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Don’t Let Government Get Its Hands on Healthcare

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According to Paul Krugman, that’s the unofficial rallying cry of the conservative opposition to health care reform. Across the country, much of the oxygen in the debate is sucked up by the tragic irony of Medicare recipients speaking out against a government takeover of health care. If the misinformation swamps our chances of overhauling the system, it will be an unmitigated disaster.

Yet it’s only the most vivid example of how too many Americans are blinded by anti-government ideology to the basic facts of how the nation’s economic and political system functions. And nobody says it better than Krugman. In his column on Monday, the economist pointed out that the very “government meddling” denounced on the right appears to have saved the economy from the worst of the economic crisis. Yet as Krugman has argued in the past, we could potentially be in much better economic shape than we are today – with hundreds of thousand fewer people out of work, for example – if we had disregarded calls to limit the size of “government meddling” and enacted a larger and more effective stimulus in the first place.

This ain’t just about Paul Krugman, perceptive though I think he is. Nor is it simply about the big national debates on health care and economy. Again and again, good, even necessary public policy smacks up against public ignorance about the way government is already deeply and intrinsically involved in structuring markets that are made to appear “free” of interference. Clear-eyed libertarians can argue that we’d be better off with a self-sustaining, self-regulating free market. The distortion comes in when we imagine that unobstructed free markets brought us the benefits we enjoy today.

Consider a point John Petro illustrated a few weeks back, in which investing in mass transit and changing land use policies gets painted as intolerable government coercion. In effect, spending public money to extend new roads, new sewer lines, new electric wiring and emergency services to areas on the exurban fringe is invisible, but public investment in light rail shows the long arm of big government. Similarly when a municipality makes a zoning ordinance that permits only large lots with single family homes in a given area, that’s the free market. If zoning regulations are altered to permit condos or mixed-use buildings, suddenly the government has “interfered.”

The same dynamic was at work from very rise of the modern American right in the suburbs of Orange County, California, where communities that owed their existence and day-to-day economic prosperity to lucrative government defense contracts, infrastructure spending, and federally insured home loans nevertheless launched contemporary conservatism with a fierce opposition to taxes and other manifestations of what they saw as unwarranted government interference in their apparently “self-made” lives.

Ideology neatly obscured the extensive public subsidies underlying ostensibly private success. It continues to do so today, preventing us from asking the genuinely relevant questions: not whether we should have government involvement, but which public actions will most effectively promote broad-based prosperity, helping to strengthen and expand the American middle class in both the short and long-term. Starting with this question helps us to evaluate whether aid to homeowners makes more sense than a bank bailout, for example, or whether food stamps make better stimulus than tax cuts. It makes it harder to distinguish between government action that lifts us all up and policy that benefits the few.

Amy Traub: Amy Traub is the Director of Research at the Drum Major Institute. A native of the Cleveland area, Amy is a Phi Beta Kappa graduate of the University of Chicago. She received a graduate fellowship to study political science at Columbia University, where she earned her Masters degree in 2001 and completed coursework towards a Ph.D. Her studies focused on comparative political economy, political theory, and social movements. Funded by a field research grant from the Tinker Foundation, Amy conducted original research in Mexico City, exploring the development of the Mexican student movement. Before coming to the Drum Major Institute, Amy headed the research department of a major New York City labor union, where her efforts contributed to the resolution of strikes and successful union organizing campaigns by hundreds of working New Yorkers. She has also been active on the local political scene working with progressive elected officials. Amy resides in Manhattan Valley with her husband.

This article originally appeared on DMI Blog on August 11, 2009 and is reprinted here with permission from the author.


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