Part Three – America’s Healthcare Costs Too High

Hedges, who spoke to voters across the country, argues in the book that the U.S. is showing signs of “a dying culture,” resulting in unemployment and declining wages. “Deindustrialization has left huge urban centers as essential wastelands. Without meaningful employment, the ability that American men and women once had to protect and promote their own interests through labor unions has been destroyed,” Hedges told Ball. He writes that both parties have abandoned working-class voters, instead forming a close alliance with corporate power. “We have to include … the decision by the Democratic Party to walk away from working men and women and serve corporate interests, Bill Clinton being the poster child for that,” he said. “With this process has come the largest transference of wealth upwards to American society, to this what they call a 1 percent, oligarchic elite, which fixes both the political and financial system to serve their interests.”

A new report from the Economic Policy Institute calls attention to the hardy perennial of how much America’s corporate titans make: bosses of the top 350 firms made an average of $18.9m in 2017. That’s a ratio of 312-1 over the median worker in their industries. Big bucks to be sure. And a big change since 1965, when the ratio was just 20-1. But what does it mean? And if there’s a problem, what is it, exactly? The EPI report makes the easy, transparent and irrefutable argument that CEO pay is unrelated to skill. It’s an artifact of the general mood of the stock market and of the specific fads and power of technology, finance and oil. But we don’t need this evidence to overthrow the tired talking point of an efficient (labor) market. If the great financial crisis didn’t blow that one up for you, nothing will. The important issue raised by this report is one that it doesn’t discuss. Was it a good idea to align CEO compensation in the country’s largest corporations with the casino of the stock market? This has been the mantra of finance economists since the 1970s – maximize shareholder value! Let the market decide! Let the workers and the consumers and the public fend for themselves!

 

The mantra has produced a world of corporate predators, looters and asset strippers, of technology and bank wealth on the coasts and industrial wastelands in between. In our era of quantitative easing and tax cuts to fuel stock buybacks, it has led to government policies aimed at making the stock market boom, while the corporations and their customers pile up the resulting debts. And so we have a country of wealth, dynamism and power, afflicted by decay, displacement, unemployment, foreclosures and blight – a country riven by resentments and anger and capable of believing the nostrums and bluster of Donald J Trump. America’s top 350 comfortable and coddled CEOs are not really responsible for this. For all I know, they are mostly hard-working, dedicated and capable men and women. But they are surely a fine microcosm of what we have become.

America’s wealthy households are increasingly moving to coastal cities on both sides of the country, but those with more modest incomes are either relocating to or being pushed into the nation’s Rust Belt, according to a new study. That’s creating “income sorting” across the country, with expensive cities like Los Angeles, New York and Seattle drawing wealthier residents. For instance, Americans who move to San Francisco earn nearly $13,000 more than those who move away, the study found. Conversely, those who are moving into less expensive inland cities such as Detroit or Pittsburgh earn up to $5,000 less than those who are leaving. To be sure, gentrification – when the rich move in, pushing out the poor – is a well-known and long-standing trend that’s impacted neighborhoods in cities such as New York. But the study from Dr. Issi Romem, a fellow at the Terner Center for Housing Innovation at the University of California, Berkeley, indicates gentrification may now be a national phenomenon. The trend may not only hurt poorer residents who are forced out, but also the rich Americans who move to coastal cities. Well-off residents who move to already expensive cities like San Francisco are bidding up real estate prices until property becomes unaffordable for all but the very richest families. Many end up renting — until that, too, becomes unaffordable. 

Researching happiness and age, I did a deep dive into the relatively new discipline of happiness economics and emerged impressed by two findings. One is that all happiness is local. According to World Bank data, the share of the world’s population living on less than $1.90 a day (inflation adjusted) declined to under 10 percent in 2015 from 44 percent in 1980, an astounding achievement. But ordinary people’s well-being depends mainly on their immediate surroundings. If you are an autoworker who loses your job in Massena, N.Y., when G.M. closes its local plant (moving some jobs to Mexico) and who spends years out of work and who watches as schools shut down and shops go dark and young people flee — for you, the fact that America’s big coastal cities are doing great, or that more than half a billion Chinese have been lifted out of extreme poverty, merely rubs salt in your wounds.

 

Second, all happiness is relative. Although moral philosophers may wish Homo sapiens were wired more rationally, we humans are walking, talking status meters, constantly judging our worth and social standing by comparing ourselves with others today and with our own prior selves. According to the Brookings Institution economist Carol Graham, poor whites are far more unhappy and pessimistic than poor blacks, even though, in absolute terms, they are better off. That would not make sense if absolute standing determined subjective well-being. It does make sense, however, when we look at relative standing. Less-educated whites (especially men) have seen their relative standing decline sharply, both compared with their parents and with rising nonwhites. Blacks, by contrast, have seen themselves doing better than expected and closing the economic and social gap.

 

Absolute standing is not irrelevant, and people will tolerate and sometimes even embrace inequality if they believe the system is fair and lets them get ahead. Still, the witticism (frequently attributed to Gore Vidal) that “it is not enough for me to succeed; others must fail” is uncomfortably accurate. In a striking experiment, certain households in Kenyan villages were randomly chosen to receive large financial windfalls. The lucky beneficiaries were pleased, of course, but their increased happiness was much more than offset by the increased unhappiness of other households, which lost nothing in absolute terms but suddenly saw themselves falling behind. Pondering the accumulated evidence, the British happiness economist Richard Layard concluded, “These studies provide clear evidence that a rise in other people’s income hurts your happiness.”

 

Inequality, in short, is immiserating. One could cite more evidence in the same vein. Places in the United States with more inequality have higher stress and worry, more political polarization and lower social connectedness, even among the wealthy. Moreover, what counts for subjective well-being is not just reality but also perception. If social media and reality TV disproportionately depict millionaires and amazing homes, or if talk-radio pundits insist that government takes from hard-working whites to subsidize lazy minorities, resentment grows, never mind what the statistics may say.

 

In a poor country with low inequality, rising national income should make people happier, and of course reducing poverty is a good in and of itself. But in a wealthy, unequal country like today’s America, gains in national income can decouple from well-being. “Each person would become happier because he was richer, but less happy because other people were richer,” Mr. Layard writes. “The two effects would cancel each other out, because relative income would be unchanged.” Moreover, if inequality is growing (as is the case in the United States), economic growth pushes the rungs of the socioeconomic ladder farther apart even as it lifts the ladder. Because people tend to compare upward when gauging status, they perceive themselves to be losing ground.

 

In light of what happiness economists have had to say, the interesting question is not why the Reagan-Thatcher consensus finally failed but why it prevailed for two generations. Partly, I think, because its call to transcend envy is morally appealing, and partly because, in the 1980s and 1990s, pro-growth policies and free-market economics seemed to have turned around a troubled economy. But partly also because there was no viable alternative. Mainstream liberalism worried about inequality but offered only policies that much of the public viewed as discredited or unfair. Now the Reagan-Thatcherist alternative has crumbled, too. In 2008, the economic meltdown made the system look rigged and ignited a populist backlash. In 2016, the backlash coalesced behind the populisms of Mr. Trump and Mr. Sanders, each of whom had a compelling story to tell those suffering from real or perceived loss of status: We will de-rig the system with radical solutions like trade wars and socialized medicine. Those may be (as I believe) wrong answers to the problem of inequality, but they are answers, and their appeal is evident.

 

Today it is free-market conservatism that is voiceless. After insisting for two generations that inequality does not matter, the heirs of Mr. Reagan and Mrs. Thatcher — people like the House speaker, Paul Ryan — have neither a coherent program to reduce inequality nor a philosophical rationale to seek one. Like it or not, inequality in today’s America drives politics toward rage and polarization, and toward destabilizing and dangerous populisms of both left and right. Trumpism and Sandersism have something to say about inequality, but mainstream conservatism does not, and it will be no match for them until it does.

When the American Medical Association — one of the nation’s most powerful health care groups — met in Chicago this June, its medical student caucus seized an opportunity for change. Though they had tried for years to advance a resolution calling on the organization to drop its decades-long opposition to single-payer health care, this was the first time it got a full hearing. The debate grew heated — older physicians warned their pay would decrease, calling younger advocates naïve to single-payer’s consequences. But this time, by the meeting’s end, the AMA’s older members had agreed to at least study the possibility of changing its stance. “We believe health care is a human right, maybe more so than past generations,” said Dr. Brad Zehr, a 29-year-old pathology resident at Ohio State University, who was part of the debate. “There’s a generational shift happening, where we see universal health care as a requirement.” The ins and outs of the AMA’s policymaking may sound like inside baseball. But this year’s youth uprising at the nexus of the medical establishment speaks to a cultural shift in the medical profession, and one with big political implications.

 

Amid Republican attacks on the Affordable Care Act, an increasing number of Democrats — ranging from candidates to established Congress members — are putting forth proposals that would vastly increase the government’s role in running the health system. These include single-payer, Medicare-for-all or an option for anyone to buy in to the Medicare program. At least 70 House Democrats have signed on to the new “Medicare-for-all” caucus. Though “single-payer” health care was long dismissed as a left-wing pipe dream, polling suggests slim majority of Americans now support the idea — though it is not clear people know what the term means. A full single-payer system means everyone gets coverage from the same insurance plan, usually sponsored by the government. Medicare-for-all, a phrase that gained currency with the presidential campaign of Sen. Bernie Sanders (I-Vt.), means everyone gets Medicare, but, depending on the proposal, it may or may not allow private insurers to offer Medicare as well. (Sanders’ plan, which eliminates deductibles and expands benefits, would get rid of private insurers.) Meanwhile, lots of countries achieve universal health care — everyone is covered somehow — but the method can vary. For example, France requires all citizens purchase coverage, which is sold through nonprofits. In Germany, most people get insurance from a government-run “public option,” while others purchase private plans. In England, health care is provided through the tax-funded National Health System.

 

American skeptics often use the phrase “socialized medicine” pejoratively to describe all of these models. But the willingness to explore previously unthinkable ideas is evident in young doctors’ ranks. But the willingness to explore previously unthinkable ideas is evident in young doctors’ ranks. “Our younger generation is less afraid to come out and say we want universal health care,” said Dr. Anna Yap, 26, an emergency medicine resident at UCLA, who served as a medical student delegate to the AMA until this past June. “But how? It’s different in what forms we see.” Younger doctors also pointed to growing concern about how best to keep patients healthy. They cited research that broadly suggests having health insurance tracks with better health outcomes. Also, doctors represent only one part of the sprawling health care industrial complex. Other health care interests — including private insurance, the drug industry and hospital trade groups — have been slower to warm to catchphrases like single-payer or universal health care, all of which would likely mean a drop in income. But increasingly physicians seem to be switching sides in the debate, and young physicians want to be part of the discussion. “There’s tremendous potential . . . to be at the table if single-payer becomes a significant part of the political discourse, and create a system that is more equitable,” Pean said.

*Special Counsel Robert Mueller is more popular than Donald Trump, by double digits (59-45 percent approval)

*Obamacare is more popular than the GOP tax law, by double digits (51-40 percent)

*The Democratic party is more popular than the Republican party, by double digits (50-39 percent)

*Voters say they are more likely to vote for a Democrat than a Republican, by double digits (49 -38 percent)

*More Hillary Clinton voters say they are enthusiastic about casting a ballot in the midterms than Donald Trump voters do, by double digits (51 – 37 percent).

Even the economy, a relative bright spot for the GOP compared to almost every other factor, isn’t viewed all that positively by anyone but Republicans. Only Republicans give the economy positive ratings (73 percent excellent or good). Most Democrats (67 percent) and independents (67 percent) say the economy is in fair or poor shape. Best yet, the poll was conducted Sunday through Tuesday, likely before most Americans had time to digest the tag-team Michael Cohen/Paul Manafort bombshells. In other words, it’s not getting better any time soon for Trump and Republicans.

Political journalist and analyst Bill Schneider said on Wednesday that the Republican Party is “bleeding educated, suburban voters” under President Trump. “We’ve been seeing that happen for a long time, including in the 2016 election,” Schneider, who is a professor at George Mason University, told Hill.TV’s Jamal Simmons on “What America’s Thinking.” “We have a very odd relationship with the polls that’s new in the polls since 2016, and Trump has caused this,” he continued. “The wealthier you are, the more likely you are to be a Republican, but the better educated you are the more likely you are to be Democrat.” Schneider went on to say that Trump has turned off educated, wealthy Republicans, living in traditional Republican strongholds. “In 2012, Mitt Romney was the prince of wealth, Barack Obama was the prince of education. That’s a division that has become bigger and bigger particularly the differences by education,” he said. “Trump turns off a lot of well-educated, affluent Republican voters who live in suburbs like Fairfax County, Va., Montgomery County, Pa.,” he continued. Republicans will have to defend a slew of what have normally been safe districts for the GOP in November’s midterm elections.