Month: March 2020

One of the more disheartening developments in what we laughingly call public debate has been the extraordinary emphasis placed on “the narrative”. The whole point of “the narrative” is issue framing. Instead of facts like who, what, where, why and when, the narrative seeks to define the contours of a story, and therefore the way the story is understood. In this manner, a story becomes part of a larger picture, woven into a tapestry of stories, pointing in the same direction, supposedly revealing a larger truth. 

But there is a problem with this. It is reasonably easy for unscrupulous players to get away with deliberately mischaracterizing issues by slippery uses of language and symbols, especially when they are not called out by the press. To be clear, it is not just deliberate mischaracterization that is a problem; it is also results from intellectual laziness and sloppy thinking that comfortably fits into the accepted “narrative”. 

Consider recent developments. The Corona virus is now charting a devastating path across the globe. With few exceptions, Taiwan being one, governments have been caught flat-footed. In part this is due to the dishonestly of the Chinese government which tried to cover up the outbreak at its epicenter in the Wuhan province. But other governments and international agencies like the World Health Organization (WHO) chose to believe them or pretend to believe them, giving the virus time to metastasize around the globe before effective containment efforts could begin. 

Let’s acknowledge that there are reasonable people (most politicians excluded) on all sides of the discussion considering the likely path and severity of the virus. In part this is due to a lack of data. As the Wall Street Journal reports, CDC officials botched the initial development of a test kit; resisted calls from state officials and medical providers to broaden testing, and health officials failed to coordinate with outside companies to ensure needed test-kit supplies. As a result, largely due to lack of information, U.S. efforts to contain the virus were hamstrung from the very beginning. 

Add to that the magical thinking of President Donald J Trump. The irony is that Trump, a germaphobe, apparently decided that the whole exercise was nothing more than a publicity problem. And so he embarked on a regimen of happy talk in the hope that it would all go away, thus displaying for the umpteenth time how utterly unsuited he is for the office he holds. 

Which gets us back to the narrative. 

There is little question that Trump put on a breathtaking display of incompetence in his initial response to the threat posed by the virus. That said, it is also the case that we have a systemic failure on our hands. The failure has been years in the making. It is the result of bureaucratic ineptitude and policies adopted across many levels of government over a long period of time. It is not the singular fault of Trump as the developing narrative has it. Nor is the solution to simply hand out buckets full of cash, which is the usual progressive solution to just about everything. 

Consider, for example, the latest policy initiative which is to “flatten the curve”. When epidemiologists talk about flattening the curve, they mean to spread out over time, rather than reduce, the incidence of contagion. The rationale for this is to avoid a concentrated case load that would overcome the treatment capacity of the health care system. Note that this approach, designed to save the system rather than individual patients, may very well result in more rather than fewer people becoming infected. On the other hand, if the system did become overwhelmed, it is quite possible, if not probable, that more people would die. 

Why Are We in This Mess?

At this stage of the game it is worth asking why the wealthiest, most powerful nation on earth finds itself with a potential shortage of hospital beds, other relevant medical equipment, doctors, nurses and other health care professionals. One important reason, although not the only one, is the collection of perverse incentives embedded in the health care system. 

Consider the question of hospital bed capacity. The limited number of available hospital beds is not an accident; it is there by design. Hospitals are subject to state as well as federal regulations.  Among those are requirements for hospitals to acquire a “certificate of need” or CON from state regulatory authorities before adding hospital beds and some other types of equipment, e.g.,— MRI machines. Partially as a result, the U.S. has only 2.8 beds per 1,000 people—less than the 3.2 beds Italy has. By way of contrast, South Korea heads the list with 12.3 beds per 1,000 people. (For an in depth discussion, please see this article in Reason Magazine.)

Anti-competitive restrictions on hospital beds and other capital equipment are not the only problem. The system is driven by price controls that discourage innovation. The biggest spender for health care is the federal government, which decrees what it will pay for certain services through Medicare and Medicaid. In turn, these pricing policies affect what insurance companies will pay providers. Which in turn affects premiums that customers pay. Which, of course, our modern central planners want to eliminate by making private insurance illegal, thus locking in all the market distortions the current system has embedded in it. A single payer system would rely on mandates and allow no competition, and would guaranty that supply and demand would remain out of alignment. 

But rational discussion of supply, demand and market pricing is to be avoided at all costs. The all important and phony narrative must be maintained. The problem is really the result of waste, fraud, abuse and corporate greed. Couple that with the fact that Donald Trump is president. Add the fantasy that he is illegitimate because Vladimir Putin put him there, and all the ingredients are there to believe anything. Anything but the truth of the matter, which is that a combination of incompetent leadership and the command and control system put in place over the years failed us. As usual.

Not surprisingly, because it fits the narrative, the solution being crafted in Washington is to throw money at favored constituencies, which may or may not have anything to do with the virus. Consider the argument for sending out checks to citizens in order to stimulate the economy. Does anybody seriously believe that sending citizens checks and then telling them to stay home is even remotely stimulative?

It is certainly the case that many citizens will experience significant hardship over the months ahead as the unemployment rate rapidly heads north. In this emergency situation it is proper for the government to act as a backstop, especially since it is a response to a situation utterly beyond the control of the citizenry. But it is important to note that the rescue is not free; the bill will have to be paid later. In addition, it should serve as a wake up call for reform that moves in the opposite direction we have been headed. The health care system should move toward decentralization, market pricing and local decision making rather than more centralization, price controls, and top down bureaucracy.  

But I’m not holding my breath. 

JFB