So slight is these economists’
leftward lean that it would require very sensitive equipment to measure.
BY Doug Henwood
With Hillary Clinton ramping
up her attacks on Bernie Sanders as a budget-buster—in the February 11 debate, she claimed his proposals would
increase the size of government by 40 percent—the New York Times (2/15/16)
offered a well-timed intervention in support of her efforts: “Left-Leaning
Economists Question Cost of Bernie Sanders’ Plans.”
While the “left-leaning” is no
doubt meant to suggest critiques from those who would be inclined to sympathize
with Sanders, all the quoted economists have ties to the Democratic
establishment. So slight is their leftward lean that it would require very
sensitive equipment to measure.
Opinion pieces critical of
Sanders often begin with a pledge of allegiance to his “impracticality.” This
story, by Times reporter Jackie Calmes, is an “objective,” newsy version of
that:
With his expansive plans to
increase the size and role of government, Senator Bernie Sanders has provoked a
debate not only with his Democratic rival for president, Hillary Clinton, but
also with liberal-leaning economists who share his goals but question his
numbers and political realism.
Though Sanders wants to
increase federal spending on infrastructure, college tuition and childcare, as
well as other programs, the bulk of his proposed increase would be for
establishing a single-payer healthcare system, and that’s what Calmes’ piece
focuses on. It would replace the current mix of multiple forms of public
insurance (Medicare, Medicaid, state and local programs) and private insurance
with a unitary federal system, much like what Canada has. It would not
nationalize doctors and hospitals, as in Britain; only the payment side would
be socialized. Sanders refers to it as Medicare for All, which is a
simplification, but close enough for politics.
The liberal-leaning economists
that Calmes rounds up suggest that Clinton may have been too modest in her
accusation that Sanders wants to jack up the size of government by 40 percent.
No, Calmes warns that “the increase could exceed 50 percent, some experts
suggest, based on an analysis by a respected health economist that Mr. Sanders’
single-payer health plan could cost twice what the senator…asserts.”
As if that wasn’t scary
enough, Calmes turns to mockery: “Alluding to one progressive analyst’s
criticism of the Sanders agenda as ‘puppies and rainbows,’ Mr. Goolsbee said
that after his and others’ further study, ‘they’ve evolved into magic flying
puppies with winning Lotto tickets tied to their collars.’”
The theme of magic was further
developed in a piece by New York Times op-ed columnist Paul Krugman, “My Magic
Unicorn” (2/16/16), in which the word “unicorn” appears six times
(not counting the headline). Krugman’s column, which denounces Sanders’
proposals as hopelessly unrealistic, refers to Calmes’ news story for support,
a news story that itself reads like an op-ed in disguise.
The “Mr. Goolsbee” quoted in
the story is Austan Goolsbee, who was a long-time adviser to Barack Obama
before he became president, and then served on Obama’s Council of Economic
Advisers. (During the 2008 campaign, Goolsbee was reported as having assured
the Canadian government that Obama’s anti-NAFTA talk was “more reflective of
political maneuvering than policy”—New York Times, 3/4/08.) Now Goolsbee teaches economics at the University
of Chicago’s business school and is a consultant to hedge funds. A very
left-leaning resume there.
And the “progressive analyst”
who came up with the “puppies and rainbows” line is Ezra Klein, who in
mid-January wrote a harshly disparaging piece, “Bernie Sanders’s Single-Payer
Plan Isn’t a Plan at All,” on the website he co-founded, Vox (1/17/16). How times change: As long-time FAIR contributor
Seth Ackerman showed in an incisive analysis (Jacobin, 1/25/16), Klein was once a strong proponent of a
single-payer scheme.
In a 2007 piece for the American
Prospect (4/22/07),
Klein explored what he called “the best healthcare systems in the world,”
including Canada’s, looking for lessons for the US. (Krugman liked the piece
enough to put it on a 2012 syllabus for a Princeton class on the welfare state.)
Klein’s conclusion, expressed in his opening sentence, was that while medicine
is hard, health insurance is simple: We should emulate these other systems that
achieve both universal coverage and cost control, like those of Canada, France,
Germany and the UK. Though he now holds Sanders’ advocacy of single-payer in
disdain, Klein specifically praised Canada’s single-payer system, citing a 2003
paper by Steffie Wooldhandler, Terry Campbell and David Himmelstein in the New
England Journal of Medicine (8/21/03) that found that administrative costs were over
three times as high in the US than in Canada, mainly because of the
inefficiencies of private health insurance. Eliminate private insurance and you
enjoy hundreds of billions in savings.
The “respected” health care
economist—it’s funny how journalists stick that handle in front of some names
and not others—that Calmes cites is Kenneth Thorpe of Emory University, who, as
she discloses, “advised the Clintons in the 1990s.” Indeed he did; he served in
Bill’s cabinet where, according to his Emory
faculty bio, he “coordinated all financial estimates and program impacts of
President Clinton’s healthcare reform proposals for the White House.”
Sanders has proposed
paying for his single-payer health insurance program mainly by raising taxes on
the rich and imposing a 6.2 percent payroll tax on employers and a 2.2 percent
income tax on households (while fully exempting lower-income households and
partly exempting middle-income ones from the tax). Those tax increases would
replace current spending on private insurance, so it would be very wrong to
call them new spending.
Thorpe’s paper argues that Sanders underestimates the cost of his
single-payer health insurance scheme by close to half. More realistic
assumptions would require substantial tax increases across the board and result
in lower wages for the presently uninsured as employers compensate for the new
payroll tax. Frightening, if true, and Calmes and her headline writer frame the
article to persuade us that it is.
Woolhandler and Himmelstein,
authors of the 2003 article on administrative costs that Ezra Klein used to
like, are not persuaded by Thorpe. In a Huffington Post piece (1/29/16), they find his estimates of administrative savings
from a shift to a single-payer system too low and his assumptions of an
increase in demand for healthcare too high. He ignores the cost of tax breaks
that would disappear under single-payer and assumes no savings on drugs and
medical devices, despite the government’s strong bargaining position as the
exclusive purchaser. (Calmes alludes to their critique in the piece with a
single sentence: “Mr. Thorpe and Sanders aides and allies have been battling
online.” The words “battling online” link to the Woolhandler/Himmelstein piece;
a print reader would be totally in the dark.)
As Woolhandler and Himmelstein
point out, in earlier studies—one done
for the state of Missouri, and another for the National Coalition on Health Care—Thorpe
projected large savings from single-payer reform. Now this former Clinton
adviser finds the opposite.
There’s a political angle to
Calmes’ piece as well, which she uses longtime Democratic economist Henry Aaron
to deliver. (Aaron is a fellow at the Brookings Institution, a think tank that
a congressional staffer once described to me as “a graveyard for conservative
Democrats.”) Aaron calls the idea of single-payer a “fairy tale” in the current
political climate. Citing the testimony of “other economists in a ‘lefty chat
group’ he joins online,” Aaron believes that were Sanders elected, he’d destroy
his political capital by fighting such a doomed fight.
I’m familiar with this line of
argument from a liberal chat group I used to hang out with online (it takes its
off-the-record secrecy with great seriousness)—it may be the same one, but I
can’t tell for sure. It goes like this: The right so dominates the present
scene that one can do nothing but play defense, hoping to salvage what remains
of social spending but never daring to ask for more. Political capital, in this
account, can only dwindle when put to work; unlike other forms of capital, it
never pays returns. The right never thought that way when it was plotting its
ascendancy from the 1950s through the 1970s.
Calmes gave the last word to
Thorpe, who concludes from a failed attempt to bring single-payer to Vermont
that it would be unworkable on a national scale. Vermont’s plan wasn’t really
single-payer; providers would still have had to contend with multiple payers,
thereby limiting administrative savings, and the state would have little
bargaining power with drug and device manufacturers. The experience of a small
state in a big country is hardly conclusive.
What might be more persuasive
is the experience of our northern neighbor, a country very much like ours.
Canada covers almost all its population at a cost of 10.2 percent of GDP. Even
after Obamacare, about a tenth of the US population is uninsured, but that
incomplete coverage costs us 16.4 percent of GDP.
Britain’s system costs 8.9
percent of GDP, a little over half what we pay. Both countries have longer life
expectancies than we do. But we should be afraid of the unicorns.
Doug Henwood is the author of My Turn: Hillary Clinton Targets the Presidency.
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