Monday, September 15, 2014

The Public Option

I can remember the debates over Obamacare. Conservatives charged that the public option is not an option, that it would amount to a government takeover of our healthcare system. Liberals defended the public option saying that it would provide the poorest among us with an option they could afford and it would keep the private providers in check, and honest.

England has a single payer plan that is run by their government. During the last summer Olympics there (if you can call it that), the opening ceremonies paid a massive tribute to their health care system. The Brits really love their healthcare system and would not do it any other way. I've read great reviews of this system by Americans visiting there, and they were all shocked and awed by the efficiency and low costs of the system.

We have something like it here in America. It's called Medicare. Numerous studies have been done on it and the consensus is that it's a public option for the elderly, and a very efficient and cost effective one at that. Some say that Medicare is one of the most important checks on private providers that we have right now.

Then there is public internet access, aka, community broadband, or municipal broadband. In over 400 cities across this country, and the list is growing, cities have been building their own networks. Municipal broadband is what happens when the incumbent providers betray the public trust and refuse to build out their networks to meet demand. Why? Bean counters in New York don't think there is enough value in the neighborhood to justify laying fiber. So small towns and communities have taken it upon themselves to build it and serve the community.

Conservatives charge that the government has no business building networks for internet access. But governments do have to build roads, right? Conservatives also wring their hands over boondoggle networks that may languish because of public mismanagement. Yet, statistics show that 95% of municipal broadband networks not only succeed, they outperform the private sector offerings in terms of price and speed. In contrast to Comcast, municipal broadband customers are also very happy with their service.

Municipal broadband helps to keep companies like Comcast, Time-Warner and Verizon honest. Municipal broadband is infrastructure, like roads, a fact that the FCC has noticed recently. It is a public option very much worth considering, so I find it puzzling when state legislatures pass laws that prevent cities from building their own fiber networks.

Apparently, the public option doesn't stop there. How about a public gas station in a deep Red State, built by conservative Republicans in Somerset, Kentucky? The gas station charges less for gas than private stations and was built on the notion that the lower prices a public gas station offers would bring tourists and businesses to town, thus creating jobs. The mayor who brought it in says that it's the job of government to protect people from big business. How about that?

Like the city of Somerset, many people in America are beginning to question the profit motive for commodities and infrastructure. There isn't anything wrong with profit, but profit at any cost is destructive. When our healthcare system costs 18% of GDP while other countries see 8-9%, we know something is wrong. We know that money could be used to create jobs. We rank something like 11th or 12th in the world in terms of internet speed, but our costs are at the top relative to other countries for the same speed. These very high costs belie the so-called "efficiency" of capitalism.

When a Republican mayor builds a public gas station intended to just break even, he is tacitly admitting that there are limits to capitalism. I'm not in favor of the abolition of capitalism because I see that there are many benefits to it. But I do believe that greater oversight is reasonable and necessary.

The public option is one way that governments can provide that oversight. It has been said that we learn by doing. When the government does it, they learn what private providers do and have an easier time regulating private providers. With a public option, we can keep private providers in check so that consumers are not gouged, and that public safety is maintained. This is particularly true of infrastructure, healthcare and, it seems, commodities like gas and water.

Now that I think about it, gas is something that everyone uses directly or indirectly, just like electricity and water. We may be onto something here with gas stations.
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