The other side of the red tape and regulation debate

To The Guardian
The Right hates regulation and red tape, but this ideological hostility only seems to extend to relieving big business and the private sector. By contrast, the last three decades have seen the public sector crushed under regulatory burdens and tied up in red tape, often in a bizarre attempt at making schools, hospitals, the police, social services and universities more efficient, business-like and accountable. Talk to most doctors, nurses, police officers, probation officers, social workers and university lecturers, and one of their biggest complaints will be the relentless increase in bureaucracy imposed by Conservative (and New Labour) governments since the 1980s.
Instead of focusing on their core activities and providing a good professional service, many front-line public sector workers are compelled to devote much of their time and energy to countless strategies, statutory frameworks, regulations, codes of practice, quality assurance procedures, government targets, action plans, form-filling, box-ticking, monitoring exercises, and preparations for the next external inspection.
A major reason for public sector workers quitting their profession, taking early retirement or suffering from stress-related illnesses is the sheer volume of bureaucracy that Conservatives (and New Labour) have imposed during the last 35 years. This bureaucracy, almost as much as under-funding, is destroying the public sector, impeding efficiency and innovation, and driving front-line staff to despair.
Pete Dorey, Bath, Somerset

Everywhere in the Western world right wing politicians focus on shrivelling public sectors.  A relative of mine, a successful head teacher, chosen to be parachuted into failing schools and put them right, retired early because the red tape was overwhelming the management of schools.  This is a barely concealed effort to make public education so unworkable that variants of private education-for-profit can be substituted.  There is nothing wrong with public education that cannot be corrected by allowing teachers to teach conscientiously and, in doing so, allowing them to  live on liveable salaries.  The turnover of disillusioned teachers cannot be good for children, and nor can the low pay.  Without education our future is grim.

Exxon and climate change

The shareholders of Exxon Mobil Corp. have asked the energy giant to publicly disclose how the fight against climate change could affect the company’s bottom line.  The initiative was supported by more than 62 percent of shareholders who voted — a big leap from last year, when there was 38 percent support for a similar proposal.  The yearly reports “would include details on how the company would survive in the event that carbon-reducing policies lead to lower oil demand”.   Exxon Mobil says it supports the Paris deal,  but is opposed the shareholder effort, saying the company is tackling climate change in other ways (oh, really? Ed.)

It’s a victory for environmental activists, who have been urging the oil company to consider the economic impact the Paris accord would have if it is fully implemented. The global agreement calls for more investment in renewable energy and for deep cuts in the greenhouse gas emissions. Apparently,  major financial firms like BlackRock, and possibly Vanguard and State Street, supported the initiative, illustrating that Investors are beginning to get the message themselves.

The nonbinding proposal now goes before Exxon Mobil’s board. Chief Executive Darren Woods said the board members would take note of the strong support from shareholders.

.Within the past two years, evidence has emerged that Exxon was aware of the threat posed by climate change for decades before the company publicly acknowledged it.  Now the goal is to make Exxon plan for a world where fossil fuels like oil and natural gas may be replaced by renewable energy.   The threat to it isn’t just reputational but is a material risk to their core business. There has to be an eventual decline in fossil fuel demand.  (Based on a report on the NPR website, precised and edited).

The vote came before  President Trump announced his breathtakingly irresponsible and damaging decision on to withdraw from the Paris climate agreement.

Judging by the poor showing of Mr. Wood’s predecesor, Rex Tillerson, who is now the semi-operational Secretary of State, there must have been a dire lack of leadership at Exxon. Let’s hope that the elevation of Mr. Woods is not simply a case of ” buggin’s turn” and that he has some foresight and gumption.

 

 

What Americans can learn from the NHS, and what Britons can learn from American healthcare.

The quality of American politics and policy seems to be going from bad to worse. Neither Republicans nor Democrats are offering compelling and optimistic visions of the future that are supported with popular enthusiasm. Trump’s approval ratings are unusually low for a president at this point in their tenure, but Democrats aren’t exactly getting people excited either, as demonstrated by series of recent special elections in which the Republicans, however narrowly, hung on to their seats.

No issue illustrates this better than healthcare. Most Americans are at least sceptical of Obama’s Affordable Care Act (ACA), which partly caused the Republican landslide in the 2010 midterms. Many believe that even if they received insurance under the ACA, the deductibles and premiums are so high, it is scarcely worth being insured. The individual mandate, which Obama saw as necessary to bring young and healthy people into the insurance pools, is widely resented as an infringement on individual liberty. For a significant minority of Americans, their opposition to the ACA derives from a belief in small government, and therefore the conviction that the ACA represents a federal overreach. Why the ACA constitutes ‘big government’ but not Medicare or Medicaid is hard to understand. But that sentiment is nevertheless real, not purely an elite phenomenon.

But Republican alternatives to the ACA are even more unpopular. Conservatives often point out that once a government programme is introduced, it is impossible to abolish. This is particularly true with the ACA. Having grown accustomed to the subsidies and federally enforced insurance standards the law provides, like a ban on denial of coverage for pre-existing conditions, people are reluctant to go back to the pre-ACA of high uninsured rates and more frequent bankruptcies from high healthcare costs. Regardless of Republican pretensions, it is clear the level of federal intervention in the healthcare industry is only going to grow- the public demands it, even if they don’t like some of the consequences of the ACA.

If repealing the vast majority of the ACA’s provisions is unrealistic, then the only question becomes how to improve it. The Republicans haven’t provided a serious answer to this question, because they believe the law is fundamentally flawed. The Democrats, however, are divided. On the one hand are centrist Democrats who want to improve the mechanics of the ACA to move towards universal coverage. They would expand and strengthen the mandate, bringing more young and healthy people into the system, reducing costs overall. They would increase federal funding for Medicaid, to compensate poor people living in states that refused the Medicaid expansion. They would also enhance the ACA’s marketplaces to make healthcare more competitive.

Many Democrats would go much further, supporting a system called single-payer. For an American audience, single-payer is best described as Medicare for all. Anyone could get government-sponsored insurance if they wanted, paid for through the Medicare levy. But this is where my knowledge and experience as a Brit comes in. Britain has had an extreme form of single-payer since 1948, called the NHS. In Britain, not only does the government pay for everyone’s healthcare, it also nationalises the vast majority of the hospitals and doctors’ surgeries. People can buy private health insurance if they want to. But unlike in America, there is no employer tax deduction for private insurance bills. So the vast majority of people are insured by the state, simply because private insurance is too expensive in addition to paying more taxes.

There are three key advantages to the NHS above the American ACA model. The first is that it guarantees universal coverage, the ACA doesn’t. The second is that it is much cheaper. America spends almost as much taxpayer’s money as a proportion of GDP on healthcare as the UK, but it doesn’t come close to achieving universal coverage. Nationalising the means of healthcare delivery helps keep costs down, because it reduces the amount of paperwork needed when hospitals charge insurers. The other advantage is that it is simple. Everyone is automatically insured, and so doesn’t have to worry about how they are covered and for what.

Having said that, most Americans would not be satisfied with an American NHS, even if it is preferable to the current system. American healthcare is generally better quality. Waiting times are lower, people are more likely to get their own bed, there is more access to expensive drugs, etc… The NHS engages in a lot of healthcare ‘rationing’ to keep costs down. This can be a brutal process, where people who need non-emergency treatment can wait for months to be seen. Once you consider that the American state is a fair bit more inefficient than the British one, it is highly unlikely that America could expand quality healthcare to all and spend significantly less than what is does currently. Britain spends unusually little on its healthcare- it’s not a route I would advise America to follow.

The best solution for America would be to allow anyone to buy into Medicare, by giving up a much higher proportion of their income to the government. This would essentially give the country universal coverage without needing the individual mandate. Unlike the ACA, it wouldn’t increase the deficit, because the programme would pay for itself. It would retain the ACA’s non-denial of coverage for pre-existing conditions. It would expand the Medicare insurance pool to include younger and healthier people, improving public finances. It also has the advantage of not interfering with the private market; people who like their current insurance should be able to keep it without fearing that government regulations and taxes will force them to change plans. Moreover, private insurers would no longer be forced to cover people with pre-existing conditions, because those people could just buy into the government system.

Britain could learn an awful lot from this ideal American system of a regulated, competitive private healthcare industry existing alongside a government-funded insurance scheme for those who can’t go private. The problem with the NHS is that it leaves the vast majority of people with no alternative. I know friends and family who have suffered considerably from this system. They have been forced to ‘pay double’- high taxes in exchange for a system that doesn’t work, and private medical bills to get the treatment the government should have given them in the first place. To remedy this, Britain ought to lower taxes for those who want to be privately insured. The NHS is fantastic at insuring universal healthcare, and the nationalised nature of healthcare delivery keeps taxes lower than if the government had to pay private entities. But the NHS isn’t the only good deliverer of healthcare. It would benefit from competition from private insurers, even if the NHS itself should remain fully public. The British left denies any advantages of private competition, arguing that if the government increased funding for the NHS, the problem would be solved. An increase in funding may improve the state of affairs overall, but many people will still be let down, and need somewhere else to go.

Best of the Week #5

If you’re like me, you are probably bombarded by constant information. Emails, calls, text messages, social media, news updates, articles recommended by friends- the list is endless. Although I enjoy writing the Best of the Week series, I realise that because of the sheer amount of information you consume, and the near-impossible task of remembering it all, highlighting links to a multitude of websites may not be very compelling or interesting.  So today, I’ve decided to talk about just two articles, but give a more thorough and original reaction to them. Let me know if you prefer this format, or if you prefer the usual way, or even if you don’t have a preference.

https://blogs.spectator.co.uk/2017/06/donald-trump-gift-progressive-narrative/. The first article comes from Ed West, who writes that Donald Trump fits the progressive view of history- that they are good guys (civil rights activists, suffragettes, unions) and bad guys (fascists, racists, colonialists, privileged white men), and that history is the eventual triumph of good over evil and progress towards a more egalitarian future. In this overly-simplistic analysis, Trump represents the ultimate ‘bad guy’, both in terms of his beliefs and his socioeconomic status. West’s point is that reality is more complex than this. Liberals’ critique of Trump may be fashionable and to a degree necessary, but Trump’s actions detract from other issues like the deficit, ethnic division or social conservatism amongst religious minorities- problems which the progressive left doesn’t feel comfortable talking about because they have no real answers to.

I share West’s frustration with American politics at the moment. Trump is precisely the liberal caricature of  what a conservative is. He is reducing the quality of politics and policy by rendering the centre-right ineffective and unrepresentative of what true conservatives believe and how they behave. Conservatives now have to go out of their way to distance themselves from every unconservative action Trump takes, and explain why those actions aren’t conservative. To a great extent, this prevents them from outlining what real conservatism would look like in practice. It also lessens Republicans’ ability to hold Democrats to account for their failings, because Democrats can always retort that they aren’t as bad as Trump, allowing them to ignore their own unpopular beliefs. Even when Trump holds conservative views, those views become discredited because they are associated with Trump. I also appreciate West’s honesty that the Right is largely to blame for this. I am personally very much in favour of cultural globalisation, so I don’t share West’s fear of an America that views itself in multicultural and pluralistic terms. But West is certainly not a xenophobe, so his conservative opposition to social change ought to be given a fair hearing. It’s a terrible shame that thanks to moronic nationalists like Trump, the intelligent case for conservatism won’t be heard by the vast majority of the American public.

https://www.nytimes.com/2017/06/27/opinion/britains-broken-ladder-of-social-mobility.html?em_pos=small&emc=edit_ty_20170627&nl=opinion-today&nl_art=9&nlid=75810130&ref=headline&te=1. A fantastic critique of Britain’s lack of social mobility. Many progressive Americans assume that the larger the welfare state, the greater the level of social mobility. This may generally be true, but Britain is very much the exception as a country with a large welfare state but a social mobility level even worse than that of the United States. Russell makes the point that a good education is no guarantor of success later in life. Throughout the developed world, it is assumed that if you work hard at school and consequently get into a good university, you will have a lucrative career. At least in Britain, factors beyond your control- the circumstances of your birth, the school you attended, the status of your family, how well-connected you are- are all at least as important as your academic ability and work ethic.

Russell doesn’t elaborate much on the solutions to this problem. She rightly mentions some of the problems: high house prices in some areas, and a lack of professional jobs in others. What she doesn’t admit is that it is in the interests of the very wealthy for levels of social mobility to remain low. In any given time period, the number of professional jobs available will always be limited, even if they increase over the long term. This makes the job market, especially for the young and inexperienced, a zero-sum game. The British upper class and upper-middle class expect their children to have at least as good jobs as they. And more than any other developed country, they actively go out of their way to ensure this. Partly by sending their children to expensive schools, or by employing tutors to give their children a one-on-one learning experience; I plead guilty to this, I had a tutor for my GCSE  Chemistry, who boosted my grade significantly. They also exploit their social networks brilliantly, giving their children work experience opportunities the working class don’t have because they don’t know the right people. To make matters worse, potential employees are more likely to be hired if they exhibit middle-class traits, such as speaking with a certain accent, understanding certain cultural references, or being able to talk about interesting experiences like gap years abroad or volunteering, which are often dependent on your ability to afford them.

The point I’m trying to make is that increasing social mobility will require far more radical policies than any Russell is proposing- policies that will hurt the upper class and much of the upper middle class. Private schools would have to either take in far more low-income pupils or be banned outright. Employers would have to demonstrate they are employing a representative cross-section of society. Schools in poor areas would have to ensure a certain proportion of their pupils apply to the top universities. Taxes on property and inheritance would have to be raised significantly, to lessen the phenomenon of inherited privilege. A vast quantity of cheap housing would need to be built in previously exclusive areas, which locals may complain downgrades the prestige of the neighbourhood. As I say in my post on the free market, (http://hanrott.com/blog/epicurus-free-market/) Britain’s upper echelons are incredibly fortunate, even as their success comes at the expense of the country as a whole. If social mobility increases, so would competition for the best jobs. This would be good for the general economy, as the best people would be performing the best jobs. But it is in the elites’ interests to prevent real social mobility from happening, which is why it almost certainly won’t.

America has lost its legislators

“We are in an ugly era of people who do not understand what the legislative branch is even for,” says Andy Karsner, who served as assistant secretary of energy for efficiency and renewable energy in the George W. Bush administration and is now based in California, working with entrepreneurs as managing partner of the Emerson Collective.

The Trump administration and Republican leadership in Congress, Karsner said, “have no skill set, they have no craftsmanship. They have no connection to the time when people passed legislation.”

In the not-so-old days legislation was drawn up, informally debated and edited by Congressional aides, many of them long- term employees with years of experience. The congressman could give them an outline of what was wanted  and they would draft it as a law.  Then came the dire Tea Party and the so- called “Freedom Caucus”, whose objective was/is the dismantling of ” big government” and the distribution of the savings to rich patrons as tax recuctions.  Scores of Congressional aides were fired while the Republicans concentrated on State rights, using templates drawn word- for- word from the corporate- funded organisation ALEC ( American Legislative Exchange Council).   Meanwhile Republican Congressmen themselves have increasingly been recruited by multi- millionaires who promise them lifetime income in return for voting as required.  Apparently poorly educated, but ambitious, these people are not thinking of the United States of America, for sure.

And this is how we get into a situation where no one quite knows how to draft a new health bill and replace Obamacare.  The latest news is that 22 million people will lose their medical coverage if the current bill (which was drafted secretly and which few have actually read) won’t be voted  on until July at the earliest,  as the Republicans bicker about the headline bits of it.  The devil will, of course, be in the detail.