Economic Barbarism

What is good, anyway? What is, to get very, very B movie here, best in life? It depends who you ask.

Mongol General: What is best in life?
Conan: To crush your enemies, to see them driven before you, and to hear the lamentations of their women.

The unspoken definition of 'good' or 'right' sets goals and directions. The sense of 'what's best' sets priorities for what to address first. That's why economic discussions need to start more often with Dave Johnson's usual question, "Who is our economy FOR, anyway?" Indeed, where are we trying to get to in such a hurry?

It seems where we're headed is an economic conquest that would leave the Vandals who sacked Rome wishing they'd gone in disguised as Jamie Dimon, who got to sack the entire world.

And even if the public might want that Conan mentality turned outward towards their enemies, it does seem unlikely that they want it set loose against them. Yet that's exactly how several politically powerful US business sectors, finance and health insurance in particular, have behaved; as though the American people (any people, really, it's all the same to them) were their economic enemy, to be squeezed mercilessly for every last cent, by any means necessary.

Many economists and wealthy business interests represent this looting as a good thing because they've successfully convinced politicians and the public, alike, that concentrated profits are the whole point of the economic game. They're backed up by the powerful financial sector, which treats the public economy like a private casino from which they can mine the equity that underwrites everyone else's livings. And they've still, amazingly, been able to seriously push the line that social spending that benefits ordinary people is a bigger threat to the country's economy than wars and bank bailouts.

This attitude isn't as popular abroad. For example, the Eurozone is considering banning Goldman Sachs from doing business there after they used TARP money to help the Greek government hide debt and default on their treaty obligations. Yet even though there's no one the US financial sector won't victimize, a temporary tax on their unseemly profits might be the only smack they get at home in the US. It's conceivable that this country might not be much better regarded than its banks if things keep going the way they are.

Rampant theft is supposedly good for business, but it hasn't been good for the average American. Things are so bad that it's getting hard to find jurors to serve at trials because people can't afford the time off. If certain kinds of business have become bad for the majority of the people they affect, on what basis is what's good for them objectively better than what's good for a gang of car thieves?

It becomes even more stark when moving into the healthcare arena, where ridiculous, double-digit rate hikes characterize the only industry that makes higher profits when it sells less and gets rid of customers.

But the health insurance industry is profitable, so it's good, right! I'll leave it to a gung-ho Cal State Northridge economist, Glen Whitman, to spell it out:

... "What the government is trying to do is transform insurance into a welfare system. ... But why should we re-engineer the insurance market to serve a function it was not meant to serve?

"The biggest practical problem with the individual mandate is the political incentives it will create, [... and] keep in mind that state legislators have already passed 1,900 mandated benefits laws that cover these areas. These force everybody to buy Cadillac health insurance. Nobody can get a Honda Civic insurance policy, and that's one reason health insurance is so expensive.

... "We should also move toward a system where people use health insurance for catastrophic expenses while paying routine costs out-of-pocket. But President Obama's plan would eliminate high-deductible insurance. That's the opposite of what we should be doing. We need a greater variety of insurance options, not fewer." ...

See, because insurance is supposed to work a certain way, a natural way, if you will, it shouldn't be tampered with and forced to do what it wasn't designed to do.

What insurance also wasn't designed to do, apparently, is to provide a reasonable standard of health care to people who need it. Eventually, 'people who need it' turns out to be almost everyone. People may not have to drive, they may not have to own a home. Yet not only must they be healthy if they're to get on with their lives and take care of their obligations, they can't predict which of a variety of medical conditions they'll eventually be surprised with. Even if they could, overwhelming consensus generally favors having Aunt Janice and Uncle Bob around in spite of the fact that they may not be in perfect health.

Whitman doesn't seem to stop to think, either, about the nature of human health. A body isn't like a car that's either been in an accident or hasn't. Forcing low and middle income households to pay for routine costs means that illnesses will go untreated because families will sometimes have to choose between paying other bills and gambling that their health will hold out. As it turns out, this isn't without its own costs, both to the individual and the economy as a whole, as pointed out in a 2007 study on chronic disease by the Milken Institute:

According to the study, seven chronic diseases -- cancer, diabetes, hypertension, stroke, heart disease, pulmonary conditions and mental illness - - have a total impact on the economy of $1.3 trillion annually. Of this amount, $1.1 trillion represents the cost of lost productivity.

... The study is the first of its kind to estimate the avoidable costs if a serious effort were made to improve Americans' health. Assuming modest improvements in preventing and treating disease, Milken Institute researchers determined that by 2023 the nation could avoid 40 million cases of chronic disease and reduce the economic impact of chronic disease by 27 percent, or $1.1 trillion annually. They report that the most important factor is obesity, which if rates declined could lead to $60 billion less in treatment costs and $254 billion in increased productivity.

Looking even further ahead, the report measures the possible cost to future generations if escalating disease leads to lower investments in education and training. In a snowball effect, the report warns, this loss of human capital and skill building could reduce the nation's economic output by as much as $5.7 trillion in real GDP by the year 2050. ...

Pressing people into a medically irrational situation that's bad for both their economic and financial health, bad for their safety, must be the ultimate example of penny-wise, pound-foolish thinking. But the health and safety of the insurance industry is apparently a greater good than the health and safety of flesh and blood humans.

If the goal is health, you want people going to the doctor regularly, especially sick people. If the goal is profit, apparently you only want healthy people going. Though everyone knows that, public health be damned, there isn't much concentrated profit in making sick, poor people healthy, even if those people and their families and communities will be far better off. The obvious trade-offs in policy are between buying Blue Cross executives new houses every week and maximizing public health; since you can't faithfully serve both of these masters, you have to pick which of them is better.

So what is good, anyway? I'm guessing that if we could get real answers to that question from the economic vandals running this increasingly barbaric society, we wouldn't like them.

Views expressed on this page are those of the authors and not necessarily those of Campaign for America's Future or Institute for America's Future