Avarice and Artifice
Since before the days of traveling medicine shows, Americans displayed a knack both for peddling bullshit and for buying it. Cultural touchstone: Dorothy’s Professor Marvel. Paradigm case: the 2024 presidential election. But the latter is simply a more visible instance of the phenomenon. Let’s look at two cases of Americans’ willingness to believe that private capitalism is always superior at delivering services over collective, government, not-for-profit programs. As with snake oil, it begins with a con man. With avarice and artifice.
Timothy Noah this morning considers efforts to privatize Medicare. Donald Trump claims he won’t. (Trump also makes claims about his height, weight, and net worth.) Noah cites a Wall Street Journal report from Wednesday (I don’t have access) that shows that despite widely touted claims that the private sector is more efficient at providing health care, well, it does not. In fact, private health care for seniors is an extraction industry where Medicare Advantage policies excel “in the filing of fraudulent claims.”
Insurance industry whistleblower, Wendell Potter, cautions that the real “Advantage” is for insurers, not the insured. And not for the taxpayer, Noah explains:
Medicare Advantage looks to people over 65 like a better deal because it covers things traditional Medicare doesn’t, such as visits to the dentist or the eye doctor. Some plans even cover acupuncture! But if you get seriously ill and need to be referred to a specialist, Medicare Advantage isn’t so great. An April 2022 study by the Health and Human Services department’s inspector general found that 13 percent of the referrals denied under Medicare Advantage would have been approved under traditional Medicare.
Medicare Advantage also shows that health care privatization is a lousy deal for taxpayers. Medicare Advantage costs the federal government 7 percent more per enrollee than traditional Medicare, according to an August 2024 study by the fiscally conservative Peter G. Peterson Foundation. For enrollees with similar health profiles, Medicare Advantage costs 22 percent more, according to the Medicare Payment Advisory Commission.
Perhaps that’s because, as the Journal’s investigations found, Medicare Advantage insurers routinely pad their government reimbursement requests with spurious diagnoses. For example, an astounding 66,000 Medicare Advantage patients were diagnosed with diabetic cataracts even after these patients had surgery to correct them, making that diagnosis, in the Journal’s words, “anatomically impossible.” In other instances, patients whom Medicare Advantage insurers reported as HIV positive received none of the recommended treatments. If a doctor failed to furnish a desired diagnosis, insurers dispatched a nurse to the patient’s home to find one. Medicare Advantage insurers also conned veterans into enrolling in the program even though they were already covered adequately by the Veterans Administration health system, which has repeatedly been demonstrated to be superior to private hospital care (something else the public is reluctant to believe).
But then there’s a future electorate born every minute. “The challenge with all privatization schemes is that private sector doesn’t aspire to save the government money,” Noah concludes. “Why should it?” That’s at odds with maximizing profit.
Education Advantage
My friend Jeff Bryant, a public schools advocate, pointed on Thursday to The Progressive‘s critique of the movement to privatize public schools. Carol Burris begins with a 2017 “rightwing billionaire-funded documentary created by the late Andrew Coulson,” Schools Inc., which argued “that for-profit schooling, funded by parents without government involvement, is the best delivery model for education.” Detect a theme here?
The “school choice movement,” which Coulson’s documentary promoted, has always been a classic bait-and-switch swindle: Charter schools were the bait for vouchers, and vouchers the lure for public acceptance of market-based schooling. While narrow debates about accountability, taxpayer costs, and the public funding of religious schools raise important concerns, the gravest threat posed by the school choice movement is its ultimate objective: putting an end to public responsibility for education.
This goal is not a secret. The libertarian right has openly dreamed of ending public education for the past seventy years—the economist Milton Friedman advocated for school choice as early as 1955, and his acolytes have continued to do so ever since.
It’s a wonder that public school privatization advocates don’t call voucher schemes Education Advantage.
Burris continues:
The America First Policy Institute, where Trump’s Secretary of Education nominee Linda McMahon serves as board chair, states in its recent policy agenda that “the authority for educating children rests with parents.” As public responsibility for schooling shifts to parents, educational subsidies will be gradually reduced until Friedman and Coulson’s dream of a fully for-profit marketplace that competes for students is achieved.
This is a twofer for the Midas cult. As I’ve noted repeatedly, education spending is the largest portion of the annual budget in all 50 states and mandated in state constitutions from coast to coast and beyond. The Market demands its cut:
The impulse among conservatives to privatize everything involving public expenditures – schools included – is no longer just about shrinking government, lowering their taxes and eliminating funding sources for their political competitors. Now it’s about their opportunity costs, potential profits lost to not-for-profit public-sector competitors. It’s bad enough that government “picks their pockets” to educate other people’s children. But it’s unforgivable that they’re not getting a piece of the action. Now they want to turn public education into private profits too.
School deserts
Donald Trump once said, “I love the poorly educated.” So does the Midas cult. They’ve offshored jobs to countries with lower labor costs where those countries’ taxpayers pay to educate them, not ours. Thomas Wilson, former CEO of Allstate, explained offshoring jobs bluntly, “I can get [workers] anywhere in the world. It is a problem for America, but it is not necessarily a problem for American business …” Higher-skilled workers they can import. Ask Elon Musk.
Burris continues:
And what about those who refuse to pay? Former Arizona legislator Paul Mosley wanted to end compulsory schooling in his state, claiming that what was once a privilege was now “being forced down everyone’s throat.” The Cato Institute has similarly signaled its approval of “unschooling,” a practice of eschewing formal education altogether in favor of informal learning. If education is governed as a marketplace, they claim, you have the right not to shop at all.
The implications of this approach are profound. In a pay-as-you-go system, few families will have the financial means to educate a special needs child outside the home. What’s more, families in rural areas will be left with few options, if any: In the for-profit marketplace, why go where customers are few and nonaffluent? If your Muslim or Jewish child lives in a town where the majority “choose” a Christian school, there may be no secular option. Schools opening and closing based on profit margins will be commonplace—more than one in four charter schools already closes by its fifth year of operation.
Can you say school deserts? That’s how it works with groceries, eh? Poorly educated workers desperate to do menial, low-paying jobs are a corporatist’s wet dream. And a countryside filled with them is a stake in the heart of a democratic republic. It begins with a con man. It ends with oligarchy, or worse.