Reihan Salam, Paul Ryan, the Safety Net, and Public Sector Profiteers

post by Bill Gardner

Reihan Salam recommends two lines of argument that he attributes to Rep. Paul Ryan:

• "[C]onservatives shouldn’t attack the safety net."
• Rather, they should "Attack Public Sector Profiteers... and the lack of spending restraint that actually exacerbates cost growth in health, education, and other domains."

I agree that conservatives should not attack the safety net, so a good first step would be to just stop doing it. Ryan's proposal would leave the safety with a gaping hole. There are more than 45 million Americans without health insurance. This number will decresease because of the expansion of Medicaid under the Affordable Care Act, but Ryan would repeal that. Among the uninsured, there are healthy Americans who could afford health insurance but elect not to purchase it, and some of them would likely be induced to purchase it through Ryan's tax credit scheme. However, the majority of the uninsured are at less the 200% of the Federal poverty level, and cannot realistically afford private health insurance under Ryan's plan. We do not yet have a real safety net if large numbers of poor families fall through it.

OK, how about "Attack public sector profiteers"? Umm... let's see, which side is promoting class warfare here?  (And how well did that work out?) 

First, what could "public sector profiteers" mean? I think public sector would include not just government employees, but also private sector workers whose income depends on government programs. In Canada this would include nearly all doctors and nurses; both are unionized, even the residents have a union. It includes many health care providers in the states. What does it mean to call them profiteers? I doubt that Reihan Salam is challenging the right of teachers or health care providers to better themselves. "Profiteering" comes from war time, when military suppliers exploit an emergency to get enrich themselves by unethical means.

So what is unethical about how public sector workers pursue their interests? I will stipulate to the following:

1. Public sector demands for income or restructured work conditions sometimes harm the populations they are employed to serve.
2. By voting as a bloc, by making political contributions, by gaining great influence in left political parties, and by cloaking their self-interests under the needs of their vulnerable clients, public sector health care providers achieve considerable leverage over government. When they use that leverage to raise taxes, they are raising their incomes by taking money from taxpayers. 

These are tendentious arguments, but that does not mean they are wrong. On point 1, medical guilds and unions often structure care in ways that increase guild members' incomes but harm patients. If this seems implausible to you, read Atul Gawande's famous article about health care in McAllen, TX. Point 2 is just, I think, a fact.

So why won't I join in an attack on public sector privateers? I think there are cases where teachers unions or health care workers unions take the wrong side of an issue, and there I side with management in the interests of students or patients. But I wouldn't single them out as profiteers. Pharmaceutical and device manufacturers, hospital owners, insurers all pursue policies in their self-interest that compromise the best interests of patients (point 1). And they have vastly greater resources to influence the political process (point 2). So unless we want to routinely refer to all stakeholders as profiteers, it is not clear to me that the word has much application.

Moreover, our views about the motives and moral integrity of stakeholders give us zero useful information about how to reform health care. Consider this argument:  

1. Defense manufacturers and contractors sometimes produce weapons that earn them huge profits, but actually diminish national security and the safety of armed services members. 
2. By making political contributions, by gaining great influence in right political parties, and by cloaking their self-interests under the banner of patriotism, defense manufacturers achieve considerable leverage over government. When they use that leverage to raise taxes, they are raising their incomes by taking money from taxpayers. 

These points are both true, but they do not tell us what weapons we need to purchase, or how high to set the defense budget. "Attack the Defense Profiteers" is not a plan to make America more secure, and a plan to "Attack the Public Sector Profiteers" will not make it healthier.