Deroy Murdock blames the trial lawyers for this:
consider the 406 percent increase in per-doctor malpractice insurance premiums between 1975 and 2003.
That’s a 406% nominal increase over a period when prices grew by 180% – so the real increase in premiums is closer to 80%.
A new study by researchers from the Harvard School of Public Health (HSPH) and Brigham and Women’s Hospital challenges the view that frivolous litigation is rampant and expensive.
Mind you, I have praised Deroy Murdock for some of his NRO opeds and I had hoped he would replace Bruce Bartlett as the lone sensible voice on economics. This attack on the trial lawyers is a real disappointment but then I noticed that Bruce Bartlett has returned with a tribute to Lloyd Bentsen.
Alas, I was very disappointed that Bruce choose to pay tribe to Lloyd Bentsen by praising the doctrine of supply-siders – especially since Bentsen helped reverse the fiscal insanity of the 1980’s by supporting Bush41’s decision to raise taxes in 1990 as well as pushing for the 1993 tax increase. But the point of high comedy came here:
Probably the high point for the committee came in 1963 when it provided much of the intellectual ammunition for the Kennedy tax cut. At that time, Rep. Wilbur Mills (D., Ark.) was a member of the JEC as well as chairman of the House Ways and Means Committee. He relied heavily on JEC economists, especially Norman Ture, to provide him with analysis and research that helped get the tax cut through Congress.
The rational for the 1964 tax cut was that we needed a boost to aggregate demand in order to return to full employment. And let’s not forget that it was Norman Ture who told Wilbur Mills that we did not need to reverse this fiscal stimulus in 1966.
Bruce also writes:
In essence, the JEC’s 1980 report took supply-side economics from the fringe and made it part of the mainstream of economic and political thinking. It made it easier for establishment Republican economists like Alan Greenspan and Herb Stein to support Ronald Reagan’s proposed tax cuts, despite their qualms about the deficit. And it had a lasting impact even among Democrats. Long after Reagan’s victory, liberal congressman Henry Reuss (D., Wisc.), who succeeded Bentsen as JEC chairman, told the New York Times, “We have learned from our mistakes in the past. We’ve given up blind pursuit of Keynesian demand acceleration.”
Has Bruce forgotten about the 1982 recession and the chain of events that led up to it? The Federal Reserve viewed Reagan’s 1981 fiscal stimulus as excessive and renewed its monetary restraint to offset it. The goal was to do what the Federal Reserve started to do back in 1966 – let tight money reduce investment demand to offset the increase in the sum of consumption and government purchases. There was a difference, however. In the late 1960’s, the Federal Reserve did not stick to its guns, while in 1982, the monetary restraint was carried out sort of like the Powell Doctrine – with overwhelming force.
Supply-siders should learn from their mistakes – and refrain from trying to blame Keynesians for the poor advice that Norman Ture gave to Wilbur Mills.