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Hamiltonian Healthcare

Obama must forget McGovernism and put a bipartisan focus on science, not finance.

In Washington, things can change quickly—and sometimes for the better. If the old conventional wisdom held that DC is hopelessly divided, Democrat vs. Republican, a new wisdom could be emerging. On some issues, the president is moving to new, higher ground—and John Boehner’s House Republicans are moving right there with him.

President Obama’s second Inaugural Address was a tribute to something old: the McGovern coalition. That is: the young, minorities, public- and non-profit sector employees, and, of course, liberals. In 1972, this coalition could deliver just 37.5 percent of the national vote to the Democratic presidential nominee, George McGovern. Yet ten presidential elections later, this voter coalition has grown substantially. Minorities are a larger percentage of the population, and the public- and non-profit sector is much larger as well. And while liberalism claims about the same share of the population today as 40 years ago, the subset of what were once called “limousine liberals” is far more rich and powerful, engorged and empowered by the bubbly swellings of financialism. And so in 2012, that old McGovern coalition had grown by more than a quarter; Obama was re-elected with 51.1 percent of the vote.

For his part, Obama the man seems most comfortable with these folks—this odd coupling of the poor and the rich, with public employees and non-profits mediating in between.  And so it was no surprise that the most memorable phrase to emerge from his second Inaugural—and the phrase that the media reacted most positively to—was a paean to McGovernite ideological touchstones: “Seneca Falls, and Selma, and Stonewall.”

That was January 21, when all seemed well with liberalism. But then, just 11 days later, on February 1, the McGovern reverie came to an end; the unemployment rate went up a tenth of a point, to 7.9 percent. It was a small increase, to be sure, but unemployment had crossed a symbolic threshold: joblessness now stood higher than when Obama had taken office four years before.

Thus the confident—critics would say smug—neo-McGovernite feelings within the Obama White House gave way to a new reality: the realization that the president had better reconnect with economically fearful Middle America—and fast. And so in his February 12 State of the Union address, Obama used the word “job” or “jobs” no less that 32 times.

Indeed, in his effort to move to the middle, and closer to business, the president’s State of the Union address even sounded some distinctly Republican-friendly notes. Obama called for “comprehensive tax reform that encourages job creation and helps bring down the deficit.” Of course, while the president may see the economic value of greater business confidence and more jobs, he is no supply-sider, yet he also inserted into his speech a call for “a tax code that lowers incentives to move jobs overseas, and lowers tax rates for businesses and manufacturers that create jobs right here in America.”

For their part, many Republicans, eager to get something done, have been thinking some of the same thoughts. Tax reform is one area where it’s possible that some sort of constructive compromise could emerge between the Obama White House and the Boehner congressional House.

To be sure, there’s still plenty of divergence between the parties. As Republicans put their focus on taxation and also regulation, Obama adds a different focus: innovation.  The president grew more lyrical as he described a “manufacturing innovation institute” in Youngstown, Ohio, and new “manufacturing hubs,” where “businesses will partner with the Departments of Defense and Energy to turn regions left behind by globalization into global centers of high-tech jobs.” Continuing, he urged Congress to work with him to “guarantee that the next revolution in manufacturing is Made in America.”

Libertarian-minded Republicans will of course decry Obama’s ideas as so much pork—and maybe protectionist pork at that. Yet others, more attuned to the pro-industry, pro-infrastructure tradition of Alexander Hamiltonian, see the new White House agenda differently. Samuel Goldman has already noted that Obama’s approach owes much to Henry Clay’s Hamiltonian “American System” from the early 19th century. And in fact, there’s much to be said for an innovation strategy to boost the economy. According to a recent report from the Brookings Institution, “Patenting Prosperity,” a strong correlation exists between innovation and job-creation. Localities with the greatest patent production are also, not surprisingly, blessed with strong growth in employment and overall wealth.

Indeed, a Democratic partisan might note that the five localities with the greatest patent production—San Jose, California; Burlington, Vermont; Rochester, Minnesota; Corvallis, Oregon; and Boulder, Colorado—are mostly Democratic enclaves. The states themselves are run by Democrats; each has a Democratic governor, and, come to think of it, all five have each elected a pair of Democratic senators.

From this one might conclude that well-educated, Democratic-leaning polities are not only friendly to innovation, but that they are, in fact, pretty good at innovation. And that’s one more reason why they are affluent.

Yet innovation—relying as it does on brains and knowledge, as well as entrepreneurialism—is one of those phenomena that seems to transcend party and ideology. Inventors and entrepreneurs may belong to one or another belief system, but their main characteristic is a desire to create—and yes, maybe also to get rich. In fact, taking into account the four centuries of the scientific and industrial revolutions, one can argue convincingly that innovation is the single greatest driver of economic growth. As Joseph Schumpeter, no liberal, wrote in 1939, “Without innovations, no entrepreneurs; without entrepreneurial achievement, no capitalist returns and no capitalist propulsion.”

Of course, when it comes to innovation, Obama still seems most interested in energy—green energy. As he said in his State of the Union, “Today, no area holds more promise than our investments in American energy.” Goldman observes of Obama’s words, “Despite the Solyndra debacle, this really isn’t a sop to campaign contributors or environmentalists. Rather, Obama believes that solar and other alternative energy sources are going to be a big business.” By this reckoning, Obama is being as Hamiltonian as he is Green.

Perhaps. But if so, Obama still faces the hurdle of being proven right in his national energy investment strategy. After all, the Hamiltonians of yore are remembered fondly because they focused their favors on, for example, railroads. If Clay and his like-minded successors, including Abraham Lincoln, had chosen to foster, say—to use a common image—the buggy-whip industry, they would be recalled today not as visionaries, but as foolishly myopic boondogglers.

In another policy arena, medical science, the president seems indeed to be riding a nascent bipartisan wave of new thinking. This new wave of science is much different from the previous wave of finance.

As we all know, for a quarter-century—from the catastrophic health insurance legislation of 1988 (which proved catastrophic to politicians), to the battle over “Clintoncare” in the mid-90s, to the Medicare prescription-drug program of 2003, to the battle over “Obamacare” in 2009-10—the focus of Beltway policymakers has been on health insurance.

Yet after the passage of the Affordable Care Act three years ago, the issue of whether or not the government would be the health-insurer of last resort seems to have been mostly settled. At that point, a new realization began to sink in: if Uncle Sam was ultimately on the hook for everyone’s care, then the new imperative was to make that care as inexpensive as possible.

So how to cut costs? How to “bend the curve?” Many in the healthcare nomenklatura, of course, seem perfectly happy with stern measures, including the rationing of care and even polite kinds of euthanasia. And as if to prove that Sarah Palin knew more than she gets credit for, one healthcare pundit even took to the op-ed page of The New York Times last year to endorse, by name, “death panels.”

Yet practicing politicians, sensitive to the needs and wants of real people, want no association with such ruthless talk. And so politicos have been searching for a different way of thinking about healthcare—and they have found it. It is a vision of medical abundance, not healthcare scarcity.

More than a year ago, on February 2, 2102, Rep. Ed Markey, Democrat of Massachusetts, declared, “If we want to balance the federal budget, we must invest in medical research today,” adding, “We will only defeat high-cost chronic diseases like Alzheimer’s if we accelerate the discovery and development of safe and effective diagnostics and treatments.”

And in September, another Democrat, Rob Andrews of New Jersey, called for a national “Apollo Program against disease,” modeled, of course, after the space program of the 60s.  Andrews, too, singled out Alzheimer’s research—and more to the point, an Alzheimer’s cure—as a fiscal, as well as ethical, necessity. After all, an actual cure is cheaper than mere care.

That same month, on September 25, 2012, the President’s Council of Advisers on Science and Technology issued a positive report on medical research, declaring, “The United States should set a goal of doubling the output of innovative new medicines that  meet critical public health needs over the next 10 to 15 years.” This White House document received little attention at the time, but it was, in fact, quite a policy turnabout. For more than three years, the Obama administration had been focusing on health insurance—on finance. But now, with that battle mostly over, its attention was shifting to science.

Yet during this time, how were Republicans responding? Mitt Romney, to name one, wasn’t responding at all. The Romney campaign was uninterested in new thinking on healthcare and science; its policy mavens proved impervious to even the most reasoned calls to join the cures debate.

But the new year has brought new thinking on the right. On February 5, House Majority Leader Eric Cantor spoke to the American Enterprise Institute, declaring, “Long term, controlling health care costs will require smarter federal investments in medical research. Many of today’s cures and life saving treatments are a result of an initial federal investment.” In a piece for Foxnews.com, I observed that Republicans were beginning a major shift, from a “Cut Strategy” to a “Cure Strategy.”

Then, a week later came the President’s State of the Union, which zeroed right in on the economic value of medical innovation:

If we want to make the best products, we also have to invest in the best ideas. Every dollar we invested to map the human genome returned $140 to our economy. Today, our scientists are mapping the human brain to unlock the answers to Alzheimer’s; developing drugs to regenerate damaged organs.

And as a warning to Republican budget-cutters, he added, “Now is not the time to gut these job-creating investments in science and innovation.” Indeed, Cantor and other Republicans will now have to develop pro-innovation polices to back up their pro-innovation rhetoric.

Then the president, who began his State of the Union with a quote from John F. Kennedy, added another dollop of JFK-esque language: “Now is the time to reach a level of research and development not seen since the height of the Space Race.”

A president who talks like this is not the Alinskyite lefty of feverish conservative imaginings. Instead, this is a President who is trying connect to one of the main cables of American economic thinking—namely, can-do innovation. That’s Schumpeterian “creative destruction” in action, and throughout the history of economic growth, creative destruction, as its name implies, has been associated with progressivism as often as conservatism.

But does Obama really mean it? Will he follow through on his pro-innovation words with pro-innovation deeds? As with Cantor and the Republicans, only time will tell. But for now, Republicans are on notice: The pro-growth Obama of the State of the Union is a much stronger figure than the McGovernite liberal of the Inaugural.

Of course, not everything has to be a fight. It’s also possible for the two parties to agree on things, to their mutual benefit.

So in addition to tax reform, we could yet achieve another bipartisan consensus, on behalf of medical research and cures. Yes, the two parties will continue to fight on everything from deficit spending to the next defense secretary, but on a couple of issues, they could find themselves moving forward together.

James P. Pinkerton is a contributor to the Fox News Channel and a TAC contributing editor. Follow him on Twitter.



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