Public Policy and Governance – Page 170

This Isn’t Capitalism

A number of people who comment on this site are consistently critical of capitalism. I, on the other hand, am a committed capitalist, provided that economic system is properly defined and provided it is limited to economic areas in which competitive markets work.

The system in America today–the system that pisses off so many contemporary Americans– isn’t capitalism. It’s corporatism.

In a capitalist system, it is true that some people will do better than others. There is nothing wrong with that; the promise of a bigger reward for building a better mousetrap spurs innovation and benefits us all. It’s only when the rewards are disproportionate to the value of the activity involved– and especially when those rewards become disconnected from actual economic productivity– that capitalism devolves into corporatism, and things get seriously out of whack.

Competitive markets have numerous advantages in the areas where they work. Unfortunately, in the United States, we have insisted on “competition” in areas where markets are demonstrably inappropriate. From health care to education to prisons, we have pursued a privatization agenda that benefits the entitled and well-connected without delivering any of the benefits of a true market.

That may be crony capitalism, but it sure isn’t the real deal. As I wrote a few years ago,

When what people make is a reflection of their connections and/or the success of their lobbyists, it’s time to consider whether we still have a capitalist system, or whether what America currently has is corporatism–a system where power is exercised through large organizations in pursuit of their own economic agendas, to the detriment of the common good.

Capitalism creates opportunity; corporatism keeps it “all in the family,” exacerbating inequality.

If you have any doubt that the United States no longer practices capitalism, take a look at the recent, high-profile (arguably obscene) “competition” for Amazon’s second headquarters. As the Intercept recently reported,

Amazon’s announcement thisweek that it will open its new headquarters in New York City and northern Virginia came with the mind-boggling revelation that the corporate giant will rake in $2.1 billion in local government subsidies. But an analysisby the nation’s leading tracker of corporate subsidies finds that the government handouts will actually amount to at least $4.6 billion.

But even that figure, which accounts for state and local perks, doesn’t take into account a gift that Amazon will also enjoy from the federal government, a testament to the old adage that in Washington, bad ideas never die.

Enterprise Zones, one of those ideas that the Intercept characterizes as “bad,” has been resurrected in the GOP’s 2017 “gift to rich people” tax bill.

Under the tax overhaul signed by President Donald Trump last year, investors in opportunity zones can defer paymentsof capital gains taxes until 2026, and if they hold them for seven years, they can exclude 15 percent of the gains from taxation. If investors carry the opportunity zone investment for 10 years, they eliminate taxes on future appreciation entirely. Investment managers have been salivatingat the chance to take advantage of opportunity zones. Special funds have been built to cater to people holding unrealized capital gains — such as Amazon employees with large holdings of company stock.

The article details the goodies taxpayers are providing one of the most successful companies in the country, and notes that Amazon has already received $1.6 billion in state and local subsidies for its warehouses and data centers.

On the same day as the New York and Virginia announcements, Amazon also announced a new “Operations Center of Excellence” in Nashville, Tennessee, a 5,000-worker facility for which the city gave Amazon $102 million in subsidies.

The report notes that these cash handouts don’t take into account “regulatory leniency and accelerated permitting” that Amazon projects routinely get.

We can quibble over what we should call an economy in which there is nothing remotely like a level playing field; an economy that enriches the already well-to-do at the expense of the rest of us and routinely socializes risks and privatizes profits, but we shouldn’t make the mistake of calling it capitalism.

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Oh, Indiana…

The #metoo movement has certainly caused a lot of discomfort for men who previously behaved badly, secure in the conviction that predatory behavior was their right as males.

Here in Indiana, we are seeing the shock of men who have suddenly realized that other people don’t view their activities with the benign “men will be boys and it’s always the girl’s fault anyway” attitudes they formerly depended upon.

Most widely publicized, of course, are the recent allegations against our Attorney General, Curtis Hill. Hill has continued to indignantly deny what everyone knows is true: he fondled/groped female legislators and staff at a bar during a sine die party.

Actually, that’s the least of Hill’s transgressions, in my opinion. I’m even more offended by the fact that he’s taken Indiana into a number of national “culture war” cases–on the wrong side–in which Hoosiers have no discernible interest. Such interventions expend state resources–human and fiscal–on causes where the only “benefit” is a higher profile for the Attorney General.

Hill’s grandstanding shouldn’t surprise us: Hill is something of a national joke as “the Elvis impersonating AG.” (I kid you not. Watch the You-Tube..) And of course, an African-American conservative Republican is something of an anomaly….

Less “snicker-worthy” is the effort led by Brian Bosma to down-play his sex-play.

Bosma’s relationship with a young woman who was a General Assembly intern at the time (she was a 20-year-old student at Ball State University; Bosma was a married 34-year-old representative) has been a staple of statehouse gossip for several years. Evidently triggered by concerns that the young woman was going to “go public,” Bosma hired a local attorney to “investigate” her–i.e., dig up dirt he could use against her if she did decide to talk.

That story and the ongoing Hill saga prompted calls for legal measures that would apply to members of the General Assembly. This being Indiana, those “calls” were essentially answered by none other than Brian Bosma (we don’t recognize conflicts of interest in Indiana), who as Speaker of the House appointed the personnel subcommittee of the Legislative Council, coincidentally, the subcommittee charged with recommending sexual harassment prevention policies.

The subcommittee met in a closed-door executive session Nov. 7 to finalize the proposed policy changes. I know it will shock Hoosier readers of this blog to learn that the policies they proposed were something less than ideal.

An Indiana employment law professor calls the proposed guidelines to combat sexual harassment at the Indiana Statehouse “shockingly dated” and designed to insulate lawmakers from liability.

“The proposal is grossly under-inclusive and arguably a waste of time and resources since the legislature could easily just affirm that all of its state employees, contractors, members, unpaid workers, interns, etc., are subject to federal and state law,” said Jennifer Drobac, a law professor at Indiana University’s Robert H. McKinney School of Law.

Drobac identified a few of the inadequacies of the proposals and the process that produced them.

Drobac questioned the wisdom of House Majority Leader Brian Bosma, R-Indianapolis, being involved in the process of revising the sexual harassment policies. An ethics complaint has been filed against him for using campaign funds to investigate a woman who said she had a sexual relationship with him in the early 1990s.

The proposed policy says that the speaker or other member of the ethics committee shall not participate in the review of a harassment claim if they are the subject of the complaint.

“However, what if they are the not the subject of the particular complaint but have conflicts of interest or a history of inappropriate (or ineffectual, i.e. failure to properly investigate) behavior,” she questioned.

The terms of these proposed guidelines aren’t the only “shockingly dated” attitudes being displayed by Bosma and the “boys” at the Statehouse. Someone needs to explain to them that a hate crimes law that omits protections for transgender Hoosiers (which is the version Bosma says he’ll allow) is tantamount to a message that crimes against some marginalized categories is okay with them….

What were those lyrics?

Back home again in Indiana…
And it seems that I can see
Our 18th Century legislature
Still staying pure
Through the sycamores for me

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Saving Net Neutrality?

In the days and weeks following the midterm elections, the news has gotten steadily better. Undecided House races have been called for the Democrats; statehouses across the country have turned blue; and according to a couple of tweets from Nate Silver, the Democrats got as many votes in the midterms as Trump got in the Presidential election.

According to Silver, that’s unprecedented.

The news may also be good for Net Neutrality. According to the Brookings Institution, a combination of the Democrats’ win and a Supreme Court decision may restore non-discrimination rules to the Internet.

On November 5, the Supreme Court declined to review the decision of the D.C. Circuit Court that twice upheld the 2015 Open Internet Rule. The industry groups that had long opposed non-discriminatory access to broadband networks had previously stopped such regulation at the D.C. Circuit. When they attempted the same thing with regard to the 2015 decision of the Federal Communications Commission (FCC), a three-judge panel ruled the FCC’s favor. The industry then appealed the panel’s decision to the entire D.C. Circuit and lost again. The industry then appealed that loss to the Supreme Court. The Supreme Court voted 4-3 (with Chief Justice Roberts and Justice Kavanaugh abstaining) to deny a writ of certiorari for the appeal. As a result, the lower court’s decision upholding the 2015 Open Internet Rule stands.

The FCC’s 2015 Open Internet decision declared broadband providers to be Telecommunications Services subject to the common carrier requirements of Title II of the Communications Act. Just like the telegraph and telephone companies that preceded them, internet service providers could not discriminate among those using the network. They could not, for instance, break the internet into fast lanes and slow lanes depending on how much a content provider such as Netflix paid them.

It will not surprise you to learn that in 2017, Trump’s FCC repealed the Open Internet Rule, and ruled that the agency had only minimal authority over internet networks. Under Trump’s FCC chief, former Verizon honcho Ajit Pai, the Commission announced it would exercise no oversight over internet access.

As former FCC chair Tom Wheeler explains, not only did the agency created by Congress to oversee the nation’s networks walk away from that responsibility, it joined the plaintiffs in asking the Supreme Court to overrule the D.C. Circuit’s 2015 decision.

The High Court declined to do so.

Add to that encouraging development the fact that Democrats will control the House of Representatives.

House Democratic leaders from presumptive Speaker Nancy Pelosi (D-CA,) to the new Chairman of the Energy and Commerce Committee Frank Pallone (D-NJ), to the new Chairman of the Telecommunications Subcommittee Mike Doyle (D-PA) have all been vocal supporters of strong net neutrality rules.

Reps. Pallone and Doyle will be able to conduct oversight hearings into the activities of Trump’s FCC, and on the effect of eliminating the Open Internet Rule.

Since meaningful new legislation is highly unlikely, given the GOP Senate and Trump’s threatened veto, the Supreme Court’s refusal to overturn the Open Internet Rule means non-discrimination might survive anyway.

I say “might” because the D.C. Circuit will hear arguments in February in the lawsuit challenging the FCC’s elimination of the Open Internet Rule. If the Circuit Court rules against the FCC, the 2015 Open Internet Rule is reinstated—and the Supreme Court has declined to consider the matter, at least for now.

In their zeal to gut oversight of their activities, the internet networks and their Trump FCC allies may have shot themselves in the foot. There is a strong case that the Trump FCC acted in an arbitrary and capricious manner when it repealed the 2015 Open Internet Rule and walked away from any responsibility over the most important network of the 21st century. If the D.C. Circuit makes such a finding, net neutrality would once again be the law of the land. Although the Trump FCC would probably spitefully ignore its enforcement and even force adoption of a new rule to free the broadband companies, that action would simply bolster the Democrats in the House.

Research suggests that an overwhelming majority of Americans favor retention of Net Neutrality.

I favor neutering Ajit Pai.

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Solving Two Problems At Once

Thom Hartmann from Independent Media has written a column that is both provocative and persuasive.

If he’s right, it would also explain what I found inexplicable on Thanksgiving–why the GOP is so dead-set against a national system that would expand access to healthcare to all Americans.

Now we know why the GOP is truly terrified of Medicare for All; it will wipe out the Republican Party’s control of the House, Senate, White House, and most state governments. Because it could make it very easy for every citizen over 18 to vote.

Here’s how it works.

In Canada, every citizen has a Canadian government-issued “Health Insurance Card” … It’s largely only available to citizens, as all citizens are eligible for the Canadian Medicare system; everybody else has to work out other insurance options (yes, there are insurance companies in Canada). And in most provinces, the card has your photo and works as an ID card as well as a driver’s license or passport.

In Canada, that health insurance card is also a voter ID card.

As a Canadian explained to Hartmann, the health insurance card is unlike other government issued identifications, such as driver’s licenses, because virtually all Canadian citizens from all socioeconomic backgrounds have them. They can be used as photo IDs for flying domestically, buying alcohol and more importantly voting!

Among other voter suppression tactics, the GOP has spent the last decade fighting a virtually non-existent “voter fraud.” The party has used this largely fabricated concern to pass voter ID laws that make it hard for people who don’t drive –due to old age, lack of ability to afford a car, or in some cities (not mine), convenient public transportation–to cast a vote.

In 2016, Donald Trump won Pennsylvania, Michigan and Wisconsin by razor-thin margins far smaller than the number of voters purged and/or turned away at the polls.

The Brennan Center documentsa 33 percent increase in voters purged during the 2014-1016 election cycle (16 million), compared with the 2006-2008 cycle (12 million purged), as the GOP has made ID and purges (along with fear mongering about brown-skinned people) their main electoral strategy. In just the past year, as many as an additional 14 million votershave been purged from rolls nationwide, while over the past two decades every Republican-controlled state has introduced rigid ID laws.

But with a national ID system in place that’s universally used because it’s the key to getting your health care and medications, there’s no need for “voter registration” and thus no ability for the GOP to purge voters. Voter registration, after all, is a practice we largely got after the Civil War because Southern white politicians warned of “voter fraud” being committed by recently freed black people, and some Northern states used it to prevent poor whites from voting.

In some places in the United States, voter registration just never caught on: North Dakota never bothered to put such a system into place; you just show up at the polls with ID to prove you’re both a citizen and resident, and vote. And with a national Medicare for All ID, every citizen could easily vote, everywhere.

Hartmann insists that the GOP’s adamant opposition to universal coverage is partly based upon the party’s realization that the universal ID such coverage would require would allow everyone to vote.

True or not, it’s hard to argue with Hartmann when he says that Medicare for All would allow America to join the rest of the developed world, by having both a national health care system and a functioning democracy.

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I Will Never Understand This

There are a lot of things I don’t understand. Bitcoin. How wireless internet works. Why anyone gives a rat’s patootie about Kardashian-type celebrities. Lots more.

But on Thanksgiving–when I reflect on my good health and comfortable life and give thanks for my family– I am reminded that what I really, really don’t understand is why so many people oppose allowing government to insure other people’s health.

Don’t get me wrong: I certainly understand debating the how of healthcare, arguing for policy A rather than policy B or C. But I’m appalled by those who evidently consider health care an optional consumer good–and believe that people who can’t afford it shouldn’t have it.

What triggered this rant was a post from Dispatches from the Culture Wars. I’ve met Ed Brayton, who writes Dispatches. He is a delightful person, a steadfast proponent of reason, the rule of law, civil liberties and science.

He also has a pre-existing condition.

While Trump and virtually every Republican lies about not wanting to do away with the ACA’s protections for those who have preexisting medical conditions, the AARP has a new report out that says the result would be a massive increase in premiums for people like me, as high as $26,000 a year.

Brayton quotes from the AARP report:

The revised American Health Care Act (AHCA) threatens to do away with the Affordable Care Act’s (ACA) protections for people with preexisting health conditions. These protections prevent insurance companies from denying these individuals coverage or charging them higher rates based on their health.

Eliminating these protections could force millions of Americans to — once again — rely on state high-risk pools. State high-risk pools are supposed to provide access to health insurance for people who cannot get coverage in the individual health insurance market because of preexisting health conditions.

State high-risk pools may sound like a good idea but, in reality, they are fraught with problems. One of the biggest lessons learned from experience with state high-risk pools: They bring steep premiums that put coverage out of reach for millions. In the past, monthly premiums in state high-risk pools could be up to 200 percent higher than in the individual (nongroup) market. Consequently, only a small fraction of those with preexisting conditions could afford to buy a plan. Yet, these premiums — high as they were — only covered about half the amount needed to pay enrollee claims. Most states tried to close the financial gap through taxes on providers and government subsidies, but even those efforts proved insufficient. We project that if states return to pre-ACA high-risk pools in 2019, as proposed, high-risk pool premiums for people with preexisting conditions could be as high as $25,700 annually.

Brayton’s reaction paints the picture in very personal terms:

High-risk pools are a disaster. They make insurance completely unaffordable for the overwhelming majority of people. As I’ve said many times, if the Republicans succeed in repealing Obamacare, I’m dead. Probably within a year. There’s no way I could afford the premiums in a high-risk pool and my medication costs run into thousands of dollars a month, and that doesn’t count all the specialists and tests and stays in the hospitals.

The United States health industry (as a student once explained to me, we don’t have a ‘system’) costs twice as much per person as in the next most expensive country, and our outcomes are far worse. (We not only aren’t “number one,” the last time I looked, we were number 37.) Private health insurance companies have average overhead costs of 23-25% (costs that include bloated management salaries and corporate jets, along with marketing costs and personnel hired solely to decide that you don’t really need that medicine).

Medicare’s overhead is 3%.

Americans pay much more for much less, all because we don’t want to subsidize medical care for the Ed Braytons of the world–or for the children of poor families, or people who don’t look like us.

The day America joins the rest of the civilized world by guaranteeing universal access to basic medical care will really be Thanksgiving.

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