consumer choice

Democratic Presidential Debate: How did consumer choice fare?

With the 2020 presidential race running on full steam, 12 Democratic candidates for president participated in yet another televised debate last night in Ohio.

Considering consumers will be directly impacted by many of the policies mentioned, here’s a breakdown by categories mentioned by the candidates and our own spin on how it relates to consumer choice.

HEALTHCARE

Mayor Pete Buttigieg makes some good points on keeping competition for healthcare insurance, blasting Sen. Elizabeth Warren for not being straight on whether taxes will go up with her Medicare For All plan.

Buttigieg: “No plan has been laid to explain how a multi-trillion-dollar hole in this Medicare For All plan that Sen. Warren is putting forward is supposed to get filled in.”

He prefers “Medicare For All Who Want It,” continuing to allow private healthcare insurance and a public option for those who want it. As we’ve written before, more choice in healthcare is what should be championed.

And Buttigieg had another great line:

“I don’t think the American people are wrong when they say that what they want is a choice…I don’t understand why you believe the only way to deliver affordable coverage to everybody is to obliterate private plans, kicking 150 million Americans off their insurance in four short years.”

Warren, on the other hand, calls her plan the “gold standard,” again stating that while taxes on the wealthy will go up, costs for middle-class families will go down. Here, she’s taking an objective view of the total costs to families, mixing taxes and healthcare expenses. Of course, that’s very convoluted, and doesn’t leave much clarity to consumers.

Sen. Bernie Sanders is more honest: “I do think it’s appropriate to acknowledge that taxes will go up…but the tax increase they pay will be substantially less than what they were paying for premiums and out-of-pocket expenses.

Sen. Amy Klobuchar: “We owe it to the American people to tell them where we’re going to send the invoice…we need to have a public option.” She calls Medicare For All a “pipe dream,” calling for an expansion of Obamacare.

Former Vice President Joe Biden: “The [Medicare For All] plan is going cost at least $30 trillion over 10 years.” He similarly wants to just expand Obamacare.

Overall, it seems there is still a lot of support for competition in healthcare, and that is to be celebrated. Medicare For All, which would remove all aspects of competition and free choice, only got moderate support by all except Sanders and Warren.

CANNABIS LEGALIZATION

The idea of a smart cannabis policy was quite absent from the debate. That’s quite a mishap, considering the ongoing issue of federal cannabis prohibition while select states continue with their own version of legalization.

The only two mentions came in the context of the opioid crisis, by Sen. Cory Booker and Andrew Yang. They only mentioned that cannabis could be used as an alternative for those addicted to opioids.

What about the very real fight to have smart cannabis policy implemented at the federal level? We hope this is covered more in future debates.

AUTOMATION

The idea of a federal job guarantee was fresh on the lips of Bernie Sanders, but that was shot down by most people on the stage.

Entrepreneur Andrew Yang hit it out of the park with this one:

“Most Americans do not want to work for the federal government. And saying that is the vision of the economy of the 21st Century is, to me, is not a vision that most Americans would not embrace.”

He promotes his Freedom Dividend, offering $1,000 a month to every American as a replacement for welfare, as a way to boost consumer spending, and help workers who lose their jobs due to automation.

There is much that could be written about whether or not this universal basic income would be good for consumers, but it is at least a different policy debated by mainstream presidential candidates on a national state.

TECH REGULATION

There was much room for beating up tech companies that offer great services for ordinary consumers. That includes services like Facebook, Amazon, and Google. We’ve written about the trust-busters and their desire to usurp consumer choice before.

Warren led the salvo, using a quip about separating the umpire and the baseball team as some kind of strange metaphor about Amazon selling its own products on its website. Enter her zinger: “We need to enforce our anti-trust laws, break up these giant companies that are dominating big tech, big pharma, all of them.” Pretty clear there.

Yang: “Using a 20th-century anti-trust framework will not work. We need new solutions and a new toolkit…the best way to fight back against tech companies is to say that our data is our property. Our data is worth more than oil.” He made the case for his Value Added Tax on digital services as well, which we’ll examine below.

Sen. Kamala Harris pleaded her fellow candidates to support her call to get Twitter to ban President Donald Trump from Twitter but got no love.

The person who made the most consumer-friendly response about tech regulation was, surprisingly, former Rep. Beto O’Rourke.

“Treat them as the publishers as we are. But I don’t think it’s the role of the president to specify which companies will be broken. That’s something Donald Trump has done…we need tough rules of the road, protect your personal information, privacy, and data, and be fearless in the face of these tech giants.”

He was one of the only people in the debate to mention consumer privacy and pushed back against trust-busting, and should hence get a pat on the back.

TRADE

No Democrat mentioned the trade wars, the harmful impacts of tariffs, and the promise of free trade. Rather, trade got mostly slammed.

Elizabeth Warren: “The principal reason [for losing jobs] is trade. Giant multinational companies have been calling the shots on trade…they are loyal only to their bottom line. I have a plan to fix that: accountable capitalism.”

Warren’s version of accountable capitalism:

  • 40% of corporate boards should be elected by the employees
  • We should give unions more power when they negotiate

Again, no mention of the USMCA free trade agreement, no talk of free trade with the European Union or any other countries.

Sen. Cory Booker agrees that unions should be empowering to offer Americans a “living wage.”

Rep. Tulsi Gabbard says universal basic income is a “good idea to help provide that security so that people can have the freedom to make the kinds of choices that they want to see.” It’s not a total endorsement for freedom of choice for consumers, but at least invokes a good notion of free choice. Not sure her take on global free trade.

TAXES

Though the candidates mentioned many new taxes they’d endorse, the one that concerns consumers the most would be the idea of a VAT – Value Added Tax.

Andrew Yang mentioned that instead of Warren’s wealth tax, he’d pass a VAT of 10%, like in European countries to help fund his Freedom Dividend. That would be akin to a national sales tax, but allowing the opportunity for businesses to claim this amount back if it’s a legitimate business expense, and the same for tourists visiting on vacation.

On its face, an American VAT would raise costs for ordinary consumers and be regressive. As the Tax Policy Foundation notes, this tax would have a disproportionate impact on lower-income households, as they tend to spend more of their income on consumption. Former Labor Secretary Robert Reich made the same point while watching the debate:

Many states and municipalities have their own sales taxes or none at all, and that does impact consumers who spend more. But a move to a national VAT would mean higher prices for ordinary goods and services for all consumers.

PROTECTING CONSUMERS

Really the only direct mention came when Warren tooted her own horn on her consumer protection agency.

“Following the Financial Crash of 2008, I had an idea for a consumer agency (Consumer Financial Protection Bureau) that would keep giant banks from cheating people. And all of the Washington insiders and strategic geniuses said “don’t even try” because you won’t get it passed…it has now forced big banks to return more than $12 billion directly to the people they cheated.”

The Trump Administration has taken the CFPB to court over whether or not it is constitutional, and Republicans have consistently attacked the organization since its founding during the Obama Administration.

“Make no mistake, it does little to protect consumers and was created during the Obama administration to enforce burdensome regulations which have stunted economic growth and negatively impacted small businesses and consumers,” said Sen. Ted Cruz, who has introduced legislation to abolish the agency.

“America has three branches of government – not four,” said Senator Sasse, who has also co-sponsored the bill. “Protecting consumers is good, but consolidating power in the hands of Washington elites is harmful. This powerful and unaccountable bureau is an affront to the principle that the folks who write laws must be accountable to the people.”

CONCLUSION

There wasn’t much mention of the impact the debated policies would have on consumers, and unfortunately no mention of free trade and lifestyle freedom.

Regardless, on healthcare and tech regulation, there were good debates and some good principles that should be championed, but still, more could have been mentioned on ways to promote innovation, privacy, science, and consumer choice.

Facebook Trustbusters Are Motivated by Partisan Politics, Not Concern for the Consumer

By Yaël Ossowski

Channeling the spirit of Theodore Roosevelt and nostalgia for the early 20th century Progressive Era, the latest bad idea being circulated in elite circles is to use the trust-busting power of the federal government to break up the social network Facebook.

The idea has been promoted by the likes of Democratic politicians like senators Elizabeth Warren and Amy Klobuchar and also Republicans like Sen. Ted Cruz. Even Chris Hughes, an original Facebook co-founder, has hitched his wagon to the idea, as expressed in his now infamous New York Times op-ed.

But let’s not kid ourselves. We’re not dealing with a corporate monopoly akin to Standard Oil, U.S. Steel or even Microsoft. We’re talking about social media websites and services available on the open web.

No one is forced to use these platforms, and are very free and cheaply able to create their own. This is not a monopoly in the literal sense, or even a figurative one.

There are already plenty of competing social networks that people use for a host of different services. Whether it’s Snapchat, Reddit, Pinterest or Twitter, there are plenty of services where people connect with friends and share information. Facebook just happens to have “clued in” to the needs of the greatest numbers of consumers. Does that warrant government intervention? No.

Let’s be clear: the internet is the ultimate playground for consumer choice. Government attempts to intervene and regulate based on political considerations, however, will only restrict consumer choice and deprive us of what we’ve thus far enjoyed.

No doubt, some actions by the company have been egregious and they’ll be rightfully punished. The Federal Trade Commission’s expected $5 billion fine on Facebook because of its mishandling of data and consumer privacy is a good first step.

But the movement calling on federal regulators to use their power to break up the company reeks of partisan politics.

Democrats are incensed that users on the platform may have been persuaded to vote for Donald Trump in the 2016 election due to an impressive outreach effort by the Trump campaign (not to mention alleged Russian front groups). Republicans, on the other hand, decry Facebook’s liberal-heavy moderation that has specifically targeted conservative pages and posts. Its censoring of a post citing the Declaration of Independence because it was considered “hate speech” is just one example.

But from what we’ve learned from Twitter CEO Jack Dorsey and other tech elites, banning individuals or pages are highly complex decisions made by thousands of moderators who follow an internal set of guidelines, whether at YouTube, Twitter or Facebook. The investigative article published on the Verge about Facebook moderators’ workload and stress while removing bad content from the platform speaks to that.

Despite these follies, the overwhelming majority of users are happy with their profiles. They’re able to connect with friends and family around the world, and share images and posts that spark conversations. Millions of small businesses, artists, and even news websites are dependent on these platforms to make their living.

Using the force of government to break apart businesses because of particular stances or actions they’ve taken, all legal under current law, is highly vindictive and will restrict the ability for ordinary people like myself or millions of other consumers to enjoy the platforms for which we voluntarily signed up.

We should hold these platforms accountable when they make mistakes, but not tip our hand to invite the federal government to determine which sites or platforms we can click on.

The government’s role is not to pick winners and losers. It’s to ensure our rights to life, liberty and pursuit of happiness, as the Declaration of Independence states. Let’s not use temporary partisan politics to determine the fate of online services and platforms from which we all enjoy and benefit.

Scroll to top