Public Policy and Governance – Page 307

Health and the Market

Well, I see that the Congressional GOP is threatening to shut down the government in October if the Democrats block repeal of the Affordable Care Act, aka Obamacare, and the partisan rhetoric is predictably flying.

A Democratic friend sent me an email listing the multiple sins of the Bush Administration, from wars of choice to decimation of the economy to the massive increase in the national debt; the message was something like “You didn’t get mad about any of these things, but now a black guy wants to provide healthcare to Americans who don’t have it, and that makes you mad!?” A Republican friend sent me a similarly incendiary message insisting that Obama is a “socialist” who hates capitalism and wants to destroy the market “that made American health care the best in the world.”

Let’s stipulate that not everyone who opposes Obamacare is a racist, and that American healthcare before the ACA was not only not the best in the world, but actually ranks around 37th. Other than that, my purpose is not to engage these arguments, but to point to a perfect example of the way “the market” works in areas like healthcare, where buyers and sellers are not on equal footing, and do not possess the sort of equivalent information that is necessary for markets to work.

I have previously referred to a book written my cousin, Morton Tavel, in which he takes on the “snake oil” aspects of the healthcare industry. He has now created a blog devoted to the subject, and his first post is a perfect example of “the market” in medicine–a discussion of all the ads about “low T”–testosterone deficiency. I encourage you to click through and read the whole post, but the bottom line is that “low T” is extremely rare. The numbers the manufacturers are hyping are misleading at best and fraudulent at worst, and the “remedy” they are promoting is expensive, unnecessary and unlikely to restore the virility of the aging men who miss their morning erections.

Markets are wonderful where they work. And they work more often than they don’t. But in those areas where they don’t work, they enable the snake oil salesmen who prey on the unwary and drive up costs for everyone.

As with so many policy debates, this isn’t an “either-or” debate between all market all the time and socializing every aspect of the economy. We “socialize” functions that markets cannot efficiently provide–police and fire protection, infrastructure provision, national defense, public education. We leave to the market those economic areas where markets have proven their effectiveness.

The decision whether to leave an activity to the market or provide it through government should be based on evidence, not ideology. And as every other western industrialized country has long recognized, the evidence for government’s role in healthcare is overwhelming, just as the evidence for the market in consumer goods and manufacturing is overwhelming.

The evidence also tells us a lot about elected representatives who–having lost the argument–are willing to shut down the American government in order to protect the profits of health insurers and drug companies.

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Incivility and an Inability to Govern

There’s an interesting symposium on political civility in a recent issue of PS: Political Science and Politics. The articles wrestle with some foundational questions: what is the difference between the sort of argumentation that illuminates differences and is an inevitable part of democratic discourse and rhetoric that “crosses the line”? What do we mean by incivility?

The consensus seemed to be that incivility is rudeness or impoliteness that violates an agreed social standard.

I’m not sure we have agreed social standards in this age of invective, but surely attacks that focus on, and disrespect, persons rather than positions should count as uncivil. An example of civility in political argument might be Dick Lugar’s often-repeated phrase to the effect that “that is a matter about which reasonable people can differ.” (Hard to imagine Mr. Mourdock, who has taken pride in incivility and intransigence, making such a statement.)

The contributors offer a variety of perspectives on the definitions and causes of today’s nasty politics, but one of the most trenchant observations came from a Professor Maisel of Colby College, who attributes the gridlock in Washington and elsewhere to “partisan one-upmanship expressed in ways that do not show respect for those with differing views.” As he notes (referring to Erik Cantor)

If your will is to prevent legislation from passing, to prevent the president’s agenda from moving forward, to work the system to your political advantage, then lack of civility works.

In other words, if your over-riding motivation is simply to beat the other guy–to keep the President from a second term, as Mitch McConnell famously admitted–and if that motivation outweighs any concern for the public good, governing is impossible.

The reason politicians no longer “respectfully disagree” with each other, Professor Maisel points out, is that they do not in fact respect the views of their opponents. They hardly know them. The days when Congressional families lived in Washington and socialized–when their children went to school together, and their spouses carpooled or otherwise interacted–are long gone. It’s easy to demonize people you don’t know.

Add to that an even more troubling aspect of today’s politics, a disregard for fact and truth, enabled by partisan television, talk radio and the internet. Survey after survey shows that people on the Left and Right alike get their “news” from sources that validate their biases. Worse, we have lost the real news, the mainstream, objective journalism that fact-checks, that confronts us with inconvenient realities. In such an environment, it becomes easier to characterize those with whom we disagree as buffoons or worse, unworthy of our respect.

When political discourse is so nasty, and regard for truth so minimal–when the enterprise of government has more in common with a barroom brawl than a lofty exercise in statesmanship–is it any wonder that so many of our “best and brightest” shun politics?

Government is broken, and we need to fix it. Unfortunately, the symposium contributions didn’t tell us how to do that.

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Framing the Wrong Argument

I like David Brooks. I even agree with a significant part of what he writes. But his column in yesterday’s New York Times not only missed the boat, it swam in the wrong ocean.

Brooks characterized the Obama ads attacking Romney’s performance at Bain as an attack on capitalism, and essentially framed the current Presidential race as a contest between “big government” and “capitalism.” This is wrong on so many counts, it’s hard to know where to begin.

I am an ardent believer in capitalism and free markets. In my opinion, Mitt Romney is the poster boy for a destructive and distorted vision of market economics that is giving capitalism its current bad name.

The sort of capitalism that works, the capitalism that originally made this country the most productive in the world, is characterized by transparency and a level playing field. Transparency means marketplaces with willing buyers and willing sellers who both possess the information relevant to their transaction. There are obviously areas–like healthcare–where that sort of information symmetry is impossible; in such areas, markets cannot work. Markets work extremely well, however, when buyers and sellers both have access to sufficient information on which to base their economic behavior.

The metaphor of a level playing field goes well beyond parity of information, however. A level playing field requires rules against cheating–and authorities willing and able to enforce those rules. Crony capitalism is the antithesis of a level playing field. Gaming the system by sending your lobbyists to Washington to buy influence, obtain favorable tax treatment, gut regulations and subsidize your endeavors are hallmarks of oligarchy. Such behaviors bear no relationship to a true market economy.

The notion that Mitt Romney represents true capitalism is delusional. So, for that matter, is the charge that Obama represents “big government.” As even the Wall Street Journal has conceded, growth in government spending under the Obama administration has been the lowest since the Eisenhower administration. The charge of “big government” rests on two aspects of Obama’s presidency: the Affordable Care Act (aka “Obamacare”) and his continuation of George W. Bush’s policies on surveillance and national security.

I agree with critics of Obama’s national security policies. Those policies infringed civil liberties when Bush inaugurated them, and they are no less ill-conceived and dangerous simply because the President pursuing them can pronounce “nuclear.” But the widespread belief that the ACA is anti-capitalist and pro “big government” rests on the same fundamental misapprehension as Brooks’ column: that anything done by the private sector is by definition “capitalism.”

The basic question to be answered when constructing a government is: what is its role? What tasks must we do collectively,through this governing mechanism we have created, and what tasks should be left to individuals, businesses and/or nonprofit organizations?

In areas where markets work, we should let them. But there are areas where markets don’t work, or work only with substantial assistance. Think public safety, national defense, infrastructure provision. Healthcare is an area where markets demonstrably do not work and have not worked. Every other western industrialized nation has come to that conclusion. The cost of ignoring that reality is draining our treasury and increasing the inequities that are splintering our polity.

Recognition of reality is sanity, not preference for “big government.”

If we really need to frame the electoral choice we face, I’d suggest “a contest between ‘I’ve got mine’ and the common good.”

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It’s a Penalty! It’s a Tax! It’s Unprecedented!

I have been bemused–and occasionally amused–by all the posturing over the provision in the Affordable Care Act requiring people to purchase health insurance.

How dare they!!

If you listen to the right-wing blogs and talking heads, you’ll come away believing that such a mandate is unprecedented. The government has never required us to do something, or penalized us for failing to do something.It’s unAmerican to penalize inaction. That evil Obama is introducing an entirely foreign element into American law. (The fact that Romney did exactly the same thing in Massachusetts is obviously different….)

Of course, this line of attack is entirely fanciful.

As a legal scholar recently noted, the very same week it upheld the ACA, the Supreme Court affirmed a law requiring sex offenders to register their whereabouts, employment and appearance with local authorities. If they fail to do so, the law in question imposes a penalty of ten years in prison–a bit more draconian than the ACA’s fine. The Court made it clear that this mandatory registration was not punishment for a crime –the individuals subject to the requirement have already paid their debt to society for those transgressions (a contrary construction would run afoul of the Ex Post Facto prohibition).

Courts upholding this particular type of mandate–and there have been several–have explicitly said that the only conduct being punished was the “inactivity” of failing to register.

There are many other examples–so many that a Professor at John Marshall Law School has actually written an essay on “The Incredible Ordinariness of Federal Penalties for Inactivity.”

As I have repeatedly noted, there is nothing wrong with faulting provisions of this particular approach to healthcare reform. What I find absolutely astonishing, however, are the logical contortions opponents will go through in order to attack the legitimacy of any attempt to extend access to healthcare. I have been absolutely stunned by opponents’ self-righteous denunciations of such efforts, and by their evident willingness to simply let the uninsured suffer and die.

A recent editorial in the Journal of the American Medical Association is worth quoting.

That editorial began “Physicians and hospitals have a moral duty to provide acute care and emergency care to those who need it.” Proceeding from that expressly moral premise, the editorial concluded that individuals “have an enforceable moral duty to buy sufficient health insurance to cover the costs of acute and emergency care…requiring individuals to buy health insurance is consistent with respect for individual liberty because individuals have a duty to mitigate the burdens they impose on others.”

We don’t talk much about the morality of policy. We should.

Yesterday, every single House Republican voted to take away health coverage for young adults staying on their family plans, raise prescription drug prices for seniors, end protections for those with pre-existing conditions, reinstate lifetime insurance caps, scrap tax breaks for small businesses, raise the deficit, and take benefits away from 30 million Americans. Pundits reporting the vote generally noted that it was one of a series of such votes, and that it stood no chance of ultimate passage. They spent a lot of time analyzing the politics of the GOPs message and speculating on its electoral effect.

To the best of my knowledge, none of them pointed out how utterly immoral it was.

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Taxing “Small Business”

This is really getting tiresome.

Obama and the GOP continue their standoff over the Bush tax cuts. Obama is willing to extend those cuts for taxpayers making less than 250,000 a year, but wants to let the cuts expire for those making more–those in the top 2%. The GOP has fought tooth and nail to protect that 2% from the horror of a return to Clinton-era marginal rates of 39%, and (lacking even a superficially convincing argument for that position) they have deployed a number of rhetorical weapons intended to justify their stance.

First it was “job creators.” Raise the marginal rate to its previous low point and the wealthy won’t create new jobs! Since we have had the historically low Bush rates for nearly a decade, and the jobs have not been forthcoming, voters have begun to see through that one. (Recent studies have confirmed that job creation bears virtually no relationship to tax rates; we have had robust job growth in periods of relatively high rates.)

The curent faux concern is for “small business.” Since many small enterprises choose to be taxed as individuals, Romney and the GOP argue that a higher rate on those making over 250,000 will “target small business.”

Obviously, the word “small” means something different to Romney than it does to most of us. The nonpartisan Joint Committee on Taxation found that in 2013, the higher rate would affect just 3.5% of small business–mainly doctors and lawyers. As Harry Ried noted during a recent debate, the GOP’s idea of “small business” evidently includes “fabulously rich so-called small business owners like Kim Kardashian and Paris Hilton.”

The Republicans’ insistence on protecting its wealthy donors from even a modest tax hike sure makes their rhetoric about the deficit ring hollow.

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