End of the Private New Deal
As Republicans loudly threaten the public New Deal, the corporate version quietly slips away
By Paul Starr
The American Prospect
Online Edition
June 20, 2005
The old corporate America that took responsibility for workers’ pensions and health care is dying, and the nation’s political leadership has hardly taken notice of the implications.
The rise of corporate social protection had a huge impact, and so will its decline. Conservatives long touted employer-provided pensions and health plans as the private alternative to big government — the very epitome, supposedly, of the American way. Liberals were ambivalent: Although employer benefits provided security for many workers, especially in unionized industries, corporate America’s New Deal left out millions of other Americans and weakened support for national health insurance.
Now corporate social protection is shrinking — for many Americans, simply disappearing — and there is no immediate prospect of public programs filling the void.
The conservatives’ remedy is to take privatization one degree further by transferring obligations for retirement and health insurance from corporations to individual employees.
Health insurance works only because the healthy subsidize the sick; individual accounts enable those who are lucky enough to stay healthy to accumulate their own insurance money, separate from the pool. But just for that reason, the unlucky who get sick have to pay more out of their own pockets, or go without care. If your idea of health-care reform is to shift costs from the healthy to the sick, the health savings accounts are for you.
The individual-account model has had one great success: It has enabled conservatives to pretend to be reformers. But, amid the decline of employer-provided benefits, there is little chance this approach will provide a genuine, long-term solution to the problems of health-care costs and retirement security.
The decline of corporate social provision, however, is also a problem for liberal reformers who have sought to build on private-employer plans. It is one thing to propose building on a stable employer-based system, but quite a different thing when that system is failing, as it is in health care. Many companies have given up hope of controlling health costs and want a way out of their intermediary role; 5 million fewer jobs brought health coverage in
2004 compared with three years earlier. The Detroit automakers have long said they spend more on health care than on steel, and that the expense is a big competitive disadvantage. It’s not all their fault: The U.S. health system is by far the world’s most expensive, and firms that provide full family coverage pay for those that don’t (for example, when a GM employee’s spouse works at Wal-Mart).
Ironically, the private corporations that provided their own New Deal in health care would have been better off with the public one that Democrats offered years ago. Without governmental action to control costs and spread them fairly, the generous social benefits once provided by corporate America are unsustainable.
For the complete article:
http://www.prospect.org/web/page.ww?section=root&name=ViewWeb&articleId=9882
Comment: Mere words can have much more meaning when they carry the weight of their noted creator. Many readers will recognize Paul Starr’s name as the author of one of the most important contributions in the past half century to the body of the health policy literature: “The Social Transformation of American Medicine,” recipient of the 1984 Pulitzer Prize. Recently, a special issue of the Journal of Health Politics, Policy and Law was dedicated exclusively to Transforming American Medicine: A Twenty-Year Retrospective on The Social Transformation of American Medicine.
Paul Starr’s words are now more prescient than ever.
The Social Transformation Of American Medicine, by Paul Starr:
http://www.perseusbooksgroup.com/basic/book_detail.jsp?isbn=0465079350
Transforming American Medicine: A Twenty-Year Retrospective on The Social Transformation of American Medicine
http://www.dukeupress.edu/books.php3?isbn=8223-6606-1