Robert Scheer’s “Big Whoop”

(9 am. – promoted by ek hornbeck)

This is a commentary about Scheer’s piece in today’s Alternet, amidst the ongoing talk about “health insurance reform.”  Generally, this diary re-asks the question inspired by Scheer’s piece: what’s the deal with cost issues?  Or, more specifically, we ought to be asking: why doesn’t the government just put this one on the credit card, like it does with banking and defense?

(Crossposted at Big Orange)

I would like to redirect eyes, briefly now, to Robert Scheer’s piece in today’s Alternet: “Big Whoop: 1 Republican Signs on to Watered-Down Health Reform, and the Media Gets in a Bipartisan Tizzy.”  This piece comes amidst general concern about “watering down the public option,” concern one can also read in TomP’s diary of yesterday.

Scheer’s argument is briefly given in one of the paragraphs toward the top: this is all a big distraction.  Health insurance reform is a farce.  Scheer’s question about why now and not when we’re in a “growth economy” is more of his self-identification as a believer in capitalism — there’s really no assurance the “growth economy” will ever come back to the US in any significant way, what with three decades of declining growth.  From the Monthly Review:

In an article on “The Centrality of Finance,” in the August 2007 issue of the Journal of World-System Research, MR and MR Press author William K. Tabb writes:

   

Real global growth averaged 4.9 percent a year during the Golden Age of national Keynesianism (1950-1973). It was 3.4 percent between 1974 and 1979; 3.3 percent in the 1980s; and only 2.3 percent in the 1990s, the decade with the slowest growth since World War II.

So yeah, there’s nothing to back up Scheer’s faith in some imagined future “when we have a growth economy.”  But there’s some substance to Scheer’s piece anyway.  Referring to the Baucus bill, Scheer argues:

The main thrust of the proposal is to forcibly submit even more customers to the tender mercies of the insurance industry while doing nothing significant to cut costs. Insurers will now pretend that the burdens on them are onerous and will demand concessions to make this an even bigger boondoggle for the medical profiteers than George W. Bush’s prescription drug coverage initiative.

OK, fair enough.  The insurance companies are, then, planning a big and permanent subsidy for their industry, to cement their position over and above the rest of us mere unsubsidized peons.  Federal Romneycare, if you will.  Now, that’s not a distraction — that’s new mandates for many of us, plus a new set of overlords.  Mandates, no public option, no real control on denials, dubious controls on insurer misbehavior, and so on.  People can’t hear or read this stuff enough, IMHO.  But then there’s this curious paragraph toward the end of Scheer’s argument:

There is an odd disconnect between the furious public debate over health care reform, with its emphasis on the cost of an increased government role, and the nonexistent discussion about the far more expensive and largely secretive government program to bail out Wall Street. Why the agitation over the government spending $83 billion a year on health care when at least 20 times that amount has been thrown at the creators of the ongoing financial crisis without any serious public accountability?

Now this is a question more people ought to be asking.  Why can’t the government just cough up the credit card, pay for everything, and leave it at that?  That’s certainly what it does with the defense budget.

At any rate, “health insurance reform” is likely to be something that only a government can afford, if it goes through.  This was emphasized by the insurance companies’ carping at the Baucus bill, and their threat to raise rates.  It’s not going to be “revenue-neutral,” not by a long shot.

So why doesn’t the Obama administration tell the insurers, “sure, we’ll cover your higher rates with higher subsidies”?  What is all the to-do about costs?  Obama likes paying off special interests — his right hand Timothy Geithner promised $12.8 trillion for the banks, so what’s a few billions here and there for insurers?

Is this a matter of budgetary priorities, on the order of “we can afford to throw a year’s GDP at the banks, but not a much smaller amount at the insurers, because we only can print so much money without risking dollar hegemony“?  

Now, I’m not one of those who actually believes the gossip about the end of dollar hegemony.  At the end of the day, a bunch of someones, rich, powerful someones, is going to be stuck with dollar-denominated assets.  And so those assets are not going to die.  So, yes, the government can afford this.  They print the money.  (Oh, sure, it’s “loans from the Fed,” and all that.  That’s just a formality.)

Is it just that Obama is in with the bankers but not with the insurers?  We know he’s in with the bankers.  From SourceWatch, quoting the UK’s Financial Times:

“Obama received more donations from employees of investment banks and hedge funds than from any other sector, with Lehman Brothers, Goldman Sachs and JP Morgan Chase among his biggest sources of support.

Or is there something else at stake here?

At any rate, I’m waiting for the final judgment to be spread about the Washington Consensus that “health insurance reform,” meaning the continued subsidy of the industrialized world’s shoddiest and most expensive health care system, is “just too expensive.”  John Geyman has said as much, and he’s one of the good guys.

Perhaps we ought to get Obama, who has become the subject of much contention as regards his stance on the public option, to clarify his position on the financing of “health insurance reform.”  

Is Obama willing to endorse enough money-printing to cover the subsidies which will be necessary to get all of America to buy expensive health insurance when a hefty portion of America is unemployed or broke or both?

Or are we going to get an Obama endorsement of health-insurance reform “on the cheap,” forcing America to buy policies which don’t cover anything because they have to be cheap enough to be affordable to people who don’t have money to spend?

What’s the deal?

9 comments

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  1. could the bankers even bake bread?

  2. You pegged why all the fuss about cost …

    … we set our overseas base empire in a time of automatic trade and current account surpluses when we had the most productive, highest income broad based middle class economy in the world, and were worried that the rest of the world would slump back into depression and act like a lead weight on our post-war growth.

    In that context, the impact of the overseas base empire in dragging the trade and current account surpluses to deficit was a good thing.

    Now, you argue:

       At the end of the day, a bunch of rich someones, rich, powerful someones, is going to be stuck with dollar denominated assets.

    But that does not ensure continued overvaluation of the US$ exchange rates. Because propping up the US$ requires ongoing purchases – its not just a matter of “not dumping” dollar denominated assets, its the ongoing decision to keep buying new dollar denominated assets.

    And the primary decision is made by people in China who are rich because they are powerful, rather than by people who are powerful because they are rich. If no longer propping up the US$ is seen as more likely to keep them in power, then a paper loss on reserve holdings by the Bank of China is of no concern. Time and again we have seen oligarchies around the world choose between the strategy required for their nation’s economic stability, and what they view as best enforcing their hold on power, and time and again “hold on power” wins.

    Now, for health care, that does not directly dictate whether we can “afford” it or not. We can care for health primarily with domestic resources, so the exchange rate of the dollar is only of secondary importance for that.

    But for those transnational corporation’s whose power is tied up with the economic clout of the US$ finance they can create in US$ capital markets, the “strength” of the US$ is a vital factor in their clout versus those with the inside track in the Eurozone or the West Pacific Rim.

    And they have been repeating this absurd propaganda of their’s about the government which issues the US$ as an IOU and sorts out the balance between allowing the money created to remain in the economy or removing it through income destruction with taxes or removing it with the permission of the wealthy in return for interest income welfare … that I believe many of them believe it. “All the smartest people in the room say so”, forgetting that they are the “smartest people in the room” because they went to schools with endowments provided by the wealthy which just coincidentally teach a pseudo-scientific sham imitation of economic theory that rationalizes the wealth of the wealthy and the incomes of their best paid servants.

    So “we the people” are permitted to have health care “reform” as a sop if necessary – preferably not, but the loose reigns of control associated with democratic institutions are the strategy settled on and reconfirmed at various critical points in our political history, so sometimes some tactical or secondary defeats have to be accepted – as long as it does not interfere with their view of what they need, and that view is that it needs to support some bullshit story about how it still makes sense for the Chinese to continue propping up the US$.

    • dkmich on October 18, 2009 at 4:50 pm

    got a very pregnant pause. The conversation was hijacked back to the swine flu.  Maher didn’t pursue it.  

    This has been the point and direction for the last 30 years.   It doesn’t matter what the people want, the country can’t afford it.  When the overlords, however, want new bombs, wars, prisons, bailouts, deregulation, or tax cuts for the rich, money is never a problem. They don’t even bring it up.   Regan, Clinton, Bush, Obama – isn’t it funny no matter who or which party is in power, the path is the same.  This is no coincidence, and neither was the timing of bankruptcy reform.  

    This is why I am so pissed that Obama sold a bill of goods just to get elected.  That’s eight presidential elections, and we’re still being led to slaughter.

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