Wednesday, December 16, 2009

Healthcare regulation vs. going with the flow.

Musing over the obvious similarities between Obamacare in 2009 and Clintoncare in 1993, I was musing further over the fact that Ira Magaziner, the principal architect of the sharing-of-scarcity 1993 plan, then moved over to the Internet, where he did a 180, creating a plan that I described, in a 1998 column, reproduced below, as "utterly libertarian... filled with phrases such as 'no new taxes' and 'industry self-regulation.'" Reflecting back on what I wrote 11 years ago, I might add that such pro-industry libertarianism was built on the foundation of pro-industry government activism. Where, after all, did the Internet come from? It was, of course, a government program. But Magaziner hit on exactly the right Hamiltonian formula: the government starts up something, then turns it over to the private sector.

The Los Angeles Times
July 22, 1998

The Chinese have a saying: If you wait by the bank of the river long enough, the bodies of all your enemies will go floating by. As Ira Magaziner, now in his fifth year in the Clinton White House, gazes out at the Potomac, he has yet to see the bodies of Speaker Newt Gingrich or any of the other House Republican leaders floating by–-but at the rate things are going, he soon will.

In the meantime, Magaziner has put forth an Internet policy paper, “A Framework for Global Electronic Commerce,” that is so utterly libertarian–-filled with phrases such as “no new taxes” and “industry self-regulation”--that this document could help the Democrats outbid the GOP for the support of high-tech entrepreneurs, as well as their cachet, and their cash.

Magaziner already holds a special place in the history of the Clinton Administration. He was principally responsible for the “Clintoncare” health plan that triggered the Democrats’ disastrous defeat in 1994, costing them their majorities in both houses of Congress. But President Clinton still kept his job. And with help from Dick Morris and John Huang, he made a roaring comeback two years later. Magaziner maintained a low profile during this period–-he wasn’t even mentioned in Morris’ memoir, Behind the Oval Office–-but beginning in 1996, he booted up his Internet project.

So now comes the Clinton high-tech offensive, seeking to love-bomb cyberpreneurs with laissez-faire. Of course, since Old Guard Democrats no longer have their committee chairmanships on Capitol Hill, Magaziner could write his “Framework” in a way that pleases New Agers, not New Dealers. In an interview, he was asked whether he saw any irony in his role as architect of health care socialization four years ago–-and yet as apostle of Internet liberation today. “I still believe that what we tried to do in health care was the right thing to do,” he said, explaining that “health care and the Internet are completely different.”

Well, maybe. But for generations, the Democrats have been the party pushing for more bureaucrats, not less. A Democratic presidency or two ago, the Johnson Administration filed suit to break up the two leading high-tech firms of that era, IBM and AT&T. Yet one doesn’t hear much talk nowadays about going after the “monopoly power” of Microsoft or Intel.

The Old Media underplayed the Magaziner plan when it was unveiled on July 1; The New York Times didn’t even cover the event. But the New Media was all over it, like a cursor on an icon. On CNET (, commentator Tim Clark referred to the plan as “a damn good start.” And one attendee at the White House ceremony, Sky Dayton, the 25-year old chairman of EarthLink, a Pasadena-based Internet service provider, trilled that the proposal was “a mandate for government to keep its hands off the Internet...It was pretty inspiring.”

What’s truly inspiring is the size of the industry that Magaziner & Co. want to seal off from government interference. International Data Corporation projects that “e-commerce” will rise from $2.6 billion last year to $220 billion in 2001. And even then, IDC estimates that fewer than 400 million people around the world will be wired–-just a few bytes out of the planetary apple, with its population of six billion.

Other Democrats, not typically thought of as pro-free enterprise, have jumped on the Magaziner bandwagon. Sen. Ron Wyden (D-OR) has proposed the Internet Tax Freedom Act, which would prohibit state and local taxes on the Net. This outrages the US Conference of Mayors, which argues that if e-commerce becomes a tax shelter, sales will be drained away from traditional retailing. Imagine: Democratic politicians favoring corporate moguls over big-city mayors.

Whatever happened to the GOP? Just two years ago, Gingrich gave a nationally televised speech in which he held up a computer chip and said that it represented the future, not only for the Republic, but for the Republicans. But today, with Gingrich watching his back more than the road ahead–-and with the Democratic party downsized to the point where its “paleo-liberal” wing can’t block presidential initiatives and with Vice President Gore, looking to 2000, now the toast of the techies–-Magaziner has a new perspective on the ebb and flow in Washington. “The last thing you want to do is have the government come in and regulate” he says happily, as the Democratic river rises.

1 comment:

Peter913 said...

You wrote:
"Magaziner hit on exactly the right Hamiltonian formula: the government starts up something, then turns it over to the private sector."

In rereading your 1998 column, I thought of words once spoken to me: "Pete, it's an idea whose time had not yet come."

In 2001 or 2002 Bush gave us all a check, aka a future tax rebate. I wanted him to keep the checks & build 200 Nuclear Power plants. Get them up and running, then sell them into the private sector at a profit & if necessary hold the private sector's mortgages on the plants.

Jim: No one listens to us, then or now.
How many times re Healthcare do we have to say: "It's Tort Reform Stupid"!

I admire your staying power on the subject. Me, I want to rip the lungs out of the "Hill People." And I hope, come next November please God, our fellow Americans will do just that in the election booths; otherwise our country is gone.