How Deep Is The Ocean?

I just returned from Western Pennsylvania, where I lived for twenty years. This was the western Pennsylvania that inspired President Obama's "guns and religion" comment and John Murtha's description of the populace as "racist rednecks". Each wave of recession that swept over the national economy took a little more from the area- a few more businesses, a little more paint off the houses, a few more young families out of the area in search of better jobs.
But this time, I had been away for nearly a year, and in the interval the national economy experienced something between a depression and a recession. In western Pennsylvania, the "something" clearly resembled the former rather than the latter. It was like homecoming after the apocalypse. The town where I used to live had been hollowed out- abandoned, boarded up houses gapped like missing teeth in middle class residential neighborhoods; over half of the store windows were empty. Groups of men and boys smoked cigarettes on street corners and in front of convenience stores. The color of the street corner loungers was white; one of them wore a "KKK" baseball cap. Except for that, I could have been could have been in Detroit's inner city.
The national media had, for at least a month, been proclaiming that economic recovery had begun. Housing starts were up; the stock market had stabilized; the surfaces of the national political economy were regaining their former shine. Even the optimists admitted that problem areas remained: consumers were reluctant to spend, the unemployment statistics were still upsetting; rates of mortgage foreclosure continued to increase. But, on the surface- which is to say at the top- things have been looking much better.
And this is the precisely the problem. Most politicians, policymakers, economists and social scientists focus on the political economic surfaces. We suffer from paradigm-blindness: we don't see anything beyond the accepted statistics, beyond the boundaries established by the latest Research Funding Proposal, beyond the t0pics that speed us to publication.
Focusing on the surface, we have lost sight of the bottom. We respond quickly to difficulties that show up on the surface. Reports, policies, and papers chart the difficulties and devise solutions to return us to something more like normal.
But beneath the surface, an invisible process goes on: the bottom is steadily eroding. As the lives of individuals, sectors, and geographic regions at the bottom deteriorate, we miss the signs because we focus entirely on the surface. The bottom has been eroding for years.
The signs of erosion are there to read. They've been there for years. There is the increasing number of the uninsured. There is the rising number of families that juggle two, three, four minimum wage jobs. There is the increased need for minimum-wage working families to depend on food banks, rental assistance and even homeless shelters to survive. There is the increased gap between the wealthy and the middle class. There is the massive loss of the family homes that served as primary asset for those at the bottom. But we've learned to ignore all that.
And so, as the waves stop and the yachts return, we anticipate a return to smooth sailing. But this is the thing about an eroding bottom: when the waves return and boats on the surface begin to capsize, a deeper ocean is a more dangerous place to tread water until help arrives.

Protests and Paradigms

In today's Wall Street Journal, John Goodman explains the town hall protests against health insurance reform, arguing that these protests are not "organized" but represent an outpouring of genuine popular opposition. The truth of his assertion depends on how one defines organization.
In fact, the current health reform debate is simply the most recent iteration of a long term organizing project. This project has been a resounding success: it has generated a paradigm that organizes virtually all discussion about inequality in the United States.
Paradigms are powerful precisely because they are invisible. They define what questions can be asked and what answers are acceptable. They organize data, true, but are more important in that they organize the way that data are gathered.
Paradigms are like invisible fences: you don't notice them as long as you stay inside, but if you try to move beyond them, you will be unpleasantly reminded that they exist. The current health care debate has moved too close to the edges of the paradigm: the public protests are, like electric currents at the edge of invisible fences, intended to shock us back inside.
In the United States, the development and implementation of social policy is organized by a paradigm that privileges differences over similarities. It specifies that the first question to be asked by social policy ought to be "can we do without it?" and that the second ought to be "if we have to have it, how can we limit its benefits to the smallest possible number of recipients?" Just as the Aristotelian/Ptolemaic view of the universe meant that questions that began "but what if the earth revolves around the sun..." were either heretical or silly, the American social policy paradigm selects against universalist questions that begin "but couldn't we provide service for everybody?"
The current social policy paradigm emphasizes small payoffs to selected groups of the needy, and large payoffs to selected groups of the more affluent and more powerful. An example: the internal revenue code offers mortgage interests deductions to virtually all middle-class homeowners, but housing assistance programs for low-income individuals and families are managed through programs that operate more like public assistance, making them relatively scarce and relatively hard to access. The prevailing social welfare paradigm consequently rewards cleavages and penalizes unity.
Once in place, paradigms are "sticky": like bad house guests, they hang around long after they have ceased to make a positive contribution. The United States social welfare paradigm has political implications- it guarantees that the most influential players will continue to be those that require the least assistance from social policies. And this, in turn, means that the future distribution of sticks and carrots is unlikely to change.
The American paradigm has another unfortunate feature. It structures the process of comparison. This is evident in the rhetoric of the current health care debate: protestors do not compare their situation to that of less fortunate individuals and ask what could be done to assist them. Rather, they compare their current situation to that which might prevail in some feared future. Similarly, protestors - and even policy analysts like Mr. Goodman- do not compare the United State's provision for low-income individuals with that of other nations. Rather, they focus on their personal satisfaction.
The operation of this paradigm is evident, for example, in Mr. Goodman's assertion that 84% of the individuals in a recent survey were happy with their health insurance. A genuinely comparative perspective would ask questions about this report: Was the sample comprised only of insured individuals? If not, were the uninsured respondents happy with their situation as well? Did the respondents understand the implicit choice to be one between their insurance and no insurance? Were they given the option of choosing between their insurance and the more comprehensive and less expensive plans offered, for instance, in nations like Switzerland?
This brings us back to the town hall protesters. They turn out to be organized after all: they are kept in line by the invisible paradigmatic fence.
To see Goodman's article, go to:
http://online.wsj.com/article/SB10001424052970204884404574362333085067364.html

A Portrait of the Uninsured

This op-ed in today's New York Times makes it clear that the uninsured are not primarily individuals who earn enough to afford insurance but have voluntarily chosen to forgo it.
http://www.nytimes.com/2009/08/23/opinion/23sun1.html

Interesting Paper on Basic Income

If only academics could learn to put interesting ideas into more vivid prose! This really interesting article by Claus Offe contains a thoughtful analysis of the ways that a basic guaranteed income affects labor contracts. Translation: If everyone was guaranteed a minimum income, would they all just stop working? And how would this affect relationships between workers and employers? For my money, it's worth trekking through the dense prose to get to the relevant ideas.
http://www.bepress.com/cgi/viewcontent.cgi?context=bis&article=1100&date=&mt=MTI1MDcxMjMyMA==&a

Subprime Contagion and John Donne

Remember the very early phases of the subprime crisis? I've been working with some others on a project that examines the way that very early media accounts framed the crisis. It's fascinating. The New York Times stories that we have studied thus far have two main themes: first,that this is a crisis that affects primarily minorities and, second, that the crisis is unlikely to "spread" to the rest of the economy.
What to make of this? Well, the economic sages were clearly wrong: the entire economy was eventually implicated. There were clearly some problems with economic policy . The widening circles of crisis have many technical explanations: the repeal of the Glass-Steagall Act, the explosion of collateralized debt obligations, regulatory capture and so on. From this technical perspective, strengthening the economic levees is the solution. But the economic sages missed a bigger picture.
The real difficulty is far more than technical. It is rooted in the idea that there are "segments" of the national political economy. As a nation, we believe that John Donne was wrong: we believe that we live in economically and socially constructed tribes on islands in the national ocean.
Some people's islands, of course, are not as nice as ours. The natives have bad financial hygiene, they are needy and they have customs that we find unappealing. If we allow them to leave their island, they will become vectors of dis-ease, and even if we don't the pollution that they create on their island can spill into the ocean and cause us problems.
This sort of thinking is not confined to this period of history or even to this nation. Historically, each of the various versions of the British Poor Law represented new strategies for keeping the poor on their island. And a great deal of the "altruism" that motivated earlier reformers in American history turns out, on closer examination, to be something more like fear of contagion.
Sometimes the feared contagion was physical, like the slum clearance efforts of the Progressive era that were intended to reduce the spread of tuberculosis and typhoid. Sometimes it was racial, as when slum clearance became an explicit effort to break up black communities that were located in neighborhoods that the wealthier wanted to colonize.
In the past decade, as income inequality has risen to a point not seen since the Gilded Age, the feared contagion has been economic. Gradations of wealth have sorted residents into tribes. And, as initial policy responses to the subprime crisis demonstrate, policymakers have become increasingly preoccupied with crafting measures to prevent the problems of impoverished islands within our economy from spreading.
They have been especially preoccupied with enacting policies that strengthen the dams that shore up the high water at the upper ends of the income distribution. Because if the dams broke, floods, rather than trickles, might be released to equalize things.
But, really, shouldn't this crisis have taught us something different? Shouldn't we have learned that we only pretend to live on islands, and that in fact, we're all in the ocean together? Shouldn't we be willing to admit that John Donne was right?

No Public Option and Publics With No Option

Remember the psychological experiment in which participants were asked to press a button that would cause pain to someone whom they could not see? The results were depressing: those with the button were quite willing to cause pain, ratcheting up the voltage with abandon.
As a nation, we are experimenting with social policy along these lines. The removal of the public option from health care reform is one more upward tick of the voltage. Some people may feel pain, but they are, after all, people whom we have learned as a society not to see.
Most of the individuals and families who are are uninsured fall into one of two groups. One group is uninsured because they lack employer-provided coverage and are unable to afford or unable to be approved for private plans. A second group is uninsured because their employers offer plans that require contributions that are too high or because employer plans will not accept individuals with specific pre-existing conditions.
This is what we know about the uninsured. About 79% are citizens, according to a 2005 report by The Office of Health and Human Services. Blacks are slightly over-represented in relation to their proportion in the population, comprising 12% of the population but 15 % of the uninsured. . Hispanics are considerably over-represented, comprising 14% of the population but 30% of the uninsured. Whites are under-represented: they make up 67% of the population but only 47% of those without insurance.
Most uninsured individuals are below the age of 35, and the vast majority, work at full (46%) or or part-time (28%) jobs. Although some are relatively wealthy individuals whose incomes are above 300% of the poverty line, over half have earnings that place them below 200% of the poverty line. And some of the individuals in the wealthier group may have pre-existing conditions that make them unable to obtain insurance.
It is important to note that most individuals are not chronically uninsured. For most, the lack of insurance comes and goes with job changes or with changes in the terms of employer-offered benefits. Here, something like a lottery structures their ability to afford medical care.
And many other individuals, of course, are underinsured or simply lack the financial resources to meet co-pays in the face of catastrophic medical expenses. These individuals help account for the very high proportion of personal bankruptcies attributable to medical costs.
But, like addicts in a state of denial, we as a nation have learned to see only what serves our purposes. Our addiction is to the status quo, and what we have learned not to focus on is the pain suffered by those who lose under the current arrangement.
Like any practiced addict, we don't just deny. We rationalize and justify. Just as every addict can explain fluently why his or her situation is unique, why that case of beer finished in one afternoon does not, in his or her particular instance, constitute binge drinking, opponents of public health insurance can explain why they are not morally bankrupt.
We explain that the uninsured could get better or steadier jobs; that they could eat more tofu and less Cheetos; that those who have insurance should not be forced to pay taxes to support losers; that no-one that whom we know personally has these problems or, alternatively,that if they do it's because they were not as careful as we were. And many of these uninsured individuals belong to groups that make us uncomfortable in any event.
And we have another problem.
Like good addicts, we have developed an attachment to our suppliers. They've done well by some of us, after all. As long as you have money to pay, the dealer is your pal. We know what we need to do to keep the arrangement going. And our suppliers have said they feel the pain of the uninsured- they're going to help them out. Oh, sure, we'll still be addicts, but the suppliers will try to arrange things so that our buzz isn't ruined by noise from the losers outside.
These suppliers- the insurance, pharmaceutical, and medical industries, along with their representatives in Congress- assure us that they will co-operate on a solution. We can continue to use, but it will be a kinder, gentler sort of addiction. And how long will this co-operation last? If history is any example, just until the impetus for reform begins to nod out.
Any recovering addict can tell you this: for an addict, supply creates its own demand. One is too many and a thousand is never enough, the saying goes. You either quit or you don't. In the end, the surest -and in the case of health reform the only- route to recovery is to go cold turkey.

Let Them Eat Tofu: Whole Foods CEO On Health Care Reform

John Mackey, the Whole Foods CEO, channels Marie Antoinette in his 8/11/ 09 Wall Street Journal editorial on health care reform. Marie, at least in the apocryphal story, was told that the peasants had no bread and responded "let them eat cake." Mackey has updated Marie's message, but retained her logic.
In Mackey's updated version, uninsured Americans substitute for hungry French peasants. The alternatives to reform that he suggests substitute for cake. The cake has three main ingredients.
First, Mackey argues that adjustments to the tax structure would solve a great deal of the problem. Legal obstacles to health care savings plans could be repealed. Individual contributions to help the uninsured could be incentivized through the tax code. The tax status of individual and employer-provided plans could be equalized.
Each of these propositions has its own difficulties. HSA's, first of all, are rarely provided by low-wage employers and they are rarely attached to temporary jobs and, secondly, would not be particularly useful for families where virtually all income goes toward housing, utilities and food.
As to the role of the tax code in stopping the stampede of well-off Americans who would otherwise be contributing to health care for the uninsured...a determined philanthropist would hardly be put off by existing arrangements. And, finally, Mackey does not tell us in what direction he would like equalization to occur--should individual plans (which are not affordable for many families in any event) become deductible, or should employer-provided benefits be taxed?
Mackey's second set of suggestions involves providing more assistance to a truly beleaguered sector - the insurance industry. Insurers, he opines, are hampered by their inability to compete across state lines and by federal mandates that require them to provide coverage for certain individuals who are at higher risk.
The last point, of course, is just silly: granted, rates might decrease somewhat if risks could be excluded, but what about the people who are insured only because of these mandates? Wouldn't their repeal increase rather than reduce the number of the uninsured? As to the first point, it is possible that competition might occur, but given the relatively small number of insurers and the strength of their common interests, it seems more likely that this would increase the probability of cartel-like behavior that would further harm consumers.
And so we come to Mackey's third line of argument. This is quite innovative: people who become ill have only themselves to blame. Individuals who eat a healthful diet and maintain a healthful lifestyle are unlikely to become ill, he assures us. Well, sometimes this works out, although often it does not. Does Mr. Mackey, who is presumably the poster child for this line of argument, bother with insurance for himself and his family? After all, they would hardly need it.
This argument does, however, provide an anodyne for any lingering idea that we might, as a society, have any obligation to help those in need of medical care. Of course, those uninsured low-wage single moms who drag themselves home after 8 hours of, say, lifting, turning, and bathing patients in a nursing home may not have the energy to fix a tasty, plant-based, low fat meal for themselves and the kids, even if they had the money to buy the ingredients or a way to the nearest organic market. And they might even be a little stressed from the various difficulties in their lives, although Mr. Mackey does not factor in this empirically-verified cause of health difficulties.
But never mind. Mr. Mackey is not making an empirical argument at all. His concerns are normative. He is, after all, both CEO and political philosopher, as we discover at the end of his argument. " Many promoters of health-care reform," he tells us," believe that people have an intrinsic ethical right to health care—to equal access to doctors, medicines and hospitals. While all of us empathize with those who are sick, how can we say that all people have more of an intrinsic right to health care than they have to food or shelter?" And he assures us that a "careful reading" of the Declaration of Independence and the United States Constitution will demonstrate that no such right exists.
Now, I'm no political philosopher, but I recollect something in one of them about the right to "life", right there with " liberty" and "the pursuit of happiness." Is it just me, or is it hard to sustain life without food, shelter or medical care?
Cake, anyone? John Mackey has lots for sale, and some of it is even organic.
To read Mackey's editorial see

http://online.wsj.com/article/SB10001424052970204251404574342170072865070.html

He responds to the furor over his article in the following selection from his blog:
http://www2.wholefoodsmarket.com/blogs/jmackey/2009/08/14/health-care-reform-full-article/#comments
For my money, this response simply makes things worse!

For a report on the demographic characteristics of the uninsured see
http://aspe.hhs.gov/health/reports/05/uninsured-cps/index.htm#Conclusion