stayed with me through my 25 years of surgical practice: "You can't practice medicine by committee."

He didn't mean that we shouldn't listen to associates or seek their advice, or that we shouldn't be aware of scientific literature conveying the opinions and research of others. He meant that every physician must, at some point in the patient-care process, make decisions and take responsibility for them. And unless the doctor does so, the outcomes will be compromised. He was warning against groupthink and telling us that patients often present challenges that cannot be solved by easily consulted algorithms.

The chairman's admonition was a succinct definition of the parameters of the doctor-patient relationship. And in the eyes of many contemporary medical thinkers—those who seek to reorder the universe of medical care in this country—it would be heretical.

In recent political debates, the autonomous physician has been portrayed as a problem to be solved, an out-of-control actor motivated by greed—and a major cause of rising health-care costs. Insurance companies and the federal government have sought to control physician behavior with the dual aim of decreasing costs and improving care. In their view, individual and regional disparities in rates of medical testing, hospitalization and surgical procedures are ipso-facto demonstrations of physician autonomy run amok.

In the United Kingdom, the National Institute for Clinical Effectiveness (NICE) provides guidelines for clinical care in order to ensure greater uniformity of practice and, it claims, better care. In this country, the recent health-care reform law established a Comparative Effectiveness Institute with the same aims.

Such institutions are illegitimate and undesirable. My field of pediatric urology is only a small subset of medicine, but recent experience demonstrates the dangers of bureaucratic, committee-based practice.

In 2007, NICE published guidelines for the care of children with urinary tract infections. A committee of diverse specialists reviewed the literature and voted on the final recommendations. Without going into great detail, these guidelines enacted a significant departure from then-current practice by recommending against thorough radiographic evaluation in many instances.

One member of the committee who was out-voted on the final guidelines publicly castigated NICE and accused the committee of misusing statistics, failing to involve the proper specialists, and seeking mainly to decrease costs. The criticisms were correct.

Since the NICE recommendations were promulgated, publications in peer-reviewed journals have shown that many children with significant underlying conditions—some leading to serious kidney disease—would go undiagnosed if the NICE guidelines were followed.

Over a decade ago, researchers at Dartmouth College documented disparities in rates of tonsillectomy in children. They famously asserted that certain high rates of tonsillectomy were inappropriate and did not improve health outcomes. To do this, they relied only on insurance claims and hospitalization rates; they had no data on the prevalence of recurrent tonsillitis or long-term cardiovascular morbidity from obstructive sleep apnea. In fact, they had no data comparing the quality of life of individuals denied the procedure with that of individuals who underwent surgery. Their broad statistical overview was simply unable to answer many important questions.

Physician autonomy is a major defense against those who comfortably sit in remote offices and make calculations based on concerns other than an individual patient's welfare. Uniformity of practice is a nonsensical goal that fails to allow for differing expression of disease states.

This is not to say that clinical research, randomized controlled trials, literature meta-analyses and guidelines are not necessary and useful. They are all essential. It is also not an argument against rigorous oversight of physician behavior, licensure and training. But we must recognize that many physicians will often make decisions that deliberately do not conform to "community standards"—and that patients will be better for it.

Dr. Greenfield is director of pediatric urology at the Women and Children's Hospital of Buffalo and a professor at the State University of New York at Buffalo School of Medicine and Biomedical Sciences.

Europe's Bank Stress Tests Minimized Debt Risk

Whatever Happened to Walking to School? - Those of us who remember using our own legs for transit now run the risk of sounding Abe Lincolnesque

Learning From Experience on Arms Control - Russia and the United States have made steady progress on verification since the 1980s

School Voucher Breakout - A bipartisan endorsement in Pennsylvania

Statement by President Obama on the Passing of Jefferson Thomas

Washington and the 'Recovery Summer' That Wasn't - The nation's capital endures recessions with less discomfort than anywhere else, and that's truer than ever today

Krueger Op-Ed: Measure Succeeds in Promoting Private-Sector Hiring

The Obama Economy - How trillions in fiscal and monetary stimulus produced a 1.6% recovery

Sunday, September 5, 2010

Press Briefing

Sep 06, 2010

President Obama to Announce Plan to Renew and Expand America’s Roads, Railways and Runways

Rocks, YouTube Undergird Kashmiri Protests

How Government Unions Became So Powerful - While politicians have opposed the right to strike, public-sector labor leaders have focused on pay increases and constitutional guarantees

Eugene Robinson: The American people are acting like a bunch of spoiled brats

The Wages of Stimulus - More spending, higher unemployment

Okada and Westerwelle: The Moral Challenge of a Nuclear-Free World

In 2007, 239 patients died of malnutrition in British hospitals

Update: U.S. Response to Pakistan's Flooding Disaster

The Diviner of System Risk - Ben Bernanke as Carnac the Magnificent

Special Envoy for Middle East Peace George Mitchell Briefs on Israeli-Palestinian Negotiations

On Employment Numbers, Romer and Econometric Models

Statement at Round Table 1: Article 19 - Living Independently and Being Included in the Community. By Judith Heumann, Special Advisor for International Disability Rights

Second Gulf Explosion Doesn’t Take Away Need for Drilling