Reports of distress pile up with disarming regularity. The latest one comes from the United States Census Bureau, which reports that the poverty rate is now 13.2 per cent, the highest level since 1997. Almost 40 million Americans live below the poverty line, which the government sets at $22,025 for a family of four (and downwards for smaller families). The median household income in the U.S. has dropped by 3.6 per cent, and with foreclosures of houses on the rise and as credit card bankruptcies begin to make their appearance, it is hardly a surprise to see more people enter the ranks of the indigent.
David Johnson, who heads the Census’ Housing and Household Economic Statistics Division, sounded stoic: “Everyone expected an increase in the poverty rate” because these numbers come from the period after the collapse began in December 2007. More than 14 million of those in poverty are children, “the biggest increase in child poverty since 1992”, said the Children’s Defence Fund.
In early September, the Manpower Employment Outlook Survey projected that job losses would only increase in the fourth quarter of 2009. Two-thirds of the employers surveyed by the largest provider of temporary workers said that they had no plans either to increase or to decrease their workforce. But, of the remainder, more employers threatened to shed jobs. This is a bad sign for an economy that has had seven consecutive quarters of haemorrhaged jobs. The White House’s Council of Economic Advisers pointed out at the same time that the $787-billion stimulus plan had helped save one million jobs. That comes to $787,000 a job, much more than the average salary of the workers.
Meanwhile, large investment firms already began to clock in large profits: Goldman Sachs bringing in $3.4 billion in the second quarter, JPMorgan Chase $2.7 billion in the same time and CitiGroup $4.3 billion. Bonuses have been promised. This gets the ire of the ordinary citizen. Newsweek’s Fareed Zakaria blew the all-clear in a Pollyannaish essay called “A Capitalist Manifesto: Greed is Good (to a point)” (June 22). “Even though we’ve had an imperfect stimulus package, nationalised no banks and undergone no grand reinvention of capitalism, the sense of panic seems to be easing.” What is good for Wall Street might not be good for those in the unemployment lines.
At least President Barack Obama recognises that things are still at a sorry pass. “As any American who is still looking for work or a way to pay their bills will tell you,” he told Congress in a speech on September 10, “we are by no means out of the woods.” The crisis, he said, was no longer the main problem. The government stimulus package has tried to settle things in the world of finance and to nudge banks to lend to businesses so that they might hire workers.
A modest social net has been set up to make sure conditions are not abysmal for the poor, although the net remains frayed. One of the principal holes in the social net is the lack of adequate health insurance. The report from the Census Bureau points out that 15.4 per cent of the population (or about 46.3 million Americans) has no health insurance. One in six Americans who got their health insurance through their jobs no longer had work, so they lost their access to the safety net. Those with insurance find that the premiums are far too high and that the deductible is prohibitive. (One pays a premium each year to the insurance company. When one needs to use the system, one has to pay a certain fee, a deductible, before the insurance company takes care of the rest of the payment, that is, the insurance company will pay up to its self-imposed cap.) No one is happy with the way things have languished.
Among the advanced industrial countries, the U.S. spends the most on its health care system. Obama said in his speech: “We spend one and a half times more per person on health care than any other country, but we aren’t any healthier for it.” Over 18 per cent of the gross domestic product of the U.S. goes to the health industry. Outcomes are no more or less than those in comparable societies. Obesity is higher in the U.S. and has an impact on the health of the population although this is largely a problem of the food industry (fast food is a culprit but so too is the regime of packaged, pre-prepared food that relies upon high fructose corn syrup, salt and fat to make itself attractive).
Studies show that the problem lies with a health care system that is too costly (with pharmaceuticals being remarkably expensive) and an insurance system whose for-profit regime bilks the customer to satisfy Wall Street. Half of the bankruptcies in the U.S. are related to high medical costs (according to an illuminating study by The American Journal of Medicine). Those without insurance do not take care of their bodies and wait for a catastrophic situation to occur, when they visit the very expensive emergency rooms (the costs are paid for by society, a hidden tax that is rarely talked about). Things are at a sorry pass. Over the past century, U.S. governments have tried in vain to reform the system.
There have been some small steps. In the 1960s, President L.B. Johnson was able to create the Medicare (for the elderly) and the Medicaid (for the very poor) programmes. In 1943, John Dingell Sr. introduced a Bill in Congress for comprehensive health care. Each year, Dingell’s son, the Congressman from Michigan, introduces the same Bill in the House, almost as a memorial to his father rather than with any realistic expectation that it will be passed.
The insurance, pharmaceutical and health care lobbies are vast, and their for-profit empires cannot countenance any change in the system. They continue to be very strong and have already put pressure on the Obama White House and on the so-called Blue Dog (or conservative) Democrats. The Blue Dogs receive vastly more campaign finance money from the pharmaceutical and insurance lobbies than other Democrats. Money knows how to interfere with reform. It pays never to turn your back on a lobbyist in a tight corner.
Obama’s play is constrained by the Blue Dogs and by his own tendency to seek the “middle ground”. He has struck out against the Canadian “single-payer” system and against a libertarian system where individuals have to buy their own insurance from the marketplace. Instead, he proposes to have every American carry health insurance. They would either get this insurance from their employers or buy it directly from insurance companies. The problem with the latter option is that most parts of the country are dominated by one or very few insurance companies, whose monopoly position allows them to raise the premiums and put barriers to the use of health care.
To put pressure on the insurance companies, the Obama plan would create an insurance exchange, to force them to compete with each other. Tax credits to small businesses and exemptions of various kinds, as well as modest pressure on insurance companies to reduce their costs (they have agreed to cut 2 per cent of their costs, hardly a concession), round out the outlines of the plan. There is no suggestion to make insurance companies non-profit entities, as they are in most parts of the world. There is equally no suggestion to cap costs or to legislate that health care providers must charge for outcomes and not for unnecessary tests.
Obama continues to insist that there needs to be a “public option”, a government-led insurance option that would compete with private entities. This is under threat and might be withdrawn. Obama is walking a very fine line to conduct meaningful reform without threatening the profit culture that coddles the entire health care system.
To the Right, this still smells like socialism. During the month of August, representatives went back to their home districts to talk about health care at town halls. Right-wing politicians and their media enablers made accusations against the Obama plan of all kinds of untrue excesses. The most egregious was the suggestion that the government would create “death panels” to reduce costs to the elderly by consensual euthanasia.
Scared and angry citizens came to these town halls bearing pictures of Obama as Hitler and with signs against socialism. It was a confused and confusing spectacle. Many members of Congress went on the back foot, unable to deal with the pitchforks pointed at them. Obama’s approval rating slipped. The speech he gave to Congress in early September was designed to reclaim the discussion. “The time for bickering is over,” he said in his rich delivery style, “The time for games has passed. Now is the season for action.”
But the Right is in quicksand. Obama laid out the falsehoods, including one that suggested that undocumented migrants would get health care coverage (which is, by the way, a human right). As Obama said that this was not true, Congressman Joe Wilson (Republican from South Carolina) yelled: “You lie.” In the U.S. government, this is unprecedented. The President’s speech is usually met with applause and a highly orchestrated decorum. Never before in recent memory has a member of Congress shouted at the President during a speech, and never with what is certainly an insult. Obama brushed him off. Wilson’s apology later was aggressively grudging. He said he received a lot of mail in support of his action.
The Right has begun to suppurate. Journalist Max Blumenthal’s new book, Republican Gomorrah: Inside the Movement that Shattered the Party (2009), tells the story of people like Wilson. Given over to an authoritarian culture that brooks no dissent and harbours all manner of frustrations and grievances, the radical Right in the U.S. has built a large subculture that is not visible to the rest of society. It is the section that continued to provide 28 per cent support to George W. Bush even in his worst period. That is almost a third of the country, and it is something to contend with. Times are rough for this section, hit as hard as others by the economic crisis. But their leaders blame the crisis on the “breakdown of the family” and hold fast to their ideology. They have no investment in any kind of social change.
It is likely that the Democrats will pass some kind of health care reform. It might not include all that is necessary to create a social safety net. But for those millions who have lost their jobs, their homes, their sense of dignity, anything is better than nothing.
VIJAY PRASHAD is the George and Martha Kellner Chair of South Asian History and Director of International Studies at Trinity College, Hartford, CT His new book is The Darker Nations: A People’s History of the Third World, New York: The New Press, 2007, which was chosen for the Muzaffar Ahmad Book Award, 2009. He can be reached at: firstname.lastname@example.org