If you need to know what side the press is on, read the trio of pieces from the New York Times, covering the spectrum of economic opinion from A to B: Mankiw tells us to cut spending into a down turn, Peter Bernstein urges that the banks should get every dime back from home owners, and Tyler Cowan, who was a cheerleader for catastrophe, tells us that it is no time for action because that would show a lack of confidence. In all, a crabbier group of failures couldn’t be highlighted all on the same day.

The reality is grimmer than this. At the same time Americans are congratulating themselves for electing an African-American as President, African-American unemployment stands at 11%. Barack Obama has moved upstairs to the White House, but the downstairs of the American economy is still unequally packed with those who have been afflicted with slavery, and then segregation.

One of the single most effective steps in changing the American economy would be a shift of the health care system to one is nationalized. The half-way house of mandates is already being rejected where it is tried. Even doctor’s, long the opponents of a shift in how medicine is paid for, are slowly coming to accept that the insurance companies are not their friends.

People think in terms of cuts, that is, they look at their own personal budgets and cut spending when in trouble, but to think like an economist, Stiglitz tells us, is to think in terms of trade-offs. Not "cut" defense spending, but move effort from making the F-22 fighter, to something else. The easier the shift, the faster we see the benefits of making the shift, and the less it costs. The reality of health care is that the current system puts about 5% of GDP in the hands of insurance companies to invest, as well as degrading care. The US spends about 16% of GDP on health care, while Germany spends approximately 11%. That is we could have a universal medical system, that we’d like more, and have 5% of GDP that would be spent on almost anything else, since currently it is going to administration, which produces no value, or to investments which are governed by the needs of matching payouts to health coverage costs, rather than being the most efficient use of the investment money. There’s no need for death by spreadsheet.

What joins the inequality of employment, and the need for a universal medical system? I think we all know that: the rate of being uninsured for non-Hispanic whites peaked in 2006 at 10.8% – and for African Americans at 20.5%. The change since then isn’t from an increase in private coverage, but expansion of Medicare, Medicaid, and military coverage. The fear that has been the core of almost every drive to stop the universalization of medicine, has been the fear that the flood of uninsured would lower care quality and increase wait times. The reverse is the case, the shifting of effort from actual health care delivery, to health care denial, means that we do not have as many doctors, nurses, technologists, machines. More demand for equipment would lower the cost by economies of scale, more people to run that equipment would increase access. Fewer people answering phones to tell you why you can’t have coverage, and more people answering alerts in hospitals. Fewer quants investing premiums, more people to search for ways of improving outcomes. Fewer lifestyle drugs, more drugs that save lives.

It also addresses one of the urgent economic crisis points: legacy costs in the auto industry, which Obama is promising to help. If the auto executives can get bailed out, and the insurance companies can get bailed out, then why, exactly, is it economically impossible to address one of the obvious inefficiencies in the American economy, one that costs us more than oil imports?

A universal medical system delivers, and delivers far more than pouring concrete, which is so uncontroversial that it isn’t being argued over. It shifts economic activity to more efficient investment, it provides better employment, it unburdens manufacturing, it reduces uncertainty among consumers, it levels out economic inequality, it eases the pressure caused by bankruptcies. The only thing that it has against it, is a white elephant of interest groups. This election we voted to get elephants off our back, the costs associated with financialized health care versus universal health care, is one of the largest ones.

There is a bill, Medicare for All, and a host of organizations fighting to pass it.


Related posts:

  1. Liveblogging the Obama Health Care Presser: Cost Control Up Front; Politics Pushed Aside?
  2. Senate Health Care Debate Liveblog
  3. Didn’t We Just Have a National Referendum on Obama’s Health Care Plan Last November?
  4. More for Health Care, Less for Insurance Execs? Rockefeller Demands 90% Loss Ratio
  5. Raising Their Rates, Health Insurance Companies Put Themselves in a Box