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Wage stagnation is the real problem
David Frum
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TEXT OF COMMENTARY
KAI RYSSDAL: Democrats hold the White House. They've got strong majorities in both houses of Congress. Fallout from the financial crisis continues to wreak havoc on the markets. And more regulations are surely just around the corner.
But commentator David Frum says that before Republicans start complaining they ought to ask themselves some hard questions.
DAVID FRUM: Like many Republicans, I don't much care for Barack Obama's economic plans. From our point of view, he is using an emergency in the financial markets as a cover to launch America into a huge, costly long-term spending program of little probable value.
Obama's infrastructure plans are bad ideas. But they do respond to a real problem.
Even before the recession, even before the financial crisis, the income of the typical American worker was stagnating. After inflation, the median American worker earned no more in early 2007 than he or she had earned seven years before.
Under any circumstances, this wage stagnation would have done the incumbent party terrible political harm. But the harm was especially great in 2006 and again in 2008 because Republicans offered no plausible idea about how to get wages growing again. Worse, we refused to acknowledge the problem even existed. We said the Bush economy was the greatest story never told. We dismissed those who disagreed as "whiners."
But there are conservative policies that offer real hope to workers at the middle. Here are two ideas:
The first is to reduce immigration flows. The arrival of more than a million very low-skilled workers, year after year -- at least half of them illegal -- has weighed heavily on the wages of less-skilled Americans.
The second is to throw open the national health care market to brisker competition. Right now, health care is regulated both by the federal government and the 50 states, with many states regulating in ways that drive prices up, not down.
That's one reason there is no Sam Walton or Henry Ford of health care, offering a reliable, inexpensive, standardized product nationwide. Instead, we have constantly rising health care premiums that devour potential wage increases.
Some Republicans and conservatives might not like these ideas. Fine. Do better. Because unless Americans are offered a better alternative, they will follow President Obama's worse one.
RYSSDAL: David Frum is a resident fellow at the American Enterprise Institute. His most recent book is called "Comeback: Conservatism That Can Win Again."
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Here we go again! Deregulate S&Ls... Taxpayers foot the bill. Deregulate banking and credit.... Taxpayers foot the bill. Now Frum suggests deregulating healthcare? When will the free market advocates actually open history books to learn that free market philosophies aren't always the best solutions? And in the case of things like healthcare, managed markets are a better solution.
Or is this just another way for those at the top to skim even more money from yet another sector of the economy, screw it up royaly, and you guessed it, screw the taxpayers who will have to pay to clean up the mess left behind, or suffer the consiquence of yet another failed free market policy?
Mr. Frum says that there is too much regulation in the health care industry. While the current regulations may not be the most effective, the head line story on Marketplace for almost a year has been a financial crisis caused by a lack of government oversight that led to a worldwide meltdown of free market capitalism in the financial sector. Before we “...throw open the national health care market to brisker competition...†we may want to consider the long term impacts. It’s bad enough that millions of Americans are losing their jobs, homes, and retirement savings. Do we want to add their health to the list of road kill? Speaking of road kill, in making the comparison to Henry Ford Mr. Frum must have missed the recent troubles in the automobile industry. Besides, I’m not sure a standardized product is the best way to provide quality health care to every American.
Frum just doesn't give up. He is riding his one trick pony into the ground. It never was intended to carry the weight of overcompensated executives, failing banks, rising unemployment, falling wages and a global climate crisis.
David: If you are so concerned about falling wages, why not look to history for your answer? Unions, with their many problems, were the most effective means of promoting wage gains. Henry Ford saw the problem a long time ago and wanted to avoid unions by paying higher wages to his employees.
Instead, Mr. Frum would have us demonize immigrants and not focus on the problem where it lies - unequal wage bargaining. May I live long enough to see Frum really embrace change and hug a union member!!
David Frum's health care prescription is a fraud. It is immoral to place profits above medical care for individuals, and his "free the health care system" mantra does just that. I hope Obama moves to a single payer system that can provide the security and coverage that ALL Americans deserve.
I commend Marketplace for including this piece by David Frum. I certainly can second that wage stagnation is a major issue because I feel it where it hurts. I bet that many of those that have commented here do to but aren't admitting the Frum is right. It sure is funny how folks are railing on Frum and on Marketplace for airing Frum. Several to the tune of "keep this off the air"! Funny how these same people purport to be open-minded, free-speech-loving, tolerant includers but end up sounding like gimme-only-what-I-wanna-hear haters.
This one made me laugh so hard I had to stop the car. When are people going to realize that Frum, along with pretty much everything else that comes out of AEI, is a total fraud? How on earth do these people keep getting air time? Tell you what, you "conservatives" should definitely implement David's ideas. By all means. But please start your own country first; don't do it in mine. You've already done quite enough, thanx.
"Obama's infrastructure plans are bad ideas." No arguments are offered in support of this sweeping assertion. No facts. No statistics. No logic or reasoning.
"many states [regulate health care] in ways that drive prices up, not down."
No examples are cited; no plausible mechanism is described, no statistics are cited, no price comparisons. Apparently we are simply expected to accept this as Revealed Truth. FRUM has spoken.
This makes no contribution to intelligent discussion of important issues, and it insults the listener's intelligence to present it as though it does. Material like this falls far short of the standards of public-radio journalism. Do better.
Norman: why Frum did not raise the issue of outsourcing manufacturing and previously high paying job? How would Obama prevent outsourcing? How he would reduce immigration - is easy. Like the commander-in-chief is directly in control of the military, through the State Dept, the President can merely issue fewer visas. And through the Justice Dept, implement more aggressive enforcement. On the other hand, the president has no direct control over the production of goods and services by businesses and corporations. He does, however, have direct control immigration rates.
Bret
Why not health care?
..because that would entail throwing out of work, all those people who work in the private healthcare industry. Then we would have to suffer through the learning curve as the government begins to do something in which it has no experience.
Britain and France were able to implement national healthcare programs because the private healthcare infrastructure was in post-war shambles. So, short of revolution, devastating natural disaster, or economic collapse, we have to work with our current healthcare-industrial complex because their lobbying clout is just too powerful. They even have ex-maverick Clinton in their hip-pocket. Sad.
Kurt wrote: "As far as healthcare - in this country this is done by private businesses and agencies, not by the government. The government can only attempt to influence the healthcare industry by offering carrots and sticks." ------------- Kurt, that's the problem. That's why our health care is in shambles and France ranks #1 in the world. The profit motive should not be involved the way it is. Some things should never be privatized. We have public education and public safety. These are considered rights. Why not health care? All evidence shows it works better.
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