Thursday, August 12, 2004
previous entry | main | next entry | TrackBack (3)
Zzzzz ... wha? Who?
Jacob Hacker’s “universal insurance” proposal gives me pause. Mark Schmitt, among others, is very enthusiastic about the political promise of Hacker’s “risk shift” idée fixe and, being a straight-shooter, he believes that Hacker has hit upon a real problem. I’m not so sure. And again, I say this very tentatively. I’m a great admirer of Hacker and I’ve learned a great deal from his work on agenda-setting, the use of crafted language to advance substantively unpopular policies, and the size and scope of the invisible welfare state. He is a creative thinker and a credit to his field. So when I disagree with Hacker, I do it very, very cautiously.
Before elaborating on my concerns and questions, I’ll note that there are two extremely expensive social policy initiatives that I would strongly support. Matt Miller has championed them, first in his recent book and even more recently in a syndicated column, though I imagine he has different motivations and different end-states in mind.
The first is universal medical coverage. There are a number of sober, sensible, comprehensive proposals, all of which involve generous tax subsidies and some of which, including Hacker’s “Medicare Plus,” involve a revised version of the “play or pay” approach pursued in the first Clinton administration. My sense is that if we don’t move swiftly, the private health insurance system will collapse. Consider the detailed and persuasive scenario outlined by Mark Schmitt in January:
What better way to guarantee a government takeover, the very nightmare scenario small-government conservatives dread most? It could be that a “prophylactic intervention,” an effort to head off the socialist freight train at the pass before it gathers steam (mangled metaphors—my command of the idiomatic is iffy at best), is the best way to secure a broadly market-oriented, innovative health care sector.
The second pricey policy initiative I’d emphatically support—if compassionate conservatism means anything, and I think it does, this is the quintessential com-con idea—is a schedule of wage subsidies as proposed by Edmund Phelps in Rewarding Work. The basic idea is this: if you work full-time and stay out of trouble, you shouldn’t live in poverty. That seems straightforward enough.
Hacker’s proposal seems similarly pricey. We’re talking real money. Is it worth it? The first two proposals I've described deliver bang for the buck: they help very vulnerable people, and the money spent goes a long way. To what extent should middle-class families—again, those who aren’t subject to grinding poverty—be insulated from the vicissitudes of risk? Assuming there are limited resources for achieving various social policy goals, is this a sound place to make a large-scale commitment? There's no doubt in my mind that this would be popular, assuming voters don't blanch at the price tag: it'll turn countless families into willing clients (not that this is everywhere and always a bad thing).
A couple of questions (most, if not all of which, will be answered in Hacker’s forthcoming book):
(1) One assumes that a good deal of income volatility can be attributed to occupational mobility, and movement in and out of the labor force. The argument for unemployment insurance has been settled: it’s a good idea; perhaps it should be made more generous. Being laid off shouldn’t be a death sentence. But isn’t occupational mobility of this kind a great strength, the obverse side of robust job creation? Well, that’s not the point, Reihan. No one wants to impose rigidities on the labor market. We’re just saying that income fluctuations ought to be smoothed. Right. Isn’t it common for a spouse who is not the primary breadwinner to shift in and out of the formal labor market depending on circumstances or taste? I imagine that’s far more common now than it had been fifty years ago.
(2) Does it make sense to dull the returns to skill? To what extent does the increase in income volatility relate to the increasing returns to skill, and experience?
The bottom line is that while I’m sympathetic to the idea of a safety net, and very troubled by the plight of the poor and the near-poor in this country and in the world, it’s not clear to me that a sweeping economic security package embracing even the upper-middle-class (people who are in a position to save and prepare for the worst) strikes me as an “inefficient” use of resources, to use an unfortunate term.
P.P.S.- I am obsessed with RISK. In German, it is known as RISIKO. My best friend and I would two-player risk, with fourteen neutral territories allocated by both players in turn, for hours on end. We generally went with a fixed allocation that paralleled the Cold War. Unlike the Cold War, this was a Hot War that would start off with a massive, apocalyptic battle waged across the Bering Strait. Eventually, my friend discovered the healing properties of natural sunlight. And I started playing one-player RISK. It was awesome. An added plus: I am now fluent in gnome-ese.posted by Suzanne Nossel on 08.12.04 at 04:56 PM
I have a feeling we will get universal health care coverage when the business community gets tired of paying for it. Being self-employed, I know how much it costs. Most people dont really have a clue.
posted by: TexasToast on 08.12.04 at 04:56 PM [permalink]
Oy. Health care makes my head hurt.
And I'm a doc and I have multiple sclerosis. So I spend a lot of time in the system, as it were, (mostly working and hardly any due to the MS, thank goodness).
From the little world that I inhabit I tend to see the structural problems but the big picture stuff is hard. I have insurance because of my work: it is darn good insurance but it costs plenty (for my employer). Hospitals, like all employers, struggle to find good health insurance plans for their employees. Kinda ironic (in an Alannis Morrissette sorta way).
And as a side note, I can see no relation between what I do and how the department is re-imbursed for what I do. Costs versus prices, anyone? I can spend an hour going through a tough melanoma case and five minutes on a benign nevus and it's all the same charge. Medicine is so weirdly and strangely and inefficiently regulated (and a lot of it is our fault as docs and a lot of it is state and federal interference) that I laugh when people say the market isn't working. What market?posted by: MD on 08.12.04 at 04:56 PM [permalink]
I'll never support medicare or any other government health insurance scheme until it is means tested. Right now we have the biggest pyramid scheme in the history of the world transferring money from the poorest age strata to the richest. The healthiest people are paying for the care of the sickest. Not right. I'll gladly pay out for those who cant afford it, but not for Ross Perot's viagra when my own health insurance is expensive enough (and which i've never used once).posted by: Mark Buehner on 08.12.04 at 04:56 PM [permalink]
Risk is for pussies. Go try your hand at Supremacy.posted by: Edwards on 08.12.04 at 04:56 PM [permalink]
Opting for government programs that require sharing of risks among the population, paid for by distributing property taken from those who can afford it, is appealing (Europeans seem to enjoy such programs, even as they experience relatively lower job and wealth creation).
But relying on the government as the supplier of our safety net brings its own risks. Barry Goldwater noted that "A government that is big enough to give you all you want is big enough to take it all away."
Kenposted by: ken on 08.12.04 at 04:56 PM [permalink]
Steveposted by: Steve on 08.12.04 at 04:56 PM [permalink]
Try dominategame.composted by: Detached Observer on 08.12.04 at 04:56 PM [permalink]
"Compassionate Conservative" reminds me of the "Holy Roman Empire": It wasn't Holy, it wasn't Roman, and it wasn't an Empire.
Can anybody tell me how many former librals are now "conservative" because conservatism is now "compassionate"?
I come up with the same number as the rest of you: zero.
It's a failed strategy to try to get elected, but if you want big government to make your life better through redistibution of other people's income, why not just vote for the party that invented it in the first place?posted by: DSpears on 08.12.04 at 04:56 PM [permalink]
Post a Comment: