Public Policy and Governance – Page 283

Our Own Desert Island

Later today–between I:00 and 2:00 pm– there will be a rally at the Indiana Statehouse on behalf of the nearly 400,000 Hoosiers who find themselves marooned on Indiana–the island of the uninsured.

States surrounding us, Republican and Democrat, have opted to take advantage of the new federal incentives and expand Medicaid. Not Indiana. Our Governor has decided that political posturing trumps the health needs of Indiana citizens who work in retail, education, home health, child care and other low-wage jobs without benefits. These are the people who are caught in the middle, who are too poor to use the new exchanges but too “rich” to qualify for Indiana’s existing medical programs.

It’s pretty obvious that refusing to expand Medicaid effectively screws over these 400,000 Hoosiers. What is less obvious–and even more maddening–is how that refusal screws over the rest of us.

If a state expands its Medicaid coverage, the federal government will pay 100% of the costs for the first three years and 90% thereafter. Indiana is forgoing approximately twenty-six billion dollars between now and 2020–dollars that would create an estimated 30,000 sorely needed new jobs in our state.
The American Academy of Actuaries says that private insurance costs will rise in non-expansion states like Indiana. Local media has reported that Hoosiers are already seeing rates higher than the rates in states that surround our “island.”
The federal money we are turning down would offset expenses for indigent care and prison health care that are currently being covered by Indiana taxpayers.

Medicaid expansion would save money while saving lives and improving the health of our citizens. It would provide access to preventative care to those who are currently uninsured, reducing the tab for healthcare costs overall, including those that we taxpayers are now paying.

I know you’ll all be shocked to discover that Indiana currently ranks near the bottom of all states for most health indicators. In a sane world, we would jump at the opportunity to improve Indiana’s health and its economy.

Governor Pence’s refusal to expand Medicaid has already forced significant layoffs by Indiana hospitals, which have argued forcefully–but thus far unsuccessfully–for expansion. Other states with Republican governors have done the math and decided that the good of their citizens should trump their hatred of the President.

This should be a no-brainer.

I’ll forego the obvious pun.

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Shades of Milton Friedman

Switzerland is evidently considering implementing a “minimum income” program that would require the Swiss government to send a check to every citizen every month.

Proposals for similar approaches here have been kicking around since Milton Friedman advocated a negative income tax. Given current Congressional hostility to anyone who isn’t a plutocrat, the prospects for the U.S. adopting such an approach hover somewhere between nil and minus a million, but there is a strong case to made for replacing our patchwork safety net with a minimal income guarantee. According to Business Insider,

In 2012, there were 179 million Americans between the ages of 21 and 65 (when Social Security would kick in). The poverty line was $11,945. Thus, giving each working-age American a basic income equal to the poverty line would cost $2.14 trillion. For some comparison, U.S. GDP was almost $16 trillion in 2012 and the defense budget was $700 billion.

But a minimum income would also allow us to eliminate every government benefit as well. Get rid of SNAP, TANF, housing vouchers, the Earned Income tax credit and many others. Get rid of them all. A 2012 Congressional Research Service report found that the federal government spends approximately $750 billion each year on benefits for low-income Americans and that rises to a clean trillion when you factor in state programs. Eliminate all of those and the net figure comes out to $1.2 trillion needed to pay for a universal basic income, still a hefty sum.

Of course, that price tag assumes a check going to every American, rich or poor. As I recall, Friedman’s proposal was more modest: send checks to folks under the poverty line, tax those over it. The Swiss approach would send money to all citizens, regardless of income, and that does have the appeal of simplicity–no income verification bureaucracy, no game-playing.

A guaranteed minimal income would have some interesting consequences: for starters, no American would live below the poverty line. Despite a 50-year War on Poverty, nearly 50 million Americans remain below that line.

A guaranteed minimum income would give American workers the security to demand higher wages and better working conditions. Families could allow one parent to take time off to raise the kids. Best of all, eliminating the numerous different government welfare programs would simplify government and lead to private-sector efficiencies, as adults would simply receive their check in the mail (or via electronic transfer) and not have to waste time filling out paperwork and visiting numerous government offices.

The major argument against a guaranteed income is that it would be a disincentive to work–or, looked at another way, an incentive to idleness. Research suggests those fears are overblown, especially since a guarantee of poverty-level income doesn’t exactly provide trust-fund luxury. And of course, the same argument is routinely made against existing programs.

If the Swiss follow through, I guess we’ll get to see who’s right.

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Diminished Expectations, Diminished Performance

I haven’t been particularly kind to several of our elected officials lately. Believe it or not, I take no satisfaction in criticizing the failures and foibles of those who’ve been elected to manage the affairs of the republic. Ultimately, after all, the fault lies with the voters who elected them.

We the People don’t have very high standards. We seem to regard these empty suits as “good enough for government work.” In short, the low esteem with which we view our governing institutions has become a self-fulfilling prophecy.

Let’s be brutally frank. Why would people who are moderately competent, let alone “the best and brightest,” want to work with the likes of Ted Cruz, Rand Paul, Michelle Bachmann, Louis Gohmert or literally dozens like them? How can we expect capable management of agencies charged with oversight of complex and interrelated public functions when the politicians to whom those managers must report have absolutely no idea how government and the economy actually work?

We recently heard elected officials insist that an American default on the debt would be “no big deal.” We’ve heard characterizations of the Affordable Care Act and HIPPA that have betrayed total ignorance of the provisions of both laws. We’ve heard assertions of constitutionality and unconstitutionality untethered from even the most tortured reading of our constituent documents.

There’s nothing wrong with policy debates. Indeed, such disputes can be very productive—but only if the debate is grounded in reality, only if it addresses genuine issues and employs credible information.

When aggressive ignorance is a political virtue and professionalism, knowledge and expertise are vices, we shouldn’t be surprised by a deficit in competent public management.

In the jargon of economics, we get the behaviors we incentivize.

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Some Voters Matter. Some Don’t.

According to a recent Pew analysis, only one out of every seven Congressional Districts was competitive in 2011.

Much of this lack of competitiveness is due to gerrymandering, of course–a matter I’ve discussed in previous posts. But much of it is due to the demography of 21st Century America and a phenomenon of voluntary “sorting.” Americans choose to live in places where they are culturally comfortable. Some choose rural areas, and others of us gravitate to what has been dubbed the “Urban Archipelago“–a reference to political maps showing chains of “blue” urban islands in states that are otherwise rural and red. Urban dwellers tend to be more diverse, more socially progressive, less hostile to government and more willing to “live and let live.” These days, that is a description of people who vote Democratic.

There are also roughly twice as many Americans living in cites as there are in rural areas.

If we really had “one person, one vote,” the policy preferences of the vast majority of Americans who occupy urban areas would be reflected in Congress. But of course, we don’t–and as a result, the 19th Century attitudes of farmers and small-town denizens continually trump the needs and desires of 21st Century citizens.

It would take a swing of 17 seats to wrest control of the House from the “Party of No.” In a sane world, where votes reflected the wishes of the majority, a shift that small would be likely.

In our broken system, it will take a miracle.

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Logical Consequences

For the past quarter-century, Americans have been bashing government–not just this or that administration or political party or elected official, but the enterprise of governing.

Want a laugh? Say “I’m from the government and I’m here to help you.” Want to indulge a conspiracy theory? The government’s giving the Alamo to the UN! Obama plans to impose Sharia law!.. Got a grudge against your state lawmakers? Push for your area’s counties to secede. Hate the feds? Put on a tricorn hat, misspell a placard and hold a rally.

The problem is, there are consequences to this constant and indiscriminate hostility to government authority, and those consequences aren’t pretty.

Example: Yesterday, to its credit and my surprise, The Indianapolis Star ran two actual news stories: one about legislative conflicts of interest and corrupt behavior, and another about inadequate regulation of child care providers. Stories about the inept rollout of the Affordable Care Act, and other tales of poor management, are everywhere.

Guess what? When we devalue government, we shouldn’t be surprised when government isn’t done very well. When we spend our time and energy arguing whether major elements of government infrastructure should even exist, we don’t have much time or energy left over to insure that all parts of government are operating properly–that public servants are competently performing those tasks that most reasonable people believe government should do.

I will be the first to acknowledge that we have public officials who deserve our scorn, policies that are–at best–counterproductive and need to be changed, and antiquated or corrupted structures that need to be revisited. The difference is, those are criticisms of how well our government is doing–not attacks on the legitimacy of government itself.

Are some regulations unnecessary? Undoubtedly. But supervising people who care for defenseless infants and children certainly seems an appropriate function of government. Most Americans would also agree that we need laws sanctioning officials who abuse their positions for personal gain.

Americans’ attitudes toward government are a lot like their attitudes toward Congress: we famously despise Congress, but approve of our own Representative. We hate government, but not the programs that benefit us, or veterans, or grandma.

Much as we may not want to admit it, we live in a complex modern world where there are tasks that only government can effectively perform–from FAA supervision of air travel, to FDA oversight of food and drug safety, to regulations preventing banks from ripping off unwary customers…..on and on. When the agencies charged with these tasks fail to do their jobs properly, real people get hurt–planes crash, people get sick and die, and–as we’ve seen– economies fall into recession or worse.

We need to stop bashing government’s legitimacy, and instead turn our attention to how government is doing its job. We need to put down the ax and pick up the scalpel–to stop characterizing government as some sort of enemy, and begin focusing on making it better.

When we insist that “public service” is an oxymoron, we shouldn’t be surprised when we don’t get decent public service.

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