When he’s right, he’s wrong… No free lunch… Speaking of healthcare

 

When he’s right, he’s wrong

It’s easy to watch way President Trump behaves and conclude he’s wrong.  And, once you come to that conclusion often enough, it’s easy to conclude he’s wrong about everything.  Easy but also lazy. 

The president promised the abandoned blue-collar population constituting his base that he would reverse trade deficits.  That will never happen so long as the U.S. remains the world’s largest economy and so long as consumption rather than savings and investment drive our economy. 

But it’s fair to observe that Trump’s focus on China and its misbehavior has resonated beyond his base. China is stealing intellectual property from American companies.  China is using its comparative advantage in manufacturing to build cash reserves that serve its One Belt One Road initiative. They are building a regional navy to challenge U.S. sea power along critical trade routes through the S. China Sea and the Straits of Malacca.  They are challenging the sovereignty of our allies by claiming islands from them and building military facilities.  So, Trump is right to challenge China.

However, even when he’s right, he’s wrong.  The way to challenge China’s global position is to form a coalition to counter their moves. You don’t build a coalition by insulting the leaders of our traditional allies and threatening to undermine the global order.  What Trump has done, both in Europe and Asia, is position the U.S. as an unreliable partner. For example, he followed through on his campaign promise to pull the U.S. out of the Trans-Pacific Partnership (TPP).  He wasn’t alone in his analysis of TPP, of course. Members of Congress and presidential candidate Bernie Sanders (that font of economic wisdom) also criticized it. Ultimately, the popular pressure even got Hillary Clinton to join the chorus.  (Hillary might be the last globalist we’ll see on presidential ticket for a while.)

Here’s what the TPP would have done for the U.S.: (1) joined us in a trade pact with all the economic powers of Asia (constituting 40% of global GDP) save one – China, (2) improved our access to the markets of those nations by lowering tariffs and other trade barriers and (3) created closer bonds with our trade partners to isolate China.

Now, the remaining countries of the original TPP have formed their own pact without the U.S.  So, instead of buying American beef and soybeans, for example, they’ll buy from Canada and Australia.  American farmers and ranchers could have used the income during our Trumped up trade war with China.  

No free lunch

Ever notice that the only items in your household budget where inflation is out of control are those where there is a pile of government money available?  If you’re caught in the middle class squeeze, you know I’m talking about health insurance and college tuition.  So-called progressives have a solution: make it free.  Of course, nothing is truly free.  They’re really talking about socializing the cost of those items.

There’s a good argument to be made for government support of a healthy, well-educated middle class.  Unfortunately, government programs designed to help the middle class afford health insurance and college tuition seem to work like the carrot that the donkey can never reach.  It moves away as fast as one tries to reach it.  

I am generally supportive of government programs that are both means tested and based on merit.  However, the free lunch promised by politicians (now table stakes for Democrats running for president) doesn’t work for me.  Tell me how you’ll address the structure that is driving up costs, tell me the criteria to qualify for it and I’ll listen to your ideas.

Otherwise, you’re just making an ass of yourself.  

Speaking of healthcare

A common trope among Republican politicians addressing healthcare is to allow the free market to do its work.  I’ve wondered how that might look and have scanned the globe (Okay.  So, I just searched on Google) for a good example.  I haven’t been able to find one – no example of healthcare being provided in a free market in an industrialized country.  If you can find one, please let me know.  

I was, however, able to find a system that seems to work better than the rest:  Singapore!  Mandatory health savings accounts (Medisave) are the backbone of the system.  Everyone pays a percentage of their income into an account in their own name.  It’s supplemented by Medifund, an endowment set up by the government to pay the expenses of the poorest 10%.  And Eldershield provides supplemental care to the elderly and those with chronic conditions or disabilities.  Everyone has some skin in the game.  Families spend their own money for care from their Medisave accounts; so, they are careful how they spend.  Providers are, therefore, incentivized to provide good outcomes at affordable prices. 

It’s not perfect and it may not work on a large diverse population like that of the U.S. However, there’s a lot we can learn from it.

WHO WILL LEAD? 

The American Dream is alive and well

Recently, I received an email quoting a Baptist minister that started:

“The American dream ended on November 6th, 2012 in Ohio.  The second term of Barack Obama has been the final nail in the coffin for the legacy of the white Christian males, who discovered, explored, pioneered, settled and developed the greatest republic in the history of mankind.

“A coalition of blacks, Latinos, feminists, gays, government workers, union members, environmental extremists, the media, Hollywood, uninformed young people, the "forever needy," the chronically unemployed, illegal aliens and other "fellow travelers” have ended Norman Rockwell's America.”

There are a lot of emotional hooks embedded in this openly racist screed.  However, I am unpersuaded.  Having grown up in the Melting Pot of New York, I don’t think of America as a monolith of white Christian males.  In my view, the American Dream is the product of hard-working immigrants, many of whom are not white, Christian or male.

Moreover, I don’t think the American dream has ended.

I would guess I am swimming against the tide of public opinion.  Rasmussen reports that about 70% of the public thinks we’re on the wrong track. Many are enamored of Donald Trump because he speaks to the trends that disrupted the 20th Century economic model that made them secure.

But, this isn’t the 20^th Century and our challenges aren’t the result of a lack of jobs.  They are the result of a lack of skilled applicants.  McKinsey reports that “[i]n advanced economies, demand for high-skill labor is now growing faster than supply, while demand for low-skill labor remains weak.”  They further predict that there will be a global shortage of workers with the skills demanded by the 21^st Century economy while the cohort of low-skilled workers will grow by over 90 million, resulting in an oversupply of 11 million such workers. 

If we are to address income inequality – if we want to “make America great again” -- we should start right here. 

Birth rates are declining in the industrialized world just as the Baby Boom generation is retiring in great numbers.  The American Dream is our greatest weapon in the competition for immigrants.  We need more engineers and well educated technical people than our education system can produce in the next decade.

Writing for Quartz.com, Leila Janah asserts that the challenges go to the heart of our education system.  “Community colleges… have a 70% dropout rate nationwide,” she reports.  “And even when people do manage to finish, they emerge with training that doesn’t equip them to succeed in the new economy – skills like marketing one’s talents in an online profile, submitting applications for project-based work, and developing new skills using on-line resources.”

Ms. Janah is associated with Rework America a private initiative whose goal is to harness the energies of “entrepreneurs, educators, technology leaders, CEOs, diplomats, community activists [and] religious leaders”… to “expand opportunities for employment … for all Americans to learn and train for the work of the future.”  Such efforts are more likely to achieve results for workers than any government program. 

To achieve the American Dream, 21^st Century workers will need to project themselves into the future rather than pine for the past.  Don't expect government to provide the answer. You must make the right choices.

The Bernie Sanders ad running in NY goes like this:  “if you’re doing everything right and finding it harder and harder to get by, you’re not alone.”

We need to modify that message thusly: if you're doing everything right and finding it harder and harder to get by, you’re not doing everything right.

WHO WILL LEAD?

#Tweeting this blog a la #Trump

When writing this blog, I endeavor to be provocative from time to time and usually get an earful from one end of the political spectrum or the other – or sometimes both at the same time.  However, the biggest complaint is that the blog is “too long”.  I now limit it to 800 words but that is still too long for many whose attention span is no longer than it takes to read the screen on their smartphone without scrolling. 

Perhaps I should emulate Donald Trump.  The New York Times reports that Trump thinks of Twitter as his own personal newspaper.  With a 140-character limit, a tweet has no room for any qualifiers.  You can’t say, “Some may disagree with me and I hope this doesn’t offend anyone; however, I believe….”  You just type the words after “believe”. 

Here are a couple of Trump tweets:

“I have never seen a thin person drinking a Diet Coke.”

“So many ‘politically correct’ fools in our country.  We have to all get back to work and stop wasting time and energy on nonsense!”

He gets his point across without all the research and attention to composition that typically takes up about 6 hours of my time.  Here’s his latest (as of this writing):

“For all my FANTASTIC supporters, and for the U.S.A., we are going to WIN AND MAKE AMERICA GREAT AGAIN, maybe even greater than before.”

I notice that he doesn’t use any hashtags.  He doesn’t need to.  He’s his own hashtag. 

So, I thought I should give it a try (notice it took me more than 300 words to get this far).  Here is my best effort to summarize five years of blogging in 140 (or less) character snippets:

#Capitalism = #prosperity = #freedom

For the long version, check out:  ‘Let’s just understand what socialism means to us’ or ‘Progress or Greed… Which Is It?’

Or how about this one?

#Economics: You don’t get it!  No, really, you don’t!

Long version… here you go:  ‘Robert Reich, the corporate income tax and the middle class’ or ‘One Issue and One Issue Only’

Lest you think I am a dogmatic, right wing conservative, I offer the following quite liberal views:

My tweet: Open the #border with #Mexico, no really… I mean it!

My blog:  Open the border… Wait! It’s already open

Or how about this?

My tweet: I don’t care who you #marry

My blog:  It’s not religion… It’s not politics… It’s personal

Are you ‘pro-life’?  This will piss you off:

My tweet:  My body, my #choice

Well, I am not a woman, so I wrote:  Orphan Black, Margaret Atwood and a Woman’s Right to Choose

From time to time, I get philosophical.  I have to work hard to clarify my thoughts and even harder to articulate them.  One of my favorites got virtually no response:  Hope, Love, Forgiveness… Can Society Achieve It?  Yet, another struck the right chord:  Leadership and the Space Between the Notes.  The first title could be a tweet, the second, not so much.

I could go on.  (I usually do.)  I’m just wondering… should I just tweet it a la Trump?  If you’ve read this far, please let me know.

WHO WILL LEAD?

Let's understand just what socialism means to us

I need to get this off my chest: I'm both upset and amazed that a wacko like Donald Trump is polling second to a mainstream candidate like Jeb Bush in the race for the Republican nomination for President. I'm equally upset and amazed that a wacko like Bernie Sanders is polling second to a mainstream candidate like Hillary Clinton in the Democratic race.

The difference between the two relates to discipline.  Trump says whatever is on his mind with no concern for the repercussions.  (I won’t bother to recount his comments as they are well covered by the press.) 

Sanders, on the other hand, has so far delivered his thoughts with a lot of “message discipline”. 

Sanders is not a Democrat.  First elected to Congress in 1990 and as Vermont’s Junior U.S. Senator in 2006, he has been an Independent who caucuses with Democrats.  He is a self-declared “democratic socialist”. 

We know what the ‘democratic’ part of this definition means.  It means that, unlike the dictatorship that governed the socialist system of the Soviet Union, the electorate chooses its government.  However, I wonder if we know what a socialist is. 

Socialism is an economic system whereby the government owns the means of production.  Citizens lose the right to private property.  Investors (if there are any left) do not have the right to a return on their capital.

Anyone who thinks that socialism would be preferable to free-market capitalism is either ignorant or stupid.  And yet, Sen. Sanders is gaining traction.  What’s happening to the United States?  Have we lost our bearings? 

What we once described as the “profit motive” has been recast as “corporate greed”.  Greed, as we all know, is one of the seven deadly sins.  So, we have redefined something with enormous positive effects as something that is sinful.  

Capitalism and the profit motive have driven innovation from the 1690s, when the invention of the steam engine and steel plows made farms more productive, to the1870s, when the invention of both the automobile engine and distribution of electricity began an era of rapidly improving lifestyles, to the 1990s when the Internet boom created an interconnected world.

The result of all this innovation…

Poverty has been reduced to one fifth of what it was in 1900.  Child labor has been reduced by half since 2000.  Number of hours worked per worker has been reduced by one third since the 19th Century.  Infant mortality is half of what it was in 1990. The store of nuclear weapons has been reduced fivefold since the end of the Cold War. Carbon emissions have been flat for the last four years. (Yes, government regulation played an important role in these improvements.)

All this is the result of innovation driven by free-market capitalism. It would not have happened if we lived in a socialist system.

As for those who contend that capitalism exploits workers, I offer this:  Other things being equal – culture, geography, education, etc. – workers always thrive in a capitalist system where socialism fails to deliver.  Think of North and South Korea, Taiwan and Mainland China, or East and West Germany.

To be clear, it is the free enterprise, capitalist system that has led to a better life for Americans.  In its absence, you wouldn't have time to play with your kids or enjoy a glass of wine with your friends on Saturday night; you wouldn't be able to access the Internet from an electronic device in your pocket; and, you wouldn't be living in a climate controlled home.  You would be working hard and not reaping the benefits.  The benefit of your labor would go to the government.

Free-market capitalism is the surest path to prosperity. To describe it as corporate greed is doing all of us a disservice.  To consider voting for a socialist is the height of folly.

WHO WILL LEAD?