A team of economists has uncovered persuasive evidence that local government officials throughout the United States are less responsive to African-Americans than they are to whites.
The researchers sent roughly 20,000 emails to local government employees in nearly every county. The emails posed commonplace questions, like “Could you please tell me what your opening hours are?”
The emails were identical except that half appeared to come from a DeShawn Jackson or a Tyrone Washington, names that have been shown to be associated with African-Americans. The other half used names that have been shown to be associated with whites: Greg Walsh and Jake Mueller. The email sent to each local officeholder was determined by chance.
Most inquiries yielded a timely and polite response. But emails with black-sounding names were 13 percent more likely to go unanswered than those with white-sounding names. This difference, which appeared in all regions of the country, was large enough that it was statistically unlikely to have been a matter of mere chance.
The findings appeared to be a striking indication of racial discrimination in seemingly benign and mundane interactions. The tendency to ignore emails sent by African-Americans was particularly pronounced in sheriffs’ offices, but it was also evident in school districts and libraries.
In a clever twist, the authors analyzed whether the replies were polite, counting responses that included either the sender’s name or words like “hi,” “Mr.,” “dear,” “good” (which captures “good morning,” “good afternoon” and “have a good day”) or “thank” (which captures both “thanks” and “thank you”). By this measure, those with apparently African-American names received 8 percent fewer polite responses than those with white names.
While many studies have found differences in treatment for African-Americans and whites in employment, housing and the criminal justice system, it hasn’t always been clear whether these differences reflect discrimination or other factors.
The usual difficulty is that it’s impossible to find, say, job seekers who are absolutely identical in every respect except race. As a result, it is difficult to conclude whether a white job seeker succeeded — and a black one didn’t — because of discrimination. While statistical techniques can adjust for some of these factors — education, geography and the like — no analysis can account for all of them.
But the new research allows for a clearer conclusion: It appears to have documented straightforward discrimination.
As a real-world experiment, it built on earlier “audit experiments,” as they are known in social science. Perhaps the most famous is a study by Marianne Bertrand of the University of Chicago and Sendhil Mullainathanof Harvard (who is a regular contributor to this column). In that earlier experiment, Ms. Bertrand and Mr. Mullainathan sent fictitious résumés to employers, finding that people with white-sounding names were more likely to receive a positive response than those with black-sounding names.
The new findings provide further indication of the many ways in which discrimination shapes the lives of African-Americans. What’s more, when it’s harder to get your neighborhood librarian to respond to a simple email about opening hours, it’s not much of a leap to imagine other interactions — dealing with a computer help desk, the front office at a school or just the dry cleaner — that go less smoothly.
Economists tend to group explanations of discriminatory behavior into two buckets: taste-based and statistical. If a librarian chooses not to respond because a person is black, that’s taste-based discrimination. In common speech, there’s a simpler label: racism.
Statistical discrimination, on the other hand, occurs when a librarian uses a person’s name or race as a marker for other characteristics. Perhaps an African-American-sounding name signals that a person is more likely to be poor. The librarian happens to be biased against poor people. In this case, race is being used as a statistic for inferring poverty, and it’s the perception of poverty that causes the discriminatory behavior.
But two pieces of suggestive evidence in this study point to the problem here as being straightforward, taste-based discrimination.
First, the authors repeated the exercise — sending an additional 20,000 emails to the same recipients — although this time with a twist. They added a signature line, identifying the sender as a real estate agent. This extra information made the sender’s name — whether it seemed to be African-American or white — less relevant for inferring income or socioeconomic status. If statistical discrimination had driven behavior in the first round, this extra information should have led to less discrimination in the follow-up. It did not.
Second, the pattern of evidence was consistent with taste-based discrimination. While the researchers didn’t determine the race of the people who responded to their emails, they did have data on the racial breakdown of the municipal work forces. The racial gap in email response rates was greater in counties where the proportion of whites was higher.
Taste-based discrimination — basically, racism — isn’t necessarily the result of conscious thought. In an email, Mr. Tonin, one of the study’s authors, said that it’s possible “this behavior is due to some sort of unconscious bias” and, therefore, that “making people aware of the problem may contribute to the solution.”
If awareness really is the first step toward a fix, then the study may be helpful in refining our understanding of racial discrimination in America. It occurs not only in the labor market and the criminal justice system, but also in countless small frictions every day.
The culprit may not be a hate-spewing white nationalist, but rather a librarian or a school administrator or a county clerk, unaware that she’s helping some clients more than others.
President Trump tossed paper towel rolls to people affected by Hurricane Maria as he visited Calgary Chapel in San Juan, Puerto Rico, on Tuesday. (Jonathan Ernst/Reuters)
With Breanne Deppisch and Joanie Greve
THE BIG IDEA: Everywhere he looks, Republican strategist and lobbyist Bruce Mehlman sees “eerie” parallels between the Gilded Age and today.
Mehlman produces quarterly reports about the political climate. In his latest, which he’s distributing to his clients today, he argues that “data is the new oil.” He likens Facebook’s Mark Zuckerberg, Google’s Larry Page and Amazon’s Jeff Bezos (who also owns The Washington Post) to captains of industry like Andrew Carnegie, John D. Rockefeller and Cornelius Vanderbilt.
“Back then you had iconic innovators who built these dominant companies and amassed great fortunes. You’ve got that again today,” Mehlman explained in an interview. “You saw income inequality spike. The last time it was as high for the top 10 percent as it is today was the Gilded Age. … In politics, you saw a rich few increasingly dominating spending to impact elections — similar to today.”
Mehlman, who was the assistant secretary of commerce for technology policy under George W. Bush and the policy director for the House Republican Conference before that, outlines additional similarities — and the lessons that might be learned from them — over 36 PowerPoint slides:
The economy shifted dramatically away from agriculture toward manufacturing from 1870 to 1920, just as it has moved away from manufacturing toward service over the past half century.
The last time immigrants made up as large a share of the population as they do right now was also during the Gilded Age.
The country was intensely divided politically. In 2016 and 2000, the candidate who lost the popular vote won the presidency. The last time that happened was 1888 and 1876.
President Trump turns his back to the crowd during his rally in Huntsville, Ala., last month. (Marvin Gentry/Reuters)
— Fear of disruption, backlash to change and frustration with inequality, immigrants and global trade all contributed back then to the sort of populist backlash we saw with Trump’s victory last November. The Republican Party, which dominated national politics in the decades after the Civil War, splintered. An aggressive press exposed corruption and the excesses of unfettered capitalism, which ratcheted up public pressure for reforms. The industrial age created new public policy problems and generated new alliances. William Jennings Bryan never became president, despite being the Democratic nominee three times, but he helped transform the country’s politics.
— The passions of the populist movement eventually gave way to the Progressive Era. The federal government busted trusts, banned corporate political contributions, imposed food safety regulations and restricted child labor. Four amendments to the Constitution were enacted, including women’s suffrage and the direct election of senators, as well as the imposition of an income tax and the prohibition of alcohol.
Global trade powered tremendous economic growth at the dawn of the 20th century. While there were a lot of winners, there were also a lot of losers. Mehlman believes that now, as then, “the winner’s circle is too small.” Success in modern America is closely correlated to where you live, how much education you received, and which sector you work in.
— Technology companies are coming under growing pressure because of the rising tides of populism, protectionism, nationalism and nativism. Mehlman, who was the policy lead at Cisco Systems during the collapse of the first tech bubble, believes industry behemoths need to worry about antitrust problems, strengthened consumer protection laws, security concerns, trade policy and new regulations that increase intermediary liability. Headaches are coming from lots of places, from Brussels to Beijing and Washington to Sacramento.
President Trump and first lady Melania Trump attend a meeting at the Luis Muñiz Air National Guard Base in Puerto Rico’s capital of San Juan. (Evan Vucci/AP)
— Against this backdrop, Mehlman thinks American politics has become less left vs. right and more insider vs. outsider. The globalist consensus that dominated through the Obama era is crumbling. “On issues like race and on immigration, we’re now finding the culture war is competing with a class war,” Mehlman said. “You used to hear it from the Pat Buchanans of the world and some of the Democrats like Bernie Sanders, but it’s now becoming mainstream in, for sure, the Democratic Party and, increasingly, the Republican Party. … The president campaigned and said we need to increase taxes on the rich. The class war has joined the culture war — both in the Progressive Era and potentially today. It could realign the political parties.”
— In this environment, he believes that it will be very hard to get any marquee legislation enacted. “Almost every Republican and almost every Democratic rank-and-file member wants to get more done,” said Mehlman, a partner at the firm Mehlman Castagnetti. “The politics that we have, and at the top, the leadership, makes it difficult, less because there are not compromises and more because to stay on top of the tiger you have to keep feeding it. So it’s very difficult to get the really big ticket things done.”
Mehlman does expect Congress to get something done on taxes. “It will probably not be 1986-style comprehensive, permanent reform,” he predicted. “It will probably be smaller. Maybe just tax cuts. It’s always easier to cut taxes than to pay for it. The climate is different today than it was in 1986.”
I asked what worries his clients most: “Around the world, the greatest concern is opacity,” he said. “They don’t know how to read the United States anymore. Once upon a time you could predict Republicans and you could predict Democrats and you kind of knew where policies and politics were going. These days, it’s unclear whether the president is going to build a new Republican Party that’s fundamentally economic nationalism, or whether he’s going to be a more traditional right-of-center Republican.”
Trump: I could ‘shoot somebody and I wouldn’t lose voters’
Republican presidential candidate Donald Trump jokes that he wouldn’t lose support for his campaign even if he shot people “in the middle of Fifth Avenue.” (Reuters)
— In his previous powerpoint, Mehlman made the case that Trump is to politics what Uber is to the technology industry. He highlighted parallels between the cycle of disruption that’s churned through Silicon Valley and what’s now wreaking havoc on Washington. (Read my July Big Idea on this theme: “Trump is the disrupter-in-chief in an age of disruption.”)
Since then, Trump’s culture wars have further inflamed his opposition and limited the potential upside of his economic nationalist message. Mehlman refers to the president’s most loyal supporters as “Fifth Avenue Republicans.” This is a reference to when Trump boasted last year that he could shoot someone in the middle of Fifth Avenue, and his supporters would still stick with him.
“The core challenge for the president politically is to try to grow his base,” Mehlman said yesterday. “There’s 98 percent support for the president among people who voted for him in the primary. And that’s great, but it’s not going to be sufficient in 2020. … As long as the culture war is concurrently raging, it’s going to be very hard to gain the support of registered Democrats and independents.”
— Go deep: If you really want to bone up on the Gilded Age, I recommend Stanford professor Richard White’s “The Republic for Which It Stands,” a sweeping history of the United States from 1865 to 1896 that just published last month. It’s 941 pages but beautifully written and a gripping narrative of a tumultuous era. (White was one of my favorite professors at Stanford. I took two of his classes.)
What’s the state of free speech in America?Sanford Ungar, who teaches about it at Harvard and Georgetown, has a simple, depressing answer.
“It’s a mess,” he says.
It’s not just the problems on college campuses where high-profile speakers haven’t been allowed to talk. It’s not just what happened in Charlottesville, where a counterprotester was run over and killed. It’s not just President Trump’s insistent call for the firings or suspensions of NFL players who take a knee during the national anthem to protest police violence.
An insidious problem also is developing in dozens of states where legislatures are considering — and sometimes approving — new laws that restrict free speech.
“They are criminalizing things that are pretty routine,” Ungar told me. “Much of the activism of the Vietnam and civil rights era would be completely illegal” under the new laws.
The lunch-counter sit-ins that were a staple of civil rights protests in the ’60s would, under some new legislation, be punishable because they “disrupt commerce.” And the demonstrations that brought thousands into the streets of major cities to protest the Vietnam War would be a crime because they blocked traffic.
Twenty-seven states have considered such legislation, he said. Twelve bills have become law, and many others remain under consideration.
Some of the bills sound perfectly acceptable at first because their purported aim is tranquility.
But here’s the problem: Meaningful protest isn’t always as mild as milk. The new laws have little tolerance for the tumultuous reality of dissent.
In Iowa, for example, the legislature considered a bill to punish protesters who block highway traffic with up to five years in prison.
In North Dakota, the governor signed a bill that would punish masked individuals in any public forum who are trying to conceal their identity.
In Arizona, the state Senate approved a bill that would add “rioting” to organized crime statutes, making participation in a protest that turns into a riot a possible criminal racketeering offense.
Florida even considered a bill that, in some cases, would exempt drivers from liability if they struck a protester.
Traci Yoder, National Lawyers Guild director of research and education, predicts that whether this wave of bills ends up passing or not, the effect may be the same — to tamp down dissent.
“Few people would be as willing to protest if they thought they could easily be arrested, fined, imprisoned or even killed,” Yoder wrote. And most regular citizens aren’t keeping track of the details, she said, but may know that the penalties have been vastly toughened.
It amounts to a nationwide movement to chill speech.
And while it might be convenient to blame it on Trump’s hard-line views on law enforcement, much of this movement predates the Trump administration. A substantial amount of the proposed legislation stems from protests over the Dakota Access pipeline and from the Black Lives Matter movement.
While countering this trend won’t be easy, Ungar is making a start with the Free Speech Project, based at Georgetown, with funding from the university and the Miami-based John S. and James L. Knight Foundation. (The former president of Goucher College in Baltimore, Ungar is a journalist, a former host of “All Things Considered,” and the author of an acclaimed book on the Pentagon Papers.)
One element is a Free Speech Tracker, which has more than 50 entries for troubling incidents or legislation around the country. That’s likely to grow dramatically over the next few months, he said.
A journalistic reality is part of the problem: There are far fewer state-government reporters around the nation than there were a decade ago. A Pew Research study showed a 35 percent decline from 2003 to 2014; it’s undoubtedly worse now.
That means that some state legislatures are freer to act at will without the watchdog function — and the public reaction to it — that once was routine.
At the root of these laws, Ungar believes, is a false narrative: “Spoiled students and liberal faculty shutting down speech because they don’t want to hear and confront the truth.” And, at the same time, the idea that protests of various kinds are “getting out of hand.”
So conservative lawmakers are stepping in to, in their view, fix it.
It’s not so simple, he says, and the stereotypes translate quickly into a political diatribe about free speech in which nobody wins.
His effort will not only keep track of what’s happening — useful in itself — but find ways to promote civil discussion across political divisions.
Protecting this basic American right sounds like it should be simple enough, but it’s often a minefield. (Or, at the moment, a football field.)
“Everybody believes in free speech,” Ungar notes, “until you get to the topic on which they don’t.”
The nonprofit Bay Journal is set to lose about a third of its funding after the U.S. Environmental Protection Agency announced it’s terminating a six-year grant it awarded the magazine just two years ago.
The EPA notice came without warning in a “very terse” email Wednesday that attributed the decision to a “shift in priorities,” said managing editor Timothy Wheeler in a phone interview Friday.
The termination is effective February 2018, when the journal was supposed to receive an annual installment of $325,000 to help support a staff of 11 and 100,000 free print and online subscriptions.
“It doesn’t completely defund us, but it does knock us back, there’s no question about that,” said Wheeler. “If we can’t replace that money, we’re going to have to make cuts. It’s a rather big drop.
“It’s not as if we didn’t realize we were vulnerable. We had been working to reduce our share coming from federal funds even before this. But we had no reason to suspect that a grant that had already been approved would be yanked like this.”
In a statement, journal editor Karl Blankenship called it an “unprecedented decision” in the history of the nonprofit monthly magazine, whose mission since 1991 has been to cover the Chesapeake Bay watershed, particularly pollution, water quality, habitat and fishery issues.
“For 27 years,” Blankenship said, “the Bay Journal has been an important source of news and information for those who care deeply about the Chesapeake.”
The EPA has funded the journal since it began. EPA funding comes through the Chesapeake Bay Program, a regional partnership of federal, state and local governments, and academic, conservation and citizens groups, all dedicated to restoring the bay.
President Donald Trump wants to zero out federal funds for the CBP in a stated effort to shrink government bloat. His chosen EPA administrator, Scott Pruitt, had voiced support for cleanup efforts during his confirmation hearings earlier this year, but since then has come under fire from conservation groups for failing to live up to those words.
At the nonprofit Chesapeake Bay Foundation, president William Baker said the funding cut shows Pruitt’s “true anti-environmental colors” in a “transparent attempt to shut down the free exchange of scientifically validated bay information.”
The bay watershed is the largest on the continent, stretching over portions of six states and the District of Columbia.
The bay deteriorated over decades of pollution and overfishing, and the EPA has been at the forefront of efforts to restore it, pushing bay states into a so-called pollution diet in 2010 that recent scientific surveys indicate are starting to work.
The Bay Journal also receives funds from the Campbell Foundation for the Environment, the Town Creek Foundation, the National Oceanic and Atmospheric Administration Chesapeake Bay Office, the Chesapeake Bay Trust and individual donations.
At a time when Democrats are locked out of power from the White House, both chambers of Congress, the majority of governor’s offices and three-fifths of the country’s state houses, their ideas at least have one reliable outlet. Democrats still control most of the country’s biggest cities.
Even that power center, though, is increasingly under attack.
In the last few years, Republican-controlled state legislatures have intensified the use of what are known as pre-emption laws, to block towns and cities from adopting measures favored by the left. The states aren’t merely overruling local laws; they’ve walled off whole new realms where local governments aren’t allowed to govern at all.
The pattern has worsened a different kind of partisan war beyond Washington, where the political divide cuts not just across the aisle, but across different levels of government. As standoffs between red states and blue cities grow more rancorous, the tactics of pre-emption laws have become personal and punitive: Several states are now threatening to withhold resources from communities that defy them and to hold their elected officials legally and financially liable.
“There are all sorts of legitimate ways we can divide power,” said Nestor Davidson, a law professor at Fordham. But if local officials risk personal fines, lawsuits and lost wealth for their communities over policy disagreements, he said, that changes the rules of the game. “That has the potential to change what it means to be a government official, to change what it means to elect people.”
States have banned local ordinances on minimum wage increases, paid sick days and lesbian, gay, bisexual and transgender rights. They’ve banned “sanctuary cities.” They’ve even banned a number of bans (it’s now illegal for Michigan cities to ban plastic bags, for Texas towns to ban fracking).
A law passed in Arizona last year threatens to withhold shared state revenuefrom local governments that adopt ordinances in conflict with state policy. Texas’ new sanctuary city law imposes civil fines as high as $25,500 a day on local governments and officials who block cooperation with federal immigration requests. And it threatens officials who flout the law with removal from office and misdemeanor charges.
Texas’ four largest cities are now suing the state in response. Gov. Greg Abbott of Texas, a Republican, has been a vocal advocate for state laws that he says are necessary to protect individual liberty from local government overreach. When cities overstep their bounds, he said this year, they “should have to pay a price for it.”
These new pre-emption laws echo 19th-century “ripper bills,” legal scholars say, state laws that ripped control from cities over their finances, utilities, police forces and local charters. The backlash against them helped spur the movement for local control in the United States. Now home rule is under a “troubling nationwide assault,” warn municipal lawyers and law professors, including Mr. Davidson, in an amicus brief supporting another legal fight, in Cleveland.
There, Ohio passed a law blocking a longstanding requirement that city construction contracts hire some local workers. Cleveland, in other words, was trying to ensure that local projects created local jobs, alleviating local poverty.
Both state legislators and municipal groups agree that pre-emption laws have proliferated in the last few years in number and in the breadth of issues they touch. They disagree on who started the fight: states in stripping municipal power, or cities in seizing new roles that weren’t theirs to begin with.
“It is about power, and I think it’s about wielding power at any cost. That’s it,” said Andrew Gillum, the Democratic mayor of Tallahassee, Fla., who formed a national group to fight pre-emption laws this year. Now that Republicans control both legislative chambers in 32 states and the governor’s office on top of that in 25, he said, their slogans lionizing local government ring hollow. “They only mean that,” Mr. Gillum said, “to the extent that they’re in control.”
The contrast between what’s happening in cities and the decentralized philosophy Republicans have championed from Washington is striking. The supremacy of local control is central to Republican plans for undoing Obamacare, rolling back regulations and leaving the federal minimum wage unchanged (wages, the party said in its platform last year, should be handled at the state and local level).
As House Speaker Paul Ryan has put it: “Government closest to the people governs best.”
That government, many local legislators clarify now, is the state.
“We’re the United States of America. We are not the United Towns of Florida. We’re not the United Counties of Florida,” said Randy Fine, a Republican state representative there who sponsored a bill this year that would have broadly blocked local laws regulating “businesses, professions and occupations.”
He said: “The state is the nexus of government in this country. The states created the federal government, and the states created local government.”
The timing and language of many pre-emptions, though, suggest that while they’re cast as broad state standards, they’re often aimed at specific cities.
North Carolina’s so-called bathroom bill sought to squash a local ordinance in Charlotte adding gender identity to the city’s nondiscrimination policy. The repeal passed by the state this year still bars local communities from adopting such protections until at least 2020.
St. Louis this year passed an ordinance banning employer and housing discrimination against women who use contraception or have abortions. Gov. Eric Greitens of Missouri, a Republican, called the state legislature back into special session in June in part to undo that law (it would turn St. Louis, he said, into an “abortion sanctuary city”).
In Texas, Mr. Abbott has called a special session for this month. On the agenda: proposals that would block cities from regulating trees on private land, restricting cellphone use in cars, and allowing transgender residents to use the bathroom matching their identity.
“It’s like quick-fire,” said Lisa Graves, executive director of the Center for Media and Democracy, which tracks pre-emption bills. “Once it passes some place, other legislatures go, ‘Oh, we could just pre-empt all of this.’ ”
Lori Riverstone-Newell, a political scientist at Illinois State University, traces modern escalation of pre-emptions to the 1980s — when the tobacco industry began to back state laws barring antismoking ordinances.
In the 1990s, the National Rifle Association followed the same state strategy with gun-control laws. More recently, the industry-backed American Legislative Exchange Council, which advocates free-market state policies, has promoted model state legislation preventing local governments from adopting what it considers a patchwork of regulatory burdens on businesses.
But where opponents point to industry influence at state houses, backers of pre-emption make a similar argument: Environmental and labor lobbies are pushing local bag taxes or minimum wages, they say, not voters engaged in some pure form of local democracy.
“It’s not illegal, but we should also not think it’s organic,” said Jon Russell, a councilman in Culpeper, Va., who leads a group of local-government officials within the American Legislative Exchange Council. “I’ve been a city councilman for almost 10 years, and I can tell you those kinds of issues are not organic. You don’t have a group of ladies sitting around in their living room wringing their hands about plastic bags or about fracking.”
He also accuses Democrats of their own hypocrisy: When blue states raise the minimum wage statewide, Democrats cheer those laws as progress.
The new punitive nature of pre-emptions, though, has escalated the fight beyond the usual partisan bickering. “It’s intended to send a chilling effect,” said Mr. Gillum, the Tallahassee mayor.
In Florida, local officials who run afoul of the state’s pre-emption on gun control are personally liable in court. Mr. Gillum and other city commissioners were sued by gun-rights groups over an old ordinance the city never repealed — but that no longer had effect — making it illegal to shoot guns in public parks. An appellate court rejected the lawsuit, but Mr. Gillum and other local officials had to defend themselves without public money (they were able to get pro bono legal help).
“It is intended to put everyone across this state and across this country where these efforts are taking place on notice: Don’t come near it,” Mr. Gillum said of issues like gun control and immigration. “And if you do, we’ll come after you personally, we’ll come after your government, we’ll come after the very survivability of your community by cutting off resources to you.”
[This article is by Steven Brill, whose biography is more interesting than the squib on this excerpt from Sunday’s Washington Post. Most pertinent new information is that over the course of about three years in the early 2000’s, Brill flipped from being a strong supporter of charter schools in NY City (in part because of his observations of the Harlem Academy) and opponent of teachers’ unions to supporting reforms of public education and cooperation with the teachers unions. Details in a short bio in Wikipedia.]
Senate Majority Leader Mitch McConnell (R-Ky.) (Melina Mara/The Washington Post)
By Steven Brill June 30 at 7:46 PM
[Steven Brill is the author of “America’s Bitter Pill: Money, Politics, Backroom Deals, And The Fight to Fix Our Broken Healthcare System.” He has received consulting fees for work on a consumer information and ombudsman program for New York-based Oscar Health Insurance. ]
If Senate Majority Leader Mitch McConnell cannot salvage his party’s effort to repeal and replace the Affordable Care Act, there is still a way forward if he and his Democratic colleagues truly want to fix Obamacare. All they have to do is be willing to compromise — and to acknowledge some history.
The failure of the Republicans to agree, so far, on an alternative to Obamacare should not be surprising — because Obamacare was, in fact, the long-standing Republican alternative to the more radical health-care reforms, such as a single-payer system, that Democrats have proposed since the Truman era. What President Barack Obama and his party pushed through Congress in 2010 was more conservative — and more pro-private sector — than what Richard M. Nixonproposed in the 1970s, or what Republican Gov. Mitt Romneyimplemented in Massachusetts in 2006. Put simply, Obama dared Republicans to take yes for an answer. In a polarized America, they still said no.
Obamacare did little to deal with the problem of health-care costs. There would be no cost-control interference with the only-in-America profits of drug companies, medical device makers or hospitals. Instead, the law subsidized Americans who could not otherwise afford health insurance, allowing them to become paying customers in the same overpriced private-sector system.
True, there would be a provision aimed at making the insurance pool big enough to keep costs lower than they would be if people could just buy insurance when they got sick. Everyone would have to buy insurance (with subsidies where necessary) or pay a penalty. But that big-government mandate was first suggested by the conservative Heritage Foundation in 1989 under the banner of a classic conservative principle: “individual responsibility.” Romneycare included the same mandate.
Obamacare performed a great public service by giving more Americans access to health care. But by not addressing costs, it preordained the problem that McConnell and the Republicans have said they are trying tofixthis year: rising insurance premiums and some insurers fleeing the market because their costs are too high.
However, the Republicans’ answer would fix nothing related to health-care costs, while eliminating access to care for millions of poor people in order to cut taxes for the wealthy. They have proposed lowering premiums not by reining in costs, but by allowing insurers to sell shoddy insurance that pays for less health care. That will not work in any event, because the healthiest people would buy the cheaper products, leaving those who need full protection in a less healthy insurance pool facing sky-high prices. (“Consumer choice” may sound like an unassailable virtue, but in insurance it can be self-defeating.)
So, here are nine ways that Democrats and Republicans could come together — if they really wanted to — to fix Obamacare by truly tackling the problem of high premiums caused by high costs.
1. The Republicans were right that a 3-to-1 ratio — heavily lobbied for by the Democrats’ friends at AARP — between the rates charged for older people and those for the youngest adults does not match the relative actuarial costs of insuring the two groups and discourages the young from enrolling. The ratio should be moved to 5 to 1, as was originally contemplated by those drafting Obamacare until AARP got to them.
2. However, much more generous subsidies should then be given to older Americans to make insurance more affordable to them.
3. Those increased subsidies could be paid for by newcontrols on the price of prescription drugs, either by allowing Medicare to negotiate prices or by other mechanisms used by every other developed country, where prices are 30 to 60 percent lower than here. Taking just 15 percent off the price of prescription drugs would produce more than $600 billion in health-care savings over the next decade, which would lower private premiums while saving taxpayers billions on Medicare costs.
4. As an additional lure to get younger, healthier people into the insurance pool, insurance companies should be allowed to offer them an introductory 50 percent off for their first year of coverage.
5. Five percent of Obamacare’s 2.3 percent excise tax on medical devices (which was suspended in 2015 and should be reinstated) should be used for a massive marketing program aimed at enticing younger people into the pool. The ad campaign should also tout the mandate to buy insurance (which must be kept) as, in the Heritage Foundation’s words, a matter of “individual responsibility.” The more young people who enroll, the lower the premiums will be for everyone.
6.Medicare should finally be allowed to fully implement competitive bidding for medical equipment and devices. Believe it or not, Congress has restricted Medicare’s ability even to negotiate the price of diabetes test strips to selected “pilot project” regions. Competitive bidding could save the government at least $50 billion over the next decade, which could be used to increase premium support for older Obamacare enrollees.
7. Antitrust reform needs to be part of the new package, too. Hospitals are merging with abandon. Every study says that although they say they are doing it to save money by consolidating services, prices always go up instead. How are insurers supposed to keep premiums under control if they can negotiate with only one hospital system that controls all the area’s hospital beds and most of the doctors and clinics?
8. The experiments in bundled payments (as opposed to paying for every episode of care) for knee and hip replacements or cardiac surgery, which Health and Human Services Secretary Tom Price has sharply curtailed, need to be restored and intensified.
9. Finally, tort reform should be included. Abuse of malpractice suits is not as costly as Republicans claim, but it is a real issue because it provides a reason — and an excuse — for hospitals to over-treat and over-test. If tort reform shaved just half of one percent off of health-care costs, that would yield close to $200 billion over a decade. Democrats need to stand up to their trial lawyer patrons on this one.
The residents of Colorado Springs undertook a radical experiment in government. Here’s what they got.
Colorado Springs has always leaned hard onitsreputation for natural beauty. An hour’s drive south of Denver, it sits at the base of the Rocky Mountains’ southern range and features two of the state’s top tourist destinations: the ancient sandstone rock formations known as Garden of the Gods, and Pikes Peak, the 14,000-foot summit visible from nearly every street corner. It’s also a staunchly Republican city—headquarters of the politically active Christian group Focus on the Family (Colorado Springs is nicknamed “the Evangelical Vatican”) and the fourth most conservative city in America, according to a recent study. It’s a right-wing counterweight to liberal Boulder, just a couple of hours north, along the Front Range.
It was its jut-jawed conservatism that not that long ago made the city’s local government a brief national fixation. During the recession, like nearly every other city in America, Colorado Springs’ revenue—heavily dependent on sales tax—plunged. Faced with massive shortfalls, the city’s leaders began slashing. Gone were weekend bus service and nine buses.
Out went some police officers along with three of the department’s helicopters, which were auctioned online. Trash cans vanished from city parks, because when you cut 75 percent of the parks’ budget, one of the things you lose is someone to empty the garbage. For a city that was founded when a wealthy industrialist planted 10,000 trees on a shadeless prairie, the suddenly sparse watering of the city’s grassy lawns was a profound and dire statement of retreat.
To fill a $28 million budget hole, Colorado Springs’ political leaders—who until that point might have been described by most voters as fiscal conservatives—proposed tripling property taxes. Nearly two-thirds of voters said no. In response, city officials (some would say almost petulantly) turned off one out of every three street lights. That’s when people started paying attention to a city that seemed to be conducting a real-time experiment in fiscal self-starvation. But that was just the prelude. The city wasn’t content simply to reject a tax increase. Voters wanted something genuinely different, so a little more than a year later, they elected a real estate entrepreneur as mayor who promised a radical break from politics as usual.
For a city, like the country at large, that was hurting economically, Steve Bach seemed like a man with an answer. What he promised sounded radically simple: Wasteful government is the root of the pain, and if you just run government like the best businesses, the pain will go away. Easy. Because he had never held office and because he actually had been a successful entrepreneur, people were inclined to believe he really could reinvent the way a city was governed.
The city’s experiment was fascinating because it offered a chance to observe some of the most extreme conservative principles in action in a real-world laboratory. Producers from “60 Minutes” flew out to talk withthe town’s leaders. The New York Timesfound a woman in a dark trailer park pawning her flat screen TV to buy a shotgun for protection. “This American Life” did a segment portraying Springs citizens as the ultimate anti-tax zealots, willing to pay $125 in a new “Adopt a Streetlight” program to illuminate their own neighborhoods, but not willing to spend the same to do so for the entire city. “I’ll take care of mine” was the gist of what one council member heard from a resident when she confronted him with this fact.
That’s where Colorado Springs was frozen in the consciousness of the country—a city determined to redefine the role of government, led by a sharp-elbowed businessman who didn’t care whom he offended along the way (not unlike a certain president). But it has been five years since “This American Life” packed up its mics. A lot has changed in that time, not least of which is that the local economy, which nearly drowned the city like a concrete block tied around its balance sheet, is buoyant once again. Sales tax revenue has made the books plump with surplus. Enough to turn those famous streetlights back on. Seven years after the experiment began, the verdict is in—and it’s not at all what its architects planned.
One of the lessons: There’s a real cost to saving money.
Take the streetlights. Turning them off had saved the city about $1.25 million. What had not made the national news stories was what had happened while those lights were off. Copper thieves, emboldened by the opportunity to work without fear of electrocution, had worked overtime scavenging wire. Some, the City Council learned, had even dressed up as utility workers and pried open the boxes at the base of streetlights in broad daylight. Keeping the lights off might have saved some money in the short term, but the cost to fix what had been stolen ran to some $5 million.
“Sometimes the best-laid plans don’t work out the way you’d hope,” says Merv Bennett, who served on the City Council at the time and asked officials at the utilities about whether the savings were real.
There has been a lot of this kind of reckoning over the past half-decade. From crisis came a desire for disruption. From disruption came, well, too much disruption. And from that came a full-circle return to professional politicians. Including one—a beloved mayor and respected bureaucrat who was short-listed to replace James Comey as FBI director—who is so persuasive he has gotten Colorado Springs residents to do something the outside world assumed they were not capable of: Five years after its moment in the spotlight, revenue is so high that the same voters who refused to keep the lights on have overwhelmingly approved ballot measures allowing the city to not only keep some of its extra tax money, but impose new taxes as well.
In the process, many residents of Colorado Springs, but especially the men and women most committed to making the city thrive, have learned a few other lessons:
That perpetual chaos can be exhausting.
That the value of the status quo rises with the budget’s bottom line.
And that it helps when the people responsible for running the city are actually talking with one another.
All it took was a few years running an experiment that everyone involved seems happy is over.
Like many revolutions, the one in Colorado Springs began with a manifesto.
It was an email that was intended to be private, sent from Steve Bartolin, then CEO of luxury hotel The Broadmoor, to the mayor and City Council. The Broadmoor is a city unto itself—a century-old resort whose three golf courses, 779 rooms and skating rink sprawl over 3,000 acres around a lake in the foothills on the city’s western boundary. In a tourist-dependent region with an unusually large reliance on sales taxes, The Broadmoor is an economic powerhouse. In 2009, at the height of the impasse over the worsening budget, Bartolin had made a comparison between Colorado Springs’ budget and the budget of his resort. Observations like the fact that the city had a computer department with 81 people, while The Broadmoor employed only nine. The email didn’t stay private for long. It quickly went viral, was published in full in the newspaper, and so energized the business community that it inspired a dozen locals to start their own shadow council, which they called the City Committee. One of the members of the committee was Bach, a private real-estate broker who had gotten his first corporate job by the audacious move of cold-calling—collect—the CEO of Procter & Gamble. Soon, the committee members prevailed upon Bach to run for mayor, to bring their principles to City Hall.
Bach’s mantra on the campaign trail was one that voters nationwide would recognize from last year’s presidential cycle: Run the government more like a business. He said he was intent on“transforming city government so it works for everyone—and without tax increases.” In fact, he wanted to do away with the personal property tax for businesses and expedite how long it takes developers to get permits, all in service of promoting job growth, which he later vowed would hit 6,000 a year. Bach considered himself an outsider fighting the city’s “regulatory agency mind-set.”
“The only difference I can see between me and Donald Trump,” he told Politico Magazine recently, “is that I don’t tweet.”
In 2011, Bach was swept into City Hall with nearly 60 percent of the vote. Not only did he win, but he arrived in office with powers no mayor of Colorado Springs had ever wielded. A ballot amendment approved by voters a year earlier had taken power away from the City Council and given it to the mayor. Now that mayor happened to be someone who felt that political compromise was a dirty word. Shortly after the election, two top council members asked Bach to give them a detailed weekly report just as the previous city manager had done. He said no. The mayor wouldn’t answer to anyone. The council, he indicated, would answer to him. And he showed that by taking on a major deal, the council was negotiating to rid itself of the local hospital.
Leaders at Memorial Health claimed the hospital was hemorrhaging money in the recession. But to Bach, the hospital was an incredible asset that was just being mismanaged—an argument he buttressed by pointing out that it was sitting on some $300 million in free cash. The council wanted to lease the hospital to a team of local leaders led by Memorial Health’s CEO for about $15 million over 20 years. Bach called it a giveaway. He demanded that the council open up the process to other bidders. Eventually, that process led to a very different financial arrangement with the massive University of Colorado Health System: a 40-year lease that, counting capital improvements, came out to nearly $2 billion. You don’t have to have an MBA to appreciate the benefits of Bach’s deal.
“I was really angry when I got on council and found out they just wanted to hand over the hospital,” Merv Bennett says. “Steve kept us from going down a terrible path.”
Bach also turned out to be right on another deal he said City Council had mismanaged before he was elected. The council had approved a generous contract to a physicist from the nearby U.S. Air Force Academy to develop and implement what he said would be a $20 million, coal-scrubbing technology on the city’s downtown power plant. “Just a terrible deal,” Bach says.
The city had pitched it as a way of making a profit—when the technology was licensed to other plants, Colorado Springs would share in the rewards. But the city was also on the hook to pay for the research and development it required, and costs quickly spiraled. Just last month, the business shut down without having made a single additional sale. The cost: some $150 million over budget. As with the hospital deal, in which the council chose to go with a local rather than open the bidding to all comers, Bach raked officials for their shortsighted provincialism that he and others felt wasn’t befitting America’s 40th-most populous city.
“This town is so easily scammed,” says John Hazlehurst, himself a former council member and now a columnist with the Colorado Springs Business Journal. “Why? Because we’re hicks. It’s really that simple.”
But there was a cost for all that head-butting in City Hall. Although the economy continued to improve, and although Bach’s outsourcing of jobs had done enough to repair the parks budget so that trees were being watered and the lights were back on, some business leaders were skittish about moving to town or expanding.
For those who opposed Bach, the political newcomer was doing damage by firing longstanding department heads without consulting anyone beforehand. Jan Martin, then the council’s pro-tem president, said she heard of Bach’s firing of the city’s police chief by word of mouth, rather than from Bach himself. “He was draining the city of all of this accumulated knowledge,” she says. Hazlehurst, watching from the sidelines, is more succinct. “Bach’s dysfunction and [the] council’s dysfunction were intimately related,” he says. “It was just a rookie government.”
There was a price to pay for Bach’s imperiousness and lack of diplomacy, and this is something about which he and his critics agree to some extent. Job creation, which had been a pillar of Bach’s campaign, never got up the steam that he had promised and, by his own admission, lagged other similarly sized cities in the region like Albuquerque, Omaha and Oklahoma City. He never managed to get the business tax repealed. And his signature plan to boost tourism with a multipronged project of museums and an outdoor stadium ran into headwinds from a council that said it wasn’t sufficiently involved in the planning.
By 2015, the final year of his term, Bach was no longer talking to any member of City Council, save for Bennett. Both sides were fighting proxy battles in the middle of council meetings, quibbling over the sorts of things—moving money from one government account to another to pay bills—that would normally be routine. People outside the council chambers were paying attention, and they didn’t care for what they were seeing—the city that was supposed to run like a business was actually scaring companies. The business leaders who had once supported him had even started their own, newer version of the City Committee—called Colorado Springs Forward—and were looking for a different candidate to back.
Mike Juran, CEO of a midsized company that “puts displays in anything that’s not a laptop or a phone,” had a choice to make in the last year of Bach’s administration. He believed his company, Altia, was poised for big growth—thanks to an automobile industry that wanted to put more gadgets in their cars. Juran wanted to stay put, but he wondered whether he would have trouble attracting young software engineers to Colorado Springs. “The city was in a weird funk and getting a bad national reputation,” he says. Juran knew that if any of his potential recruits googled the city, they would see that it had gone dark, a wildfire had recently destroyed 300 homes, and the city was home to disgraced pastorTed Haggard. Much of this had nothing to do with Bach’s administration, but Juran also knew that Bach’s belt-tightening had hidden effects that were going to erode the city’s quality of life. Colorado Springs had spent years putting off enormous infrastructure problems that would one day come due—one, an issue with stormwater, was so bad it would soon be the focus of a lawsuit from the Environmental Protection Agency. Juran began looking into offices in Denver or Silicon Valley.
Bach had made a campaign promise to serve only one term. But the promise wasn’t necessary—by 2015, he, along with everyone else, knew the then-71-year-old’s chances for reelection were close to zero. Even the business leaders who had helped get him elected knew Bach wasn’t the man for the job anymore. What was needed was a steady hand, and Colorado Springs ended up getting exactly what it needed.
“Finally,” Juran says, “we had grown up and decided we wanted to be a real city.”
If every election is a referendum on the politician who came before, John Suthers was as clear a renunciation of Steve Bach as could be found. Far from a political outsider, Suthers had spent his life working inside government, from student body president of his high school (“No others than Suthers”), to local district attorney, to head of the Department of Corrections, to state attorney and all the way up to attorney general of Colorado, where he served for 10 years.
“When Suthers came in it was as if Michael Jordan had joined your pickup basketball team,” says columnist Hazlehurst. “He’s a consummate politician. … He knows what he’s doing.”
Suthers was a Republican like Bach, and he shared Bach’s belief in keeping government budgets on a leash. But unlike Bach, he wasn’t going to try to strangle the city with it. Suthers believed there was a fundamental difference between business and government—no matter how strong the mayor’s office is, there are still a bunch of other elected officials who need a say. So Suthers’ first goal after getting elected was, he says, to improve his relationship with the City Council. He did that by scheduling two monthly catered lunch meetings, acquiescing to many of their requests for staff and resources and, in the minds of many, treating them like partners rather than combatants. “My predecessor sent over a budget on the day it was due and said, ‘Take it or leave it,’” Suthers says. “I’ve been doing this for a long time. … I didn’t wait until [the last minute] to tell [the council] what I was thinking.”
Suthers’ collaborative approach also led to something that might have been unthinkable in the dark, budget-strapped days of 2010.
Colorado Springs’ reputation as a Republican stronghold might seem overblown to a visitor walking downtown. Just minutes from the pricey liberal arts school Colorado College is a kombucha shop, a store that sells hour-and-a-half stays in sensory deprivation tanks, and a book seller that gives prominent shelf space to the latest Noam Chomsky and is owned by Richard Skorman, the current City Council president. Yet despite those superficial signs of changing demographics, Donald Trump still beatHillary Clinton by more than 22 points in Colorado Springs’ El Paso County. Even with that small-government mind-set still relatively intact, three times in his first two years as mayor, Suthers has gone to voters either proposing a new tax or asking to keep extra tax revenue. By overwhelming margins, he has now persuaded the supposedly anti-tax zealots of Colorado Springs to commit $250 million to new roads, $2 million to new park trails and as much as $12 million for new stormwater projects. “The ballot items were enormous statements of confidence,” says Chamber of Commerce Director Dirk Draper. “They showed that while the community is fiscally conservative, it’s not radically so. If you can find someone to explain it to where it makes sense, voters will allow it.”
Today, Suthers can point to a whole host of data points that suggest Colorado Springs has more than recovered. “We’re on a roll, big-time,” he says. The city’s unemployment is a vanishingly low 2.7 percent. Some 16,000 jobs have been created in the past 24 months—a pace that exceeds Bach’s lofty goals. Flights at the airport have increased nearly 50 percent from a year ago. And large projects have either opened recently—such as a National Cybersecurity Center that takes advantage of the defense ecosystem built up around the Air Force Academy—or will soon, like the U.S. Olympic Museumslated for 2018, a natural offshoot of the fact that Colorado Springs has been home to the U.S. Olympic Training Center for nearly 40 years.
The city’s experience as a political petri dish might not have produced any easy answers. But at least for Suthers, it has produced a verdict on the run-the-government-as-a-business mantra. “Some personalities in the business world don’t suffer fools very much,” he says. “You’ve got to suffer a lot of fools in politics.”
This is the larger lesson of Colorado Springs’ experiment: Ideas matter, but so do relationships. Colorado Springs remains fiscally conservative; on this score, there’s more agreement than not between elected officials and their constituents. But ideological consensus isn’t enough to overcome a lack of surrogates willing to advocate your policies when, even with the strongest mayor system, it’s not entirely up to you.
At a recent charity roast, the 180-degree change in attitude among the city’s political class was on full display. The emcee joked that while Suthers had agreed to come and endure good-natured jokes about his comb-over, the previous year Bach had been invited and offered a different response. “It was two words,” he said, “and the second one was ‘you.’”
Despite Bach’s sandpapery reputation, many who used to spar with him are willing to give the former mayor credit today. Suthers says Bach’s extreme focus on the budget helped right the city financially, and his efforts helped set the stage for a revival of the airport. But most of all, what the leaders of Colorado Springs seem most thankful for is that one man’s turmoil begat another man’s harmony.
“Steve was the ultimate change agent, and they usually have a short shelf life,” Bennett says. “If it weren’t for the lights going out, we might not have had Steve. And if it weren’t for Steve, we might not have John.”