Old Red Scare tactics, even older argument
An increase in bipartisanship has not occurred and, unfortunately, the future is not filled with hope.
Conservatives do not hesitate to make accusations and gin up stories. They also haven’t given up on challenges coinciding with the Constitution. The right-wing media focuses on hype stories rather than real solutions.
Since February, most policies proposed by the Obama administration have not been challenged by intelligent solutions. Instead, when Obama proposed bailouts, no resolves were given. The media talked about tea parties and socialism.
Now with health care reform raging, we don’t hear about solutions that challenge public options. Instead, we are inundated with charges of death panels, socialism and communism. For the record, you can’t practice both socialism and communism.
So has one party really degenerated? Have conservative and moderate thinkers gone to hide in their closets and basements, waiting for their fears to recede? They have actually done the complete opposite.
Republicans, conservatives and moderates alike have been writing and thinking just as much as the people in President Barack Obama’s cabinet. So why then have we not heard these great counter proposals? Are the real right-wing, and the people that are leaning close to it, being silenced?
It turns out that their voice is intelligent and worth much thought, but it’s overshadowed by a simple case of supply and demand.
Greg Mankiw is one person who comes with many respectable ideas and proposals, but you won’t find him in the spotlight.
Mankiw, an economics professor at Harvard, consistently shares his opinion of policy news and how the Obama administration is doing. One of his most recent blog postings is a an excerpt from an article written by one of his colleagues.
“There is our inefficient and inequitable system of tax-advantaged, employer-based health insurance,” School Dean Jeffrey S. Flier wrote. “While the federal tax code promotes overspending by making the majority unaware of the true cost of their insurance and care, the code is grossly unfair to the self-employed, small businesses, workers who stick with a bad job because they need the coverage, and workers who lose their jobs after getting sick.”
Mankiw’s acknowledgment of his colleague’s thoughts demonstrates an intelligent opinion of his own.
Mankiw is definitely not alone but there appears to be a small audience for respectable right-wing thinkers. Hopefully, they are all in the Senate or House, battling things out the correct way. The news is a constant reminder that this is not the case though.
When Obama gave his speech on health care, Rep. Joe Wilson (R-S.C.)interrupted the president, yelling, “You lie!”
The true problem is the lack of demand for intelligent debate and the actual progress and attainment of successful reform. Droves of people have shown their value of fixing the issue at hand, time and again. The result has been the favoring of fun and conspiracy, not truth and law making.
Scares of communism and socialism get the public’s blood boiling. They bring out emotions and desires to scream and shout.
While almost 10 percent of our nation is unemployed, some are still worrying about Obama’s birth certificate. If that’s too outdated, there’s always a 2012 theory, or a forecast of Obama tripling his czar count and turning blood red.
Wall Street Journal’s Thomas Frank sufficiently captures the fuel for the demand of a good scare.
“Can you really hope to gin up a red scare without almost no reds? Sure you can. Because red scares are fun,” Frank wrote. “It’s somehow ennobling to believe that our leaders have secretly betrayed us; that beneath the placid, suit-and-tie surface lurks a hideous alien philosophy; that time is running out for our country; that we alone have figured it out and now we are stepping bravely forward to give the congressman a piece of our minds.”
Andrew Taylor is an economics junior and may be reached at opinion@thedailycougar.com
Andrew Taylor 
incidentally, Mr. Flier’s point is the thesis to a paper I wrote for Bean’s class:
The current public policy in regard to health care and coverage in the United States is extremely convoluted, and as such, it is difficult to determine which portions are working well and which are running to counter to the nation’s objectives. When making an economic decision one must always examine incentives, especially those created or destroyed by government action.
In the U.S., employer-based health insurance provides a ‘tax shelter’ for workers, whereby company contributions to employee coverage are free from income taxation. This money spent on behalf of an employee is implicit income, which can lead workers to overspend their explicit income on a pricier insurance plan and disallows them from taking this income in cash and purchasing a policy on their own. Because this tax shelter does not apply to individuals, an outside policy is more expensive than a policy provided by an employer. This limits consumer choice and creates an incentive for workers to find a job with a company that offers health insurance, which is generally unfair to small business, the self-employed, and workers who stay at a particular job – which may be less productive for the economy – to avoid losing this tax sheltered income. Employer contributions are someone else’s money being spent on your behalf. According to Milton Friedman, your employer has “the incentive to economize… but not the incentive to get full value for [their] money, at least judged by the tastes of the recipient.” Thus, the system by which over half of all Americans receive their health coverage puts tax incentives into hands that will economize but not get the best value for money spent.
As it stands, workers who purchase employer-provided health insurance have an unfair advantage over those workers who do not. Roughly half are subject to taxation on this income and half are not . Dropping this tax shelter could allow increased competition among employers as well as reveal to buyers more of the true cost of their coverage, making workers indifferent between their company plan and outside plans. If coverage were available on a level playing field for all workers, a better market would develop in which everyone is subject to the same costs and workers have full choice on policies, both of which would deter overspending. Some would feel that making the higher income earning 66% carry 95% of the burden of this new tax would be appropriate. The $100 billion raised by the government could then potentially be used to subsidize the health coverage for the bottom 1/3 of income earners. Regardless of who the burden falls on, providing the subsidy only through employers that can afford to offer coverage arbitrarily favors certain individuals in the economy over others.
One argument to keep the tax shelter for company-provided health coverage would be to expand it to those who purchase a private plan without employer contributions. This is similar to Senator John McCain’s proposal in the 2008 general election. By expanding the tax subsidy to all workers, this plan would allow for the same benefits as ending the tax breaks on employer-provided insurance alone: a level playing field, a larger market for standalone policies, and equal hiring opportunities for smaller businesses and entrepreneurs. What it might not do is reveal true costs of coverage to purchasers, especially those with ample money to spend on health coverage even without this tax ‘loophole’. When government action makes any service in the economy artificially cheap, it will tend toward overuse.
Tackling the issue of how to finance rising healthcare coverage costs will likely be the most important policy area of the century. An economist could expect an increased portion of income to be spent on health because this spending is not subject to diminishing returns as other areas of consumption are. It may not be rising costs of health coverage alone that are the problem but an uneven distribution of spending amongst the population. Allowing for a visible cost, equal opportunity market that is easy to participate in for all citizens is the first step to solving the problem.
Steven Christopher
November 15, 2009 at 2:57 am