As you may or may not have noticed from the little “Reading Desk” gadget I added to my sidebar, I have been reading a book called Supercapitalism, by Robert Reich. This book is outstanding, and it has drastically changed my perception of what’s wrong in our economy.

Anyway, below, I have reproduced an excerpt from the book, wherein Reich opines on employment linked healthcare. I typed it by hand, so please excuse any typos.

Finally, not only are corporations unfit to decide what is socially virtuous, but under supercapitalism they are often unable to deliver services that are inherently public. Pushing them to do so begs the question of whether the responsibilities would be better undertaken by the public sector. The campaign against Wal-Mart charged in full-page advertisements that “Wal-Mart’s low pay and meager employee benefits force tens of thousands of employees to resort to Medicaid, food stamps, and housing assistance. Call it the ‘Wal-Mart Tax.’ And it costs you $1.5 billion in federal tax dollars every year.” The problem with this logic is that America had already decided to provide Medicaid, food stamps, and housing assistance to the poor–even if the poor are also working. It seemed more efficient for these benefits to flow from government, and for employers to alert their low-income employees of the availability of them, than for the private sector to provide them as conditions of employment. If we wish to change the rules an require private employers to pay wages and provide health benefits sufficiently high that no employee has to rely on government largesse, we should seek to do that through the democratic process. But it makes little sense to chastise one employer–even one as large as Wal-Mart–for playing by the rules.

A major theme in the book is that corporations are money making machines; that’s their purpose, and that’s their design. It’s therefore foolish to rail against them when they engage in socially irresponsible behavior like cutting benefits and externalizing costs to the public at large–we shouldn’t expect anything different. The solution is to use our power as citizens of a democracy to impose social responsibility, through legislation, not market choices, as you’re about to see…

Should the rules be altered, as Wal-Mart’s critics advocate? What would be a worthy political debate, but we’re not having it. I, for one, think the minimum wage should be raised to be about half of the average worker’s hourly pay. That was the ratio in the Not Quite Golden Age[*], and it seems to me a reasonable compromise. But Wal-Mart’s critics also want Wal-Mart to provide employees with good health insurance coverage, which, in my opinion, is no longer a responsibility employers should take on.

Bear with me for a moment, because this is just the sort of issue the nation ought to be debating but that the focus on Wal-Mart obscures. The reason employers got into the business of providing their workers health insurance in the first place, remember, was because it is a form of payment that avoids being taxed. This made it attractive to both employers and employees in the Not Quite Golden Age, before medical costs skyrocketed and competition intensified. Even though employer-provided health care has diminished since then, in 2006 it still constituted the biggest tax break in the whole federal tax system. According to recent estimates, if health care benefits were considered taxable income, employees would be paying $126 billion a year more in income taxes than they do now. In other words, employer-provided heath care is a backdoor $126-billion-a-year government health insurance system that’s already up and running.

But it’s a crazy system. You’re not eligible for it when you and your family are likely to need it most–when you lose you job and you income plummets. And these days, as we’ve seen, no job is safe. Why add to family anxieties by ending eligibility for this backdoor government health insurance just when an employee is shown the front door? The system also distorts the labor market. It prevents lots of people from changing jobs for fear they’ll lose their health insurance, or won’t get the benefits they do now. And it invites employers to game the system by seeking young, healthy employees who pose low risks of ill health, while rejecting older ones who are likely to have more costly health needs. The system also encourages employers to try to push married employees onto their spouse’s health insurance plan so that the spouse’s employer bears the cost.

It’s also an upside down system. The lower your pay, the less coverage you’re likely to have. Even if Wal-Mart is pressured into providing more health insurance for its lowest-income workers, this wouldn’t change the overall pattern across America. Workers in the lowest-paying jobs don’t generally get any health insurance from their employers. The higher your pay, the more health coverage you get, with top executives and their families getting gold-plated plans guaranteeing top-notch medical attention for just about every health-risk imaginable. As a result, our current $126 billion backdoor government health insurance system mainly benefits upper income people.

[Emphasis added]

That seems like a knock down argument for socialized medicine to me; in a sense, we’re already paying for it! By making it an explicitly socialized structure, we’d only have things to gain. Direct oversight of the system would guarantee that we weren’t subsidizing care for the super rich, and we could be sure we were doling out coverage to those who need it most. Decoupling healthcare from employment would increase job mobility because employees would be more confident to switch jobs knowing they wouldn’t lose health coverage. Moreover, taking healthcare decisions out of the hands of sticky fingered business managers would make the system fairer, as well as free them up to do what they should be doing: running a business.

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I highly recommend this book. It’s enlightening, and empowering, and it’s not that heavy.

*The Not Quite Golden Age is the name Reich uses to refer to the seeming boon times of the ’50s.

Six years ago today, Bush announced we were going to war with Iraq.

Listen to the language he uses:

“…to disarm Iraq, to free its people, and to defend the world from grave danger.”

“…Saddam’s ability to wage war…”

“We have no ambition in Iraq, except to remove a threat, and restore control of that country to its own people.”

“[we] will not live at the mercy of an outlaw regime that threatens the peace with weapons of mass murder.”

“We will meet that threat now, with our Army, Air Force, Navy, Coast Guard, and Marines, so that we do not have to meet it later with armies of firefighters, and police, and doctors on the streets of our cities.”

“…the dangers to our country, and the world, will be overcome.”

Today we look back, and we can say there was no threat. Yet the Bush Administration clearly whipped up support for the war by implying impending attacks on the American people. We were duped, and it can be very hard to admit that.

It’s especially hard for the families of the troops still over there. Faced with a lack of justification, many of them have understandably substituted a new rallying call: the liberation of the Iraqi people. Don’t get me wrong, spreading freedom is a noble cause, but this gripes me for two reasons.

First, the American people are not generally preoccupied with this kind of thing, and if we were, there would be far more worthy subjects for our attention. I don’t mean to downplay the atrocities committed in Iraq under Saddam Hussein, but North Korea, East Timor, Rwanda, Darfur, and Cambodia are all instances where someone should have stepped in to end brutally oppressive regimes or mass murder, and the U.S. didn’t step up to the plate. We shouldn’t be allowed to wear the ‘liberator’ hat unless we are out there indiscriminately liberating.

Of maximal relevance is Saddam’s gassing the Kurds. There was no palpable threat to the American people at that time, so we let him have at it. When we went to war in 2003, it was because we were made to fear him. Make of that what you will — our obligation to peace and freedom as a superpower is another debate entirely — but we are not liberators, and that is not why we went to war in Iraq.

The second problem is that we were not spreading freedom. Freedom would entail allowing the Iraqis to choose their own goverment and economic systems. We essentially installed your standard western Executive/Parliamentary/Judicial representative republic, which we assume to be the most highly developed form of government (debatable). It was certainly better than the dictatorship they had before, however what concerns me is that with American style democracy, came American style economy. We didn’t separate the two concepts, we just set up a capitalist market and called it done.

Nowhere is it written that Democracy = Captalism, which is one thing that frustrates me so much about the American political environment today. One could imagine a capitalist dictatorship, a socialist democracy, or a communist republic, but in practice we don’t distinguish economic system from political system — we mistakenly think it’s a package deal.

The Iraqis very well may have wanted to be socialist country like France, but we didn’t give them the option. Instead, we opened their market to all of our ridiculously cheap American products and services, so they will never be able to develop industry of their own. We won’t let them institute tariffs on our goods, so they will be perpetually suckling at the teat of American hypercapitalism; without economic autonomy, they will remain a third world country forever.

We are quick to “bring ‘em what we got,” but we soon forget how we got here: a century of sky-high tariffs and economic isolation, which fostered growth of our own economy. Only then did we open up our market to foreign goods. We are denying this to the Iraqis.

Some ‘freedom.’

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One last thing Bush said:

“…coalition forces will make every effort to spare innocent civilians from harm.”

Yeah Right.

h/t Andrew Sullivan

This is a third-hand quote, but it is amazing:

“I think there is a prudential reason for maintaining a progressive tax system (and we certainly can argue about “how” progressive it should be): namely, that if you believe, as I do, that the U.S. is best served by maintaining a capitalist system and a free market, we have to accept that one of the natural consequences of such a system is the accumulation of wealth in the hands of fewer and fewer people.

Regardless of whether these fewer and fewer deserve the money they accumulate or are unfairly being punished by progressive taxation, the political consequence of such an accumulation of wealth is radicalism - a majority that uses its political power to destroy the system rather than simply to modify it.

In other words, progressive taxation is required to maintain the political viability of a free market.”

Original post and commentary here.

Cash is more than just cash, it’s opportunities. Once education or owning a shelter are commodified, they are subject to the same rules as money: he who hordes them wins. We have tried to shoehorn freedom into the mould of capitalism, but some things just shouldn’t be capitalizeD.

Sarah Palin won’t stop ranting about how Obama is going to turn the country into a communist state:

“See, under a big government, more tax agenda, what you thought was yours would really start belonging to somebody else, to everybody else.”

In classic Palin style, she singlehandedly accuses liberals of advocating abolition of private property, while at the same time blurting out a completely unintegrated noun phrase “more tax agenda” that sounds like some kind of Buzzword-Tourette’s tic.

This single sentence is a scintillating example of the Republican strategy: make people fear your opponent with utterly inarticulate, nonsensical, baseless accusations, delivered with a contrived appeal to down-home sensibility. And tragically, this seems to be working.

To me, the discourse plays out as follows:

Liberals: “The rich are getting richer at expense of the poor.”
Republicans: “You are a redistributionist.”
Liberals: “No, it’s just alarming that in 1980, the top 7% owned 20% of the wealth, and today the top 1% owns the same amount. We need to rebuild the middle class.”
Republicans: “You are a socialist.”

Republicans are just calling names, they aren’t offering any real solutions to the problem that our country is becoming a plutocracy.

Well let me make a radical claim: redistribution is exactly what we need right now. At times, that word has been (rightly) treated as a profanity, but today it shouldn’t be. The pendulum has swung too far in the direction of plutocracy, and it’s time that it swing back towards fairness. You may call that change in direction “socialism”, but we have to pull to get back to center.