In a Letter to the Editor of the Wall Street Journal just days ago, John Goodman, president of the conservative Dallas-based National Center for Policy Analysis, repeats this classic premise of Milton Friedman’s economic views: “capitalism confers its greatest benefits on people at the bottom of the income ladder. People at the top would have done well under any system. It is people at the bottom who are most liberated by markets.” This view of the world has dominated U. S. politics for several decades. As we saw in our last post, however, free markets in health care are driving up costs at three and four times the rate of cost of living and family incomes. It is long overdue to hold this theory to account for its actual track record and its impact on people needing health care.
These benchmarks show how flawed and disconnected this economic theory is from reality.
• There are 46 million uninsured and at least another 25 million under-insured (generally defined as spending over 10 percent of their annual income)
• Even among the more than 150 million Americans with employer-sponsored
health insurance, a 2007 report by Families USA found that:
a. among the 50 million non-elderly Americans who spend more than 10
percent of their pretax income on health care, 4 of 5 are insured
b. of the 13.5 million in families spending more than 25
percent of their pretax income on health care, more than 3 of 4 are
• A majority of uninsured and underinsured go without necessary health care
because of costs
• The costs of cancer care are going through the roof at rates much higher than
for general medical care; a 2007 study by the Kaiser Family Foundation and the
Harvard School of Public Health found that nearly one-half of cancer patients
without consistent health insurance coverage use up all or most of their savings,
leaving them short for basic necessities.
• A 2008 study by the Centers on Budget and Policy Priorities found that 2.4
million elderly Americans have been driven into poverty by medical bills,
despite having Medicare coverage; seniors now spend 22 percent of their
annual incomes on health care (compared to 15 percent when Medicare was
enacted in 1965).
• Medical bills account for about one-half of the 2 million bankruptcies each
year; of those bankrupted, 3 of 4 were employed and insured when they fell ill.
• Household debt today is at the highest level since 1933.
• A 2008 analysis by Deloitte’s health research center has found that medical care
now accounts for 16.6 percent of the average American household’s income,
more than housing (14.4 percent) and food (13.1 percent).
• Consumer confidence has fallen to a 28 year low
• A recent Rockefeller Foundation/Time survey found that 85 percent of
Americans feel that the country is headed in the wrong direction, with a
majority saying that “the American dream is no longer attainable”; 80 percent
believe that whatever social contract we have had has deteriorated, and that a
new one is needed.
• The accompanying graphic shows in brutal detail that the robber baron era
preceding the Great Depression has reappeared with an even wider gap in 2006
between incomes of the top 0.01 percent and the bottom 90 percent of U. S.
(Source: Thompson, G. Meet the wealth gap. The Nation 14 (12): July 1-15, 2008)
These points make clear how untrue and preposterous the trickle-down theory of economics really is. It is a cruel hoax. We are in the second Gilded Age, and conservative market policies fail the public interest. A recent article in The Nation by John Cavanagh and Chuck Collins of the Washington-based Institute for Policy Studies, describes our current predicament in these terms:
“Our top-heavy era has evolved from a heavily bankrolled effort by conservatives and corporations to instill blind faith in the market as the magic elixir that can solve any problem. This three-decade war against common sense has preached that tax cuts for the rich help the poor, that labor unions keep workers from prospering, that regulations protecting consumers attack freedom. Duly inspired, our elected officials have rewritten the rules that run our economy – on taxes and trade, on wage policies and public spending – to benefit wealthy asset owners and global corporations. To reverse this reckless course, we need to change our nation’s dominant political narrative and restore faith in the critical role that government must play to protect the common good.”
In future posts we will address some directions for health care reform which will bring necessary care within reach of all Americans based on medical need, not a disappearing ability to pay in our runaway market-based non-system.
Adapted from: Do Not Resuscitate: Why the Health Insurance Industry is Dying, and How We Must Replace It, 2008 by John Geyman. With permission of the publisher, Common Courage Press
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