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[Photo by Piron Guillaume via Unsplash]

A Neoliberal Argument for Medicare for All

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[NB: Note the byline, as always. /~Rayne]

The old white billionaire dudes lipping off about “un-American” expectations of fairness and equity in income distribution jogged something loose in me.

I’m so damned angry about their willingness to complain their ability to buy yet another fucking yacht may be diminished because the average working American has the chutzpah to demand health care for everyone on top of a living wage.

What really cheeses me off is the utter stupidity of these so-called business geniuses.

WHY ARE THEY IN THE HEALTH CARE BUSINESS AT ALL??

Let’s pick on Mr. Luxury Beverage’s business. His core competency is preparing beverages to meet Americans’ tastes in an appealing environment.

Why has he spent any of his corporation’s human resource dollars on health care programs? His corporation’s expertise is NOT health care or insurance; they’re only providing health care because competition for stable, healthy employees is tight and turnover costs a butt-load of money.

I know you’ll love that technical term ‘butt-load’ but seriously, turnover in low-wage jobs in which employers have invested considerable training eats away at profit margins. It can take a year or two for low-level employees to reach maximum productivity — like pouring the optimum level of crema on a double espresso and know the entire menu by heart while operating at full-speed during rush hour.

What does it cost the Luxury Beverage business if workers leave inside that first year because they can get health care elsewhere?

Ditto for Mr. Business News Provider. His core competency is gathering, reporting, distributing timely news preferred by businesses ahead of the rest of the competition; time matters greatly if stock trades on this corporation’s work product. Why is his corporation in the health care business at all?

And yet both disparate businesses — beverage purveyor and news distributor — expect a comparable level of health among their workforce. They aren’t factoring into SWOT analyses the possibility a competitor’s workforce might be more healthy and fit.

If we look at other industries like the automotive industry or construction, healthy workers who can handle physical demands becomes mission critical. Only so much work can be automated or eased with technology and equipment.

And yet the cost of negotiating and providing health care for their employees can be the difference between profitability and business failure.

The challenge is greater when competing with companies overseas as automakers do.  Health care costs for the Big Three here add a significant percentage to the cost of goods sold — far more than $2 billion a year — while their foreign competitors pay less because the costs is absorbed across all of society instead of their businesses’ experience. The costs are based on a population which has had uniform access to health care throughout their lives.

So why are industries which aren’t delivering health care in the business of providing health care at all?

It’s in the best interest of the country and its industries to use economies of scale to acquire good health care at lower cost, provide it to the entire country, so that the country’s businesses can focus solely on their core competencies as well as the features which differentiate them positively from competing overseas products.

This is exactly what the neoliberal “strong but impartial state” is for in concert with “free enterprise, the system of competition,” to provide what the people know is needed to establish economic justice, insure domestic peace, provide for the common defense against health and employment insecurity, promote the general welfare of all citizens and workers, while securing an optimum opportunity for businesses to compete.

The U.S. is going to spend $3.5 trillion on health care this year under this current system. This is nearly two times what comparable countries spend on average. It’s inflating the cost of everything we make and sell. Imagine the profits corporations could make and keep if they didn’t have to spend valuable time and resources on health care benefits management.

But, but socialism! — this is the immediate refrain offered as push back against institutionalizing health care as a federal program to be provided to all.

Do you see either Mr. Luxury Beverages or Mr. Business News Provider complaining about the federal government’s role in assuring baseline education across the country through its K-12 public school system? I would argue this is the most American federal program we have now or have ever had since its inception with the Pilgrims.

But socialized K-12 education!

Imagine having to argue as a presidential candidate that we can’t have education for all though this program has already directly benefited every business and our common defense in some way.

Imagine American corporations, each independently in isolation, spending billions each year on human resources to research and negotiate education programs as an offering for employees and their families. Ridiculous, right? It’d suffocate so many young businesses on the verge of scaling up.

But these old white male billionaires don’t see any problem with publicly-funded education for all which helped make them what they are today.

I can’t believe I’ve had to argue a neoliberal case for publicly-funded health care for all because a guy who grew up in public housing thinks such health care is “un-American.”

 

Treat this as an open thread.

Financing Medicare For All

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If you only read mainstream media you’d think Bernie Sanders’ Medicare for All bill was terrifyingly expensive. An opinion piece behind the paywall in the Wall Street Journal cites a couple of studies with huge headline numbers like $2.5 trillion dollars in the first year, from the Urban Institute. Taxes will soar, government takeover of health care blah blah blah. It comes from centrist Democrats like Jonathan Chait and Ezra Klein who I saw in an appearance on Seth Meyer’s show. Here are two things to bear in mind in self-defense.

1. In 2015, we spent about $3.2 trillion on health care in the US. There is a cool graphic here showing where it was spent and who paid that amount. Maybe the cost of health care covering everyone for the kinds of things the Affordable Care Act requires would cost more than that. (The Sanders Plan covers other services as well as those under the ACA, but let’s ignore that because I can’t find numbers.) We calculate the additional amount we would need by adding the cost of all uninsured people and the cost of the care that people with insurance can’t afford because of deductibles and other co-pays, and subtracting the savings from the new plan. Any analysis that doesn’t start with this is bullshit.

It’s true that the Sanders plan would change who pays and how much, so someone would have to redo that cool graphic I mentioned. Some businesses would pay more, others less, and there would be a change in corporate taxation as deductible costs of insurance change. Some individuals would pay more and others less. But whatever those changes might be, the amount we need to raise isn’t frightening, and practically everyone will be better off.

It’s easy to see the savings from negotiating drug prices, lowering the reimbursement to doctors and hospitals, reducing excess profits from the health insurance companies, and reducing the costs of administration throughout the health care business.

It’s also easy to see that the additional costs are not that high. Approximately 9.1% of us were uninsured in 2015, so the cost might be as high as 10%, or $320 billion. That doesn’t seem too terrible when the savings are deducted. It will be easy to finance that if we want to. I have a long list of things to cut if anyone cares, starting with dismantling the carceral state.

2. We need to think clearly about taxation. We live in a fiat money system; the US is sovereign in its own currency and cannot go bankrupt. I’ve read Modern Monetary Theory by Randall Wray and many shorter pieces and I am convinced. I could make an interesting argument from MMT about this whole matter, but I won’t and I not going to focus on that. If single-payer a hard sale, convincing the devotees of Econ 101 (course title: My Neoliberalism) about MMT is hopeless. Actually with the excellent Stephanie Kelton as a teacher and leader I could well be wrong. Check out this on the Twitter, and follow her if you don’t already.

I agree with Warren Mosler, another MMT theorist, that taxes for revenue are obsolete. But that doesn’t mean that taxes are obsolete. Quite the contrary. Mosler quotes from a 1945 speech by Beardsley Ruml, chair of the New York Fed, to the American Bar Association. Ruml gives four grounds for taxation other than revenue:

1. As an instrument of fiscal policy to help stabilize the purchasing power of the dollar;

2. To express public policy in the distribution of wealth and of income, as in the case of the progressive income and estate taxes;

3. To express public policy in subsidizing or in penalizing various industries and economic groups;

4. To isolate and assess directly the costs of certain national benefits, such as highways and social security.

We can make a case for taxes and other measures to support Medicare for All relying solely on those four principles, without explicitly discussing MMT. If we do that, we lay a foundation for future tax issues, and for a sensible discussion of tax reform more broadly. I have a list of tax changes that will meet those standards. How about that NASCAR deduction for a starter. We raise a bit of money and get rid of a bit of corruption with one change.

This is a great teachable moment for MMT, just as the government shutdowns were with the heated arguments about the trillion dollar coin. I know Kelton and others will push on the MMT side. We need to win this, and we can’t afford to fight on two fronts. In particular, it isn’t helpful to attack people who don’t want to argue about MMT on the way to fixing our health care system. People like me.