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Ad Hominem - Humanidades e outras Falácias: Crítica ao post de Adolfo Sachsida
Ad Hominem - Humanidades e outras Falácias: Crítica ao post de Adolfo Sachsida: Esses dias, Adolfo Sachsida publicou, em seu blog, um " Conselho aos Seguidores de Von Mises ". Segundo ele, a postura intelectua...
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Rep. Paul Ryan's Irving Kristol Award address: Conservatism and community
May 08, 2013
Video
Conservatism and Community
Paul Ryan
American Enterprise Institute, Kristol Lecture
May 8, 2013
Remarks as Prepared for Delivery
Paul Ryan
American Enterprise Institute, Kristol Lecture
May 8, 2013
Remarks as Prepared for Delivery
I want to thank Arthur for his remarks. And I want to thank all of you for this award. It’s always an honor to be recognized by your peers. But it’s a special honor to be recognized for your work—for your contribution to a cause. And I’m especially grateful because in this case it’s our common cause. It’s the American Idea.
What is this idea? Well, it’s the belief that the circumstances of your birth shouldn’t determine the outcome of your life—that if you work hard and play by the rules, you can get ahead. As I’ll explain, this belief is at risk—and in need of support. And AEI has given its support. For years, you’ve taught the country about the American Idea: what it means, where it came from, who first spoke of it, and why. One man who gave his all to this effort was Irving Kristol.
Kristol was a Renaissance man. He could discuss Rousseau, then size up Reagan—all while the rest of us tried to catch up. He was that perfect blend of book smarts and know-how. In short, he was one of a kind.
But you’ve carried on his work. You’ve continued to defend the American Idea. Four years ago, Charles Murray stood here and argued we should keep our way of life because it’s the best way of life—the most challenging and the most fulfilling. Last year, Leon Kass took up the baton. He argued we should love our country, not just because it’s our own—but because it is good. It respects every person’s dignity. Both men reminded us why we should defend the American Idea.
But we might lose it. Today the Left runs Washington. They want to replace the American Idea with the progressive state. They want to replace equal opportunity with equal outcomes. And they’re well intentioned, I might add. They’re trying to do good as they see it. Hard as it might be to admit, they’re speaking to a need—a need for security in a world of growing complexity. Before conservatives can win, we have to understand what we’re doing wrong.
The fact is, we also have to speak to this need. We have to explain how too much government will weaken security—and how our agenda will increase security. We have to reclaim the center of our politics. And we can. It’s not too late.
My predecessors on this stage discussed why we should save the American Idea. Tonight, I want to discuss how we can save it. It’s a big project. It goes beyond politics. But I’ll stick to the political side—with a due sense of humility in a crowd like this. Here’s the CliffsNotes version: Both the Left and the Right too often split the world into two halves: the individual and the government. They forget a key part of life—the part that gives real security. They forget society—that space in between. We can save the American Idea by saving that space for society.
All in all, I hope that I show you the value of a politician’s perspective—and that you don’t take the award back when I’m done.
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First, let’s review where things stand. The Left thinks we’re in a new era—and for good reason. The health-care law isn’t just another entitlement. It puts one-sixth of our economy in the hands of federal bureaucrats. It allows government to stage-manage our lives in the most personal of domains: our health. And now that the Supreme Court has upheld the law, we cannot be sure it will enforce the Constitution’s limits. We can’t be sure government will stay within its bounds.
So how did we get here? The health-care law is part of a larger movement called progressivism—which began in the late 19th century. At first, it was a bipartisan affair. The progressives included both Republicans, like Teddy Roosevelt—and Democrats, like Woodrow Wilson. These leaders were skeptical of the Constitution. They disliked the idea of limited government.
You can understand why. At the turn of the 20th century, change was everywhere—from the crowded streets of New York to the plains of Texas. America was becoming more urban, more industrial. Families were leaving the farm for the city, where their lives fell into turmoil. And life became more complex. No longer did most lives follow the changing of the seasons. They now followed the twists and turns of the business cycle.
We were growing fast—which meant serious growing pains. Immigrants slept in tiny apartments—ten people to a room. Families lived with the threat of disease—and, too often, death. Banks went bust. Our economy was growing mightily. But there was great pain too. And that pain seemed to cry out for somebody to do something. And that somebody, the progressives thought, was the federal government.
The progressives thought they were improving on the Founders’ work. They thought the Constitution was old and inadequate. People needed more than natural rights. They needed government-granted rights. Only government could navigate the turns of history. Only government could remove the uncertainty from life. In the progressive state, government would build up the most wealth for our country—and divvy it up in the fairest way.
The progressives saw our federal system as an obstacle. They thought our local communities were parochial and inefficient. Why should people have to rely on their family? Why should they have to work with their neighbors? They believed the attachments of family and neighborhood—like the Constitution—were old and inadequate.
Their policies weakened those attachments. In fact, they strengthened only one attachment—to government. The progressives wanted a national community, where government stood supreme, tending to the needs of its subjects.
Progressivism is well-intentioned. But it is also—in my humble opinion—arrogant and condescending. Instead of helping people make their own decisions, it makes those decisions for them. It makes Washington the center of power—and politicians the center of attention. Here’s one reason Teddy Roosevelt was a progressive. His daughter once said he wanted to be the bride at every wedding and the corpse at every funeral.
But this vision proved compelling. It drew thousands of people into government: the New Dealers, the whiz kids, the poverty warriors. Confident in their cause, they seized the moral high ground. They said they were the heirs of the Founders—when in reality, they were the replacements. They said they were for the people. And their opponents? They were for the rich. They were selfish. When we were debating the health-care bill in the House, one Democrat described the Republican position this way: “Don’t get sick, and if you do get sick, die quickly.” Funny, I don’t remember that part.
The progressives hijacked our rhetoric too. They knew the appeal of our founding principles. They masked their novel ideas in the Founders’ language. As president, Woodrow Wilson started new federal agencies and created a new income tax. And what did he call his agenda? The New Freedom.
Behind all this talk is the same idea—the same idea behind the health-care law. The Left thinks they can make health care more rational. And they don’t mind stepping on a few toes to do it. The law puts new burdens on doctors. It adds new coverage mandates—including those that violate some people’s religious beliefs. So doctors talk of closing their offices. And Catholic bishops are thinking of closing their hospitals. Government is pushing out all those providers who don’t agree with it. It’s clearing out the space between itself and each person. It’s invading deeply personal relationships—and in some cases, ending them.
Yet the Left keeps winning elections. Why? Well, you can see the appeal. In uncertain times, people look for security. Progressives seem to have an answer. We may not be leaving the farms anymore. But we are moving into an information-driven economy, where change is rapid. “Creative destruction” sounds a lot better than it feels. Change dislocates and disrupts. The hardships are real. And the progressive state offers a sense of security.
But it’s a false sense of security—because government can’t keep all its promises. We’re learning this the hard way. For years, we’ve talked about big government in theory. Now, we’re seeing it in practice. Again, look at the health-care law. We were told if you liked your insurance plan, you could keep it. But companies are expected to drop coverage. We were told if you liked your doctor, you could keep her. But your doctor might not keep you. We were told premiums would fall. But they’re going up—dramatically.
The health-care law will collapse under its own weight. But we have to offer something better in its place. This is our opportunity to take back the initiative. And our goal isn’t just to win an election. It’s to improve people’s lives. Politics is a means to an end. And the end is for all people to be able to pursue happiness.
So our job isn’t to make even more empty promises. It’s to revive the American Idea. We have to show the American Idea is superior to the progressive state—both in our time and for all time. We have to show the American Idea offers true security—because unlike the progressive state, it offers true community. Its promise is real.
Here’s what the Left got right: The American Idea needs a strong government to secure it. But a government is effective only when it is limited. And a massive government can stifle the American Idea. Government can’t replace our local communities. And it shouldn’t even try. Instead, it should reinforce our communities. Government should expand the space where a free society can thrive.
###
We should expand that space because it’s part of the American Idea. We want everyone to have a chance in life—a chance to be happy. And we’re happiest when we’re together. We want to be together. It’s in our nature. We feel it in our bones.
Now, Barney Frank once said government is the name for the things we do together. But that’s just one name. There are lots of them: the church meeting, the neighborhood watch, the food bank, the small business, the health clinic, the homeless shelter. We like to call these things “mediating institutions.” But in the end, they’re just people—people working together.
And the more we work together—out of our own free will—the stronger we become. The strongest glue isn’t fear or force. It’s friendship and love. We stick together because we share the same beliefs. That’s the source of our strength. And when government tries to do too much—when it replaces cooperation with coercion—it weakens our country. It pulls us apart. It deprives people of their purpose.
So conservatives most of all believe in cooperation—because we believe most of all in freedom. That’s something I learned from AEI—from people like Peter Berger, Richard Neuhaus, Michael Novak, and Bill Schambra. You’ve preserved and expanded on Robert Nisbet’s central insight: People hunger for freedom—for self-fulfillment. And they hunger for a community—where they realize their potential. That’s the key to the American Idea. And I learned it from you.
I also learned it from my mom Betty. My dad died when I was 16. And it was tough on our family. But my mom went out and got involved. She got involved in everything: the school board, the local parish, the garden club, the bridge club. Heck, she didn’t even know how to play bridge. She still doesn’t. And she made lifelong friends—in a group of widows, actually. When a friend in Janesville lost a husband, Betty was the first to comfort. And over time, the group began to grow. Out of their loss, they created something new. They formed a community of support.
She’s just one of many people like her. My hometown—Janesville, Wisconsin—is full of them—like Burdette Erickson. Several years ago, the fourth ward of Janesville was overrun with drug dealers. And they were brazen. They did deals in the light of day—even on one elderly woman’s front porch. She wouldn’t look out her front blinds because she was afraid she’d be shot. So Burdette gathered his neighbors in his basement one night. And they made a pact with one another: Either the drug dealers go—or we go.
Then they formed a neighborhood watch. The families told the police about the gangs’ deals and hideouts. And soon, they took back the ward. Now, inmates in the local prison tell each other to avoid Janesville—because they’ll be busted. Young families are moving in. And the drug dealers are moving out.
Our country is full of stories like these—of people banding together to meet a common need. And the most obvious example is our system of free enterprise. As Arthur likes to say, we have to remember free enterprise isn’t only the efficient thing to do. It’s also the right thing to do—because it’s a school of character. The voluntary exchange of goods and services brings out the best in us. It builds trust. It teaches discipline. And it rewards hard work. We have to make the moral case for free enterprise.
In short, we have to show the full scope of our vision. We have to explain that conservatism is about more than the economy. It’s also about our culture. It’s about the kind of country we want to be. It’s about the kind of life we want to share. We want people to enjoy the journey of living a full life—a life full of trials and tribulations, loss and gain, and ultimately the betterment of ourselves, our children, and our communities.
We have failed to communicate this vision to those who have never heard of it. We’ve retreated to our cultural cul-de-sacs in an effort to protect our immediate surroundings. Meanwhile, our inner cities, our barrios, and our poor rural communities have languished. This is where our opportunity lies. This is where we must go. This is where we must demonstrate our full vision of freedom and community.
This vision is our response to progressivism. It’s not as easy to sell. But it is more complete—and much more real. We have to show how it works—and how, in so many cases, today’s version of the American Idea is right under our noses.
We can start just six miles down the road. A few weeks ago, I took a trip to Anacostia with my good friend Bob Woodson. I’m a big fan of his—and a big believer in his Center for Neighborhood Enterprise. You see, Bob doesn’t just talk about these communities. He talks with these communities. In fact, it’s in these very neighborhoods that we see our vision in action. Tonight, I want to share a story I heard just six miles from here. It’s about a man named James Woods.
James grew up around here. His family wasn’t well off. They struggled. But they loved each other. He served ten years in the military. After he got out, he met up with some friends from his past. And those friends got him in trouble. They started selling drugs. He became addicted. He was homeless. He slept in the streets. Soon, the law caught up with him.
James was charged with selling drugs. The law said 20 years in prison. But a judge gave him a break: He got only three.
After James got out of prison, he made a decision. He wanted to be the man his parents raised him to be. He would change. So he joined an all-men’s ministry. But he was still struggling. He was still searching. Every night through his bedroom window, he would hear singing. It was the ministry of Pastor Shirley Holloway right next door. James didn’t know Pastor Holloway. But he heard her members praying. And he was intrigued. So one day he went across the street and joined the House of Help City of Hope.
It was a life-changing moment. James became good friends with Pastor Holloway. And she did him a big favor: She paid his legal fees to keep him out of jail. James got a job and offered to pay her back. But instead of cashing his checks, Pastor Holloway was saving them, so he would have a nest egg. He was stunned. It wasn’t that she saved his money—without his knowing. And it wasn’t that she gave him a job. It was that she showed him love. James would say he didn’t expect Pastor Holloway’s love—because she didn’t know him. But in a way, she did know James. She knew who he could be.
Soon James turned his life around. At the ministry, he met his future wife Angela. She had followed a path similar to James’s. Today, they’ve been married for 13 years. As James would say, Angela loves God now. And because she’s his wife, she’s always praying. James has been clean for 13 years. He now counsels about 60 men at the ministry. He helps the unemployed, the homeless, the addicted. Angela, meanwhile, has a steady job as a security guard.
If you asked Pastor Holloway for her secret, she’d say her ministry uses two ingredients: faith and love. Her motto is, “We don’t see the problem. We see the person.” Since the ministry started in 1995, they’ve served over 40,000 people struggling with drug abuse. And 85 percent of their members have stayed clean—85 percent.
The secret, of course, is the people. In people we find real security—and real love. A welfare check wouldn’t have helped James. It might have met his material needs—but only for a time. He had spiritual needs too. Only people—and God—can address those needs. James, Angela, and Pastor Holloway are three great examples. I’m honored to have them as my guests tonight. Please join me in recognizing them for their inspiring story.
###
When we make policy, we should keep people like James in mind. Our job isn’t to replace the Pastor Holloways. It’s to support them. Yes, the federal government has a role to play. But it’s a supporting role, not the leading one. Its job is to give people the resources—and the space—to thrive. And in this role, we should follow two principles: solidarity and subsidiarity.
Solidarity is the belief that we’re all in this together. We share a common purpose: the pursuit of happiness. And public servants should share one goal: the common good.
Subsidiarity is like federalism. It’s the belief that each part of society adds to the whole, and that each part must be free to do its work—on its own terms. So government shouldn’t assume other people’s tasks. It shouldn’t make decisions better left with the family or the neighborhood. The people closest to the problem are the most likely to solve it—because they know the community best. And this is the opposite of progressivism, which believes Washington knows best.
We need to apply these timeless principles to the challenges of today. That’s what we do in the House budget. Our budget is known for one part of our vision—that government can’t spend beyond its means. And it’s true. The national debt hurts our economy. It restricts opportunity. It weighs down our communities.
We have to stop spending money we don’t have. That’s our policy. But that’s not our purpose. Our purpose is to reclaim the American Idea. And our policies reflect that purpose. We’re not just trying to balance the books. We’re trying to grow the economy. We’re trying to expand the space for society.
The welfare state threatens to close that space. That’s why we need to change course. We need to strike a balance between society and government. We need to let each part play its role. We need government to meet its obligations without crowding out the American Idea.
In short, our purpose is to ensure that if you work hard and play by the rules, you can get ahead. It’s to leave our children a country as strong as the one we inherited. And to do that, government must reinforce the space for society. It must apply the principles of solidarity and subsidiarity.
Take Medicare. We need to protect this critical program. We need to maintain solidarity with seniors. But we also need to strengthen it—by harnessing the knowledge of our local communities. We need to harness the power of subsidiarity.
Instead of imposing one plan on everyone, we give seniors a choice—so they can pick the insurance plan that works best for them. Progressives think people aren’t smart enough to make these decisions on their own. But look at Medicare’s prescription-drug benefit. It works like the reform we’d apply to all of Medicare. It comes in consistently under budget. And satisfaction with the program is sky high.
We apply these same principles to Medicaid. We maintain funding to show solidarity with the poor. And we harness the power of subsidiarity by enlisting the aid of the states. We give state governments more flexibility. We let them tailor their programs to their people’s needs. And by doing so, we hope to make Medicaid a better program for the people who rely on it.
But our replacement must go further. We have to help people who aren’t on either program. And that’s the majority of our country. The health-care law will make things worse. But even the current health-care system needs to be fixed.
Today, our tax code provides an open-ended subsidy for an employee’s health insurance. It does nothing for people who buy insurance on their own. The code locks workers to their jobs, favors the wealthy, and pushes up costs. Well, we need to help families get and keep their insurance.
We can do that by attaching the tax benefit to the individual. And if they choose a plan less expensive than the benefit, they get a refund. People shouldn’t lose their insurance if they change jobs. The benefit should travel with the person—not with the job.
The big question in health care is who should decide? We think you should decide, not Washington. Under our plan, the federal government would make a defined contribution to your health-care security. We would cap the growth rate of that contribution—to eliminate waste and to encourage competition. But we would also give more help to the poor and the sick—and less help to the rich. Support would go only to those who needed it. And under our plan, we would put you in control. Only you know what works best for you and your family.
Our reforms should offer people not just the dignity of self-determination—but the comfort of community. Health care is a deeply personal issue. When your health is at stake, you want your doctor to be someone you trust, someone you know—someone who knows you. In Janesville, we are more likely to see our doctors at the YMCA or the school play than at the clinic—just as it can and should be. You don’t want to be just the next person in line. You want the doctor to be like family. But the health-care law is forcing doctors to close their practices. It’s taking this relationship out of your hands.
If we reform health care the right way, free enterprise can control costs and increase quality—without this kind of bullying. Markets aren’t bleak tundras where the strong dominate the weak—as progressives too often imagine. They’re pipelines of knowledge. They bring crucial decisions to the family, where they belong.
It’s not just health care. We have to apply these principles to all the challenges of today: defense, energy, education, immigration, taxes. We have to explain how our policies will improve people’s lives. The answer is, we will use the power and resources of government to give people the room to thrive. We will maintain the partnership our society has had with our government in the past—even in this new era of an aging society and a global economy.
This is a complete vision of conservatism. It’s what we’re striving for. It’s not a vision of petty materialism. It’s not one of lonely individuals overseen by a massive government. It’s one of moral nourishment, of self-fulfillment, of growth and opportunity.
We can’t treat politics like a game. We aren’t competing for a trophy. We’re competing over the country’s future. We’re trying to determine what kind of people we will be. We have to recognize the stakes. We have to get serious.
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And we will. Winston Churchill once said the Americans can be counted on to do the right thing—only after they’ve exhausted all other possibilities. He got that right. Sometimes, other people can see us better than we see ourselves. In fact, I think the best description of the American spirit was written by a Frenchman: Alexis de Tocqueville.
We remember Tocqueville for his keen study of our culture. We remember his insight that our local communities are schools of freedom. They teach us how to see past our differences. They teach us how to work together.
But he also had a sense for politics. He said the Senate was home to “the celebrities of America”—that there was hardly a member who hadn’t done an “illustrious deed.” The House, on the other hand, was home to “obscure persons.” He added, “Often the eye seeks in vain for a celebrated man within in it.” Kind of humbling, you know?
But on a night like this, I’m less eager to stand out—and more eager to join in. To receive the Kristol Award is to join a fellowship of scholars. It’s to take part in the community of ideas. You’re the people who got me interested in politics. You taught me how to take it seriously. So I’m grateful to you all.
And I’m grateful for tonight. You’re quite the crowd for an evening’s company. And in your dedication to truth—and your pursuit of justice—you’re a testament to the American Idea.
Thank you.
Obama Care
The Obamacare Election
The Romney-Ryan plan is maddeningly vague, but at least it reduces the role of government in health care.
As the fractious 2012 presidential campaign careens down to a photo finish, no issue presents a starker contrast between the two candidates than health-care reform. President Obama is committed to implementing his elaborate reform of health-care markets by creating state exchanges, extending Medicaid coverage to some 25 million new enrollees, retaining the current reimbursement system for Medicare, and implementing an individual mandate.
Former Governor Romney seeks to repeal and replace Obamacare. On Medicare, Romney proposes a “premium support” or voucher system that would offer an alternative method of financial support to senior citizens and is calibrated to offer the largest subsidies to the most needy persons.
Illustration by Barbara Kelley
In assessing these two programs, a recent New York Times editorial minces no words in its denunciation of Romney’s proposals. The Times argues that Romney’s undeveloped proposals will not grant sufficient coverage both to those who are currently uninsured and current Medicare recipients.
But the Times does nothing to protect its own flanks. The Times assumes, for example, that so long as Obamacare announces its intention to expand coverage and control costs that the techniques that it proposes will necessarily achieve that result. In fact, my greatest fear about the law is that it will topple on all fronts because its reach exceeds its grasp.
The law is, at best, a work in progress. It is not a complete program. Many of its features have already proved themselves to be economically unviable. The problem is the law’s key assumption that competition among private insurers will not bring down the cost of health care or reduce the ranks of the uninsured.
This same flawed reasoning led to disaster in real estate markets, where rent controls caused a reduction in the quality of housing and a reluctance of firms to remain in the field. Similar results are already happening with respect to health care under Obamacare. Its “medical loss ratio” (MLR) imposes a maximum amount of revenues that can be spent by insurers on “administrative” cost—a term of art that has yet to be fully defined.
The consequences of this one regulatory initiative have not been trivial. Many extant insurance plans, especially those targeted to low-income workers with high turnover rates, have applied for and received administrative waivers from the MLR requirements because their actual costs are far higher than the allowable MLR.
On this issue, the Department of Health and Human Services really had no choice, because the alternative would have been the wholesale withdrawal of insurance coverage to a vulnerable portion of the market given that the so-called insurance exchanges are not yet up and running. We are not talking about a small breakdown in the system: Over 3,000 employers have received waivers to keep their plans in operation for over 3 million workers.
The Messy State-Run Exchanges
The health-care law fares no better with its state-run exchanges, directed at those who are unable to procure health-care insurance through the voluntary market. Right now, there is a conscious equivocation on the part of the states to sign up, let alone invest, in a program that may well not be around after the November election. Even so, the law is unstable when taken on its own terms. As an economic matter, it may well be in the interest of employers to “dump” their employees—especially their high-risk employees—onto the exchanges that may not be up and running by the highly ambitious January 2014 date for their implementation, leaving many employees (whose income is too high for Medicaid) with no place to go.
It is unclear whether it is rational for employers to pay the required, but smaller, fee to the exchanges in order to avoid the direct costs of the new programs. One possibility is that they will retain coverage because they are able to pass much of these health-care costs down to their employees. But what if employees prefer higher wages and exchange coverage to lower wages and ostensibly better coverage?
The uncertainties here are great because it is not clear if either employers or the exchanges can afford to pay for the rich set of minimum coverage benefits that could prove unaffordable even for individuals eligible for generous government subsidies. The law presumes Cadillac plans as its default.
The Revenge of the Law of Unintended Consequences
The New York Times is heedless of the institutional risks of the law. For instance, it lauds the program for its decision to “require insurers to accept all applicants and charge them without regard to health status” starting in January 2014. That program was in effect as of September 2010 with respect to children, and it led to a contraction in the number of health-insurance suppliers in the market.
The larger initiative promises more of the same. Why? Individuals will likely load up on insurance when they need it, only to drop it, as they are allowed under the law, when their personal medical emergency has passed.
There is of course no way in which any market-based system of insurance will provide cross-subsidies to high-risk patients, which is what Obamacare tries to do. But in the concern for health-care access, it is easy to overlook one major advantage of market-based insurance, which is that people will retain their coverage no matter who else is admitted into the plan. Once cross subsidies are mandated, however, many people will find it cheaper to drop out of their plans than to pay insurance premiums for other people. The individual and employer mandates are intended to block that alternative, but, ironically, the law may well have set the penalties—or “taxes”—too low to achieve that particular end. Yet once these plans unravel, it could well increase the number of uninsured.
In an effort to respond to these concerns, the defenders of the law have claimed that it includes various efficiencies that are intended to keep the program from spiraling out of control. Really? The provisions already cited do no such thing, and the most careful analysis of the cost structure that I have read, The Fiscal Consequences of the Affordable Care Act, by Charles Blahous of the Mercatus Center at George Mason University, projects the exact opposite result by concluding that between 2012 and 2021, “The ACA is expected to add at least $340 and as much as $530 billion to federal deficits while increasing federal spending by more than $1.15 trillion over the same period and increasing amounts thereafter.”
As Blahous notes, these numbers are necessarily spongy because of the now inveterate tendency for everyone to regard new benefits as fixed in stone, but to treat new cost constraints as unfortunate nuisances rightly subject to constant erosion by future Congressional action.
The Times also falters in its claim that a government advisory board can make good on its promise to “propose cuts in payments to providers and insurers if necessary to meet budget targets.” That task requires the heroic assumption that the physicians and insurers will never exit the market if the payment cuts make it impossible for them to cover their costs, including those needed to comply with the law. Indeed, the real fear here is that the supply of health-care professionals will fail to meet the added demand generated both by the exchanges and the Medicaid extension.
Time For a Fresh Start
Plainly, there is need for a fresh start on this program. David Hyman and I have proposed that the only way in which it is possible to reduce costs and increase access is by a systematic program of deregulation that allows new entry into the market by parties such as out-of-state medical groups, corporate providers of basic health-care services, or out-of-state insurers now blocked from doing business within the state.
The Times itself pays a backhanded compliment to this proposal when it chides Romney for consigning the uninsured to emergency room care. But the entry of these new market players would reduce that grim prospect by allowing the entry of private health-care businesses into the market that specialize in providing walk-in care to all individuals at lower costs. Once those costs are reduced, individuals will filter back into the health insurance market without government compulsion.
The same can happen to employer health-care programs. Over the past 30 years, employers have dropped about 15 million workers from such plans because they cannot afford to pay for the government mandates that force them to offer expensive coverages for benefits that employees do not want.
In short, it is not possible to cure the present dangers of current regulation by more regulation.
The same can be said here of Medicare’s perilous situation, where the current program is not sustainable so long as it provides all individuals with expensive care at zero margin costs. It is difficult, of course, to figure out how to work a premium support plan, but at least the Romney-Ryan plan offers the promise of forcing individuals to internalize some of their own costs in an effort to prevent the system from going bankrupt, which it easily can do. The difficulties here stem in part from the delicate problem of transition, as it is not possible to cut current Medicare recipients from the program without massive and unacceptable dislocation.
The Romney-Ryan programs seek to introduce a ten-year transition period, after which those individuals who do not like the current Medicare program can opt into the voucher-like support plan that gives them greater control over their own health care expenditures. It would be rash to predict that any system like this could work, given the political risks that are sure to crop up during a long transition period. But it is foolish to think that yet another round of payment controls can bring the Medicare budget into balance, when all such efforts have had, at most, limited success during the 47 years of Medicare’s existence.
There is no easy path to health-care reform and there is no way in which market mechanisms, going forward, can undo all of the damage done to the system. But doubling down on government control of the market will not make matters better, as President Obama would have us believe. The Romney proposals are maddeningly vague in many respects, but at least they hold out the prospect of unraveling many of our past regulatory mistakes by shrinking the size of the government role in health care.
As the fractious 2012 presidential campaign careens down to a photo finish, no issue presents a starker contrast between the two candidates than health-care reform. President Obama is committed to implementing his elaborate reform of health-care markets by creating state exchanges, extending Medicaid coverage to some 25 million new enrollees, retaining the current reimbursement system for Medicare, and implementing an individual mandate.
Former Governor Romney seeks to repeal and replace Obamacare. On Medicare, Romney proposes a “premium support” or voucher system that would offer an alternative method of financial support to senior citizens and is calibrated to offer the largest subsidies to the most needy persons.
Illustration by Barbara Kelley
But the Times does nothing to protect its own flanks. The Times assumes, for example, that so long as Obamacare announces its intention to expand coverage and control costs that the techniques that it proposes will necessarily achieve that result. In fact, my greatest fear about the law is that it will topple on all fronts because its reach exceeds its grasp.
The law is, at best, a work in progress. It is not a complete program. Many of its features have already proved themselves to be economically unviable. The problem is the law’s key assumption that competition among private insurers will not bring down the cost of health care or reduce the ranks of the uninsured.
This same flawed reasoning led to disaster in real estate markets, where rent controls caused a reduction in the quality of housing and a reluctance of firms to remain in the field. Similar results are already happening with respect to health care under Obamacare. Its “medical loss ratio” (MLR) imposes a maximum amount of revenues that can be spent by insurers on “administrative” cost—a term of art that has yet to be fully defined.
The consequences of this one regulatory initiative have not been trivial. Many extant insurance plans, especially those targeted to low-income workers with high turnover rates, have applied for and received administrative waivers from the MLR requirements because their actual costs are far higher than the allowable MLR.
On this issue, the Department of Health and Human Services really had no choice, because the alternative would have been the wholesale withdrawal of insurance coverage to a vulnerable portion of the market given that the so-called insurance exchanges are not yet up and running. We are not talking about a small breakdown in the system: Over 3,000 employers have received waivers to keep their plans in operation for over 3 million workers.
The Messy State-Run Exchanges
The health-care law fares no better with its state-run exchanges, directed at those who are unable to procure health-care insurance through the voluntary market. Right now, there is a conscious equivocation on the part of the states to sign up, let alone invest, in a program that may well not be around after the November election. Even so, the law is unstable when taken on its own terms. As an economic matter, it may well be in the interest of employers to “dump” their employees—especially their high-risk employees—onto the exchanges that may not be up and running by the highly ambitious January 2014 date for their implementation, leaving many employees (whose income is too high for Medicaid) with no place to go.
It is unclear whether it is rational for employers to pay the required, but smaller, fee to the exchanges in order to avoid the direct costs of the new programs. One possibility is that they will retain coverage because they are able to pass much of these health-care costs down to their employees. But what if employees prefer higher wages and exchange coverage to lower wages and ostensibly better coverage?
The uncertainties here are great because it is not clear if either employers or the exchanges can afford to pay for the rich set of minimum coverage benefits that could prove unaffordable even for individuals eligible for generous government subsidies. The law presumes Cadillac plans as its default.
The Revenge of the Law of Unintended Consequences
The New York Times is heedless of the institutional risks of the law. For instance, it lauds the program for its decision to “require insurers to accept all applicants and charge them without regard to health status” starting in January 2014. That program was in effect as of September 2010 with respect to children, and it led to a contraction in the number of health-insurance suppliers in the market.
The larger initiative promises more of the same. Why? Individuals will likely load up on insurance when they need it, only to drop it, as they are allowed under the law, when their personal medical emergency has passed.
There is of course no way in which any market-based system of insurance will provide cross-subsidies to high-risk patients, which is what Obamacare tries to do. But in the concern for health-care access, it is easy to overlook one major advantage of market-based insurance, which is that people will retain their coverage no matter who else is admitted into the plan. Once cross subsidies are mandated, however, many people will find it cheaper to drop out of their plans than to pay insurance premiums for other people. The individual and employer mandates are intended to block that alternative, but, ironically, the law may well have set the penalties—or “taxes”—too low to achieve that particular end. Yet once these plans unravel, it could well increase the number of uninsured.
In an effort to respond to these concerns, the defenders of the law have claimed that it includes various efficiencies that are intended to keep the program from spiraling out of control. Really? The provisions already cited do no such thing, and the most careful analysis of the cost structure that I have read, The Fiscal Consequences of the Affordable Care Act, by Charles Blahous of the Mercatus Center at George Mason University, projects the exact opposite result by concluding that between 2012 and 2021, “The ACA is expected to add at least $340 and as much as $530 billion to federal deficits while increasing federal spending by more than $1.15 trillion over the same period and increasing amounts thereafter.”
As Blahous notes, these numbers are necessarily spongy because of the now inveterate tendency for everyone to regard new benefits as fixed in stone, but to treat new cost constraints as unfortunate nuisances rightly subject to constant erosion by future Congressional action.
The Times also falters in its claim that a government advisory board can make good on its promise to “propose cuts in payments to providers and insurers if necessary to meet budget targets.” That task requires the heroic assumption that the physicians and insurers will never exit the market if the payment cuts make it impossible for them to cover their costs, including those needed to comply with the law. Indeed, the real fear here is that the supply of health-care professionals will fail to meet the added demand generated both by the exchanges and the Medicaid extension.
Time For a Fresh Start
Plainly, there is need for a fresh start on this program. David Hyman and I have proposed that the only way in which it is possible to reduce costs and increase access is by a systematic program of deregulation that allows new entry into the market by parties such as out-of-state medical groups, corporate providers of basic health-care services, or out-of-state insurers now blocked from doing business within the state.
The Times itself pays a backhanded compliment to this proposal when it chides Romney for consigning the uninsured to emergency room care. But the entry of these new market players would reduce that grim prospect by allowing the entry of private health-care businesses into the market that specialize in providing walk-in care to all individuals at lower costs. Once those costs are reduced, individuals will filter back into the health insurance market without government compulsion.
The same can happen to employer health-care programs. Over the past 30 years, employers have dropped about 15 million workers from such plans because they cannot afford to pay for the government mandates that force them to offer expensive coverages for benefits that employees do not want.
In short, it is not possible to cure the present dangers of current regulation by more regulation.
The same can be said here of Medicare’s perilous situation, where the current program is not sustainable so long as it provides all individuals with expensive care at zero margin costs. It is difficult, of course, to figure out how to work a premium support plan, but at least the Romney-Ryan plan offers the promise of forcing individuals to internalize some of their own costs in an effort to prevent the system from going bankrupt, which it easily can do. The difficulties here stem in part from the delicate problem of transition, as it is not possible to cut current Medicare recipients from the program without massive and unacceptable dislocation.
The Romney-Ryan programs seek to introduce a ten-year transition period, after which those individuals who do not like the current Medicare program can opt into the voucher-like support plan that gives them greater control over their own health care expenditures. It would be rash to predict that any system like this could work, given the political risks that are sure to crop up during a long transition period. But it is foolish to think that yet another round of payment controls can bring the Medicare budget into balance, when all such efforts have had, at most, limited success during the 47 years of Medicare’s existence.
There is no easy path to health-care reform and there is no way in which market mechanisms, going forward, can undo all of the damage done to the system. But doubling down on government control of the market will not make matters better, as President Obama would have us believe. The Romney proposals are maddeningly vague in many respects, but at least they hold out the prospect of unraveling many of our past regulatory mistakes by shrinking the size of the government role in health care.
Richard A. Epstein, the Peter and Kirsten Bedford Senior Fellow at the Hoover Institution, is the Laurence A. Tisch Professor of Law, New York University Law School, and a senior lecturer at the University of Chicago. His areas of expertise include constitutional law, intellectual property, and property rights. His most recent books are Design for Liberty: Private Property, Public Administration, and the Rule of Law (2011), The Case against the Employee Free Choice Act (Hoover Press, 2009) and Supreme Neglect: How to Revive the Constitutional Protection for Private Property (Oxford Press, 2008).
Capitalism.
Mitt Romney's résumé at Bain should be a slam dunk. He has been a successful capitalist, and capitalism is the best thing that has ever happened to the material condition of the human race. From the dawn of history until the 18th century, every society in the world was impoverished, with only the thinnest film of wealth on top. Then came capitalism and the Industrial Revolution. Everywhere that capitalism subsequently took hold, national wealth began to increase and poverty began to fall. Everywhere that capitalism didn't take hold, people remained impoverished. Everywhere that capitalism has been rejected since then, poverty has increased.
Capitalism has lifted the world out of poverty because it gives people a chance to get rich by creating value and reaping the rewards. Who better to be president of the greatest of all capitalist nations than a man who got rich by being a brilliant capitalist?
Capitalism has lifted the world out of poverty because it gives people a chance to get rich by creating value and reaping the rewards. Who better to be president of the greatest of all capitalist nations than a man who got rich by being a brilliant capitalist?
"Capitalism has lifted the world out of poverty because it gives people a chance to get rich by creating value and reaping the rewards."
Yet it hasn't worked out that way for Mr. Romney. "Capitalist" has become an accusation. The creative destruction that is at the heart of a growing economy is now seen as evil. Americans increasingly appear to accept the mind-set that kept the world in poverty for millennia: If you've gotten rich, it is because you made someone else poorer.
What happened to turn the mood of the country so far from our historic celebration of economic success?
Two important changes in objective conditions have contributed to this change in mood. One is the rise of collusive capitalism. Part of that phenomenon involves crony capitalism, whereby the people on top take care of each other at shareholder expense (search on "golden parachutes").
But the problem of crony capitalism is trivial compared with the collusion engendered by government. In today's world, every business's operations and bottom line are affected by rules set by legislators and bureaucrats. The result has been corruption on a massive scale. Sometimes the corruption is retail, whereby a single corporation creates a competitive advantage through the cooperation of regulators or politicians (search on "earmarks"). Sometimes the corruption is wholesale, creating an industrywide potential for profit that would not exist in the absence of government subsidies or regulations (like ethanol used to fuel cars and low-interest mortgages for people who are unlikely to pay them back). Collusive capitalism has become visible to the public and increasingly defines capitalism in the public mind.
Another change in objective conditions has been the emergence of great fortunes made quickly in the financial markets. It has always been easy for Americans to applaud people who get rich by creating products and services that people want to buy. That is why Thomas Edison and Henry Ford were American heroes a century ago, and Steve Jobs was one when he died last year.
When great wealth is generated instead by making smart buy and sell decisions in the markets, it smacks of inside knowledge, arcane financial instruments, opportunities that aren't accessible to ordinary people, and hocus-pocus. The good that these rich people have done in the process of getting rich is obscure. The benefits of more efficient allocation of capital are huge, but they are really, really hard to explain simply and persuasively. It looks to a large proportion of the public as if we've got some fabulously wealthy people who haven't done anything to deserve their wealth.
The objective changes in capitalism as it is practiced plausibly account for much of the hostility toward capitalism. But they don't account for the unwillingness of capitalists who are getting rich the old-fashioned way—earning it—to defend themselves.
I assign that timidity to two other causes. First, large numbers of today's successful capitalists are people of the political left who may think their own work is legitimate but feel no allegiance to capitalism as a system or kinship with capitalists on the other side of the political fence. Furthermore, these capitalists of the left are concentrated where it counts most. The most visible entrepreneurs of the high-tech industry are predominantly liberal. So are most of the people who run the entertainment and news industries. Even leaders of the financial industry increasingly share the politics of George Soros. Whether measured by fundraising data or by the members of Congress elected from the zip codes where they live, the elite centers with the most clout in the culture are filled with people who are embarrassed to identify themselves as capitalists, and it shows in the cultural effect of their work.
Another factor is the segregation of capitalism from virtue. Historically, the merits of free enterprise and the obligations of success were intertwined in the national catechism. McGuffey's Readers, the books on which generations of American children were raised, have plenty of stories treating initiative, hard work and entrepreneurialism as virtues, but just as many stories praising the virtues of self-restraint, personal integrity and concern for those who depend on you. The freedom to act and a stern moral obligation to act in certain ways were seen as two sides of the same American coin. Little of that has survived.
To accept the concept of virtue requires that you believe some ways of behaving are right and others are wrong always and everywhere. That openly judgmental stand is no longer acceptable in America's schools nor in many American homes. Correspondingly, we have watched the deterioration of the sense of stewardship that once was so widespread among the most successful Americans and the near disappearance of the sense of seemliness that led successful capitalists to be obedient to unenforceable standards of propriety. Many senior figures in the financial world were appalled by what was going on during the run-up to the financial meltdown of 2008. Why were they so silent before and after the catastrophe? Capitalists who behave honorably and with restraint no longer have either the platform or the vocabulary to preach their own standards and to condemn capitalists who behave dishonorably and recklessly.
Yet it hasn't worked out that way for Mr. Romney. "Capitalist" has become an accusation. The creative destruction that is at the heart of a growing economy is now seen as evil. Americans increasingly appear to accept the mind-set that kept the world in poverty for millennia: If you've gotten rich, it is because you made someone else poorer.
What happened to turn the mood of the country so far from our historic celebration of economic success?
Two important changes in objective conditions have contributed to this change in mood. One is the rise of collusive capitalism. Part of that phenomenon involves crony capitalism, whereby the people on top take care of each other at shareholder expense (search on "golden parachutes").
But the problem of crony capitalism is trivial compared with the collusion engendered by government. In today's world, every business's operations and bottom line are affected by rules set by legislators and bureaucrats. The result has been corruption on a massive scale. Sometimes the corruption is retail, whereby a single corporation creates a competitive advantage through the cooperation of regulators or politicians (search on "earmarks"). Sometimes the corruption is wholesale, creating an industrywide potential for profit that would not exist in the absence of government subsidies or regulations (like ethanol used to fuel cars and low-interest mortgages for people who are unlikely to pay them back). Collusive capitalism has become visible to the public and increasingly defines capitalism in the public mind.
Another change in objective conditions has been the emergence of great fortunes made quickly in the financial markets. It has always been easy for Americans to applaud people who get rich by creating products and services that people want to buy. That is why Thomas Edison and Henry Ford were American heroes a century ago, and Steve Jobs was one when he died last year.
When great wealth is generated instead by making smart buy and sell decisions in the markets, it smacks of inside knowledge, arcane financial instruments, opportunities that aren't accessible to ordinary people, and hocus-pocus. The good that these rich people have done in the process of getting rich is obscure. The benefits of more efficient allocation of capital are huge, but they are really, really hard to explain simply and persuasively. It looks to a large proportion of the public as if we've got some fabulously wealthy people who haven't done anything to deserve their wealth.
The objective changes in capitalism as it is practiced plausibly account for much of the hostility toward capitalism. But they don't account for the unwillingness of capitalists who are getting rich the old-fashioned way—earning it—to defend themselves.
I assign that timidity to two other causes. First, large numbers of today's successful capitalists are people of the political left who may think their own work is legitimate but feel no allegiance to capitalism as a system or kinship with capitalists on the other side of the political fence. Furthermore, these capitalists of the left are concentrated where it counts most. The most visible entrepreneurs of the high-tech industry are predominantly liberal. So are most of the people who run the entertainment and news industries. Even leaders of the financial industry increasingly share the politics of George Soros. Whether measured by fundraising data or by the members of Congress elected from the zip codes where they live, the elite centers with the most clout in the culture are filled with people who are embarrassed to identify themselves as capitalists, and it shows in the cultural effect of their work.
Another factor is the segregation of capitalism from virtue. Historically, the merits of free enterprise and the obligations of success were intertwined in the national catechism. McGuffey's Readers, the books on which generations of American children were raised, have plenty of stories treating initiative, hard work and entrepreneurialism as virtues, but just as many stories praising the virtues of self-restraint, personal integrity and concern for those who depend on you. The freedom to act and a stern moral obligation to act in certain ways were seen as two sides of the same American coin. Little of that has survived.
To accept the concept of virtue requires that you believe some ways of behaving are right and others are wrong always and everywhere. That openly judgmental stand is no longer acceptable in America's schools nor in many American homes. Correspondingly, we have watched the deterioration of the sense of stewardship that once was so widespread among the most successful Americans and the near disappearance of the sense of seemliness that led successful capitalists to be obedient to unenforceable standards of propriety. Many senior figures in the financial world were appalled by what was going on during the run-up to the financial meltdown of 2008. Why were they so silent before and after the catastrophe? Capitalists who behave honorably and with restraint no longer have either the platform or the vocabulary to preach their own standards and to condemn capitalists who behave dishonorably and recklessly.
"Historically, the merits of free enterprise and the obligations of success were intertwined in the national catechism."And so capitalism's reputation has fallen on hard times and the principled case for capitalism must be made anew. That case has been made brilliantly and often in the past, with Milton Friedman's "Capitalism and Freedom" being my own favorite. But in today's political climate, updating the case for capitalism requires a restatement of old truths in ways that Americans from across the political spectrum can accept. Here is my best effort:
The U.S. was created to foster human flourishing. The means to that end was the exercise of liberty in the pursuit of happiness. Capitalism is the economic expression of liberty. The pursuit of happiness, with happiness defined in the classic sense of justified and lasting satisfaction with life as a whole, depends on economic liberty every bit as much as it depends on other kinds of freedom.
"Lasting and justified satisfaction with life as a whole" is produced by a relatively small set of important achievements that we can rightly attribute to our own actions. Arthur Brooks, my colleague at the American Enterprise Institute, has usefully labeled such achievements "earned success." Earned success can arise from a successful marriage, children raised well, a valued place as a member of a community, or devotion to a faith. Earned success also arises from achievement in the economic realm, which is where capitalism comes in.
Earning a living for yourself and your family through your own efforts is the most elemental form of earned success. Successfully starting a business, no matter how small, is an act of creating something out of nothing that carries satisfactions far beyond those of the money it brings in. Finding work that not only pays the bills but that you enjoy is a crucially important resource for earned success.
Making a living, starting a business and finding work that you enjoy all depend on freedom to act in the economic realm. What government can do to help is establish the rule of law so that informed and voluntary trades can take place. More formally, government can vigorously enforce laws against the use of force, fraud and criminal collusion, and use tort law to hold people liable for harm they cause others.
Everything else the government does inherently restricts economic freedom to act in pursuit of earned success. I am a libertarian and think that almost none of those restrictions are justified. But accepting the case for capitalism doesn't require you to be a libertarian. You are free to argue that certain government interventions are justified. You just need to acknowledge this truth: Every intervention that erects barriers to starting a business, makes it expensive to hire or fire employees, restricts entry into vocations, prescribes work conditions and facilities, or confiscates profits interferes with economic liberty and usually makes it more difficult for both employers and employees to earn success. You also don't need to be a libertarian to demand that any new intervention meet this burden of proof: It will accomplish something that tort law and enforcement of basic laws against force, fraud and collusion do not accomplish.
People with a wide range of political views can also acknowledge that these interventions do the most harm to individuals and small enterprises. Huge banks can, albeit at great expense, cope with the Dodd-Frank law's absurd regulatory burdens; many small banks cannot. Huge corporations can cope with the myriad rules issued by the Occupational Safety and Health Administration, the Environmental Protection Agency, the Equal Employment Opportunity Commission and their state-level counterparts. The same rules can crush small businesses and individuals trying to start small businesses.
Finally, people with a wide range of political views can acknowledge that what has happened incrementally over the past half-century has led to a labyrinthine regulatory system, irrational liability law and a corrupt tax code. Sweeping simplifications and rationalizations of all these systems are possible in ways that even moderate Democrats could accept in a less polarized political environment.
To put it another way, it should be possible to revive a national consensus affirming that capitalism embraces the best and most essential things about American life; that freeing capitalism to do what it does best won't just create national wealth and reduce poverty, but expand the ability of Americans to achieve earned success—to pursue happiness.
Reviving that consensus also requires us to return to the vocabulary of virtue when we talk about capitalism. Personal integrity, a sense of seemliness and concern for those who depend on us are not "values" that are no better or worse than other values. Historically, they have been deeply embedded in the American version of capitalism. If it is necessary to remind the middle class and working class that the rich are not their enemies, it is equally necessary to remind the most successful among us that their obligations are not to be measured in terms of their tax bills. Their principled stewardship can nurture and restore our heritage of liberty. Their indifference to that heritage can destroy it.
—Mr. Murray is the author of "Coming Apart: The State of White America, 1960-2010" and the W.H. Brady Scholar at the American Enterprise Institute.
The U.S. was created to foster human flourishing. The means to that end was the exercise of liberty in the pursuit of happiness. Capitalism is the economic expression of liberty. The pursuit of happiness, with happiness defined in the classic sense of justified and lasting satisfaction with life as a whole, depends on economic liberty every bit as much as it depends on other kinds of freedom.
"Lasting and justified satisfaction with life as a whole" is produced by a relatively small set of important achievements that we can rightly attribute to our own actions. Arthur Brooks, my colleague at the American Enterprise Institute, has usefully labeled such achievements "earned success." Earned success can arise from a successful marriage, children raised well, a valued place as a member of a community, or devotion to a faith. Earned success also arises from achievement in the economic realm, which is where capitalism comes in.
Earning a living for yourself and your family through your own efforts is the most elemental form of earned success. Successfully starting a business, no matter how small, is an act of creating something out of nothing that carries satisfactions far beyond those of the money it brings in. Finding work that not only pays the bills but that you enjoy is a crucially important resource for earned success.
Making a living, starting a business and finding work that you enjoy all depend on freedom to act in the economic realm. What government can do to help is establish the rule of law so that informed and voluntary trades can take place. More formally, government can vigorously enforce laws against the use of force, fraud and criminal collusion, and use tort law to hold people liable for harm they cause others.
Everything else the government does inherently restricts economic freedom to act in pursuit of earned success. I am a libertarian and think that almost none of those restrictions are justified. But accepting the case for capitalism doesn't require you to be a libertarian. You are free to argue that certain government interventions are justified. You just need to acknowledge this truth: Every intervention that erects barriers to starting a business, makes it expensive to hire or fire employees, restricts entry into vocations, prescribes work conditions and facilities, or confiscates profits interferes with economic liberty and usually makes it more difficult for both employers and employees to earn success. You also don't need to be a libertarian to demand that any new intervention meet this burden of proof: It will accomplish something that tort law and enforcement of basic laws against force, fraud and collusion do not accomplish.
People with a wide range of political views can also acknowledge that these interventions do the most harm to individuals and small enterprises. Huge banks can, albeit at great expense, cope with the Dodd-Frank law's absurd regulatory burdens; many small banks cannot. Huge corporations can cope with the myriad rules issued by the Occupational Safety and Health Administration, the Environmental Protection Agency, the Equal Employment Opportunity Commission and their state-level counterparts. The same rules can crush small businesses and individuals trying to start small businesses.
Finally, people with a wide range of political views can acknowledge that what has happened incrementally over the past half-century has led to a labyrinthine regulatory system, irrational liability law and a corrupt tax code. Sweeping simplifications and rationalizations of all these systems are possible in ways that even moderate Democrats could accept in a less polarized political environment.
To put it another way, it should be possible to revive a national consensus affirming that capitalism embraces the best and most essential things about American life; that freeing capitalism to do what it does best won't just create national wealth and reduce poverty, but expand the ability of Americans to achieve earned success—to pursue happiness.
Reviving that consensus also requires us to return to the vocabulary of virtue when we talk about capitalism. Personal integrity, a sense of seemliness and concern for those who depend on us are not "values" that are no better or worse than other values. Historically, they have been deeply embedded in the American version of capitalism. If it is necessary to remind the middle class and working class that the rich are not their enemies, it is equally necessary to remind the most successful among us that their obligations are not to be measured in terms of their tax bills. Their principled stewardship can nurture and restore our heritage of liberty. Their indifference to that heritage can destroy it.
—Mr. Murray is the author of "Coming Apart: The State of White America, 1960-2010" and the W.H. Brady Scholar at the American Enterprise Institute.
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