Third Way Perspectives
April 22nd, 2014
China’s military, the People’s Liberation Army, is currently engulfed in the worst corruption scandal in its history. Two of its top officials have been detained and accused of bribery, embezzlement and abuse of power, including a cash-for-promotion racket that benefited hundreds of officers. More heads will roll as dozens of senior personnel must have offered bribes — or had been bribed — to get ahead in the ranks, calling into question the very leadership of the 2.3 million-strong army.
It’s easy to look across the Pacific and feel a twinge of schadenfreude. But if Beijing can’t get this metastasizing scandal under control, it’s bad for America’s strategic interests for three basic reasons.
April 11th, 2014
The 1980s are all the rage once again—from neon clothes to Robocop and the Teenage Mutant Ninja Turtles. Even America’s 1980s foreign policy is back in fashion amongst Neo-Cold Warriors longing to return to the Reagan era.
President Barack Obama quipped to Mitt Romney during the 2012 election that, “The 1980s called—they want their foreign policy back,” and he’s giving the military more money, even adjusted for inflation, than President Ronald Reagan ever did. But, the Neo-Cold Warriors still can’t abandon their Reagan nostalgia, especially after Russia’s invasion of Crimea, which has led some to ask “Was Mitt Romney right about Russia?”
Obama’s military outspends Russian President Vladimir Putin’s by more than seven to one. Yet, Rep. Paul Ryan, R-Wisc.,) rails against the president because, “For decades, defense spending made up roughly 50 percent of the federal budget. Today, it’s just 18 percent.” While ignoring the fact that defense spending hasn’t made up more than 50 percent of the federal budget since we put a man on the moon, Ryan is also concerned about the decline in defense spending as a percentage of GDP. Sen. Lindsey Graham, R-S.C., similarly bemoans the fact that America’s defense spending falls short of the 6% percent of GDP it was under Reagan, and The Wall Street Journal claims that by this metric Obama will leave his successor a “weaker” country than he inherited.
Whether or not you think the current level of spending is sufficient, defense spending as a share of GDP measures militarization of our society, but that does not necessarily mean strength. Applying Reagan’s magic percentage today ignores changes in our economy, the threat environment and our capabilities.
April 7th, 2014
Raising the minimum wage has justifiably captured policy makers’ attention, but if the goal is to materially raise living standards for every American worker, we should also be calling for a minimum pension. Done right, this would not only create real wealth for the middle and working classes, it would use the power of financial markets to reduce wealth disparity instead of widening it.
There is a vast difference in the way the wealthy and the rest of Americans earn their money. In 2010, 60 cents of every dollar earned by those in the top 1 percent came from investments and businesses they owned. For the middle class, it was 6 cents.
For decades, the returns to capital have far outstripped the returns to labor. Before the mid-1980s, worker salaries constituted 65 percent of national income. In 2012, they were 58 percent. Economists rightly fret over how this contributes to wealth inequality. Well, if you can’t beat ’em, join ’em. If all working people, whatever their wage, could get a piece of these gains, it would improve their financial well-being exponentially. This is where the minimum pension comes in.
March 25th, 2014
It is clear that HealthCare.Gov is working better. Enrollment figures are climbing. Over 5 million Americans have selected a plan through the federal and state marketplaces, and another 6.3 million are getting coverage through Medicaid. While problems remain, the level of interest in getting coverage has grown—to as many as 2 million visits to the federal website in one day.
But amid these public proof points will be another less obvious measure of success—a decline in the need for a patchwork of programs designed to help the poor who continue to lack coverage despite the Affordable Care Act (ACA).
One of those programs, called the 340B Drug Pricing Program, however, shows no signs of slowing down. The 340B program supports clinics and hospitals that serve a high proportion of low-income and elderly patients. 340B requires drug manufacturers to provide discounts to hospitals and clinics that generally serve low-income patients or other groups like HIV-AIDS patients. The program allows hospitals and clinics to dispense the drugs purchased through 340B to their patients who may have their own private insurance coverage and pocket the difference between their deeply discounted purchase price and the amount that a health plan reimburses for the drug. For example, hospitals like Denver Health, which is the public safety-net provider for the city, have used 340B to expand services for at-risk patients. The discounts range from 20% to 50% off the cost of drugs. Those discounts are often bigger than the discounts required of drug manufacturers for Medicaid patients. Federal auditors have found that Denver Health is compliant with program requirements. But they also have found many other facilities to be out of compliance under current federal policy. Moreover, current law and regulations may be inadequate to ensure 340B is truly helping vulnerable Americans.