Like the rest of us, President Obama is assessing the significance of Scott Brown’s election as the new Senator from Massachusetts. The President would be wrong to interpret the election as a rebuke to healthcare reform.
The President’s quick response has been to replace his push for healthcare reform with invectives against the financial services industry. The President’s approach may work in the short term and certainly will fail in the long term.
Healthcare reform, along with tax reform and military spending, is one of three key areas in which change is needed to undue the failed policies of President George W. Bush. Undoing these policies is essential to restoring the long-term health and stability of our economy and society.
President Obama understands that voters, above all else, are fearful or uneasy about the economy. Voters want to see urgency from Washington over the economy that the Democrats have not shown. For over a decade, the Fox News-Republican juggernaut has fed the public's desire for angry rhetoric, scapegoats and flawed quick fix solutions. The Fox News medium has moved the message away from rational, long-term thinking. Effective politicians must be angry and indignant, and not in a liberal way.
The sad reality is that there is little that can be done by President Obama, or any President for that matter, to improve our economy in the short term. Recessions are cyclical. They cannot be avoided. As we have seen during President George W. Bush’s term, attempts to avoid or delay them may only make the inevitable next recession significantly worse. Like W.’s attempts to stave off recession with underfunded taxes and give away checks, President Obama’s populist saber rattling against the banks with threats of taxes may only worsen the situation by weakening those financial institutions on which America relies for lending, credit, and liquidity.
Recent history that led us into this severe recession provides clues as to the way out. George W. Bush’s major decisions that hurt the American economy were extending a drastically underfunded tax cut, exacerbating our health care crisis by passing a drastically underfunded medicare bill without sufficient cost controls, and launching an unfunded trillion dollar plus war in the Middle East based on the false premises that Iraq had WMD and connections to al Qaeda. These three measures together hobbled U.S. fiscal stability and made the current recession the beast that it is.
Thus far, our President has decided to continue the costly, albeit somewhat refocused, military initiatives in the Middle East. President Obama cannot raise taxes in the middle of a recession. Sadly, that leaves only the healthcare reform that our President looks to be on the verge of abandoning.
Our President has cited the sapping effect that our healthcare system has on our competitiveness. In rough summary, America pays twice as much as the rest of the first world for healthcare that is half as good. A logical conclusion is that Americans pay four times per unit of decent healthcare than citizens of other first world nations.
The American healthcare misery widespread and desperate: more than half the bankruptcies in the U.S. are caused by health problems and in more than half of those cases the sick had insurance that proved substandard; 42,000 Americans die every year due to lack of adequate healthcare insurance; and corporations cannot afford to hire American workers because of the competitive disadvantage to businesses located in foreign countries in which the government picks up the cost of worker health insurance.
The challenge of America’s broken healthcare system is great, and so are the political consequences. The healthcare industry has a strong hold over our government, including especially Senators from small states in which the electorate cannot afford to make sufficient donations to elect a politician without undue influence from industry. To make matters worse, Republicans have formed an alliance with Rupert Murdoch to fight all serious efforts at Democratic reform. With demagoguery, Fox News has turned against the Democrats a large portion of less affluent Americans who would benefit most from healthcare and other reform. Obviously, with Scott Brown’s election, a filibuster in the Senate is now the greatest immediate threat and will require political wrangling and compromise.
At the same time, if the President and Democrats do not succeed in passing significant healthcare reform, the cost will be much greater than doing nothing. If Democrats fail to deliver on their campaign promises of healthcare reform, voters in November will not be receptive to excuses based on finger pointing and procedures in the Senate. As Bill Clinton is quick to point out, 2010 will be a repeat of 1994. In the long run, the health of both our economy and American citizens will be far worse if the President replaces healthcare reform with populism against banks. If the resulting healthcare reform is imperfect, President Obama now has cover in the threat of a Republican filibuster in the Senate.
This is not to argue that structural financial reform is not needed. It is. But not as a substitute for healthcare reform. The President should not underestimate the near term and long term effects of a failure to deliver on his promise of healthcare reform. As Donna Shalala, among others, has observed, Americans hated Bush’s medicare bill when it was passed and within a year of passage the measure was popular to the point where to repeal it would be political suicide. I for one, hope the President keeps his recently rekindled fire burning, including to finish the job of attaining substantial healthcare reform.