Free to Lose
By PAUL KRUGMAN
NY Times Op-Ed: November 12, 2009
Consider, for a moment, a tale of two countries. Both have suffered a severe
recession and lost jobs as a result - but not on the same scale. In Country
A, employment has fallen more than 5 percent, and the unemployment rate has
more than doubled. In Country B, employment has fallen only half a percent,
and unemployment is only slightly higher than it was before the crisis.
Don't you think Country A might have something to learn from Country B?
This story isn't hypothetical. Country A is the United States, where stocks
are up, G.D.P. is rising, but the terrible employment situation just keeps
getting worse. Country B is Germany, which took a hit to its G.D.P. when
world trade collapsed, but has been remarkably successful at avoiding mass
job losses. Germany's jobs miracle hasn't received much attention in this
country - but it's real, it's striking, and it raises serious questions
about whether the U.S. government is doing the right things to fight
unemployment.
Here in America, the philosophy behind jobs policy can be summarized as "if
you grow it, they will come." That is, we don't really have a jobs policy:
we have a G.D.P. policy. The theory is that by stimulating overall spending
we can make G.D.P. grow faster, and this will induce companies to stop
firing and resume hiring.
The alternative would be policies that address the job issue more directly.
We could, for example, have New-Deal-style employment programs. Perhaps such
a thing is politically impossible now - Glenn Beck would describe anything
like the Works Progress Administration as a plan to recruit pro-Obama
brownshirts - but we should note, for the record, that at their peak, the
W.P.A. and the Civilian Conservation Corps employed millions of Americans,
at relatively low cost to the budget.
Alternatively, or in addition, we could have policies that support
private-sector employment. Such policies could range from labor rules that
discourage firing to financial incentives for companies that either add
workers or reduce hours to avoid layoffs.
And that's what the Germans have done. Germany came into the Great Recession
with strong employment protection legislation. This has been supplemented
with a "short-time work scheme," which provides subsidies to employers who
reduce workers' hours rather than laying them off. These measures didn't
prevent a nasty recession, but Germany got through the recession with
remarkably few job losses.
Should America be trying anything along these lines? In a recent interview,
Lawrence Summers, the Obama administration's highest-ranking economist, was
dismissive: "It may be desirable to have a given amount of work shared among
more people. But that's not as desirable as expanding the total amount of
work." True. But we are not, in fact, expanding the total amount of work -
and Congress doesn't seem willing to spend enough on stimulus to change that
unfortunate fact. So shouldn't we be considering other measures, if only as
a stopgap?
Now, the usual objection to European-style employment policies is that
they're
bad for long-run growth - that protecting jobs and encouraging work-sharing
makes companies in expanding sectors less likely to hire and reduces the
incentives for workers to move to more productive occupations. And in normal
times there's something to be said for American-style "free to lose" labor
markets, in which employers can fire workers at will but also face few
barriers to new hiring.
But these aren't normal times. Right now, workers who lose their jobs aren't
moving to the jobs of the future; they're entering the ranks of the
unemployed and staying there. Long-term unemployment is already at its
highest levels since the 1930s, and it's still on the rise.
And long-term unemployment inflicts long-term damage. Workers who have been
out of a job for too long often find it hard to get back into the labor
market even when conditions improve. And there are hidden costs, too - not
least for children, who suffer physically and emotionally when their parents
spend months or years unemployed.
So it's time to try something different.
Just to be clear, I believe that a large enough conventional stimulus would
do the trick. But since that doesn't seem to be in the cards, we need to
talk about cheaper alternatives that address the job problem directly.
Should we introduce an employment tax credit, like the one proposed by the
Economic Policy Institute? Should we introduce the German-style job-sharing
subsidy proposed by the Center for Economic Policy Research? Both are worthy
of consideration.
The point is that we need to start doing something more than, and different
from, what we're already doing. And the experience of other countries
suggests that it's time for a policy that explicitly and directly targets
job creation.
***
From: Healthcare-NOW!
Sent: Thursday, November 12, 2009 8:58 AM
Subject: Response to Passage of House Health Bill
Dear Healthcare-NOW! Supporter:
On Saturday, November 7, 2009, the House passed H.R. 3962, the Affordable
Health Care for America Act, to much celebration by the Democratic party.
Healthcare-NOW!'s view, however, is that the House bill is a gift to the
insurance industry at the further expense of the people of this nation.
The bill's advocates claim it will cover an additional 36 million people,
subsidize the cost of insurance for families up to 400% above the poverty
level, increase Medicaid coverage to 150% above the poverty level, close the
Medicare donut hole by 2019, place a surcharge on individuals making more
than $500,000 and couples making more than $1,000,000, will end rescissions
and pre-existing conditions.
What the Democrats fail to mention is the bill leaves millions of people
uninsured, allows medical bankruptcies to persist, criminalizes and fines
the uninsured, increases the number of underinsured, does nothing to contain
the sky rocketing costs, blocks women from their reproductive rights,
transfers massive public funds to private insurance companies strengthening
their control over care, protects pharmaceutical companies' superprofits at
patient expense, fails to reclaim the 31% of waste in our system, expands
Medicaid without regard to the state budget crises, discriminates based on
immigration status and age, and sets up several levels of care covering less
for those without the ability to pay. Those who have coverage will
increasingly find care unaffordable and will go without. The whole system
will inevitably fail from being fiscally unsustainable.
So is the House bill better than nothing?
"I don't think so," writes Marcia Angell, M.D., former editor of the New
England Journal of Medicine. "It simply throws more money into a
dysfunctional and unsustainable system, with only a few improvements at the
edges, and it augments the central role of the investor-owned insurance
industry. The danger is that as costs continue to rise and coverage becomes
less comprehensive, people will conclude that we've tried health reform and
it didn't work. But the real problem will be that we didn't really try it. I
would rather see us do nothing now, and have a better chance of trying again
later and then doing it right."
Given that the bill does nothing to contain or reduce rising costs or end
the private health insurance industry's dominance, we hoped that the
Progressive Caucus would stand strong. But they did not. All but two of H.R.
676's cosponsors voted for H.R. 3962 -- Rep. Eric Massa [D-NY] and Rep.
Kucinich [D-OH].
Rep. Massa stated, "At the highest level, this bill will enshrine in law the
monopolistic powers of the private health insurance industry, period.
There's really no other way to look at it."
Despite telling single-payer advocates that Congressman Weiner's
single-payer amendment could not go to vote because it would open the
floodgates for regressive amendments on abortion and immigrant access, the
Democratic leadership allowed votes on both. Prior to the vote on H.R. 3962,
the Stupak Amendment passed that will prevent women receiving tax subsidies
from using their own money to purchase private insurance that covers
abortion and in many cases will prevent low-income women from accessing
abortion entirely.
"The House of Representatives has dealt the worst blow to women's
fundamental right to self-determination in order to buy a few votes for
reform of the profit-driven health insurance industry," writes Terry
O'Neill, President of National Organization for Women. "We must protect the
rights we fought for in Roe v. Wade. We cannot and will not support a health
care bill that strips millions of women of their existing access to
abortion."
Healthcare-NOW! fought to win a fair and open debate on healthcare reform
including the merits of a single-payer system. This has not yet happened,
but the advocacy for this system has greatly impacted the debate in
meaningful ways.
We need to continue to build the grassroots movement for single-payer,
not-for-profit, national healthcare. We look forward to much brain-storming
at our upcoming national strategy conference in St. Louis this weekend, and
the opportunity to move forward with renewed energy, creative ideas, and
resolve.
Meanwhile, we have the opportunity NOW to continue to support the Sanders'
Single-Payer Amendment to be introduced in the U.S. Senate, Congressman
Kucinich's efforts to get the state single-payer amendment back in when the
House and Senate bills are reconciled, and the efforts of the Mobilization
for Health Care for All.
Thanks for all that you do,
Healthcare-NOW! National Staff
P.S. We need your support. Please donate today.
Healthcare-NOW! survives on the generosity of our supporters. Please
consider making a donation to support our efforts to pass HR 676 using our
secure server.
339 Lafayette St. | New York, NY 10012 US
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