It’s been a long break for me, during which I left the beautiful world of boutique finance to return to the New York Fed for a summer of number crunching. I’m now starting a Masters in Political Science at MIT, focusing on security, so this blog is going to be changing substantially: I hope to blog my experience studying security. The MIT program was once a locus of Soviet research and now boasts a robust program in the area of “security studies”. I was attracted to the program because I think that the questions of terrorism and counter-insurgency which have dominated security discussions for the past 9 years will recede in the face of a return to great power conflict, owing largely to the relative decline of US predominance. MIT has operated well in the latter space, though not so well in the former. In addition to the normal assortment of politicos and rootless academics, the program also hosts a few National Security Fellows each year–military personnel moving up the chain who’ve opted to spend a year in academia instead of at the traditional professional institutions that would attend promotion, such as the War Colleges. I’m as interested in my fellow classmates–who, at first blush, are some very intelligent people–as the course material. The overarching question: what compels people to study war? (As always, I’m wholly unsure of what’s compelling me.) It should be an interesting time; I hope to share the intellectual journey with all of you. This is real dark comedy! (the dark coming from the war aspect, the comedy hopefully coming from me.)
For now, however, one last blast from me on economics: I’m one of the few card-carrying Republicans you could find who supports single-payer health-care (please distinguish “card-carrying Republican” from “Republican”; I’m not a racist (I’m not white) and I don’t hate human progress (I’m only mentioning my ideological stripes to illustrate the debate (I voted Obama))). To me, the arguments are obvious: removing employer-based health-care would liberate and further liberalize the labor market: it allows for greater ease in the job search process by eliminating one crucial metric by which an employer is evaluated; it allows easier and less costly entrepreneurship by removing the need to provide health-care to employees; it provides for greater flexibility to pursue one’s goals by removing the incentives to stay in a job you don’t like; and it lowers overall health care costs by removing administrative costs for screening patients, freeing up capital overall for investment purposes. In other words, single-payer health care is pro-capitalism, and pro-free-enterprise (unless, of course, you work in the insurance industry, in which case you should find a new, more socially useful job).
As a (card-carrying) Republican and a conservative, I am, however, very distrustful of large federal schemes for solving problems. I would make an exception for single payer, since I think we could do it in a way that preserves our American economic system (e.g. we don’t necessarily need a National Health Service like Britain; we could just have one national insurance company, while allowing doctors and hospitals to remain private). Nevertheless, I’m realistic, so I know that the US will probably always hate single-payer overall, and I sympathize with those who have a gut reaction to a government-run program.
President Obama was acutely aware of government-hatred when running for president, and boldly chose to still talk about health care in a way aimed to mollify the very seething hoards of anti-government conservatives we see now. Accordingly, during the campaign, he didn’t support insurance mandates (Hillary did), and didn’t support single payer. The political game plan was clear: propose a good (though not great) reform that would go a long way to covering the uninsured and would provide a public option, and propose it in such a way that was not susceptible to the charge of “government-run health care”. Given that the election pointed to a sort of center-left national mood, and the popularity of Medicare (a public option for seniors), this was a great plan, and he’s attempting to follow it: in the joint-session speech, Obama attempted to refute the idea that he was proposing government-run health care:
So let me set the record straight here. My guiding principle is, and always has been, that consumers do better when there is choice and competition. That’s how the market works. ‘ (from whitehouse.gov)
Critics have latched on to the public option as an example of Obama’s socialist agenda. Some of these critics have Medicare, but don’t seem to realize it’s run by the government. Many of these critics are crazed lunatics who don’t deserve serious attention.
But, as to the claim that Obama isn’t proposing government-run health care, I say “you lie”! A much more pervasive and potentially troubling idea than the public option, which has been pushed since the administration’s inception by OMB director Peter Orszag, was the idea of creating national panels to perform comparative effectiveness research for medical treatments, and to allow this research to determine Medicare reimbursement rates (http://www.nytimes.com/2009/07/23/business/economy/23econ.html). Given that the President produced no “plan” per se, one can assume that pronouncements from a key cabinet member constitute part of his plan. Not to sound like a right-wing nutcase, but this is a dangerous idea that threatens the fabric of our society and our basic freedoms as Americans. One of those freedoms, rarely talked about but integral to our dynamic economic system, is professional freedom: the professions–law, medicine and (though less rigorously “professional”) academia and the press–are allowed to operate almost completely independent of government power. The government may require certain forms of licensing–e.g. bar qualifications to operate in court, and medical licenses–for the purpose of protecting citizens, but as to all other aspects of their makeup, they operate independently and autonomously. They govern their activities professional organizations, certify their members through boards of professional certification, evaluate their performance through internal disciplinary measures, and further their knowledge and practice through journals, conferences, academic departments etc..The development of the professions, dating back centuries, was one of the most important factors in the development of the modern world (indeed, to throw in some of my current experience, the importing of professional structures into the Prussian army was one of the decisive factors leading to Prussian and later German military dominance in 19th and early 20th centuries, and the attendant emergence of civilian control over the military (society being now a client of the professional military) is one of the key features of modern democracies).
Peter Orszag proposes making comparative effectiveness research, an activity that is by rights governed by the medical profession and performed through the persons of medical professionals, a government function. His proposal is to allow this government research to determine medicare reimbursement rates, but given how government power works, any observer should fear that this limited mission could creep. E.g. any malpractice claimant could potentially cite the research of such a board. It represents a de facto intrusion of government power into the a sacred professional realm. “Death panels” were a canard, but a close look at this proposal yields something almost as alarming. Who’s to say that, if they had it their way, the administration wouldn’t give these panels absolute veto power over all decisions on the provision of treatment? This desire is latent in all of Mr. Orszag’s statements on the topic. How could anyone possibly prevent the eventual politicization of such boards, or their dominance by corporate interests (Big Pharma, Big Insurance)? I was cheering for Obama’s team of enlightened Ivy-league nerds at the beginning, assured that the caricature was false, but this is profoundly naive social engineering. What standard of care would put economists as well as doctors in charge of medical care?
(Relatedly, would you rather trust a doctor or an economist? (Orszag is, by all accounts, a top economist.) As a son of doctors who’s spent most of his professional life in the company of economists, I’d say go with the doctors. Doctors actually fix things, like illness, whereas whether or not the entirety of economic thinking has had any positive impact on human affairs is an open question.)
So, what I’m saying all in all, is that Obama is proposing a government takeover of health-care–the nutcases are partially right. Mr. President, you lie!
