A Standard, Republican Administration

Not Different in Substance

Many commentators have claimed that Trump’s Republican Party is different from the pre-Trump party. It is said that while the pre-Trump party was the party of business, the new party is the party of the working class. The old party supported low taxes and limited regulation of business. It supported free trade and opposed labor unions. The new party, on the other hand, is a populist party that supports trade restrictions in order to benefit working Americans, and the new party opposes immigration on the ostensible grounds that immigrants take jobs away from Americans and also pollute American culture. The new party supports conservative positions on cultural issues, as well.

It is true that the Republican Party has changed its position on free trade, but we should not delude ourselves into thinking that the changes indicate an interest in the welfare of working Americans. The Republican Party is still the party of business, but the interests of American business have changed both because new types of businesses have emerged and because the competitive environment in the world’s market has changed. The Republican Party may no longer the party of General Motors and U.S. Steel, but it is the party of Silicon Valley and Wall Street.

And yet, Trump's Republican Party seems very different from the pre-Trump party, and "seems" is the key word here. The Republican commitment to business-friendly policies is concealed by a change in political style and rhetoric. Trump's brash, flamboyant, populist style makes the party seem new, and his willingness flout the traditional norms of political discourse have attracted millions of voters. People who feel that "the system" is rigged against them are inevitably attracted to a politician who expresses a willingness to tear it down. 

However, Trump's iconoclastic style is a front. It conceals his commitment to policies that favor big business over other interests. That commitment should not surprise us. After all, he is himself a billionaire, and so are his friends and advisors.

A Standard Republican Cabinet and a Billionaire Advisor

Anyone who doubts the real identity of the "new" Republican Party need only look at the list of people whom Trump has picked for his cabinet. Here are a few of them: 

Secretary of State: Marco Rubio, a senator from the very Republican State of Florida and a member of the state's reliably Republican Cuban community

Secretary of the Treasury: Scott Bessent, a billionaire hedge fund manager

Secretary of Defense: Peter Hegseth, a former military officer and a conservative TV commentator

Secretary of the Interior: Gov. Doug Burgum of North Dakota, a conservative politician with longstanding ties to the oil and gas industry

Secretary of Agriculture: Brooke Rollins, a conservative lawyer and CEO of America First Policy Institute.

Secretary of Commerce: Howard Lutnick, a billionaire Wall Street executive.

Director of the E.P.A: Lee Zeldin, a conservative politician who has a long, consistent record of opposing environmental regulation of business

The list of goes on, and – apart from a few genuine nuts like R.F Kennedy, Jr. - it is a list of members and supporters of corporate America who would not have appeared out of place in any Republican administration in the twentieth or twenty-first century. These are the people who will make and execute the policies of Trump’s administration, and there is hardly a MAGA populist among them. 

Then, there is Elon Musk, who seems to have a unique place as an advisor to Mr. Trump. Musk is a billionaire, and his friends and advisors are a “who’s who” of Silicon Valley billionaires, venture capitalists and executives. They will add the weight of their pro-business attitudes to those of the members of Mr. Trump's cabinet.

A Split Over Immigration

The lack of MAGA populists among Trump's closest advisors creates a problem for the party as a whole and for Trump’s administration. He was elected as a populist, and the millions of voters who responded to his MAGA message are not expecting business as usual. The strain that this situation creates is already apparent.

Part of the MAGA message was a pledge to shut down immigration. The MAGA voters do not interpret the pledge to mean that immigration will be shut down except when corporations want to hire immigrants, but people like Elon Musk want immigration to continue and even to expand when it is profitable for his companies and those of his friends. This difference has already surfaced in a public dispute over expanding the number of H1-B visas for technical workers.

The dispute over H1-B visas is just the beginning. The MAGA voters have been promised a program of massive deportation of millions of undocumented immigrants, but we can be sure that if anything like that is really attempted, it will generate opposition from the big farmers and agricultural corporations who fund Republican campaigns in many states. Big agriculture will resist any attempt to take away its work force, which is composed largely of undocumented immigrants.

Don't Bet Against the Influence of Big Business

It would be risky to bet against corporate agriculture on this issue. The big farmers and agricultural corporations will probably get what they want just as big business usually has throughout our history. In general, when popular policy proposals have been opposed by big business in this country, the popular proposals have been abandoned or watered down in ways that eliminate their threats to big business. Mr. Trump may be a danger to democracy in this country, but on matters of domestic policy, his administration will almost certainly be a standard, pro-business, Republican administration, which will do its work behind a screen of vindictive, iconoclastic, populist rhetoric. The MAGA Republicans will love the rhetoric and may not notice that their pockets are being picked, but Democrats will have a big opportunity.

Solving the Problem of "Delay and Deny"

Anger Over "Delay and Deny"

The recent shooting of Brian Thompson the CEO of United Healthcare has led to an outpouring of anger over the behavior of health insurance companies, which use the tactics of "delay and deny" to avoid paying for surgical and medical treatments that have been prescribed by doctors. There is no doubt that the insurance companies use those tactics, and many people feel that it is wrong for them to do so: an insurance company - they say - should not second-guess the doctors who are experts in medical care.  

The insurers "delay and deny" treatments by requiring that healthcare providers must obtain "prior approval" before the treatments are applied. Critics of the requirement say that requiring prior approval is an unjustifiable interference by an insurance company in the practice of medicine and that we should prohibit the companies from requiring prior approvals. However, such a prohibition would not be easy, and it would have unintended consequences. 

Before we try to prohibit insurance companies from requiring prior approvals, we should first understand why the companies have taken on this role. We need to know more about the way our healthcare system really works and why it is so expensive. We have a truly dreadful healthcare system, and while the insurance companies are indeed profit-driven organizations, they are not uniquely greedy actors in a system where everyone else acts from purely humanitarian motives. In our healthcare system, the healthcare providers are also driven by a desire to make money. They cannot work to maximize profit because, nominally at least, they are non-profit organizations, but they do work to maximize their revenue.

Healthcare Providers Maximize Their Revenue

Healthcare Providers Are Local Monopolies

Healthcare in the United States is usually provided by large corporations that are motivated to maximize their revenue and market share. It is not difficult for them to do that because typically a community has only a few healthcare providers, which are local monopolies or oligopolies that have monopoly power to set their prices. Moreover, in most cases, neither patients nor doctors care what a treatment costs because the bill is paid by an insurance company. So, the healthcare providers can and do raise their prices easily.

"Fee For Service" Drives Up Costs

Moreover, our system pays for services, not for outcomes. So, healthcare providers can increase their revenues by performing unnecessary services and by inventing new ones. A doctor may be incentivized to perform unnecessary surgeries by being paid a share of the revenue that they bring in, and a hospital may increase its revenue by charging a “facility fee” for the use of an operating room or by charging for each strip of gauze that is used. Such revenue enhancing strategies are common in our healthcare system.

Insurance Companies Cannot Bargain Collectively

In theory, the insurance companies could fight back against the healthcare companies’ inflated charges by bargaining with them. In theory, the insurers could push for contracts under which the healthcare companies agreed up front to limit their charges. However, the bargaining power of the insurance companies is limited by the fact that our antitrust laws prohibit them from bargaining collectively. Instead, they bargain individually. Some insurance companies are able to make better deals than others, but none do as well as they could do if they were able to bargain collectively.

Healthcare Providers Have Not Defined Best Clinical Practices

Finally, we should note that most healthcare companies have not encouraged their doctors to define the best clinical practices for treating various medical conditions. Best practices have been defined in a few places. For example, the doctors at Intermountain Healthcare have defined the best practices in clinical areas like cardiology or gastroenterology, and a doctor who wishes to use a treatment that is outside of the recommended best practices must justify the proposed treatment to his/her colleagues. However, most healthcare providers in the United States have neither defined nor adopted lists of best practices.

When the doctors take responsibility for defining the best clinical practices, an insurance company receiving the bill for a treatment can know immediately whether or not a particular treatment is justified, but in the absence of best practices defined by the doctors, an insurance company must itself decide whether a treatment is justified. That is the situation in which we find ourselves today. 

Insurance Companies Have Become Gatekeepers in a Bad System

Insurance companies have become gatekeepers in a bad system. They face healthcare providers who are highly motivated to maximize their revenue by performing unnecessary or invented services, and the insurers must decide in each case whether or not to pay for a particular treatment. To do so, they insist on prior approval of many treatments, and the result is the “delay and deny” that so many patients and doctors object to.

To Eliminate "Delay and Deny" We Will Have to Reform Our Healthcare System

We cannot solve this problem merely by prohibiting the insurance companies from requiring prior approval of certain treatments. If we did that, the healthcare providers would still be able increase their revenue by performing unnecessary services and by billing for additional, invented “services.” In this situation, the insurance companies would respond to the increase in the claims they would have to pay by raising the price of health insurance as they have done in the past. Individuals and employers would either pay more for health insurance or settle for health insurance with bigger deductibles or bigger co-pays. All of us would suffer.

To solve this problem, we will have to think systemically. We will have to reform our entire healthcare system. Our reform must provide healthcare for all of our people and must include non-market means of controlling costs.  For a review of the ways that this might be done, you can watch the video “Sick Around the World,” which looks at the healthcare systems of several countries that spend far less than we do on healthcare and provide healthcare for all of their citizens.

Toward a Just Healthcare System in the United States: The Problem of Cost

 How Has Capitalism Run Amuck in Healthcare?

The shooting of Brian Thompson has focused our country’s attention yet again on the injustices of our healthcare system.  We are seeing a revival of proposals for Medicare for All as a way to provide a more just healthcare system, but if we are going to do that, we are going to have to find a way to control the high cost of healthcare in the United States. Otherwise, Medicare for All will break us financially.

The high cost of healthcare in our country is an example of what last week’s post called “capitalism run amuck,” but that statement is too general to be useful as a guide for action. In order to fix our healthcare system, we will need something much more specific. How has capitalism run amuck in healthcare, and what can we do about it? Several years ago, I wrote a blog post on this topic, and rather than repeat what I wrote then, I refer you to “Why Does Healthcare Cost So Much in the United States?” Here is another view.

These sources deal with systemic problems, not with instances - like that reported in today's New York Times - where greed induces companies to act in ways that are obviously immoral. Greed and immoral behavior have existed throughout human history. They are not unique to capitalism, and we should not focus on them as the causes of our healthcare system's problems. Instead, we should focus on structural features of our system that cause it to be expensive and unjust even when everyone acts in good faith. My blog post referred to above lists a number of such features in our healthcare system.

Thinking About Solutions

How can we solve the problem of the ever-increasing cost of healthcare? How can we create a system that provides care for all of us at a cost we can afford to pay?  I will not attempt to offer a detailed prescription for a solution, although a modified and improved Medicare for All could provide one answer to the question. However, I can suggest some principles that can form the basis of a solution.

First, we must accept the need for non-market methods to control costs. That is, we cannot rely on market competition to control costs in our healthcare system. We will not be able to provide care for all citizens without using non-market methods to control costs. Every country with a successful system of universal healthcare has had to use non-market methods for controlling costs, and there is no reason to believe that we can be an exception. 

Medicare's cost control mechanism is very imperfect. Medicare can set the price it will pay for any specific service, but its fee-for-service model offers no protection against the proliferation of unnecessary services or against the continual invention of new "services." 

Second, our system must encourage hospitals and doctors to strive for high quality care rather than for maximum revenue and market share.  Some incentives of this kind are already included in the Affordable Care Act. For example, a hospital may be penalized if it has too high a readmission rate. However, much more will need to be done.

Third, we need a system that encourages people to make good use of primary care. Good primary care reduces the need for emergency care and for hospitalization, which are the most expensive parts of our healthcare system.  Some encouragement for people to use primary care is already included in the Affordable Care Act. For example, the act requires that certain kinds of screening tests – like colonoscopies - be offered free to patients.  We might also reduce costs by requiring primary care physicians to act as gatekeepers to the rest of the healthcare system as is done today in the United Kingdom.

Fourth, we need a system that encourages people to live in ways that promote health.  Much of the cost of healthcare in the United States is due to the cost of caring for people with chronic conditions like diabetes or obesity, and the frequency of such conditions can be reduced by encouraging people to adopt healthy lifestyles.  Ways to do this are not hard to find. For example, Medicare could pay for membership at a gym on the theory that regular exercise will make people less likely to need expensive medical care.

Finally, the system must provide patients and doctors with accurate information about prices in order to enable them to make decisions based on costs. Often, a medical condition may be treated effectively in various ways that have widely differing costs. 

If we can find ways to control the cost of healthcare, we will be able to provide healthcare for all of our people. As we work toward that goal, we must not forget that our resources are not infinite. Other countries have found ways to control costs, and we can do it, too.

What is the Issue?

Two Recent Events 

A month ago, Donald Trump was elected to be the next president of the United States, and a few days ago, Brian Thompson, the CEO of United Healthcare was shot to death. The two events do not appear to be related, but they are symptoms of the parlous state of American Democracy. Mr. Thompson’s killer has been seen on social media as a kind of folk hero, and the shooting as a legitimate protest against the inhumanity of health insurance companies. Mr. Trump ran for president successfully as a kind of voice of the common people against an oppressive elite. Thus, both events are symptoms of a political and economic system that millions of Americans feel is rigged against them, and they are not wrong.

A Rigged System

We live in a system in which an outlandish share of the wealth and the income is held by a tiny minority of wealthy people. In one of the world’s richest countries, millions of hardworking people struggle to pay their rent or feed their children. We live in a country with some of the most advanced medical care in the world but where unexpected illness is the number one cause of personal bankruptcy. The injustice of our system is plainly visible to everyone, and deaths of despair have become ever more frequent in recent years.

Capitalism and Democracy

In his book, The Crisis of Democratic Capitalism, Martin Wolf argues that liberal, representative democracy and market capitalism depend on each other but that their mutually supportive relationship is fragile. It depends in each country on a tacit bargain that capitalism will deliver an acceptable level of living to all of the country’s citizens. Otherwise, they will see that the system is rigged against them, and they may turn to authoritarian, anti-democratic leaders who promise to remedy their distress. Thus, a capitalist system that fails to live up to the tacit bargain that makes it compatible with democracy will inevitably render that democracy unstable. That is the situation in which we find ourselves today.

Wolf suggests that the elements of an acceptable level of living include:

• Prosperity
• Opportunity
• Security
• Dignity

Our system produces a high level of national prosperity, but it falls short on the other three elements for millions of our people, and so, unsurprisingly, the system has become unstable.

The Propaganda of the Deed

This is not to say that either the election of Trump or the shooting of Thompson is a rational, response to the injustices of our society. It has always been clear that Trump’s “populism” is fake, and his recent cabinet appointments have made the fakery even clearer. Similarly, the shooting of Thompson will probably not have much affect on our health insurance system. The shooting of Thompson looks very much like “the propaganda of the deed” of the anarchists of the late 19^th and early 20^th century. It is an act of political desperation by a person who believes that all of the usual approaches to political change are blocked.

The election of Trump is the fruit of a political culture in which lying by our politicians and our government have eroded our sense of truth and morality. Today, many people believe that no politicians or institutions of government are trustworthy. Trump does not lie more than the rest, but at least his lies seem sympathetic to millions of voters. We need change - they believe - and that is what he promises. So, why not take a chance? If our system is rigged against people like us, maybe we should tear it down and try something else.

That is exactly the situation that Wolf describes in his book. Capitalism run amuck has broken the bargain that says that it must produce a decent standard of living for all of the people, and so, it has become incompatible with representative democracy. If we want to preserve our democracy, we will have to rein in our capitalism. 

We Must Frame the Issues in Economic and Sociological Terms

If we want to rein in our capitalism, we will have to think about the issues involved in economic and social-structural terms rather than psychological ones. We cannot deal with issues of this scale in terms of the psychologies of specific persons. The question to be answered is not why particular individuals voted for Trump or what specifically drove Luigi Mangione to shoot Brian Thompson. The question is what is it about our society and our economy that causes millions of people to vote for a man like Trump and that drives a young man to risk his life in an act of propaganda of the deed?

The Fight to Maintain the Constitutional Power of the Senate

A New Issue to Split the Republican Party 

Not long ago, I published a post in which I argued that theissue of the deportation of undocumented immigrants would cause a split in the Republican Party. Sunday’s NY Times included an article that described yet another issue that may split the party. The issue is the power and independence of the Senate. Trump wants the Senate to rubber-stamp his cabinet appointments without exercising the body’s constitutional power to “advise and consent.” This is one of the Senate’s most important powers, and senators who care about the Senate as an institution will work to preserve its power. They will work to make sure that the Senate does a thorough job of vetting Trump’s cabinet appointments.  Those senators have considerable power as we saw when Matt Gaetz withdrew his name from consideration when it became clear that the Senate would not approve him without a fight.

Support the Institutional Power of the Senate

The fight to maintain the power of the Senate is not unrelated to the fight against mass deportations because Trump has chosen people who are committed to his policy of mass deportations, and he wants the Senate to rubber-stamp them. In this situation, we can resist mass deportations by encouraging our senators to support the institutional independence of the Senate, and we can also resist deportations by working locally to build support for the senators who want to preserve the power of the Senate to advise and consent. We can begin by contacting our senators to encourage them to support and fight for the independence of the Senate, and we can work locally to encourage others to do the same.

Oppose Mass Deportation Directly

We can also work locally to encourage local leaders and others to contact their congressional representatives to express opposition to mass deportation. The opposition may be based on humanitarian concerns, but it may also be based on a purely economic argument. Mass deportation will cause many local businesses to lose their work forces or their customers, and that will damage the communities where the businesses are located. The cost of the deportations will be paid using taxes paid by the residents of the communities that are damaged. Why should we allow our government to use our tax money to damage our communities?

So, if you believe in preserving the constitutionally mandated power of the Senate to review a president’s appointments, you should contact your Senators to let them know that you support them in their fight. You should also encourage your friends and neighbors to do the same thing. In the meantime, we can all work to spread understanding of the harm that mass deportations will do to our communities.