Markets and the Public Good: Private and Public Leadership
Some argue that we should just let the market alone work things out and government intervention is always a problem.  While we do need to regulate wisely, to protect the public good, which includes protecting the free market, the extreme ‘markets alone’ position is inconsistent with our long history of public-private collaboration for prosperity, from the moon launch to the super highway system.

In our current debates over financial and health care regulation it would be prudent to recognize that in both arenas we need responsible public and private leadership, and in times like today it would be best if they were working in concert.

Economist Paul Krugman is not interested in excusing the leadership failures in the private sector that caused the great recession, and continue to delay our recovery.  But he is equally uninterested in ignoring the leadership failures in the public sector making the situation worse still.  This is a great column, well worth the two minutes it will take to read it.  After criticizing German leadership failures Krugman turns to the Fed.

“Yet let’s not ridicule the Europeans, since many of our own policymakers are acting just as irresponsibly. And I’m not just talking about congressional Republicans, who often seem as if they are deliberately trying to sabotage the economy.

Let’s talk instead about the Federal Reserve….Why won’t the Fed act? My guess is that it’s intimidated by those congressional Republicans, that it’s afraid to do anything that might be seen as providing political aid to Obama, that is, anything that might help the economy. Maybe there’s some other explanation, but the fact is, the Fed, like the European Central Bank, like the U.S. Congress, like the government of Germany, has decided that avoiding economic disaster is somebody else’s responsibility.

None of this should be happening. As in 1931, Western nations have the resources they need to avoid catastrophe, and indeed to restore prosperity — and we have the added advantage of knowing much more than our great-grandparents did about how depressions happen and how to end them. But knowledge and resources do no good if those who possess them refuse to use them.  And that’s what seems to be happening.”

Financial to Health Care MarketsIt seems clear that President Reagan could not be elected in today’s Republican party.  Farah Stockman reminds us that President Nixon’s support for a national health care system (like President Obama’s in that it also sought to strengthen our current system of privately provided insurance) would similarly exile him from the Republican party today…for supporting universal coverage and for doing so by seeking an alliance with Ted Kennedy.

“Ted Kennedy, whom Nixon assumed would be his rival in the next election, made universal health care his signature issue….  Nixon proposed a plan that required employers to buy private health insurance for their employees and gave subsidies to those who could not afford insurance. Nixon argued that this market-based approach would build on the strengths of the private system. “Government has a great role to play,” he said, “but we must always make sure that our doctors will be working for their patients and not for the federal government.”

No one breathed a word at the time about Nixon’s plan being unconstitutional.

When Obama ran for office, his aides contacted Altman, a key architect of the Nixon plan, and asked him to serve as an adviser….  Although the two plans are different — Nixon’s mandated companies to buy insurance, while Obama’s mandates individuals — both bolster the system of private insurance instead of creating something new.

“Every once in awhile Obama would say, ‘Wouldn’t single-payer be simpler?’ ”’ Altman recalled. “The answer is yes. But America wasn’t ready for it.” When Congress finally passed the bill, Altman knew that it would take years to perfect it. But he felt extremely proud. He never imagined that the Supreme Court could throw a wrench in it. That would never have happened in the 1970s.”