Fighting for more equality isn’t the same as government running things — badly
We’ve grown accustomed to how, if you take a day off, President Donald Trump will say or do something so teeth-grindingly dumb that it almost makes you fear for your safety, let alone the economy. I took most of last week off, and came back to find it was Democrats’ turn.
I speak of three things: Sen. Chuck Schumer and Bernie Sanders’s proposal to regulate stock buybacks; Sen. Kamala Harris’s observation that Medicare for All, a new holy cause among Democrats, likely means the end of private health insurance; and the Green New Deal spearheaded by Rep. Alexandria Ocasio-Cortez and Sen. Edward Markey, a gigantically expensive set of climate-change solutions that would waste trillions of dollars in an thinly veiled effort to make the federal government the employer of last resort.
The three share the same flaws: They vastly overstate government’s skill set (setting incentives and basic rules, not operations), and the desire of the governed to pay vastly higher taxes to do jobs liberals and many moderates think should be done. It’s disappointing because liberals are turning their backs on better, cheaper, more entrepreneurial solutions — ideas from earlier Democratic presidents who delivered prosperity and also bent toward justice.
Let’s take last week’s follies in turn, beginning with buybacks.
There are 3,600 U.S. public companies. Business invests $2.5 trillion yearly. Companies are in 100-plus industries in 11 sectors (just using the categories dividing the Standard & Poor’s 500).
Sanders and Schumer know how all of them should allocate capital. Sure.
Let’s make this simple: Tim Cook’s a better steward of Apple’s AAPL, -0.88% capital than Sanders, not least because Apple’s CEO pays full-time attention to Apple. That’s true even if, like me, you haven’t loved Apple’s buyback strategies.
A moment’s thought tells you so.
And it’s a debate we had under Franklin Roosevelt, when progressives wanted government to regulate which companies could go public, but lost the argument to the better alternative of mandated disclosure. Now we’ve got the deepest, fairest capital markets on earth. Even if CEOs sometimes displease politicians.
Now let’s talk about health care.
Medicare-for-All solves for the wrong problem — the goal is universal health-care access, not delivering control of insurance to the government per se, or bankrupting United Healthcare UNH, +0.58% . M4A risks support for universal care by disrupting how 156 million Americans now get their coverage through work.
Democrats ignore copious evidence that Americans don’t want one-size-fits-all insurance — and that the Affordable Care Act and reforms in Medicare itself have highlighted better reforms. It’s fashionable to deride ACA, Medicare Part D and Medicare Advantage as Republican ideas — but people like them.
Medicare Advantage, which lets consumers choose private plans over the government’s base plan for out-of-hospital coverage, now has 34% market share and will have 42% by 2028, according to the Kaiser Family Foundation. Differences between traditional Medicare and Advantage help many people who know their own finances best. Their judgment deserves respect.
ACA added coverage for 20 million people. The uninsured rate fell to 10% from 18%. Another 2.2 million would be eligible for coverage if holdout states like Texas, Florida and North Carolina had expanded Medicaid under the law.
ACA didn’t raise middle-class taxes or dismantle existing coverage. It didn’t boost the deficit, but controlled health-care inflation for the first time in decades and reduced income inequality.
In other words it delivered what people wanted — more care. Its problems are fixable for vastly less than the $33 trillion tax increase the right-learning Mercatus Center says Sanders’s Medicare-for-All plan requires. (Sanders says people would save by not paying insurers).
On climate, again, Obama had better solutions than the jobs program masquerading as a climate-fighting plan from Ocasio-Cortez’s alliance.
Obama tripled the percentage of renewable energy the U.S uses for electricity, spawned the electric-car industry (especially Tesla TSLA, +0.08% ), and cut coal use 40%, His policies caused a 14% drop in energy-related carbon emissions from 2005-2016 — on pace for the declines called for in the Paris accords.
All it took were tax breaks worth $5 billion yearly. U.S. utilities — notably Xcel Energy XEL, +0.00% and former coal leader Southern Co. SO, -0.04% — are moving fast. Xcel will be 80% carbon-free by 2030 and Southern 50% — with both essentially carbon-free by 2050. That’s what you can do under current law.
You don’t need government contractors installing solar panels on houses or building high-speed trains nobody wants to phase out airplanes when what’s needed is wind-driven electricity plants and relatively cheap R&D for airline biofuels.
Cars are the most obvious case. By about 2025, electric vehicles will be cheaper than gasoline-powered ones — so carbon use in transportation, 28% of U.S emissions, falls rapidly.To make people go electric sooner, expand a $7,500 tax credit for EV buyers Washington’s planning to phase out, and keep wind and solar subsidies also slated to wind down.
You don’t ban big cars that people like (just make them electric). Don’t ban airlines (just drive them toward better fuel).
Being smarter makes Democrats less vulnerable to Republicans looking to exploit fears of change, promoting a leaner but still-liberal government making promises it can keep.
After all, a platform of losing your health insurance, having the government tell you what car to drive — and huge tax increases to make this happen — is the only way to lose to the Dotard-in-Chief.
Author: Tim Mullaney is a commentary writer who covers the economy and corporate news.