Yes to universal health care, and Switzerland

Published September 27, 2017 in The Hill

Linda Gorman, director of the Independence Institute’s Health Care Policy Center, recently argued on these pages for a repeal of ObamaCare. Gorman claims that the movement toward a more European-style health care system, such as Obamacare steers us toward, leads us in the wrong direction.  For support, she compares our health care system with Switzerland’s.

I’ll address that comparison toward the end of this article.  Before getting there, though, I want to engage Gorman’s broader argument, both because it draws for support on my research comparing health care financing in the US with other countries, and because it misses basic health care economics.

To tackle the essence of Gorman’s argument that Americans are better off with a health care system leaving some uninsured, let’s step back from the specifics of Switzerland’s health care system.  Let’s instead examine the “European (or Asian)” model of health care.  Continue reading

Is Free Tuition Europe’s Message to America?

Published November 15, 2015 in Tacoma’s News Tribune.

grad capsBERGEN, Norway.  Should college be free for students, as Bernie Sanders contends?

Those who take this position usually support it with two claims: We need the best-educated workforce in the world, and cost should not deter young people from developing their talent.

In other words, free tuition would lead to a more prosperous and equitable America. And since college in countries such as Denmark and Norway is free, why can’t it also be free for Americans?

Yet if we follow Sanders’ suggestion and look abroad for inspiration, it’s not so clear that “free tuition” is the take-home message. Look closely at other nations, and it is apparent that we almost excessively invest in college. Continue reading

When it comes to unfair tax systems, Washington is No. 1

Published in Tacoma’s News Tribune February 1, 2015

tax burdenThe start of the 2015 legislative session has brought stiff competition for the most suitable image of Washington’s tax code. Reuven Carlyle, chairman of the House Finance Committee, called it a Ford Pinto, the automotive jewel once named by Forbes as “The Worst Car of All Time.”

A bit more kindly, Gov. Jay Inslee evoked earlier transportation history, finding the moniker jalopy more fitting to the tax system’s barely functioning condition.

Sticking with the transportation theme, my vote is with the sedan chair, that 17th-centuryWashingtonAll European conveyance in which the rich and royal rode, carted around by bearers.

There is much to dislike about taxes, of course, but those we pay in Washington are especially onerous. Start with the hundreds of tax breaks, each one no doubt enacted some point in the past to encourage a worthwhile pursuit. Or not. Continue reading

As inequality in the US grows, the rest of the world progesses

Published in The News Tribune, March 27, 2013

Two months ago, economists from around the world converged in San Diego for their annual convention. Dozens presented papers on the hot topic of growing income inequality in the United States.

These papers led to lively and at times heated debates, some of which have subsequently spilled over onto blogs as well as the nation’s opinion pages.

The tendency to focus on the U.S. and our troubling upward trend in inequality is a natural one. But it also misses astonishing progress on the inequality front. Continue reading

That rising tide seems to be missing a lot of boats

Published in The News Tribune, March 14, 2013.

Another encouraging sign of slow economic recovery came last week from the Bureau of Labor Statistics (BLS). It reported that nationwide, February experienced a net increase of 236,000 new jobs.

A year ago, unemploy-ment sat at 8.3 percent; today it is 7.7 percent. A painfully slow improvement, for sure, but at least the labor market is headed in the right direction.

Or is it? Continue reading

We can save much grief by getting ahead of social problems

Published in The News Tribune, February 27, 2013.

Each year as a nation, we spend more than $150 billion on research to find health-improving products. Such research has led to spectacular advancements in the health of those born prematurely or afflicted with heart disease, diabetes or cancer.

Yet when it comes to promoting a healthy population, we shouldn’t be so quick to congratulate ourselves. Continue reading

It’s unfair to group the ‘welfare state’ into single lump

Published in The News Tribune, November 22, 2012

Often, holiday meals like those at my house consist of a range of separate contributions which collectively add up to the Thanksgiving Dinner.  As we sit down to partake of the varied assortment of dishes, no one would think of criticizing the turkey because the mushroom soup dish contained more fried onion rings than green beans, or because someone insisted on adding a bag of marshmellows to the sweet potatoes.

The fact that different dishes are on the same table doesn’t somehow turn them into one “Dish” called “Thanksgiving Dinner” that deserves a singular judgment.   Instead, we pass judgment on the successful (and quietly perhaps, the less successful) features of each individual dish.  Continue reading

Rising inequality partly to blame for stagnant economy

Published in The News Tribune, October 25, 2012

Are we better off today than we were four years ago?   For too many people, the answer is no.

As disappointing as this fact is, it’s mostly due to the cycles that modern economies are prone to.  Four years ago we had just passed a cycle’s crest; today we’re slowly climbing out of its trough.  To compare these two periods is to contrast two points in the economy’s short term ups and downs.

This detail of course doesn’t make it any easier for those suffering through this cycle.  It’s just that such a perspective doesn’t reveal much about the true direction in which our economy is headed.   Continue reading

Op-ed: Approve Initiative 1240 to allow public charter schools

Published in The Seattle Times, October 22, 2012

Three previous swings at establishing public charter schools in Washington came up empty, so why are proponents for them still at bat?

Passion for charter schools is part of the reason Initiative 1240 is on the Nov. 6 ballot. Another reason is that hope springs eternal — a changing political environment opens up new possibilities and with it, perhaps, a different outcome. Finally, a new campaign for charters might succeed in dispelling common arguments against them that could change the debate.

One common argument is that there’s no evidence the average public charter school outperforms traditional public schools. While true, this fact shouldn’t lead to the conclusion that charters aren’t good for Washington’s children. Continue reading

We must give our trust to educators, but we must verify the results

Published in The News Tribune, October 11, 2012

What President Ronald Reagan liked to say about our relations with the Soviet Union, “Trust, but verify” is also true of education.  This is why I think the charter school initiative, I-1240, is a good idea:  it strengthens our trust in schools and it provides new ways to verify that this trust is deserved.

Comparing international relations and negotiations over nuclear disarmament treaties with education and charters schools deserves explanation.  To do that let’s turn back the clock.  Continue reading

Court ruling could leave state’s poor without access to health care,

Published in The News Tribune, August 2, 2012

The Supreme Court’s decision this summer to uphold the most controversial part of the Affordable Care Act (ACA) – the “mandate” requiring individuals to buy health insurance – was both historic and a critical victory for those battling to achieve universal health care in the United States.

However, while most of the public’s attention has rightly focused on the Court’s determination that the federal government can indeed require us to buy health insurance, this wasn’t the only provision in the ACA that opponents argued was unconstitutional:   They also claimed that the ACA’s expansion of Medicaid to more of the nation’s poor coerced states’ participation by setting the penalty for nonparticipation too high. Continue reading

In this upside-down world, public college means heavier debt load

Published in The News Tribune, June 6, 2012

With the latest news that tuition at our state’s public institutions of higher education will probably rise another 16 percent next year, it’s easy to imagine that our public colleges soon will be as expensive to attend as are the private ones.

But in fact for many students, private colleges have already become the more affordable option.  Continue reading

No country for young (and undereducated, unemployable) men

Published in The News Tribune, March 28, 2012

Over the last six months Washington’s unemployment rate has fallen from 9.3 to 8.2 percent.  That’s terrific news. The same is occurring in states across the nation as employers are now hiring at a record pace.

Yet as some pessimistic sage surely said, every silver cloud has its dark lining.

The problem with our labor market is one I’ve been highlighting this month:   too many citizens have inadequate job-market skills with few options for upgrading them, and receive too little support for navigating what for them is an unstable job market.

Continue reading

Poor public policies send desperate people to dubious colleges

Published in The News Tribune, March 14, 2012

In my last column I argued that the life line we’re throwing to those at the bottom rungs of society is increasingly beyond their grasp. Truth is, we also don’t provide them with many chances to rise up.  With neither a hand out nor a hand up, too many citizens are consigned to pretty dim life prospects.

What’s more, other efforts taken to assist them have been akin to the actions taken by Captain Renault in the movie Casablanca.  The Captain famously responded to a shooting of a Nazi by a known assailant with the unforgettable instructions to “round up the usual suspects.”  Renault hoped that the appearance of vigilance would protect him from his evil superiors, and we all hope he was right. Continue reading

Safety net continues to shrink for those who need it most

Published in The News Tribune, March 2, 2012

The Obama Administration’s recently-proposed budget continues what has become a troubling trend in federal policy.  And it isn’t the growing debt I’m referring to.

What is is the large number of citizens who we seem to have given up on.  In fact, so forsaken are they, and dire the consequences to us of this abandonment, that I’ll use my next two columns to pick up where this one leaves off.

The trend is this:  We’re supplying our most vulnerable and low-skill citizens with fewer and fewer public dollars.  Instead, our nation’s “safety net” increasingly targets the rest of us, particularly those with jobs and a working- or middle-class income.  I’m all for helping the gainfully employed – especially those with low income — but when public dollars are scarce, the marginalized are the least capable of competing for them because few advocate on their behalf.  Not surprisingly, they’re losing out in the competition for public dollars.   Continue reading

Let’s be thankful that our problems are those of rich countries

Published in The News Tribune, November 24, 2011

These are divisive times.

It’s easy to see why.  Jobs are scarce, millions have lost their health care coverage, college debt exceeds credit card debt, income inequality is rising, more people are hungry, and state and federal governments look to be on unsustainable paths.   In the past, a robust economy and rising tax revenue succeeded in keeping some degree of division under wraps.

Today’s more austere times means that we now have to establish priorities rather than add new ones.  We’re faced with the inevitable – and unenviable — task of choosing between higher taxes or less spending. Continue reading

Back to square one with end of federal long-term care policy

Published in The News Tribune, October 25, 2011

With little fanfare, a Class Act died earlier this month.

Formally known as Community Living Assistance Services and Supports, Class Act was a short-lived health care program created as part of the recent health care overhaul.  The Obama Administration has just now cancelled it.

Class Act’s demise is noteworthy — certainly much more than would be indicated by its placement on the back pages of the newspapers.   Its end helps remind us of a present and growing problem we have yet to solve.   It also reminds us of the inadequacies in current health care policy. Continue reading

Task for new UW President: Make college affordable

Published in The News Tribune, July 8, 2011

The University of Washington has made an interesting choice for its new President.  Michael Young, who this week took over UW’s realm, does not seem to fit the liberal reputation of this institution.  But let’s hope he proves successful in addressing the conservative features of the University.  Such conservatism marks most of the nation’s public colleges and universities, and poses one of higher education’s largest challenges.

Some background is needed to understand this.  Let’s take what is fast becoming one of the most challenging issues in higher education:  providing an affordable education for the state’s students. Continue reading

Unfair distribution of wealth has nation going to the dogs

Published in The News Tribune, June 16, 2011

It’s not quite the dog days of summer, but dogs are making the news.

First came the story of the dog Trouble who just passed away.  Although she preferred to call her dog “Princess”, “Trouble” was the name the billionaire Leona Helmsley gave her beloved Maltese.  You may recall that Trouble gained fame four years ago after Helmsley’s death.  Leona, concerned that her dog might have to live out her life leading – well, a dog’s life — left Trouble a $12 million inheritance so that her dog could continue leading the life to which she had become accustomed.  Continue reading

State must not give up its role in affordable education”

Published in The News Tribune, May 26, 2011

For the next few years at least, the Legislature’s power to set tuition at the state’s higher education institutions has come to an end.  By ceding this authority, the Legislature recognized that it couldn’t drastically cut higher education’s support on the one hand, while also prohibiting institutions from turning to students for the difference.

Now that this is resolved, lawmakers should turn to policies re-establishing an affordable system of higher education in Washington State.  Continue reading

Fiscal problems falling on the shoulders of children

Published in The News Tribune, March 15, 2011

In theory, local, state and federal governments operate like layers on a cake, each making separate and distinct contributions to the overall cake.  The federal government defends us from foreign enemies, state governments build roads, and local governments quench fires.  In practice, governments are related in ways making the analogy of a marble cake more apt.  For instance each state administers a distinct unemployment insurance program, but federal law and tax dollars make this a state-federal partnership.

Despite complicated relationships among our governments, the fiscal problems that each government now faces is addressed without  considering the collective impact of all the budget cuts.   And so, almost no attention is being paid to how our collective responses to governments’ fiscal problems are disproportionately harming children. Continue reading

Leaders must find creative answers to budget crisis

Published in The News Tribune January 25, 2011

Budget woes are coming home to roost in Tacoma.  First came the announcement from Governor Gregoire that she wants to close the State History Museum in order to save $3 million.  Then, Tacoma Public Library announced it is closing two of its branch libraries.  The latest news comes from the Tacoma School District – Foss High School is being placed on the chopping block in order to save $2 million.

Given that all of these government entities are required by law to balance their budgets, cuts are inevitable.  But are these the right ones to make?  I won’t pretend to know the answer to that; but I think we can agree on two priorities. Continue reading

Government should help poor to save for retirement

Published in The News Tribune December 21, 2010

At a time of year when businesses everywhere are urging us to spend, the bipartisan presidential commission on reducing the national debt and Governor Gregoire’s proposed budget sound like Ebenezer Scrooge.  According to both, saving, not spending, is the order of the day.  One can’t help but wonder what Charles Dickens would say about the new-found cult of “austerity.”

 

As conservatives will point out, Dickens’ A Christmas Carol extols the virtues of private charity, and wasn’t intended as a guide to government action.   But the basic principle underlying Dickens’ classic is that we all owe a duty to the less fortunate among us.  Sometimes that duty is best performed by means of collective, governmental action. 

 

At the very least, the government should not pass up policies that could help the poor at little cost to anyone else.

 

But the presidential Commission missed an opportunity to do just that in its proposal for fixing Social Security.

 

The dilemma of Social Security is this:  Within a few decades the revenue flowing into the system will not be enough to cover the required payments.  We thus must either cut benefits, find additional revenue, or combine the two.   The bottom line for any reform should be that it protects the pensions of the most unfortunate among us. 

 

On this point, the Commission’s plan is not that bad.  First, it reduces everyone’s benefits by slowing cost-of-living adjustments and increasing the age at which we’re eligible for a full pension.   Second, it increases the amount wealthier individuals will pay into Social Security.  Finally, it restructures pensions so that those to the wealthy decrease and those to the poor increase. 

 

A good starting point.  But we should keep in mind that Social Security has always been meant to supplement citizens’ other sources of retirement funds.  For low income workers, Social Security provides about $10,000/year — not enough to get them over the official poverty line.  But these retirees as well as almost half of all retirees rely on Social Security for roughly four out of every five dollars of post-retirement income.   For many, then, the premise that Social Security is a supplement just doesn’t hold. 

 

We could of course beef up the size of the government’s pension to low income retirees.  This is what other rich countries do:  On average they provide their low income citizens with about 50 percent more retirement income than we do.   Or we could follow in their footsteps by providing greater income support.  Yet these policies are partly responsible for the budget problems plaguing European nations; and anything that increases our own budget woes during these austere times is a non-starter.

 

But here’s what we can do that wouldn’t be all that costly:  enact policies to promote savings and asset accumulation among low and middle income citizens.   In addition to low income, a lack of savings is what explains why too many citizens reach retirement without a nest egg to supplement their Social Security check.  

 

The federal government already has loads of policies that promote wealth accumulation.    Think of the home mortgage deduction, the favorable taxation of capital gains, and tax breaks for contributions to retirement or college savings plans.  But these policies, which collectively total  hundreds of billions of dollars in subsidies, are not targeted to those at the lower end of the income distribution; over 90 percent of these subsidies to wealth building go to those in the top half of the income distribution.   Not surprisingly, these citizens already own over 95 percent of the nation’s wealth.   Current subsidies thus encourage wealth accumulation among the wrong people.

 

We know from demonstration projects that given the right support, those with even very low income can and do save.  Through tax credits and other forms of government subsidies, it is possible to get low to moderate income households to build up assets.   By doing so during their working life, citizens gain the ability to plan, respond to emergencies, and pass on opportunities to their descendants – in addition to retiring with greater income security.

 

Promoting saving among poorer citizens is an idea that all Scrooges should like.

Health care reform repeal takes us in wrong direction

Published in The News Tribune November 14, 2010

Bolstered by the election, Republicans are now renewing their commitment to repeal Obama’s health care reform act.  The government’s “takeover of health care” was a bad idea, they say.   Courts in the meantime are reviewing the Act’s constitutionality, with many arguing that the federal government cannot legally mandate insurance. 

Not being a constitutional scholar, I’ll take a pass on this legal challenge and instead say why mandating insurance is exactly what the federal government should be doing. 

Aside from a moral argument that everyone should have health insurance, the reason for mandating insurance is that without universal coverage, the health insurance market is unacceptably wasteful and unfair. Continue reading

Paying twice for education: We’re spending a lot of money to help college students catch

Published in The News Tribune October 10, 2010

Imagine, if you can, using taxpayer money to build an expensive stadium, then before it is paid off you implode it so that you can build an even more luxurious stadium, again with taxpayer money.

OK, too much of a stretch?  How about this:  We spend millions of taxpayer dollars to build a highway that doesn’t quite meet in the middle.

Sometimes in the public sector is seems like the adage “Measure twice, cut once” should be “Pay twice, get once.” Continue reading