August 2012, Annie Bird and Alexander Main

Dean Baker
Truthout, August 13, 2012

Dean Baker
The Guardian Unlimited, August 13, 2012

Governor Romney's decision to select Paul Ryan as his running mate has condemned the country to 90 days of ridiculous news stories and columns about a choice on the size and role of government. The debate is silly because its explicit assumption is that Paul Ryan wants a small role for government. There is no evidence to support this assertion.

The impact of the government on the economy goes far beyond the amount that it taxes and spends. The way in which structures markets has a far more important impact on the economy. For example, government granted patent monpolies for prescription drugs raise the price the country pays for its medicine by close to $270 billion a year (1.8 percent of GDP). This is every bit as much a big government intervention into the economy as if the government raised taxes by this amount. The total cost of all the monopolies that the government grants as "intellectual property" could run as high as $1 trillion year, or roughly a quarter of federal spending.

The government structures the economy in many other ways as well. The implicit "too big to fail" insurance that it gives to the largest banks is a transfer of more than $60 billion a year to their executives and shareholders by some estimates.

The selective protectionism in trade policy, which deliberately puts manufacturing workers in direct competition with low-paid workers in the developing world, while leaving highly paid professionals like doctors and lawyers largely protected, has the effect of redistributing an enormous amount of income upward. And the Federal Reserve Board's policy of raising interest rates to increase unemployment among less-educated workers, and thereby depress their wages, as a way to keep inflation at its 2.0 percent target also has an enormous impact on the distribution of income and the economy.

It is incredibly misleading to restrict a discussion of the government's role in the economy to its tax and spending policies. These policies are at least moderately redistributive, but they don't come close to offsetting the impact of upwardly redistributional policies that the government imposes when it structures the market. (This is the topic of my non-copyright protected book, The End of Loser Liberalism: Making Markets Progressive.)

The latest data from the MSPP (Ministry of Health) shows that the number of cholera cases and resulting deaths continues to rise. As of August 2, there have been a total of 583,871 cases and 7,497 deaths reported since October 2010 and this almost certainly is an underestimate. While the number of cases this summer has not spiked as high as it did last year, there have still been 377 deaths and nearly 45,000 cases reported in just the last three months.

The MSPP attributes the slower rate of infection this summer to unusually dry weather; however they predict an increase in the coming months as the hurricane season begins. The Pan American Health Organization estimates that Haiti could see up to 170,000 new cases this year, which would mean an average of about 20,000 cases per month over the next five months. Over the previous three months, the average number of cases has been over 15,000. Despite this, funding for the cholera response, as well as for the infrastructure needed to stem the spread of the disease, has been inadequate.  At the end of July, the Comite de Coordination des ONGs Internationales en Haiti (CCO Haiti), which is made up of many international NGOs operating in Haiti, released a statement on the situation:

The cholera outbreak that has already claimed thousands of lives all over the country remains a major threat to public health. Cholera prevention and response should be a key priority for the Haitian Government.

…

Furthermore, many public health workers in the Cholera Treatment Center (CTCs) have not received salaries for several months and there are reports of strikes by front line medical staff to redress this situation. This is a serious issue negatively affecting the effectiveness of the cholera response and it needs to be urgently addressed. In addition, there is evidence that the MSPP struggles to carry out its work efficiently due to poor logistics and inefficient fleet maintenance. This seriously hinders the material distribution within the CTCs, Cholera Treatment Units (CTUs) and Acute Diarrhea Treatment Centers (ADTCs), and affects the appropriate collection of cadavers. Necessary arrangement should be made to correct the situation. Overall, the MSPP must once again reinforce its leadership and coordination roles at both central and departmental levels.

Donors must provide sustained and adequate funding to support a comprehensive and integrated approach to cholera prevention and care.

Although less severe than the cholera outbreak last year, the current situation on the ground is much worse than statistics portray. And yet, a shortage of funding has translated into fewer health partners and created serious gaps in coverage. From August, 2011 to May, 2012, the number of Cholera Treatment Centers (CTCs) has declined from 38 to 20, and the number of Cholera Treatment Units from 205 to 74.

In their latest humanitarian bulletin, the UN Office for the Coordination of Humanitarian Affairs (OCHA) noted that, “national capacity to respond to potential outbreaks, especially during the rainy season, remains very weak. The country has only 468 beds for cholera admissions, with 233 of these already occupied. At the height of the epidemic in June 2011, 2500 beds were available.” Despite this, OCHA notes that “significant progress has been made especially in the surveillance and reporting of the epidemic as well as in the integration of cholera care in the national healthcare system.” 

Despite OCHA’s positive assessment of strengthening the national health care system, as CCO Haiti pointed out, MSPP is still facing serious issues in their response to cholera. One reason why the Haitian government has had a hard time leading the response is that the international community largely bypassed the government in their provision of funding for cholera. The government of Haiti received only $4.9 million in funds for the cholera response, while the Red Cross alone received $6.1 million. While CCO Haiti calls for increased funding from donors, it is imperative that this money not simply be channeled to international NGOs, but through the MSPP. As the UN Special Envoy has noted, “aid is most effective at strengthening public institutions when it is channelled through them.”