Big Business + Big Labor + Big Government = Universal Health Care?

If history is any guide, Rahm Emanuel has revealed the Obama administration’s strategy to cajole big business into supporting universal health care as the foundation of a New New Deal (See the WSJ: “Emanuel Sets a Challenge,” Nov. 19). The strategy implies a radical expansion of the Federal government’s commitment to social insurance mandates. National unemployment insurance and public pensions, the harbingers (or Trojan horse) of the social welfare state, were passed with similar political strategies in almost every developed democracy during the crises at the end of the 19th century and in the 1930s.

Today, corporate CEOs’ first preference is to remove rising health care costs from their income statements and the attendant liabilities from their balance sheets. Their second preference is to have somebody else pony up to help pay for it. The Democrats’ gambit is to close off the first option and leave the second as the only alternative to doing nothing. Obviously the political architects believe the triumvirate of big business, big labor and big government can steamroll universal health care over special interest opposition. This at a time when the electorate has expressed the lowest approval ratings in history for large public institutions – a level of mistrust that applies to both parties’ stewardship.

Of course, these special interests include individual taxpayers, consumers, and anyone unaffiliated with the big three, which means small business, entrepreneurs and the self-employed--who’ll all get flattened in this scenario. Every taxpayer will be subsidizing the inefficient provision of corporate and public health care and we’ll be told it’s for our own good. The only possible consequence of mandates is the loss of consumer choice and control needed to contain costs. This makes little sense in an expanding world market for private health care. Costs are best reduced by maximizing consumer choice and providing incentives to economize all around. Social insurance should only play a limited role in cases of catastrophic illness or accident. It looks like it’s time to pay attention to what change in Washington will really mean.

A Failure of the Free Market Model?

It's quite heady reading the international press these days. The proclamations of the demise of free market capitalism are proliferating like kudzu. The formerly sober Nikolas Sarkozy has been one of the most vocal in pronouncing a New World Order (based on the French model, one presumes), while talk of a New New Deal is all the rage on this side of the Atlantic. This past weekend's G20 meeting in Washington DC was a lovefest of cooperation and self-congratulation, even if George Bush wasn't quite bussed on the cheek.

But perhaps we should all take a deep breath.

Exactly what do these folks from around the world think brought them together? Was it good fellowship and neighborly concern? No. It was an interdependent network of international capital and product markets. We inhabitants of earth have just rediscovered that our fates are inextricably intertwined! But it's the global capital and trade markets that have accomplished this wondrous feat.

It's market specialization and free exchange that make the candlestick maker dependent on the watchmaker dependent on the shoemaker dependent on the banker dependent on the lawyer dependent on the farmer dependent on the grocer and so on in an endless web of interdependency. Interconnected capital markets combine one woman's savings with another man's labor and both become better off - without ever even sharing a hug. Such interdependence makes cooperation more rewarding and conflict more punishing.

Oddly enough, that great altruistic theory of state socialism accomplishes the exact opposite. In socialist societies people become isolated and suspicious, business relationships become arbitrary, honesty and transparency become clouded. People and nations cease trading to become self-sufficient. And everyone becomes poorer in a dangerous downward spiral.

So, tell me now: Are we truly going to abandon free markets and embrace statism? Are we going to be governed by who we know and what favors we owe? Will we abandon accountability and responsibility to survive on the whims of politicians? Will we pretend to work, while they pretend to pay us?

Come now, ...not bloody likely.

2008: Not an Ideological Realignment?

Interesting article in today's WSJ on the recent election, putting it in historical context. (article here - subscrip req'd)

Ms. Marisco basically compares the 2008 election with other realigning elections, specifically FDR's win in 1932. She also gives a good comparison of 2008 to 1980, arguing that both elections resulted from the failures of the previous administrations. (I'm not sure FDR wasn't also running against "4 more years of Herbert Hoover.")

In any event, the 2008 election indicates a repudiation of government failures, which implies a desire for competence, not expansion of incompetence. The calls for a New, New Deal are misguided in so many ways, as I have argued previously.

Like Reagan, the shift of independents to Obama is motivated by the candidate and his ability to reassure voters of his competence and leadership qualities. Ideology and positions on the issues are a completely different matter.

How We Vote?

Read an absurd op-ed in the NYTimes yesterday titled, "What is Your Vote Worth?" criticizing the Electoral College system, again. I reprint here it in full:

“The conception of political equality from the Declaration of Independence, to Lincoln’s Gettysburg Address, to the Fifteenth, Seventeenth and Nineteenth Amendments can mean only one thing — one person, one vote,” the Supreme Court ruled almost a half-century ago. Yet the framers of the Constitution made this aspiration impossible, then and now.

Under the Constitution, electoral votes are apportioned to states according to the total number of senators and representatives from each state. So even the smallest states, regardless of their population, get at least three electoral votes.

But there is a second, less obvious distortion to the “one person, one vote” principle. Seats in the House of Representatives are apportioned according to the number of residents in a given state, not the number of eligible voters. And many residents — children, noncitizens and, in many states, prisoners and felons — do not have the right to vote.

In House races, 10 eligible voters in California, a state with many residents who cannot vote, represent 16 people in the voting booth. In New York and New Jersey, 10 enfranchised residents stand for themselves and five others. (And given that only 60 percent of eligible voters turn out at the polls, the actual figures are even starker.) Of all the states, Vermont comes the closest to the one person, one vote standard. Ten Vermont residents represent 12 people.

In the Electoral College, the combined effect of these two distortions is a mockery of the principle of “one person, one vote.” While each of Florida’s 27 electoral delegates represents almost 480,000 eligible voters, each of the three delegates from Wyoming represents only 135,000 eligible voters. That makes a voter casting a presidential ballot in Wyoming three and a half times more influential than a voter in Florida.

This system, along with the winner-take-all practice used to allocate most states’ electoral votes, creates the potential for an absurd outcome. In the unlikely event that all 213 million eligible voters cast ballots, either John McCain or Barack Obama could win enough states to capture the White House with only 47.8 million strategically located votes. The presidency could be won with just 22 percent of the electorate’s support, only 16 percent of the entire population’s.

The authors here (a sociology grad student and two graphic designers?) adopt the logic of reductio ad absurdum to argue their case, though one wonders if they are even aware of it. They assume modern definitions of political equality mean “one person, one vote,” and then argue this principle was thwarted by the framers of the Constitution. Then they cite the remotest mathematical possibility as proof of the absurdity. They seemed to have missed the point by a mile.

Our democracy has established the principle of “one person, one vote,” but the concept of political equality and justice are not violated by the Electoral College, the Senate, or the apportionment of House seats. The objective of a social choice mechanism, which is what voting is, is to arrive at a result acceptable to the majority of voters while adhering to accepted notions of equality and justice. A direct vote with a simple majority does not necessarily accomplish this as it would strongly favor the tyranny of absolute numbers, which may only affirm the narrow interests of that majority. In other words, high population states and regions would dominate our national politics. Is this fair or just? Not to those in small rural states.

Furthermore, when that majority is geographically based, as it is today and often has been in our past, the incentive for inhabitants of regions that are persistently dominated is to secede from such a tyranny. Such secession movements are fairly common, especially in today’s world. (Just ask a Québecois.)

The intent of the framers of the Constitution was not to insure some individual notion of fairness based on equal weighting on the outcome. Rather it was to develop voting rules that reinforce the cohesiveness of a disparate, voluntary union of states. This is critical in choosing a national leader who is meant to represent the entire nation and is insured by making the geographic distribution of votes across the states as important as the raw count of votes. (Besides, the EC only really comes into play when the popular vote is too close to make a clear determination.)

Our voting system has accomplished its objective more successfully than any other political experiment in world history. It has done this while also reinforcing the concept that every vote counts—and it does, just not in the way some people have wrongly assumed. It would be very wise for us to keep this in mind, because it is a strong union, not an individual sense of importance, that ultimately defends our rights and liberties.