Your Teacher Said What?! (29 page)

It never did:

This didn't represent a big problem for the
New York Times
, however:

There are a few reasons why the thousand-plus pages of the financial-reform bill pay so little attention to the actions of Fannie and Freddie. The first one is that the Frank of Dodd-Frank is Massachusetts congressman Barney Frank, who in 2000 called concerns about Fannie and Freddie “overblown,” claiming there was “no federal liability whatsoever,” and in 2002 said, “I do not regard Fannie Mae and Freddie Mac as problems. I regard them as assets,” and even in 2008 was still defending them, saying, “The private sector got us into this mess. . . . The government has to get us out of it.”
⁴⁵

But the bigger reason is the predictable one: Progressive thinking
always
prefers a government solution to a market one. And so (surprise!) does the
New York Times
. In fact, the
Times
used up so much of the milk of human kindness in support of Fannie and Freddie that it was fresh out when it came to the paychecks earned by people in the financial-services industry.

Now, I admit that it's a little hard to generate great gobs of sympathy for people who are paid the kind of bonuses that have become standard operating procedure in the banking, insurance, and investment businesses. But the principle of executive compensation is only one of the dozens of economic subjects about which the
New York Times
has an opinion. A wrongheaded opinion. More than anyone else, the
Times
has been leading the charge to restrict the amount of money that banks and other institutions pay their senior employees, because the banks were recipients of the huge loans associated with the various aspects of the 2008 and 2009 bailouts.

The loans themselves had come with a lot of strings attached, including restrictions on compensation. This was one of the reasons that so many of the banks receiving federal loans were so eager to repay them and so get out from under the pay guidelines (and, by the way, one of the reasons that the U.S. government actually made a
profit
on the Troubled Asset Relief Program that stands, as of this writing, somewhere north of $50 billion).

But the idea that the federal government needs to “rein in” overly rich pay packages survived loan repayment; in the words of the
Times
editorial board:

Which prompted this back-and-forth with Blake:

 

“Blake?”

“Yes, Daddy?”

“Did you read the e-mail I sent?”

Silence.

“Blake?”

“I read most of it.”

“What'd you think?”

“Well, the guys at the
Times
don't want us to pay the banks, and the guys at the
Journal
do.”

“Not the banks. The bankers.”

“Right. Bankers.”

“What do you think about that?”

“Well, I didn't really understand it.”

“What didn't you understand?

“Well, in the part I read, the guys at the
Times
thought these bankers were paid too much, and they didn't want us to pay them. But we're not paying them, are we?”

 

The political appeal of this is obvious; its economic justification is about as obvious as capping the pay of Tina Fey because
30 Rock
is broadcast over public airwaves and regulated cable systems. For example:

Luckily, the
Wall Street Journal
sees that this particular emperor isn't wearing any clothes:

But compensation is actually a sideshow in the battle over regulation of the financial-services industry. The main event and the centerpiece of the Dodd-Frank bill was the creation of a new Bureau of Consumer Financial Protection, and needless to say, the
Times
and the
Journal
saw the issues a little, well, differently:

As I said, politicians—or, at least, Progressive politicians—know who should be in charge: them, or at least the regulators they appoint.

It's not just that the
New York Times
loves economic regulation by “experts.” The financial industry is hugely complicated, and if you're going to have any regulation at all, expertise isn't the worst qualification I can think of. It's pretty scary, however, that their idea of an expert is someone like Elizabeth Warren, a—wait for it—professor at Harvard Law School and a career academic and the
Times
's favorite candidate to be director of the new Consumer Financial Protection Bureau, as it is now known. You might think that the best person to run the bureau would be someone with a background in banking or finance; but if so, you're probably reading the
Wall Street Journal
anyway.

 

There are areas where it is easy to be a free-market advocate, areas where the sheer, unadulterated idiocy of Progressive ideology makes a slam-dunk case for free-market capitalism. And not just an ordinary slam dunk: a slam dunk by Shaquille O'Neal over a bunch of Girl Scouts. Like, for example, the Patient Protection and Affordable Care Act, which was signed into law by President Obama on March 23, 2010.

The Progressive effort to make the national government responsible for the nation's health care (or at least its health insurance) is as old as Progressivism itself; it was one of the promises on which Theodore Roosevelt ran for president on the original Progressive Party ticket. He lost. His cousin, FDR, attempted to make the federal responsibility a part of the original Social Security legislation. He lost, too. Harry Truman in 1949; Richard Nixon in 1972; Bill Clinton in 1993. Lost, lost, lost.

Got to give them credit for persistence.

By the time the Obama administration stepped up to the plate, health care—doctors, pharmaceuticals, hospitals, insurers—accounted for roughly one-sixth of the entire American economy: more than $2 trillion. America spends a lot on its health care, but it gets a lot in return. The free-market component of that trillion-dollar business had produced a steady stream of near-miraculous innovations, from antiretroviral drugs to stereotactic neurosurgery to PET scans. Free-market research and development had lowered infant mortality, extended life span, and transformed the practice of medicine. Procedures that twenty years ago would have taken hours to perform in an operating room were now being done in doctors' offices; knee surgeries that had years-long recovery times (if patients ever really recovered) now had patients running marathons weeks later.

Of course, it needed to be fixed.

Luckily, the incoming administration had a model in mind for the way to fix it. In 2006 the Commonwealth of Massachusetts, under its governor, Republican Mitt Romney, had enacted its own health-care reform, which promised to insure every resident of the state—at no cost to its poorest residents, at a heavily subsidized cost for others. By March 2009, when President Obama announced his intention to tackle the subject, the Massachusetts experience was a clear example . . . of something.

The
Times
saw it this way:

It's not so surprising that the editors of the
New York Times
were able to find evidence that the Massachusetts plan was not only working but doing so “without seriously straining its budget.” Psychologists call the tendency to see only the data that confirms preconceptions a “confirmation bias,” and it was pretty clear that the
Times
had a ton of preconceptions about not just government enterprises in general but government-run health care in particular. The
Times
opinion on such matters was, well, predictable.

But as the late Senator Daniel Patrick Moynihan used to say, everyone is entitled to his own opinion, but not his own facts. Which is what the
Wall Street Journal
was ready to point out:

Of course, the
Times
wasn't just cheerleading for the plan based on the delusional solvency of the Massachusetts plan, though it's hard to miss, once again, the chronic inability of Progressives to add up a column of figures twice and get the same result. As always, the real attraction is the belief that the best possible health-care system is one that forbids the squalid search for profit.

The real objective—of the
Times
, a whole lot of the Democratic Party, and the president himself—was a single-payer system: one in which
all
medical care is government run and financed. However, there was, and is, such huge opposition to such a Canadian-style system that Progressives (outside of predictable places like Cambridge and Berkeley) apparently decided that their best strategy was misdirection: If they couldn't take over the entire $2 trillion industry at first, maybe they could do so at last, by what became known as a “public option” that would “compete” with private insurance.

The essential idea of the public option was incoherent from the beginning. If people were offered a government-run health-insurance plan that was neither better nor cheaper than private insurance, they would have no reason to choose it; on the other hand, the only way to make it either better or cheaper was to subsidize it . . . which is sort of the opposite of competition.

 

“Blake?”

“Yes, Dad?”

“Do you know the difference between private school and public school?”

“Dad. I'm in fifth grade, for gosh sakes.”

“So you do know?”

“Of course. Private school costs a lot more.”

“What if they were the same price?”

“Then everybody would go to private school, wouldn't they?”