Polling on the Republican Future

Yesterday I posted on The Daily Kos (I have a diary over there), with respect to David Broder's pre-election column, in which Mr. Broder said that the Republican's power would be exaggerated because of the size of their victory in the House. Aside from my comments, I posted a poll, asking readers this question:

Do you believe that the Republicans' gains in Congress mean that they will dominate our politics for the next five years?

I received 55 responses, as of 5:20 PM Mountain Standard Time today. The responses were:

Yes 8

No 42

Not Sure 5

I know that the Daily Kos is a liberal site, but I think it's interesting that such a large majority of the respondents to my question do not believe that the Republicans have put themselves in the catbird seat for as long as five years.

President Obama: Change Your Methods, Not Your Goals

In this November 4 column, David Broder asserts that the problem with the Obama administration hasn't been the goals the President set, but the way in which the Democrats in Congress went about pursuing them. The results turned a lot of Americans against the programs, not because they didn't want healthcare or a stimulus package, but because the programs enacted in Congress were overweight and ineffective.

So, now that he can't get it done without the Republicans, President Obama should do what he said he was going to do: reach out to Republicans, work on getting things done in a timely and efficient manner, and stop playing the partisan game. In Broder's opinion, and I find a lot of truth in this, the President made himself too dependent upon the operating styles of Speaker Pelosi and Majority Lead Reid. They led him down a garden path by playing to all the usual power bases and constituencies.

It's time for President Obama to set his own course and captain his own ship.

A Bad Penny Always Turns Up

I posted this morning on a David Broder column. It felt good to be back.

I hadn't posted since back in July, and I don't see any good reason to go into all the reasons, and/or excuses, for my absence. There was a death in the family. That necessitated two trips to Florida. Those, plus my week's vacation in Pagosa Springs, Colorado, in September, provided me with a pretty good backlog of work both at the office and at home. Et cetera, et cetera.

But I have been reading. Scandinavian mystery novels have been prominent lately. I read Jo Nesbo's Nemesis and Stieg Larsson's The Girl with the Dragon Tattoo and The Girl Who Played with Fire. According to a reviewer I heard on NPR (yes, I listen to NPR sometimes), Larsson's novels are consciously descended from a series of detective stories by Maj Sjowall and Per Wahloo. I read a bunch of those novels back in the '80s (we were living in Pennsylvania at the time, as I recall), and they were very good.

A Swedish friend of mine commented, apropos of Henning Mankell's Faceless Killers, that all the Swedish mystery writers were Maoists. I'm not sure about that, but it is true that the detective novel has been used by them as a means of social criticism. That's certainly true of Stieg Larsson, who died shortly after delivering the manuscript of his third novel The Girl Who Kicked the Hornet's Nest.

Of course, there is a long tradition of using the mystery novel to shine a light on the seamy side of society. Dashiell Hammett, author of the classic The Glass Key, was a committed Communist (and one hell of a good writer).

I finished Nixonland, by Rick Perlstein, today. It's long - the text ends at page 748 - but it is a fascinating and detailed look at American politics from 1965, when we all thought we had entered into a liberal consensus, through 1972, by which time that consensus had been shown to have been an illusion. After Tuesday's election I have to agree with Perlstein that we still live in Nixonland.

An Election Pre-Mortem by David Broder

A lot of people were predicting the results of the general election on Tuesday, November 2, and most of them were right about the general results:

The Democrats lost big.
In particular, the more conservative Blue Dog Democrats lost dramatically.
The Republicans did well.
The effects of the Tea Party movement were ambiguous.

David Broder, in his column in the Washington Post, attempted not a prediction, but a pre-mortem. (Or a premature post-mortem - take your pick.)

Broder's key point is that any analysis which concludes that this election spelled "doom for the Democrats and a shift to the right in our politics" will be wrong. He thinks this for several reasons: the size of the shift to Republicans in the House will lead us to exaggerate the extent of their power; the voters are very skeptical about both parties; neither party has a compelling spokesman on economic issues (though Broder mentions that Rep. Paul Ryan of Wisconsin "has assumed the role of analyst and provocateur); neither party has compelling spokesmen on the other leading issues of the day, either.

All of these are valid points, and all of them taken together mean that Tuesday's election wasn't nearly so dramatic break with the past as the talking heads, and many Republicans would have us believe. I think John Boehner had it right when he said that this wasn't so much a victory for the Republicans as the public giving them one last chance to get it right. And I think Mitch McConnell was dead wrong when he said that the most important task for the Republicans is to defeat President Obama. That's exactly the kind of thinking that could make the Republicans' gain in power very short-lived.

We live in interesting times, folks.

You Can't Get from Here to There Via a Tea Party

As I said over on my Facebook profile, I mostly post articles by smart people, that is, by people who agree with me. This column by Douglas Schoen and Pat Caddell is an exception. I think there are a lot of things wrong with Schoen and Caddell's argument, but I'd really like to pick on one paragraph. I think the following indicates both their cynicism and their wrong-headedness.

"[Democrats] must adopt an agenda aimed at reducing the debt, with an emphasis on tax cuts, while implementing carefully crafted initiatives to stimulate and encourage job creation."

In other words, pander to the Tea Partiers by telling them the same lies that the Republicans are trying to sell. Let me repeat this so you'll know it is true:

You cannot reduce the deficit by lowering taxes.

You cannot reduce the deficit by lowering taxes.

You cannot reduce the deficit by lowering taxes.

The mechanics here are pretty clear: The additional economic activity stimulated by a tax cut may generate additonal tax revenue, but it won't generate enough revenue to make up the losses caused by the tax cut itself.

So what about the Laffer Curve? What about supply-side economics? What about the Kennedy tax cuts?

It has become a shibboleth on the right that cutting taxes raises revenue because of the increased economic activity. But this isn't true at all times and in all places. The law of diminishing returns applies to tax cuts, as well as to a lot of other human activities. When the marginal top rate of Federal income tax was 90%, as it was in the Roosevelt and Truman administrations, cutting taxes released a lot of activity and it diminished the amount of tax evasion that had been going on. Cutting taxes from 90% to 71% made it less profitable to hide income, and it provide people with money that they were eager to spend. The postwar boom didn't ride on tax cuts alone, though. During the war demand had been suppressed by forced savings - all those war bond drives with Deanna Durbin and Betty Grable stored up a lot of money, and by rationing. After the war all that stored-up money was turned into cash and used to by newly-available houses, automobiles, and business opportunities.

Similarly, the Kennedy tax cut of 1962, when the top marginal rate dropped from 71% to around 52%, reinforced, but did not cause, a boom that was really led by the German economic miracle, and the recovery of the other countries devastated by World War II. This recovery would eventually turn around and bite the U.S., but in the early 60's we were busy selling stuff to satisfy the recovering demand around the world. And, again, lowering tax rates tends to diminish tax evasion and fraud. Moreover, the Kennedy tax cut was overridden by the stimulus package of the 1960s - Vietnam plus Great Society equaled overheated economy and booming inflation, which made it looks as if tax revenues rose enough to make up for the cuts.

We could go through a lot of economic history, some of it quite contentious. Here's the truth, the whole truth, and nothing but the truth. Taxes are low enough now that we can't hope to release a store of pent-up demand and hidden income by lowering them a little more. Instead of a pile of forced savings on hand, people and companies are serious in debt. The demand isn't there to be released by lower taxes. So cutting taxes will simply reduce government revenue and increase the size of the deficit. Thus endeth the lesson.

(By the way, in the interest of full disclosure, Pat Caddell, who was President Clinton's favorite pollster, was a consultant to the TV show The West Wing. Helen and I watched every episode of The West Wing and loved it. On that basis, I hold a certain affection for Caddell. That doesn't mean I don't think he's serious wrong on the present topic.)

Catching Up with April Posting: Republicans

Is the Republican Party sticking its collective head in the gas oven? Are Republicans swallowing the tailpipe of an idling Lincoln Continental? Is the conservative movement so blinded by its hatred of the left and its own self-righteousness that it is failing to see clearly?

I would say "Yes!" to all of the above. David Frum, former Canadian, former Bush speechwriter, conservative policy wonk was apparently fired by the American Enterprise Institute (AEI) for saying something like this. And Ron Radosh, in this reflection on l'affaire Frum, is singing to the same sheet music. Tactically speaking, American political parties must appeal to the broad squishy center of the political spectrum. Frum questioned Republican tactics in the healthcare debate, and he no longer works at AEI, because conservatives don't want to hear that they need to change. If they wanted to change, they wouldn't be conservatives, would they?

Next time you see a stegosaurus in the park, ask him how that refusal to change thing worked out.

(The title of this piece? It's April 4 and this is my fourth post in the month of April. Now I have to go do my daily Bible reading.)

Are We Nostalgic for 1934?

In general, people may not have a lot of fondness for 1934. It was smack in the middle of the Great Depression, and things were pretty bad. But, as Daniel Gross points out, it was better than in 1930 or 1932, and the economy was growing. So Mr. Roosevelt's party, the Democratic Party, the party of Woodrow Wilson, didn't lose seats in the House and Senate, as conventional wisdom says the president's party must in the off-year. No, the Democrats gained seats, increasing their majorities, and positioning themselves to carry out the "Second New Deal."

Can this happen again? A lot depends upon just exactly how much the numbers move between now and November, but the Republicans should beware of counting their chickens before they are hatched. Of course, it the Republicans are disappointed in the fall, think how unhappy the Tea Party patriots, Fox News, Sarah Palin, and members of various armed militias are going to be!

David Broder on Discipline in the States

I agree with David Broder that the states are showing more fiscal discipline than Washington. I even agree that it's crazy to extend the Bush tax cuts, for anyone, at any income level, in the face of this deficit.

But I do have a couple of quibbles with his column.

For one thing, he notes that all of the states, with the exception of Vermont, have constitutional requirements to balance their budgets. That's true, but it's not as important as you might think. These requirements only apply to the operating budget. The states are also allowed to borrow money for their capital budgets, and so they can run very substantial consolidated deficits. And they do. The way the requirements come together is that, in order to balance the operating budget, you have to keep your debt service to a manageable level. That, in turn, limits the total amount of debt a state can take on.

Second, while the states may be free to cut spending, fire state workers, and so on, the Federal government is responsible for trying to fire up the economy and get us back to full employment. So the Federal government needs to run deficits. Actually, in many cases, those balanced-budget clauses cause the states to impose unnecessary pain and suffering on their residents, cutting budget just when private spending is also lagging.

I get very tired of governors running for president with the slogan: "I balanced my budget." Well, so what? First, you were required by law to do so. Second, it's a lie.

A Missed Opportunity?

The other evening our kitchen phone rang, and I, standing right by it, answered the call. I found myself, as so often these days, talking to a computer. In this case, the computer was programmed to have pre-recorded questions played for my enjoyment, and, depending upon my answers. This represents advances in voice recognition software we don't really appreciate because they are so often used in either intrusive or obstructive ways.

The first question the computer asked me was, "Are you a tea party patriot?"

I replied, "No."

The computer then asked me, "Do you support Sarah Palin?"

Again, I said, "No."

The computer then muttered some jargon and hung up.

Afterwards I realized that, had I responded affirmatively to either question, or to both, I would probably have been treated to additional questions. Those questions might very well have provided me some insight into matters of concern to the fringe of the Republican Party. I missed a great opportunity to learn something about the priorities and the thinking of Tea Party/Sarah Palin supporters!

I think I'll survive the disappointment.

The Anniversary of the Stimulus: Is It a Success?

Daniel Gross is in no doubt, and neither are a lot of economists. The stimulus has been successful, at least in averting the worst consequences of the financial crisis of 2007-2008.

Why are the Republicans so determined to portray the stimulus, the Recovery Act, as a failure? First, this is the Obama administration's only major legislative accomplishment of 2009. If this was a failure, then the administration has had no successes at all.

Second, these people are trying to reject the judgment of Richard Nixon that "we are all Keynesians now." John Maynard Keynes had a couple of profound and very useful insights, but the main idea for which he is both praised and condemned is that the government can become the spender of last resort. Some of the voices on the right are trying to destroy the concept of government as a useful tool for dealing with human problems. If the stimulus worked, then Keynes is somewhat vindicated, and the government role in the economy is legitimized. That's what they mean by "socialism," these people who have no idea what socialism might be, a system in which government activity is a vital part of the economic life of the country.

John H. Makin had a pretty good article in the October 2009 issue of Commentary, in which he concedes that Keynes was right, while asserting that there was something to the doctrine of efficient markets. It's a far more reasonable presentation than one usually sees from the right side of the aisle.

Death and Taxes

Jackie Calmes has written a nice piece on the deficit situation. She discussed this matter on Washington Week last Friday, and she knows her stuff.

The key here is simple, in general outlines: There is a deficit because the government is spending more money than it is bringing in. This can be resolved by increasing the amount of revenue, by decreasing the amount being spent, or by a combination of the two. Those are the only options. There is no magical "third way."

Republicans refuse to countenance any tax increases. That's fine, under two conditions:

1) The Republicans are prepared to present a program of spending cuts that will bring total expenditures down to current revenues, and,
2) They are able to persuade enough Democrats to support these cuts to provide a majority in both the House and the Senate.

Even if I believed that the Republicans in Congress were finally ready to do away with farm subsidies, business subsidies, energy subsidies, and a big chunk of military spending, I don't see how even the most optimistic Republican could believe that a majority of Congress can possibly support program cuts sufficient to balance the budget. For one thing, I think you could only accomplish that result if you cut Social Security, Medicare and Medicaid benefits, and probably cut benefits for veterans and both military and civilian retirees, as well.

So some taxes, somewhere along the line, will have to be raised. And that means that a lot of Republicans in Congress are going to have to go back to their constituents and tell them the truth. Tough job! It might even be politically fatal.

The Conservative Manifesto

I have, somewhere on my bookshelves, a copy of The Communist Manifesto, penned by Karl Marx and Friedrich Engels and published in 1848. Who can forget the opening lines?

"A specter is haunting Europe - the specter of communism. All the powers of old Europe have entered into a holy alliance to exorcise this specter: Pope and Czar, Metternich and Guizot, French Radicals and German police spies.

"Where is the party in opposition that has not been decried as communistic by its opponents in power? Where the Opposition that has not hurled back the branding reproach of communism, against the more advanced opposition parties, as well as against its reactionary adversaries."

They don't make manifestoes like that any more, and I don't think the Mount Vernon manifesto is likely to make the kind of impression on our national politics that its sponsors would like. It's pretty tame stuff, in this day and age, to accuse your opposition of ignoring the Constitution, particularly when the right, in the persons of George W. Bush and Antonin Scalia, have found it convenient to re-write that venerable document at need.

By all means, let us have constitutional government. As a first step, rather than trotting out the tired old myth that Congressional powers are limited to the list in Article I, Section 8, how about noting that nothing in Article II gives the President the power to act in the stead of Congress?

A manifesto? I don't think the conservative bloc in this country has the energy to create anything like a manifesto. After all, they keep falling back on the 162-year-old trick of calling upon the specter of communism as a focus for their fears.

Mirror, Mirror, on the Wall

This is a very nice column from Richard Cohen. I don't think I've reprinted a Cohen piece before, and I think I used to read him in venues other than the Washington Post. (The Washington Monthly, maybe?)

The gist here is that Sarah Palin is neither the demon feared by the left, nor the savior awaited by the right. She's an empty suit, a vessel into which people pour their fears and longing, a distorting mirror in which one sees what one desires, expects, or most wishes not to see. (I think the tendency on the left to see these characters as threatening is due in large part to a desire for validation. "See, I told you there was a fascist in that closet!")

What do you think? Is Sarah Palin a political phenomenon, or just another gold-digger from Sandpoint?

Tea Parties and Flat Taxes

E. J. Dionne spends this column talking about why the Tea Party movement has arisen, why these people insist on seeing the distinctly moderate President Obama as a "socialist," and what is the source of all this rage. I think he quite rightly puts his finger on the anti-government sentiment that goes all the way back to the Anti-Federalists. Some years ago, the Library of America published a two-volume set on The Debate on the Constitution. It can be a real eye-opener in terms of how many people were very suspicious of the power of centralized government.

This leads me to another, related, topic: the flat tax proposals of such conservatives as Steve Forbes. Let's not dismiss these proposals as impractical, fiscally ruinous, or the product of the lust of the rich to keep their ill-gotten gains. The flat tax idea is, at least in part, an aspect of the "starve the beast" concept. Ronald Reagan earned a lot of criticism for his assertions that he could increase defense spending, cut taxes, and reduce the deficit, all at once. Sure enough, that didn't happen, and he had to raise taxes again to keep the deficit under control. But the idea wasn't as ridiculous as it might have sounded, if, that is, you accept a couple of premises.

Premise One is that government spending is essentially non-productive, and that, because of this, it doesn't generate further economic activity. A dollar spent by the government is spent once; a dollar spent by private business is spent many times as it works its way through the economy. This is nonsense, of course. While government spending is, generally, non-productive - from an economic point of view, the military is a complete nullity, it isn't, on that account, tagged with a lower velocity than private spending. A billion dollars spent on a new government building has the same impact on the economy as a billion dollars spent on a new automobile factory.

But this premise leads one to suppose that cutting taxes always allows the money to be spent in some more productive way, thus boosting the economy, and, yes!, raising tax revenues.

Premise Two is that the government will limit its activities according to the amount of money it has, i.e., that there will be no deficit spending. Therefore, tax cuts serve to "starve the beast" by depriving it of its sustenance. This, too, is utter nonsense. Both Republicans and Democrats happily plunge into deficit spending rather than either raise taxes or cut programs that are dear to their constituents' hearts. And every program, no matter how useless, is dear to some constituent's heart.

The flat tax has to bring in less money than a graduated ("progressive") income tax, even if, as Forbes has suggested, we do away with such shibboleths as the home mortgage interest deduction. That's because people making $30,000 per year can only afford so much in taxes. You might get $4,500 (15%) from them, and that would then become the limit for everyone. At a flat 15%, the government would take in a lot less than it does now, and it would have to shrink. QED. Except that it won't shrink; it'll borrow instead.

The only way to shrink the government is to cancel expensive programs. Cancel all farm subsidies. Cancel all business subsidies. Cancel subsidies for energy programs. Cancel subsidies for home heating expenses. Cancel subsidies for small business loans. Cancel subsidies for student loans. Cancel the tax breaks on home mortgage interest, capital gains, and anything else that effectively subsidizes an activity. Cut the military in half and close two-thirds of the military bases in the country. Raise the co-pays on Medicare and Medicaid so that the insurance only covers serious medical conditions and treatments. Give all Federal employees, including the military 20% pay cuts. Give all Federal pensioners, including the military and Social Security recipients 10% pay cuts. Do all that, and you might balance the budget. Watch for that proposal in your local newspaper! Not!

Speaking of Ignorant Yahoos ...

In my previous post, I mentioned that a lot of liberals believe that conservatives are all ignorant yahoos. I think a lot of this goes back to the two Georges: George Wallace, who inveighed against "pointy-headed intellectuals," and George W. Bush, who concealed any intellectual curiosity he might have had behind that annoyed frat-boy smirk. Among those often nominated for yahoo status is Sarah Palin. But David S. Broder thinks we need to take the lady from Wasilla seriously. No, really.

It's very easy to underestimate someone like Sarah Palin. She's from North Idaho, the only part of the northern United States to regularly rank behind Arkansas in statistics on education, income, and healthcare. You always knew when you drove into Idaho from Washington; the broken pavement and potholes proliferated. So, Sarah Palin is just too North Idaho for my taste.

But there are late-bloomers. There are people whose misspent youths are no real indicator of their present talents and abilities. There are people who rise to the occasion. Read U.S. Grant's Personal Memoirs sometime. While overestimating your opposition may lead you to give up without a fight, underestimating them may leave you unprepared for the fight you face. Let us not allow Sarah Palin's weaknesses, real and apparent, to blind us to her very real strengths. This column is a good starting point.

Liberal Condescension

Gerard Alexander thinks that he's found a new weakness among liberals: condescension. The easy answer to why liberals think they know everything, are right about everything, and have no reason to change their ideas, is that liberals do know everything. We are always right. And the conservatives are just a bunch of ignorant yahoos. At least, that's Al Franken's point of view.

This is a long article, but it may be worth reading for some serious thoughts about why the two sides aren't listening to one another.

I think, from my own point of view, that most of the up-front policy ideas on both the liberal and the conservative side are based upon deep-down attachments to ideas that no one has examined very thoroughly, and which everybody finds rather frightening to question.

Whenever I see a reaction out of all proportion to the action which supposedly triggered it, I know that there is some underlying force that has built up on the reactor's side.

Here's an example. The Republicans are highly averse to tax increases. They are passionate about not allowing any tax increases. This is practically an article of religious faith with them, and the evil of higher taxes is so self-evident to them, that they find it difficult to articulate reasons for their position. In fact, a lot of the opposition to taxes is based on a still-deeper article of faith: You can reduce the size and influence of government by cutting taxes.

The problem is that the "starve the beast" theory has never worked. The government, whether under Democrats, Republicans or Martians (I refer to the late Bush administration), continues to spend, borrowing to make up the difference. The Republicans cannot admit that starving the beast is an ineffective strategy, however, because they don't have any other strategy for cutting the size of government, except by doing things that voters don't like.

Let's face the obvious problem: The people, in their majesty - vox populi, vox dei - want more services than they are willing to pay for. They want the government to do things that cost more than the amount of money they are willing to allow it. And they don't want their representatives to tell them that they can't have it both ways.

You can't cheat an honest man, as the saying goes, but what we have here is a dishonest electorate.

Hanson's End of Year Assessment - or Is It the End of Civilization

Greetings, all. A happy Saturday to you, and I hope it's a good one.

Victor Davis Hanson blogs, writes for neocon magazines like Commentary, and, apparently, worries a lot about the state of America here at the end of 2009. At least, in this column , Hanson seems concerned that we're worse off under Obama than we were under George W. Bush. Calm, cool, competent, and charismatic - that's the W we all remember, right?

Anyway, there's a catalog of woes here, and Mr. Hanson is right about one thing: If we don't see some of these things turning in a favorable direction by midsummer 2010, the Democrats and the Obama administration could be in real trouble. Everybody who wants Mitch McConnell to be the Senate's next Majority Leader raise your hands! I didn't think so.

An Appeal for Passion

Michael Gerson's article, on Obama's Afghan decision makes what I think is a very important point, although Gerson himself may not be fully aware of it: Reason doesn't motivate. President Obama's decision may be driven by reason and calculation, but it needs to be justified to the public and the military with feeling, with passion, with a bit of fervor.

So far, I think Gerson is right. People don't send their kids to war, they don't like to see kids sent to war, because it's the reasonable thing to do. They have to feel the rightness of the policy. So Mr. Obama does need to use his rhetorical gifts to sell the public on this war, as well as to show the military that he is committed to this policy.

However, when Gerson wrote speeches for George W. Bush, he used emotion, and Bush ended up as the most unpopular President since Nixon, and regarded by many as the worst President since James Buchanan. There are two problems with appeals to emotion:

First, emotion can be used to replace reason, to support policies that aren't really justified. One of the dangers here is that emotion can suppress debate, can prevent the consideration of reasoned alternatives.

Second, once the public and the military have been persuaded of the rightness of a course, once they are fully committed to the policy, the leaders lose their flexibility. If you look at the end of Vietnam, one of Richard Nixon's problems was that so many Americans looked at the negotiations with North Vietnam and the Viet Cong as a betrayal of the men and women who had died in the war. And those Americans were the ones who supported the war, the ones who enabled Nixon to maintain some momentum in Congress.

Appeals to emotion may be necessary to gain public support for an increasingly unpopular war, but if Obama takes that course, he may find himself riding the tiger of public opinion.

New Books on Sarah Palin

I know, Sarah Palin's own book is out now, but this review of two accounts of the Palin phenomenon could be interesting either as background before reading Palin's own book, or for fact-checking after you read her account. Those of you who are in need of more political reading matter - here you go!

So you shouldn't have to look into the link provided above, here are the two books in question:

SARAH FROM ALASKA
The Sudden Rise and Brutal Education of a New Conservative Superstar
By Scott Conroy and Shushannah Walshe
PublicAffairs. 301 pp. $26.95

THE PERSECUTION OF SARAH PALIN
How the Elite Media Tried to Bring Down a Rising Star
By Matthew Continetti
Sentinel. 226 pp. $25.95

Three Obstacles to Health Reform

I mentioned in my previous post that I had submitted an essay to The Washington Post's pundit contest. This is not that essay; it is the original version, before I realized that the contest had a 400-word limit. (This piece runs 655 words, or so Word tells me.) I hope you enjoy it.


I think I’m a pretty typical American, so far as my health insurance situation is concerned. I get my health insurance through my employer, and my share of the cost comes out of my bi-weekly checks in an amount small enough to cause me very little pain. I’ve been happy with the service I’ve gotten from my healthcare providers, including my radiation treatments for prostate cancer, though I was irritated to learn that my favorite eye doctor was excluded from the latest list of preferred providers. I think it’s really too bad that some people don’t have insurance, and I worry that my own insurance might either go away or become so expensive that I won’t be able to afford it.

There are problems with our current system, and I think something ought to be done about them. At the same time, I don’t want to wreck a system that seems to produce pretty good results most of the time. So I welcome the initiatives by the Obama administration and the Congress to reform the system. There are just a couple of areas in which I think the pro-reform forces (and their opponents) seem to ignoring the elephants in the room.

First, there’s the simple matter of supply and demand. If demand for a good or service goes up, what did our economics teachers tell us would happen to the price? The price will go up as well. What does the act of providing insurance to many uninsured people, or insisting that their employers and the insurance companies provide coverage, amount to but an increase in demand? As many as twenty-five million people who do not have insurance today will be able to walk into a doctor’s office or a hospital, flash a card, and demand service. That is a ten percent increase in the demand for medical services, and I would expect the prices of such services to increase accordingly.

The second elephant in the room is the rate schedule. Doctors and hospitals complain that Medicare and Medicaid pay less than the “cost” (read: list price) of various procedures and tests. Congress has declined to enforce limits on payments to doctors in the past. And some doctors won’t take Medicare patients. When people compare the U.S. system to that in other countries they need to note that the rates for some procedures are set much lower than those here, and that doctors and hospitals aren’t permitted to decline to treat people. One way to lower costs is to enforce a reasonable rate schedule and demand that all doctors and hospitals accept payments according to that schedule or lose their licenses.

Third, there is the shibboleth about coming between the doctor and the patient. We don’t want, says President Obama, to have any bureaucrat, government or private, coming between the doctor and the patient. Well, we may not want that, but that’s exactly what we need to do. We need to stop doctors from ordering unnecessary tests (especially when they own a share in the laboratory), from performing unnecessary procedures, and from prescribing unnecessary drugs. The total of healthcare costs is the total income of hospitals, medical workers, insurance companies, pharmaceutical companies, and the government agencies involved (Medicare, Medicaid, USPHS, Indian Health Service, and so on). In order to lower healthcare costs, we have to lower the incomes of some of those people and organizations.

There are a lot of specific improvements in the healthcare reform bills before the Congress. A lot of good things are going to be done. But none of those things will lower the cost of the healthcare system unless we face the three problems I have outlined above. Frankly, I don’t think that Congress is capable of dealing responsibly with problems whose solutions are likely to be very unpopular. But I can always hope that there are some adults up on Capitol Hill. I’d like to think that there are.