Contributors

Saturday, June 18, 2011

Three Dogmas that Don't Hunt

Trickle-down economics. The war on drugs. Private health insurance. These three staples of conservative dogma have been tested for decades and have all failed to deliver on their promises.

Trickle-down economics is the theory that tax cuts for corporations and the wealthy will create jobs. It didn't work in the 80s when Reagan introduced it (and George H. W. Bush dubbed it "voodoo economics"), and it didn't work in the 2000s when George Bush introduced his tax cuts for the wealthy. In fact, some of the most prosperous times we had were in the 50s and 90s, when tax rates were higher than they are now.

The reason tax cuts don't create jobs is that corporations don't create jobs just to be nice. They do it to make money. And for the last 30 years it has been cheaper to create jobs in China, Singapore, Malaysia and Viet Nam. The only way jobs will be created in the US is to even the playing field, by raising the standard of living (and wages) in Asia, or by wage and benefit laws (as Europe does), or by restricting free markets in some way (which China and other Asian economies do), or by lowering the standard of living (and wages) in the United States.

The Republicans have been working to drive US wages down for years, and their efforts are now bearing fruit.

Employers constantly complain that immigration desperately needs reform because they can't find employees to do grunt work for slave wages, or high-skill labor for slave wages.

They have pretty much destroyed most private sector unions, and now they're working on public employee unions. They're hard at work destroying unions in the last sector of manufacturing where the US actually has a healthy export market -- aircraft -- with this Boeing flap.

Driving down wages in the US is ultimately foolish. This is the most desirable market in the world because we're so consumer driven. But if our workers aren't making any money, they can't consume. That's why Henry Ford starting paying his workers fair wages -- he realized that people had to make enough money to buy his cars.

Most of the people running American corporations today aren't like Henry Ford. Most of them didn't actually start their businesses. They either inherited the wealth (like the Koch brothers and Donald Trump), or they're just hired gun CEOs. The Fords of today are guys like Bill Gates, who happens to think that rich people don't pay enough taxes.

The war on drugs is another failed boondoggle. Declared by Richard Nixon in 1971, it involved military action in foreign countries where drugs are produced, drastically increasing prison sentences for drug offenses in the US, and even confiscating assets of people merely suspected of (not convicted of) drug crimes.

It has been an absolute failure. Our prisons are full. Mexico is practically a failed state because the criminals smuggling drugs into the US run rampant there. And drug use is unabated. We learned the lesson with Prohibition, why are we so dim-witted on drugs?

Lastly there's health care. The United States almost had socialized medicine in the 1950s. But many corporations at that time decided to provide health care as a fringe benefit, a cheap (at the time) recruiting tool. Since then, health care costs have been rising much faster than the general rate of inflation.

Countries like Sweden, France, Germany, Australia, Canada, Japan and New Zealand spend much less than the United States on health care. They all have socialized medicine, and all have higher life expectancy rates. Some claim that this is due to more homogeneous populations and cultures, but that's wrong: Canada, Australia and New Zealand are immigrant nations like the United States, with a majority European ancestry, plus small indigenous populations and a wide variety of other ethnicities.

Some people blame rising health care costs on expensive new technologies. The odd thing is, similar technologies have increased productivity and reduced costs in all other industries in the United States. You would think that better imaging would drastically increase diagnostic accuracy and efficiency. New non-invasive arthroscopic surgical techniques have revolutionized orthopedic medicine: patients who underwent procedures that put them in the hospital for weeks 20 years ago now walk out the same day.

With all those advances, how can modern medicine be so much more expensive (in real terms and in terms of percentage of GDP) than it used to be?

The two big reasons are the health insurance model, and the health insurance companies themselves.

Insurance is just the wrong idea. Health care isn't like getting hit by a hurricane -- everyone will use health care, no matter how healthy they are. We all need immunizations and regular medical checkups, we all come down with colds, we all sprain our ankles, we all have children (or were once children). We all face the same dangers from epidemics like swine flu or E. coli outbreaks. The vast majority of us will have some kind of disease or require some kind of treatment for a non-trivial ailment, and the sooner we discover our problems the cheaper they are to deal with. And we all get old.

It behooves us all for everyone to be healthy -- sick coworkers cause us more work and cause employers to lose money. So it just makes sense to pool our resources to fund our common health care, the same way we pool our resources to fund fire and police departments. Certain individuals use the police and fire departments more than others, but we all contribute the same (unless we abuse those services).

But health insurance is a big business, and a very profitable one. These companies suck up a third of all our medical expenditures, and they're pure overhead. A bunch of useless corporate fat-cat bureaucrats, they decide who lives and who dies. And, like any big business, the only consideration is how much money they'll make. If denying coverage to those who need it most means a 20% boost in profits, that's what's gonna happen.

So, why do these three ideas retain so much currency among conservatives even though they haven't worked in 30 or 40 or 50 years? To quote Deep Throat from the Nixon era: follow the money.

11 comments:

juris imprudent said...

Employers constantly complain that immigration desperately needs reform because they can't find employees to do grunt work for slave wages, or high-skill labor for slave wages.

No wonder you work in the public sector if that is how you view every single fucking business in this country! And slave wages? Must be something like social justice - because it is an plain oxymoron otherwise.

The war on drugs is another failed boondoggle.

Funny how you only mention Nixon in reference to this. Yes I completely agree that it is past time to declare victory in this war and bring the troops home (just to emphasize how brain-dead the "war on..." concept really is). The collateral damage from this 'war' vastly exceeds any imaginary benefit from it. So who, besides us crazy-ass libertarians, and a few odd conservatives are behind shutting it down? Name me one national liberal that says we should stop this and take a radically different approach? I will note, for once, you are really preaching heresy to your choir. Good on ya! [Just watch out for the blowback.]

juris imprudent said...

[Had to split my comment]

Canada, Australia and New Zealand are immigrant nations like the United States, with a majority European ancestry, plus small indigenous populations and a wide variety of other ethnicities.

The percentages of non-european ancestry in those countries is much smaller than the U.S., where that ethnic descriptor is only slightly above half of the populace, and falling. In CA already, "whites" [which is what you are saying] are less than half of the populace.

But many corporations at that time decided to provide health care as a fringe benefit

No. It was a union-supported law that created the tax incentive for corporations to offer it. Also, the social model of the 50s was you went to work for a business and most likely stayed there for all of your work-life. Does that bear much resemblance to our current world?

The two big reasons are the health insurance model, and the health insurance companies themselves.

Funny how you skipped right over practitioners of medicine. How well compensated were they in say the 30s-50s compared to the last 30 years? How has the AMA controlled the number of new doctors trained and admitted to the market place? How much did a doctor's office visit cost in the 50s relative to today? No diagnostics - just sit down and talk to your doc?

Why do doctors run un-necessary tests? Is it because of liability concerns - you didn't mention that either.

So you leave out to large components (and maybe not the largest - but you ignore them entirely) and leap on evil insurance companies.

Insurance is just the wrong idea. Health care isn't like getting hit by a hurricane

Getting cancer is like being hit by a hurricane. Putting a new roof on my house because it is old isn't paid for by home insurance. Painting the exterior, or furnishing or new appliances aren't paid for by insurance (unless my house was destroyed by fire or hurricane).

You damn sure show why this debate is screwed up - because you think "insurance" should take care of routine stuff (in health care) that no one would assume to be true for homeowners or auto.

Think of health insurance in terms of why you have home or auto and it is for safety against catastrophe, not to take care of every little thing. Think of health insurance this way and it is absolutely insane to have it tied to employment. Think of health insurance this way and stop expecting that every medical expense you have should be paid for by someone else.

Because that is what insurance does - it pays for your losses out of a pool of shared risk. It isn't some magical pot of corporate money, it is everyone putting in - betting they won't really need to use it.

Socializing medicine just says everyone pays in a share of the pool (for all costs, not just major injury/disease) and most people will not get back what they put in. It is cost-transfer, just like income-transfer - and idiot 'levellers' just love that.

Anonymous said...

Actually, I was just hoping that the comments would stay at zero.

Mark Ward said...

Juris, Nikto worked in the private sector for thirty years and has extensive knowledge of how business works.

Larry said...

He sure as s*** doesn't show it, that's for sure.

juris imprudent said...

My apologies. That commented sounded so much like you M. Sorry to realize that N is as profoundly ill-informed. Obviously neither he nor you read the article I linked about job creation. The real question is, why do I expect better?

I do know now that my question as to what leading liberals have come out against the War on Drugs will be for naught (since N never engages in comments). Which means another correction - M is not attempting to change liberal/middle of the road/conservative thought on drugs. That was a bit of a surprise to me, oh well.

Anonymous said...

They're hard at work destroying unions in the last sector of manufacturing where the US actually has a healthy export market -- aircraft -- with this Boeing flap.

Ah, I see... so in your opinion Boeing shouldn't be allowed to expand in to right-to-work states, but should be required to stay in union states forever?

juris imprudent said...

So, Nikto throws out the utter stupidity that the War on Drugs is a 'conservative' position, and then neither he, nor anyone else, can point out the liberals that are calling for its end? Does the stench of unvarnished partisanship rise much higher? I can cite Buckley and Friedman as conservative/libertarian opponents to the WoD - where is your liberal/progressive leadership?

Still unclear on why the WoD is worse than the drugs themselves? Google Jose Guerena.

Mark Ward said...

Well, it's pretty simple, juris. The liberals are wrong in the case of the war on drugs and Buckely and Friedman are 100 percent correct. This would be an example of how fucking brain dead Democrats are on an issue. Prohibition never works and it never will. All drugs should be legalized and available to purchase with a doctor's prescription.

There is this bizarre notion out there that, if this happens, everyone will be high all the time. I wouldn't take heroin if it were legal, would any of you? With so many drugs available via prescription, the illegal ones now are pretty trivial when you think about it. If they were legal, the could also be regulated and taxed and would eliminate a whole host of other problems we have including (but not limited to) health care costs and debt.

juris imprudent said...

Well, not a thing I can really disagree with there, save perhaps the doctor's prescription bit. I certainly don't need that to buy alcohol. Nice to hear you admonish your own side for a change.

Anonymous said...

We all need immunizations and regular medical checkups, we all come down with colds, we all sprain our ankles...

Ah yes, the "inflexibility of demand" canard. Although you don't seem to be able to get your head around the notion that not everyone assigns the same priority to a cold or a sprained ankle, and a lot of people don't bother with regular scheduled checkups, even if the price is already bundled into what they've already paid.

So are you saying that everyone must treat health issues with the same priority? Or only that we all have to pay for those priorities whether we consider them important or not? Are you going to demand the arrest of the person who misses the appointment for their checkup?

It behooves us all for everyone to be healthy -- sick coworkers cause us more work and cause employers to lose money. So it just makes sense to pool our resources to fund our common health care, the same way we pool our resources to fund fire and police departments.

Ah... so what you're saying is that in the same way we all pay for a fire department because a neighbor's fire can quickly become your own, we should all pay for health insurance because a coworker's cold can quickly become your own.

In short, you're demanding that everyone assign the same priority to a cold that you do... and that someone whose work keeps him alone nearly all the time be required to pay for a contagion risk he is in no danger from.

Certainly it "just makes sense" to pool resources and share risk, at least for most people. That's how insurance came to exist in the first place. Does "it just makes sense" automatically equate to "we should have the authority to arrest everyone who doesn't do it"? That's what "government mandated" means, no?