Libertarianism and Big Business: A Dissent
The March-April issue of Cato Policy Report featured a discussion among Timothy Carney, Uwe Reinhardt, and Ross Douthat of Carney’s book Obamanomics: How Barack Obama Is Bankrupting You and Enriching His Wall Street Friends, Corporate Lobbyists, and Union Bosses. The tenor of the discussion was reflected in the title, ”Big Business, Big Government, and Libertarian Populism.” Richard L. Gordon, a distinguished economist emeritus at Pennsylvania State University and a Cato adjunct scholar, took strong issue with all three commenters and sent us the following rebuttal, which we’re pleased to publish here:
The March/April Cato Policy Report covered a January 2010 Cato Book Forum on Timothy P. Carney’s Obamanomics. Carney summarized his book and there were responses from Uwe Reinhardt, a Professor at Princeton noted for advocacy of strong government intervention in health care, and Ross Douthat, a (first-year) New York Times columnist, a self-styled conservative who (from scanning his columns) seems a weak one. The result was three tirades about how big business runs government. It is surprising in the twenty-first century to see outside of WhiteHouse.gov, movies, and television dramas such naïve attacks on the power of big business. This is not the libertarianism that I know. However, superficially plausible dominance theories are too convenient not to revive frequently, regardless of enormous refutations. Thus, some key, familiar points need recollection.
The charge of big-business dominance has at least three flaws. First, it is a myth. Politicians created the massive growth of government with more input from intellectuals than from business executives. Second, it reverses causation; government ensnares industry. Third, it is absurd since big business, however defined, consists of diverse, often conflicting companies.
By Pulling His Punches, Bernanke Shatters ObamaCare’s Credibility
Federal Reserve Chairman Ben Bernanke gave a speech in Dallas yesterday where he inadvertently discredited claims that ObamaCare would reduce health care costs and the federal deficit. According to The Washington Post:
Federal Reserve Chairman Ben S. Bernanke warned Wednesday that Americans may have to accept higher taxes or changes in cherished entitlements such as Medicare and Social Security if the nation is to avoid staggering budget deficits that threaten to choke off economic growth…
While the immediate audience for the speech was the Dallas Regional Chamber, his message was intended for Congress and the Obama administration…
Bernanke has urged Congress to address long-term fiscal imbalances in congressional testimony before, but usually only when he is asked about them by lawmakers. His speech Wednesday aimed to reach a broader audience, steering away from technical economic speak and using plain, sometimes wry, language — a rare thing for a Fed chairman.
The non-partisan Congressional Budget Office projects the annual federal deficit will be at least $700 billion in each of the next 10 years. Deficit spending is a form of taxation without representation, because it increases the tax burden of generations who cannot yet vote (often because they are as yet unborn). Bernanke wants us to end deficit spending. Kudos to him.
But consider the timing of his speech. Why wait until April 7, 2010, to deliver that message directly to the public? Why not give that speech in January? Or February? Or any time before March 21?
The reason is obvious: Bernanke held back to appease his political masters.
Universal Coverage Means ‘Willing to Let You Die Sooner’
I cannot disagree with Uwe Reinhardt’s response to my previous post at National Journal‘s Health Care Experts blog. But his response bears clarification and emphasis.
Improving “population health” generally means “helping people live longer.”
To paraphrase, Reinhardt then writes:
If helping people live longer were our objective in health reform, we could do better than universal coverage. But health reform is not (solely or primarily) about helping people live longer. It is (also or primarily) about other things, like relieving the anxiety of the uninsured.
I applaud Reinhardt for acknowledging a reality that most advocates of universal coverage avoid: that universal coverage is not solely or primarily about improving health.
Will Reinhardt go further and acknowledge that, since universal coverage is largely about some other X-factor(s), that necessarily means that advocates of universal coverage are willing to let some people die sooner in order to serve that X-factor?
(Cross-posted at National Journal‘s Health Care Experts blog.)
Why the Democrats’ Health Care Overhaul May Die
The problem that Democrats have faced from Day One is finally coming to a head.
The Left and the health care industry both want universal health insurance coverage. The industry, because universal coverage means massive new government subsidies. The Left, because that’s their religion.
But universal coverage is so expensive that Congress can’t get there without taxing Democrats.
- Sen. Jay Rockefeller (D-WV) is the biggest opponent of Sen. Max Baucus’ (D-MT) tax on expensive health plans because that tax would hit West Virginia coal miners.
- Unions vigorously oppose that tax because it would hit their members.
- Moderate Democrats in the House oppose Rep. Charlie Rangel’s (D-NY) supposed “millionaires surtax” because they know it would hit small businesses in their districts.
And on and on…
But if congressional leaders pare back those taxes, they lose the support of the health care industry, which wants its subsidies.
- That’s why the health insurance lobby funded this PriceWaterhouseCoopers study saying that premiums would rise under the Baucus bill: the $500 billion bailout they would receive isn’t enough. They also want – they demand – steep taxes on Americans who don’t buy their products.
- The drug companies, the hospitals, and the physician groups are likewise demanding big subsidies, and will run ads to kill the whole effort if those subsidies aren’t big enough.
As always, health economist Uwe Reinhardt put it colorfully:
It’s no different from Iraq with all the different tribes…‘How does it affect the money flow to my interest group?’ They are all sitting in the woods with their machine guns, waiting to shoot.
Once the shooting starts, industry opposition will sway even Democratic members, because there are physicians and hospitals and employers and insurance-industry employees in every state and congressional district.
Can President Obama and the congressional leadership satisfy both groups? My guess is, probably not, and this misguided effort at “reform” will therefore die. Again.
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