A Quiz for Capitalists
Step right up! Test your knowledge of political reality!
(FORTUNE Magazine) - Are you a confused Capitalist? With crises looming in health care, pensions, and energy (to pick the short list), corporate America's pragmatism is sorely needed in public life. Yet the business community's capacity to help shape solutions is crippled by something no one will admit: confusion over the terms of debate. Maybe its their workloads, but executives who pride themselves on being well briefed on business issues are prone to walk around with crazy political premises in their heads. Think I'm overstating things? Take this quiz.
Whose Medicare prescription drug plan was bigger?
(a) the one proposed by Al Gore in the 2000 campaign or (b) George W. Bush's, enacted in 2003 and now being rolled out.
Answer: (b). Bush's plan was nearly twice the size of the outer limits of Democratic ambition in the previous presidential election. Yet Dems assail it as inadequate because it wasn't theirs and they fear the GOP could make inroads into the crucial seniors' vote. The drug bill wasn't perfect--there's been confusion galore over the dozens of private plans. Still, if poorer seniors picked any one of those plans by throwing a dart, they'd be vastly better off than before. What does it say when Democratic "strategy" is to discredit a program that offers hundreds of billions to the low-income seniors they're supposed to care about?
The median stock ownership of U.S. households is (a) $78,700, (b) $24,300, or (c) 0?
Answer: (c). For all the hoopla over the democratization of the stock market, the latest (2004) Federal Reserve data show that just 48.6% of U.S. households own stock, meaning the median ownership is zero. (The median holding for households that do own stock is only $24,300.) What's more, two-thirds of stock market wealth is held by 5% of the population. The lesson? Pushing an "ownership society" is fine, but it's a cynical marketing ploy if we direct the lion's share of new "ownership" incentives (as Bush has in taxes, health, and pension policies) to those who already own everything.
True or false: Pork-barrel spending is out of control?
Answer: False. Yes, reports about bridges to nowhere make for fun headlines, and such pork now amounts to $27 billion, up from $10 billion in 1995, according to the watchdog group Citizens Against Government Waste. But stacked against a federal deficit of $500 billion and unfunded liabilities in the tens of trillions, crusades against pork amount to a diversion. How worked up should we really be that pork has gone from 0.6% to 1% of the budget?
Whose health-care policy was more conservative (a) Bill Clinton's or (b) Margaret Thatcher's?
Answer: (a). In fact, Thatcher would have been thrown from office had she proposed a plan as right-wing as Clinton's, which relied on private docs to deliver the medicine and still would have left several million people uninsured. When a plan too conservative for Thatcher can be successfully demonized in the U.S. as "socialist," executives should realize that the health debate here is profoundly misleading.
Whose government was bigger (a) Ronald Reagan's or (b) Bill Clinton's?
Answer: (a). Federal spending under Reagan averaged 22% of GDP. Under Clinton it was 20%--the same as for George W. Bush. All the carping from the right that Bush is a "big-government conservative" misses the big picture: Uncle Sam could spend $250 billion more a year and still leave government as small as under Reagan.
Pharmaceuticals account for what portion of national health spending (a) 38%, (b) 50%, (c) 10%?
Answer: (c), according to government data. Yet surveys show that most people think drugs account for 40% to 50% of health spending--and the rest of the health industry is thrilled to have folks so confused. Drug companies may not be saints (disclosure: I consult for one), but it should put things in perspective. Even restrictions on drug pricing can never solve America's health-cost crisis, because those costs are driven largely by what's happening in the 90% of spending that has nothing to do with drugs.
You get the idea. So what's a confused capitalist to do? The political parties won't help; confusion is part of their strategy. The press won't help; it's too busy playing stenographer to the parties. No, business itself needs to muster the will to push past bipartisan charades to real answers. Given how emotionally attached folks have become to phony political "truths," the real question may be this: Is business ready for the deep political therapy it needs if we're to save the American dream?
MATT MILLER is a senior fellow at the Center for American Progress and author of The 2% Solution.