Hostile Takeover: Resisting Centralized Government's Stranglehold on America (31 page)

About 17 million college-educated Americans are doing jobs that require less than the skill levels associated with a bachelor’s degree, according to the U.S. Bureau of Labor Statistics.
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There are more than 5,000 janitors in the United States with Ph.D.s, other doctorates, or professional degrees.
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When did the federal government determine that everyone should go to college? How could they possibly know the dreams and aspirations of so many unique individuals? Talk about a presumption of knowledge. Peter Thiel, a cofounder of PayPal, strongly doubts that government bureaucrats know best when it comes to higher education. He is actually paying college students big bucks to drop out and develop business ideas instead.
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His idea is that a college education—given the standards and costs today—is not a prerequisite if you have the right talent and ideas. Thinking of extremely successful college dropouts like Bill Gates, Mark Zuckerberg, and Steve Jobs, Thiel is definitely on to something important. While not everyone with a good idea should drop out of college, we need to get away from the one-size-fits-all notion that a college education is “required” for success of any kind.

But don’t dare raise the issue with the centralized elite of the education establishment. For them, a college education is a “right,” and like any positive right proposed by the Left, it must be financed with taxpayer dollars. Who benefits from this arrangement? Mostly politicians, college administrators, and tenured professors. For them, persuading society that a college degree is a “right” is a shrewd investment. Facing a guaranteed supply of new, subsidized customers every year, the higher-ed establishment can simply raise its prices. It’s a great business model, if you care more about the sustainability of the system than about the future indebtedness of your customers.

OCCUPY THE EDUCATION INDUSTRIAL COMPLEX

R
EMEMBER
S
ARAH
M
ASON?
H
ER FACE IS THE COMPOSITE IMAGE OF
Time
magazine’s Person of the Year dedicated to “The Protestor.” The Occupy L.A. activist attended Northern Arizona University. Now she works at an art gallery, and the debt payments from her student loans are the real reason she feels so disenfranchised from the system. “I really don’t know what the system is because if you accumulate billions of dollars in debt like Washington Mutual or the Greek or Irish government, apparently you just get a clean break,” she says. “It’s like, we’ll just lend you our tax revenues so you can turn this mess around.”

Sarah, like many Millennials saddled with the skyrocketing costs of a top-down education establishment, wonders where her bailout is. “I think the Occupy Wall Street Movement has shown that a lot of attention has been going to the fact that students have made an investment in their educations, then they come to the real world and they realize that that investment is essentially worthless.”
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In many respects, the student loan crisis looks remarkably similar to the subprime mortgage crisis. Both involve easy and readily available credit made possible by government policies that sounded too good to be true.
Everyone who wants to should go to college. Everyone who works hard has a right to their own home.
In the mid-2000s, government-sponsored enterprises Fannie Mae and Freddie Mac encouraged lenders to hand out mortgages to countless people who should never have gotten them in the first place.
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But when these borrowers began to default en masse on their mortgage loans, the whole financial sector nearly collapsed, and taxpayers were forced to pick up the tab. In the same way, the government’s grants and loans have increased the number of students who go to college. College enrollment has surged in the past decade, sure; but the government-backed student loans have driven up the cost of education, essentially flipping on its head the economic rationale of higher education. The promise was a better future, not insurmountable debt. But more students than ever before are defaulting on student loans, up to 8 percent in 2011.
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Taxpayers will instantly be on the hook for hundreds of billions of dollars when this bubble does indeed burst. But many taxpayers are not college-educated—only about 27.5 percent of Americans have a college degree.
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So, just like the apartment-renting taxpayers who had to bail out people who purchased homes they could not afford, the majority of Americans who did not go to college will likely bail out the Sarah Masons of the world.

The only ones untouched by this vicious cycle are the insiders: politicians, the Education Department
educrats
, the teachers’ unions collecting ever more mandatory dues to feed the beast, abusive teachers in broken schools who cannot be fired, and tenured professors who find the actual process of teaching students beneath their stature. For them, business is booming.

Don’t you think it’s high time that parents and taxpayers educate the insiders, remind them who they work for, and teach them about customer service, from the bottom up?

CHAPTER 11
L
OSING
P
ATIENTS

R
OBERT
R
EICH IS RILED UP.
“W
E CANNOT, SOME PEOPLE SAY, ANY
longer afford as a nation to provide the safety nets for the poor and the infirm or for the people who fall down for no fault of their own,” he declares, incensed. “But how can that be true if we are now richer than we have ever been before?”
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His audience clearly agrees with the sentiment, cheering and applauding. It is November 15, 2011, and Reich is addressing an Occupy Cal protest on the Mario Savio steps at the University of California, Berkeley. “We are losing the moral foundation stone on which this country and our democracy are built,” he continues.
Applause.

A key member of the Obama campaign’s policy transition team, and labor secretary in the Clinton administration, Reich is now a tenured public policy professor at UC Berkeley. He wants the Occupiers gathered in Sproul Plaza to know that he cares. In fact, he cares far more than
some people.
“Now, there are some people out there who say we cannot afford education any longer, we cannot afford, as a nation, to provide social services to the poor.” (He regularly employs President Obama’s favorite rhetorical device, the straw man.)

Applause.

Reich also wants Occupy Cal to know that he stands with them. He is proud of the Berkeley tradition “of free expression, of social justice and of democracy.”

You must also—and in fact I’m sure you do—feel in your gut that the Occupy movement—the Occupy Cal, the Occupy Oakland, occupations are going on all over this country—are ways in which people are beginning to respond to the crisis of our democracy. And I am so proud of you here today. Your dedication to these principles, your willingness to be patient, your willingness to spend hours in general assemblies, your willingness to put up with what you have put up with is already making a huge difference.

Applause.

Reich is simpatico with their sense of “moral outrage” over the failures of the system to take care of the “infirm.” “The days of apathy are over,” he says.
Applause.

You may wonder what exactly the
moral foundation
is, according to Professor Reich, if you care about
social justice
? What does a proper government-run
safety net
look like when it comes to caring for the
infirm
? These questions were at the heart of the debate over the signature progressive accomplishment of Obama’s first term, and it is important that we get to the answers unclouded by political hyperbole.

WHOSE CARE?

D
EBATE OVER HEALTH CARE REFORM IS BY DEFINITION A MOST PERSONAL
argument. After all, it’s about your health, and the well-being of you and those you love. The decisions we make about our health are personal, informed by our right to life and liberty, and by the personal knowledge that only we have about the needs and circumstances of those closest to us. Patients should come first. Patients should decide. Patients, the customers in health care, should be in charge. Health care decisions are best made individually, from the bottom up.

The idea that someone else would decide for us is downright un-American, a moral breach of a sacred boundary. And that, in its essence, is what the battle over Obamacare was really all about.

You will recall the unified sense of outrage expressed by advocates of Obamacare when opponents claimed that the legislation would lead to “death panels” staffed by government bureaucrats empowered to determine for you, from the top down, which treatments you might qualify for based on some kind of cost-benefit to society, within the constraints of some politically determined global budget. In August 2009, in the heat of the national debate over his plan—his fellow Democrats were on the defensive in town hall meetings across the country, struggling to defend their health care bill amidst a citizen outcry—President Obama himself sought to step forward and debunk the notion:

The rumor that’s been circulating a lot lately is this idea that somehow the House of Representatives voted for “death panels” that will basically pull the plug on grandma because we’ve decided that we don’t—it’s too expensive to let her live anymore. . . . Now, in fairness, the underlying argument I think has to be addressed, and that is people’s concern that if we are reforming the health care system to make it more efficient, which I think we have to do, the concern is that somehow that will mean rationing of care, right?—that somehow some government bureaucrat out there will be saying, well, you can’t have this test or you can’t have this procedure because some bean-counter decides that this is not a good way to use our health care dollars.
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The president denies any such motive or outcome under his plan to manage health care, based on the best knowledge of the brightest health care planners, from the top down. “I recognize there is an underlying fear here that people somehow won’t get the care they need,” he assured a crowd of supporters that day at a Portsmouth, New Hampshire, town hall meeting designed by his staff to stanch criticism of his plan. “You will have not only the care you need, but also the care that right now is being denied to you—only if we get health care reform.”

There are no explicit “death panel” provisions in the bill, of course. Legislation is never named for what it really is, and the “Patient Protection and Affordable Care Act” is no exception. In reality,
patients
are not
protected
. It’s not
affordable
. It’s not
care.
Nancy Pelosi understood this from day one, and she knew that the vivid imagery of health care rationing was the Achilles’ heel of any government takeover of health care. But facts are stubborn things, and the legislation that Pelosi passed and Obama signed
will in fact
shift power over important matters affecting people’s lives and health by injecting a bureaucrat into the sacred doctor-patient relationship. When the supporters of Obamacare talk about “controlling costs,” they are speaking euphemistically about using their new bureaucracy to deny certain treatments deemed “too costly.”

WE’RE GOING TO LET YOU DIE

B
ACK IN 2007,
S
ENATOR
O
BAMA WAS CAMPAIGNING FOR PRESIDENT
on a platform of “universal coverage”—who could be against that? Robert Reich, meanwhile, was giving another speech to another UC Berkeley audience, and the seasoned Democratic apparatchik who would be appointed to President-elect Obama’s transition team had somehow wandered off the party message. Way off message.

Remember Berkeley, the epicenter of
social justice
where they defend a
safety net
for the
infirm
as a moral right? Well, it turns out that there are exceptions to your rights. There is fine print in the social contract. Here, according to Reich, is

what a candidate for president would say if that candidate did not care about becoming president. In other words, this is what the truth is, and a candidate will never say, but what candidates should say if we were in a kind of democracy where citizens were honored in terms of their practice of citizenship, and they were educated in terms of what the issues were, and they could separate myth from reality in terms of what candidates would tell them.

[W]hat I’m going to do is I am going to try to reorganize it to be more amenable to treating sick people. But that means you—particularly you young people, particularly you young, healthy people—you’re going to have to pay more.

Applause.

Thank you.

And by the way . . . if you’re very old, we’re not going to give you all that technology and all those drugs for the last couple of years of your life to keep you maybe going for another couple of months. It’s too expensive, so we’re going to let you die.

Applause.

Also, I’m going to use the bargaining leverage of the federal government in terms of Medicare, Medicaid—we already have a lot of bargaining leverage—to force drug companies and insurance companies and medical suppliers to reduce their costs. But that means less innovation, and that means less new products and less new drugs on the market, which means you are probably not going to live that much longer than your parents.

Applause
.

Thank you.
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Pay more. Innovate less. Die sooner.
Applause. Applause. Applause.
Did he really say that? Did they really applaud? And he thanked them? You and I would not believe such a thing could be true except for the decentralized transparency of YouTube. Listen for yourself, and tell me if you are not totally creeped out.

Barack Obama, by the way, has never disassociated himself from Reich’s views on health care.

But you have to give Reich credit: he understands what he is proposing and he is willing to admit the logical consequences for patients, at least among friends.

BAD MEDICINE, UNIVERSALLY

B
UT DON’T TAKE
R
EICH’S WORD FOR IT.
G
OVERNMENT-RUN HEALTH
care has been tried already. Britain offers one of the best examples of centralized medicine in practice. Since 1948, the United Kingdom has had a true “single payer” health care system. The British government purchases and distributes 95 percent of all medical items and services in the country. One global budget, fixed by Parliament and distributed by Her Majesty’s Health Ministry, provides for virtually the entire health care sector of the economy. Most hospitals are publicly owned, and most health care professionals are, in effect, public employees.

American progressives like President Obama openly admire this sixty-year experiment in government medicine. They like its simplicity and what they imagine to be its superior efficiency and social equity. Indeed, Obamacare clearly draws its inspiration, if not all its details, from the British model. U.S. progressives hope it is but the first step toward bringing that model to America.

If you want to see the future they’re bringing us, consider this fact: the British National Health Service is one of the world’s five largest employers, with no fewer than 1.6
million
employees.
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That’s not a typo. If the NHS were an army, it would be the second largest on earth, behind only that of the People’s Republic of China. Yet the NHS serves an island population of just 62 million people, compared to China’s more than 1,200 million. NHS employees now represent more than one-quarter (26.7 percent) of all public employees and more than 1 of every 20 workers employed in the U.K.—and a substantial majority are not health care providers but administrative personnel.

“If the quality of British medicine were uniformly high,” reports a Joint Economic Committee study, “there might be no good argument for reducing [the NHS] bureaucracy or liberating [British] doctors and patients. But the quality of British medicine is not uniformly high,” JEC notes. “In fact, the U.K. has a poor record relative to other European nations and the U.S. on several measures, including specialty access, cancer outcomes, patient-centeredness, life expectancy, and infant mortality for socially deprived populations.”
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These dismal results confirm what Milton Friedman called Gammon’s Law, named for a British physician named Max Gammon, who studied the NHS in England closely in the 1960s and ’70s. Dr. Gammon measured the Service’s productivity by comparing two simple variables: inputs (defined as the number of employees) and output (measured as the number of hospital beds). His finding: while inputs had increased sharply, output had actually fallen. This led him to formulate the rule that now bears his name: “In a bureaucratic system, an increase in expenditure will be matched by a fall in production. Such systems act rather like ‘black holes’ in the economic universe, simultaneously sucking in resources and shrinking in terms of ‘emitted production.’”
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In other words, the more the government spends in a top-down system, the less care patients receive.

NOT SO NICE

I
N THE
U.K.,
THE RATIONING PROCESS IS QUITE TRANSPARENT.
I
T
puts a remarkably specific monetary value on human life, expressed in pounds sterling. The Quality Adjusted Life Year, or QALY, is the amount of money that NHS experts have determined an additional year of a human life is worth, based on various factors, such as one’s current age, medical condition, and the likelihood of benefiting from the treatment. Generally, if a treatment costs more than £20,000 to £30,000 per additional QALY gained through the treatment (an arbitrary limit determined by budgetary constraints), then it is deemed “not cost effective,” and individuals and families who want those treatments are left to pay for them entirely out-of-pocket, sometimes by traveling abroad.
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The name of the agency that crunches the Quality Adjusted Life Years to determine if you are worth treating? The National Institute for Health and Clinical Excellence, NICE.

Just to prove how not-so-nice NICE is, the bureaucracy has rejected the use of the often life-extending drug Avastin (bevacizumab) for use in shrinking cancerous intestinal tumors, because “the cost . . . at about £21,000 per patient, does not justify its benefits.” Avastin is used in the U.S. and across Europe, but will now be effectively unavailable in the U.K. NICE’s decision, which came after a year of internal deliberation, will affect an estimated 6,500 NHS patients.
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