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Cost Disease Socialism

We are in an era of spiraling costs for core social goods—health care, housing, education, childcare—which has made proposals to socialize those costs enormously compelling for many on the progressive left. This can be seen in the ideas that floated around the 2020 Democratic primary. Proposals for free college and student debt relief, Medicare for All, free or nearly free universal childcare, and massive subsidies for renters in expensive cities were proposed by President Biden’s challengers, and continue to be at the top of the agenda for the left wing of the Democratic Party.1 Indeed, the current vogue for “socialism” on the left is, on closer examination, almost always about socializing these common household expenditures. The traditional socialist call to “seize the means of production” has thus been updated to something closer to “subsidize my cost of living”—a less revolutionary ambition, perhaps, but one that is no less flawed.

Soaring costs have blown a hole in the budgets of the working and the middle classes, offsetting the full benefits of a growing economy, particularly given the modest wage growth of the last four decades.2 But simply socializing the costs and blowing an equally large hole in the federal debt is not a sustainable alternative. It is propitious, then, that the rise of “cost disease socialism” has coincided with the Left’s growing fluency in Modern Monetary Theory—a school of macroeconomic thought that, whatever its deeper contributions and subtleties, has become shorthand for the view that deficits don’t matter because the sovereign can always monetize its debts.3

We beg to differ. Governments do not face the same budget constraints as a household, and a larger federal deficit was appropriate given the pandemic and persistently low inflation (until very recently). Nonetheless, these facts do not mean that public debt and deficits can grow without limit; nor do they provide a blank check for spending as if opportunity costs have ceased to exist. Enigmatic macroeconomic theories notwithstanding, the maxim “there is no such thing as a free lunch” still holds true.

Yet instead of looking backwards, we take a prospective approach. Cost pressures in sectors like health care, housing, childcare, and higher education are creating growing, irrepressible public demands to move such costs onto public budgets. Doing so would be a mistake, in our view, because the root cause of escalating costs is overwhelmingly regulatory, rather than budgetary, in nature. Shifting costs onto the public, therefore, would not only fail to fix the underlying problem; it could also make cost disease substantially worse by shielding consumers from market prices while guaranteeing overregulated sectors a source of unconditional demand. This can result in a vicious cycle in which subsidies for supply-constrained goods or services merely push up prices, necessitating greater subsidies, which then push up prices, ad infinitum. Even if the cost of a particular program seems small today, spending growth linked to a particular cost-diseased sector will tend to undermine our fiscal sustainability in the long run, since by definition they represent the sectors in which costs grow faster than the economy as a whole.

A regulatory approach to fiscal sustainability has some political upsides, as well. Independent of the prospective budgetary impacts, tackling cost disease head-on would directly expand the real incomes of ordinary Americans, while making the economy as a whole more productive. Programmatic cuts, in contrast, create “losers” virtually by definition, and do nothing to alter the underlying political economy that gave rise to said programs in the first place. If fiscal conservatives in America feel like they are fighting a multiheaded hydra, in which cuts to one program are followed by the expansion of three others, this is surely a major reason why.

What Is Cost Disease, Anyway?

The economist William Baumol famously observed that differences in productivity growth across different parts of the economy cause the cost of goods and services in labor-intensive sectors to balloon over time. Even though string quartets are no more productive than they were in 1900, for example—one violin part still requires one violinist—the cost of assembling a quartet requires paying would-be violinists on par with the myriad more productive things they could be doing in the year 2022. Wages are thus determined not merely by the marginal productivity of labor in a given occupation but also by the opportunity cost of not working in higher-paying occupations that compete for the same labor.4

Baumol’s cost disease, as it has come to be known, is the curse of any highly productive economy. The United States is no exception. Chart a graph of cost inflation over time, and labor-intensive services like health care, childcare, and education all rise up and to the right.5 Not coincidentally, these are also some of the most highly regulated and subsidized sectors of the economy. Faced with pressure to make such services more affordable while not reaping the whirlwind of organized provider oppo­sition, lawmakers opt for regulations and subsidies that socialize costs from a household’s point of view rather than address the underlying dynamics. At best, this merely shifts private costs onto public budgets. At worst, it exacerbates cost disease by stimulating greater demand for the affected service while reducing the market incentive to discover lower-cost alternatives.

Baumol’s original framing is somewhat misleading because cost disease is not entirely a mechanical fact of the service economy over which we have no control. In reality, cost disease is just another term for highly differential rates of productivity growth. With new technologies and better market design, labor-intensive, non-tradable services thus have the potential to become the single greatest source of future productivity growth. Socializing such services is in that sense a double threat to fiscal sustainability, since it both grows the numerator (spending) while shrinking the denominator (GDP growth) through institutional and technological lock-in.

On the technological front, for example, the wage growth sparked by industrialization contributed to the decline in domestic servants, but also to many labor-saving technologies designed to simplify various forms of housework.6 Even the string quartet, the canonical example used by Baumol in his own writing, has in a sense undergone a productivity revolution thanks first to record players and, nowadays, to digital streaming services.7 The London Symphony Orchestra receives seven million monthly listens on Spotify alone, which represents approximately seven million more listeners than it could ever hope to reach through in-person performances.

In other cases, cost disease isn’t eliminated so much as managed through institutional evolution and reorganization. Growing wages, urbanization, and expanded labor market opportunities for women in the twentieth century led many rural schoolhouses to become cost-prohibitive, resulting in their steady amalgamation under consolidated education systems. Rather than reduce the labor cost of teachers, per se, schools adapted by pooling resources, standardizing curricula, extracting efficiencies through economies of scale, and taking advantage of transportation technologies like busing. Larger class sizes and impersonal bureaucracies came with their own costs, of course, but such trade-offs were unavoidable in lieu of actual improvements in the labor productivity of educators. Perhaps one day progress in artificial intelli­gence (AI) and online education will combine to enable school systems to re-localize, if not be leapfrogged by homeschooling AI tutors. If that sounds fantastical, simply treat “AI tutor” as a stand-in—a limiting case—for any innovation that does for schooling what Spotify did for the symphony. Whether or not new, technology-enabled models of K–12 education can be made to work at scale, institutional adaptability and experimentation will remain essential to managing, and ultimately transcending, educational cost disease in the long run.

Lastly, it is important to keep in mind that many areas of cost growth are not technically examples of Baumol’s cost disease at all. Strictly speaking, Baumol’s theory of cost disease refers to sectors typified by definitionally labor-intensive production—a string quartet is not a quartet without four musicians. The dilemma of genuine cost disease (hence the “disease”) arises from the fact that we humans are the only input to production. One person’s cost is thus another person’s com­pensation—a dynamic that worsens as productivity growth makes all non-diseased goods and services abundant, and thus a relatively smaller share of one’s overall budget.

For the purposes of this essay, however, it is worth relaxing Baumol’s definition of cost disease to include other areas of spiraling cost growth such as housing. Much like other “diseased” sectors, the high cost of rent in many U.S. cities is in part a function of regulations that restrict supply and limit housing innovation, leading to a demand for subsidies or additional regulations like rent control. Yet unlike genuine cost disease, rents show up in the national accounts as a form of profit, not labor income, and as such there is no inherent incompatibility in a high-wage, low-rent economy. On the contrary, the construction of substantially more housing would allow more workers to live and work in areas where they can demand a higher wage.8

To give a more general definition of cost disease, then, we look to what these labor-intensive services and housing have in common: intrin­sically high demand combined with structurally constrained supply. Unlike the preference for apples over oranges, our consumption of education, childcare, health care, and housing is largely nonnegotiable. There may be different kinds of childcare (family-based versus center-based, say), but if you have children, there is simply no substitute for childcare, per se. Cost-diseased goods and services can thus be said to have intrinsically high demand by dint of their relative non-substitutability. Unlike necessities such as food or water, however, supply is constrained by structural factors, whether due to a mode of production that is inherently resistant to productivity growth or, as in the case of housing, due to the interaction between the regulatory environment and the intrinsic scarcity of land.

It should not be a surprise that relatively non-substitutable goods find their way onto public budgets. In a democratic society, it is hard to argue that such goods should be allocated exclusively by ability to pay. Politically, however, this compelling claim can serve as a very effective cloak for protecting the producers of these goods. As we will see in the following sections, putting constant pressure on these producers from the regulatory side is essential to reconciling legitimate demands for access to core services with reasonable budgetary control.

Health Care

The enormous and growing cost of health care in the United States makes it a natural starting point for understanding the linkages between cost disease and fiscal sustainability. In 2019, national expenditures on health care amounted to $3.8 trillion, or 17.7 percent of GDP, which is more than double the Organisation for Economic Co-operation and Development (OECD) average of 8.8 percent of GDP.9

The question of “who pays” can have important consequences for the growth in health care costs. Exempting employer-paid premiums for health insurance from federal income and payroll taxes, for example, is well known to incentivize compensation in the form of health insurance benefits, particularly for employees in high-income tax brackets.10 Re­placing the ESI exclusion with a fixed, per-employee tax credit would help eliminate this bias. Similar “demand-side” reforms are possible on the public-payer side, as well, from “value-based” reimbursement models in Medicare to replacing the matching grants used to fund Medicaid with per capita block grants that avoid rewarding the highest-spending states.

Nonetheless, achieving serious spending reductions while expanding access to low-cost medical services will ultimately require supply to outstrip demand, which implies radically enhancing the productivity of the U.S. health care sector itself. And while much attention has been paid to America’s high drug prices and the profit margins and administrative duplication of private insurers, the most severe sources of health care cost disease are at the provider level, from physician shortages to excessive hospital consolidation.

Ever since the “managed care backlash” of the late 1990s, strict hospital budgeting has fallen out of favor in the U.S. context, not least because most states passed legislation restricting the cost-cutting measures that managed care organizations could impose. One estimate suggests the backlash to managed care alone caused U.S. health care spending as a share of GDP to increase by 2 percentage points. While improved tax treatment might push hospitals to economize, more robust cost controls will ultimately require reversing the backlash to managed care and models like it.

Meanwhile, nonprofit hospital mergers have increased significantly over the past two decades, resulting in a dramatic consolidation of the U.S. hospital sector.11 Nonprofit hospitals pose problems for the com­petitiveness of U.S. health care. Under current law, the Federal Trade Commission (FTC) is unable to investigate nonprofit hospitals for anticompetitive conduct. Instead, the FTC’s authority extends only to merger reviews, for which nonprofit hospitals have tended to receive more lenience.12 As the FTC’s acting chairwoman, Rebecca Kelly Slaughter, has noted, “One of the chief drivers of increasing healthcare expenditures is the increasing prices of healthcare services, particularly hospital prices.”13 Hospital competition has been further inhibited by a federal prohibition on new physician-owned hospitals,14 as well as state-level “Certificate of Need” (CON) laws that empower incumbent hospitals to block new market entrants.15 Eliminating these barriers to competition for health care services will be essential to controlling cost disease in health care.

Improving competition within the hospital sector can be complemented by reforms to expand the provision of primary care. The number of practicing physicians per person in the United States is lower than in just about any other developed country. From 1980 to the early 2000s, the prevailing wisdom was that the number of physicians within the United States should be reduced. During this period, a series of ill-judged reports by the federal government warned of an impending physician surplus.16 These reports ushered in a period in which both private and public actors took actions to constrain the supply of U.S. physicians, the most significant of which was a decades-long moratorium on new medical school slots.

Of the physicians that the United States does produce, 67 percent opt for relatively lucrative careers in specialty care, leaving the supply of primary care physicians particularly constrained.17 This trend isn’t sur­prising given the enormous costs of medical education in the United States. Apart from Canada, the United States is the only wealthy country that requires prospective doctors to earn a separate four-year bachelor’s degree prior to entering medical school. Accordingly, U.S. physicians must undergo a minimum of eight years of postsecondary education followed by three to seven years of residency training. Most of Europe, in contrast, offers consolidated six-year medical degrees.18 Foreign doctors are thus all but shut out from practicing in the United States, given multiple licensing requirements and the need to redo residency programs that are themselves in short supply.19

The scarcity of primary care physicians has resulted in a growing proportion of primary care being provided by nurse practitioners (NPs) and physician assistants (PAs). Research consistently finds that primary care provided by NPs and PAs is high quality; however, state-level “scope of practice” laws that restrict the ability of NPs and PAs to operate independently have made them imperfect substitutes for doctors.20 In recent years, a number of states have reformed nurse scope of practice regulations to expand the supply of primary care. To date, however, all such reforms have fallen short of reaching their full potential by, for example, continuing to restrict NPs’ and PAs’ ability to establish independent clinics, or requiring their practice to be under a doctor’s supervision.21

Higher Education

Like health care, broad access to higher education is impossible without addressing its underlying cost structure. If those costs are not addressed, the public will not accept that access to those goods is beyond their reach. They will demand that the costs be taken off their books and put onto those of the government. And they will be right to do so.

The common approach of allowing the sticker price of higher education to go up while providing various forms of discounting to reduce the degree to which those increases hit less advantaged students is a strategy with significant downsides. Increasing the effective price paid by students with higher familial income makes those students a premi­um good on college campuses. As Elizabeth Armstrong and others have shown, the culture of flagship state universities in particular has been shaped by the need to appeal to the children of the upper-middle class.22 In addition, the search for full-tuition-paying students has increased the need to attract foreign students, in particular those from China (with consequences for the cultural dimensions of U.S. foreign policy).

Baumol’s theory of cost disease would seem to be an adequate explanation for why the second strategy is a nonstarter, since higher education mostly consists of humans in classrooms interacting with other humans. If we assume that higher education involves a fixed number of instructors interacting with a fixed number of students, then the parallel to Baumol’s string quartet is exact. By definition, the relative cost of higher education will go up, and then the only question is the distribution of costs between consumers and various sources of subsidy. Yet it does not appear that our higher cost structure is mainly a function of the higher salaries of professors. While the United States is at the higher end of professor pay globally, it is not at the very top, and Canada, for instance, pays more per professor despite having a much lower overall cost structure. To extend our metaphor, it’s not the salaries we pay the performers in the string quartet that seem to be the problem.

Where American higher education really does stand out is the huge sums of money we devote to the system’s administrative costs, and the much lower intensity with which we use the university’s physical plant. There is little question that American universities devote considerably more of their resources to administrators, as compared to instructional employees, than they did a generation ago. And American higher education also uses far more physical capital per unit of education than do comparable systems in other countries. In part this is due to a spree of new construction as colleges scramble to compete for students through increasingly lavish student services.23 It is also closely related to the organizational imperative to construct new buildings. As a recent report observes, “The arms race in facilities has gotten too far in front of reasonable expectations for revenues to support it, especially revenues from enrollment.”24

If only the United States could get control of its administrative and physical plant costs, it could reduce the price paid by students without additional subsidy or reducing the resources devoted to instruction. Unfortunately, the problem is easier to solve on a spreadsheet than it is in the real world.

First, the United States is likely to see a considerable decline in the number of domestic students over the next few years, purely as a function of demographic factors. Second, it is unlikely that this decline will be compensated for by an increase in foreign students. The gap between supply and domestic (especially full-paying) demand in recent decades has been largely filled with foreign (in particular Chinese) students, but the blowback from Covid-19 and increasing international competition is likely to put a squeeze on this as well. In short, we cannot solve the cost problem in higher education by sweating our existing corps of administrators and stretching our physical capital stock over a larger body of students. If anything, we will have fewer students in the system in the future.

Furthermore, there is no easy way to deal with the problem of excess physical capital. If universities were to use their buildings more intensively, for instance, it is not obvious that they could sell off most of the excess space, since it is very asset-specific. There is not an active secondary market for classrooms and office space for professors. That suggests that if we are to rationalize this side of the cost problem, it will mean taking some institutions entirely out of the education market, and then squeezing more students into the institutions that remain. Universities with the most precarious finances—in particular, thinly endowed private institutions that are already in a death spiral of dis­counted tuition—should be encouraged to go bankrupt, with their physical capital redeployed for other purposes.

Reducing administrative costs is no walk in the park either. While there is some administrative empire-building in some institutions, most administrators are actually performing real functions. Many of them are engaged in regulatory compliance, and so reducing their number would require significantly deregulating institutions of higher education across the board, in areas from human subjects review to financial aid.25 Another area for growth in noninstructional employees has been in student life, and so reducing noninstructional costs will require rethink­ing the actual character and administrative density of non-classroom life in American universities.

More broadly, we may simply need to increase the amount of institutional churn in the higher education sector. We know how that can be done badly. A large number of private, mostly online colleges turn out to be exercises in grift and rent-seeking, designed to exploit asymmetric information and the availability of federal aid. We need to experiment with new ways of paying for higher education that better align what students need with what they are paying for.

Housing Affordability

Since the 1990s, housing costs in major urban areas have skyrocketed. As the economic center of gravity in the United States has shifted back to cities, they have attracted large numbers of high-skilled, high-earning people. The first wave could afford to buy houses, but as successive waves came, all available homes were purchased and they were left with only rental properties.26

This wouldn’t necessarily be a problem if housing supply were allowed to expand as demand increased. Housing supply has failed to keep up with growth, however, and restrictive zoning and land-use regulations are a major cause of the problem. A 2014 review of the literature by Joseph Gyourko and Raven Molloy found that “locations with more [land-use and zoning] regulation have higher house prices and less construction.”27

One common objection to the construction of new housing is that such housing tends to be “luxury” housing. Aside from this misleading terminology, criticizing new housing developments for increasing housing costs is wrong for two reasons. First, it ignores the phenomenon of “churn” in the housing market. While newer, tonier developments may be affordable only to higher-income residents, this opens up other housing choices that would have been occupied by such residents. In an area which only has hundred-year-old rowhomes, these wealthier residents will outbid lower-income residents for what is available.

Second, there is compelling empirical evidence that the construction of more (by definition) newer housing reduces rents. One study from Germany found that a 1 percent increase in housing supply led to a reduction in monthly rents by 0.4 to 0.7 percent. In Washington, D.C., rents in Navy Yard, where housing construction has increased the supply dramatically, fell by around 8 percent from 2014 to 2018. By contrast, the Capitol Hill neighborhood, which has seen little to no increased construction despite being in the same zip code as Navy Yard, experienced a 20 percent increase in rents.28 Liberalizing zoning regula­tions to allow for greater housing construction would go a long way toward slowing the growth of rents in high-cost housing markets. The housing affordability crisis is fundamentally a supply-side problem that demands a supply-side solution.

Demand-side solutions like housing vouchers or renter tax credits—at least without seriously attacking the supply-side problem—are likely to make things worse. In 2019, Daniel Shoag conducted an analysis of various housing affordability measures. According to Shoag, demand-side interventions such as housing vouchers “have served as an important part of the safety net, but property owners capture a significant share of the benefits. This problem seems especially severe in markets with inelastic supply. It therefore seems unlikely that further demand-side subsidies can solve this specific problem.”29

Whether it’s legalizing accessory dwelling units, making it easier to convert single-family housing to multifamily uses, speeding the approval of apartments, or even reinvigorating the construction of social housing, the only way off the hamster wheel of subsidy is unleashing the supply of housing of all sorts. Simply resisting the socialization of these costs is no answer—like health care, education, and (as we’ll soon see) childcare, those concerned about budget discipline need to focus on the microeconomic sources of strapped household budgets.

Childcare

Federally funded universal childcare is one of the most popular ideas on the left right now. While the various proposals differ in important ways, they share a common vision of greater federal involvement in childcare, regulations that mandate worker quality, and public financing to make formal childcare centers either free or heavily subsidized. Typically left off the agenda is equal recognition of home- and family-based models that remain the dominant source of childcare in the United States—which surveys show most parents prefer.30

While framed as responses to a crisis of affordability, most major childcare proposals are variations on subsidizing demand while restrict­ing supply. Without addressing the root causes of rising childcare costs, such approaches will merely exacerbate childcare affordability by fuel­ing cost disease. International experience suggests universal day care, in particular, comes with significant risks, both to the well-being of children and to the freedom of parents to choose a childcare model that works best for them.31

Like many health care and educational services, professional child­care services are relatively low-skill and labor-intensive. In normal goods markets, the long-run supply curve is typically elastic: an increase in the demand for widgets may raise the price of widgets in the short run, but in the long run firms respond to the higher price by developing more productive techniques for producing widgets and compete the price back down to a long-run equilibrium. In contrast, in a cost-diseased sector like childcare, there are natural (and often legal) limits to how productive a childcare worker can become, such as caps on the number of children a single worker can oversee at a time. Supply is also made less responsive through barriers to entry.32

Supply may nonetheless increase with a sufficiently large subsidy, but only by pulling in workers from more productive sectors through artificially higher prices and wages. You could call this approach “leaning into cost disease,” and it presents the worst of two worlds. Not only do childcare costs continue to escalate but they come at the expense of the broader economy’s productivity.

The effects of cost disease are not limited to making low-skill, labor-intensive services more expensive. Cost disease also affects the relative costs of different institutional arrangements, putting pressure on old economic models to adapt or disappear in ways that are often hard to foresee. The decline in community schools is the classic example. As teacher salaries grew commensurate with the wage growth in more productive sectors, the economics of small local schools became unten­able. Over time, cost disease in education caused thousands of community schools to consolidate into larger, regional schools that take advantage of economies of scale.

These sorts of transitions are always painful, but particularly so when they’re put off through subsidies and various kinds of support that slow down the restructuring. A major problem with subsidies to childcare providers, whether given directly or indirectly through vouchers, is thus the risk of entrenching a particularly high-cost model of childcare delivery. This is why it is virtually always preferable to simply provide low-income parents with cash, giving them the choice over different care arrangements based on market prices.33

The question remains: how do lower-income households afford the high cost of formal childcare under the status quo? The simple answer is that they don’t. As it stands, more than 40 percent of children under the age of five are in regular care arrangements involving relatives, while less than 25 percent are in a formal, paid childcare arrangement. Importantly, this largely reflects parental preferences. In a 2021 survey, 47 percent of parents in the United States with children below the age of six stated that their ideal primary childcare arrangement was a parent or close relative, irrespective of the price of the alternatives.34

Advocates of center-based childcare nonetheless tend to treat the by-product of these parental preferences—a low willingness to pay for formal childcare—as evidence for the existence of a market failure. For example, a report by the Center for American Progress calls attention to “child care deserts” based on an analysis of the capacity of childcare centers by zip code.35 Yet parents, on the whole, state a strong preference for parental or family care over day care centers, which does more to explain the erratic uptake of external care arrangements than cost alone. And, importantly, it’s a preference that is strongest in low-income households.

Consider that Canada doesn’t have a national childcare program, yet it has a prime-age female employment rate that is nearly 6 percentage points higher than in the United States. Canada’s liberal regulation of home day care providers is part of the reason why. Only one-third of Canadian children aged four and under rely on formal day care centers, similar to the rate in the United States. The remainder make use of private care like family (28 percent) and home day care (31 percent). Only 11 percent of Canadian parents cite affordability or the feeling that they had only one option as the reason behind their choice of childcare.

With appropriate cash benefits to parents and a legal framework that opens up lower-cost options, there is no argument for favoring universal center-based childcare outside of social engineering. Given a transparent price for childcare, parents can—and do—make their own choices.

The Political Economy of Deficit Spending

The argument for budget sustainability has always been forward-looking. As economist Herbert Stein’s famous “law” puts the matter, “a trend that can’t go on forever won’t.”36 And yet budget hawks have tended to fight the last battle, either by seeking politically untenable cuts to popular programs, or by insisting on procedural gimmicks within the budget process that are routinely waived or easily gamed. Both these approaches fall victim to what economists call the “time inconsistency” problem, which is just a technical way of saying “today’s actions, tomorrow’s regrets.”37

Consider the insolvent pension funds that the Biden administration’s American Rescue Plan bailed out to the tune of $86 billion. Such a large, no-strings-attached wealth transfer to union interests was only possible due to deficit financing, which divorced the link between the bailout’s benefits and its costs, thereby blunting voters’ ability to evaluate the trade-off in the here and now. In contrast, the analogous union-run pensions in Denmark—Bernie Sanders’s model of a socialist paradise—are fully funded by law. In fact, all the big welfare states in Scandinavia make a point of ensuring future obligations are financed and maintain some relationship to the beneficiary’s ability to pay, including through large value added taxes. They do so not out of an austerity mindset, or to the exclusion of taxes on the rich, but rather as a crucial aspect of good and honest government, ensuring that the public gets all the government it wants and is willing to pay for—but no more.

Independent of one’s macroeconomic views, deficit financing within the context of the budget process is undesirable due to the way it undermines democratic accountability. Relieved of having to make hard choices, lawmakers are free to pursue expedient reforms that reward politically favored interests with minimal resistance. The justification for linking spending to financing is democracy, not austerity—ensuring that claims on the public fisc are fully deliberated and justified in the light of other public priorities. Looking ahead, never-ending deficit financing of new programs thus risks enabling never-ending waves of rent-seeking by providers of cost-diseased goods and services.

This article originally appeared in American Affairs Volume VI, Number 1 (Spring 2022): 18–32.

Notes
1 How Does Bernie Pay for His Major Plans?,” Berniesanders.com, 2022.

2 Mark J. Perry, “Chart of the Day (Century?): Price Changes 1997 to 2017,” American Enterprise Institute, February 2, 2018.

3 Noah Smith, “Beware of Economic Theories Claiming to Explain Everything,” Bloomberg, April 23, 2019.

4 Alex Tabarrok, “The Baumol Effect,” Marginal Revolution, May 31, 2019.

5 Eric Heland and Alex Tabarrok, Why Are the Prices So Damn High?: Health, Education, and the Baumol Effect (Arlington, Va.: Mercatus Center at George Mason University, 2019).

6 Ester Bloom, “The Decline of Domestic Help,” Atlantic, September 23, 2015.

7 Tyler Cowen, “Why I Do Not Believe in the Cost-Disease: Comment on Baumol,” Journal of Cultural Economics 20, no. 3 (1996): 207–14.

8 Brink Lindsey and Samuel Hammond, “Faster Growth, Fairer Growth: Part III. Liberating the Captured Economy—Reduce Regulatory Barriers to New Housing,” Niskanen Center, 2020.

9 Rabah Kamal, Giorlando Ramirez, and Cynthia Cox ,“How Does Health Spending in the U.S. Compare to Other Countries?,” Health System Tracker, December 23, 2020.

10 Key Elements of the U.S. Tax System,” Tax Policy Center, 2021.

11 Michael G. Vita and Seth Sacher, “The Competitive Effects of Not-for-Profit Hospital Mergers: A Case Study,” Federal Trade Commission, 1999.

12 Steven Porter, “Nonprofit Hospitals and Antitrust Enforcement: Should FTC Have Jurisdiction?,” HealthLeaders Media, September 17, 2019.

13 Rebecca Kelly Slaughter, “Antitrust and Health Care Providers Policies to Promote Competition and Protect Patients,” Federal Trade Commission—Public Statements, May 14, 2019.

14 Brian J. Miller et al., “Reversing Hospital Consolidation: The Promise of Physician-Owned Hospitals,” Health Affairs, April 12, 2021.

15 Matthew D. Mitchell, Elise Amez-Droz, and Anna Miller, “Phasing Out Certificate‑of-Need Laws: A Menu of Options,” Mercatus Center, February 25, 2020.

16 Robert Orr, “The Planning of U.S. Physician Shortages,” Niskanen Center, September 8, 2020.

17 Robert Orr, “Reversing Hospital Consolidation: The Promise of Physician-Owned Hospitals,” Niskanen Center, December 18, 2019.

18 Robert Orr and Anuska Jain, “The Case for Shortening Medical Education,” Niskanen Center, March 17, 2020.

19 Philip Sopher, “Doctors With Borders: How the U.S. Shuts Out Foreign Physicians,” Atlantic, November 18, 2014.

20 Robert Orr, “Too Little for Too Much,” Milken Institute Review, January 24, 2021.

21 Robert Orr, “The US Has a Primary Care Shortage—Scope of Practice Reform Can Help,” Hill, February 21, 2020.

22 Elizabeth A. Armstrong and Laura T. Hamilton, Paying for the Party: How College Maintains Inequality (Cambridge: Harvard University Press, 2015).

23 Jon Marcus, “The Paradox of New Buildings on Campus,” Atlantic, July 25, 2016.

24 State of Facilities in Higher Education: Facilities Insights into the Growing Storm over Higher Education,” Gordian, 2020.

25 The Cost of Federal Regulatory Compliance in Higher Education: A Multi-Institutional Study,” Vanderbilt University, October 2015.

26 Jacob Anbinder, “The Pandemic Disproved Urban Progressives’ Theory about Gentrification,” Atlantic, January 2, 2021.

27 Joseph Gyourko and Raven Molloy, “Regulation and Housing Supply,” NBER Working Papers, no. 20536 (October 2014).

28 Payton Chung, “A Tale of Two 20003s: High Rises or High Rents,” Greater Greater Washington, July 18, 2018.

29 Daniel Shoag, “Removing Barriers to Accessing High-Productivity Places,” Hamilton Project, January 2019, 19.

30 Wendy Wang and Jenet Erickson, “Homeward Bound: The Work-Family Reset in Post-Covid America,” Institute for Family Studies, August 17, 2021.

31 Matthew Yglesias, “Quebec Gave All Parents Cheap Day Care—and Their Kids Were Worse Off as a Result,” Vox, September 24, 2015.

32 Diana Thomas and Devon Gorry, “Regulation and the Cost of Child Care,” Mercatus Center, August 17, 2015.

33 Patrick Brown, “Child Care Pluralism: Supporting Working Families in Their Full Diversity,” Niskanen Center, June 17, 2021.

34 National Tracking Poll,” Bipartisan Policy Center, December 2020.

35 Rasheed Malik et al., “America’s Child Care Deserts in 2018,” Center for American Progress, December 6, 2018.

36 Ed Dolan, “There Will Be No End to Fiscal Chaos without Better Budget Rules,” Niskanen Center, March 18, 2019.

37 Dolan, “There Will Be No End to Fiscal Chaos without Better Budget Rules.”

Photo: Getty Images.


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