(Today's guest poster is Henry Farrell of Crooked Timber. He and author Jacob Hacker join us to chat today. This is quite an important work and I urge everyone to read Henry's post and spend some time with the two of them in the comments, it is no doubt a book we're going to be referring to again and again here -- JH)
Jacob Hacker has written a very important book. One of the biggest problems that progressives face in American politics is that the game is rigged against them. Over the last thirty years, right wing think tanks and pundits have succeeded in changing the center of gravity of American politics. Ideas such as gutting social protection used to belong to the Birchers and other flat earthers at the fringes of debate. They’re now received wisdom among the chattering classes. Jacob Hacker wants to reverse this. He’s a political scientist; much of his previous work has shown how the right has worked under the radar to undermine basic social protections. This book, however, isn’t a standard piece of political science commentary. It’s an attempt to change politics by reshaping the collective wisdom closer to what progressives want.
This is a highly ambitious project. Hacker wants to push back some of the ideological gains that the right wing has made over the last thirty years. A diffuse coalition of conservatives, libertarians and business interests has sought to get rid of broadly based social security and medical benefits and to push for ever lower taxes. They haven’t done everything that they set out to do, but they’ve succeeded in changing the language that policy makers use to think about these issues. The result has been that politicians have been unwilling to protect people from the new risks caused by globalization and market pressures. Indeed, instead of protecting ordinary people, government has helped pile more risks on their heads.
Some examples. Medical costs are growing ever higher, and the health insurance industry is a mess. The result is that people, especially those with no insurance or limited coverage, face ever more financial risks. According to a recent study a quarter of families affected by cancer had to spend all their savings to pay for treatment; one in ten had skimp on food, heat or housing to bear the burden, and 13% went into major debt. As Hacker documents, instead of proper health insurance reform, we’re being given individual Health Savings Accounts, which transfer the risks and hard tradeoffs to individuals. Employment is becoming ever more unstable in a globalized world, but government doesn’t seem very interested in protecting vulnerable workers. Ordinary families who are faced with these pressures can’t easily seek refuge in bankruptcy any more thanks to recent legislation which drastically weakens bankruptcy protections. Finally, traditional defined benefits pension plans have been replaced over time by defined contribution plans, in which individuals bear the risk of stock market slumps. Now, conservatives and libertarians want to get rid of Social Security and replace it with so called ‘personalized’ accounts, regardless of the massive transition costs that this would involve.
The right has been so successful in getting these changes through because it has redefined the middle ground of American politics. By relentlessly pushing mantras like “personal responsibility” and “increased choice,” it has reshaped the boundaries of the politically possible, making some options available which were previously impossible, while taking others off the table. This has in turn paved the way for major political changes weakening social protections that already exist, and making sure that new protective measures aren’t created to address new risks. While the right has managed to disarm some of the opposition to these changes, it hasn’t been able to make them popular. Despite the boosterism of the business press, middle class Americans aren’t very happy in the modern economy. They have very good reason to feel insecure. Hacker shows how economic risk has increased dramatically over the last few decades. However, politicians in both the Democratic and Republican party have mostly ignored this problem, where they haven’t actively made it worse. Because the space for allowable political argument is so conservative-friendly, real, far-reaching policies haven’t been able to get off the ground.
This is what Hacker wants to change. He wants to redefine the terms of debate, showing how Americans are far more vulnerable to economic risk than in the past, and how politics has worsened the problem. Everywhere that right wing pundits talk about “personal responsibility,” he wants to highlight the real and profound risks that ‘responsibility enhancing’ measures involve for ordinary families. Not only that – he wants to show how these risks would be far lower if government was doing its job properly. Government could do a lot more to make people’s lives less risky if it reformed social insurance and expanded Medicare. There isn’t any necessary reason why it can’t do this. Governments in other countries have been far more active than the US in protecting their citizens. The real problem has been one of political will. Politicians aren’t responding to ordinary people’s needs, at least partly because it’s hard to articulate these needs in a political language that has been reshaped by the right wing.
This imbalance of debate reflects a broader problem that the netroots are increasingly coming to focus on. As Digby said a couple of weeks ago, one of the reasons that Democrats are repeatedly sucker-punched by the right is because they are working within intellectual limits that have been set by right wing foundations and pundits over the last few decades.
The conservative consensus says that low taxes, limited government, individual rights, strong national defense and family values equals a better life. Many people, including many liberals, have absorbed that message into their worldview and it's going to take some work to unravel it. It won't happen through issue advocacy. People already favor all the government programs they depend on (and some they that don't even exist, yet.) But they have been disconnected from government itself --- their ownership of it and their obligation to keep it working. Until we successfully challenge the conservative consensus with new language and new ways of thinking about government and politics, it's going to remain in place. And it's going to be very difficult to successfully advance the progressive agenda until that changes.
Progressives have had difficulty even beginning to conceptualize how they might create a coherent agenda, because they think with concepts developed by people whom they fundamentally disagree. George Lakoff and others who claim that progressives just need to repackage their arguments are missing this point. Democrats need to reframe their agenda. Progressives don’t need to work on how they use maternal and paternal imagery. They need to develop basic concepts that allow them to change the ways in which they think about politics.
This is exactly why Hacker wants to reshape the way in which Americans debate and think about economic issues. He has laid out the beginnings of a very ambitious project. But it’s the right kind of ambitious. If the mid-term elections demonstrated anything, it’s that ordinary Americans want politicians to address the real uncertainties and worries that they feel when they think about their economic future. Hacker provides some of the intellectual foundations for a smart economic populism that would help provide answers for these Americans
There are a lot of points for discussion in this book; I haven’t even begun to touch on some of Hacker’s major arguments (you’ll have to buy the book yourself to find out more). Here are three points for starters.
(1) Kos wrote back in June about how John Edwards’ speech about the “Working Society” provides the kind of “big ideas” that the Democratic party needed. However, Kos was unsure about whether Edwards’ plan would appeal to the middle class. Can Hacker’s emphasis on risk and insecurity help bring these ideas home to middle class voters? (I suspect that Edwards himself thinks so; he describes Hacker’s book as an important book for anyone concerned about the continuing vitality of the American dream).
(2) Is there a trade-off between focusing on risk and focusing on inequality? Matthew Yglesias and Ezra Klein have argued that Hacker doesn’t pay enough attention to growing economic inequality, and the need to enhance the bargaining power of workers. Both Mark Schmitt (on the same page) and Hacker disagree in different ways. Schmitt argues that fighting risk isn’t quite the same thing as trying to redistribute resources, and Hacker claims that fighting insecurity is an important initial step in tackling inequality too. Which of these positions is right, and what does that mean for the political priorities that progressives should adopt?
(3) Could this agenda be hijacked by the right? Two conservatives, Ross Douthat and Reihan Salam have recently argued in the Weekly Standard that the Republicans need to respond to liberals like Hacker by focusing on health care and income volatility themselves. Does this suggest that if Democrats don’t start providing answers to these problems – and soon – their lunch will be eaten by the Republicans?
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Thanks so much to our guests for being here today. I loved this book and I can see why it’s making all the right wing heads explode — it really takes a sledge hammer to all the myths they’ve used to con the country into, essentially, embracing mechanisms that make the rich richer and everyone else more vulnerable to economic insecurity.
(As always with book salon, please limit comments to the topic of the book — if you want to talk OT you can do it on the previous thread.)
Professor Farrell thank you so much for leading the discussion today about The Great Risk Shift. I apologize, this is kind of an off the wall question. Considering you are at Georgetown University, you may or may not be familiar with the old Jesuit General, Pedro Arrupe, S.J. If you are familiar, could you speak to any moral overlap between Fr. Arrupe’s teachings on “Faith and Justice” and Professor Hacker’s The Great Risk Shift?
Welcome to our guest poster, Professor Henry Farrell, and to the author of our featured book, Professor Jacob Hacker.
We are delighted to have both of you here.
Welcome Jacob Hacker and Professor Farrell - thanks for delineating the theft of the public commons (our water, air, land, food, communities, etc.).
Thanks also for devising tools by which we may retake them - the commons belong to us, not the megacorps or their wholly-owned “elected” (bankrolled) officials.
Nice to be with you guys. John - I am now at George Washington University, which isn’t Georgetown (though it’s very easily confused). My earlier education was at the hands of Irish Benedictine monks, who are Jesuits’ rivals for influence over young minds, and they didn’t tell me anything about Arrupe. More generally though, I think that there is a lot in Christian, Jewish and Islamic traditions (the three that I know a little about) which speaks to the need to recognize that others have done less well than you, and to help protect them from an unfavorable environment. The story of St. Martin and his cloak comes to mind …
Welcome, Henry. I agree with you with regard to Edwards’ arguments on the “two Americas” and the relationship to some of what Hacker is saying on risk shifts, especially. With the rise of “populism” as a theme lately — via Lou Dobbs, as a media example leading the charge with his “assault on the middle class” rhetoric — where do you see this going in the lead-up to the 2008 Presidential campaign? Do you dare hope for some real discussion on the issues involved…and, if so, from whom?
It’s very difficult, as a practical matter, to break people from their addictions to the mantra words “personal responsibility” and “free markets,” and I’m wondering what advice you have for us, Jacob and Henry, as to how we, using our media platform here, can help change the terms of the national thought process, bit by bit?
Thanks so much for joining us, both of you!
The contrast of our economy with those of western Europe provides mixed results in my opinion. Even countries devoted to cradle-to-grave services such as Sweden are evaluating and retrenching.
Isn’t there inherently some swinging of the pendelum between all YOYO = You’re On You’re Own, and all government? I understand your central argument that the right used their bulldozer to push this off the cliff.
Christy, I think that this is one of the key issues for the Democrats. There is clearly a lot of populist energy out there, which both the Democrats and Republicans have ignored in one way or another (the less pleasant side of this is some of the anti-immigration hysteria which some Republicans have been trying to whip up). Ideally, I would like to see this populist energy focused on what I think should be its real targets - the growing inequalities in American society, and, as Jacob documents, the way that the burden of risk is increasing for ordinary people. My purely personal take on this is that Edwards is the candidate who seems to get this, and to be willing to make it a major theme of his campaign. What Jacob’s book does, among other things, is to show how these aren’t just issues for the poor, but also for the struggling middle class, and to show also how real solutions lie within reach for these problems, if there is the political will.
Thanks much to our distinguished host and author. This is exactly the book we need. We’ve lost the ability to defend the concepts we know to be correct and need to recapture the language that explains this. There are reasons for government and reasons why civilized people turn to government to solve certain problems. We understood this with FDR and the New Deal, then we forgot. I hope this book helps us reclaim the ability to explain/defend that.
Pachacutec @ 7
I guess a big part of the job is going to be taking back the language that they’ve focused grouped to death and twisted tortuously toward ends that have nothing to do with what their true objectives are.
Gentlemen, do either of you have observations on how the precautionary principle may be used to help shift risk back to the megacorps?
Henry@9,
You say that
Political will on whose part? The electorate? The politicians? How do we go about pushing the political will in that direction to a degree that it is noticeable?
Edwards in the 2004 campaign talked about poverty as a moral issue, something which has not been a part of our discussions for a long time.
His insistence that tens of millions were only one paycheck away from poverty sounded harsh at the time, but increasingly on the mark now.
Probably he read Professor Hacker’s earlier books on the subject!
Parachutec - again purely personal, but I think that Jacob’s book points to some of the ways that you can do this. Whenever someone starts talking about “choice,” start asking questions about whether (a) there is real choice involved or just bogus ideology, and (b) whether the people who are supposed to be making the ‘choices’ are in a good place to make them. Hammer home the ways in which basic social protections that Americans rely on are being undermined, bit by bit, and how new risks aren’t being addressed at all. What I think this points to is the need not for progressives to concentrate on framing, but on what their core values are. Creating an economic safety net is clearly one of these core values - although this has been partly forgotten in the age of the DLC.
Egregious - certainly, all systems provide mixed results, and some of the West European economies (esp. those in Southern Europe) have real problems. I think that the extent to which there is real retrenchment in Sweden is greatly overstated. The right won the recent elections - but only because they promised only to tinker around the edges a bit (in the previous elections they had advocated major reforms and gotten walloped very badly as a result).
Hi, Henry! Welcome to book salon. I’d like to ask what you think about the leader of the Christian Coalition getting ousted because he wanted to help the poor rather than bash the gays and restrict abortion rights. Why is it that the poor are so stigmatized in this country? It’s like Americans think of poverty as some kind of moral failing.
Do you think this is part of what has so consistently inhibited real economic reform in this country?
Thank you again for coming today.
Henry at 9 — That is the question, isn’t it, ultimately whether or not we will have the political will to make the necessary changes. I have never understood why those who have a lot cannot see that everyone benefits from those who have less being able to get a larger piece of the whole, thereby raising everyone up another notch. We all benefit by the tide raising everyone’s boats. It’s just that, incrementally, the folks in the yachts don’t get to feel their rise as much and lord it over the rest of us…which is to say, I suppose, why so many of them don’t feel any incentive to make the effort in the first place.
Switching from a “me, me, me” society to contemplating things in terms of “we” is going to be difficult after years of indoctrination in “Reagan speak.” Which is where Jane at 11 is exactly right. Targeting the speech idiocyncracies is going to go a long way toward making independent thought on the issues possible. But where to start on that is a tough call to make, I think.
I can’t wait to get and read the book. After having fought these SOBS for the past four years on foreign policy, I look forward to educating myself on another flank of the war that needs to be fought. Joe
I don’t know whether Edwards read Jacob’s earlier books, but he surely has read this one (he blurbs it enthusiastically), and I believe that he invited him and others to participate in a major policy workshop last year on how to fight inequality etc.
It’s always a great honor to have Ambassador Wilson at an FDL Salon.
Welcome! to Host Henry Farrell and Author Jacob S. Hacker.
Does Populism require a Great Person to articulate most clearly in the public square? Is personal history and background informative and dispositive toward selection, or elevation, of a spokesperson? My roots affect my viewpoint; do the American people deserve a leader whose populism evolved naturally from rising above adversity and personal challenges?
Thank you so much for your work.
Thank you for your response about Sweden.
In Germany I observe severe downward pressure on wages in manufacturing, for example, autos, as eastern Europe becomes more economically active.
Is this a good parallel to the United States loss of manufacturing and downward pressure on factory wages because of developing world alternatives?
Welcome, Ambassador Wilson! Always a privilege to see you.
Welcome back, Joe! We’ll make a dirty hippie of you yet!
From Reagan onward, part of the Republican mantra is that government doesn’t work, can’t help the average schmo, and is simply a sinkhole for one’s hard-earned cash.
The Bushies have actually been trying their best to prove that all those things are true, in part so that their adherents can say, in effect, “see for yourself–government didn’t work on 9/11, on the Gulf Coast. It can’t work. Only the free market can.”
Which brings me to the point–I don’t think Democrats have been entirely willing to embrace the proper rejoinder (”it doesn’t work when screw-ups are running it and are trying to destroy it”) because they’re partially complicit and beholden to the same interests seeking to profit from the privatization of government.
Is that a reasonable view at this political moment? The general tide has turned a bit in the last election, but, still, this election was full of “anything’s got to be better these guys” rather than a fundamental embrace of Democratic policies, such as they are known to the public.
Welcome, Ambassador Wilson!
We try and stay on topic in Book Salon threads, but some time soon, I think it would be great if you would do a question and answer session about the mounting chaos in Iraq.
In fact, what are you doing later tonight? I was going to write about the war tonight for Late Nite.
John Casper @ 20
Thanks. I am hear to learn. It has always befuddled me that we cannot see the utility in taking better care of our own. When I was in government we had access to all sorts of programs that provided coverage at favorable costs because we were a large cohort.
The military is the single largest example of cradle to grave socialism in our society, yet the officer class is republican. They have theirs so screw everybody else. Doesn’t make a lot of sense to me.
Kirk - I think the precautionary principle is important, but applies primarily to non-economic risks in areas like scientific development, GMOs etc.
RevDeb - I think that this is a lack of political will - or, to use the scientific term, gutlessness - on the part of political leaders rather than ordinary people. I think there is a real constituency out there for this.
TRex - I hadn’t seen that story. As stated, there is a religious tradition of protecting the weak etc which has mostly lost out in modern conservatism (or at least not been translated into actual politics). People like Grover Norquist have been at pains to make sure that this tradition stays lost in conservatism - see the fight they had in Alabama a few years back. But it may well be that as the Norquist/Abramoff wing lose influence among conservatives, this comes back to the fore. This should give real pause to Democrats - if they don’t take up this set of ideas themselves, someone else is likely to, and maybe use them in ways that Democrats and progressives don’t like very much.
TRex @ 25
I have kid duty later tonight. I would be happy to try to answer some questions on Iraq, but with every passing day the situation becomes ever more grave. I worry that we might actually have to fight our way out. There are no magic bullets.
egregious at 22 — it’s certainly a very good argument for trade negotiations that include wage raising provisions for countries who tend to suppress that sort of thing for workers (i.e. using prison labor and captive labor paid a pittance to keep prices low, etc.) There is a whole picture that most folks in this country, myself included, forget to include in the thought process far too much of the time. And that ripples out to every aspect of labor here and abroad as a result. And simply saying that “the markets will equal it out in the end” glosses over a whole helluva lot of ramifications that need discussion.
John Casper @ 20
I am here to learn.
montag @24 has some good points.
This administration and many before it have done everything in their power to try to undo the FDR legacy, economically, socially, governmentally and ideologically (all fear all the time v. nothing to fear but fear).
FDR’s way was charted by the depression and the very real need for people to help one another through it. Contrast that to succeeding generations who have been taught that getting ahead of everyone else is the goal.
Can we really come back to a more equitable society without having to crash first?
Over at kos, Sirota argues that people currently framing our political and economic arguments live in a small number of places along our coasts.
His point is their arguments lack reality because they have no contact with regular people in the rest of the country. Perhaps we can help out with that.
I’ve got a brother in Indiana, graduate of Northwestern, who’s working the night shift at Target. He has a few choice observations about the economy.
This is one of the main reasons I am so grateful to have Edwards and Tester in the party. I believe they can serve as an economic conscience to counter against the Blue Dog/Ellen Tauscher crowd who are running as fast as they can into the arms of K Street.
And Trex - I should also say that there is a longstanding tradition (esp. in some versions of Protestantism) of seeing worldly success as evidence of godlieness and vice versa.
montaq - I think that both of your points (Republicans trying to prove that government is screwed up by screwing it up themselves, and Democrats being to some extent complicit) are fair points. Nor do I think that the tide has changed yet for the Democrats. They did much better than they did previously, but I really think that they need to create a new coalition, using the ideas in this book and others, over the next two years, if they’re going to make those successes into something solid.
Henry,
Just a reminder that Lakoff is constantly reminding folks that his notion of reframing is NOT about repackaging words- but about being aware of and articulating our deepest values.
That whole miserable Calvinist thing, yep. Predestination. It’s alive and well in GOP policy. “If you weren’t doing anything wrong, then you wouldn’t be poor!”
Christy Hardin Smith @ 29
And child labor.
I ain’t giving up my lunch to any GOPers, that’s fer sure. And if our National Democrats are so disconnected from their base — and so connected to their corporate teat — that they give away this advantage on our party’s core issue, their next forty years in the political wilderness won’t be enough.
Henry, — The health “insurance” example in the main post is interesting because we almost always think of the problem as lots of people without “insurance.” No insurance => no health care. But that paradigm is itself a limitation on policy choices and one focused on private insurance companies.
It’s possible to have a universal health care system in which the notion of privately purchased “insurance” from insurance companies is not essential. The “insurance” feature is simply one way of covering costs of care through some mechanism that collects revenues to pay for it. But taxes also pay for social services that can be universally provided, without forcing each citizen or family to purchase “insurance” or to be employed by a company that provides some insurance program.
When we cast the problem as everyone needs “insurance” we are forced to figure out how each member pays for this insurance — but the solutions for many folks always return to pooled revenue solutions, paid for by taxes, and probably administered by government, not just insurance companies.
Is this what we’re talking about here?
Welcome Ambassador Wilson!
If I weren’t already asking questions today, I’d be too shy to post.
Thank you for your patriotism and your service to our nation!
Professor Farrell - thanks for addressing the precautionary principle question.
And gentlemen - a follow-up question…
The megacorps and their elected vassals have successfuly diverted the public - their victims - from the corporations’ deliberate sustained assault upon our physical and social well-being.
One of the most common and most shattering consequnces of these crimes is the soaring rate of malignancies (cancer).
Sandra Steingraber - in her evocative book Living Downstream - personalized (for the reading public) the link between individual cancer survivors and the epidemic increases in malignancies generated from massive release of pesticides and industrial pollution.
Today one-quarter to one-third of Americans may now expect to develop cancer: the army of cancer surviviors and their loved ones may be a potent and compelling political force.
What role - if any - might either of you imagine for survivors of cancer in raising public awareness about the great risk shift?
At a time when electronic media seem to predominately shape public emotions, how can this potential army of cancer survivors share their wisdom about the short end of the great risk shift?
And how might the integrity and power of their suffering push aside the talking heads’ puffery to grab airtime?
I’m thinking that with “The Great Risk Shift” another piece of the jigsaw puzzle comes together.
* Risk shifting from corporations to individuals
* The gini index is still going through the roof
* Lakoff reminds us that the market economy is not some law of nature but a social invention that can be rearranged to improve the lot of all members of society.
* How to start a viral meme that makes being rich or conspicuous consumption a social embarassment (sp)
I am sorry if this seems like a set of disembodied thoughts, but I hope the shorthand makes sense to you.
Thank you so much for this book.
Joe - nice to have you as part of this conversation.
egregious - I think that the cost pressures for Germany are less because of Eastern Europe, than because the market has changed for many of their most important exports. It used to be that the Germans had the super high-quality end of the market for autos, machine tools etc locked up, and everyone else produced to a much lower quality, so that they didn’t compete directly with the Germans. But now there are a lot of producers who aren’t quite as good as the Germans but are reasonably close, and are a lot cheaper, which has transformed the market in ways that make it much more competitive for German producers. Still, they are a manufacturing powerhouse. Italy is in much bigger trouble, because its manufacturing is in sectors such as footwear that are much more heavily exposed. But I could go on about this for pages … this is one of my academic areas of interest.
On your brother, yeah. It’s a general problem of elites, and a particular problem in this country, especially thanks to the weakening of the unions, who were the main go-betweens bringing the problems of guys at Target (which is still, at least in part, a union shop, right?) to the attention of the people in Washington.
TeddySanFran - I don’t think it needs a single person to articulate it, but it helps. The Presidency is the biggest bully pulpit in the country - if you have a powerful President willing to make waves, it makes change a whole lot easier.
Ever since hearing a report a couple of years ago about farm wives getting jobs in town because otherwise farmers couldn’t afford health insurance, I’ve thought that Democrats are going about the healthcare debate all wrong. The rhetoric is endlessly about “the uninsured” and emergency rooms, which is automatically interpreted to mean “the poor,” which is then vulnerable to undermining by conservatives’ crypto-racist “undeserving people might be getting something.”
It seems to me that it would be more accurate (and appeal to a broader audience of voters) to talk about how middle-class people have to desperately cling to jobs with insurance (or hope they don’t get sick, if they don’t have it), and can’t become entrepreneurs, or go back to school, or any other part of that “opportunity society” crap. Of course, that would require pushing for single-payer and universal healthcare and taking on the insurance industry, rather than this incremental, compromise-before-we-start approach we’ve been getting (which I think is another bad decision.)
I haven’t gotten to read the book yet, Professors; do you think this meshes with the risk shift concept?
(BTW, Henry, I’ve been a big fan of Crooked Timber since way back.)
sofistic at 41 — We have seen a bit of a shift in terms of folks with substantial wealth being goaded into charity donations and foundation set-ups, and I attribute that to the public “shaming” that Bill and Melinda Gates and Bono and Warren Buffett and Oprah and…well, you get the picture. Public figures stepping up and establishing a pattern of conduct that had fallen out of style for a while, but which had gone on a generation back in terms of public good foundations. Perhaps it had always gone on, but just not been publicly discussed much for a while, but bringing it out of the shadows has had a good effect in goading others into doing so as well. So that’s a bit of positive pressure, I’d say.
scarecrow - that is a large part of it, although for legal-constitutional reasons, I think that universal health care without some private provision is a non-starter, for better or worse (and private provision, it should be said, isn’t necessarily bad; what is bad is our current system, which is a morass of perverse incentives).
Kirk - follow through the link labeled ’study’ in the third paragraph of the main post for some chilling discussion of cancer and its effects on risk.
Uninsured or underinsured=health insurance insecurity.
Just borrowing from the playbook that changed hunger to food insecurity.
Charity donations and setting up foundations seem like they mostly overlap, but they don’t necessarily.
A lot of wealthy people set up a foundation to avoid estate taxes. The foundation, if set up to be nonprofit, is only required to give away 5% of its assets every year.
In contrast, with a direct donation to charity, the full amount is put to work immediately.
[Disclaimer: my nonprofit foundation gives away 50-80% of its assets every year to the Russian children’s hospital. But a great many stick to the 5%.]
Thank you Henry.
… and thank you, sofistic, for the gini index.
I learn something every day here.
Redshift - I think that what Jacob is doing is exactly trying to show how this is a middle class problem. Now there are some risks to this - which I think lie behind Matt Yglesias’ worries (see link in main post). In particular, programs which are too heavily biased towards the middle class are clearly going to do very little to help those who are even more deeply and seriously screwed. But creating a coalition to bring through changes is about figuring out what are the right compromises, and showing people how they have more in common with those who they don’t identify with than they think. Every couple of months the Economist, which I read every week, makes some snide comment about the politics of class warfare, and how it is destined to fail. We have been seeing the politics of class warfare in this country over the last several decades, and it has succeeded all too well. The Economist has been one of its chief protagonists. And one of the ways in which it has succeeded is in weakening the basis of solidarity and fellow feeling between people who have shared interests. That’s why we need books like this.
Gotta run. I look forward to reading the rest of the thread tomorrow. And to reading the book. Joe
Henry @ 44
I don’t know, Henry, what if we thought in the manner of the founders and invented things outside of the existing set of ideas. If there can be universal health systems in most European and Scandanavian countries, why not here? There is nothing sacred about private versus public funding; it is just a different set of methods to get to the goal.
Henry @ 45
I agree that the choice should be there, but the debate usually denies that choice. I see that in the debate about electricity markets and “choice,” where the original Enron view was that regulators should step out of the way and allow (they meant “force”) each customer to choose from private supply companies at prices negotiated between the customer and the supply company. Fine for large customers, but terrible for small customers, with little/no negotiating power. But there is a common pool alternative, which serves every customer that does not choose a private supplier — it does this automatically and at the lowest cost at which the common pool obtains power. [It’s analogous to allowing the govt to negotiate drug prices) Enron and it’s advocates sought to suppress access to this common pool, and that is the system that eventually blew up in California. Eastern electricity systems have markets and “choice,” but one of the choices is to simply be served by the common pool at the lowest pool price. And it works.
TeddySanFran @ 47
Many many moons ago, I did a masters thesis on income inequality trends, and have followed it all those years since. That’s where I first learned of the Lorenz curve and the gini index.
Henry @ 45
Thanks so much for illuminating that relationship - alas, when I served as psych consultant for a major med school’s oncology program, even our affluent Westside LA patients were losing their assets due to uncovered expenses.
If I am perseverating, please forgive me. Something deep inside me heard so many wrenching accounts of suffering from the great risk shift’s devastating legacy of cancers induced by (avoidable) chemical contamination.
As human opinion-making occurs first in the brain’s emotional centers - and only later in the cognitive centers - some part of me hopes these compelling human narratives can shape opinion against the great risk shift.
Conversely, I may well have completely lost perspective - it wouldn’t be the first time :)
Just a brief comment on an area I know little about- alas- but it seems to me that the issue of universal health care can’t be addressed without also adressing the cost of insurance for health care providers. IIRC, European countries that have some form of what they refer to as socialized medicine exist in a “less litigious environment” - no huge payouts of punative damages, etc. (That was pointed out to me often, when I lived in Britain, way back when).
Henry, maybe you could provide some perspective as to how important this issue might be.
Many blogs have noted the success of Populist Democrats with red state working class voters.
This is the key to victory — crafting populist pocketbook and kitchen table issues that appeal to all working Americans.
Blue collar voters have long said there isn’t a dime’s worth of difference between the parties. Since the Democratic Party was sold out to K-Street by Tony Cuehlo and the DLC and Rahm Emannuel (a Tony Cuehlo wannabe) there is a lot of truth in this. David Sirota has been making this case, but we need to shout it out, loud and clear — Democrats will stand up for working Americans, while Republicans sell them out.
The question of risk is a subject for study not only in economics but in my own field of public health.
Two generations ago a person becoming paralyzed from a helmetless motorcycle crash would bankrupt their own family. One generation ago these were our patients at MGH [Mass General-Boston], and were mostly covered by insurance. I suppose you could argue we are fast swinging back toward the original model.
The helmet risk question brings up the issue of how to being pressure to bear to make changes. Under the original model, if my kid tries to go without a helmet, I can personally try to apply pressure to keep our family from being ruined (and of course, the child above all).
During the years of relatively full insurance (never all–we should not extrapolate the experience of the middle class to everyone) how could people be persuaded to use helmets? It became a government public safety campaign, with lots of complaints about impinging on personal freedom. Ok but everyone pays for that guy to recover in the neurosurgery department.
I absolutely believe in health insurance and in sharing the risk of catastrophic expenses. Yet there is an argument to be made that we are weakening and depersonalizing the kind of social feedback that previously got people to make changes toward less risky behavior.
One could argue the same about cigarette smoking–risk, freedom, feedback, who pays.
sofistic - my understanding is that there would be serious constitutional issues with a universal single payer health care system (although this isn’t my area of expertise; I could well be wrong).
Scarecrow - I think that Enron is a perfect example of the problems of “choice.” Actual choice is great, as anyone who (like me), grew up with in a country with a telecom monopoly can testify to. And there are wonderful things that markets can do. But all too often, lobbying on behalf of “choice” and against “government regulation” is aimed at securing the interests of powerful companies such as Enron, which can then present choices to less powerful actors that aren’t really choices at all. And I think negotiating power is really crucial to understanding this. Many simplistic applications of economic theory don’t get this, because they assume that individual actors don’t have any negotiating power. But in real life, they do, and use it, unsurprisingly, to grab as much of the goodies as they can, and to screw the less powerful.
Thank you Mr. Farrell and Mr. Hacker– now back to read and learn.
One of the things I found very helpful about this book is the focus on what is happening to all spectrums of the workforce. For reasons we continually debate, it’s hard to get the blogosphere excited about labor issues, but in large part I think it’s because people who read the blogs don’t think of themselves as being affected by those issues. It actually made me slightly uncomfortable turning the pages. It’s not that we’re all screwed, but the need to do something now is quite critical. And changing the terms of the discussion, which this book does so well, is critical.
egregious - I think there is a real point here. Not all efforts to make individuals responsible for their own risks are a bad idea - sometimes people should be discouraged from doing stupid things.
Valley Girl - there is a linkage here, but it’s not as strong as people sometimes think. Many European countries are now getting pretty litigious too, which creates stresses and strains on medical systems that aren’t designed to deal well with this. But also, the threat of litigation has served a real social function in the US in the lack of serious regulation. It has often forced companies to behave more responsibly than they would have otherwise for fear of being sued if they don’t (which isn’t to say that all class action law suits have merit, but a lot of them do, and they have served as a sort of rough and ready form of regulation/compensation, especially in the South). Now, of course, we are seeing efforts by Republicans to bring through “tort reform” which is a codeword for making it more difficult to bring through class action lawsuits. This campaign has been waged using some pretty dishonest rhetoric from the American Chamber of Commerce and others. It serves the twin purposes of keeping Republicans’ friends in business happy, and weakening a group (class action lawyers) who are heavy financial contributors to the Democratic party.
I have not read the book yet, but I have a question for professor Hacker: Is there some way to develop a risk index for different groups?
Years ago in one of my misguided projects as a statistical programmer, I developed a risk index for a large health care provider (their risk management department) [I then scurried back to higher ed as fast as I could, heh]
Great topic, look forward to reading it very soon; thank you for being here to chat with us, Henry.
In regards to indexing, one index that I find telling is the Transparency International Corruption Perceptions Index (TI-CPI). It is telling that the USA has fallen on the scale in terms of perception of corruption, and that many of the countries in which risk is more equitably distributed are those that are higher on the TI-CPI scale (seen as less corrupt). This isn’t the kind of information that the general public may digest readily without some crisp framing, but it can speak to the corporatists out there since they ultimately are more exposed to risk if corruption becomes more likely when risk is inequitable.
Iraq is now towards the bottom of the index. Little surprise.
egr — The 5% of foundation assets required to be given away may include expenses to give it away, if I’m not mistaken.
TRex, thanks for that about the CCA, wow.
If I may share a bit of my personal experience with regard to health care and insurance, I shall. Please scroll beyond this comment if it’s not relevant.
Upon being de-employed in June 2005, my health insurance converted to COBRA for 18 months, paid for by the State of California due to the nature of my disability. My former employer had to forgo its $8 monthly management fee to keep the monthly COBRA premium under the State’s $500 limit. At open enrollment (this month) my insurance administrator’s administrator announced new premiums, starting 11/1/06. These new premiums exceed the State’s $500 limit. Therefore, my health insurance will end November month-end, rather than December month-end.
At which point, CAL-COBRA engages, with lower administration fees and no middle-man insurance administrator’s administrator. For another eighteen months (until 6/1/08) and at a lower premium than the previous eighteen months, my health care needs are met by the State. The State will now pay itself to manage, administer, and bookkeep my health care.
The silliness continues, of course, in that my health care is provided by an agent of the State (ultimately) — a UCSF practitioner. Were I able to hand her cash each time I saw her (and were she able to organize her time without state constraints) all the middle-ness would be gone.
I do not understand this vast mechanism that is Non-HillaryCare, but I do see its idiocy, its cruelty, and its fraud from deep within its bowels and recesses. And that’s why I shared this; my view from inside, as all of yours from inside, informs my understanding of it better than the view of those who profit from it, lobby for it, and legislate it.
Like bankruptcy, health care woes will never strike those who legislate it. How have we come to this in America?
Is Professor Hacker related to Prof. Andrew Hacker? Both seem to have the same hard-edge reasoning.
TeddySanFran, yes the 5% can include some of the expenses.
The notion of rugged individualism is a blight on our country. This is seen in the failure of some to refuse government help because they feel that it is an individual acknowledgement of failure. Even when the cause of the trouble is well beyond their control, dust bowls, illnesses, factory closings, and such.
They have no problem with help from their neighbors or kinfolk, but fail to see that their countrymen are, collectively, their neighbors.
We need to press the issue, we need to learn to treat the common good as an ideal, not an aberration. No more “Army of One” oxymorons.
We need to be the teamwork nation, the many heads are better nation, the we can get through this together nation.
“Ask not what your contry can do for you,…”
egregious @ 55
That government action came in part because of pressure from insurers, same with seatbelts, because catastrophic care ate into profits. That may be one way in which feedback between government and the private insurers worked to decrease catastrophic injury, but, we’re now seeing this same impulse taken to extremes for the sake of profit–denying people employment (or insurance) because of smoking or even obesity.
Where exactly does that end? As genetic information becomes more greatly disseminated (and it will), at what point do we begin to deny people the same opportunities to live and work in society because they are a potential future liability? In the case of smokers, we can make reasonable limitations on their effects on the health of others without impinging on their right to work and otherwise participate in society, but, if the bottom line is the profitability of the insurer as a feedback mechanism, should that become an institutionalized model for all risks, which it is rapidly becoming?
This is one of the reasons why I have extraordinary doubts about any health system which depends upon for-profit insurers and hospitals. If profit is the determiner for policy, no good can result for society at large.
Henry- thanks for your answer. I agree completely that the threat of litigation serves a purpose in lack of serious regulation, as you say. Probably impractical/ impractible but I was thinking of something whereby punitive damages (medical) in some part might be funneled back to help support the costs of health care for all.
Montag at 66:
If I recall correctly, the first insurance organizations were co-ops started by the “animal clubs”, eg, eagles, moose, etc. And they were called something like “widows survivors funds,” or something like that. There is no reason, in my estimation, that the non-profit co-op model couldn’t be used for all “essential services” in our society, including health care, insurance, banking, etc.
This is a huge, evolving debate within the men’s gay community about personal responsibility to one’s partner, oneself, and one’s community with regard to HIV transmission. These arguments are made: our community must make it unacceptable for knowingly HIV-positive persons to transmit HIV. The 21st century concept of sero-sorting (having unprotected sex with those of the same HIV-status) evolved from the 1990’s “barebacking.” Barebackers who didn’t “use condoms every time” were demonized. Sero-sorters who don’t use condoms because they only have sex with same-status partners are hailed as the new non-transmitters: HIV Stops With Me!
Demonizing is the danger, but it can be socially re-constructed.
For instance, when I see a motorcyclist without a helmet, driving in the rain, I think, “Stupid.”
When I see a smoker, I think “Addict, and stupid.”
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Thanks for this discussion, all!
montag @ 67
Yes the profit motive gives them incentives not to pay claims. You are basically forced to pay into a system with no guarantee of payout in the event of catastrophe. This is what we are facing with Homeowners insurance in Louisiana. Homeowners is about 4 or 5 times what it used to be. The insurers won’t even insure you if you flooded at all. They are forcing everyone into the state coverage of last resort. This is going to kill our recovery if it continues.
Part of the problem I think with my preliminary research is that some of the larger compaines have de-mutualized. We used to have mutual companies in the sense that they were policy holder owned. They were beholden to policy owners not shareholders. These compaies competed directly with the publicly traded companies. I think this competition kept the big guys more honest.
Now all they want to do is take on the primo customers with the least risk of all. I think they should have to take at least a portion of the risky folks along with the primo customers. Dumping the risky folks on the state does not help things at all.
egregious - this is indeed one of the major problems of insurance systems with a mixture of public and private care. Unless there are strict rules preventing this, private insurers are likely to “cherry pick” the low risk candidates from the pool by offering them lower rates, eventually leaving universal providers with a pool of extremely expensive patients, who aren’t cross subsidized by the younger and healthier (if you’re an economist or a libertarian, this isn’t necessarily a bad thing; I happen to disagree). Jacob presents an interesting alternative scheme in his book, which he has worked out in detail elsewhere. If he were in the discussion, I would defer to him on this - he hasn’t been able to make it so far I suspect because of Thanksgiving travel problems. My own flight from San Francisco was cancelled last night, so that I arrived home to DC and my computer just 15 mins before the book club was due to start.
Valley girl - some kind of arrangement like this might be possible - but better in my opinion would be proper regulations that would impose serious penalties on employers or others who create the health risks in the first place, and thus give them incentive to stop doing it. There are a lot of really nasty workplace illnesses that are effectively unregulated - look up “popcorn lung” on Google for example.
sofistic 69 - these kinds of groups have been in existence at least since the Middle Ages afik.
montag @ 24
Bush had the gall yesterday to talk about the great work the “armies of compassion” are doing to help people affected by Katrina. I damn well hope some Democrats will seize on this to talk about how clearly it demonstrates that private individuals and organizations, while their work is commendable, cannot make up the slack when government abdicates its responsibilities, and furthermore, that all that tax money that the Republicans “gave back” to rich people and corporations didn’t, strangely enough, go to compassionate causes when they needed it.