Op-Eds

A Central Bank Should Not Be Distracted By A Political Agenda

June 21, 2022

On Wednesday, June 15, House Democrats decided to disregard rampant inflation and a bleak economic forecast in favor of granting the Federal Reserve substantial power outside the scope of its dual mandate. The passage of the Federal Reserve Racial and Economic Equity Act is not only an astounding political move at the worst possible time, but it also highlights the radical left’s commitment to a long march through our institutions. They seek to use the Federal Reserve to advance their social justice warrior agenda.

To keep the Federal Reserve’s core monetary policy function from the taint of political agendas, the time has come to bifurcate the Fed and separate its role as a prudential regulator. Americans need monetary policy fully dedicated to addressing 8 percent inflation and an economy on the verge of recession. The whims of political opinion should not sway the Fed’s focus away from its dual mandate of stable prices and high employment. Unfortunately, Democrats are using every layer of government to pursue their environmental, social, and corporate governance (“ESG”) agenda, which is exactly what we saw with the Federal Reserve Racial and Economic Equity Act.

What is ESG? It depends on who you ask since ESG is in the eye of the beholder. There’s no definitional limitation to the concept, which is precisely why ESG has become a populist rallying cry for Democrats to try to appease different voter groups. Climate change, board diversity, income equality, abortion rights, gender identity, workforce ethnicity, labor practices, and voting rights are just some of the hot topics commonly lumped into the ESG bucket. The ambiguity is strategic and intentionally flexible to allow its use as a political weapon.

The Fed, an independent agency spared from the congressional appropriation process, provides left-wing activists with an ideal vehicle for implementing their ESG agenda. On the topic of climate change, for example, the Fed itself has openly stated that it believes its “financial stability monitoring framework is flexible enough to broadly incorporate many key elements of climate-related risks.”

Unfortunately, this broad interpretation of power appears to be held by more than just bureaucrats at the Federal Reserve. The Federal Reserve Racial and Economic Equity Act goes further than addressing climate change by, among other things, directing the Fed to: address racial disparities in wealth, income, and employment; evaluate depository institutions based on their diversity practices and require companies to report on their diversity practices; collect information on credit applications from small business owners who self-identify as LGBTQ; and create a federal office that would deploy people posing as potential buyers to test creditors’ compliance with anti-discrimination law.

None of these directives combat inflation, which 66 percent of Americans expect to get even worse in the coming year. The Fed MUST stay focused on its dual mandate—which is why I re-introduced the Federal Reserve Regulatory Oversight Act earlier this year with a Senate companion sponsored by Sen. Thom Tillis (R-N.C.). This bill would simply separate the prudential regulatory functions from the central bank within the Fed’s structure. It would ensure that 1) our central bank can combat inflation without being distracted by implementing a purely political agenda, and 2) all monies used to fund the prudential regulatory function of the Fed are subject to the appropriations process.

Under current law, the Fed internally funds itself through interest earned on the securities it holds along with the fees it receives for services provided to depository institutions. The Federal Reserve Regulatory Oversight Act would adjust this arrangement to prohibit expending any of these funds towards “non-monetary policy-related administrative costs,” including costs associated with supervisory and regulatory functions. These functions would consequently be funded through the congressional appropriations process and thus directly subjected to congressional oversight. The central bank would then operate without political interference dominating its regulatory and supervisory functions.

Essentially bifurcating the Fed into two agencies has become more necessary as Congress and Fed bureaucrats have continuously tried to leverage the agency’s powers to pursue a political agenda. Now is not the time for that. Now is the time to protect and preserve the U.S. dollar and the broader economy. While some, including myself, have questions or criticisms regarding the U.S. monetary policy in recent years, we should all agree that subjugating the dual mandate and leveraging the Fed as a political weapon will not help America during these trying times.

This piece originally appeared in The Hill

My Not-So-Secret Plan to Combat Inflation

December 23, 2021

It doesn’t take an economist to figure out that historically low interest rates, two rounds of stimulus payments, extended unemployment insurance, and unrestrained government spending will result in higher consumer demand, outstripping the supply of goods, especially since employment levels—and productivity—have not yet returned to pre-pandemic levels.

And yet, it has taken several months for the Federal Reserve and the Biden Administration to even admit what Americans have known for months: Inflation is real and far from transitory. Democrats started by gaslighting Americans, claiming that inflation is a “high class problem.” Then they tried to attribute the inflation to supply chain bottlenecks—never mind that Administration policy has contributed to those very same shocks. Now that the administration admits the obvious, though it’s kicked the political football back to the Federal Reserve. Meanwhile, Joe Biden falsely claims Build Back Better is positioned as the solution to inflation. In reality, pouring more money into this economy right now is the equivalent of pouring gasoline on the fire.

Just in case President Biden doesn’t have a “secret plan to fight inflation,” he can borrow mine:

First, the Federal Reserve must gradually stop distorting the economy. Right now, every month, the Federal Reserve buys $80 billion of U.S. Treasuries and $40 billion of mortgage-backed securities (MBS). Does the real estate market really need higher prices courtesy of the Fed? The Federal Reserve’s announcement that they would accelerate their tapering of these purchases is a step in the right direction. They need to remain committed until they incrementally return to the proper level of Fed intervention: $0.00.

Likewise, Congress should stop spending money it does not have. Like the Fed, Congress cannot go cold turkey without causing real harm. President Trump presented a budget that balanced in 15 years. Congress ignored it. Unfortunately, President Trump signed the bills that Congress passed rather than insist on a path to balance the budget. Fifteen years was hardly aggressive.

Right now, workforce participation for 18-65 year-olds is around 62%. At the time of the 2008 financial crisis, it was closer to 67%. Unfortunately, participation never recovered. In fact, it kept trending down during the Obama administration. Under the Trump administration it improved, but only to 63.5%. Based on that gap in participation, prior to COVID, there was still a large upside potential for economic growth

To deal with inflation, nothing should discourage investment in America or participation in our workforce. Too many of Biden’s Build Back Better initiatives harm productivity or discourage workforce participation. One proposal I find interesting – childcare – doesn’t even come with an expectation that you work, go to school, or even volunteer to help your community. Thankfully, Senator Joe Manchin (D-WV) has taken a firm stand against such reckless spending. Let’s hope he holds strong as Leader Schumer threatens to proceed with a vote early next year.

Getting people back to work would help to ease the strain that surplus demand is placing on retailers and manufacturers. This requires not only limiting the government interventions mentioned above, but also doing away with measures (like COVID19 mandates) artificially keeping people out of the workplace.

Late last week, the Bank of England surprised the world by announcing an interest rate hike in response to inflation levels. Historically, negative surprises can shock markets and are best avoided, but the instinct to get inflation under control is correct. The Federal Reserve has been abundantly cautious about shocks to the market. It’s time for them to discount politics and focus on their core mission: stable prices and full employment.

In a crisis, Democrats have only one solution: more government. Right now, America risks a fatal overdose of government. The solution is simple: more freedom, less government, and sound money. Unfortunately, if Congress and the White House conspire to dump more government fuel on the already roaring fire, the Federal Reserve may be forced to cover by continuing to grow its already bloated balance sheet. This would be a setback for efforts to fight inflation. Senator Manchin is already leaning in on this plan, now the other members of Congress should do the same.

Reclaiming War Powers: The Homage Congress Owes Veterans

November 12, 2021

Veterans Day is the day our nation sets aside to thank the men and women who have defended our nation. These are people who continue to enrich our communities today, just as they once accepted a responsibility that could have cost them their lives. It is fitting to have a day to honor these patriots.

Every veteran I know became a better person for their time in service. Since 1973, America has been made and kept free by an all-volunteer force of men and women who chose to risk everything for their country. Their service was not only purposeful and fulfilling but part of their own growth and development. People like me, who enlisted in the infantry, saw the fall of the Berlin Wall, had the opportunity to attend college, and continued to serve others — in uniform and afterward.

Following the Cold War, America’s divisions grew and became more apparent. We were united by a common enemy in the Soviet Union and, for a time, in the war on terror. But even our military has entertained distractions from its unifying purpose: to be always ready to fight and win our nation’s wars. Like any good team, focus matters.

From the first-line leaders to the commander in chief, leadership is essential. Thankfully, our military identifies and develops unparalleled leaders. Collectively, our military has made impossible tasks seem reasonable. However, some problems facing our active-duty warriors and veterans can only be solved by political leadership. Sadly, that record has been disappointing at best.

Unity of command and economy of force are two principles of war that America has consistently ignored in the war on terror. The war in Afghanistan was largely conducted through a series of 20 one-year deployments. Leaders turned over, and the mission itself became distorted and, at times, incoherent. Our military remained at war while America was only passively aware of the fight it was in, of the sacrifices our nation asked of those who serve, and of the consequences of failure. That’s why the Founding Fathers created a Constitution that requires Congress to declare our wars. This requires any war to become a high priority for the entire nation, not just those who serve in uniform.

Congress, for its part, abandoned its post, failing to declare war or define meaningful objectives in its use of force authorizations. Defeating the Islamic State group in Syria and Iraq was a noteworthy exception, but successive White House administrations waged expensive and prolonged engagements in the Middle East without well-defined missions and with incredibly limited accountability.

As our troops remained at war, most people stopped paying attention. After we overthrew the Taliban and brought Osama bin Laden to justice for carrying out the 9/11 terrorist attacks, civilians had little at stake in the outcome of the conflict. Preserving the status quo contributed to a sense among Pentagon officials, defense contractors, and hawkish politicians that endless war should become a way of life.

This August, as the United States blundered through a botched and long-overdue withdrawal from Afghanistan, the public was reminded of the costs of war and the price our troops pay. A completely backward plan to pull troops, depend on the Taliban for security, and only then evacuate civilians led to that chaos around the Kabul Airport. The Islamic State group's Afghanistan affiliate exploited the scene, killing over 100 people, including 13 U.S. service members. In addition to this tragic loss, the Biden administration left behind valuable equipment and weapons, which are now in the hands of our enemies. Worse still, U.S. citizens and Afghan allies were left behind enemy lines.

After an embarrassment of this scale on the world stage, the responsible leaders should offer their resignations or be fired. The lack of accountability at the top is striking, especially when rank-and-file members are thrown into the brig for pointing out the obvious. The glaring two-tiered system of accountability combined with the abuse of constitutional authority for war-making define the urgent need for Congress to reclaim its war powers and properly deploy its oversight authority.

Congress shirked its constitutional duty in Afghanistan and Iraq. Rather than passively cutting checks for endless funding, Congress owes it to our veterans to be more thoughtful in the use of force and to demand accountability — regardless of which political party occupies the White House. This not only honors America’s veterans but also instills confidence in those considering future service to our nation. If we cannot inspire future generations to serve, America cannot be made and kept free — nor shall we have earned freedom.

This piece originally appeared in the Washington Examiner.

Vaccine hesitant Americans aren't necessarily anti-vaxxers

October 26, 2021

In December 2020, then-President-elect Joe Biden told Americans that he did not think vaccines should be mandatory. Since then, he’s changed his tune.

Just last month, he directed the Occupational Safety and Health Administration (OSHA) to issue an emergency order for employers to develop and implement COVID-19 vaccine requirements. Some state and local governments have issued their own mandates. Many businesses have not only imposed requirements on their employees, but now require vaccines of their customers.

To prevent this madness, and the growing contempt for others it engenders, I introduced the Vaccine Passport Prevention Act. In the meantime, courageous Republican governors like Greg Gianforte of Montana and Greg Abbott of Texas have banned vaccine passports and certain vaccine requirements. Unfortunately, the rhetoric has become increasingly divisive, marginalizing the concerns of people who are skeptical about receiving a coronavirus vaccine.

Recently, a constituent asked about vaccine hesitancy: "If (they) are safe and effective, why shouldn't (they) be mandated like many other vaccines?" Many people who support vaccines, and have taken them, oppose mandates, but why are so many opposed right now?

Here are several of the most common objections shared with me.

Natural Immunity. The question of natural immunity accounts for a significant portion of objections. Normally, recovering from a communicable disease is recognized as imparting immunity. No vaccine required. Multiple studies, including this one from Israel (https://www.science.org/content/article/having-sars-cov-2-once-confers-much-greater-immunity-vaccine-vaccination-remains-vital), show that recovering from COVID-19 confers measurable protection against serious infection.

Financial Privacy Dodged a Joe Biden Bullet....This Time

September 15, 2021

This past May, the Department of Treasury issued their General Explanations of the Administration’s Fiscal Year 2022 Revenue Proposals which contained new Biden Administration policy proposals aimed at furthering Biden’s tax--spend-inflate agenda. While excessive spending and an ongoing tug-of-war over the tax code has become routine, one Internal Revenue Service reporting proposal was truly jaw-dropping.

Treasury’s proposed comprehensive financial account information reporting regime may sound benign, but this proposal would mandate financial institutions report gross inflows and outflows over merely $600 (not a typo) to the IRS. These reports would contain a breakdown of physical cash, transactions with a foreign account, and transfers to and from another account with the same owner. Further, this reporting mandate would apply to all business and personal accounts held at these financial institutions.

Fortunately, Congress did not include this proposal in the Democrats’ $3.5 trillion-dollar reconciliation package this week. Thus, the U.S. was able to successfully dodge a bullet—this time. However, it should nonetheless be troubling to anyone who values financial privacy that we have even gotten to this point. It’s incredible that a presidential administration would even suggest implementing a regulatory regime that would report any “inflows or outflows” in nearly all bank accounts that would be instantly reported to the federal government.

Such a proposal should never see the light of day.

Nevertheless, Treasury claims that such reporting would close the tax gap with business income, saying that “revenue loss is driven primarily by the lack of comprehensive information reporting and the resulting difficulty identifying noncompliance outside of an audit.” Despite the lack of supporting evidence, it appears that Treasury is content with implementing a heavy-handed approach destroying what little is left of financial privacy.

It’s ironic that such a proposal would come from an administration that professes a desire to address the unbanked, underbanked, and underserved communities. When one-third of unbanked households (over 2 million households) currently state that their reason for not having a bank account is because they do not trust banks, this further erosion of financial privacy will only make the problem worse. It seems clear that Treasury does not care about Americans’ financial privacy nor do they understand a fundamental issue underlying the unbanked epidemic in the U.S.

Are these and other Americans justified in not trusting the IRS with their financial information? Being only six years removed from 700,000 Americans having their taxpayer accounts hacked, and considering there are currently 1.4 billion attempted cyberattacks against the IRS each year, Americans’ concerns are more than justified. It would be gross negligence to hand over an abundance of unnecessary personal data to an institution that is both a prime target for hackers, and is inadequately prepared to secure such information.

In addition to consumer-side privacy issues, financial institutions would also be tasked with overburdening and extensive reporting requirements. These very same institutions that proved to be invaluable components of our economy at the onset of COVID-19 would have been strong-armed into ramping up their compliance departments just to hand over more sensitive personal information to the IRS. While technically these are private actors, such a requirement would have made every financial institution a de facto arm of the government. It’s already worrying enough that these same financial institutions must comply with the over-intrusive and problematic Bank Secrecy Act. Adding this new layer of tax reporting compliance would have been an unimaginable expansion of the financial surveillance state.

Fortunately, Republicans harmoniously voiced their opposition to this proposal while it was under consideration. This month, prior to the reconciliation text being released, I was happy to join my Republican colleagues in sending a letter directed to Speaker Pelosi, Ways and Means Chairman Neal, IRS Commissioner Rettig, and Treasury Secretary Yellen outlining our concerns about the impact such a reporting requirement would have on Americans and financial institutions. I was glad to see that the proposal was not included in the drafted tax legislation this week, however I suspect that such a proposal will not go away overnight given this Administration’s tendency to advocate for an empowered surveillance-state.

It’s evident that Biden’s agenda has no bounds when it comes on intruding against our personal liberties and hurting our financial institutions. Regardless of one’s political affiliation, this is a proposal that should give us pause. Should this surveillance regime had been implemented, what would’ve been next? Beyond destroying the value of the dollar with runaway inflation, will the federal government continue to consider filtering bank transactions? Or allow credit for only those whose transactions fit with the Administration’s priorities?

We can’t let it come to that. This isn’t China. We need to stop these surveillance proposals and focus on preserving the liberties that have made this country great

Ex-Army Ranger Rep. Warren Davidson: 20 years after 9/11 we must wage war differently

September 9, 2021

Twenty years ago, America changed. On the morning of Tuesday, September 11, 2001, I was at work at my manufacturing business in Ohio when an unprovoked terrorist attack shocked the nation and galvanized Americans of all stripes. The response was, thankfully, visceral. 

Few people recall that al Qaeda was already a known threat on 9/11. They bombed America’s embassies in Kenya and Tanzania in August 1998 – while I was serving in the 75th Ranger Regiment. We were convinced we would be departing swiftly to deal a decisively fatal blow to al Qaeda in response. Unfortunately, President Bill Clinton chose not to attack them directly – one of several factors that influenced my decision to leave the Army.

In 2000, President George W. Bush campaigned for the presidency primarily on domestic issues—particularly education. That day, President Bush, was reading to school children in Florida when he was called away to reckon with a nation that suddenly recognized we were at war. Within a week, Congress authorized the use of military force in Afghanistan, the nation harboring Usama Bin Laden. 

Twenty years ago, America changed. On the morning of Tuesday, September 11, 2001, I was at work at my manufacturing business in Ohio when an unprovoked terrorist attack shocked the nation and galvanized Americans of all stripes. The response was, thankfully, visceral. 

Few people recall that al Qaeda was already a known threat on 9/11. They bombed America’s embassies in Kenya and Tanzania in August 1998 – while I was serving in the 75th Ranger Regiment. We were convinced we would be departing swiftly to deal a decisively fatal blow to al Qaeda in response. Unfortunately, President Bill Clinton chose not to attack them directly – one of several factors that influenced my decision to leave the Army.

In 2000, President George W. Bush campaigned for the presidency primarily on domestic issues—particularly education. That day, President Bush, was reading to school children in Florida when he was called away to reckon with a nation that suddenly recognized we were at war. Within a week, Congress authorized the use of military force in Afghanistan, the nation harboring Osama Bin Laden. 

Twenty years after the attack, and more than ten years after 9/11 mastermind Osama Bin Laden was brought to justice, our troops have left Afghanistan. Once again, it is in the hands of the Taliban.

September 11, 2001 saw 2,977 killed at the World Trade Center, the Pentagon, and in Shanksville, Pa. An entire generation of Americans became embroiled in a War on Terror that they could no longer ignore. In the conflicts that followed, we lost over 2,500 Americans in Afghanistan and over 4,000 more in Iraq.

That deceptively articulated change in mission proved far less effective than a narrow focus on eliminating terrorist sanctuaries – not to mention the far greater cost  in lives, injuries, and treasure.

Somewhere between invading Afghanistan and pivoting to Iraq, someone changed the mission. Our military makes hard jobs look easy every day. And so, the Bush hoisted a new assignment upon them: nation building. 

That deceptively articulated change in mission proved far less effective than a narrow focus on eliminating terrorist sanctuaries – not to mention the far greater cost  in lives, injuries, and treasure.

Twenty years after the attack, and more than ten years after 9/11 mastermind Osama Bin Laden was brought to justice, our troops have left Afghanistan. Once again, it is in the hands of the Taliban.

September 11, 2001 saw 2,977 killed at the World Trade Center, the Pentagon, and in Shanksville, Pa. An entire generation of Americans became embroiled in a War on Terror that they could no longer ignore. In the conflicts that followed, we lost over 2,500 Americans in Afghanistan and over 4,000 more in Iraq.

Immediately after 9/11, Congress seemingly surrendered its power over war—or more charitably—forgot to guard its war powers jealously from executive overreach. The 2001 authorization for use of military force (AUMF) made sense at a time of national crisis, but the language of the authorization remains in effect and has been tortured to apply not only in Afghanistan, but also to individuals, governments, and groups globally.

Some of these groups and individuals didn’t harbor hostility against America—or even exist—in 2001. In retrospect, grief and anger clouded Congress’s judgement. A bipartisan group of lawmakers and I are still trying to have this blanket authorization revoked so that Congress can reclaim its constitutional duty to declare our nation’s wars – and provide the accountability to ensure these wars are strategically fought and decisively won.

Afghanistan should make clear that Congress needs to provide clear, concise, and achievable mission statements and provide assertive oversight to ensure that whenever a war is declared, that America as a nation is at war—not just our military. 

"Great nations don’t fight endless wars." However, they do decisively win them. 

As I learned in the Army, at West Point, and in business, failure must be met with accountability. The War on Terror has certainly not ended. It must still be won. And it must be waged differently.

One enduring casualty from America’s reaction to 9/11 has been an erosion of the right to privacy, protected by the Third and Fourth Amendments to the Constitution. The PATRIOT Act empowered the intelligence community to spy on American citizens without first obtaining a warrant. The law had near-unanimous backing in the Senate (98-1) and strong bipartisan support in the House (357-66). Privacy advocates at the time raised the alarm, but fear and the sense that 9/11 could have been prevented drowned out the objectors for simply defending the Constitution. 

As Bin Laden accurately predicted, 9/11 also cost America’s government any sense of fiscal responsibility. The scale of the attack, Americans’ horror at watching the Twin Towers collapse on live television, and the national resolve to prevent it from happening again unified lawmakers and Americans. That unity swiftly eroded as the nation’s leaders committed essentially unlimited resources to nation-building in Afghanistan, Iraq, and elsewhere. 

By 2004, Vice President Dick Cheney even said, "Reagan proved deficits don’t matter." Of course, Reagan did no such thing; he proved America can take on debt to win a focused war—in his case against the Soviet Union. Since 9/11, American deficits have exploded with seemingly unrestrained foreign and domestic spending. Bankrupt nations are hard to secure.

On the evening of 9/11, during his address from the White House, President Bush promised that the terrorists would not succeed in disrupting the American way of life. Government employees would return to work the next day and businesses would reopen. The light of American freedom would not be dimmed because of these attacks. 

Unfortunately, some of our fellow Americans continue to chip away at the freedoms that make America unique among all nations. Congress and multiple presidents have failed to correct the emotional decisions made after 9/11. 

Today, as we observe 20 years since the 9/11 terror attacks, I’m calling on my colleagues to revoke the 2001 AUMF, restore Third and Fourth Amendment privacy protections to Americans, and curb runaway federal spending. 

Truly winning the war on terror isn’t just an elusive absence of war, but the restoration of our way of life. 

We owe it to those who have borne the burdens of battle, and to all future Americans, to defend freedom as we remain vigilant against all enemies—foreign and domestic. 

Show gratitude to fallen heroes by learning their stories

May 31, 2021

Loyalty, duty, respect, honor, selfless-service, integrity, courage: These are the values that every soldier comes to understand through Basic Training. New recruits don’t just learn these values. They come to live by them. It’s something those who serve today share with the veterans who came before them and will surely share with the generation after us. They aren’t simply advice for living well. They are virtues that prepare soldiers for their mission: defending the United States of America and our way of life from all enemies, foreign or domestic.

Ingrained in these virtues, honor, in particular, is a quality we impart to soldiers. We ask and expect soldiers to make great sacrifices, knowing that the preservation of the Republic can be a cause greater than one’s own self. The underlying premise of this training is as simple as it is profound: There is no greater love than to lay down one’s life for one’s friends – especially in defense of our great country.

It’s no small thing. And it’s the reason we set aside this last Monday in May.

As a history student at West Point, I spent four years reflecting on those who came before me. My professors remarked that studying history at West Point is different because the history they teach is often shaped by students they taught. The expectation hung in the air: the current class was expected to continue this story.

Knowing this, it’s impossible for soldiers to escape the sense of history and duty in day-to-day life in the military. The bases they’re stationed on, the names of the ships that transport them, and the equipment they use bear the names of heroes, units, and battles that have shaped the history of our nation. Often, these stories are written in blood.

Today, I hope civilians will familiarize themselves with these stories. History books and old war movies are a start, but now that the country is opening again, consider attending a local observance and hearing the stories from those who served alongside patriots who made the ultimate sacrifice. Walk to smaller cemeteries and local memorials and read the names of individuals who died for a country they loved.

President John F. Kennedy had the right idea when he said, “As we express our gratitude, we must never forget that the highest appreciation is not to utter words but to live by them.” My hope is that as Americans spend Memorial Day honoring the fallen, they will be inspired by them, and come to love this country and their fellow Americans with as much dedication as the men and women we honor on Memorial Day.

We are granted the opportunity every year on Memorial Day to do as President Kennedy has said. I urge everyone to take this holiday to reflect on the blessings we enjoy as Americans. Thank our nation’s fallen defenders by cherishing your blessings and finding a way to advance the cause of freedom in your community.

Who's afraid of price transparency?

May 26, 2021

Americans have become accustomed to a health care system that deprives them the most basic information related to the cost of their medical care. Think about the last time you shopped for health insurance. You probably considered the differences between PPOs and HMOs, the network, the deductibles, and the ancillary costs like imaging or lab work. Maybe you considered a plan with a flexible spending account or health savings account. But it’s almost guaranteed that you were unable to actually compare prices of basic services and preventative medicine across insurance plans; as a rule, hospitals and doctors’ offices don’t share them.

Even after the fact, when patients receive an Explanation of Benefits (EOB), the real price is not clear to anyone. For example, one recent procedure had a list price of nearly $10,000, but the covered price for in-network care, based on my insurance company’s pre-negotiated rate for that service, was less than $1,000. For a small business paying for the exact same procedure for an employee, the price may have been $5,000. For a large employer, maybe $1,500. For someone paying cash, they’ve unwittingly entered into a negotiation based on their ability to pay. All of these scenarios are possible, but at no point can a patient discover the actual cash amount the hospital accepted for payment.

President Trump identified part of the problem when he issued his executive order requiring hospitals to publish prices for “shoppable” medical procedures. This move drew immediate outcry from the health care industrial complex. But we should ask ourselves why hospitals and health insurers regard price transparency as such a threat.

Making the cost of medical procedures transparent restores a feature of consumer markets to health care by reinstating price signals and leveling the playing field for new market participants. To start adding market functionality to Americans’ health care, I introduced the Health Care Price Transparency Act. This legislation, which was also introduced in the Senate by Sen. Mike Braun (R-Ind.), will take a page from President Trump’s book and require hospitals to publish prices for some 300 medical procedures online.

While it’s possible that patients might use this information to make informed decisions about where to have a joint replacement surgery, publishing prices puts pressure on the market for health insurance by making the cost of entry clear to newcomers.

Health insurers and medical providers enjoy a cozy relationship. They negotiate prices behind closed doors, and instead of charging consistent prices, patients pay different rates for the same services, depending on their insurance plan and deductible. Not only is this an unfair practice in any other consumer market, it creates distrust of doctors and health insurers. It ends up incentivizing people to avoid seeking medical attention altogether, possibly delaying lifesaving treatment — all because they are afraid of being hit with large and unpredictable bills.

Regulators too, have made it very difficult to enter the market to provide alternatives to the status quo. This is evidenced by the fact that earlier this year three of America’s most visible companies — JP Morgan Chase, Amazon, and Berkshire Hathaway — walked away from their joint venture, Haven, to disrupt the health care system. Despite the size and success of the companies involved, after three years, the collaboration produced some small-scale experiments, but not the large disruption that health insurers feared — and that Americans have longed for.

At the end of the day, American patients are least heard by insurers and most affected by the broken status quo. Unlike other reform proposals, this price discovery requirement offers a light-touch approach to reforming health care that will make it easier for new insurers or businesses to enter the market by enabling competitive price negotiations that are currently not possible.

Our health care system needs price competitiveness to give patients the best quality care at the lowest prices — or to at least allow us all to assess how price and quality are related. Price discovery works in every other sector of the economy and there’s no reason why we can’t embrace the power of the market to improve health care for Americans. I hope that my bill can serve as a starting point to unite Democrats and Republicans to force hospitals and health insurers to move away from “business as usual” and start making changes that restores Americans’ trust that their health care providers are prioritizing affordability and transparency for patients.

This opinion piece appeared in The Hill.

Letter to the Editor: The Federal Reserve Is Financing Future Debt Problems

March 1, 2021

Economists John Greenwood and Steve H. Hanke ably sound the alarm in “The Money Boom Is Already Here” (op-ed, Feb. 22). Too many have looked away as the Federal Reserve prints dollars by another name: quantitative easing. While the authors rightly describe the profound implications of the massive surge in M2 from the money that has already been spent, they neglected to mention the implications for the pending $1.9 trillion in Covid spending that President Biden and many at Treasury and the Fed have requested. Follow their logic and understand the profoundly bad implications of an additional $2 trillion on top of the $4 trillion in prior Covid-rationalized spending.

Wall Street Bans "Outsider Trading"

February 1, 2021

Activist investors unleashed chaos on Wall Street this week, nearly bankrupting hedge funds, juicing the stock prices of fading companies, and most importantly, exposing the two-tiered system of finance.

In broad daylight, some of the most recognizable online brokerages showed the world that they believe in a free market only in theory. Robinhood, the app that democratized retail investing by letting users make commission-free trades, provides the richest irony. Now that main street America can aggregate market information and has the power to short stocks and buy options, the very firms that opened the stock market to millions have had a change of heart.
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