Thursday, October 30, 2008

It’s Time To End Unemployment As We Know It

Congress has coughed up seven-hundred billion dollars so far to cover the bad bets made by the high-rolling denizens of Wall Street. Henry Paulson and Ben Bernanke have managed to scrape up a few hundred billion more here and there to shore up and bail out companies they deemed to be “too big to fail.” Despite the infusion of this tsunami of taxpayer and governmental largess, the stock market is still in free fall because investors realize that we are in the early stages of a recession that threatens to become a second Great Depression. The actions taken by Congress and the present administration address the effects and the most proximate cause of the current financial crisis (the dramatic increase in the number of bankruptcies and foreclosures), but do very little to address the root cause - job loss.

Now, in an attempt to address public anger related to The Great Wall Street Rescue Mission, there is discussion among our elected representatives about cutting taxes or sending out another round of stimulus checks. While these measures may enable over-extended debtors to make ends meet or credit-starved consumers to go on one last spending spree, we need to realize that we can not consume our way out of a crisis that was created, in large part, by over-consumption. We need to work our way out. We need to put a solid foundation under our economy by putting every able-bodied worker to work.

The loss of jobs due to outsourcing, downsizing, and a faltering economy was the first domino to fall in the present financial crisis. Putting people back to work will reduce the number of foreclosures and give newly employed workers the means necessary to rent or purchase some of the houses that are now sitting empty. The private sector is not going to create jobs in the face of a serious, possibly long-term, downturn in our economy. The government is going to have to step in, as it did during The Great Depression, if we hope to reverse the downward spiral of job losses and avoid a serious recession.

In an essay in Newsweek George Will quotes, approvingly, the response of a fictional Republican candidate for president on NBC’s “The West Wing” to the question “How many jobs will you create?” His response: “None. Entrepreneurs create jobs, businesses create jobs. The president’s job is to get out of the way.”

It is true that entrepreneurs and businesses create jobs when they believe that economic conditions are such that they will realize a reasonable profit from starting or expanding a business. On the other hand, when economic conditions lead them to experience or expect lower profits, or monetary losses instead of capital gains, businesses don’t create jobs, they shed them. Working with Congress, a president in such a situation should take up the slack and find meaningful employment for people who are unable to find work on their own.

In the Capitalist Bible (more commonly known as An Inquiry into the Nature and Causes of The Wealth of Nations) Adam Smith’s prescribed a laizzez faire approach to the economy on the part of the government because he felt that workers would, if left alone by the government, do whatever work would create the most wealth for themselves. Collectively, this would lead to the greatest possible accumulation of wealth within a nation.

Smith wrote at the dawn of the Industrial Revolution. When Wealth of Nations was published (1776) 97% of the people in the United States lived and worked on farms and produced nearly everything they needed themselves. A person’s standard of living was tied directly to how hard he or she worked and nearly everyone was “self-employed.”

In the wake of the Industrial Revolution, mechanization, along with the principle of division of labor, and the specialization that results from it, have made us highly inter-dependent. Very few people are self-sufficient or self-employed. We are highly dependent upon the business community, both large corporations and smaller businesses, to provide employment. When young adults leave school and enter the work force, or older workers are laid off, most of them think in terms of “finding a job.” Very few think in terms of starting a business. We look to existing businesses to provide employment for us, but business owners and managers are driven by the profit motive, creating and providing jobs is simply a by-product.

Adam Smith’s famous “invisible hand,” its movements dictated by the immutable laws of supply and demand, takes away jobs as readily as it creates them. Markets operate quite efficiently for those involved, while leaving any number of people out of work. At the present time, as the prospects for profit dim for most industries, more and more people are finding themselves out of work and unable to find work. The downward spiral of recession has begun.

As George Santayana famously remarked, “Those who cannot remember the past are condemned to repeat it.” We keep hearing that this is “the worst financial crisis since the Great Depression” and yet our political leaders don’t seem to remember the curative power of alphabet soup. The various jobs programs of the “New Deal” (the WPA, PWA, and CCC) were quite effective in ameliorating the effects of The Great Depression and eased the suffering of millions of people in the bargain.

Franklin Roosevelt never fully bought into Keynesian economics and his jobs programs stopped short of achieving full employment. As a result, economic conditions improved, but it took our entry into World War Two to finally put an end to both joblessness and The Great Depression.

After the war Congress, worried that unemployment resulting from the shift back to a peacetime economy would send our economy back into a depression, passed the Employment Act of 1946 (typically referred to as “The Full Employment Act”) which stated that “it is the continuing policy and responsibility of the Federal government to use all practicable means . . . to foster and promote . . . useful employment opportunities, including self-employment, for those able, willing, and seeking to work.” Right there, in a bill passed by the seventy-ninth Congress and signed into law by President Truman over sixty years ago, is the key to an effective and equitable solution to our current economic crisis.

The “Full Employment Act” stopped short of guaranteeing everyone a job. That would require making the government the employer of last resort. It’s time to take that step. To paraphrase the welfare reform of the 1990s, we need to end unemployment as we know it. Paying able-bodied workers to sit home and do nothing when there is work to be done is inexcusable. It robs the workers of their dignity and shortchanges taxpayers in the bargain.

According to the latest report from the Bureau of Labor Statistics, 9.5 million people were unemployed nation-wide in September of 2008. For less than half the amount authorized to bail out Wall Street and financial institutions we could put every one of those unemployed people to work for a year at wages or salaries averaging $35,000.

A few members of Congress, including Senator Obama, have mentioned putting people to work on infrastructure and energy-related projects. There is a clear need for some public works projects to be undertaken at the present time. Our nation has a crumbling, outdated infrastructure and a dire need to implement an energy policy that includes speeding the development of new sources of energy.

Our government can reduce unemployment significantly by simply putting people to work on these projects that desperately need to be done, but we need to move beyond these obvious examples and develop a much broader range of opportunities to provide meaningful employment for those unable to find jobs on their own. Even the standard example, often given as a criticism of “make work” projects - digging holes in the morning and filling them up in the afternoon - could be made meaningful today if we combat global warming by having the workers involved plant a tree in between the digging and the filling in of the hole.

Putting people to work will increase our GDP and give taxpayers some benefit in return for their money. Achieving, or even approaching, full employment will pay for itself, at least in part, by leading directly to reduced pay-outs for unemployment benefits and other forms of welfare. There is plenty of work to be done. It’s time to limit the size of the cast of “American Idle” to those who are truly unable to work.

Putting people to work is the key to avoiding a deep and lengthy recession and helping individuals turn their financial fortunes back in a positive direction. Given jobs that pay a decent wage, many of the individuals who are in over their heads financially could eventually work their way out of debt and hold onto their homes, or a less expensive home, in the bargain. People who have already gone bankrupt, or lost their home, as a result of job loss will reenter the market to buy or rent a house when they find work. Slowing the tidal wave of foreclosures and increasing the demand for housing will halt the erosion in the value of houses, which will stabilize the value of the mortgage-backed securities (“collateralized debt obligations”) whose decline in value triggered the present financial crisis.

Creating jobs and adjusting the terms of mortgages held by homeowners who are capable of paying off a mortgage if the terms are renegotiated will take more time and effort than simply buying up the “bad paper” Wall Street has generated, but working from the bottom up in these ways is a more effective and a more equitable means of avoiding a second Great Depression than bailing out the fat cats and hoping some of the benefits trickle down. The belatedly risk-averse gamblers who have converted Wall Street into a casino can then decide for themselves whether they should sell out now at fire-sale prices or give the “buy and hold” strategy a chance to work.

Sunday, March 16, 2008

Meek Proposal Could Help Avoid A Bloodbath For The Democrats

The increasingly negative tone of the exchanges between Hillary Clinton and Barack Obama, their staffs, and their supporters, isn’t the only bullet the Democrats need to dodge to avoid tipping the odds in John McCain’s favor. The brewing storm over the issue of whether the delegations from Michigan and Florida should be seated at the Democratic convention is the other obvious factor that could drive a wedge into the party that could cost them votes in November.

Florida and Michigan held their primaries early in clear defiance of the rules laid down by the Democratic party. The candidates agreed not to campaign in those states. Four candidates, including Obama, took their names off of the ballot in Michigan. Now the Democrats are concerned about alienating voters in those states if they are not represented at the convention.

If the delegates who were elected in those states' primaries are seated, it is clearly to the advantage of Senator Clinton, who “won” both primaries. If she were to get the nomination, helped by this sort of maneuver, there is absolutely no doubt that a sizable number of Obama’s supporters would not support her in November.

The primary discussion of what to do about this situation has focused on allowing some sort of “do-over” — mail-in ballots, caucuses, or even new primaries in both states. This is a bad idea for at least a couple of reasons.

First of all, any of these options will cost the party, at either the state or national level, a lot of money that could otherwise be used to try to win the general election.

In addition to the cost, a re-vote of any sort not only removes the punishment, stated in advance, for violating party rules, it actually rewards the renegade states. Florida and Michigan jumped the gun hoping to have added impact in determining the party’s nominee for president. With the contest for the nomination too close to call, giving them a re-vote at the end of the process gives them exactly what they were seeking to begin with - an out-sized role in determining the nominee.

Of course the Dems could simply let the credentials committee hash the matter out in August, but that is a recipe for disaster. No matter what they decide, if their decision is the deciding factor in determining the Democratic candidate, the losing candidate and his or her supporters are going to cry “foul” with good reason.

The Democratic party is really stuck between a rock and a hard place. The best way out of this dilemma has been offered by Jerry Meek, the chairperson of the North Carolina Democratic Party. Meek’s proposal is that after all of the other primaries and caucuses are over (around mid-June) the convention credentials committee would allocate delegates for Florida and Michigan based on each candidate’s percentage of the total popular vote in other states. That might not make the renegade states happy, but it is the best solution possible under the circumstances.

Monday, March 10, 2008

An Open Letter To Barack Obama

The Clintons are making you an offer you can, but shouldn’t, refuse.

There may well be an element of calculated scheming on the part of the Clintons in floating the offer of a "joint ticket." I think you would be wise, however, to take them up on the offer. An agreement between yourself and Senator Clinton that whoever comes in second for the Democratic nomination will accept the vice-presidential slot on the ticket would go a long way toward ensuring a Democratic victory in November.

Over seventy percent of the Democrats polled have indicated a preference for both yourself and Senator Clinton to be on the ticket. We already have a president who ignores the will of the people. It would be nice to see the leading Democratic contenders respond to the preferences of their supporters.

The number of new voters participating in the Democratic primaries and caucuses this year is a real tribute to you and to the power of your approach and your message. The excitement that you have generated among your supporters needs to be maintained through November and beyond. Even a minor mud-slinging contest between yourself and the Clintons has the potential to turn off the supporters of the losing candidate to the point where they stay home in November.

I know how difficult it can be to resist the urge to strike back when you are being criticized and attacked. You have demonstrated admirable restraint in that regard. Lately it seems that you are beginning to weaken a bit and have made a few negative comments of your own. Stay strong.

More than the mere hope of change, you have already changed the climate of this election. You have demonstrated the power of staying positive.

I am convinced that if the Clintons continue to go negative and you can resist the temptation to fire back a little longer you will win the nomination. If you don’t get the nomination - agreement or not in the meantime - I hope you will join the "dream ticket."

Wednesday, February 27, 2008

Let’s Turn Down The Heat On Discussions Of Global Warming

Even if the alleged threat of global warming is a nefarious plot by power-hungry, mad scientists to trick us into giving up our cars, we will benefit from changing our energy-intensive ways.

Despite consensus within the scientific community that global warming constitutes a serious threat to the human race and that human activity is contributing to the warming trend, there are some people who insist that there is nothing to be concerned about and no reason to alter our behavior.

For some reason discussions of global warming tend to get a bit heated. Several possible explanations for this angry tone come to mind. The long-standing antagonism between environmentalists and industry may be one factor. The tension between science and religion may be another. Some people may be concerned that addressing global warming threatens our love affair with the automobile - fearing that sooner or later the government is going to take our cars away or require us to drive cars powered by carrot juice that won’t even come close to going zero to sixty in a matter of seconds. A final possibility is that we may be witnessing the "Springerization" of America. Heated exchanges of opinion score much higher ratings for talk radio and television programs than calm, reasoned discussions. Repeated exposure to loud, angry shouting matches may have desensitized us and created a mind-set that prefers heat to light when discussing the issues of the day.

Whatever the explanation, global warming seems to have become one of those issues, like abortion or gay marriage, where no one is allowed to remain neutral. There seems to be very little middle ground. You either accept global warming as a serious threat, or dismiss it entirely.

I am not a scientist, but I do my best to understand the scientific aspects of important issues. When "four out of five dentists" recommended sugarless gum "for their patients who chew gum," I didn’t switch to sugarless gum, I quit chewing gum. (I also found myself wondering what was wrong with that fifth dentist.) In the same spirit, if four out of five scientists are concerned about global warming, I am willing to share their concerns.

Global warming seems to be an issue where we would be wise to err on the side of caution. If the grim scenario envisioned by the scientific community comes to pass, the consequences will be severe. We should be doing everything we can to minimize the damage.

The good news for those who are not alarmed by the threat of global warming is that even if the scientific community is wrong about the seriousness of the threat or the fact that human activity is contributing to the problem, we will still benefit from the actions we should take. In the process of reducing our "carbon footprints" we will save money on gas for our cars and on our utility bills. We will lessen the inflationary impact of increases in the price of oil. We will send less money to OPEC.

America has had a long and smoggy relationship with the automobile. That love affair is a bit rocky at present. As the price of oil rises, the cost of driving is going up. By subsidizing the oil industry and keeping taxes on gasoline relatively low, the government has helped to keep gas prices down. For a long time now, we have paid much less for gas than drivers in Japan or Europe. With each new spike in the price of oil the ability of the government to cushion the effects gets more difficult.

I am personally opposed to corporate welfare and I believe the subsidies to oil companies should be eliminated. That would, however, lead to additional increases in the cost of gasoline. I also believe that the benefits-received principle of taxation should be utilized whenever possible. Excise taxes on gasoline should be levied by state governments and by the federal government at a level that provides all of the money needed to maintain our streets, highways, and bridges. This too would lead to a rise in gas prices. The combined effect of these two actions would result in a fair market price for gasoline. That price would be substantially higher than it is now.

If we want to abandon our commitment to a market economy, the government could keep gas prices artificially low by regulating oil company profits or by nationalizing the oil industry. Even if the government were to take either of these highly unlikely steps, it would offer only a temporary respite. In the long run, the price of gas is rising, and will continue to do so, for reasons that are beyond our government’s control.

Oil is a finite resource. While the amount of oil on the market at any given time may fluctuate, the amount of oil left in the ground (the total supply) can only go down. The demand for oil is rising as China and India and other smaller countries around the globe join the Industrial Revolution. Anyone who understands the law of supply and demand, knows that when supply goes down and demand goes up, prices rise.

The law of supply and demand is not subject to repeal by Congress. Our economy is going to be impacted by rising oil prices. By acting aggressively to reduce our oil consumption, we will be less susceptible to inflationary pressures as the scenario described above continues to unfold.

Calls to reduce our dependence on foreign oil have been a staple of political rhetoric since the the first OPEC oil crisis in the early 1970s. There are good reasons to move beyond vague, empty promises. Not all of the petrodollars flowing to OPEC are being used to build lavish palaces. A fair percentage is being spent on weapons.

We would be wise to remember Lenin’s remark that we (capitalists) would sell them (communists) the rope they will use to hang us. It’s not just communists who might use weapons we have sold or financed against us. Reducing or eliminating the transfer of huge sums of money to the kings and dictators running the countries that sell us much of the oil we consume would be a wise move.

Energy independence is an important goal. We need to stop talking about it and take action.
With or without the threat of global warming, there are absolute benefits to minimizing our consumption of oil. By finding cleaner ways to power our cars, driving less, and driving fuel efficient cars, we will save ourselves a lot of money and have cleaner air to breathe.

The second major prescription for individual action to combat global warming is to use less energy to light, heat, and cool our homes. We are being asked to insulate our homes more effectively, to turn our thermostats up a little in the summer and down a little in the winter, and to purchase energy efficient appliances.

What if we do all this and it turns out that scientists have sounded a false alarm with regard to global warming? We will have saved a considerable amount of money on our utility bills. Those of us who have gone so far as to install solar panels or other devices to generate electricity for our homes will not even have utility bills.

Utility companies are well aware of the threat of extinction. They can build wind farms and huge banks of solar panels, but it is quite possible to create energy from these sources without the involvement of utility companies. Homes have already been built, and in other cases retrofitted, with devices that generate electricity using renewable, non-polluting sources. A growing number of homeowners have been able to "go off the grid" entirely. In some cases homeowners are even able to sell unused electricity back to utility companies.

This trend is not going to be reversed. As the demand for solar panels and other products providing clean, renewable energy continues to grow, prices will drop, profits will increase, and it will become more and more cost-effective for homeowners to switch to these options.

While coal is still relatively abundant, it is, like oil, a finite resource. In the long run the price of coal can only go up.

We can argue about how long our supply of coal will last, but sooner or later we will have to switch to renewable sources of energy. There are environmental and economic benefits to doing that sooner rather than later. We may disagree about how much damage is done to the environment by burning coal, but nobody is arguing that burning coal is good for the environment. The sooner we switch to clean sources of energy, the better.

Another key argument made by those who oppose taking action to combat the effects of global warming is that we will damage our economy in the process of acting to counter the threat. Will our economy suffer? Yes and no. Whenever major changes take place in an economy there is some disruption. Some jobs are lost. Some new jobs are created.

This process is already underway at present. Research and development into green products is beginning to produce results. Concerned consumers are already helping to increase demand for the new products that are being developed and introduced in response to global warming.

To cite one example, electric cars are already on the market. They will continue to improve in terms of range and ease of use. Automobile manufacturers who continue to crank out gas guzzlers have been losing market share for some time now. The market share of automakers who produce electric cars, hybrids, and fuel efficient vehicles is expanding and will continue to expand. Those auto manufacturers who don’t transition fast enough may ultimately go out of business.

The revolutions in transportation and communication have accelerated the globalization of the economy. With or without a response to the threat of global warming, some industries are going to shrink, while others are going to expand. Serious efforts to combat global warming might speed up the process, but the end result will be the same.

The business community has already joined the fight to reduce carbon emissions. The full weight of entrepreneurial activity, inventors, and venture capitalists is on the side of new technologies. The smart money is no longer being invested in typewriters or telegraph lines. Gas guzzling cars and coal-burning utility plants will eventually go the way of the typewriter and the telegraph, but companies utilizing old technologies will do everything they can to drag out the process of changing over to new technologies.

Coal companies, large utility companies, and oil companies, in particular, want to keep their gravy trains running for as long as possible. They don’t want to leave any coal or oil in the ground. The slower we move in the direction of renewable energy, electric cars, etc., the more profit they stand to make. The key battles in their efforts to maintain profitability will be fought in the halls of government.

Utilities and oil companies wield considerable influence within the political arena. Their profits are threatened by most of the actions we need to take to counter the effects of global warming. They will not go down without a fight.

It would be nice if governments at all levels were willing to take the lead in addressing global warming, but the pressure these industries exert make governments reluctant to act. The primary concern of most politicians is staying in office. They will remain comfortably in the pockets of oil and utility companies unless and until they get the feeling that they are losing more votes by supporting those interests than can be offset by the votes they can purchase with the campaign contributions they are getting from them.

A button I have left over from the 1960s says "If the people will lead, eventually the leaders will follow." Responding to the threat of global warming is a cause where this may need to be the case. We can drive less. We can drive 55 miles per hour on highways even if the posted limit is higher. We can buy electric cars or hybrids. At the very least, we can buy the most fuel-efficient cars possible.

We can switch to compact florescent light bulbs. We can buy energy-efficient appliances. We can plant trees. We can turn our thermostats up a bit in the summer and down a bit in the winter.
The "power of one" is a popular concept these days. The power of a hundred million, or two hundred million, is even greater. Let those who doubt the scientific community go on doubting. If enough of us who are concerned take action, we can begin to turn things around without the help of the government.

At some point we will manage to elect a Congress and a president who will join, or perhaps even lead, our efforts. The government plays a huge role in our economy. (Larger than it should, but that’s another matter.) It is important that they join our efforts as soon as possible.

There is a lot governments could do to reduce carbon emissions short of passing legislation. Government contracts for calculators were a major factor in creating a level of demand that led to mass production and, in turn, to drastic reductions in the price of calculators. Government contracts for solar panels, electric cars, etc. would have the same effect.

If governments joined concerned individuals in making fuel efficiency a top priority when buying cars, the government wouldn’t need to mandate fuel efficiency. The market would take care of that. If governments at all levels simply joined consumers by purchasing only compact florescent light bulbs, the demand for conventional light bulbs would plummet and companies would stop producing them.

As mentioned above with regard to individual consumers, the government could save a lot of money by becoming more energy efficient. That would enable them to reduce taxes, which as any good Republican will tell you, is a great way to win votes.

Even if the scientific community is wrong about global warming, taking the actions listed above will give us cleaner air to breathe and save us a lot of money on transportation and utility bills. We have little to lose and much to gain by moving in the direction of non-polluting, renewable sources of energy.

The dire predictions of Karl Marx have proven to be less than accurate, but his rhetoric was quite energetic, so I will close by paraphrasing him: Concerned citizens of the world conserve. We have nothing to lose but high gas prices, soaring utility bills, and polluted air. We have a world to save!

© 2008 Gary Winston Apple

Used by permission. All rights reserved.

Permission is hereby granted to make or post copies of this essay for non-commercial use, provided the copyright notice is included in the copy.

Tuesday, February 19, 2008

A Modest Proposal for Reforming the Health Insurance Industry

How To Reduce Health Care Spending With Or Without Help From The Government

Reform is coming to the health insurance industry. If we’re not careful, the reforms may make matters worse instead of better.

The pressure for reform is building because the skyrocketing cost of providing health insurance for employees is becoming too much of a burden for businesses. Large firms find themselves at a competitive disadvantage in the global economy. Small businesses simply can’t afford the cost. The percentage of workers with health insurance provided by employers is declining.

The practice of providing health insurance as a fringe benefit began during World War II as a means of circumventing wage controls. It has endured because it benefits everyone involved. Employers can deduct the full cost of providing insurance as a business expense. Workers pay less in taxes since they are not taxed on the value of the premiums paid on their behalf. Insurance companies get more business than they otherwise would.

Since increases in premiums don’t show up as a reduction in take-home pay, workers have been insulated from the impact of dramatic increases in the cost of health insurance. Now costs have reached the point where employers are reducing their contributions toward premiums and co-pays are rising.

As more and more workers are left to fend for themselves, even those who can afford health insurance experience a great deal of "sticker shock" when the cost of premiums is no longer hidden among their fringe benefits. Individuals with incomes just above the limits for Medicaid simply can’t afford to purchase a policy on their own. Many young and healthy members of our society who could afford coverage, elect to forego having health insurance if it’s not provided through their employer. The people who need insurance the most - those with serious health issues and/or chronic conditions - are the most likely to be priced out of the market or simply excluded by insurance companies.

Health care spending in the United States has been spiraling out of control for some time now. A report by the World Health Organization paints a very clear picture:

  • The percentage of our gross domestic product devoted to health care more than tripled during the period from 1960 to 2005, growing from 5.2% to 16%.
  • Overall, the World Health Organization ranked our health care system as 37th best in the world.
  • In 2004 we spent $6102 per person on health care, compared to $3165 for Canada, $3150 for France, $3043 for Germany, and $2508 for Britain.
Although we outspend them by a wide margin, life expectancy in the U. S. is lower than it is in any of these other nations. All of these other nations have universal health care.

Britain, with the lowest cost per capita, is the only nation with a system that can legitimately be labeled "socialized medicine." Hospitals in Britain are owned by the government. Doctors and other health care providers are government employees.

Spokespersons for the insurance and pharmaceutical industries and their reactionary supporters in the Republican Party often use the term "socialized medicine" to describe the Canadian system. (Actually, they don’t just use the term, they hurl it like an epithet.) The Canadian, French, and German systems can more accurately be described as "socialized health insurance."

Advances in medical technology and new medications have increased the cost of health care. It is now possible to treat medical conditions that were previously not treatable. These new care options are expensive, but also improve the quality of life, and may even extend life itself, for chronically ill and terminally ill patients. Diverting a little of our GDP from SUVs and iPhones seems a reasonable trade-off in such cases.

The higher cost of health care in the United States, compared to the other nations mentioned above, can be attributed to a second, less benevolent, factor - the involvement of private insurance companies in nearly every interaction between health care providers and patients with health insurance. The army of bureaucrats who screen applicants, review and approve (or disapprove) claims, and handle disputes adds to the expense of health care. The clerical workers needed to shuffle paperwork back and forth between insurance companies and health care providers adds to the cost of health care. And the profits of insurance companies adds a final measure of cost.

Our "health care" crisis is, in reality, a health insurance crisis. The involvement of the insurance industry does nothing to improve the quality of health care, while adding significantly to the cost. In a strange perversion of the normal role of insurance, with regard to health care, the burden of paying the premiums for coverage has become unbearable for many people who don’t have any significant medical expenses other than insurance premiums.

It is no accident that the primary focus of "health care" reform is on making sure every member of our society has health insurance. Insurers and drug companies have managed to put a fair number of politicians in their debt through the legalized bribes known as campaign contributions. As a result, they may well retain a dominant role within the health care market even if we get a few reform measures passed.

Our timid, frightened representatives in Congress find themselves trapped between insurance and pharmaceutical companies who make large contributions to their election campaigns and outraged citizens tired of being forced to choose between living with the risk of being uninsured (including the risk of being denied care) or of being fleeced by the insurance industry. Now Congress faces increased pressure as their corporate sponsors outside the insurance business join the chorus calling for reform.

Although members of both major political parties have been co-opted to some extent, health care reform is one issue where there is a stark contrast between the parties. The positions of this year’s candidates for the presidency (some no longer in the race) illustrate the differences.

Not a single Republican candidate has offered any reform that would reduce the role of the insurance industry. They propose "health savings accounts" that would let businesses off the hook and privatize risks. They want to put caps on damage awards and end "frivolous lawsuits" in cases of medical malpractice. They favor tax credits to offset the cost of individuals purchasing insurance on their own. (This, of course, would make it easier and more acceptable for businesses to drop coverage as a fringe benefit.)

Republicans warn of the dangers of "socialized medicine" and "one-size-fits-all" programs controlled by the government. The Democrats favor a larger role for government.

Dennis Kucinich was alone among the candidates in supporting "Medicare-for-all." While this approach has merit, it is not likely to be implemented, at least not directly.

The mainstream Democratic plan to achieve universal health insurance was originally put forward by John Edwards. It has now been adopted (with minor differences) by both Hillary Clinton and Barack Obama.

The plan involves four key elements: (1) "community rating," which would require insurance companies to accept all applicants and charge all policyholders the same premiums; (2) subsidies for small businesses and moderate-income individuals; (3) mandated coverage, which requires employers to provide health insurance and also requires individuals who aren’t covered through their jobs to purchase insurance; and (4) a buy in to Medicare, or a similar government operated program.

Several of the Republican candidates offered support for subsidies for small businesses and low-income individuals to help achieve universal health insurance. Some Democrats would support tax credits to offset the cost of purchasing insurance for individuals who are not covered through their jobs. Other than that there is little agreement between the parties. Control of Congress and the White House after this year’s elections will determine the nature of health care reform.

The insurance industry will have no problem with tax breaks, subsidies and/or mandates since all of these measure will increase their profits. Insurers may not even object to community rating as long as the government is willing to put up the money needed to pay for the higher premiums resulting from the inclusion of high risk individuals. The net result of these "reforms" would be universal health insurance through private insurance companies.

Forcing businesses to provide coverage, requiring individuals to purchase insurance, and using taxpayer’s money to pay for those who can’t afford insurance, will shift the burden of paying off the insurance companies, but these reforms accomplish nothing in terms of reducing the overall cost of health care.

Insurance companies are the problem. Increasing their role in health care is not the solution. The overall cost of health care in the United States is not going to be reduced unless we succeed in eliminating or marginalizing, the role of insurance companies.

The battle will be joined - and won or lost - on the basis of the last element in the Democratic plan. Giving people the option to buy in to Medicare, or some similar government-operated program, at a price equal to the actual cost, will reduce the role of private insurers. It will also reduce their profits. The insurance industry will fight this piece of the Democratic plan with every weapon at their disposal.

Medicare has several advantages over private insurance companies with regard to keeping costs down. In addition to eliminating profits, there is no money spent on advertising, there is no need to maintain a sales force, and policing the system costs less than what private companies spend trying to deny claims and screen out high risk individuals.

It will be difficult for Republicans to object to a buy-in option if it’s done right. The government would not be forcing anyone to sign on, but would simply offer consumers a choice between private insurance and a public plan. If the premiums to buy into the program are equal to the cost of running the program, offering people that choice will be revenue neutral. There would be no need to raise taxes to pay for the program.

Republicans never miss an opportunity to push the message that government is incompetent and incapable of providing services as efficiently as private enterprise. If they truly believe that, they have nothing to fear from offering people a choice between private insurance and a government-run program.

Should the Democratic Party manage to get all four elements of their plan passed into law, we will have accomplished a reasonably satisfactory reform of the health care industry. A "Medicare for all who want it" system will reduce the overall level of spending on health care.

The primary inefficiency within a Medicare-style system is that it is open to abuse by providers of medical care who can increase their income by over-treating patients. If Uncle Sam is picking up the tab, there is no incentive for either patients or doctors to limit the duration or range of treatment. Providing oversight to limit such abuses adds to the expense of the program.

To keep health care costs to an absolute minimum, we need to offer consumers one additional option - catastrophic illness plans that make health insurance work the way insurance is supposed to work.

In Wealth of Nations, Adam Smith described the virtues of a market economy where fair prices result from a large number of buyers interacting with a large number of sellers. To achieve the efficiencies of a market economy, we need to reduce the role of both the health insurance cartel and the government by limiting health insurance to the traditional role of insurance - spreading and sharing the risk of catastrophic events.

You can get a tune-up for your car or get minor repairs done without involving the company that provides your car insurance. You can replace a broken window or repair a leaky faucet without involving the company that insures your home. We could achieve a significant reduction in the cost of health care by eliminating routine care from insurance policies. We should be able to get treatment for minor accidents and ailments, without involving a health insurance company.

In any given year, the vast majority of us have no need for anything more than routine medical care. Within a system where insurance functioned in the normal manner, a substantial percentage of the interactions between doctors and patients would take place without generating additional costs for both providers and insurers that result from the review and approval process and the associated paperwork. This simple change in our approach to health care would reduce the cost of health care more significantly than any other reform being proposed.

Consumers would have complete freedom to patronize any doctor or hospital. To help them make informed decisions, a complete list of the fees charged by each doctor and hospital should be available upon request. The transparency of the fee structure alone would help to control costs. The complex deals negotiated between insurance companies and health care providers make it difficult to even figure out the true cost of care.

Some insurance companies already offer plans with greatly reduced premiums and high deductibles. In some cases companies pay for part of the cost of preventative measures, such as annual check-ups, but most of the cost of health care is paid directly by patients.

These types of plans are not very common. They are often considered as a last resort for those who can’t afford the premiums for full coverage. They are also not very popular with many people who are forced to settle for such a plan. Overcoming the resistance to this approach might be difficult.

A system where employers or the government pays your premiums creates the illusion that you are getting something for nothing with regard to health care. A lot of people are addicted to that illusion. They fail to realize that the costs are passed on to them through a combination of higher taxes and reduced pay. (Shall we blame Milton Friedman for failing to convince more people that there is no such thing as a free lunch?)

A plan with lower premiums and a high deductible makes a lot of sense for healthy individuals. A Medicare-style plan makes more sense for those with chronic health problems. These alternatives, however, should be offered as options, not mandated.

Even though catastrophic illness plans save most people money and would reduce the overall cost of health care if they were widely adopted, some people will not want to buy into a plan that requires them to pay for health care directly. After all, paying for health care is not nearly as much fun as going shopping. On the other hand, more people might take advantage of this option if it were readily available. It is a choice that should be offered by both employers and the government.

Employers who provide health insurance as a fringe benefit could reduce their costs by negotiating to include catastrophic illness plans as an option offered employees. If a reasonable share of the savings from reduced premiums were passed on to employees to offset their increased out-of-pocket expenditures for health care, most workers would eventually realize that they are better off financially with that type of plan. Even employees whose medical expenses exceeded the deductible amount would see only a small increase in actual cost. The overall cost of health care would be reduced for both workers and employers.

The decreased income to insurance companies would be largely offset by the savings they would realize from having a greatly reduced role in the health care system. They would no longer need to provide oversight or approval for routine medical transactions. Profits might decline somewhat, but insurance companies would remain profitable.

If such a plan were offered by the government it could help moderate-income individuals and families by basing premiums on ability-to-pay. With or without a progressive premium schedule, a government-run plan offers the additional benefit of maximizing over-all savings by eliminating profits.

The primary goals of whatever reforms are implemented should be to reduce the overall cost of health care and to offer consumers a range of meaningful choices. Consumers should have the choice of acquiring a policy through a private company or buying in to Medicare. Consumers should have a choice between full coverage and a policy that covers only catastrophic costs. All of these options need to be available if we hope to reduce the cost of health care significantly.

If Congress manages to supplement the existing Medicaid and Medicare programs with a buy-in to Medicare they will deserve a higher approval rating and a brief respite from being labeled a "do-nothing" Congress. If they add the option of a catastrophic illness plan they will have done everything we can reasonably expect from the government with regard to reducing the cost of health care.

If the unholy alliance of insurance companies, pharmaceutical companies, and Republicans, manages to buy-off and/or bluff the Democrats into stopping short of these goals, people who want to limit the cost of health care will have to go it alone.

The savings from eliminating profits could be realized without government involvement through an insurance company organized by consumers as a not-for-profit corporation or a co-operative. The primary challenge for this approach would be enrolling enough people to spread risk broadly.

Given my own libertarian leanings, I am inclined to believe that this would be a better solution to the health care crisis. Considering the dismal track record of libertarian ideas, I’m willing to settle for government getting the job done.

This is one issue where a grassroots movement could be quite effective. It would involve nothing more than individuals and individual employers negotiating and purchasing catastrophic plans in lieu of, or as an alternative to, full coverage plans. People who want to go on paying off the insurance industry to meddle in their dealings with doctors should be free to do so. Those of us who are tired of supporting "bureaucratized medicine" should band together to limit the role of insurers with or without help from the government.

© 2008 Gary Winston Apple
Used by permission. All rights reserved.

Permission is hereby granted to make or post copies of this essay for non-commercial use, provided the copyright notice is included in the copy.

Monday, February 18, 2008


(The following was a letter to the editor, which was published in The Kansas City Star on February 15, 2008. It was written in response to a Star editorial addressing the need for massive improvements to the sewer system in Kansas City, Missouri.)

A Star editorial (2/10, "Don't burden customers when constructing sewer proposal") says Kansas City should not "burden customers" by passing on the expense of improvements to the sewer system needed "to prevent storm-water from entering sewage lines during heavy rains" leading to pollution of waterways.

Instead the Star calls for city officials to "lobby for federal funds" or increase the sales tax. I disagree.

Much needed momentum is building to curb "earmarks." This is what earmarks looks like from the local point of view. People across America should not be forced to pay for local projects. Shoppers in Kansas City shouldn’t be expected to chip in either. People who use the sewer system should pay for the improvements.

To minimize rate increases the city should make sure "city officials have slimmed down" this "incredibly ambitious" proposal (as your editorial writer puts it) where possible, then pay for it by issuing tax-exempt bonds to be paid off over the life of the improved system.


(The following entry was initially published in The Kansas City Star on February 5, 2008. They did some minor editing, primarily changing the paragraph structure. A longer essay on the same topic was posted on this blog on January 28, 2008.)

Representative Emanuel Cleaver expressed legitimate concern regarding one item in President Bush’s State of the Union address. ("In Congress," 1/29.)

While agreeing with the president about the need to "pump up the economy," he stated that "we’re going to borrow money . . . the bulk of it from China, and then our public will go out and buy Chinese products."

Some recipients may choose to pay down personal debt or save the money. These alternatives will mute the stimulative effect of the rebates.

Rep. Cleaver indicated he would support the stimulus package because "there does not appear to be any other option on the table." Some Democrats are reportedly disappointed that the package won’t include an extension of unemployment benefits.

One of our elected representatives should put another option on the table that is more effective than a shopping spree and preferable to extended unemployment benefits - a liberal dose of New Deal-style public works programs.

I am aware that using the terms "liberal" and "New Deal" will touch a raw nerve with many "conservatives." Before the knee-jerk reaction sets in, I hasten to add that Ronald Reagan, among others, advocated replacing welfare with "workfare."

Reagan believed that giving someone a hand up in the form of a job is preferable to giving them a hand-out in the form of welfare benefits. I agree. There is work to be done. Bridges around the country are in need of repair or replacement. Sewage systems in many cities need to be updated and/or replaced. A modern version of the Civilian Conservation Corps could put people to work planting trees.

Public works projects would stimulate the economy more effectively than tax rebates and move able-bodied workers from the unemployment and/or welfare roles to gainful employment in the process.

Legislation to send out tax rebates will undoubtedly sail through Congress. What politician wants to play the role of the Grinch instead of being counted among those playing Uncle Santa Claus by giving taxpayers the generous gift of borrowed money - especially in an election year?

When the shopping spree is over, we should put people to work.

Monday, February 4, 2008

On Super Tuesday I Will Be Part of the Revolution

The Revolution has barely been televised. Perhaps we can change that.

In past elections I have frequently been among the unhappy souls suffering from "electile dysfunction," the inability to become aroused by any of the candidates. I occasionally find a candidate I like in the primaries. In November I almost always find myself voting for the lesser of two evils.

This year is surprisingly different. There are three candidates that I could vote for with some degree of excitement who are still in the race as my state (Missouri) takes its turn in the primaries. It seems likely that at least one of them will be on the ballot in November.

Except for a brief fling as a member of the Citizen’s Party in 1980, I have never belonged to a political party. Although I consider myself an independent voter, I almost always vote for the Democratic candidate in races that seem competitive and for Libertarian Party candidates in other races. I haven’t voted for a Republican since Jack Danforth represented Missouri in the Senate. This time around, the fact that one of the remaining candidates for the Republican nomination is a libertarian (and former presidential candidate for the Libertarian Party) offers me a rare opportunity to vote my conscience without "wasting" my vote.

The slugfest between Barack Obama and the dynamic duo that is "The Clintons" is still too close to call. In all probability I will cast my vote in November for the winner of that contest. I won’t be participating in the choice between them myself, however, because on Super Tuesday I plan to be part of the Ron Paul Revolution.

I don’t agree with his position on health care, but I do agree with him on several other important issues. As a strict constructionist, he is calling for a massive reduction in the size of the national government. He would eliminate entire departments and pass the monetary savings back to taxpayers and powers back to the states. He doesn’t believe the government should be in the business of legislating morality. He wants to bring our troops home, not just from Iraq, but from everywhere. This last proposal is the one that really put him over the top with me.

I have spent my entire adult life looking on helplessly as our military forces have been used to promote and protect corporate interests around the world, interventions that have often obstructed, rather than encouraged, democracy. I have never agreed with our government taking on the self-appointed role of policeman of the world. Our resignation is long overdue.

Hopefully, the United Nations will rise to the task of fulfilling its purported mission of maintaining peace. If not, we may need to replace it with a more effective international organization. Either way, it’s time for us bring our troops home.

Representative Paul does not advocate an isolationist policy. He believes we should remain actively involved in global affairs. Other nations manage to participate in the global economy and to interact with other countries without having troops stationed all around the world. It’s time for us to give that approach a try.

Some people consider voting for a candidate with no apparent chance of winning to be "wasting" your vote. I think the real waste is that so much newspaper space and air time is spent discussing poll numbers and reporting on the amount of money raised by each candidate. It's a shame the mainstream media seem determined to ignore candidates like Dennis Kucinich and Ron Paul.

Voters seem to want "change," but candidates advocating and articulating real alternatives to the status quo are marginalized and ignored by mainstream media. As the field of candidates shrinks, if enough people vote for Ron Paul, it will become more difficult for them to avoid giving his platform some much needed exposure.

Beyond the issue of ending our imperial misadventures, the issue I care most about is health insurance. Both Obama and Clinton propose health care plans that would allow a buy-in to Medicare. That is the key to freeing us from the vise-like grip of the insurance industry.

I am deeply disappointed in Ron Paul’s position on this issue. He is among those guilty of muddying the debate by using the term "socialized medicine" to describe Democratic proposals, which can more accurately be described as "socialized insurance." The fact that, as president, he could veto any meaningful reform would make a choice between him and either Obama or Clinton very difficult for me, as I am equally disappointed in their unwillingness to completely end our occupation of Iraq.

With only a slight preference for Obama over Clinton, and the unprecedented opportunity to vote for a libertarian with at least some chance of winning, I will be voting for Ron Paul on Super Tuesday.

Should he overcome the odds and win the Republican nomination, I will look forward to November and the delightfully difficult choice between the greater of two good candidates, as opposed to the more traditional lesser of two evils. If Ron Paul makes it to November, I will be sorely tempted to opt for the revolution.

Monday, January 28, 2008

Put People to Work Instead of Sending Them Shopping

Where have you gone Franklin Roosevelt? A writer turns his lonely thoughts to you.

Legislation to stimulate the economy by sending out checks to every household in America should sail through Congress with little opposition. After all, what legislator is going to stand in the way? Why play the role of the Grinch when you can be one of a cast of hundreds playing Uncle Samta Claus, giving taxpayers the generous gift of their own money?

This quick, one-off version of tax relief won’t do any harm to the economy. Neither will it provide much of a stimulus. Some people will go shopping, but the spree won’t last long. A good chunk of the money spent will be used to purchase goods made in other countries, thereby muting the stimulative effect here in the USA. Other people may use the money to pay down personal debt. This will shift some of the overall level of indebtedness from personal accounts to the national debt, helping it reach the ten trillion dollar mark a few months earlier. Those of us who are debt-free may choose to add to our savings. (Who knows this might bump the national savings rate back into positive numbers.) When all is said and done the effect of this particular stimulus to the economy will be negligible and short-lived.

What is disturbing about this approach to staving off a recession is that a far more effective means of doing so is not even being discussed. Reports indicate that some Democrats are disappointed that the stimulus package will not include an extension of unemployment benefits. I am disappointed that the idea of putting people to work is not included. It is time once again for a liberal dose of New Deal-style public works programs.

I am aware that using the words "liberal" and "New Deal" will touch a raw nerve with many "conservatives" who have devoted a great deal of effort to dismantling the New Deal. Before the knee-jerk reaction sets in, (Oops! Too late!) I hasten to add that Ronald Reagan, among others, advocated replacing welfare with "workfare." Reagan believed that giving someone a hand up in the form of a job is preferable to giving them a hand-out in the form of welfare benefits. I agree.

The Employment Act of 1946 states that "it is the continuing policy and responsibility of the Federal government to use all practicable means . . . to foster and promote . . . useful employment opportunities . . . for those willing, able, and seeking to work and to promote maximum employment, production, and purchasing power." I see little evidence of that policy. This would be a good time for Congress to actually assume that responsibility.

John Maynard Keynes prescribed a relatively simple formula for smoothing out the cycles of boom and bust that characterize unfettered capitalism. When the economy is heading into a recession, the government should cuts taxes and increase spending, incurring deficits in the process. When the economy is expanding, the government should raise taxes and cut spending in order to pay down the public debt that has accumulated. This allows the government to position itself to stimulate the economy again when the next downturn approaches, without amassing a ruinous level of indebtedness.

Politicians eagerly embrace the first half of Keynes formula because cutting taxes and/or increasing spending is always popular with voters. When the economy is expanding nicely and the opportunity to pay down the national debt presents itself, they may give lip service to the concept of fiscal responsibility, but fear for their jobs keeps them from actually doing anything to reduce the debt . Even in the best of times voters tend to punish legislators who raise taxes. Every cut in spending irritates those who were benefitting from the money being spent.

In a happy confluence of events for politicians, we find ourselves on the cusp of, or in the early stages of, a recession during an election year. Cutting taxes and/or increasing government spending is necessary. Putting unemployed or under-employed people to work will stimulate the economy more effectively than sending out gift certificates to people who have already done plenty of shopping.

There is work to be done. The need for repairs to our infrastructure is clear and growing. Assessments of bridges around the country show a substantial percentage in need of repair or replacement. The sewage systems in many of our cities need to be updated and/or replaced. A modern version of the Civilian Conservation Corps could put people to work planting trees. Public works projects to address these and other problems would move able-bodied workers from the unemployment and/or welfare roles to gainful employment and stimulate the economy in the process.

The checks are coming. I don’t plan to go shopping. I have no debt to pay down. I will add to my savings.

An article in my local paper yesterday indicated that a fair percentage of the people they interviewed (a decidedly unscientific sample) indicated that they plan to pay down debt or save the money. I hope that turns out to be the case. Maybe if enough taxpayers demonstrate fiscal responsibility with their tax rebates, politicians will do the same when the economy heats up again and we have an opportunity to pay down the national debt.

If the "shopping spree" approach to stimulating the economy is as ineffective as I anticipate, I hope that Congress will dust off the New Deal play-book and fight recession with public works projects.

All I am saying is give Keynes a chance!

Thursday, January 17, 2008

Make the House of Representatives More Representative

What's the job of the candidate in this world? The job of the candidate is to raise the money to hire the consultants to do the focus groups to figure out the 30-second answers to be memorized by the candidate. This is stunningly dangerous. - Newt Gingrich

Would some change-minded candidate or other kindly inform the American people what this business amounts to? Change what into what? - William Murchison

I’m not a candidate for anything, but one change I believe we should make is to change the House of Representatives into a legislative body that more effectively represents the will of the people. To this end, I propose a constitutional amendment providing for proportional representation in the House of Representatives.

Under the present system each state is divided into congressional districts and voters elect a single representative from their district. With proportional representation voters nationwide would each cast a vote for a political party and its slate of candidates. Political parties would nominate ordered lists of candidates pledged to support that party’s platform. Seats would be awarded to each party based on its percentage of the total number of votes cast nation-wide.

This approach would allow candidates for, and members of, the House of Representatives to focus on participating in drafting their party’s platform. It would relieve them of the burden of raising huge amounts of money to fund individual campaigns. This, in turn, would keep them from becoming indebted to special interest groups. Reducing the influence of special interests would go a long way toward improving the approval ratings of Congress and would begin to restore our faith in government.

If this amendment were to pass, the real action for members of the House of Representatives would take place during the run-up to each party’s convention and the convention itself, as they engaged in serious discussions of which issues should be included in the party platform and how each issue should be addressed. While it would be up to each party to determine just how strong of a commitment its candidates would be expected to make with regard to supporting the party platform, members of the party gaining a majority of the seats in the House would logically be expected (by voters as well as the party) to support their party’s platform.

Drafting a platform was once a vital part of the nominating conventions of political parties. The platform is supposed to define the party’s positions on the issues of the day and offer some idea of what the party hopes to accomplish. Today, however, the nominating conventions of the major parties have become little more than coronations formalizing the nomination of a presidential candidate who has already secured the number of delegates needed to win the nomination. By making party platforms and the conventions at which they are written meaningful again, proportional representation would provide an incentive for civic-minded citizens to get more actively engaged within party organizations.

With the focus shifted from individual candidates to party platforms, the sort of attack ads that have come to dominate political campaigns would be pointless in elections for members of the House. The fact that voters would be choosing between parties based largely on each party’s platform, as opposed to the personalities or peccadillos of individual candidates, would promote debates between political parties that would highlight the differences in their plans for addressing issues of importance to the nation.

I believe that most of our legislators ran for political office initially because they have a genuine interest in the give and take of dealing with political issues. I doubt that they are happy about being under constant pressure to raise money. Many of them would undoubtedly welcome the opportunity to spend more of their time devising solutions to the problems we face as a nation.

Political reporters must also be getting a bit bored with simply reporting the results of the latest polls and providing updates on the amount of money raised by each candidate. Even their "informed discussions" of strategy and momentum are a hollow exercise at heart. Covering the process of drafting party platforms and commenting on the details of each party’s proposals would clearly be more engaging for serious-minded members of the media. It would afford them the opportunity to participate in debates and discussion about how the issues and problems facing our nation should be addressed. It would cast them in the vital role of helping voters compare the agendas of various parties.

If we were to succeed in shifting a considerable amount of media attention to party platforms, formal debates could be restructured to do a lot more to help voters make informed decisions on election day. Instead of each candidate reciting their pre-programed responses to questions posed by the moderators, a series of in-depth discussions of the proposals included in each party’s platforms, with each debate focused on a different issue, would highlight the similarities and differences between the parties. Political parties could select one or more party members to represent the party in each debate.

Once elected, the members of the party winning a majority of the seats in the House of Representatives should have no problem getting the legislative proposals included in their party’s platform passed by the House. Combined with the fact that members of the House are elected every two years, this would make the House of Representatives much more responsive to the will of the voters. This is in line with the intention of the Founding Fathers that the House of Representatives would be the most democratic part of the Federal government.

The system of checks and balances provided for in the Constitution would remain in place. The Senate would have to concur with the legislation approved by the House. The president would retain the power to veto legislation. And the Supreme Court could still declare a law to be unconstitutional. It would be up to voters to decide whether to vote a straight party ticket (for the Senate, the House, and the president), thereby reducing gridlock, or to split their vote. (Some people like gridlock.)

The system of representation in Congress provided for in the U. S. Constitution was the end result of a compromise between representatives from the small states and the large states. The small states wanted to retain the provision in the Articles of Confederation giving each state an equal number of representatives, regardless of its population. The large states wanted representation based on population. The Connecticut Compromise provided for a bicameral legislature consisting of a Senate where each state would be equally represented regardless of the size of its population and a House of Representatives, where the number of representatives from each state would be determined by population.

This was a necessary and effective compromise at the time, but it failed to take full advantage of the concept of a bicameral legislature. Having both senators and representatives represent geographic regions (states and districts within states, respectively) is redundant. Furthermore, under the system devised over two hundred years ago, we have a "national" government without a single component that represents the nation, as opposed to the states.

In the early years of the republic most citizens of the United States identified strongly with the state in which they resided, considering themselves to be "New Yorkers" or "Virginians," etc. This is no longer the case. While some people (particularly sports fans) may identify strongly with their state (or city or alma mater), when it comes to political matters most of us consider ourselves to be "Americans." It is time for at least one part of the national government to represent the interests of the nation as a whole.

Proportional representation is not a new or an untested idea. It is quite common in other democratic governments around the world. Nor is this sort of change in the Constitution unprecedented. In a change necessitated by the rise of political parties, the Twelfth Amendment provided for the electoral college to cast separate votes for president and vice-president and provided a method for resolving elections in which no candidate received a majority of the electoral votes cast. Under the Seventeenth Amendment, direct election of senators by the voters within each state replaced election by state legislatures.

Our political process is in dire need of repair. Our elections have degenerated into a witches brew of fund-raising and advertising. Far too many of the ads paid for with the money raised are attack ads. Even the positive ads amount to nothing more than catch phrases designed by each candidate’s advisors to evoke a Pavlovian response from voters. Slogans, sound bites, talking points, and rhetorical platitudes, address the mood of the electorate, while carefully avoiding saying anything of substance.

Every candidate earnestly assures us that he or she will provide quality health care for all, improve education, help the U. S. achieve energy independence, support family values, and keep us safe from terrorists. Furthermore, they promise to cut taxes and balance the budget.

Like all good illusionists, they are careful not to reveal the details of how they plan to implement this amazing balancing act. Serious, in-depth discussions of the problems facing our nation and the issues of the day take place in forums on the Internet and in the op-ed pages of newspapers and magazines, but are missing in action during political campaigns.

This year’s hottest political buzz word is "change." And the main thing voters want to change is the political culture in Washington. Approval ratings for Congress are even lower than for President Bush. (Not an easy feat!) Providing for proportional representation in the House of
Representatives would make our government more responsive, more democratic, and more effective. Voters who are serious about wanting change should find out which candidates would support this amendment and vote for them.

A couple of footnotes:
1) If this amendment were to pass, it would need to include a provision to alter the Twelfth Amendment which provides for the House to elect the president with a vote by states if no candidate for president wins a majority of electoral votes. I would suggest having the House choose between the two candidates with the most electoral votes (instead of the top three), with each member (as opposed to each state) having one vote.
2) The same redundancy with regard to members of both the House of Representatives and the Senate representing geographic areas, is true of all of the state legislatures (except Nebraska, which has a unicameral legislature). Voters in each state who support the idea of proportional representation should encourage their state legislatures to pass similar amendments to their state constitution.

A final note:
Assuming that you are in agreement with this modest proposal, where do we go from here? You don’t need to join a political action committee or make a financial donation. You simply need to help spread the word. Send a copy of this essay to everyone you know who might be interested in making our government more responsive to the will of the voters. Be sure to include your representatives in Congress and your state legislature.

© 2008 Gary Winston Apple
Used by permission. All rights reserved.

Permission is hereby granted to make or post copies of this essay for non-commercial use, provided the copyright notice is included in the copy.