Back to Brock

In earlier posts, I wrote about Woody Brock’s book American Gridlock – his characterization of the current political debate as a “dialogue of the deaf,” his thoughts on the deficit, and his solution to the entitlements problem. In my ongoing discussion of the book, which I urge you to read, I will look for stories that demonstrate one of the issues Brock raises: (1) the public economic crisis that threatens to make this a “lost decade;” (2) the entitlements crisis; (3) preventing perfect financial storms; (4) China and bargaining theory; and (5) distributive justice.

This morning’s news is dominated by the catastrophe hovering over Europe. This is hardly a new story, as we have been reading for months about the potential collapse of Greece, the recession in Spain, the Irish debt, Italy’s financial crisis, etc. While the doctrine of austerity may seem a rational intellectual solution to these problems in national treasury offices and newspaper editorial pages, it doesn’t work so well when people are injected into the equation.

Brock’s distinction between sound public investment in a nation’s infrastructure as opposed to deficit spending for short-term stimulation offers a way forward. A sound investment creates things we need – new bridges, better education systems, public transportation – and guarantees a return. It’s not easy to implement – “shovel ready,” for example, is not the right criterion – but it is the only way to get beyond the current impasse. It will put people to work building things we desperately need that will pay for themselves over time. And it will require people to work together, which is the antidote to the hardening economic and ethnic divisions that are Europe’s biggest threat.

A Thought on Taxes

I watched yesterday one of those short “debates” on CNN in which a Democrat and a Republican stand around a table and respond to questions by reciting their party’s talking points. On the “Buffett Rule” – which sets a minimum tax rate of 30 percent for Americans whose incomes exceed $1 million – the Republican talked about the “job creators” who would be discouraged from the heroic role they play, while the Democrat talked about the national need for “fairness.” The journalist talked about polls that show 64 percent of Americans favor the Buffett Rule, named for Warren Buffett who noted that he pays taxes at lower rate than his secretary. The journalist also pointed out that the public is all for slashing spending . . . until people start to talk specifically about what programs to cut. Obviously we need to get real about this issue – about exactly where the cuts will be, about precisely what jobs, other than domestic servants, are created by the personal incomes of the very rich, etc.

Lost in yesterday’s discussion was why we pay taxes at all. A tax has become simply a burden, and therefore the lighter the burden the better. What happened to the notion that a tax is an investment in the country and in ourselves – one whose value we can measure by the return that investment brings? Yes, there is enormous waste that needs to be addressed. But there is so much that needs to be built and that we as a society should be building together.

The Power of One

The Supreme Court has been accused of legislating from the bench at least since 1803, when John Marshall outmaneuvered Thomas Jefferson in Marbury v Madison to establish the power of judicial review. But the current Patient Protection and Affordable Care Act Cases represent the first time of which I’m aware that advocates are appealing directly to the politics of the justices – and to one justice in particular. For despite all the parsing of Justice Scalia’s concerns about broccoli, the hitherto inconceivable idea that the Court might actually declare the health care law unconstitutional appears to rest with the pen of one man: Anthony Kennedy. In the conventional wisdom, the court’s even split between ideological conservatives (Roberts, Alito, Scalia, Thomas) and liberals (Ginsburg, Breyer, Sotomayor, Kagan) leaves Kennedy as the decider – and both sides are aiming their arguments at his often fuzzy concept of “liberty.”

Anthony Kennedy decided who should be president in 2000 in Bush v Gore. Having him now decide the future of health care seems a lot of power for one man who has never been elected to any public office. It will also further erode the Court’s image as the neutral arbiter of the law.

Corrections:  Two corrections from Friday’s blog: one a typo (“renewal energy” should have read “renewable energy”); the other an inexcusable slip. The administration’s estimate of the impact of a one-cent rise in the pump price of gasoline is $220 million in increased quarterly profits, not $220 billion. Even in these times, being off by a factor of 10 to the third power is not a rounding error. I am thankful to a reader for questioning the number. He said, and I totally agree, that whatever credibility I have is based on not making sloppy errors. So, please let me know whenever I do.

Spaghetti Bolognese

After a two-day hiatus, we return to Woody Brock and American Gridlock. It is a fitting time to look at his discussion of the second great issue whose resolution has been lost in the politics of nastiness: entitlements, and in particular, health care, which is currently under discussion before the Anointed Nine. The issue of health care is enormously complicated –Brock calls it the “Spaghetti Bolognese of public policy problems – and his chapter addressing it is one of the book’s best. He is critical of “Obamacare,” but for reasons that have received little public notice – unless we address the supply side of healthcare, particularly by creating conditions that will produce more practitioners, America will end up both broke and rationing services. The logic that takes him there involves a fascinating discussion about the much-misunderstood law of supply and demand, but the essence of his argument is that the need to (1) provide access for 50 million currently uninsured Americans and to (2) control costs as a percentage of GDP are on a collision course unless the supply curve expands faster than the demand curve.

Universal health care is a public good, one in which the government must be involved, and so the focus on the “individual mandate,” which has become the centerpiece of the debate, seems nonsensical to me. We already have universal coverage, unless we are prepared to let the uninsured lie in the streets untended. This debate ought to be about making sure that does not happen.

Obamacare

In the almost two years I have been enrolled in Medicare, I have found it to be by far the best medical insurance plan I have ever had. I once said that to my doctor, who replied, “You know, many of us agree.” In fact, in our long – and so far successful – partnership to keep me alive, we went through a mini-crisis several years ago when he stopped accepting Aetna, which was the “gold plan” I was on at the time. He said he was fed up with the onerous paperwork the company demanded, its niggling oversight of his patient care, and what amounted to interference in his medical practice. Ultimately he had to return to the fold because a small group practice is no match for a huge corporate insurer. And as anyone who has to deal with Verizon can attest, just because you are not the government doesn’t mean you can’t be intractably bureaucratic and provide awful service. Moreover, at least for me, Medicare isn't cheap. I pay reasonable but not insignificant monthly premiums for the parts of the system that are not free.

Despite the constant allusions to the horrors of socialized medicine with its death panels asd rationed care, the United States currently spends more on health care than any other country, and the health of its people is no better as a result. The current law under scrutiny by the Supreme Court Nine is the first national effort to seek fair and full access to health care. It’s not perfect, but it’s a long overdue first step.