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JULY 14, 2022
Meyerson on TAP
Where Markets Don't Go, Here's How the State Can Step In
California Gov. Newsom announces that the state will make and distribute
insulin at cost.
California Gov. Gavin Newsom is whooshing through Washington this week,
seemingly to promote at least the thought among his fellow Democrats
that he'd be an excellent choice for the party's next presidential
nominee should Joe Biden opt out of the running. I admire much of what
Newsom's done as governor, though I have very real doubts about how
he'd perform nationally with working-class voters. (California's
electorate has just about the lowest percentage of working-class whites
of any state.)
Still, one initiative Newsom announced
last week holds promise as a way that he and other Democrats could do
something that could, if expanded, tangibly benefit working-class lives.
Last Thursday, Newsom announced that California is appropriating $100
million in its new budget for developing, manufacturing, and
distributing insulin at cost. "Nothing epitomizes market failures more
than the price of insulin," he said. As 37 million Americans suffer from
diabetes, a program like Newsom's would clearly benefit a sizable
share of the populace.
Newsom isn't alone in seeking to reduce insulin's hugely marked-up
cost, which can range as high as $6,000 a year. A bill has been
introduced in Congress to put price controls on the drug, which is why
it may not win enough Senate Republicans to go anywhere. Colorado has
placed a $100 monthly cap on co-payments for insured insulin users. A
consortium of hospitals is funding a nonprofit to make generic insulin.
But manufacture and provision to all in need of insulin, whether insured
or not, whether hospitalized or not, is on no apparent drawing board
save the state of California's.
That's partly because size and progressivity matter. California can
afford to get into the business of public provision of a necessity
because it has an economy larger than those of all but four nations, and
because it has the most progressive state income tax in the United
States. This year, that has yielded the state a balanced budget of just
over $300 billion.
The broader lesson here is that when confronted with market
failures-something we have in abundance-there's an option: a
public option. The market failure most plaguing California, and
increasingly most other population centers as well, is the dearth of
affordable housing. If Democrats want to get serious about curtailing
inflation in the long run and enabling millennials and Gen Zers to get a
leg up economically, they need to get government into the housing
construction business, with funding on a scale that only the federal
government and particularly flush states like California can provide.
In a nation whose credo could be "Market Failures 'R' Us," the
solution necessarily becomes de-marketizing the goods, physical and
social, that the market isn't producing. Newsom's is a good first
step; a lot more have to follow.
~ HAROLD MEYERSON
Follow Harold Meyerson on Twitter
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A looming strike and struggles with a proposed merger could reflect a
reckoning for the rail industry's determined efforts to squeeze
capacity. BY DAVID DAYEN
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