Progressives Have a ‘Trickle Down’ Problem

Too many think big ideas are easy to achieve and can be accomplished from the top down.

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In George Bernard Shaw’s Back to Methuselah, the serpent says to Eve in the Garden of Eden: “You see things; and you say, ‘Why?’ But I dream things that never were; and I say, ‘Why not?’”

What’s funny is that a version of this quote is often ascribed to Robert F. Kennedy as the perfect distillation of progressive idealism. 

I don’t think Kennedy’s idealism was the root of all evil, or even remotely evil in its intent. But this idea—on display at the Democratic convention this week and an article of faith in Democratic politics—that all that prevents us from doing profound, “transformative” things is our lack of imagination can have objectively evil consequences.

Many of the Democrats who sought their party’s nomination this year didn’t just promise to socialize medicine, enact the Green New Deal, ban fracking, etc. They also insisted that it would be fairly easy to do. The only things that prevented such transformational policies were obstruction by villainous billionaires or special interests and the failure of previous politicians to think big enough. 

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  1. Avatar photo
    C C Writer

    This column was picked up by the op-ed page of today's (Monday, Aug. 24) Chicago Tribune. Always happy when Jonah has a chance to make an important point to the newspaper's audience.

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  2. Joe1776

    Of course lots of the left will start talking about Scandanavia. But these soft socialist policies are in much of Western Europe why not talk about them as well? What we see is their economies are severely lagging behind the US economy.

    Ireland lusembourg Switserland and Norway have a higher gdp per capita than the US for 2019. That is about 20 million europeans are doing better than the US but as we will see western/northern Europe is about 424 million people. So this is less than 5% of Europe. And that includes Ireland which really has an inflated GDP but ok. What about the other 95% of Western Europe? They are doing much worse by objective measures. How much worse are they doing than the US? Just looking at the world bank numbers from 2019:



    Denmark (6 mil), Netherlands (17 mil) and Austria (9 mil) would need to boost their economy about 10% to match the US.



    Germany (84 mil) Sweden (10 mil) and Belgium (11 mil) would need about a 20% boost to their economies to match the US.



    Finland (5.5 mil) and France (65 mil) would need a 30% boost in their economies to match the US.



    The United Kingdom (68 mil) and Malta (.5 mil) would need a 35% boost to their economy to match the US.



    Italy (60.5 mil) would need about a 47% boost to match the US



    Spain (47 mil) would need about a 54% boost to match the US.



    Portugal (10 mil) would need a 79% boost to match the US.



    Greece (10.5 mil) would need a 108% boost to their economy to match the US.



    Population numbers are based on this:

    https://en.wikipedia.org/wiki/List_of_European_countries_by_population



    So why assume adopting these economic models will result in us matching the top 5%? Why are we ruling out the possibility these sorts of economic measures won’t lead us to be like Italy, Spain, or the UK which account for over 40% of the population we are considering. If it turns out the same for us as it did for them, our economy would be looking at over a 40% decline!



    So to get an idea of how big a drop that is, the biggest drop from the great recession of 2007 -2009 was a total drop of 4.7% of GDP.

    https://www.federalreservehistory.org/essays/great_recession_of_200709#:~:text=Beyond%20its%20duration%2C%20the%20Great,data%20as%20of%20October%202013).



    Suffice it to say these sorts of declines would be catastrophic for Americans that are used to a much higher level of spending power than Europeans.

    https://trueandreasonable.co/2020/07/28/european-soft-socialism-compared-to-the-usa/

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  3. Merlin

    President Trump has certainly accomplished a great number of big and very bad ideas surprisingly easily and proved they can achieved and can be accomplished from the top down when you have virtually every Republican politician, voter and member of the Right Wing commentariat backing him up to the hilt. And we can all see where that has gotten us.
    It has shown the way and set the stage for Joe Biden and the Progressive Democrats to successfully implement an even greater number of bigger and and even better good ideas to address and resolve the host of issues and problems that the previous Administration exacerbated and created.

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  4. JohnO

    "Progressives Have a 'Trickle Down' Problem"
    Perhaps it's obvious, but populists in general have that problem. Not exactly symmetrically since the left still believes more in collective action that populist the right does.

    Collectivism has a strong natural tendency to national top-down. If you implement it too much locally, the people you nominate to pay for it tend to move away. Note, I'm not saying that precludes any collective solution to anything, just I think honest people of the left admit they want to ramp up collectivism nationally in part because they realize it's harder to move out of the country than out of their progressive state or city.

    However still a lot of populist right people want collective action ('make corporations bring jobs back home' and so forth) that would have to be national top down. It's just that nearly none of them will admit when they're being collectivist (they are for maximum freedom, rhetorically). Whereas some core of thinking progressives realize and admit their top down policies would be difficult to implement in various cases, especially in American conditions (they don't *all* seriously think 'almost every other developed country...' is such a killer argument always, they realize some other developed countries tend toward doing government poorly and being generally ramshackle like the US; the US is more like Italy than Germany let alone the Nordic countries, hard than ever to argue that based on recent events, and it's not because of Trump or the Republicans). They still think it's better to try than not. I don't agree with them, but I can relate to this POV, as opposed to the silly implication that everything would be so easy to solve if dark forces would just stand aside. Which is what makes me as much an anti-populist as a conservative.

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  5. CatoTheElder

    I find my self compelled to object, I’m afraid.

    Not to everything in Jonah’s article, but to some.

    So that I’m being up front about things, I’ll first chide Jonah a bit for his seemingly willful whacking of straw men herein. I know he doesn’t like it in arguments from others, and rightfully so. I think he might wish to rethink a few bits of the above in that light.

    For instance: “Even if you think it would be worth the effort to destroy the fossil fuel industry and lay waste to the health care system as we know it,....”

    Here, I’ll push the fossil fuel industry to the side for the moment, because I think the clearer, easier case is that to do with health care. The sentence quoted above goes on to mention how “serious people” think about such things, at least in one simple regard—the political difficulty and complexity of doing the job. There’s little doubt that, because of intense opposition, much of it coming from rent-seeking, entrenched corporate powers, “doing the job” of moving most if not all of the country to a Medicare for All plan would be, yes, difficult and complex. That said, many serious people think that such a plan, or something similar, is indeed the right way to go. Let’s look at some reasons why.

    When it comes to health care in the US, one of our first concerns should be cost. We spend approximately 17-18% of GDP on health care. That sounds like an awful lot of money, and it is. Rounding off a bit, it comes out to a little over $3 trillion/year. Which, granted, in the current scheme of things, sounds like just another COVID-19 stimulus package. But it’s serious money.

    Some data, now. Yes, there will be math, I’m afraid. Ranking nations by GDP (PPP) per capita, World Bank data from 2019 has the US number 8 on the list at approx. $65K, just behind Norway ($67K) and slightly ahead of Brunei (also $65K; all these numbers are rounded to the nearest thousand for sake of simplicity). A bit further down the list is Denmark at $60K. Germany, to select another nation of possible interest, comes in number 15 on the list at $56K.

    The World Bank also supplies data about what that GDP is spent on. If we look at their data for % of GDP spent on health care, we find the US at 17% (2018 data), Germany at 11%, and Denmark and Norway at 10%.

    Now, a word on health care apples and oranges. Readers might notice that I didn’t bother to list Brunei’s percentage of GDP spent on health care. The reason is that it’s not at all clear that their health care system and outcomes can reasonably be compared, at least directly, at large scale, with the US or other developed nations. But health care outcomes from Denmark, Norway, and Germany should interest us, especially since they spend quite a bit less money providing that care. In short, health care outcomes across the board in those three EU nations compare favorably with those in the US. They live as long, or longer, and quality of life measures related to health care are at least as good as ours. This should prick up the ears of those interested in achieving economic gains for the US. Thus, these nations are dealing with fruit from the same orchard, or at least of the same variety, as is the US.

    The data above rather strongly suggest that the US is highly inefficient in providing health care. Indeed it suggests that some 6% or more of our GDP is in effect wasted in a grossly inefficient “system” of health care. (The quotation marks are to point to a real and important truth: the US does not have an actual system of health care provision.)

    Now a bit more math comes into play. If we assume for the moment that the extra 6% of GDP we spend on health care is indeed wasted, when it comes to consideration of per capita GDP and what it means for standard of living, we can lop off 6% of that number, because it doesn’t contribute to standard of living at all. Indeed, it’s worse than just that, as we’ll see in a moment. But back to our consideration of effective per capita GDP, as it relates to standard of living.

    Assuming other things being more or less equal when comparing Norway, Denmark, and Germany to the US, regarding standard of living, etc., we can reduce the US per capita GDP by 6%, giving a number more reasonably comparable to others on that list.

    It doesn’t make a huge difference in rankings, since there’s already quite a spread amongst all the nations of the world when it comes to per capita GDP, but still, there’s this: the effective US per capita GDP falls to $61K, which puts us about even with Denmark, and much closer to Germany. When it comes to effective economic competition, however, such a change is dramatic. In effect, it tells us that our productivity isn’t what we think it is, and much of our apparent advantage has disappeared.

    All this means that we should be open to consideration of plans by which to improve efficiency, reduce costs, and improve our nation’s economic competitiveness by reorganizing our methods of health care delivery. It does not mean that Medicare for All is the best plan, or even a good plan. But we should look closely at it before we just toss the idea aside; it’s clear we should be able to do better than what we’re doing now.

    Let’s now look at the prospective costs of a Medicare for All plan. Most readers will be familiar with the Bernie Sanders version thereof, which was estimated to come in at a cost of $30 trillion over the subsequent decade after implementation. A huge chorus of wailing and moaning, with a percussion section comprising much gnashing of teeth, ensued. It was alleged it would destroy the economy, ravage “the world’s best health care system”, and hasten the advent of the Apocalypse.

    But let’s consider it calmly for a moment. First, we should all acknowledge that projections of the sort being discussed are fraught with uncertainty. But they’re what we have, so let’s proceed.

    Above, I noted that at present we spend a bit more than $3 trillion/year on health care. Assuming no changes in much of anything, over the next decade we could expect that as a nation, we would have put in slight excess of $30 trillion towards health care. Hmmm. That number sounds familiar, and it should—that’s the estimated cost of implementation of a Bernie Sanders Medicare for All sort of plan. Yet the prospect of that much money going toward the provision of health care in our current Rube Goldberg arrangement of health care provision doesn’t seem to keep too many in the GOP camp awake at night, let alone prompt them to subscribe to the Prepping for the Apocalypse newsletter. In summary, we’re already looking at spending more than $30 trillion for health care over the next decade. Now the argument is solely one of practicality and comparison of prospective outcomes the proposed alternatives might give us, since either way we’re spending the money. Which means our borrowing from the Chinese, to refer back to Jonah’s comments above, needn’t necessarily change much.

    But, as I said above, the situation is actually worse than what was just described. Not only is that 6% of GDP effectively wasted, but with such wastage comes a significant opportunity cost. What could that 6% of GDP—which comes to about $1.2 trillion per year—be put towards if we don’t have to put it into a wasteful hodge-podge of health care activities? In effect, we’re talking about taking all the money the federal government spent in 1990 and applying it as a general stimulus to the economy. As the late-night commercials tell us, though, “But wait! There’s more!”

    The immense inefficiency in health care provision is just one way that our current arrangement is a drag on the economy. Let’s consider for a moment the way in which medical insurance is “done”.

    The US is the only nation of which I’m aware wherein health insurance is frequently tied to one’s particular employment. For a large portion of the population, health insurance comes as part of a package of compensation. There are myriad reasons why this is a bad idea. As just one instance, let’s recall that more than one major corporation has been described as being as much a health care provider as anything they purport to be their mission. That means that many companies are spending much time, effort, and money managing health care plans instead of designing and producing better widgets. This is a somewhat hidden but nonetheless large drag on the economy.

    “And that’s not all!”—the fact that health insurance is so frequently tied to employment makes life very difficult for small businesses to grow, especially as they approach the size where provision of health care becomes in essence mandatory. It also distorts the job market, discouraging full-time hiring (with its attendant health insurance costs) in favor of more part-time hires. Employees also lose a degree or two of freedom. When one’s health insurance is tied to employment, transition from one job to another is made more difficult and complex. The limitation of worker movement in this way is yet another factor slowing down the economy.

    In summary, there are a host of arguments in favor of serious evaluation of alternatives to our current mess that we sometimes call a health care “system”. It’s not a system, and it’s certainly, by any reasonable analysis, not the best in the world, though that claim is so frequently made. (Good? Yes. Any clear advantages over, say, Denmark? No.) Some serious people are willing to consider some version of Medicare for All, etc., etc. simply—and properly—because what we’re currently doing really is not the best of all possible worlds, though many—especially on the political right—would have us believe otherwise.

    A final, essentially parenthetical, note. Jonah makes a good point in saying that too many thing that big changes can be made more or less by simply wanting them badly enough. But I think he might be overlooking the fact that wanting them badly enough is necessary to provide the motivation to take on big change.

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    1. Avatar photo
      Victor Clairmont

      Why are you comparing small nations with similar homogeneous populations to a nation of 330 million people with some of the highest diabetic and obesity rates in the western world and assuming the costs should be the same?

      Also, we lead the medical world in breakthrough on drugs and medical technology, and pay some of the highest investment's in creating those drugs. Anywhere from 500million upward to get the drugs tested and to market. The nations you cited do not bring half of the world's new medicine to market. So there's a trade off right there.

      Also, you would have to address how drug companies get a monopoly (3-7 years) from the Government and cuts out the importation of foreign drugs in establishing the cost of medicine. Also, you would have to tackle the stopping of the ability to allow states to cross compete with medical insurance.

      So that throws your numbers off the way you have presented them.

      I don't mind serious evaluation on fixing the bloated healthcare system, but what is the solution exactly you are proposing? Following in the footsteps of smaller nations when our government already takes in 4.5 trillion in GDP roughly per year, half of that towards entitlements (mandatory spending) and another trillion to the military (discretionary spending) to police the world and make nations like Germany safe and not start World War 3, and then the leftover for other programs (SNAP etc.).

      What is the actual cost, benefit, and tax raises necessary for this overhaul with these other factors added in?

      Because even from left and far left sources, you are looking at 20 trillion minimum for Medicare for All.

      20 trillion over 10 years, (and it's actually more close to 30 trillion but I'll use Elizabeth Warren's numbers) that means you need to come up with a minimum of 2 trillion from taxpayers.

      So how much will you raise taxes on all classes?

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      1. CatoTheElder

        I chose nations with per capita GDPs nearest those of the US. With all due respect, even if one agglomerates the data from the entire EU, the results are basically the same, with the EU dragged down a bit by Turkey and a couple others. Yes, the US has the highest rates of obesity and diabetes. But that’s also perhaps a bit of a chicken-and-egg phenomenon. Those rates are the highest amongst the poor, who have...the lowest degree of access to effective health care.

        I’ve addressed the medical technology item elsewhere; if you wanna play the game on a per capita basis, many EU countries hold their own quite well. In fact, just look at where there are strong efforts towards COVID vaccines. It’s hardly an American monopoly.

        The duration of drug patents isn’t really part of the problem. Inappropriate/overuse is, to some extent, but that’s a whole other topic.

        Actually, I don’t have to address interstate health insurance competition; those who would oppose a national plan need to do that. That said, that actually is, conceptually, at least, an easy fix. The problem? There are lots of entrenched powers getting rich off the current setup.

        I’m not actually arguing for a particular plan; I’m more making the case, in general, that plans such as Medicare for All aren’t irrational acts by non-serious people. As for the notion of “following in the footsteps of smaller nations”, well, as I said above, one way is to look at the net effects across multiple countries that share health care system characteristics of interest. One can also take into account that once a nation reaches, say, the size of France or Germany, size differentials start to matter much less when one is looking at per capita data. And remember, we’re looking at administrative and government ideas. Very often partisans in this country will point to a particular state—let’s say Massachusetts, and extrapolate from that state’s experience to what would happen if the nation as a whole did the same sort of thing.

        One can also look at all those smaller (but still sizable) nations as experiments, each doing its own trial of a system of health care administration. Were one to want to scientifically examine the likely effects of a given system, one would probably wish to design the study like many medical trials—which need to include enough participants to ensure adequate power for reasonable analysis and conclusions, but not so many that the studies never get done. We can actually take advantage of what has been done, and what can subsequently be learned from what was done, in Germany, France, the UK, Norway, Canada, Australia, Japan, Ecuador, and elsewhere.

        When it comes to costs, it seems you assume that we’ll keep spending on health care, outside any new government-led and/or run programs, the same amount of money we’re currently spending. As a Medicare for All (or single-payer, or whatever) is rolled out and more and more citizens are enrolled, money would shift from the current “system” into the Medicare for All plan. Yes, there are inevitable start-up costs, transition costs, and so forth. But the alternative? To keep on doing what we’re doing? I don’t think people who think seriously about the topic come to the conclusion that that is a good idea.

        As for increased taxes, yeah, I’d be more than happy to nudge ‘em up a bit here and there in order to achieve good universal health care. I’ll even toss out the beginnings of a plan just off the top of my head: Increase corporate income tax to about the midway point between where it is now and before it got cut. Increase personal income tax for those making more than $200K by 2%, for those over $400K by 4%, and for those over a million by 5%. Add a 3% entertainment tax on tickets to major sporting events, concerts, and the like. Reduce ag subsidies 5% annually until down to half of what they are now. Make capital gains tax rates be equal to income tax rates. Eliminate the mortgage interest deduction for all but primary dwellings immediately, and for all mortgages, including primary dwelling, over the next ten years. Will all that be enough? Too much? I don’t know. But there’s lots of money in this country—everyone likes to talk about how we’re on of the richest nations in the world—so I’m sure it can be done. But first—and here’s where I think Jonah misses the boat a bit—we must gather up the will to do it. It’s simple—we’ve got to want it enough. But let’s not confuse simple with easy. Ain’t nobody saying it’s gonna be easy.

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        1. Avatar photo
          Victor Clairmont

          You actually didn't address the fundamental issue. You kind of gave up at the end by saying "I don't know. there’s lots of money in this country..."

          So if you don't know why are you creating a plan?

          So again, what's the cost?

          You say, "Yes, there are inevitable start-up costs, transition costs, and so forth. But the alternative?"

          But you don't say the cost.

          Warren says 20 trillion.

          You're proposed slight increases in taxes will not cover it.

          Again, 4.5 trillion the government takes in taxes. 2 million on entitlements, 1 trillion on military, rest on everything else. our GDP is 20.5 Trillion. How much of that are you taking out? How will you explain for slow growth and sell that to tax payers?

          Even the democrats abandon ship in the primaries for people suggesting this. And voted to not put it in their platform.

          Also, there's is 200 trillion in wealth in America (Meaning things that have been taxed, your car, television, house). Are you planning to double tax it? You'd have riots in the streets if you did.

          What are you cutting or who are you raising taxes on, because you are going to need a 15 to 20% tax increase on some of these bracket's at minimum. And you will need to do it across all the demographics, not just the rich. Also, be ready for more people to dodge taxes and business to move outside the US to evade the costs.

          And remember, you are covering the poor too with Medicaid for All. So it's not a chicken or egg question on the health issue. You are covering people that are diabetic, have a myriad of other problems that most insurances would never take because they would not make money off them. That's how insurance works. They bet they get 50 people that won't need to use them, to cover the 5 that will get sick. Europe for the most part, does not have the health problems the US has.

          It's why the Affordable Care Act doesn't pay for itself. It taxes young people that literally said, "Nope. Not paying. Hit me with the 500 fine". And you saw insurance premiums get jacked up to kingdom come.

          By the way, if you think it's a matter of getting the will to do it, you should probably tell your party that. For us over in the center, we look at this and say, "Nope."

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          1. CatoTheElder

            Dear Mr. Clairmont, you’ve mistaken my intent entirely. I have never intended to devise a complete plan; thus, your efforts to counter my argument, even though I entertained them a bit, are in effect pointless. My primary point was to show that consideration of such plans are not at all unserious. You’ve taken the fact that I’m not prepared with details of my own particular plan as evidence that no such plan can be prepared. That’s simply not the case.

            There are some basic bits of math I did present, and which you have failed to address. As things stand at present, the US is on course to spend more than $32 trillion on health care over the next decade—if nothing changes.

            The Sanders/Warren proposals were estimated to “cost” somewhere in the $20-$30 trillion range over ten years. How much of those costs are in essence overlapping costs, meaning that some of the meaning that was already going to be spend is redirected toward the new program? Since actual health care is what is being paid for, and actual health care delivery would be transitioning to the new program, clearly some significant portion of the costs are indeed overlapping, which means the likely actual added costs are less than you’re advertising, and significantly so. But that’s in one key sense beside the point entirely.

            I made note of several advanced economies that have some version of what is too often pejoratively described as socialized medicine, and that provide it at significantly less cost than what we now spend, and they achieve as good as or better outcomes. Your whines about different demographics are the first refuge of scoundrels and the desperate defenders of the status quo; serious analysis of combined data across, say, the EU, or the OECD, finds the same thing—everyone else does it as good, more cheaply.

            If American ingenuity and determination are really so wonderful that the rest of the world can’t keep up with us, surely we can find some way to take the good parts of their plans, combine them with the good things we do, and come up with a system that costs less than the outrageous sum we now pay and provides decent health care to all citizens. You’re free to believe otherwise, of course, but in doing so, you’re essentially saying that Americans aren’t up to the task of matching the performance of other countries in this regard. I don’t believe that to be the case.

            Your continued resorting to our high prevalence of diabetes and obesity is tiring. I’ve addressed that, briefly, and it’s simply not adequate to explain why we don’t do better, statistically speaking. How about the Europeans’ generally much higher rates of smoking? In both Germany and France, for instance, the percentage of adults who smoke is about 50% higher than in the US. Shouldn’t they have higher mortality rates and worse outcomes? Yet they do not. Many European countries, like France and Germany, have large immigrant and refugee populations, greater proportionally than we do, with their own health problems. Should that not be factored in as well? I’m afraid that if we go down the path of trying to control for each of those factors, we’re going to waste a lot of time—because it’s already been done, and few of the serious people who’ve done it think that the “demographics” makes enough difference to supply the reason why we look so inefficient.

            I was critical of the Affordable Care Act at the time, and still am. At its presentation, I likened it to building a bridge halfway across the river and opening it to traffic. It simply wasn’t going to get us where anyone wanted to go. With it subsequently being half-gutted, the situation has gotten worse, not better.

            Look, I am proposing that we look hard at the various systems in use to deliver health care effectively and affordably in developed nations around the world, sort the wheat from the chaff, and find ways in which we can devise a system whereby we can provide health care to everyone, rich or poor, black or white, male, female, or none of the above, right-handed or left-behind, etc., etc., and do it at some better level of cost effectiveness. If you think that putting pretty little bows on the package we’re dealing with now is going to somehow result in better results in a few years, just ‘cause “America!”, well, you’re free to believe that of course. Just don’t tell me I’m the unserious one.

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        2. Joe1776

          "Yes, the US has the highest rates of obesity and diabetes. But that’s also perhaps a bit of a chicken-and-egg phenomenon. Those rates are the highest amongst the poor, who have...the lowest degree of access to effective health care."

          So maybe obese people in the US just didn't have a health provider tell them being obese is unhealthy and can lead to type 2 diabetes? Is that the argument? Most obese people know obesity can lead to type 2 diabetes and other problems.

          I think there are cultural things we can do as Americans to help people. But hopefully we can agree the government is not to blame for what people decide to eat for lunch.

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          1. CatoTheElder

            Congratulations, you’ve beaten down a straw man.

            Obesity is often a lifestyle phenomenon, with some contributions from genetics and social pressures. It strongly contributes to the development of adult-onset Type 2 diabetes mellitus. Both diseases are susceptible to effective lifestyle changes, but are better addressed by prevention—and prevention most often necessarily includes a regular primary care provider with whom the patient has a meaningful relationship. The poor and uninsured almost never have such care. You can follow the logic from there.

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    2. Joe1776

      American's pay more because we effectively subsidize medical technology for the world. Medical companies spend huge amounts to develop technology in the hopes of selling it to a free market. They think people will find it worth the money. That is where they will finally get the money back with some profit hopefully. And then when people like Canada say we will only half it still makes sense to sell it at that price than not sell it at that price. But if the American market also starts just arbitrarily having a bureaucrat set a low price they will no longer develop the technology.

      Consider soviets could not sell tech to the free market. They could only sell it to one entity the government and hence the government could always just tell them what they would pay regardless of that companies costs or profit. How much new medical technology came out of the Soviet Union during that socialist time?

      https://en.wikipedia.org/wiki/Timeline_of_medicine_and_medical_technology#1900%E2%80%931999

      https://www.carevoyance.com/blog/medical-technology-advances-100-years

      Technology simply stops when industries are nationalized. Sure countries that have nationalized healthcare are still involved in medical technology - but they are doing it to sell to the American market! Once the american market goes this technology will greatly slow.

      Nationalizing healthcare is very short sited.

      Trump is forcing companies to give us the prices they give government healthcare. That will mean that companies will have to charge these government's more too so that the costs of research are more fairly shared.

      https://www.forbes.com/sites/avikroy/2020/07/24/trumps-most-favored-nation-prescription-drug-executive-order-will-reduce-costs-for-seniors--taxpayers/#2fd15e661860

      What you will see is other government health care systems will either start paying what america pays or they will not have the same tech. This is a much better approach.

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      1. CatoTheElder

        American companies do not “effectively subsidize” medical technology for the world.

        Analysis of the market quickly shows that there are many foreign companies and/or subsidiaries that push medical technology forward as well. Everything from MRI machines to ventilators (ahem) are developed and improved upon by companies in nations like Germany, Norway, the UK, France, and Australia, amongst others. Claiming that Soviets could not sell tech to the free market actually undermines your case. No one is suggesting anything like the old-style Soviet approach to doing much of anything.

        Finally, your claim that Trump is “forcing companies to give us the prices they give government healthcare” is not accurate. He’s made some attempt to influence some of the market toward cost fairness for one portion of healthcare—prescription drug prices. Regarding the rest of the system, his primary effort has been one to demand “transparent pricing”. Which sounds good, but doesn’t take into account that it’s still the house dealing the cards.

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        1. Avatar photo
          DougAz

          I agree Cato. There are many Pharmaceutical and Medical Device companies in Europe and Asia. Who innovate

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          1. Joe1776

            I am not saying they don't. You guys keep thinking I am saying these countries with national health care do not also have private companies trying to develop new tech. But that is not what I am saying at all.


            I am saying that they innovate to sell to the american market because we are willing to pay the free market value. If we nationalize and the price we will pay becomes whatever some bureacrat decides then they will not innovate. No one will. Not here in the US not anywhere. It will be like the Soviet Union. When there is no free market to sell your innovation to then there is no innovation.




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        2. Joe1776

          I did not say american companies subsidize the medical research I said Americans do.


          "Analysis of the market quickly shows that there are many foreign companies and/or subsidiaries that push medical technology forward as well. Everything from MRI machines to ventilators (ahem) are developed and improved upon by companies in nations like Germany, Norway, the UK, France, and Australia, amongst others."

          I am not saying other countries private or public sector do not try to develop technology. My point is they are developing it *for the American market* not for Canada. They are developing these technologies because they think a free market will value them. When the entire market is nationalized there is no free market to value a product. The end product will be worth whatever the bureacrat says it is worth. You do not have people saying what they are willing to pay for it.

          "Claiming that Soviets could not sell tech to the free market actually undermines your case. No one is suggesting anything like the old-style Soviet approach to doing much of anything."

          Many people are suggesting government paid health care. And if America ends up with that where will the free market be?

          That is why nationalizing health care will make the entire world much more like the soviet system. If there is no more free market to determine the vaule of the medical product no one will spend the money. You spend billions to make a drug to cure cancer and the government just sits back and says ok we ill only pay you a penny per pill. That is why there was no research in the soviet union that was worth while. I am sure the government tried some research but as with everything else the government is bad at innovation and great at corruption so very little came of it.

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          1. CatoTheElder

            With all due respect, I think you’re very nearly entirely wrong.

            When a company, whether in Germany, the US, or wherever (with a few notable exceptions) develops new technology, they do it not explicitly for a given market, but for the global market. (This is for bigger corporations only; the smaller ones work within all sorts of nearer horizons.) Catering to larger segments of the market is almost always a given, but that’s usually done at the margins.

            Do you happen to know what kinds of machines are used in radiology departments in Canada, the UK, and even Bangkok? The same that are commonly found in New York, Paris, and so on. In many instances, the local hospitals still direct their own purchasing of equipment, without direction from above.

            It’s clear to me that you’re not really familiar with the various models of single payer, nationalized, or highly regulated systems out there. Please read about, say, Germany’s model (you can start here if you’d like: https://www.ncbi.nlm.nih.gov/books/NBK298834/) and reconsider some of your views.

            In nearly all nationalized systems, the wealthy subsidize, indirectly, the cost of insurance and/or care for the less well off. The same is true in the US to some extent, but completely.

            But perhaps the greatest argument against the fears of socialized/nationalized health care is that the people receiving it are generally at least as satisfied with their care as Americans are, according to surveys on the matter. The citizenry of the UK by and large love the NHS, though many on the American right would have us believe otherwise.

            Much of your argument seems to come from bogey-man type fears of the alleged horrors of socialized medicine. I don’t see things that way, nor do I see good reason to do so. But, as they say, I suppose your mileage may vary.

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        DougAz

        Some medical Device history that will prove this incorrect. The greatest Medical devices came from inventors who essentially gave them to humanity:
        1. Willem Kolff - In Holland, under Nazi rule - invented the Artificial Kidney - ie Dialysis
        1.a He invented the artificial heart
        1.b He invented/add to the Heart-lung machine

        2. Professor Karl Hall - invented the Heart Valve - Norway

        Yes, business/entrepeneurs have also been amazing at bringing forth inventions.
        But America funds innovation all the time through governement agencies. Like - The Defense Dept. Like DARPA, the internet (DAPRANET), NIH, SBIR and many grants.

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        1. Joe1776

          Look at the huge lists of medical developments in my posts. Giving half a dozen examples where people gave away tech doesn't "prove [my position] incorrect"

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            DougAz

            Okay.

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        George.Skinner

        I think you've got the cause and effect backwards: Americans pay for for medical care, which means more medical technology development. The rest of the world gets the benefit of that technology because Americans have paid for it. In any case, the major cost of medicine in the US is the cost of labor. Everybody who works in the sector tends to get paid substantially more than in other countries, and the staffing levels are higher too (which is why there aren't waiting lists.) Given that 1 in 8 Americans work in the health care sector, I think you're going to find cutting back wages and spending to be a challenging proposition.

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        1. Joe1776

          Im not sure we disagree. Are you responding to my comment?

          I am not saying we should cut back on medical research or pay less to the staff.

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      DougAz

      Very good Cato. I published the below, 19hrs ago, got buried. So I am copying my post from here to support you. Your data might be more accurate, here is my earlier post:

      Headline: AFTER Medicare For All is in place, America saves ~10% of GDP - EVERY year.
      America SAVES $2.1 Trillion every year - After M4A is up and running

      So wrong Jonah.

      A. Science Does NOT start at the bottom usually. We start with a Hypothesis. In business its A vision. A future state. Inductive logic...thinking outside the Box is intrinsic to both the Scientific Method and Process

      B. Engineering also has to first envision... from Marketings customer needs assessment and reduction to specifications to engineer products

      C. In business, we always try to simplify and talk big picture, bullet points.

      D. Political folks..pundits and professional politicians are so easy and quick to get in the weeds. I will show you Jonah:

      Medicare for all SAVES money.

      A. US spends 20% GDP on Healthcare

      B. Single payer Nations pay 10%

      Thus: AFTER Medicare for All is already in place, The American economy will eliminate and free up $2.1 Trillion...every year. AFTER Medicare for All is in place.

      We also have the 20th best Healthcare Outcomes. See COVID-19.

      So.. M4A Saves money. Has enormous release of unproductive non value added wasted money.

      And America gets better outcomes.

      Simple. Understand the Big Simple Picture. Productivity. Better Health outcomes

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      1. CatoTheElder

        I missed your comment; wish I’d seen it earlier. To a very large extent, I agree. The numbers are always a little squishy, of course, especially the further out one looks. But the premise remains.

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          DougAz

          You expressed it very well and I thank you for that -

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      2. JohnO

        Naturally a short summary with oversimplify. Buy you seem to be doing it especially naively or intentionally. Besides over stated the difference in spending, it's unfortunately very non obvious that the US political system would or could enforce the healthcare rationing that would substantially lower the total amount spent. Those two things, money spent and basically system, are much more distinct than you assume.

        Likewise the 'health outcomes' things like the COVID comment ignores serious differences in US demographics v various other rich countries which have caused both to a significant extent. And on general healthcare as opposed to COVID, it ignores the better outcomes Americans of mid to higher socio-econ groups get in areas like cancer treatment and outcomes v a lot of other developed countries. In political reality it's one thing to improve some people's lot and leave others the same, quite another to take away what some people have, which would be necessary on large scale to make the US system actually replicate the spending of various other countries.

        IOW it points back to the problem Jonah's talking about. 'No the healthcare issue is very simple, we must simply do X collectivist solution and force every state to go along if we can get 50%+1 votes nationally'. Whoever really thinks that's really going to creat a smooth transition to better outcomes at 1/2 the cost is deluding themselves, in the more charitable assessment.

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        1. CatoTheElder

          Whether DougAz overstates spending differences is a matter of both conjecture and opinion. I agree that he might be doing so, but only “might”. I would guess a more modest savings going forward, and admit that it’s a guess. [This is as good a time as any to point out something I did not in my original comment—one of the strongest arguments is that which maintains that a Medicare for All (or similar) system would result in (a) organized, systematic health care for all—something that in spite of the ACA, we still don’t come close to, and (b) a massive reduction in individual uncertainty and anxiety regarding the costs of health care, especially amongst small business owners and the self-employed that already pay huge amounts for health insurance, and among those on the lower rungs of the economic ladder, where having insurance tied to a job really does produce a drag on the labor market.

          As for health outcomes, I really don’t think you’ll want to stand too long on that argument. One might notice that I ignored outcomes regarding COVID-19 in my post. I did that intentionally; it’s a new entity, and the causes, effects, and outcomes, are too dynamic to allow for reasonable comparative analysis in any depth at present. But as far as the general run of health care outcomes, the US does basically about the same as most other OECD nations. We simply do not have better health/medical outcomes—and the statistics consistently show this.

          I grimaced a bit when you claimed “better outcomes Americans of mid to high socio-economic groups get in areas like cancer treatment and other outcomes v a lot of other developed countries”. Firstly, it’s an apples-to-oranges comparison; it compares the outcomes of our mid-to-high-level earners with those of all comers in most developed nations. Hardly a fair comparison. And then there’s this—to find this assertion as true, one must cherry-pick nations for comparison. Again, hardly a fair analysis.

          No one seriously claims that large-scale meaningful health care reform would be easy. But serious people can seriously claim we should try, and that with sufficient commitment to the task, and capable leadership, it can be done.

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          1. JohnO

            "We simply do not have better health/medical outcomes—and the statistics consistently show this.

            I grimaced a bit when you claimed “better outcomes Americans of mid to high socio-economic groups get in areas like cancer treatment and other outcomes v a lot of other developed countries”.

            You can grimace, but this is a real factor in changing the system. The US does have poorer (for the money at least) outcomes *on average* but that partly reflects different demographics than the rest of the developed world. Like COVID outcomes, which is why that is relevant whether you used it in your argument or not.

            But changing to a more rationed nationalized system is going to result in some people getting told 'there's nothing we can do' in cancer cases where those people would also be told that by say NHS in UK now, might also if poorly covered in US, but in many other cases in US would not. This will not be hidden from people permanently and will cause a big push back. That's a specific political reality beyond 'I know it's not easy'. Although the person I specifically responded to *was* saying it's easy... And it's also relevant to whether the US ends up with high cost mainly socialized system v high cost about half-socialized system like now. I might be convinced the least worst way to move forward is more socialization. But I just don't take seriously the idea it will inherently cut costs. Or do that in a progressive state, and come back and show me. The overwhelming temptation will be to use a party-line Democratic plan as an income redistribution measure, like Obamacare was also oriented. And in that case it's always easier to give away stuff than take it back.

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          DougAz

          After 66 years, and a good life of experiences and accomplishments, I rest on that.

          Jonah's point was - essentially - "Visions" dont' work.

          Even America was founded with a Vision and Mission - The Declaration and Preamble are those.

          I was starting where most things start in business. WIth the top-level vision and benefits. The problem is that is first thing to understand. The mechanics follow, but the fact remains, - America wastes $2.1 Trillion for lower outcomes. Covid is totally a fair measuring stick vs other Single-Payer National Healthcare systems, which have uniformly outperformed our system.

          In business, it is okay to say, this approach is not working. And it is not working well.

          My proof to me, is simply this:

          How in the 50s, could my WV parents, living in a Trailor, and a minimal wage job for Dad, afford to have my birth. Or when I was hit by a car at 3 and in a coma for 3 months. A few car accidents in the 60's and emergency rooms. Hospitalized for pneumonia at 10.

          I was treated, siblings treated. No Insurance. And we didnt' go broke because of healthcare.

          America like the other modern nations today, USED to Spend 8% of GDP. Up until 1988. When Reagan encouraged Privitazation of Insurance/Healthcare. NOT a single value add is created by Health Insurance.

          In fact, before all this, in the 70s', Big Corp used like Blue Cross/Blue Shield - NOT to risk-OUT preconditioned, and others with health conditions. BC/BS was simply an administrator for BigCorp.

          So - It is just a set of facts. America pays Twice as much for Half the outcome - and that's a big opportunity to put productive money for everyone back in their pockets.

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    4. Harlon Martin

      That is an impressive / serious argument and analysis. You have obviously studied the health care subject extensively. My bias is: the government most often underestimates costs, program quality & effectiveness, doesn't clearly consider unintended consequences, and poorly manages programs.

      With that full disclosure of my bias said, what is your opinion of the effectiveness of any changes on quality of care, availability of care, potential for shortage of doctors, lesser emphasis on developing / improving medical technology, etc.? People come from all over the world to the TX Medical Center for health care, because they deem it superior to their home countries and it is known for quality of care, best practices, and technological innovation.

      Anecdotally, I offer the following observations: My friends in the UK complain about the medical bureaucracy that provides health care for all -- long waits for appointments & procedures, a perceived lack of emphasis on quality of care, the shortage of doctors, what appears to them as rationing of care (rules about what procedures you can have and when can have them), their characterization of it as very impersonal care, etc.. Also, my sister-in-law is a retired Gastroenterologist and she is of the opinion fewer Americans are pursuing MD study (very expensive to do so) and that many pursuing study in Us are of foreign dissent (with many returning to their home countries after education and residency).

      Since you have studied this issue a lot, I am interested in your analysis and/or opinion of potential for unintended consequences from radical changes in our health care system. Economics tell a valuable story, but what about quality and availability of care? Thanks!

      Respectively, HM

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      1. CatoTheElder

        Thank you. Let me see if I can address at least some of the items you bring up.

        I think you’re quite right regarding government cost estimates—they can be, shall we say over-optimistic? The same argument is sometimes made regarding quality of programs. I think in this regard it’s much less true. And especially when it comes to health care, where the outcomes can be, and are, deeply scrutinized on a routine basis.

        You are right in pointing out that people from all over come to Texas, New York, California, etc. to obtain health care. Those people are almost always the very rich from much less developed nations, or who are seeking the absolute creme de la creme in treatment, and (at least occasionally) find it in the US. But other rich folks are at the same time making their way to London, Paris, Zurich, and other places, too.

        An interesting, related point: over the last decade or so, many Americans have found it worth their time and effort to go abroad to get their health care, especially for common but high-cost procedures like joint replacements, etc. One can go to such unexpected places as Mexico and Thailand, amongst others, and get one’s new hip at a marked discount (say, one-third the cost, many cases), with equally good outcomes, etc.

        I’d be wary of making decisions based on anecdotal evidence. I know people in the UK as well, and also in Canada, Germany, Spain, and elsewhere. There are some who complain about quality of care, wait lists, and more, but, when large-scale surveys are performed, citizens of most developed nations have more or less the same level of satisfaction as do citizens of the US. Going back to government estimates of cost, quality, etc., let’s recall that those very same concerns apply as much in other nations as they do here. The crystal balls on sale in Denmark are of no better quality than the ones here.

        Physician shortages are a real issue in many places. The causes are many, and fixes are difficult. Education and training costs are very high for students. This discourages some from taking the path into medicine. There’s also a limited number of quality training programs, and starting up a new medical school is no easy endeavor—thus, the pipeline itself is a limiter. Finally, many new graduates enter into specialized fields and/or enter into practice in areas of relatively low need. There’s no real need for more orthopedists in most major cities in the US, for instance, but the numbers continue to grow. Meanwhile, smaller cities and towns find it hard to nearly impossible to attract basic primary care providers because of relatively low pay, difficulties with support and facilities, and more.

        As for your concern about unintended consequences, let me say I share it. But it cuts both ways. The risk that there will be undesirable unintended consequences resulting from the choice of a particular path is always there. Even if one chooses the same path one is already on. The nasty nature of unintended consequences is that they can in effect use not just what we don’t know, but what we don’t know we don’t know, to really and truly mess things up. Also, it’s important to realize that what is NOT on the table is a simple continuation of what we’re doing. Health care in the US has changed dramatically over the last few decades, in ways sometimes good, sometimes bad. A lot of those changes were not foreseen, and of those that were, they still often came about with a much different flavor to them. There is no reason to expect that the administration and delivery of health care will not change over the next decade or three, even if we plan on doing nothing to effect such change.

        I hope that you, especially, understand one thing about all this that is very important to me. I think it’s very important—darn near a moral imperative—that the US, one of the wealthiest nations in the world, as well as one of the most powerful, find a path toward a society in which each and every person can and does receive good health care without over-great concern for their financial well-being, without being tied to a job they don’t like, etc. I do believe that if we can force ourselves to consider what sacrifices might be necessary, and at what cost, to bring about that society, we can find that path and improve the lot of the nation as a whole. I’m not going to worry much about whether Jeff Bezos, Elon Musk, and the Walton clan might find utra-high-quality health care harder to obtain. I simply don’t see that as an issue ever likely to keep me awake at night. I would offer a new version of the old-fashioned “women and children into the lifeboats first” approach: Let’s start from the bottom up and make sure everyone gets good health care. There’s one thing that is, and should be, simple—the principle that this is the right thing to do.

        I hope I’ve at least moderately well addressed the issues you brought up. Please understand that I don’t think any of this would be easy or without real, often unintended, costs. Yes, sacrifices would be necessary. But we’re already making sacrifices—it’s just that we’re used to those, and afraid of those we haven’t experienced yet.

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          George.Skinner

          Canadian health care is really good - once you're in the hospital. Where people end up in trouble is getting access to the specialists, tests, and treatments. There can be long waiting lists for access to those things because budgets are limited and the system is designed for high utilization of a finite capacity of resources. If you aren't a good advocate for your own care, or if you don't have a regular health care provider who advocates on your behalf, you can end up suffering for a long time before treatment. That's also one of the dirty little secrets of Canadian health care: there are different standards of treatment depending on who you are and who you know. Politicians and public figures invariably receive preferential access. If you're plugged into the health system, you might also be able to pull strings for faster access. We can decry how money can buy better care in a private systems, but we're really swapping it for political currency in the public Canadian system.

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            Mudskipper

            This sounds a lot like what we have. Where I live, you can wait months to see a specialist. Or wait months to have an elective surgery. Having a primary care doctor who can work the system and advocate for can make a difference. Having an "in" with a doctor can make a difference. Having power, either because of money or public status can make a difference. So I'm not quite sure how the Canadian system is worse.

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        2. Harlon Martin

          Thanks for your thoughtful reply. Yes, I am supportive of as you say "a path toward a society in which each and every person can and does receive good health care." After the ACA rollout, litigation, and the problems thereafter, I am skeptical of top down control by government. I do anticipate there will varying degrees of quality and availability, based on factors too numerous to list. But, you are correct the goal should be the goal! Thanks!

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    Jeffrey Fisher

    Important to remember that PPACA was largely based on the model initially implemented in Massachusetts by a republican governor at a local level. When Democrats saw value in it and rolled it out nationwide, Obama was quite vocal about the fact that it’s not perfect, and health care reform would be accomplished through “fits and starts” and would be an iterative process until it works as desired. He knew and was clear with the American people that the effort would require us to take some steps backward before moving forward again. I think this implies a deep understanding of the process of compromise. The ACA also left state insurance regulators in control of local regulation. As it should be. Nevertheless, Republicans in control for much of Obama’s term were vehemently unwilling to engage in a process of compromise with him throughout his term. Even when it came to making the ACA better in the eyes of conservatives and industry. This caused him to use his Agency’s rulemaking authority to try to make the ACA better, even walking some things back when it became clear that certain initial policy positions were unworkable. Your point about top down policy making is well taken. But The ACA and Obama are not the best illustration of your point here. One could argue that the top down problem is worse today than it would otherwise be due to Republicans unwillingness to engage in compromise, while hoping the ACA would be overturned or self implode. True compromise takes willing participation on both (or multiple) sides. In the absence of engagement leaders try to move the ball in other ways that are inevitably one-sided.

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    Michael

    Step back and reconsider the history ... Other governments have tried that whole "top down managed economy." Do you recall the name of the political party that tried this in Italy?

    It seems to me, that this Italian political party used black-shirted protesters to inflict violence on any ideological opponents ... whilst the police stood idly by ... then arresting the beaten victims of the violence.

    If the first round was the tragedy, this round must be the farce.

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  8. Major Monogram

    The Democrat party doesn’t give a whit about the Constitution.

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  9. Kevin K.

    Do you think politicians are able to so easily bamboozle voters mainly because the voters lack even a basic understanding of their government? Being from Mexico 🇲🇽 I couldn’t understand how only very few people in my law school class knew their country’s history or were able to challenge a constitutional law professor’s opinion. It was honestly like sitting among sheeple.

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    Bill Merrigan

    Jonah, this feels like an incomplete essay.

    Being hard to achieve does not disqualify the pursuit of an objective. Getting to the Moon... winning the Second World War... eradicating Polio... these required top-down approaches. As a Conservative, what are your criteria to support these sort of top-down, big idea efforts? Are there any you see where the objective can ONLY be accomplished by a top-down effort, and should we have the urgency to implement? For example, mitigating and/or adapting to climate change?

    PS - hope you are enjoying a cool afternoon in the San Juan Islands.

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      George.Skinner

      I think the difference is between stating a goal, and executing a strategy that achieves that goal. If you formulate a good strategy, it can "trickle down" as other people figure out how to realize the strategy. Once you've determined that lunar orbit rendezvous is how you're going to land a man on the moon, you can figure out the different problems that need to be solved to make that happen: rendezvous of spacecraft in orbit, navigation from the Earth to lunar orbit, communications systems, etc. The trick is you need to adjust that strategy to acknowledge your constraints and limitations. Obamacare is a pretty good negative example: the basic strategy was reasonable, in that they needed everybody paying into insurance so that they could extend coverage to people with pre-existing conditions. Pooling the risk would ensure that the premiums from young, healthy people would offset the costs. They just couldn't make it work in the context of the existing health care system because the politics didn't work. The strategy needed to be adjusted. Maybe just make Medicare buy-in possible for people without coverage - less grand in scope, but accomplishes the goal of making sure nobody is left without health care because they can't afford it.

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