In late spring, oil prices dipped below zero for the first time ever. Futures contracts for May delivery traded as low as negative $37 a barrel, as producers and speculators paid refineries and storage facilities to take excess crude off their hands.
In some sense, this historic moment was inevitable. Oil markets are completely saturated. Worldwide coronavirus lockdowns have depressed energy demand. And in March, Saudi Arabia and Russia announced they would increase production, thus exacerbating the glut.
President Trump has tried to help beleaguered U.S. producers. He recently mediated a deal between Saudi Arabia, Russia, and other major oil producers, who collectively agreed to cut production by nearly 10 million barrels a day.
But prices are still falling. And now, the White House is toying with other ways to prop up U.S. oil producers, ranging from tariffs on imported oil to direct cash payments to energy companies.
This desire to help energy companies, and the millions of workers they employ, is commendable — but ultimately counterproductive. In the long run, the industry will emerge stronger if the White House allows the free market to resolve this crisis.
This pandemic-induced economic crisis is going to be painful for the energy sector. Cost-cutting and layoffs are already underway.
But the industry is strong and adaptive, and has bounced back from past crises by investing in technology. In fact, economic pressure encourages the kind of innovation and belt-tightening that helps companies thrive in the long run.
The United States last faced low oil prices in 2014 and 2015, when Saudi Arabia ramped up output to try to cripple U.S. producers that specialized in fracking — a technique used to extract oil from underground shale rock. By early 2016, prices had dropped below $30 a barrel, well below what U.S. shale producers needed to break even.
The government didn’t come to the rescue, which forced frackers to get creative. They researched how to extract more oil for less, and came up with a variety of new techniques, like drilling several wells simultaneously and using drones to detect faulty equipment. As a result, the average break-even price for frackers dropped from $69 a barrel in 2014 to an average of $40 a barrel by 2017. Had the government tried to solve the problem by slapping tariffs on Saudi crude, the U.S. oil industry likely would have never set its all-time production record of 13.1 million barrels a day in February.
We can be confident the U.S. energy industry will apply its ingenuity to this crisis, too — because these days, it excels at invention. In 2019, the oil and gas sector increased adoption of digital technologies, including cloud data storage and new software. Over the next five years, digitizing could slash the cost of oil production by almost 10 percent.
By using sensor technology — tiny, data-tracking devices attached to oil-field gear — producer ConocoPhillips recently cut in half the amount of time it took to drill new wells in South Texas. Other companies are using data analytics to search for the best drilling locations.
In short, the pressures of a downturn are likely to encourage even more future-focused transformation. The industry doesn’t need to hide behind tariffs. If we trust the free market to encourage creativity, in the long run, we’ll all benefit from a cheaper and more efficient energy supply.
Editor’s Note: This is an edited excerpt, comprising the Introduction and Conclusion, from a longer essay by Mr. Atlas. Titled ‘The Costs Of Regulation And Centralization In Health Care,' it is published by the Hoover Institution as part of a new initiative, "Socialism and Free-Market Capitalism: The Human Prosperity Project."
The overall goal of US health care reform is to broaden access for all Americans to high-quality medical care at lower cost. In response to a large uninsured population and increasing health care costs, the Affordable Care Act (ACA, or “Obamacare”) aimed first and foremost to increase the percentage of Americans with health insurance. It did so by broadening government insurance eligibility, adding extensive regulations and subsidies to health care delivery and payment, and imposing dozens of new taxes. The ACA was projected to spend approximately $2 trillion over the first decade on its two central components: expanding government insurance and subsidizing heavily regulated private insurance.
Through its extensive regulations on private insurance, including coverage mandates, payout requirements, co-payment limits, premium subsidies, and restrictions on medical savings accounts, the ACA counterproductively encouraged more widespread adoption of bloated insurance and furthered the construct that insurance should minimize out-of-pocket payment for all medical care. Patients in such plans do not perceive themselves as paying for these services, and neither do physicians and other providers. Because patients have little incentive to consider value, prices as well as quality indicators, such as doctor qualifications or hospital experience, remain invisible, and providers do not need to compete. The natural results are overuse of health care services and unrestrained costs.
In response to the failures of the ACA, superimposed on decades of misguided incentives in the system and the considerable health care challenges facing the country, US voters at the time of this writing are being presented with two fundamentally different visions of health care reform: (1) a single-payer, government-centralized system, including Medicare for All, the extreme model of government regulation and authority over health care and insurance, which is intended to broaden health care availability to everyone while eliminating patient concern for price; or (2) a competitive, consumer-driven system based on removing regulations that shield patients from considering price, increasing competition among providers, and empowering patients with control of the money. This model is intended to incentivize patients to consider price and value, in order to reduce the costs of medical care while enhancing its value, thereby providing broader availability of high-quality care.
Outside a discussion of the role of private versus public health insurance are two realities. First, America’s main government insurance programs, Medicare and Medicaid, are already unsustainable without reforms. The 2019 Medicare Trustees report projects that the Hospitalization Insurance Trust Fund will face depletion in 2026. Most hospitals, nursing facilities, and in-home providers lose money per Medicare patient. Dire warnings about the closure of hospitals and care provider practices are already projected by the Centers for Medicare and Medicaid due to the continued payment for services by government insurance below the cost of delivery of those services. Regardless of trust fund depletion, Medicare and Medicaid must compete with other spending in the federal budget. America’s national health expenditures now total more than $3.8 trillion per year, or 17.8 percent of gross domestic product (GDP), and they are projected to reach 19.4 percent of GDP by 2027. In 1965, at the start of Medicare, workers paying taxes for the program numbered 4.6 per beneficiary; that number will decline to 2.3 in 2030 with the aging of the baby boomer generation. Unless the current system is reformed, federal expenditures for health care and social security are projected to consume all federal revenues by 2049, eliminating the capacity for national defense, interest on the national debt, or any other domestic program.
Second, beyond the growing burden from lifestyle-induced diseases, including obesity and smoking, that will require medical care at an unprecedented level, America’s aging population means more heart disease, cancer, stroke, and dementia—diseases that depend most on specialists, complex technology, and innovative drugs for diagnosis and treatment. The current trajectory of the system is fiscally unsustainable, and millions are already excluded from the excellence of America’s medical care.
In most nations, heavy regulation of the supply of health care goods and services care is coupled with marked centralization of payment for medical care. The United States has a far less centralized but still highly regulated system in which health expenditures are roughly equal from public and private insurance. The system is characterized by its unique private components: more than 200 million Americans, including most seniors on Medicare, use private insurance. The US system is the world’s most effective by literature-based, objective measures of access, quality, and innovation, but US health care demands reform. Health care costs are high and increasing, and the projected demand for medical care by an aging population and the future burden of lifestyle-related disease threaten the sustainability of the system.
Although the regulatory expansion under the Affordable Care Act reduced the uninsured population, it generated increased private insurance premiums, a withdrawal of insurers from the market, and sector-wide consolidation that is historically associated with higher prices and reduced choices of medical care. In its wake, American voters are now presented with two fundamentally different visions for reform that have a diametrically opposed reliance on regulation and centralization: (1) the Democrats’ single-payer proposals, including Medicare-for-All, based on the most extreme level of government regulation and authority over health care and health insurance; or (2) the Trump administration’s consumer-driven system that relies on strategic deregulation to increase market-based competition among providers and empowering patients with control of the money. Both pathways are intended to contain overall expenditures on health care and broaden access.
Intuitively, a single-payer model of health care represents a simplification, but the reality is that such centralized systems impose overwhelming restrictions on both demand and supply. Government-centralized single-payer systems actively hold down health care expenditures mainly by sweeping restrictions on the utilization and payment for medical procedures, drugs, and technology under the single authority of the central government. The overall costs of this false simplification are enormous, creating societal costs that extend beyond calculated tax payments that are required to support such a system.
The alternative approach involves rule elimination and decentralization, that is, strategic deregulation, to induce competition for value-seeking patients. Reducing the price of health care by competition, instead of more regulation, generates lower insurance premiums, reduces outlays from government programs, and broadens access to quality care. Broadly available options for cheaper, high-deductible coverage less burdened by regulations; markedly expanded health savings accounts; and tax reforms to unleash consumer power are keys to achieving price sensitivity for health care. Reforms to increase the supply of medical care by breaking down long-standing anti-consumer barriers to competition, such as archaic certificates‐of‐need for technology, unnecessary state‐based licensure of physicians, and overly regulated pathways to drug development, while facilitating transparency of price and quality among doctors and hospitals, would generate further competition and reduce the price of health care. Preliminary results from such deregulatory actions demonstrate promising results and offer an evidence-based context for the broader discussion of the role and reach of government regulation in socialism compared with free-market systems.
Unexpected expenses are never welcome and no one likes a costly surprise. So it’s no wonder that there is a lot of talk in Washington and Congress about “protecting” patients from surprise medical bills. Current legislation — SB 1895 — sponsored by Senators Lamar Alexander (R-Tenn) and Patty Murray (D-Wash.) makes such claims. It sounds good until you realize that all the “protecting” talk is just that — talk. Even worse, is that rather than protecting consumers, it will make things worse.
The most common cause of a surprise medical bill is when a person uses a healthcare provider that is not in their insurance plan’s network of providers. While it doesn’t happen that often, it most typically happens in a hospital emergency room — either because the patient is not able to consent to care or because the patient received inaccurate information about insurance coverage.
Insurance companies have contracts with healthcare providers (both doctors and hospitals) to provide medical services at pre-negotiated discounted rates. That makes them “in-network.” The “out-of-network” providers charge a price without any pre-negotiated discounted rates, meaning the out of network costs are greater.
While it is true that most doctors are in most insurance networks and hospitals often have ways to shield their patients from higher costs, there are occasional gaps that remain. And while it is uncommon, it can be costly when it occurs. But despite their rarity, these circumstances are used by politicians to make us think they are proactively solving problems for our benefit. Sadly, they are doing nothing of the sort.
There are a number of proposals currently under consideration in the halls of Congress to fix surprise billing, but they have a couple important things in common. In one-way or another, all of these pieces of legislation entrust the government with the power to set prices. This will impose heavy costs even if executed properly, an idea that is almost laughable given the government’s track record on reducing costs.
This reminds me of the Obama-Biden repeated promise that they had a plan that would save us all thousands of dollars every year and allow us to keep our healthcare plan if that’s what we wanted. Obviously, Obama and Biden failed to deliver on that promise. It was the lie of the year even as judged by liberal fact checkers. Literally, millions of Americans lost their preferred plans and virtually everyone saw their health insurance costs increase, not decrease, by thousands.
So a healthy dose of skepticism about promises to fix surprise billing with government price controls is entirely justified. It should not be enough for politicians to repeat over and over the mantra that they’ve got the fix. We’ve seen this play before. It doesn’t end well.
Government-imposed price controls skew incentives and reduce the availability of quality healthcare. To make things worse, government-imposed price controls also reduce the likelihood of future healthcare innovations and slow the development of promising medicines and procedures. But the bad news doesn’t end there — current proposals shift more and more power to health insurance companies, rather than giving consumers more control over their own healthcare.
Regardless of what their true motives were or are, the results we have witnessed in the last 50 years from politicians promising “fixes” has been that things end up costing a lot more than promised, and government gets more and more control. Those who can afford lobbying efforts may escape the costly impact of these government mandates. But rarely do these promised fixes on balance help the average citizen.
The marketplace — and the negotiations that take place when you have two or more parties all trying to maximize the value that they receive — has a knack for providing high quality goods and services for the lowest possible prices. That is the process that has brought us smart phones that have more computing power than was used in the 1960s in the Apollo program. It’s also the process that allows consumers to own huge flat screen televisions at a cost of several hundred dollars. We need to harness that power and that drive to high quality and low prices in the medical arena.
Instead of continuing to empower government and those who can afford lobbyists to protect their interests, let’s try reforms that put economic power back in the hands of healthcare consumers. Let’s trust the marketplace to do what it does so well — boost quality and keep prices comparatively low. We trust the marketplace to provide us with food, housing, technology, and a thousand other things, why not our healthcare as well?
Today, the average American eats better and spends a lot less to feed themselves than our great grandparents did. As a result, we have access to all manner of foods — something even kings didn’t have a few generations ago. Additionally, we work far fewer hours to obtain that food. As a result, we have more money for larger, more comfortable homes, nice automobiles, vacations, and hospitals — something average Americans in 1776 didn’t even dream about.
So if we want to see more affordable and better quality healthcare available to us all — why not harness the power of the marketplace? Where’s the proof that government-run schemes produce the needed quality and low costs? In contrast, the marketplace has a strong track record. Let’s try it!
By Daily Times•
In his final attempt to torpedo Pennsylvania’s Mariner East 2 pipeline, now-former Chester County District Attorney Thomas Hogan filed criminal charges against security contractors hired to secure pipeline construction sites. Sadly, the accusations are merely another publicity stunt in the D.A.’s crusade to upend the permitted project rather than an honest effort to serve the public. Pennsylvanians deserve better than this kind of gamesmanship that puts political agendas ahead of residents’ welfare.
The charges accuse several security personnel employed by Mariner East of paying state constables to provide security for the pipeline during construction. The constables’ authority, Mr. Hogan alleges, was used as a “weapon” to “intimidate citizens.” But the facts of the situation tell a different story – one that when coupled with the D.A.’s record of claims against the Mariner East point a finger back at Mr. Hogan for politicizing his public office.
It’s not uncommon for businesses of all industries to employ private security. That’s especially true for energy developers and operators, who regularly hire personnel to not only protect their investments, but also to ensure individuals are not inadvertently injured by equipment or ongoing construction around infrastructure sites.
Long before the Mariner East developers contracted the security personnel now under scrutiny, they consulted local law enforcement about the possibility of using state constables. Those authorities raised no concerns. And it’s hard to imagine why they would.
Pipelines have become targets for environmental extremists, and reports of sabotage and other criminal activities against energy infrastructure have grown in recent years. In fact, one disgruntled central Pennsylvania landowner even lured bears to pipeline work sites, set fires near equipment, and harassed workers in an unlawful attempt to halt the pipeline. Another group admitted to sabotaging equipment in southeast Pennsylvania. It’s a sad reality that pipeline operators often need extra security to prevent senseless attacks, and based on past criminal activity, it’s necessary for the Mariner East builders to take additional precautions.
It’s also important to understand the function of Pennsylvania’s constables. Like a sheriff, a constable is an elected or appointed position in the executive branch of government. Primarily, they serve at the direction of the courts to issue summons and warrants and the like, but they are fully empowered to enforce both criminal and civil laws.
Unlike most law enforcement officials, constables do not receive a set salary. They are compensated by assignment at rates established by state law. As public peace officers, constables are employed by a third party – never directly, as a security guard would be. In that way, Mariner East’s situation is not unusual: The developer hired a private contractor to secure the construction sites. The contractor then enlisted the support of state constables.
John-Walter Weiser and Philip Intrieri, the president and the solicitor of the Commonwealth Constable Association, respectively, recently called out the absurdity of the Chester County D.A.’s claims. “It is frankly offensive to accuse a constable of ‘selling his badge,’ when he is only operating under a fee-driven system he did not create, and which is intended to save our tax dollars,” Weiser and Intrieri wrote last month. “Filing felony charges of law when that law is unclear is a grievous abuse of power.”
It’s impossible to reconcile the precautions taken to add extra security around the Mariner East Pipeline with the charges now being leveled. Instead, the evidence points to an ideological campaign against midstream energy infrastructure. Mr. Hogan has criticized Mariner East and has promised that other charges are “coming down the line.” In his statement announcing the most recent allegations, Mr. Hogan goes so far as to accuse Gov. Tom Wolf of being “asleep at the wheel.” All this was said and done as Mr. Hogan was leaving office.
The D.A.’s attacks against the Mariner East Pipeline seem to peel back the true motives behind these latest charges – which are to derail energy infrastructure deployment in Pennsylvania. But these accusations are too serious for residents to accept as politics as usual. As Hogan’s successor Deborah Ryan takes office, it is critical that Pennsylvanians are afforded an open debate about the Commonwealth’s energy security – not policy by litigation that, apparently, will readily sacrifice those who find themselves on the wrong side of the agenda of those in power.
So many of our institutions failed us during the pandemic. Free enterprise isn’t one of them.
When future historians tell the story of this pandemic, I hope American capitalism is not so despised and maligned by the professoriate that they leave out the pivotal role private enterprise and individual autonomy played, not just in slowing and ultimately defeating the virus, but in getting the country back to work.
It was individual Americans who started socially distancing in March, as COVID-19 took hold in Italy and many mayors and governors were still calling fears of contagion from China overblown, if not bigoted. By the time our leaders came around to the crisis, millions of American workers and their employers were already taking steps to keep each other safer. And while Republicans and Democrats in Washington played politics with financial aid aimed at blunting the great economic pain necessitated by shutdowns, thousands of businesses, trade associations, and patrons were starting relief funds for the most heavily impacted.
Among the companies that could stay open, I will admit I am biased in my pride for one in particular.
Home Depot, the company I helped found, boosted wages and doubled overtime to acknowledge the valor of workers who wanted to stay on the job during some very scary times. Knowing that kids were at home because schools were closed, Home Depot expanded paid time off to help parents and made hours more flexible for older workers who were deemed at risk for COVID-19 infection. Many other companies offered similar incentives.
When it came time to attack the virus itself, businesses around the country showed the same decency and ingenuity, quickly repurposing to meet demand for personal protective equipment (PPE) such as masks and gowns for frontline medical workers. Apparel company Brooks Brothers and MLB uniform tailor Fanatics switched their stitch to make masks. So did hockey company Bauer and retail stores David’s Bridal and Jo-Ann Stores. A NASCAR team, North Carolina-based Stewart-Haas Racing, helped its neighbors by putting idle racing transports back on track, delivering 2 million medical masks to Novant Health facilities in North Carolina, South Carolina, and Virginia. Whiskey and vodka distilleries, especially small, locally owned ones, switched to making bottles of alcohol-based hand sanitizer.
Cutting-edge manufacturers used 3-D printers to make PPE. Charlottesville-based women’s shoemaker OESH made a mask that had soft edges, making its seal as strong if not better than what would be provided by N95-rated masks. There wasn’t time for FDA approval (which is a question we should take up later), but the skillful engineering made the mask a success.
One Delaware company, ILC Dover, worked with the National Institute for Occupational Safety and Health to shorten the regulatory review process from one month to a week. That way the company could make its new Powered Air Purifying Respirator hood, which provides 100 times the protection of an N95 mask, available to health-care workers attending to patients with COVID-19.
National big-box stores, corner-store pharmacy chains, and delivery services really stepped up in hiring temporary workers. Wal-Mart, Walgreens, CVS, Costco, 7-Eleven, Ace Hardware, Dollar Tree, Dollar General, Domino’s, Pizza Hut, Papa John’s, Instacart, FedEx, UPS, and grocery chains around the country all upped their hiring to meet demand and provide opportunities to the recently unemployed.
Perhaps most strikingly of all, tech companies have really shined. Amazon, Uber Eats, GrubHub and dozens like them made it possible to keep a social distance while keeping the homestead supplied with groceries and supplies. Tech companies didn’t just keep us fed, they kept us on the job. Employers used existing, but often untapped, IT capabilities provided by companies such as Zoom, Microsoft, Apple, and Google to transform a cubicle and conference-room workforce into a remote team interacting through a camera and video screen. In the short term this kept a company’s productivity up, and long-term applications could create a more flexible workplace that could better support parents or employees who want to live in a rural area.
Of course, the biggest heroes are yet to earn their fame. Hard at work are the world’s leading scientific and research minds toiling for vaccines and treatments. Eli Lilly, Johnson & Johnson, and Moderna all have billion-dollar investments into fast-tracking a cure.
Throughout this entire ordeal, which is far from over, our blinkered press has focused on the negative, on anecdotes of price gouging, temporary supply-chain disruptions and shortages, and companies that saw outbreaks in the workplace.
But it takes a special kind of dumb to look at all the institutions that came up short under the pandemic and put free enterprise anywhere near the top of the list. Our free-enterprise system is the best at allocating resources and responding to crises. The private sector should be praised, not demonized, for its efforts during this pandemic. The examples are numerous, and they keep on coming.
The best thing the government did, arguably, is get out of the way. Government watchdog Americans for Tax Reform has identified more than 600 rules or regulations that were changed to give companies the room to innovate and adapt to meet the demand for equipment and other goods created by the pandemic. My hunch is these are probably 600 regulations that do not need to come back once this is over.8
We are not a perfect country, but we do have something that will always help us prevail — either over a pandemic or the next pitfall we encounter. We have regular people who dare to do heroic things.
Americans don’t need to be told what to do, and companies don’t need command-and-control regulation to do what’s best for a community. That’s because Americans’ entrepreneurial spirit is the biggest factor flattening the curve.
ALEXANDRIA, Virginia, June 10 — The 60 Plus Association issued the following letter:
To: President Donald J. Trump, The White House, 1600 Pennsylvania Avenue, NW, Washington, D.C. 20500; The Honorable Alex M. Azar, Secretary, U.S. Department of Health and Human Services, 200 Independence Avenue, SW, Washington, D.C. 20201; Vice President Michael R. Pence, The White House, 1600 Pennsylvania Avenue, NW, Washington, D.C. 20500; The Honorable Seema Verma, Administrator, Centers for Medicare and Medicaid Services, 7500 Security Boulevard, Baltimore, MD 21244; Brooke Rollins, Assistant to the President, Director, Domestic Policy Council, 1600 Pennsylvania Avenue, NW, Washington, D.C. 20500
President Trump, Vice President Pence, Secretary Azar, Administrator Verma, Mrs. Rollins:
On behalf of millions of taxpayers and consumers across the United States, the Coalition Against Rate-Setting (CARS) urges you to oppose price controls on the healthcare system. For the past year, some members of Congress and some individuals in the Trump administration have repeatedly floated the idea of “fixing” the pressing problem of surprise medical billing through a “rate-setting” system. These fatally flawed proposals would have Washington, D.C.bureaucrats dictating to doctors the prices they should charge patients. Recently, Politico reported that the administration is considering a plan that would, “outlaw health care providers from putting patients on the hook for thousands of dollars in expenses — but without mandating how doctors and hospitals would recover their costs from insurers.”
While such reporting gives cause for cautious optimism, we recognize that much remains to be negotiated. As such, the Coalition would like to reiterate that any mandates or price controls would make surprise billing problems worse and disrupt care for millions of patients across the country. These effects would be particularly devastating as the COVID-19 pandemic continues to claim far too many lives. We therefore urge you to reject rate-setting and embrace market-oriented solutions to solve the pressing problem of surprise medical billing.
During the worst public health emergency in our lifetimes, millions of patients across the country have found themselves in emergency rooms and healthcare clinics. Many of them reasonably assumed their troubles would be over after being discharged, only to receive a surprise medical bill in the mail days or even weeks after being discharged.
Each year, 1 in 7 patients in the U.S. receive these unwanted, unexpected expenses after being sent home by their doctors. This devastating problem stems from increasingly narrow health insurance networks which increasingly refuse to compensate attending doctors at in-network medical facilities. Far-reaching pieces of legislation such as the Affordable Care Act (aka Obamacare; signed into law in 2010) have simply made the problem worse, and now, an estimated three-quarters of Obamacare plans feature narrow insurance networks.
Yet, despite federal interventions and regulations making the problem worse, some government officials want to double-down on bureaucratic control over the healthcare system. Members of Congress such as Sen. Lamar Alexander(R-Tenn.) and Rep. Frank Pallone (D-N.J.) have proposed rate-setting for doctors and repeatedly tried to insert this “fix” in Coronavirus-related relief legislation. Officials in the Trump administration have worked hard to get a thorough understanding of this issue and deliberate on their own plan to end unwanted medical expenses. But rate-setting would only make the problem worse, and lead to the widespread consolidation of hospitals, clinics, and doctor’s offices across the country. California has already tried this failed approach, implementing healthcare price controls in 2017. According to a 2019 American Journal of Managed Care study examining the law, rate-setting has led to healthcare facilities closing their doors and merging with other, larger practices. Doctors are even contemplating leaving California altogether.
On January 22, 14 advocacy groups and think-tanks formed CARS to warn lawmakers and the Trump administration about the myriad unintended consequences of rate-setting. CARS is now 34 groups strong, and its work has been cited extensively by national and state media. On April 28, CARS released a letter signed by more than 160 economists urging officials to reject healthcare price-controls.
CARS urges you to take these scholars’ arguments into account, and remain vigilant against federal overreach in the healthcare system. Millions of doctors are on the frontlines of the COVID-19 pandemic treating patients, and now would be the worst possible time to impose onerous price controls on them. Thank you for your time and consideration of this pressing issue.
Tim Andrews, Executive Director Taxpayers Protection Alliance
Christopher Sheeron, President, Action For Health
Bob Carlstrom, President, AMAC Action
Brent Wm. Gardner, Chief Government Affairs Officer, Americans for Prosperity
Norman Singleton, President, Campaign 4 Liberty
Ryan Ellis, President, Center for a Free Economy
Andrew F. Quinlan, President, Center for Freedom and Prosperity
Jeffrey L. Mazzella, President, Center for Individual Freedom
Thomas Schatz, President, Citizens Against Government Waste
Twila Brase, RN, PHN, President & Co-Founder Citizens’ Council for Health Freedom
Matthew Kandrach, President, Consumer Action for a Strong Economy
Jason Pye, Vice President of Legislative Affairs, FreedomWorks
George Landrith, President, Frontiers of Freedom
Saulius “Saul” Anuzis, President, 60 Plus Association
Mario H. Lopez, President, Hispanic Leadership Fund
Andrew Langer, President, Institute For Liberty
Harry C. Alford, Co-Founder, President/CEO, National Black Chamber of Commerce
Pete Sepp, President, National Taxpayers Union
Robert Fellner, Vice President & Policy Director, Nevada Policy Research Institute
Wayne Winegarden, Ph.D, Senior Fellow & Director, Center for Medical Economics and Innovation Pacific Research Institute
Joshua H. Crawford, Interim Executive Director, Pegasus Institute
Renee Amar, Vice President for Policy and Government Affairs, Pelican Institute for Public Policy
Paul Gessing, President, Rio Grande Foundation
Robert Alt, President & CEO, The Buckeye Institute
David McIntosh, President, The Club For Growth
James Taylor, President, The Heartland Institute
James L. Martin, Founder/Chairman, 60 Plus Association
Jessica Anderson, President, Heritage Action For America
America used to be the place where, as Emerson is said to have observed, the person building the better mousetrap could be assured the world would beat a path to their door. We were driven by an entrepreneurial spirit that led to an increase in global living standards and produced some of the great advances of mankind.
Nowadays the pathway to prosperity is blocked by plaintiffs’ lawyers, federal and state regulators, crusading consumers advocates, environmental activists and others who believe the only institution on which we can rely to solve the really big problems is government.
That’s a shame because the spirit of free enterprise problem-solving is still alive and well. Everyone who realizes there’s profit to be made coming up with solutions are hard at work doing what so many of the so-called smart people say is impossible.
“We are a nation that knows how to solve big problems when we set our minds to it,” says Nate Morris, the CEO of Rubicon, a technology company at the leading edge of 21st century waste management. “Waste is a big problem, and we should not wait for someone else to try to solve it. We should do the work, we should use innovation and free markets to drive transformation, and we should build a stronger, more resilient economy in the process.”
The numbers alone are scary. According to some estimates over the next ten years nearly 95 million metric tons of plastic waste the United States once sent to China for permanent disposal will have to go put elsewhere thanks to import restrictions.
Whether or not it can be done, an effort must be made to try. Right now there are two approaches: one, as typified by Rubicon’s efforts, relies on innovation, investment, and consumer-driven demand to creates a new infrastructure relying more on the use of recycled goods to manage waste and prevent the build-up of discarded plastics and other items the American shopper depends upon. The other approach, the one government regulators, social justice warriors, and those like them prefer is to the use and manufacture of certain items no matter how expensive, inconvenient, or comparably unsafe the alternatives might be.
On Wednesday Rubicon issued a report, Toward a Future Without Waste, that shows how technology-based solutions can increase the proliferation of sustainable products The evidence comes from its experiences delivering results for its customers, with plenty of examples demonstrating the market-based approach to waste and emissions reductions works. The company found, for example, that local governments could generate significant cost savings while sending fewer materials to landfills through the making better use of technology.
Using the RUBICON SmartCity technology suite “helped the city of Atlanta save up to $783,453 annually while reducing the recyclables going to landfill by 83 percent by adjusting the city’s solid waste service schedule,” according to the report. As one estimate has it, it has the potential to save US cities up to $208 million over the next 10 years through reduced disposal costs, optimized fleets, and other metrics. For cash strapped urban centers like Atlanta, that’s money that can instead be channeled into childhood conservation education and other environmental stewardship projects that can create a pathway to the clean air, water, and environment everyone wants but is so often too expensive to get, we’re told by experts, without draconian changes to the way we live our lives.
Advances in technology have also made it easier to dispose of products that are hard to recycle. The fast-food chain Chipotle partnered with Rubicon to create a mail-back pilot program at 25 of its locations to keep single-use gloves out of landfills. From April 2019 through December 2019, the report says, more than 625,000 gloves were recycled, giving the company plenty of incentive to expand the program to all its stores.
“There are currently two ways to make money from waste. One is by setting up the equivalent of a utility, where big corporations and big government agree to a one-size-fits-all approach, charging businesses and households to haul away their waste and bury it,” Morris says. “The other is a free market-based, dynamic approach: cooperate with others and innovate to help people reduce or reuse more of their waste— and inspire a new generation to build on our progress to bring about the end of waste as we know it.”
This is the kind of private sector, technology-based innovation that can change the planet for the better while adding favorably to the corporate bottom line. It requires no government regulation, no special licenses, and no additional fees to bureaucratic institutions that “feed the beast” while giving us all a cleaner world to live in.
As pressure mounts on Congress to bail out the U.S. Postal Service to the tune of $85 billion in total relief, the USPS needs to show its hand and prove to America whether or not COVID-19 is the true source of its financial troubles.
Many influential voices— including the Washington Post Editorial Board— have pointed to the fiscal deterioration of the USPS ($69 billion lost in recent years) and questioned how responsible it would be for Congress to write a check without first requesting some operational changes to achieve “a more permanent fix.” But first the Postal Service must prove itself deserving of the funds by showing a clear correlation between USPS’ projected COVID-19 impact and its bailout demands. Especially now that the Administration is pushing to combine the agency’s $10 billion credit line extension with key postal reforms, no bailout money should be awarded until USPS exercises complete fiscal transparency and produces the data to back up its dire claims.
With this blitz for systemic change gaining momentum in Washington, here are three more specific pragmatic elements of the USPS to address:
Refurbish internal operational inefficiencies
Consistent with The Post’s guidance, there are options to reorient the Postal Service into a leaner operation on its own— without the government stepping in. This includes looking at closing or consolidating underutilized postal facilities and potentially developing new products, provided that they pass muster through robust screening to ensure that the fiscal benefits outweigh the costs.
Further items include repairing protocols and compliance for postal management of contractors, use of scheduler tools, equipment purchasing, postage reselling, and more. Endeavors like these, which the USPS can implement on its own, are projected to save at least $3.2 billion annually. With a litany of internal elements to correct, it is a certifiable a myth by doomsayers that privatization would be on the horizon for the USPS. Simply ensuring that leadership’s guidance is applied throughout the organization, while also rooting out waste and abuse are instrumental to keeping it thriving as an independent entity.
Determine the truth about competitive products and packages: Drain or Gain?
The USPS has continually considered package delivery to be a ‘bright spot’, but it is essential for lawmakers, the Administration, and the public to know exactly what this means as the agency reports an increase in parcel delivery (1.6 million in volume, and $7 million in revenue) in recent troubling periods.
Under package profitability assumptions by the USPS, it must be determined how $13 billion of pandemic-induced losses would occur in the midst of a package surge. Per USPS reports, packages show an operating ratio of 65% – translating to 35 cents in profit per dollar of revenue. Thus, assumptions show that any losses elsewhere in the postal system should be covered by gains in packages.
A decline in First-Class Mail volume is extraneous to the equation as it is consistently the Postal Service’s most profitable base of products with revenues exceeding costs by a 2 to 1 margin. For USPS to deliver less mail in the current period only means a reduction in available revenue for USPS to financially support (cross-subsidize) other Postal products – like competitive items and parcels with ballooning systemic losses as a result of excessive costs.
The Postal Service cannot claim fiscal pandemic damage on one hand, and then also tout positive impact of parcels. For these reasons, a sensible solution is for lawmakers and Administration to pursue an ‘open book’ approach with full accounting transparency in which it is entirely clear how competitive costs are defrayed in the system.
Adapt to Evolution in Technology and Consumer Demand
Further leaning on recommendations of The Post, the post office could prepare for phasing out mandatory Saturday mail delivery, which USPS claims could save $2 billion per year. For many years the Postal Service has struggled to meet its own objectives in timeliness for First-Class Mail despite the ongoing concerns raised by its regulator.
Reducing the extent of weekend delivery would help the Postal Service to finally achieve the savings that it expected to accrue in recent years after eliminating single-piece overnight FCM service and shifting some mail from a 2-day to a 3-day service standard. During this initiative, the USPS only realized 5.6 percent of the projected savings of $1.61 billion for both years. Oversight of the Postal Service has also sought to accelerate the formation of strategies designed to mitigate threats to volume and to engage with the newly dominant digital communications industry in order to help to protect First-Class correspondence mail and make it relevant once again for future generations.
We should be preserving our laws and our freedom in times of crisis.
It’s reasonable to assume that the vast majority of Americans process news and data, and calculate that self-quarantining, wearing masks, and social distancing make sense for themselves, their families, and the country. Free people act out of self-preservation, but they shouldn’t be coerced to act through the authoritarian whims of the state. Yet this is exactly what’s happening.
There has been lots of pounding of keyboards over the power grabs of authoritarians in Central and Eastern Europe. Rightly so. Yet right here, politicians act as if a health crisis gives them license to lord over the most private activities of America people in ways that are wholly inconsistent with the spirit and letter of the Constitution.
I’m not even talking about national political and media elites who, after fueling years of hysteria over the coming Republican dictatorship, now demand Donald Trump dominate state actions. I’m talking about local governments.
Under what imperious conception of governance does Michigan governor Gretchen Whitmer believe it is within her power to unilaterally ban garden stores from selling fruit or vegetable plants and seeds? What business is it of Vermont or Howard County, Ind., to dictate that Walmart, Costco, or Target stop selling “non-essential” items, such as electronics or clothing? Vermont has 628 cases of coronavirus as of this writing. Is that the magic number authorizing the governor to ban people from buying seeds for their gardens?
Maybe a family needs new pajamas for their young kids because they’re stuck a new town. Or maybe mom needs a remote hard drive to help her work remotely. Or maybe dad just likes apples. Whatever the case, it’s absolutely none of your mayor’s business.
It makes sense for places like Washington, D.C., Virginia, and Maryland to ban large, avoidable gatherings. But it is an astonishing abuse of power to issue stay-at-home orders, enforced by criminal law, empowering police to harass and fine individuals for nothing more than taking a walk.
The criminalization of movement ends with ten Philly cops dragging a passenger off a bus for not wearing a face mask. It ends with local Brighton, Colo., cops handcuffing a father in front of his family for playing T-ball with his daughter in an empty park. It ends with three Massachusetts men being arrested, and facing the possibility of 90 days in jail, for crossing state lines and golfing — a sport built for social distancing — in Rhode Island.
There is no reason to close “public” parks, where Americans can maintain social distance while getting some air or space for their mental and physical well-being — or maybe see a grandchild from afar. In California, surfers, who stay far away from each other, are banned from going in the water. Elsewhere, hikers are banned from roaming the millions of acres in national parks. Millions of lower-income and urban-dwelling Americans don’t have the luxury of backyards, and there is absolutely no reason to inhibit their movement, either.
Two days before Easter, Louisville, Ky., mayor Greg Fischer attempted to unilaterally ban drive-in church services for the most holy day in Christianity. It’s one thing if people are purposely and openly undermining public health. The constitutional right to assemble peacefully and protest or practice your religion, however, is not inoperable in presence of a viral pandemic.
Would-be petty tyrants, such as Dallas judge Clay Jenkins, who implores residences to rat out neighbors who sell cigarettes for “putting profits over public health,” forgets that we are not ruled by him, and that he is merely our temporary servant.
But it’s important and necessary, say the experts. Great. Convince us. Most polls show that 80-something percent of Americans will stay home for the rest of this month even if lockdowns are lifted.
The question of how many lives would be lost if we didn’t shut down economy is a vital one, but it is not the only one. There is an array of factors that goes into these decisions. One of them should be preserving our laws and our freedom in times of crisis.
“Reality check,” writes Bethany Allen-Ebrahimian in Axios, “Citywide quarantines, travel restrictions and obsessive public health checks aren’t authoritarian. They’re the kind of total mobilization that happens during major national crises such as war, regardless of the system of government.”
This position, often repeated, is utter nonsense. For one thing, we aren’t at “war.” There are no coronavirus spies and no coronavirus sabotage. Affixing “war” to societal problems — the war on drugs being the most obvious example— is typically a justification for expanding state power. Also, authoritarianism isn’t defined as “strict obedience to authority at the expense of personal freedom except when there is a pandemic.” Your declarative sentences and forceful feelings do not transform the meaning of either authoritarianism or freedom. Though if we dump our principles every time there’s a crisis, they might as well.
They want to fix a false problem with solutions that don’t work!
One of the pillars of the internationalist world view that is solemnly proclaimed by the establishment is the dogma of climate change – what it is and how to fix it.
This view is accepted aa a fixture by such institutions as the United Nations and many national governments, including until recently, the United States government. We can thank President Trump for rejecting this nonsense. He withdrew the USA from the Paris Accord (which was negotiated by the Obama Administration, but never submitted to the Senate and therefore not ratified by the USA).
Most Democrat presidential candidates want to eliminate fossil fuels in 10 years although the entire world depends on fossil fuels for survival, and there is no comparable substitute for fossil fuels. Windmills are not only inconsistent, but they also create new environmental hazards. Solar panels seem to have a place for supplementary energy production, but they are not transportable or suitable for transportation.
Even their statement of the problem is out of date. Nobody can look at the violent weather we have been experiencing and doubt that the climate is changing. But when has it ever not been changing? As far back as records go there have been changes in the climate. Remember the Ice Age?
Yesterday the scientists were telling us that there is global warming and the polar ice cap is melting. If that were true, battery-driven cars wouldn’t help us much. The first thing to do would be to move all the seaside structures to higher ground (as Andrew Yang has recommended). But we see large numbers of people who won’t even move their towns away from flood plains after being flooded out every other year. How are we going to move New York City or Los Angeles inland?
Luckily. more recent data are showing that the ice cap isn’t melting anymore. Not only that, but after the Club of Rome’s first two reports (1972 & 1976) scared us all with the idea that pollution is the common enemy of all mankind but was controllable by human carbon emissions, the more sober climatologists have begun to assert that human intervention is vastly overrated. In fact, humans can’t change the weather; that’s just common sense. (In 1996, The Club of Rome admitted that “pollution” was actually used in their early reports as merely an intellectual construct aimed at uniting nations to rally to their cause).
It is true that air, water and food pollution are dramatically affected by human waste and therefore controllable by humans. But most of the damage in today’s world is done by the thickening of the world’s ozone layer (between the sun and the earth’s surface) which in turn is exacerbated by increased emissions of carbon dioxide. These emissions apparently are affected by the burning of fossil fuels like coal and petroleum products such as gasoline and fuel oil.
The most prolific producers of these pollutants are developing nations which were not even included in the Paris Accords’ quotas. It was basically an agreement by which the USA would pay for as much of the world pollution as India and China wanted cleaned up. Every Democrat running for the presidency vows to reinstate the Paris Accord.
The actual situation in the USA and the world was summarized in a press release from the UN’s International Energy Agency (IEA) as follows:
In fact, the International Energy Agency (IEA) found that the U.S. decrease in emissions was the largest total of any country, at 140 million tons. It also noted that over the last 20 years, U.S. emissions have decreased nearly one gigaton (1 billion metric tons).
Globally, emissions flatlined in 2019. After two years of growth, global emissions remained unchanged at 33 gigatons in 2019, even as the world economy grew by 2.9 percent.” (Fox News story, 2/11/2019)
The distribution of global activity is in the IEA release:
“A significant decrease in emissions in advanced economies in 2019 offset continued growth elsewhere. Emission in the European Union fell by 160 million tons, or five percent, driven by reductions in the power sector. For the first time ever, natural gas produced more electricity than coal and wind-powered electricity nearly caught up with coal-fired electricity. Japan’s emissions fell by 45 million tons, or around 4 percent, as output from newly restarted nuclear reactors upticked this year. Emissions in most of the rest of the world grew by nearly 400 million tons in 2019, with almost 80 percent coming from countries in Asia where coal-fired power generation continued to rise.” (IEA, 2/11/2019)
Thus, not only is the USA already doing its part to alleviate the effects of ozone pollution, but so are many other countries. The “existential crisis” of which Bernie Sanders so often speaks does not exist.
This is not to say that nothing more should be done about ozone pollution. The old saying applies: “Because you can’t do everything doesn’t mean you should so nothing.” We can and should do what we can to affect this problem. But our efforts are necessarily limited. For example, we can’t stop volcanoes from releasing more pollution in a day than humans can in weeks if not years. Our ancestors successfully adapted to continuous, sometimes drastic, weather changes. So can we.
I have argued elsewhere that a new set of ethical standards with respect to the world around us should be formed. Traditional Western religion teaches us that all other creatures exist for use by humans. I believe that modern science has given us another view of the complexities of the world. We must learn to treat this world with more respect and more consideration.
Appreciation for the beauty and brilliance of the world God has given us is a good first step. Crying WOLF! WOLF! is not.
Freelancers are rising up in opposition to the state’s new law regulating “gig workers.”
By City Journal•
Are California Democrats—responsible for the state’s new anti-gig-worker law, AB5—so out of touch that they’re not aware of the growing anger of their constituents? It appears so.
Since AB5 took effect on January 1, hundreds of thousands of Californians are finding their businesses in tatters. Musicians can’t join bands for a one-night gig, chefs can’t join forces with caterers, nurses can’t work at various hospitals, and writers must cap their submissions per media outlet to 35 per year. Under the law, these freelancers can no longer conduct the same business-to-business transactions they have for years or even decades. Clients with whom they fostered valuable relationships are gone—as are their successful careers and incomes. An overwhelming majority of professionals in fields affected by AB5 identify as liberals and have generally voted along the blue line. Today, however, many are so disillusioned with their representatives that they’re changing political loyalties.
When Gloria Rivera, a San Diego-based, Peruvian-born translator and interpreter, achieved U.S. citizenship, the first thing she did was register as a Democrat. “Now I’m seeing a lot of people like me who are either going Independent or Republican,” she says, “myself included. The Democrats are not listening to us.”
Lorena Gonzalez, the San Diego assembly member who authored AB5, faces public condemnation wherever she goes. Online and in person, independent contractors are confronting Gonzalez and demanding a repeal of the law. Her condescending response: independent contractors need the protection of union-driven labor laws. In a damning KUSI news interview, Gonzalez denied that AB5 has resulted in widespread income loss. Her dismissive attitude has fueled outrage against Democrats. “Lorena Gonzalez is doing a great job turning everybody red,” says Rivera.
Gonzalez deserves much of the blame for the AB5 train wreck, but she had plenty of support from her party: nearly every assembly member who approved AB5 is a Democrat, including Governor Gavin Newsom. Those opposed: Republicans and Independents. Senator Patricia Bates, a Republican state senator representing parts of Orange and San Diego counties, has been hearing from constituents who had no idea that they were swept up in the AB5 net. “They’re asking, ‘Who did this to me?’” says Bates. “I don’t like to make it partisan, but I have to tell them the majority party that runs the show did it. There’s a new awareness about the anti-business environment and how it affects their right to work, to be free.”
Independent contractors are entering new territory. Suddenly, a more conservative approach seems more attractive. “My entire political mindset has changed drastically following the enactment of AB5,” says Cathy Hertz, a freelance copyeditor of STM (science-technology-medicine) books, from Loma Linda. Hertz campaigned for Barack Obama cross-country at her own expense in 2008; she campaigned for him locally, in Los Angeles, in 2012. “Now I feel that the rights of entrepreneurs are being stifled, trampled upon, violated,” she says. “Free enterprise is one of the main pillars of modern democracy.”
Apparently oblivious to the reaction in California, congressional Democrats have passed HR 2474, a national version of AB5, known as the “Protecting the Right to Organize” or “PRO Act.” The PRO Act, designed to boost union membership, will put 57 million independent contractors across the country out of work if it becomes law. These enterprising professionals will be forced into low-paying jobs—if they can find them—with none of the autonomy, flexibility, or opportunity that they currently enjoy. When the Trump administration denounced the bill, people who normally hiss at mention of the president’s name found themselves in a peculiar position: feeling grateful.
As for Gonzalez, she’s up for reelection this year and is aiming for secretary of state in 2022. Her campaigns will be tougher than she likely imagines. The movement against her is ramping up.
“I see a revolution on the horizon,” says David Mills, a musician from Lake Elsinore who created the Facebook group Freelancers against PRO Act. “This may be the final straw that breaks the camel’s back. But I think it’s leading to something good. The American people on all sides are waking up. We’ve gotten too caught up in partisan support. Now we’re paying attention. There is a huge uprising. People had to lose their jobs to find out what it was.”
Kevin Kiley, a Republican assembly member representing a large swath of Sacramento and a vocal ally of independent contractors, agrees. In January, he led a rally on the steps of the state capitol against AB5 and introduced a bill to repeal it. “We have a capital that’s controlled by special interests, and the public good isn’t even considered,” says Kiley. “That disconnect is stark. I’m more motivated to change this law than anything I’ve ever worked on because it has such a direct and negative impact on peoples’ lives. I believe very deeply in economic freedom, the right to pursue your calling. AB5 is a grave moral offense. So if there’s a silver lining to all this, it’s giving a diverse range of people a window into the dysfunctional nature of politics in Sacramento. For those who are disenchanted with the political majority, there is now an opportunity for alternatives.”
Such alternatives are popping up around the state. Evan Wecksell, a comedian and tutor by trade, is running for state senate as a write-in candidate for District 25, which encompasses parts of Los Angeles and San Bernardino county. He was registered as a Democrat until recently. Today, he’s a Libertarian.
“I definitely sense a change,” says Wecksell. “People who swore they would never vote for a Republican are doing it. We were not up to speed with knowing what was going on in Sacramento, but AB5 was a lesson and we’re learning from it. They’re taking away our natural human rights.”
Independent contractors are a unique bunch. Deeply committed to individual liberty, they’re becoming a unified group of fighters in California. They come from all walks of life and political persuasions, and if voting differently means that they can continue to run their businesses as they see fit, then so be it. Unless Democrats change course, the AB5 revolt may be the Brexit that the U.S. never saw coming. California certainly didn’t.
America’s health care system is still a mess. The Affordable Care Act, Barack Obama’s signature legislative achievement, has sparked continued increases in premiums and deductibles while failing to bend the health care cost curve down as promised.
That’s just one of the assurances ACA supporters made about the new law it failed to keep. Obama was badly misinformed when he promised people could keep the coverage they had, if they liked it, once the ACA became law. Some suggest he knew at the time this was a lie, but he’s not saying, one way or another.
Yes, there are more people insured than ever before, but many of those people still can’t afford to use that insurance because the deductibles are so high. Plans in the individual markets are canceled from one year to the next, forcing people to re-enroll in something similar or find new insurance altogether.
That’s not the way it was supposed to be. Efforts at repeal collapsed thanks to the Senate Democrats’ procedural instance any plan to replace it be adopted with 60 votes or more. So much for what the people want.
The idea getting the most attention, the Medicare-for-All proposal first put forward by Vermont Sen. Bernie Sanders and embraced by other Democrats running for the party’s presidential nomination, is a non-starter. The non-partisan Committee for a Responsible Federal Budget estimates the Sanders’ plan “has a gross cost of $30.6 trillion and, incorporating offsets, would add $13.4 trillion to deficits over ten years under our central estimate.” The plans floated by former Vice President Joe Biden, Massachusetts Sen. Elizabeth Warren, former South Bend, Indiana Mayor Pete Buttigieg, and others also don’t come close to paying for themselves.
Obamacare was supposed to increase transparency for consumers, allowing them to make better decisions about the care they received and what it would cost. That hasn’t happened either, and though President Donald Trump is pushing for action from Congress to pass laws putting price tags on all kinds of care, nothing spectacular has happened in that area either – largely because the health insurance companies are still driving the train.
They helped write the ACA and are now employing armies of lobbyists to make sure they don’t go under because of it. They’re pursuing new laws and regulations to insulate them from their responsibilities to their customers, to protect them from liability, and to avoid paying for services using a variety of what can best be called coverage loopholes.
The biggest of these has come to be known as “surprise billing,” an issue the president has taken to heart. No one likes to get a bill they didn’t expect, especially when they thought they were covered for the expense. Yet let an in-network doctor perform a procedure at an in-network hospital using an out-of-network anesthesiologist and send tissue out for analysis to a pathology lab at a nearby, affiliated and out-of-network hospital, and that’s precisely what happens.
In that case, as I recently experienced for myself, the insurance suddenly doesn’t count because you went out-of-network. That you didn’t know it and that you asked ahead of time that everything to be done “in-network” doesn’t matter so you must pay for the out-of-network services performed. It doesn’t seem fair, but it’s legal.
Congress, led by Tennessee Republican Lamar Alexander, has crafted a bill to change that. The problem with the Alexander approach is that it relies on price controls. The track record of price controls creating adverse consequences is long and storied.
The bipartisan Alexander bill requires insurers to pay the surprise bills when they arise based on the average price for the services provided. This is called “benchmarking” and it’s a bad idea because it empowers the government to make further intrusions into the health care marketplace and gets the country all that much closer to a Medicare-for-All style system.
“Price controls” and “government rate-setting” are a large part of what helped wreck the U.S. health care system in the first place. Insurers need to own their responsibilities to their customers and level the playing field on their own.
There are free market solutions for these issues waiting for GOP support
On most of the issues highlighting the 2020 campaign, the Republicans have a great story, especially the economy, law enforcement, foreign policy (including trade), national security, energy, and job creation. The Democrats have concentrated on three critical issues, however, which are nearly ignored by most Republicans: the wealth gap, health care, and climate change
These issues are currently owned by the Democrat candidates; they have not even been addressed directly by the Republicans. This silence is a tragic mistake because current polls show that these three issues are of critical importance to significant numbers of the American electorate. If Republican candidates continue to ignore these two issues, they will suffer in the only polls that really count – the votes in November.
Today’s topic is the wealth gap, with discussions of health care and climate change to follow in succeeding columns. I use the term, “wealth gap” in preference to “wage gap” and “income inequality” because “wealth” includes assets which are relatively long range as opposed to “wages” or “income” which may fluctuate from time to time.
The Republican response to the wealth gap is the “trickle-down” economic theory: prosperity for the wealthy means incremental income to the entire workforce because the wealthy will of necessity invest in an expanding economy thus benefiting the workers who actually produce new goods and services by which the economy is actually expanded. This is the argument prominently featured by President Trump in his famous rallies.
And, measured by present and past metrics, it is true. A flourishing economy does indeed raise wages and job opportunities. When applied to a stagnant employment environment, the chief beneficiaries on a percentage basis are the lower wage workers – i.e. when a person goes from unemployed to employed, the percentage of improvement is 100%. This is, of course, a valuable trend.
The next step, however, poses an altogether different problem: in a tight labor market – which America is rapidly approaching – how does an employer retain an experienced worker? And an ancillary problem: how does the country avoid a steady inflation, as wages rise, and senior employees can seek and find ever higher wages?
There are free market solutions to both these questions. My answer may be considered by traditional economics a radical solution, namely profit-sharing. There are various ways to implement the concept of profit-sharing – e.g. stock grants or options, profit-based bonuses, or employee stock option plans (ESOP), among others.
The basic hedge against inflation is the fact that increases in income to the workers comes from profits rather than expenses, so prices do not have to increase. The operational result is that workers who have a stake in the performance of the company tend to work harder and more efficiently, and greater income leads to higher job satisfaction and loyalty.
There are other reasons to advocate profit-sharing, namely, redressing the imbalance in asset ownership in America, which currently shows that at least 80% of America’s wealth is controlled by 1% of the population. This is a frightening situation for a democracy which is founded on a prosperous middle class. Oligarchs are waiting to rule the nation (e.g. already three billionaires are running for president).
There is also a moral reason for profit-sharing which can be summarized as follows:
1) The increase in national wealth over the past 200 years is due primarily to increases in productivity, which in turn is due to new technologies.
2) The implementation of technological innovations involves a number of stakeholders – inventors, investors, managers, implementers and buyers.
3) The benefits of the new technologies are currently heavily weighted toward all the stakeholders expect the implementers – the workers who bring into actual being the ideas of the inventor – i.e. they design and build the machinery which produces the product, fabricate it, market and sell it, repair it and teach users. Without the implementors, there would be no technology – only ideas on paper.
4) All of the stakeholders should be rewarded when the product is sold; it is only fair, therefore, that each be rewarded in proportion to the value of their contribution to the success (or failure) of the product. This is called “profit-sharing”.
This idea is not as novel nor as radical as it may seem to traditionalists. In the first place, the entire history of free-market capitalism shows it ever evolving towards more and more recognition of the value of labor in the forward march of progress.
It is also true that the chief proponents of this march have historically been the organized labor movement – at least until the 1970’s. Since then American unions have shifted from ever advancing workers’ rights in the marketplace to attempting to achieve progress through government intervention, which has meant in practice an alliance with the Democrat Party and a slippery slope toward socialism.
The results have not been encouraging. We have seen the denuding of America’s manufacturing base, the disheartening imbalance of income between management and labor, and the gradual slipping of much of America’s middle class into poverty and desperation. The bureaucracy of American Labor has failed miserably in protecting and advancing the cause of America’s workers.
The most impressive advocacy for profit-sharing in today’s marketplace is called “Conscious Capitalism”. This is a rapidly growing group of companies who represent a new generation of free market businesses. It is both a movement and an organization.
As an organization, Conscious Capitalism, Inc. now numbers thousands of companies, millions of employees, with chapters in 41 countries, and a number of large firms including Federal Express, Southwest Airlines and Costco among others. (For more information, see www.ConsciousCapitalism.org).
As a movement, it counts Amazon as one of its colleagues along with many other companies, both large and small. While this group is not particularly fond of organized labor, I believe there is a place for Labor in this movement, unions which work with and not against management and represent workers who are both employees and recipients of prorated profits from their work.
The time for advancing workers’ rights is now – in the 2020 election campaign. To win back the workers of America, the GOP must move “Onward and Upward!”
Frontiers of Freedom expressed great alarm this week over the U.S. Postal Service’s (USPS) latest financial results which showed $748 million in losses during the first quarter of FY 2020.
George Landrith, President of Frontiers of Freedom, said:
“The U.S. Postal Service is hemorrhaging money! In the first quarter of FY 2020, they have already reported $748 million in losses. And it isn’t like 2019 was a good year. Last year, they lost an unbelievable $8.8 billion in FY2019. To put that into perspective, the Postal Service has posted 13 consecutive years with a net loss of a billion dollars or more, and its unfunded liabilities and debt now total more than $143 billion. It is extraordinarily difficult to lose that kind of money when you are operating a government-granted monopoly like the Postal Service has on First Class Mail.”
Frontiers of Freedom President George Landrith also called out the agency over its negligence and financials, stating:
“It is readily apparent that the current USPS business model is failing. It is up to Congress, the Postal Regulatory Commission, and the new heads of the USPS Board of Governors to address the ongoing challenges. This includes ending nonsensical postal subsidies, trimming down the agency’s excessive costs, and complying with new laws impacting the USPS.”
Frontiers of Freedom previously hailed the work of Congress and President Trump to address some of USPS’ major systemic flaws with the enactment of the Synthetics Trafficking and Overdose Prevention (STOP) Act in 2018. This bill was an essential step in requiring the Postal Service to meet industry standards in data collection and monitoring practices of packages that enter the U.S. from abroad.
Despite the required protocols to protect our communities from hazardous and criminal items, the Government Accountability Office reports that USPS continues to fall short on its requirements to provide Customs and Border Protection (CBP) with advanced electronic data (AED).
Failing to keep up with the directives of the STOP Act prompts further troublesome questions as the Department of Homeland Security embarks on robust initiatives to impede the flow of counterfeit and pirated goods. However, in assessing the Postal Service, DHS finds a “significant gap in the information CBP receives,” among numerous critiques and findings. Landrith remarked, “Ultimately, the work to intercept illicit drugs and contraband is an immense challenge, and there is simply no excuse for USPS to not do its part.”
On the USPS’ array of responsibilities, Landrith concluded:
“Americans should be greatly concerned about the USPS procrastinating on its priorities. Looking ahead, it is crucial for the board to install a new Postmaster General with well-qualified business expertise. The demands of stakeholders, legislators and citizens continue to go unanswered. The path to reform will be wide-ranging, and USPS leaders and lawmakers will need to act with urgency.”