PAUL KRUGMAN DOUBLE SHOT

Two from the left-leaning Princeton economist/New York Times columnist.

Losing Our Country

I'll have more to say on that another day, but for now let me just point out that middle-class America didn't emerge by accident. It was created by what has been called the Great Compression of incomes that took place during World War II, and sustained for a generation by social norms that favored equality, strong labor unions and progressive taxation. Since the 1970's, all of those sustaining forces have lost their power.

Since 1980 in particular, U.S. government policies have consistently favored the wealthy at the expense of working families - and under the current administration, that favoritism has become extreme and relentless. From tax cuts that favor the rich to bankruptcy "reform" that punishes the unlucky, almost every domestic policy seems intended to accelerate our march back to the robber baron era.

It's not a pretty picture - which is why right-wing partisans try so hard to discredit anyone who tries to explain to the public what's going on.

These partisans rely in part on obfuscation: shaping, slicing and selectively presenting data in an attempt to mislead.

Click here for the rest.

Obfuscation and sophistry, ain't that the truth. What people don't understand is that their economic situation has at least as much to do with specific, conscious policy decisions as it does with "the way things are." That is, there is a certain amount of economic reality that is simply out of the control of lawmakers and business leaders, but there is a geat deal of that reality that exists by design. So, while neo-liberal apologists rail away against virtually any government intrusion into the private sector, their allies in government are busy enacting policy which stacks the legal deck in favor of the wealthy, at the expense of everybody else. In other words, this government-out-of-business attitude is a hypocritical sham. The wealthy love the government, as long as it's working in their interests, and they use their power and influence to make sure that it does so. There's a reason that so many people are living on loans and credit cards, working for ever lower wages in the ever expanding service sector, and it's not because of the "economy:" laws have changed such that big business is now able to take the lion's share of the wealth created by hard working Americans. That's our money, damn it, and what has been destroyed by law, that is, the middle class, can just as easily be recreated by law. It's high time that this happened.

One Nation, Uninsured

Sixty years later, the patchwork system that evolved in the absence of national health insurance is unraveling. The cost of health care is exploding, the number of uninsured is growing, and corporations that still provide employee coverage are groaning under the strain.

And

The great advantage of universal, government-provided health insurance is lower costs. Canada's government-run insurance system has much less bureaucracy and much lower administrative costs than our largely private system. Medicare has much lower administrative costs than private insurance. The reason is that single-payer systems don't devote large resources to screening out high-risk clients or charging them higher fees. The savings from a single-payer system would probably exceed $200 billion a year, far more than the cost of covering all of those now uninsured.

Click here for the rest.

Not only is healthcare in the US a major crisis, it is a prime example of the failure of captalist "market" principles. The goal here is social: three quarters of the population want universal coverage. However, the "market" is ill suited to accomplish this goal--there are numerous differences between the economics of healthcare and the economics of say, selling soap. I'm not ready to go into a detailed analysis, but Atrios of Eschaton, who is by training an economist, once made this statement about the issue:

A rather smart person recently clarified the whole health insurance issue to me -- what we call health insurance in this country has little resemblance to actual insurance, and thinking about it as an insurance problem largely muddies the issue. What we have is a health care delivery industry, with little divide between the providers of health care and the providers of health insurance. It's all one tangled mess, and the incentives are completely skewed across the board.

Yet public discourse on the issue tends to be in terms of "markets." Understand this: healthcare is just not a "market" in any sense of the term that is popularly understood. Consequently, "market" solutions are doomed to fail. The only way out of this mess is through massive government intervention, and cries of "socialism BAD" won't do a damned thing to change the fact that the market has failed so badly in this sphere that even big corporations are suffering.

It's like building roads. If the government didn't do it, private companies would certainly pick up the slack, and even get rich at the same time. But there would be no coordination or public accountablity: the resulting crazy quilt of roads would poorly serve the public and general business interests, and too bad if you don't like it because the road companies are making lots of money with their private sector enterprise. Why should they do something for which there would be little or no profit? The government has to build roads or chaos would ensue. And chaos is exactly what we have as far as healthcare is concerned. Really, the only people standing in the way of universal coverage are the private sector interests who profit from the current chaos. That is, the insurance companies.

Screw 'em.

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