Sunday, September 20, 2009

Newsflash: New Guy Surprisingly Similar to Old Guy

So Obama gets elected and swoops into Washington with a big mandate and now the question for him becomes, how do I make all of my various sponsors happy? If you look at the proposals carefully you can see that the whole policy debate is shaped by this dynamic. What is consistently present throughout the policies favored by the White House is an effort to use tax money to subsidize the existing employer-based private system instead of doing the logical thing and taking the bite — for a bite had to be taken out of someone — out of the pharma and insurance industries.

As an added bonus for all of us, the “reform” will include individual mandates designed to significantly increase the insurance and pharma industry’s customer base. So in the end, what we’re looking at is a pair of handouts to corporate donors: tax subsidies to ease the cost of insurance for employers, and mandates to push more business to the health care industry.

-Matt Taibbi

Here's a fun fact: during the dueling Golden Ages of the '50s and '60s (depending on where you stood on the political/cultural spectrum), and for a few years before and after, the United States of America experienced one of the longest and most sustained periods of prosperity in its (or possibly anyone's) history. Wages rose, year after year. Homeownership became the default setting, even for the lower middle-class. The segment of the population able to attend college and get higher education exploded, and even those without a degree managed to live the middle-class American Dream, thanks to the efforts and sacrifices of labor and community organizers and the (perhaps enforced) largess of the massive companies that employed most people, who typically hired on somewhere and stayed there for life, taken care of by and invested in their workplace, where they were provided not only a living (and generally rising) wage, but benefits like pensions and health insurance. It was a good deal for everyone, lots of mutual back-scratching going on, where if you made the good faith effort to see that your employer thrived, your employer in turn saw to it that you had what you needed, both now and in the future, after you retired.

Then, somewhere around 1973, things changed. Since then, wages have been stagnant, which means that even if you make a little more money every year than you did the last, for the most part wage growth has, at best, just barely kept up with inflation. This means that even if you get paid more money (your cost of living raise), your purchasing power remains the same, because, thanks to the magic of inflation, that money is worth less than it used to be. This is why bankers and people at the Fed and at Treasury are always so on about curbing inflation, because even the rich and powerful with whom they lunch and play golf feel the effects of inflation, and they sure as hell don't want their money to be worth less than it was last year, just the same as you and your socioeconomic peers.

So what happened? Well, for one thing, corporate profits are up some 200% in that time, and executive pay has gone from an average of 42 times average worker pay in 1980 to 344 times average worker pay in 2007 (down from a high of 525 times average worker pay in 2000). But that's not the whole story.

The truth of the matter is, you have been getting those raises. It's just that, instead of getting them in the form of spendable cash, the money goes to your employer-sponsored health care. See, it's not just you who pays more for health care, though the magic of higher premiums and higher deductibles. The cost to employers goes up, too, to the tune of double-digit percentage increases every year. Right now, one out of every six dollars spent in the US is spent on health care. GM went broke thanks to its health-care (and, to a lesser extent, pension) liabilities, to the point where some $1100 of the price of every car they made was already promised, to pay for the ever-more-expensive health care of its active and retired workforce. That's just one example, and it's one of the reasons that health care reform is even possible now, because American industry, stuck offering health insurance by its own historical choices, is finding its ability to compete in a global marketplace hampered by its obligations.

Now, them on the right would tell you that the right thing to do is to back out of the deal and leave those folks high and dry. After all, to them on the right, if a person makes a bad decision, then that person must pay the price, and they will, as a general rule, be glad to stand around and hoot and holler while the punishment is being meted out. They love them some punishment on the right, so long as it's individual people (and poor ones, at that) being punished. Serves 'em right, they say, between cackles and hand-rubbing. But let it be a large corporate entity that makes said mistake, and consequences simply cannot be allowed to happen, for them on the right, whether they know it or not, are the tools of said corporate entities, and most of them don't even get compensated. They're like suicide bombers: they'll pay the price so their masters can make a buck (or a point).

But it's not GM's fault that health care keeps getting more expensive. It is, for the most part, the insurance companies' fault. The fee-for-service model, and the lack of competition, cause perverse incentives to be built into the system, making it more profitable for doctors to order unnecessary tests and medications, because that's how they make money. Not to mention the whole dropping you when you get sick because you had acne/toenail fungus/a headache once thing. There's a whole article in the September 2009 issue of the Atlantic that deals with some of this stuff, as well as make some recommendations as to what to do about it. I don't agree with all of the man's conclusions, but it's provocative stuff.

Health care reform is necessary. Of that there's no doubt. That we will not get the radical reworking we so desperately need is also not in doubt. What scares me is that we are likely to end up with a mushy middle-ground 'compromise' like the one in the Taibbi quote above that is the worst of both worlds. Yes, we'll probably get specific rule changes that, say, make it harder for insurance companies to deny people with 'pre-existing' conditions treatment or coverage, and they might even force health care into the information age, so that records are kept electronically, which with a few other common-sense, tinkering-around-the-edges-reforms could save up to $2 trillion (that's $2,000,000,000,000) over the next ten years. But if things go as they seem like they might, what we'll end up with is the individual mandate, in which you will be fined for not having health insurance, but without, say, a public option, which would be a (gasp! pearl-clutch! faint) government-run health care provider (like-gasp!-Medicare, or the VA) that would, ideally, be able to engage in economies of scale and common-sense cost-saving measures in order to deliver a better product at a lower price, which would provide a benchmark against which private insurance could (and should be made, imho) to compete. So the insurance companies are rewarded for their years of fuckery by a vastly expanded, captive pool of fuckees who are now required by law to buy their product, without an effective counterbalance to the new fuckery that will inevitably result.

See, I'm a big believer in capitalism, despite any appearances to the contrary. I think that insurance companies that say they couldn't compete with a government-run health plan aren't trying hard enough. I think they lack faith in American ingenuity, which managed to go from Great Depression to Kicking Fascism's Ass in less than a decade, and, as such, have shown themselves to be the parasitic, anti-American scum that they are.

I guess I'm like the folks on the right, except opposite. I'm for giving people, living, breathing, fallible-but-trying people another chance, especially when they find themselves in a bad situation through no fault of their own. But cold-blooded corporate entities whose food, air, and water is the sweat of the working man's brow and the product of his labor? Fuck 'em. Evolutionary conditions change, and those that can't adapt will perish. And when they do, something will arise from their ashes that can do the job for a fair price, and I will be the first one to sign up.

Capitalism works. It really does. But the rules have to be set up to where the right people win. We got out of the jungle, and we built this nice city to live in. We should start acting like it. As for Barack Obama, well, I'm willing to reserve judgement for just a bit longer, but he sure is starting to look like more of the same, just another politician, even if he does give good speech. We didn't elect him to hand the insurance companies another few quarters of unsustainable growth at the expense of middle- and working-class prosperity, much as we didn't elect him to continue Bush's policies of domestic surveillance or Wall Street's continued rapacity. We sent him to Washington with the expectation that he'd do what he said he would. It's high time he started.

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