Donald Trump’s presidency is off to a rocky start. Political promises are easier made than kept. He needs our help.
Take health care. During the campaign, Trump promised to replace Obamacare with a plan that would cover more people, improve benefits, and lower costs. People cheered. But Trump had no plan. House Republicans came up with a plan that would cover fewer people, provide fewer benefits, and significantly raise costs for most health care consumers. Opposed from all sides, it never came up for a vote.
Now the nation wonders. Which of Trump’s vague and conflicting promises regarding health care, jobs, tax reform, fiscal responsibility, infrastructure repair, and trade will he and the Republicans honor, and which will they abandon? No one seems to know, including the president. And that creates an opportunity for adults from both Republican and Democratic parties to respond.
On health care, the media has been buzzing recently about a tested and proven plan that could fulfill Trump’s promise to extend coverage and improve benefits while saving $617 billion annually on health care overhead and drug price costs.
It’s called Medicare for All. A January 2017 Pew Research Center poll found that 60% of Americans favor a federally funded health care system. The only losers would be private health insurance companies. With Trump’s backing, the plan could potentially win bipartisan support, and give Trump a victory and a claim to credit for the most important health reform in U.S. history.
Trump’s other big-ticket policy issues are less easily addressed: jobs, regulation, tax reform, trade, and fiscal responsibility. Perhaps we might start with a defining question and then apply some foundational principles of real market theory—as distinct from market ideology.
The question traces back to a 1909 quote from a young Winston Churchill, then a member of the British Parliament, “Formerly the only question of the tax-gatherer was, ‘How much have you got?’ ... Today ... we also ask, ‘How did you get it?’”
Trump is correct that the system is badly broken and in need of significant rethinking.
The contemporary version of Churchill’s question adds another consideration: “Is it something we want more of or less of?” Put the burden of funding public programs and services on those who enrich themselves at the expense of the larger society, and let the market do its job.
This brings us to three foundational principles of efficient market allocation in the public interest.
• Full costs must be internalized—which means they must be borne by the profit-taker and the ultimate consumer—not externalized onto the public.;
• There can be no concentrations of market power that allow a seller to extract unearned profits by monopoly pricing; and
• Financial assets must be invested productively, not in financial games that extract unearned value from society.
To have an efficient market economy, the government must enforce these principles either through regulations or a compensating “market adjustment” fee. A carbon emissions fee added to coal, petroleum, or natural gas at the point of extraction would correct for significant current market distortions that encourage the use of fossil energy and destabilize the climate. The proceeds could be used to create millions of jobs advancing the transition to sustainable energy.
Similar market adjustment fees could correct other market distortions, including outsourcing jobs to sweatshops, mining rather than recycling material resources, dumping toxic wastes, financial gains unrelated to the production of anything of value, monopoly pricing, and much more. Proceeds from such fees could be used to create jobs rebuilding America’s infrastructure—another Trump promise.
Trump is correct that the system is badly broken and in need of significant rethinking and restructuring. He has served us all in breaking things open—but only if we use the moment for serious rethinking grounded in sound principles. Now is the time to step outside the conventional ideological boxes of establishment politics and move forward with ideas that can win broad political support.