While Democrat candidates for president are busy finding ways to deepen government’s reach into key sectors of the economy, Republicans are working hard to fix what Washington has already broken.
The former can be seen most clearly in Hillary Clinton’s plan to increase the federal government’s role in higher education. She accomplishes this goal by doing what the federal government does best – offering up a lot of money in order to get just a smidgen of control; a smidgen that will grow unchecked until Washington essentially runs the show. Clinton’s proposal accomplishes this by offering up hundreds of billions of taxpayer dollars, which states are in no financial position to be able to turn down, in return for making colleges live up to certain standards.
Certainly, standards aren’t always a bad thing, especially when it comes to a college education. But just as we saw with Obamacare–which made insurance plans all look essentially the same–there are some serious downsides to government-mandated uniformity; namely, higher costs and less of innovation.
“Even if this does a better job of controlling college costs, there are big costs to giving the federal government the power to do those things,” Cato’s Neal Mc Cluskey said of Clinton’s plan. “It will apply uniform rules and regulations, and if you have a single payer of higher education making all the controls, there goes competition. There goes innovation.”
Part of the problem is that higher education and health care are attractive targets for the progressive ideal. And as Arnold Kling and Nick Schulz wrote for National Affairs in 2011, they also present the most important bulwarks against government control:
These are our foremost growth sectors — the ones most central to employment and consumption; the ones that, increasingly, drive our economy. And it is in precisely these two sectors that the case for extensive government intervention and planning, if not outright control, is dominant — and becoming ever more so.
If there is to be any hope of reversing this trend, champions of market economics must come to see these two sectors as the front lines in the battle for capitalism. At stake is not only an ideological or theoretical point, but also American prosperity. The historical record makes this clear: In the nations where it was practiced, government control of the old commanding heights of the economy made those industries less efficient and less innovative — bringing overall economic performance down with them.
Fortunately, Republican candidates are taking a different tack. Rather than expand the gap between Americans and their economic choices in order to create room for government technocrats, Republicans are attempting to eliminate the divide altogether. In so doing they eliminate any room for crony capitalists to play, they reduce the risk of government favoring certain groups over others, and they put a halt to the endless cycle of increased subsidies and higher costs that have plagued health care and higher education.
To see this is in action one need look no further than the various Republican proposals to replace Obamacare in its entirety. Previously, we’ve seen plans from Senator Marco Rubio and governor Bobby Jindal. And this week, Wisconsin governor Scott Walker added his plan to the mix. The main reform is simple, but powerful: Walker would provide a tax credit towards the purchase of any state-approved health care plan to anyone who does not receive insurance from their employer. This does three important things. First, it equalizes the treatment of health insurance (currently, only individuals who receive insurance through an employer can exclude the amount spent from their taxable income) in order to eliminate harmful incentives. Second, it would ensure that everyone has access to some level of coverage. And third, it gets the federal government out of the business of deciding some arbitrary coverage floor, which allows states and insures to figure out innovative product offerings.
Shifting power out of the hands of regulators and into the hands of consumers is a powerful message, and one that Republicans would be wise to promote. Washington hasn’t gotten much right in the last twenty years, under Republican or Democrat leadership. While Democrats spend time denying that legacy and argue over who can spend the most money, Republicans should leverage it and compete to see who can create the freest market.