On Thursday I spoke at a panel at the Federalist Society’s National Convention entitled: Is Everyone for Federalism Now? The title is a backhanded tribute to the President. Finally, he is bringing us together, because he has caused the liberal resistance to Trump to appreciate federalism—a cornerstone of conservative thinking about constitution! But that is actually the shallower reason for the renewed interest in possible cross- ideological agreement on America’s most famous practical contribution to governance. The deeper reason is that a whole new school of law professors has embraced federalism under the new name of “national federalism.” Two of its most distinguished adherents, Heather Gerken and Abbe Gluck, were on this panel.
Count me a skeptic, however, about the prospect of any enduring alliance. To be sure, there may be tactical and opportunistic use of federalism by those who oppose the administration: that is the nature of politics particularly in Washington where for many politicians the meaning of the Constitution changes depending on whether they are in power. And there may be a few actual areas of rapprochement: it is conceivable, for instance, that some liberals may join conservatives in opposing commandeering of state officials.
But in general there will be no intellectual convergence because the right and left’s understanding of federalism—its content, origins and purposes—is very different. The right believes that federalism derives from a text of the Constitution that limits the power of the federal government, giving different responsibilities to federal and state officials. The purpose of this distribution of power is ultimately to protect individual liberty from government.
In contrast, progressives who promote federalism support a federalism that promotes activist government and exists largely at its sufferance—almost the opposite of constitutional federalism.
A recent letter from Congressman Henry Waxman, demanding that a pharmaceutical company justify its pricing of Solvadi, a new drug to cure Hepatitis C, precipitated a selloff in biotech stocks. Waxman’s concern about Solvadi’s price does not appear well-founded when one compares Solvadi to the alternatives. While more expensive per dose than the previous treatments, Solvadi is more effective and requires a shorter course, marking it as a substantial advance for curing this serious illness.
The Congressman’s intervention raises larger questions about the relation of government policy to innovation. Anyone who is getting older—and that is all of us—should see medical innovation as one of the most important measures, if not the most important measure, of a successful health policy. As Eric Topol details in his fine book, The Creative Destruction of Medicine, technological acceleration, including advances in genomics and stem cell research, suggests that we are on the cusp of a golden age of medical innovation. But government-imposed price controls and other policies can reduce the incentives for devising new treatments, resulting in preventable death and illness.
Sadly, our health care debate does not sufficiently focus on innovation. Indeed, the very name of the so-called Affordable Care Act emphasizes the current cost of health care, not its benefits, and certainly not future benefits from innovation. Supporters of the Act have focused on holding down health care costs and limiting their growth.
In my last post, I considered the difficulty the government has in reflecting innovations in its analysis of economic growth, because measurement by rule cannot capture economic reality. Here I continue the theme by discussing the failure of government statistics to take account of the improvements in health care and then consider some objections to the idea that economic growth is continuing at a rapid pace rather than stagnating.
In a brilliant article, economists Kevin Murphy and Robert Topel showed that improvements in longevity have provided huge social gains not counted in GDP. Indeed, they calculated that including the value of these gains added from 10 to 50 percent to GDP depending on the period analyzed. And their calculations do not include gains to the quality of life, which they estimate are on the same order of magnitude. Thus, improvement in social well-being has been substantially understated in government GDP figures.