Medicare for All is as Ridiculous as Nationalizing Potato Chips | Opinion

It was a revealing moment on Fox News this past week. Two guests were on Laura Ingraham's show, The Ingraham Angle, talking about "Medicare for All," a progressive plan gaining traction in Congress to extend the government program focussed on seniors to all American citizens.

Representing free enterprise was Alfredo Ortiz, the CEO of Job Creators Network, a group that lobbies for millions of small business owners across the country, and the many millions more who work for them.

Representing the left-wing part of the Democrat Party was Adam Green, Founder of the Progressive Change Committee.

Ortiz was up first and gave the following answer about the move to socialize health care. "Socialism takes and capitalism creates," Ortiz said. "That's why you see thousands of people coming to America from Venezuela, Nicaragua and Mexico. They're fleeing socialism."

Green then took his turn, and explained why eliminating all of the competing companies in the health care industry—the health insurance industry in particular—would save Americans and small business owners money. "We would not have to pay for these exorbitant marketing costs, CEO salaries, and duplicative costs," he explained.

It wasn't the first time we've heard that argument. President Obama made an almost identical point in the first presidential debate in 2012. Walk down the hallways of academia in any state in the nation and you'll hear similar cries from the social justice chorus. The "C" words (capitalism and competition) and the "P" word (profit) roll off the tongues of most of them as if they themselves were diseases. The word profit is usually preceded by qualifiers such as "windfall" or "excess" or "unreasonable."

If you own a small business, you might be wondering: Unreasonable profits? Is there such a thing? How do seemingly intelligent people come up with such ideas?

It all began when Karl Marx coined the term "surplus value" to describe profits. That's what profits were to Marx: a surplus that belonged to someone else besides the actual owner of the business. That, it turns out, was one of his great contributions to modern economic life.

The great Irish playwright and socialist George Bernard Shaw came up with another term to describe profit a few decades later. He called it "the overcharge."

In the minds of many intellectuals and some politicians, the world would be a better place if we eliminated those greedy capitalists from the equation, and all of those competitors spending all of that money on marketing, on fat cat CEO salaries, on profits and dividends, heating bills and office space and all of the other duplicative costs and instead put all of that business under one big government roof, and—poof!—we'd have all those surplus profits left over for the workers.

But does anyone really think we can make our health care system cheaper and more efficient by squeezing out the so-called duplicative costs and profits of private insurers and other big players in the health care market?

To understand the absurdity of such a claim, let's apply the same logic to any part of the American economy. To a small—and beloved—product category: let's take the potato chips test.

Take a walk down the potato-chip aisle of any major supermarket. There, on display, is the miracle of modern free enterprise. Dozens of brands competing for our attention. Competing for our hard-earned money.

There are choices galore. Expensive chips and cheap chips. Healthy and not so healthy chips. Baked chips, fried chips, salty chips and salt free chips, too.

There's Herr's and Lay's. Pringles and Kettle. Mrs. Vickers and Ruffles. Fritos and Old Vienna. And there's Dirty Chips, Sun and Cape Cod, Jays and Tyrells, Wise and Zappo and North Fork, too.

And that's not counting the choices within each brand. Take Pringles, my daughter and bride's favorite. They have enough flavors to satisfy anyone's palate. And all of them are all shouting out to us, "Pick me!"

Most of us get excited about all of that choice and competition. We, the not-so-well-educated masses, intuitively understand that all of those competitors, in their scramble to make a better or cheaper or healthier chip, makes American life better.

But the average progressive's mind—the ordinary socialist's mind—drifts when walking down that very same potato chip aisle.

"All of that waste!" they think. "Ah, the efficiencies our government could bring to potato-chip making if only all of these businesses would get out of the way. If we could only squeeze out all of the profits from the big and not-so-big potato-chip companies, and all of those fat-cat executive salaries, and all of that marketing money each of the companies spends on silly commercials to attract customers. If only we could just get rid of all of those duplicative costs, and have just one big government-run potato-chip company, we'd all be better off!"

And then would come the next logical leap from progressives: pass a bill in Congress called "The Potato Chip For All" Act.

The truth is, most of us know what potato-chip aisles would look like if the government ran things. There'd be one brand—The National Potato Chip Company—and it would offer one flavor. The bag would be dull. And the chips would be stale. And cost $10 a bag.

All of which leads to a deeper question. Does Adam Green, or for that matter Alexandria Ocasio-Cortez and her progressive fans, not understand why businesses form in the first place? Do these folks not understand that all of those duplicative costs—all of the competition—serves a deeply moral purpose? Mainly, to bring more choices to humanity. And at lower costs?

Do these progressives on Capitol Hill and the halls of academia not understand that a world without profit is a world without business. Without profits, there are no jobs, and without profits, there is no tax base. Without profits, there is no money to pay for the salaries of teachers, cops, fireman—and yes, even members of Congress and all of the government workers and bureaucrats in Washington DC.

Do progressives know how hard it is to generate profits, and how ephemeral they are? That the moment a company begins to make a profit, competitors soon come crawling out of every crack and crevice trying to get a share of those profits? And that this pursuit of profit—all of the competition and the messiness competition engenders—makes for the remarkable choices American consumers have at their disposal? And our remarkable standard of living?

It is the hope of profit, and the threat of losses, that actually drives owners in the free-market economy to produce at the lowest possible cost. Too many on the far-left can't wrap their heads around a simple idea: Walmart makes big profits because it delivers such low prices. And lower prices are good for the working poor and working class.

Henry Ford got rich lowering the cost of cars and making them affordable to the average American. Before his innovation in auto manufacturing—the moving assembly line—only wealthy folks could afford to own a car.

It wasn't too far in the distant past, 2012, that the very same progressives were not happy with gas prices, which had reached their all-time highs. Did they roll out a plan to dramatically increase supply? Nope. They instead rolled out the "Gas Price Spike Act" to go after profits they deemed were unreasonable. And who should define "reasonable" profits?" A newly created Reasonable Profits Board.

I'm not kidding! Look it up. House Democrats proposed the idea back in 2012, with the white male version of Ocasio-Cortez leading the charge: Congressman Dennis Kucinich.

But drill down even an inch deep on this notion of "reasonable profits" and the whole idea collapses. Exxon Mobil made $40 billion last year, a mountain of money. But their profit margin was 8.6 percent. That's about 20 cents per gallon—which is less than the nearly 50 cents the federal and state governments took for every gallon sold to the American public.

Indeed, if it weren't for an increase of supply by America's fracking revolution, and the efficiencies they created on the extraction front, gas might still be at $4 a gallon nationwide. According to the fuel finding app GasBuddy, Americans are saving nearly $225 million a day a day thanks to energy capitalists innovating and chasing profit. $255 million a day!

This past year, it turns out that Apple once again ranked as the most profitable company in America, with $45 billion in profits at 21 percent margins. Google raked in $19.5 billion in profits, and with 22 percent margins. Microsoft cracked the Top 10 with $16.8 billion in profits, and 20 percent margins. Johnson and Johnson wasn't far behind, with $16.5 billion in profits and nifty 23 percent margins.

Most Americans see profit margins like that, and think, "Good for them!" Others call their broker and buy a few shares of those companies. It's a beautiful facet of capitalism: the little guy can own a stake in our highly profitable publicly traded companies.

Progressives and social justice warriors see big profits, and think, "How awful!" And without taking a breath, think to themselves, "Let's form a commission and figure out a way to tax those profits. Or squeeze them out through some regulatory regime so that money can be put to better use by us."

The fact is, progressive politicians and academics may not like the free-enterprise system. But they need it to pay for their utopian dreams.

That's the real-life paradox 21st century socialists have to live with every day. The very people who decry capitalism can least afford to live without it.

If the Ocasio-Cortez wing of the Democrat Party prevails on Capitol Hill, the economy will surely contract. And that will mean less money created by our free enterprise system for them to redistribute.

Here's hoping Republicans—and even an old school Democrat like Joe Biden or an independent Democrat like former Starbucks CEO Howard Schultz—start bringing up the potato chip test in their stump speeches and debates. It's a test the progressives can't pass.

It's what the 2020 election will very much be about.

Lee Habeeb is VP of content for Salem Radio Network and host of "Our American Stories." He lives in Oxford, Mississippi, with his wife, Valerie, and his daughter, Reagan.

The views expressed in this article are the author's own.​​​​​

Medicare for All is as Ridiculous as Nationalizing Potato Chips | Opinion | Opinion