Senator Warren’s Health Plan or Her Integrity: Pick One
Senator Elizabeth Warren (D. MA) is a leading candidate to be the Democratic presidential nominee. She has plans for nearly everything and styles herself as a wonk. This contrasts with her desire not to show her 70 years by bounding on to campaign stages and waving her arms about.
Fair enough. It is, after all, politics and we should not let our expectations get too far out of control.
As a professor at Harvard Law School, financial fraud against consumers was an area of particular focus for her. One of her biggest achievements as both a professor and a Senator was the creation of the Consumer Financial Protection Bureau under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
A linchpin of the federal securities laws since the passage of the depression era legislation is that you cannot lie to investors when you try to sell them stocks or bonds. Interestingly, you can peddle wretched investments, but you have to tell the truth about how wretched they are.
The Consumer Financial Protection Bureau (CFPB) extends that idea to those who don’t buy stocks or bonds but are still subjected to possible harm by the financial services industry. Abusive lending practices by payday lenders are a prime example.
One might differ with how far her signature legislation went in curtailing bad behavior, but the essential concept of not lying to people who are less equipped to understand financial subtleties seems like a good thing.
Senator Warren wanted to head the CFPB, but she was stymied by those who opposed it, and the job was given to her ally, Richard Cordray.
Now, let’s assume that selling people stocks and bonds honestly is a good thing. We can quite safely go further to say that lending people money, which they will have to pay back when they get their next paycheck, also requires honesty to avoid defrauding the least sophisticated.
That is a backdrop against which I ponder Elizabeth Warren’s signature campaign issue — Medicare for all. It will impact every person in America, including perhaps those technically not entitled to be here.
Is the group consisting of “everyone” larger than the group consisting of “stock and bond buyers?” Is it larger than the group consisting of “payday borrowers?” Seems like the answer is “yes” to both. Are there some in the “everyone” group who might be unsophisticated and generally deserving of protection from being defrauded when it comes to healthcare policy and its costs?
Well, I know I am, so that makes at least one person in the “everyone” group. How about you?
Why then is it okay to lie to the entire country about the consequences of such a far-reaching plan and shouldn’t consumer advocate, Elizabeth Warren, know better than to do so?
Her campaign ducked telling voters how much Medicare for All would cost until the pressure became insurmountable. They released a figure of $20 trillion, pretty close to the total national debt. Other analysts from left, center and right put the figure at north of $30 trillion but these are at best directionally accurate.
Providing free health care for 325 million people costs a lot of money, especially because her plan removes all payments from consumers. No co-pays, no premiums, no deductibles, no out-of-pocket expenses.
Somewhere along the way, perhaps at a Harvard faculty meeting, Senator Warren must have met an economist to whom she could have asked, “what happens when you make a necessary service free?” The answer would have been “people consume more of it.”
How much more healthcare will people consume when it is free? Has that increase been factored into the $20 to $30 trillion cost of her plan?
Are voters not just about as deserving of being protected against misleading statements or fraud as stock and bond buyers? Or payday borrowers?
Should law professors who made their careers espousing the merits of disclosure not stick to that idea when they run for office?
Over to you Senator Warren.