- The Conscience of a Liberal by Paul Krugman
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“Chapter 8: The Politics of Inequality”
This chapter seeks to identify the cause of partisan divide. Some claim that such a divide is abstract, yet reality crushes any such claims. Bipartisanship is clearly demonstrated by Presidential tax policy; Republicans decrease tax on the wealthy and Democrats increase tax on the wealthy. This is just one example, but party lines are clearly drawn. Republicans endorse cut cuts for the wealthy, minimization of government, and elimination of welfare programs. Democrats support tax increases on the wealthy, and government enhancement of a welfare state.
Inequality arose through many channels. Radicalization of the right wing, rooted in Movement Conservatism, drove such inequality. Reagan’s radical policies were constrained by strong Democratic presence in the legislative branch. After Reagan, Republicans sought to revoke the policies of the New Deal; some policies going as far as to annul the estate tax. As there have been no equivalent radical acts by the Democratic Party, one can assume that Republican radicalism has driven bipartisanship.
Today, various think tanks and foundations incentivize Republicans to be extremists. They found campaigns, ensure posh post-political positions, and publicly scrutinize those who don’t endorse far right-wing antics. These foundations also aid in influencing the general public with skewed, pro-conservative facts and partial truths. The institutions have also established the permanence of movement conservatism, as Republicans across generations share the same beliefs.
Bipartisanship is now the norm, but the true causation is unclear. Krugman attributes this to the growth of Movement Conservatism, aversion towards welfare, anticommunism, and racism. However, this is not the complete answer. As will be discussed in the following chapter, Krugman thinks that Republican antipopulist economic agenda may be the missing piece of the puzzle.
Chapter 9: Weapons of Mass Distraction
In chapter 9, Krugman discusses the microeconomics of voting and dispells a long standing myth in that voters have been duped by the GOP. Particularly, voters must experience a utility to vote that exceeds their utility of not voting, and Krugman says that a candidate’s promotion of voter self-interest is not enough to create this utility shift. While he states that the GOP has used linguistic chicanery in building their support base, especially in regards to national security, Krugman argues that issues such as class and race have divided American voters more than other issues, such as war and religion, have.
In regards to race, Krugman revisits Reagan’s rhetoric that he employed to win the White House. For instance, he discusses Reagan’s contrived story of a “welfare queen” in Chicago. Additionally, he note the significance of Reagan choosing Philadelphia, Mississippi, the site of a 1964 lynching of three civil rights workers, as the opening location for his 1980 presidential campaign. As we have seen from other chapters in the book, Reagan also openly supported discrimination by private landlords based on race or other immutable individual characteristics. Accordingly, Reagan’s and Johnson’s social positions helped shift the Southern white vote to the Republicans. However, due to the 2008 voter turnout of African Americans and younger voters, Barack Obama’s election appears to have reversed this trend.
Other enumerated factors that have shifted voter support in favor of the GOP are patriotic rhetoric, the evolution of the Christian evangelical neoconservatives and their rising political impact through voting and policymaking, the growing numbers of immigrants, illegal or otherwise, who are not able to vote, and vote blocking, such as what occurred in the 2000 election when Katherine Harris purged a large number of African American voters from the voting rolls who were misidentified as felons.
“Chapter 10: The New Politics of Equality”
The chapter opens with discussion of the 2006 Democratic victory in Washington. What would come of a Democratic House and Senate? Was it a signal of changing times or a response to Bush “strategery.” In the summer of 2007, 74% of Americans were dissatisfied with the overall performance of the United States. Despite strong national economic indices, the majority of citizens frowned upon current economic conditions. Strong national numbers did little to decrease growing inequality or improve average living conditions. Nor did they hide the fact that corporate profits and executive salaries were reaching record highs.
Will future policies focus on correcting economic inequality and insecurity? And if so, will history repeat itself? Krugman argues that this is unlikely. First, Clinton’s failure to popularize his health care reform could have been salvaged through improved communication and leadership. Additionally, current economic frustrations are increasing the call for government interference. Lastly, Movement Conservatives have lost the ability to distract and persuade the general public. Iraq and policies on national security have negatively contributed to conservative credibility.
However, national security is likely to play a major role in shaping future policy. Republicans have worked long and hard to establish an identity as being tough on national security. Bush and his counterparts were able to intensify and extenuate coverage of his “war on terror.” This effectively minimized coverage on economic conditions. Bush’s schemes were effective for quite some time, but today aversion with the management of the Iraq War is the norm. Krugman argues that this will likely have long-term effects on American politics. Bush’s failure in Iraq can be accredited to mistakes common to movement conservatism. Dedication to decreasing taxes on the rich led to insufficient funding in Iraq. Corruption and lack of accountability were also prevalent throughout the war. Therefore, it is unlikely that Republicans will be able to rely on their policies on national security to win elections. However, historically Republicans have won without a focus on national security. This was accomplished by a focus on race. Will conservatives continue to use race as a source of strategy?
Today, race is not a strong point of movement conservatism. Krugman first states that America is becoming less white, specifically non-Hispanic white. Growth of the immigrant population usually shifts political control to the right; however, immigration is an issue which has long divided the party. Movement Conservatism is grounded in those who favor white dominance over blacks. As stated by Krugman, it is difficult to be anti-black without also discriminating against immigrants. Republicans have fought this trend with attempts to keep minorities disenfranchised. Additionally, it appears that racism does not carry the same weight it has in years past. (We just elected the first black President) This lessens conservative’s abilities to gain votes associated with racial tension.
It seems today that voters are looking for answers. Voters are no longer naïve and are willing to question the government. Based on the facts stated above, Movement Conservatism is at a halt. Liberals need to find solid ground to sustain control and influence. They can’t simply be the lesser of two evils.
Chapter 11: The Health Care Imperative
Krugman begins this chapter by discussing the argument against guaranteed health care for Americans. He writes that opponents of guaranteed health care argue that while life is unfair and gives certain people bad breaks in regards to their health and their access to health care, others, who do not suffer these misfortunes, should not be burdened with subsidizing the corrections of other peoples maladies. However, Krugman asks, “Is this the right thing to do?” Well, according to some polls that Krugman discusses, it is not the right thing to do. In fact, a majority of Americans support guaranteed health care for all Americans. Furthermore, politicians, i.e. movement conservatives, recognize this and do not publicly admit that they do not think everyone is entitled to health care insurance. Instead, the simply deny that there is a problem with health care in America; they play to fears that guaranteed health care will diminish individual choice and the quality of care; they claim it is not possible, or they amalgamate portions of all of these arguments to fight against universal health care.
Sadly, these arguments are just another attempt to promote economic inequality within our health care system, so approximately 45 million Americans go uninsured every year while another 16 million are underinsured. Moreover, nearly forty percent of private bankruptcy filings are attributable to burdensome medical bills. Since I worked in the health care industry for nearly twelve years before attending grad school, the following paragraphs are based on my observations and perspectives; however, it was encouraging to see that Krugman supports every one of them in this chapter.
While there is a moral hazard involved with making one person pay for the health care of another person, especially when the needy person created his or her health condition, there are worse moral hazards at play in supporting private health insurance. Private health care insurance programs generate profits in two ways: by selecting the least risky clients and by finding ways to deny coverage for the clients that they have selected. By allowing insurance companies to select the least risky clients, our society allows these insurance companies to profit from denying health care coverage to other individuals based on profit motivations. Second, our current system allows private health insurance companies to violate their contracts with their insured by trying to find loopholes to deny coverage despite the fact that these insureds may have paid every single premium on time.
In addition to the moral hazard mentioned above, people frequently state that they do not trust the government and a bunch of bureaucrats to run their health care. I have one simple question for these people. Do they trust CEOs to make those same decisions? If so, why? Private insurance is more likely to deny coverage for health care than a bureaucrat because the private insurance is driven by personal financial motivations where a government agency will likely not reimburse its employees with financial incentives.
Doctors often complain that they do not want bureaucrats telling them what treatment that they can and cannot offer. However, doctors are told what treatments that they can and cannot offer every day by people at insurance companies. I do not believe that the doctors fears are well-founded anyway. Medicare denies claims far less frequently than private insurance companies do ([]). Additionally, I believe that doctors will be able to operate with less stress under a government system because they will know what one payer provides instead of trying to discern the payment policies of multiple payers. Therefore, the economic condition of medical offices will improve because they will not need to spend time trying to obtain authorizations for coverage or appealing reimbursement denials. This of course will allow doctors to see more patients and generate more revenue. Cost of care analysis will be simple and straightforward. Finally, it will facilitate business planning because physicians will be able to employ demographics to analyze how their patient base will change over a certain number of years. After all, do physicians really believe that the government wants them to go out of business?
Do you ever wonder why new pharmaceuticals gain approval faster in European countries than they do in America? Sure, different regulatory standards dictate the approval process, which by no means argues that European standards are less stringent than ours, but they are different. Another reason is that the government is involved in the pharmaceutical process from an early stage because European governments pay for medications. Therefore, the European governments approve drugs on safety and economical issues nearly simultaneously. For instance, if a European government finds that a drug is safe but determines that its cost outweighs its marginal benefits so decides not to pay for it, then the pharmaceutical industry will not develop the drug. This should be good news for pharmaceutical manufacturers because it will allow them to allocate research and development costs more predictably and efficiently. Of course, some people would say that the government is not in a position to decide the costs and benefits of pharmaceuticals. Is a private insurance company in this position because the do it all the time? Furthermore, it seems from data in Krugman’s chapter that the government is in a better position to do this than insurance companies because the average life expectancy in Western European countries is far greater than America’s life expectancy is.
At this point in my discussion, I just want to say that private health care entities are creating their own demise. They continuously increase costs, which leads people to seek alternative solutions, sort of like the recent hike in gasoline prices. I imagine in a few years that we will have a number of health care companies asking Congress for a bailout like the automakers are doing now.
Even though people argue that the private sector must do a better job than government at providing care, many studies demonstrate the superiority of government systems. First, for every dollar spent on health care, fifteen percent of that dollar is consumed in administrative costs under private plans on average versus five percent consumed by government plans on average. Is this any surprise considering the disparity in salaries between the two? Additionally, as my previous internet link and Krugman’s book shows, insureds consistently choose government plans over private plans when given the option. On a personal note, my step-father has been a Medicare beneficiary for fourteen years. During the beginning of this process, he elected to let Medicare provide his benefits. After a couple of years, he went with a private Medicare HMO. After the first year, he reelected Medicare and has remained with Medicare ever since. By the way, he is a Republican. The reason that people choose government plans over private plans is not only because of the greater efficiency with which government programs operate, but because they have greater choice with government plans. While private plans have a certain number of doctors, hospitals, outpatient clinics, etc., that people can choose, Medicare patients can go virtually anywhere. Finally, if the government actually operates hospitals and employs physicians as well as administer the plan, then tort litigation will decrease because the government can dictate how, when, where, and why it is sued and who sues it. Therefore, health care costs will decrease for this reason as well.
Another excuse that people offer for the impossibility for guaranteed health coverage is the inability to pay for such a system. Interestingly, my families employer-sponsored health insurance premiums have consistently cost over $300 per month. Since government health programs, such as Medicare and the V.A., typically operate more efficiently than private health programs, I imagine that we will notice an increase in our real income because we will be paying less in taxes to support a government health plan than we do in premiums to run a private health plan.
As Krugman’s book and the above demonstrates, guaranteed health care is possible in America and should be implemented immediately. It will improve the quality of life of every American and improve the economic prosperity of the country itself due to greater productivity and decreased economic burdens that require bankruptcy. Of course, the plan must be comprehensive in that it must not only cover physiological conditions, but mental health issues as well.
“Chapter 12: Confronting Inequality”
In this chapter, Krugman discusses methods to reduce economic inequality. He first states the following reasons why equality is vital: lack of economic progress for lower and middle class Americans, and the American dream of being able to better yourself from the class you were born into. Great inequality has negative effects on society and politics.
Income inequality is problematic if it leads to social inequality, and it has. The wealthy live extravagant lifestyles filled with life’s luxuries. While the lives of the rich seem unfair to many, the damaging aspect is that many simply cannot afford to meet basic needs. To finance common needs such as housing and education many Americans are forced to take on large sums of debt. This results in more and more families and individuals declaring bankruptcy. Many attribute the rise in bankruptcy to more and more people trying to mimic the luxurious lifestyle of the wealthy. Studies however show that this is not the case, as many Americans are spending to provide opportunities for their children. It has been proven that the more opportunistic ones upbringing the more likely he or she is to succeed. Chances of upward social mobility are much lower in the United States, but why? To begin, we lack the national health care and other amenities provided by most developed nations.
The impact of inequality goes beyond the average family and leaks into our political system. As Krugman has repeatedly stated, abundant financing goes a long way in politics. Particularly damaging is the how income in politics tends to support Movement Conservatism ideology.
Lastly, inequality breaks the bonds of society. A society in which people are labeled “us” and “them” doesn’t support policies for the greater good. We need to be the “United” States of America.
So how do we decrease income inequality? Krugman first points out two forms of income inequality: market Inequality and inequality of disposable income. Market inequality is continuing to increase and is nearing the rates of the 1920’s. Market inequality generates taxes for the government which is then redistributed to various entities. Inequality of disposable income, income after taxes, is less than market income but greatly affects the living conditions of many. Krugman states that one way to reduce inequality is to distribute a larger percentage of market income. This appears to be an absurd concept to Republicans, and many claim this would disincentivize people to work. Krugman states that lower GDP in France is a reflection on French work ethic instead of a negative impact of greater income distribution.
If the United States elected to adopt such policies, what impacts would we see? To begin, we would need to revise many existing tax policies, particularly tax cuts for the elite. Adopting progressive taxation would generate the capital needed to finance many national welfare programs. Existing loopholes must also be identified and eliminated. A particularly damaging loophole is taxing capital gains at a lower rate than ordinary income and the ease with which one can declare income as capital gains. Again, it would be difficult to gain support for these concepts.
The government should also take initiative to reduce market inequality. The first step was taken when Congress increased the minimum wage in 2007. Krugman disputes the popular argument that increasing minimum wage will increase unemployment rates. Additionally, increasing the minimum wage will put upward pressure on wages for employees at the bottom of the food chain. Lastly, an increase in union membership would help to reduce inequality. Countries with high unionization rates do not have nearly the same income inequality as the United States. Unions work to assure that members enjoy the same wage increases as most middle-class Americans. They also promote same pay for the same job. As stated in previous chapters, unions also spread information and encourage members to vote and become actively involved in politics. Having more union members, typically middle-class, involved in politics will increase support for Democratic policies.
If we as a society don’t take measures to reduce vast inequality, are we setting ourselves up for yet another Great Compression?
Chapter 13: The Conscience of a Liberal
Krugman ends his book, and I end this discussion, by demonstrating an interesting paradox, which is that while Republicans have invoked patriotism and conservatism, Democrats have become conservative in trying to preserve nearly seventy years of history while the Republicans have tried to dismantle these institutions. Democrats have become the true patriots in trying to protect all Americans while Republicans have pushed for inequality. Democrats have tried to extend Democracy by affording rights to people imprisoned in the “War on Terror” while Republicans have tried to horde Democracy at the expense of America’s global credibility. In fact, it seems that movement conservatism has tried to create the same type of government found in Iraq: an authoritarian theocracy.
Krugman closes the book with the call to be liberal, which means being simultaneously progressive and conservative. Krugman argues that this is not a paradox because to be conservative, we should complete the New Deal and move it forward, which will progress America. I will add one thing to Krugman’s argument, and that is that not only health care should be guaranteed, but college education should be as well. As recent numbers have shown, the rising cost of college education has outpaced health care, food, and energy over the last twenty years. If we are to remain competitive on a global stage, this must change.
And finally, since no one has yet answered one of my initial questions, I will reintroduce it here: how can middle class Americans who claim that they support the middle class embrace a party that wants to destroy the very policies that created the middle class?
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