The Real Damage From Investing Too Little in Higher Education: State Budget Cuts and Federal Responsibilities
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan contends that the federal government should provide support for the states' higher education systems, which have faced massive funding cuts as a result of the recession. Buchanan describes the economic benefits of higher education, and warns that without federal support for state colleges and universities, America will become a permanently poorer country in the near future. He focuses, in particular, on the ominous current situation of California's famed public universities, and on the cautionary tale arising from the Thatcher government's cuts to British higher education in the 1980's, which took a ruinous toll.
Thursday, December 3, 2009
Why the U.S. Government Must Invest in Infrastructure Now, Or Pay A Steep Cost
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan argues that it is imperative for the U.S. to adopt policies that will improve its infrastructure, especially its transportation infrastructure -- in order to preserve the nation's competitiveness, while also making headway in reducing its current troubling levels of unemployment and underemployment. Drawing examples from his own recent travel, Buchanan points out that travel in many other countries compares favorably to travel in the U.S., on a number of different scales. He warns that these kinds of contrasts will affect where businesses locate, where tourists visit, and what the world thinks of America. Buchanan also contends that the past economic stimulus included too few infrastructure projects, and more should be initiated.
Thursday, November 19, 2009
Should Federal Agencies or Courts Protect Consumers in Financial Markets?
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan poses, and suggests an answer to, the following question: When a family’s house is at risk of foreclosure, or when credit debt threatens to push them into bankruptcy, should they be able to turn to an agency whose explicit role is to protect them, or should their only recourse be to fight for their future through the courts? Buchanan explains the limited role that courts can play -- by invoking equitable doctrines or, in one recent case, by discharging a mortgage in bankruptcy after the bank could not prove that it owned the mortgage. In light of this limited role, he contends that, in these areas, agency power should supplement the power of the courts.
Thursday, November 5, 2009
The Proposed Consumer Financial Protection Agency: Enhancing, Not Restricting, Free Markets
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan comments on a frequent objection to President Obama's proposed new agency, the CFPA. The CFPA's mission would be to change the regulatory rules regarding credit cards, mortgages, and other consumer financial transactions. The objection holds that a free market approach, with minimal or no regulation, is superior to regulations such as those the CFPA would provide. But Buchanan responds that this arena is already regulated in important ways-- and must inherently always be subject to regulation. Thus, the only real question here, he contends, is whether the regulations at issue will be pro-financial institution or pro-consumer -- and right now, he says, they are slanted much too far in the institutions' favor.
Thursday, October 22, 2009
Financial Market Reform: Two Goals, No Frills
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan considers two key regulatory goals -- keeping banks small enough that they stay out of the "Too Big to Fail" category, and keeping salaries and bonuses for financial executives and money managers in line with the ideal incentive structure. Regarding bank size, Buchanan points to Japan's example as a cautionary tale, and regarding incentivizing executives, Buchanan notes that research shows that executives may actually be more interested in how much they make relative to others, than in how much they make absolutely. In both areas, Buchanan advocates bright-line rules, rather than flexible standards, so that compliance (or lack of it) is crystal clear.
Thursday, October 8, 2009
Stop Denigrating Government: There is No Economy Without It
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan argues that recent claims that the government should stay out of markets -- such as the market for health insurance -- take an all-or-nothing stance that clashes with reality. Drawing in part upon the work of Professors Liam Murphy and Thomas Nagel, Buchanan suggests that the idea of property -- or markets -- without government to enforce related law is incoherent. Accordingly, he calls for reframing the debate to ask not whether government should intervene in the economy, but simply how it can do so in the most positive possible way.
Thursday, September 24, 2009
Can Capitalists Learn to Love Socialized Medicine?
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan offers an interesting response to those who object to the government's involvement in America's health care system. Buchanan's argument draws upon the study "Retirees at Risk: The Precarious Promise of Post-Employment Health Benefits," by Richard L. Kaplan, Jordan Zucker, & Nicholas J. Powers. Buchanan points out that when employers break promises -- due to bankruptcy or other reasons -- to take care of their employees by providing retirement health care benefits, the government must inevitably step in, rather than leaving workers to suffer. Buchanan suggests that government health care is, in this way, an ally to both workers and employers. He also notes that government health care could be even more of an ally to business, if coverage were to be broadened far beyond situations where employers breach their contracts to provide worker health care, to reach all workers.
Thursday, September 10, 2009
Rationing Health Care: We Have Always Done It, We Do It Now, and We Always Will
FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan argues that charges that the Obama health care plan will "ration" care are both accurate and irrelevant to the debate. Buchanan explains how any health care system, like any system that allocates goods and services, must technically ration them. He also argues that the current system of private health insurance not only rations care, but rations it in irrational ways -- for instance, by making some options (such as getting care covered while traveling) so burdensome that insured persons simply eschew them, despite possible risks to their health. Buchanan urges that the debate must move toward a comparison of two systems of rationing -- the one we have now, and the one we might have under Obama's plan -- and away from the loaded and misleading use of the term.
Thursday, August 27, 2009
Can the Public Option in Health Care Reform Be Saved? Should It Be? Part 2
In Part Two of a two-part series of columns, FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan continues his commentary on the ongoing debate over health care reform -- and in particular, the "public option." (If the "public option" proposal becomes law, then Americans will still have the choice among various private insurers, but will also have the choice to opt to get health insurance through a non-profit plan run by the government.) In Part One of this series, Buchanan focused upon the two key arguments in favor of the public option. In this column, Part Two, Buchanan contends that a public insurer would be unlikely to be able to keep its cost down, and that, even if it did so, it would still suffer bruising, misleading, yet likely successful attacks from critics. Buchanan concludes that the Congressional regulation of private health insurers may provide an approach superior to that of the public option.
Friday, August 14, 2009
Can the Public Option in Health Care Reform Be Saved? Should It Be?
In Part One of a two-part series of columns, FindLaw columnist, Cornell Visiting Scholar, George Washington law professor, and Economics PhD Neil Buchanan weighs in on the ongoing debate over health care reform -- and in particular, the "public option." (If the "public option" proposal becomes law, then Americans will still have the choice among various private insurers, but will also have the choice to opt to get health insurance through a non-profit plan run by the government.) Buchanan suggests that the public option may have a fatal flaw, but it's not one of those critics tend to mention. The real problem with the public option, he argues, may be that politicians’ (perhaps deliberate) misunderstanding of the mechanics of public finance will cause them to unfairly attack the public option, and thus undermine public support for it.
Thursday, August 13, 2009
Everyone Seems to Agree That Budget Deficits are Harmful. Can They All Be Wrong?
FindLaw columnist, George Washington law professor, Cornell Visiting Scholar, and Economics PhD Neil Buchanan argues that budget deficits -- the specter of which is often used by politicians to scare Americans -- can actually be healthy for an economy, especially one that is mired in a recession like ours. Buchanan contends, accordingly, that President Obama should be not put on the political defensive on the ground that his stimulus package contributes to deficit spending. Paralleling deficits with medicine and then with vitamins, Buchanan encourages readers to see their positive side, and notes that while deficit spending run the risk of being tainted by logrolling and pork, it also can be a boon to all if done correctly.
Thursday, July 16, 2009
How is Money Created? Debunking Some Myths About Recent Policies to Stabilize the Financial System and the Economy
FindLaw columnist, George Washington law professor, and Economics PhD Neil Buchanan argues that the now-common charge (made repeatedly in The New York Times) that the Federal Reserve is creating money "out of thin air" -- and that this decision will inexorably cause inflation and even hyper-inflation -- is misguided. Buchanan contends that the real risk is, instead, that the government is not doing enough to address the recession. He also explains why gold-standard proposals would not ultimately defeat the "money out of thin air" concern, even if that concern were valid. Buchanan concludes that the question is much more subtle than the "thin air" claim suggests: It is not about whether the Fed should create money (which it inherently must do), but about how, specifically, it should decide how much money to create.
Thursday, June 18, 2009
Mortgages, Housing, and the American Dream: Do We Really Need to Own Our Homes?
FindLaw columnist, George Washington law professor, and Economics PhD Neil Buchanan argues that the current housing crisis should prompt us all to carefully reconsider the fundamental American assumption that homeownership is superior to renting. Buchanan notes that our legal system offers multiple incentives for homeownership, but asks if those incentives are justified in light of the fact that homeownership leads families to invest virtually all their capital in one place, rather than diversifying investments. Buchanan points out that for many, it is preferable to rent rather than buy; that many homeowners only stay in a given home for a few years anyway; and that homeownership always carries significant risks, which have now been intensified and exposed by the recession.
Thursday, May 28, 2009
The 2009 Social Security Trustees' Report: Good News Behind the Headlines
FindLaw columnist, George Washington law professor, and Economics PhD Neil Buchanan argues that the dire headlines and commentary about Social Security, in the wake of this year's Trustees' report, paint a much bleaker picture than is truly accurate. Buchanan puts the facts and figures regarding Social Security carefully in context, and assuages young people's fears that, by the time they retire, there will be nothing left for them. In fact, he contends, there is no question that their benefits' buying power will exceed that of their grandparents' benefits. Buchanan also warns about conflating the fates and situations of Social Security and Medicare, when the latter is indeed in serious trouble.
Thursday, May 21, 2009
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