Political and Health Reform and “Externalities”

A side effect or consequence of an industrial or commercial activity that affects other parties without this being reflected in the cost of the goods or services involved, such as the pollination of surrounding crops by bees kept for honey.

Wikipedia, definition of Externality

August 18, 2011 - When I was taking an eight week course on Health System Management at the Harvard Business School/School of Public Health, our instructors talked often about “externalities.” Externalities, as I understood them, were events outside your immediate control, things you could do nothing about.

An “internality,” if I may coin a word, on the other hand, would be something you could do on your own to change prevailing psychologies, attitudes, ideas, and norms to alter your audience’s patterns of thinking.

These days you’re hearing a great deal about political externalities. As a matter of fact, President Obama has transformed externalitymanship, sometimes known to the cynical as the “blame game” to a high art form.

Obama's externalities, things he claims he can do nothing about, include;


• President Bush: Obama blames Bush for the mess he inherited, despite the fact that Obama says the recession had bottomed out a four months after he was sworn in. Now he claims, he has stopped growing due to external factors.

• ATMs: In June,2011 Obama blamed automated teller machines and airport check-in kiosks for the lack of jobs, saying that "businesses have learned to become much more efficient, with a lot fewer workers." Productivity, in short, is a bad thing, except when it applies to government.

• Republicans: Last week, Obama said that because "some in Congress would rather see their opponents lose than America win, we ended up creating more uncertainty and more damage to an economy that was already weak." The GOP is unpatriotic and seeks to wreck the economy.

• Tea Party: This miniscule sliver of the Republican party, voted in by an overwhelming majority of Americans in November 2010, he maintains, has "terrorized" the majority and blocked his attempts to create jobs. Never mind that its members represent Middle America and are better educated than the general populace.

• Gridlock: Obama says bitter partisanship blocks his attempts to do good. He's basically complaining about political obstacles to his latest "stimulus" plan — spending hikes, gimmicky tax breaks, and a massive tax hike — already been tried and failed.

• The Media: Obama says the "splintered" press, i.e. Fox News and talk radio, are to blame for Washington's failure to boost the economy. "If you never even have to hear another argument," he said, "then over time you start getting more dug in into your positions." He seems to forget the mainstream media is overwhelmingly on his side.

• Businesses: Obama often blames companies for sitting on massive piles of cash, becoming “rich” from excessive profits, and harping foolishly about “uncertainties” generated by Obamacare, shared sacrifice, and inevitable taxation.

• Health Care: Obama seems to blame the public for not understanding his munificent health law, 26 states for challenging it in court, his own Medicare Actuary saying it will not control costs and will limit access, and physicians for expressing skepticism about its negative consequences.

• The Global Economy: There is nothing the U.S. can do, Obama maintains, about the lack of growth in the global economy and the dire situation in Europe’s top-heavy welfare states, which critics say he may be emulating.

.Japanese supply chain disruptions, European debt problems, Arab Spring disorders, and Oil Spikes, not necessarily in that order.

• Texas Job Growth: Sure, Texas has added nearly 40% of all jobs in the U.S. during the recession. But that growth is due to externalities – a robust energy sector in Texas, Mexicans coming across the border for low-income jobs, a paucity of welfare programs providing for the poor and unemployed, lack of effective regulations constraining “get-rich-quick” entrepreneurs and greedy corporate giants.

These externalities may be and should be considered in any political argument, but they overlook certain “internalities” in Texas - a business friendly environment with low taxes, a consciously low level of regulations, a firm belief in the benefits of entrepreneurship and innovation, and a physician-compatible climate triggered by tort reform, which has brought 20,000 new physicians flocking into Texas. Americans may not understand the subtleties of externalities, but they understand concreteness of jobs, they understand health care has created 430,000 jobs since the recession began while the U.S. was shedding 7.5 million jobs, and they understand Texas leads the nation in job growth.