Monday, March 14, 2016

The Trump-Sanders Bipartisan War on Free Trade

Like most economists, I am strongly inclined toward free trade. I cringe to see the way free trade is under attack, from both parties, during this primary season.

The two populist candidates are the worst offenders. Bernie Sanders, whom I support on many other issues [1] [2] [3], goes off the rails when it comes to trade. Donald Trump, whose policy views are sometimes too vague to pin down, has made clear-cut opposition to “horrible trade deals” a centerpiece of his campaign.

Nor is the pushback from the rest of the field as strong as one might hope. Hillary Clinton has changed her position on the Trans-Pacific Partnership (TPP), which she supported as Secretary of State, and runs away from her previous support for the North American Free Trade Agreement (NAFTA), which she liked well enough when her husband signed it into law. On the Republican side, Ted Cruz, Marco Rubio, and John Kasich all profess to favor free trade in principle, but when pushed, as they were during last week’s Republican debate in Miami, they quickly go on defense, hedging their support for trade with numerous “ifs” and “buts”.

Let’s take a look at some of the candidates’ least defensible arguments against free trade, starting with Trump and moving on to Sanders.

Friday, March 4, 2016

Why Sanders Healthcare Plan is on the Right Track Despite Critics on Left and Right

Presidential candidate Bernie Sanders has reopened the healthcare debate by urging America to adopt a system more like that of other wealthy countries. “The United States is the only major country on earth that doesn't guarantee health care to all people,” he says, “And we end up spending far, far more per capita on health care as do the people of any other country: Canada, U.K., France, whatever.”

Yet, even though he’s right, his healthcare platform is under attack, not just from the right, but also from the left. Here is why I think his critics are wrong.

What to call it?

Sanders says he wants a healthcare system like those of other wealthy countries—one that provides better results at a lower cost than the one we have. Unfortunately, there is no generally accepted term that covers all such systems as a class.

Sanders calls his plan “Medicare for All,” but that is misleading. As we will see, his proposal—at least the brief version posted on his campaign website—differs from Medicare in some important ways. It also differs from many of the systems in other countries that he admires most.

Liberals tend to call Sanders’ plan a “single-payer” system. That is correct, in that Medicare for All would in fact be a system under which a single agency would make directly pay healthcare providers with funds from the government budget. However, many of the best healthcare systems of other wealthy countries are not single-payer systems in that sense. Their plans are surprisingly diverse. Some, like those of Germany and France, funnel payments through multiple independent insurance funds. Others, including those of the UK and Canada, are more decentralized than the “single payer” label suggests. None of them covers 100 percent of national healthcare expenditure.