That didn’t take long at all.  Left-wing congresscritters have (re-)introduced legislation to create a “public option” in ObamaCare’s health insurance exchanges.

The Congressional Budget Office scores the bill as reducing federal deficits by $53 billion by 2019.  How?  Paying doctors and hospitals less!  Put that on a bumper sticker! The public option would use Medicare’s price and exchange controls to pay doctors and other health care providers 5 percent more than Medicare does.  Except for prescription drugs: the public option would, ahem, “negotiate” those prices, meaning it would use a separate price-control scheme and pay less than Medicare does.  (That means PhRMA probably won’t be bankrolling the public-option campaign the way it bankrolled the pro-ObamaCare campaign and is bankrolling the re-election bids of its congressional benefactors.)  Providers, such as community hospitals, would take a huge pay cut if some of their privately-insured patients suddenly only paid Medicare plus 5 percent.

When costs explode under ObamaCare the way they are exploding under RomneyCare, expect the public option to be the Left’s go-to solution. In CongressDaily, co-sponsor Rep. Raul Grijalva (D-Ariz.) says:

By reintroducing it, we make sure that people don’t forget this is a viable option…. I think as the health bill is implemented, more and more people are going to come to the realization that cost containment and competition aren’t as robust as they should be, because of the absence of the public option.

Naturally.  Because the first thing that comes to mind when I think cost-containment and competition is government health care programs.

For a refresher on how the Left confuses cost-containment with spending-containment — and on why the public option is a really, really, really bad idea — see my paper, “Fannie Med? Why a ‘Public Option’ Is Hazardous to Your Health.”

With Majority Leader Harry Reid’s announcement that Democrats have the 60 votes needed for final passage of the Dodd-Frank financial bill, we can take a moment and remember this as the moment Congress planted the seeds of the next financial crisis.

In choosing to ignore the actual causes of the financial crisis — loose monetary policy, Fannie/Freddie, and never-ending efforts to expand homeownership — and instead further expanding government guarantees behind financial risk-taking, Congress is eliminating whatever market discipline might have been left in the banking industry.  But we shouldn’t be surprised, since this administration and Congress have consistently chosen to ignore the real problems facing our country — unemployment, perverse government incentives for risk-taking, massive fiscal imbalances — and instead pursued an agenda of rewarding special interests and expanding government.

At least we’ll know what to call the next crisis: the Dodd-Frank Crash.

A new AP-Gfk poll reveals that about two-thirds of the American public lack confidence that the financial regulation bill, currently being crafted by House and Senate conferees, will actually help avert future financial crises. 

The public is right to be skeptical, as there is nothing in either the House or Senate bill that ends bailouts or ends “too-big-to-fail.”  In fact parts of the bill, such as the expansion of deposit insurance, will actually increase the likelihood of future crises.  (The IMF has an insightful working paper on the negative impacts of deposit insurance). 

Perhaps the failure of Congressional efforts to end financial crises is the result of Washington’s unwillingness to recognize that government itself was the major driver of the recent crisis.  Fortunately the public seems to get that.  Some 70 percent of the poll respondents believe that government shares blame for the crisis.  Here’s to hoping that Congress will at some point listen to the public, and end many of the distortionary policies that caused the crisis.

Democratic House leaders apparently have reached a compromise that may bring the DISCLOSE Act to a vote. The National Rifle Association, a group that enjoys some support from House Democrats, objected to the bill’s disclosure provisions. DISCLOSE’s authors have now agreed to exempt “organizations that have more than 1 million members, have been in existence for more than 10 years, have members in all 50 states, and raise 15 percent or less of their funds from corporations.” The National Rifle Association qualifies for the exemption. But you knew that.

I wonder what principle of campaign finance regulation justifies this exemption? Earlier the authors of DISCLOSE said the American people deserve to know who is trying to influence elections. Now it would seem that voters only need information about relatively small, young, geographically-confined organizations that receive more than 15 percent of their money from corporations.

There is no principle at stake here. The NRA had enough support to stop the DISCLOSE Act. House leaders had to compromise by cutting the NRA a deal, a special exemption from the proposed law. The deal does show, if nothing else, that House Democrats are really worried about new money entering the fall campaign. They are willing to go a long way — even as far as helping the NRA — to make sure other speech funded by businesses and groups is not heard.

Finally, imagine you are a member of a group not exempted from DISCLOSE. You have been treated unequally by Congress.  The courts have said Congress can treat you unequally if they show that this exemption  for the NRA has a rational relationship to an important government purpose.  How does exempting older, bigger, more widespread groups with less than fifteen percent corporate funding help Americans cast an informed vote?  Put another way, if the NRA deserves an exemption, doesn’t everyone?

Today begins the televised political theatre that Barney Frank has been waiting months for:  the first public meeting of the House and Senate conferees on the two financial regulation bills.  While there are a handful of important differences between the House and Senate bills, these differences are overshadowed by what the bills have in common.  The most important, and tragic, commonality is that both bills ignore the real causes of the financial crisis and focus on convenient political targets.

As our financial system was brought to its knees by an exploding housing bubble, fueled by government mandates and distortions, one would think, just maybe, that Congress would roll back these distortions.  Despite their role in contributing to the crisis and the size of their bailout, however, neither bill barely mentions Fannie Mae and Freddie Mac.   Except, of course, to continue their favored and privileged status, such as their exemption from a proposed new “consumer protection” agency.  What we really need is a new “taxpayer protection” agency.

Nor will either bill change the government’s meddling in what is probably the most important price in the economy:  the interest rate.  Given the overwhelming evidence that loose monetary policy was a direct cause of the housing bubble, one might expect Congress to spend time and effort preventing the Fed from creating another bubble.  Not only does Congress ignore the issue, the Senate won’t even allow GAO to look at the Fed’s conduct of monetary policy.

Instead of spending the next few weeks gazing into the camera, Congress should stop and gaze into the mirror.  This was a crisis conceived and born in Washington DC.  The Rayburn building serving as the proverbial back-seat of the housing bubble.

A new Rasmussen poll has 80% of the American public supporting an audit of the Federal Reserve.  Only 9% of the public oppose, with the rest unsure.

Unfortunately the poll did not ask specific questions over whether such an audit should cover monetary policy or just the Fed’s 2008 bailout activities.  So while the poll is likely to keep pressure on Congress, during its conference negotiations over financial regulation, to retain some audit of the Fed, the likely result is that Congress will leave out any real, on-going audit of monetary policy. 

After Sen. Bernie Sanders essentially gutted his own amendment, Senator Dodd and the Obama administration agreed to a minor audit of the Fed’s emergency lending programs.  Ron Paul, sponsor of the House version of the audit, quickly labeled this as a “sell-out”.  Fortunately Congressman Paul looks to be a House conferee on the bill, so some hope remains of a full audit being included.

Opponents of a Fed audit claim this would undermine the Fed’s political independence.  Sadly what opponents, including many economists, are missing is that the Fed is currently far from independent of politics.  This is again an area where the public gets what the experts miss, as just 20% of poll respondents thought the Fed has acted independently.  A full 60% felt the Fed was too much influenced by the President, getting at a crucial point concerning Fed independence:  it is independence from the Executive branch that is critical.

The Atlantic has posted (h/t Future of Capitalism) an article by Virginia artisanal meat provider Joe Cloud sounding the alarm about how as regulation intensifies, only producers with the scale and sophistication to deal with it will be left standing:

Although species go extinct on Earth on a regular basis, every so often there is a major event that comes along and wipes out 40 or 50 percent of them. The same thing happens in the small business world. A few businesses fold every year due to retirement, poor management, and changes in the market, and that is quite normal. But then every so often a catastrophe comes along and causes a wholesale wipeout.

For small meat businesses in America, catastrophic events result from changes high up in the regulatory food chain that make it very difficult for small plants to adapt. The most recent extinction event occurred at the turn of the millennium, when small and very small USDA-inspected slaughter and processing plants were required to adopt the costly Hazard Analysis and Critical Control Point (HACCP) food safety plan. It has been estimated that 20 percent of existing small plants, and perhaps more, went out of business at that time. Now, proposed changes to HACCP for small and very small USDA-inspected plants threaten to take down many of the ones that remain, making healthy, local meats a rare commodity.

I’ve been following this particular controversy for a while, and perhaps its most depressing aspect is how very typical the pattern is. In 2008, following demands that it do something about much-publicized Chinese toy recalls, Congress passed the Consumer Product Safety Improvement Act, which devastated many hundreds of smaller manufacturers, importers and retailers of children’s clothing and playthings while leaving relatively unscathed Mattel, Hasbro, and the biggest discount retailers (all of which had in fact supported passage of the law). More recently, major food and agribusiness firms have signed on to support a major new round of federal food safety regulation despite warnings that it could pose big compliance challenges for many local bakers, fruit-baggers, and other small providers whether or not their products pose any notable risks.

I generally share many of the views of the “locavore” movement regarding the value of distinctive local food cultures and the importance to kids and cooks of getting a more direct sense where food comes from. Trouble is, some of us who imagine ourselves friendly to locavore thinking reflexively support whatever regulatory proposals are billed as most stringent and thus most protective. By the time we realize the choices we have lost, it can be too late.

From a recent news item in The Economist:

[M]illions of Americans…think that Barack Obama’s health-insurance laws must be overturned…[P]olls suggest that many Americans still dislike them…

At the federal level Republican leaders in Congress have jumped on every bit of negative news—for example, a recent report from the Congressional Budget Office suggesting that the reforms will cost more than originally forecast—as just cause for overturning them…

The real action is outside Washington, though. Virginia, Utah and Idaho have outlawed the new individual mandate, which will require everyone to purchase health cover, and other states are looking at similar measures. Elsewhere, opponents have taken to the ballot box. Missouri will hold a referendum in August on the matter. Perhaps half a dozen other states may see a constitutional amendment blocking Obamacare on the ballot in November.

Critics have also filed various lawsuits challenging the constitutionality of health reform. In the most prominent nearly two dozen states, almost all led by Republicans, have banded together. Their chief legal argument is that the new individual mandate is unconstitutional. On May 14th the National Federation of Independent Business, a trade group representing small companies (who worry especially about the costs of compliance with the new law), declared that it too would join in.

Repeal the bill.