Liberalism and social insurance.
Jacob Hacker has another article up at TNR's site about social insurance and liberal politics. Nothing we haven't seen before, but these arguments are just so true and right that they bare repeating over and over:
Although the Depression was a watershed in liberal thinking about the economy, there was nothing automatic about the reforms eventually embraced. Nor did the New Dealers simply dream up a coherent program once the scope of the disaster became clear. Instead, they drew on a wide range of often well-established ideas and precedents, guided by an abiding conviction: Capitalism needed to be "made good."
Making capitalism good implied many things: public employment, the taming of monopolies, relief for the destitute. Yet the most important ideal--and certainly the most enduring--was insurance. The word is familiar today, but, in the 1930s, it had a radical air. Insurance was an affirmation of free will over fate. If not an effort to stay the hand of God, it was an attempt to soften His blow. And it rested on modern actuarial science. The genius of insurance, especially when coupled with the power of the state to require participation, was that it could transform individual misfortunes into social costs distributed broadly across the citizenry. "Social insurance," as it came to be called, transformed the dislocations of modern capitalism into risks that could be managed and redistributed, rather than blows of fate that could only be feared and suffered.
In this passage and those that follow, Hacker gets at several points that are vital to the current political debate, both over specific programs like Social Security and over the broader role of government as society's insurer. First, he correctly points out that the beauty and endurance of the New Deal programs is that social insurance is simultaneously a progressive and a conservative idea. Its progressivism is obvious. Its conservatism rests on several facts. For one thing, it involves minimal governmental oversight and interference, its core programs providing simple income transfers rather than the type of in-kind provision of services (like housing or health care) that traditional liberals have long championed. Neither does social insurance propose or entail radical redistribution across socio-eonomic or ethnic classes. The philosophy of insurance rests on our shared uncertain expectations as citizens beginning life, not on the actual lifecycle realizations that fate hands us. Ex-ante, we're all together in the same boat; ex-post, anybody can fall onto hard times, illness or destitution through no fault or small fault of their own. And insurance provides those who fall a level of protection befitting their previous contribution to society as measured through wages. Because of this philisophical reliance on the Rawlsian "veil of ignorance" where uncertainty is universal and payouts are proportional, the New Deal social insurance programs entailed few of the normative choices about who "deserves" extra protection, or an extra economic boost, that hurt much of the Great Society liberal programs like AFDC.
Second, support for broad-based social insurance -- unemployment insurance, Medicare, social security, and supplemental security income -- actually rests on an appeal to the best in citizenry, our sense of and respect for an commitment to society, shared experience and public good. This too is tradtionally conservative, in the same sense that veneration of national service, and shared sacrifice in hard times, is traditionally a conservative (now a neoliberal) phenomenon. Making a personal sacrifice for the State in wartime, or even showing solidarity with for other States faced with national disasters or unavoidable military engagements, has a powerful draw for Americans: witness the extent to which military families supported the Iraq war early on, or the outpouring of private resources into the recent East Asian tsunami relief funds. Demanding a few dollars off your paycheck, roughly the same few dollars everyone pays, to support the "society" that supports you, is a politically supportable, even appealing, request, particularly when, as is the case with Social Security proper, the main deprivation being insured against-- old age -- is one that everybody in society eventually faces with an almost 100% probability.
Hacker's major theme is that the need for social insurance is actually greater today, in the post-welfare-capitalist society, than it has been at any point since the Great Depression, and that this fact retains enormous political power:
Against this backdrop, it's little wonder Americans remain so pessimistic about the economy. President Bush keeps saying the "economy is strong, and it's getting stronger." But Americans don't believe it. Unfortunately, Americans also don't believe that government can effectively address the problem of rising insecurity. In a recent series of focus groups, the Economic Policy Institute (EPI) found that middle-class Americans "believe traditional relationships that formerly provided some security are disappearing." Yet they also believe that "government is corrupt and neither trustworthy nor a source of solutions." The middle-class response to rising insecurity, according to the EPI's focus groups, is blunt and resigned: "It's up to me."
All of which suggests that there may well be a method to the madness of Bush's calls for an "ownership society." The Republican agenda is to replace existing protections with highly individualized private accounts and then let the chips fall where they may. This strategy may help the affluent and fortunate, but it won't provide strong guarantees of economic security to most Americans...Yet, while the ownership society can't guarantee economic security, it fits perfectly with the idea that "it's up to me"--that Americans are on their own in the new world of work and family. And, the more Americans believe that, the more likely it is that they will support conservative politicians who want to shift even more risk onto their shoulders. Call it the vicious cycle of insecurity--if Americans feel no one can help them, they will back leaders who won't. In the '30s, Democrats saw economic security as the keystone of a broad coalition in support of their party. Today, Republicans appear to see economic insecurity in much the same way. [Emphasis mine.]
There's a lot more to Hacker's piece (and his earlier, pre-election one on the same topic) but the highlighted bit gets to two of the major political realities facing liberal politics and politicians in the US. The first is a problem: that Bush and the Republicans understand Americans' sense of insecurity, and its sources, as well as the Democrats do, but, for various reasons, are willing to talk about it more plainly at crucial moments. Hacker quotes Bush's 2004 nomination speech at the start of the piece:
"The times in which we work and live are changing dramatically. The workers of our parents' generation typically had one job, one skill, one career, often with one company that provided health care and a pension. And most of those workers were men.
Today, workers change jobs, even careers, many times during their lives. And in one of the most dramatic shifts our society has seen, two-thirds of all moms also work outside the home.
This changed world can be a time of great opportunity for all Americans to earn a better living, support your family, and have a rewarding career. And government must take your side.
Many of our most fundamental systems -- the tax code, health coverage, pension plans, worker training -- were created for the world of yesterday, not tomorrow. We will transform these systems so that all citizens are equipped, prepared, and thus truly free to make your own choices and pursue your own dreams.
Essentially, Bush could acknowledge the fact of a changing, postindustrial society because his party is the party of conservatism, despite the fact (maybe even because of the fact) that his policy prescriptions are terrible, exacerbating the very problems he was addressing. Kerry, fronting the (comparative) party of modernity and of progressive change, had no big rhetorical breakthrough to make on the topic of change, even though his policy solutions were closer to the ones needed to mitigate working and middle class insecurity. In tangling with the concept of American angst in the face of modernity, Kerry would have endured all of the risk of upsetting potential supporters but reaped none of the gain of breaking a political taboo. This was the same crack logic behind Bush's famed embrace of the poor -- of the nun washing the feet of the homeless -- in his 2000 nomination address. Bush wasn't actually proposing to do anything for the desperately poor except rhetorically encourage the provision of private charity on their behalf. The Democrats weren't really proposing anything either -- their welfare policies were accessible through participation in the tax system -- but as the (comparative) "party of the poor", neither did they have any mileage to make in acknowledging the existence of those who existed outside that system. By merely talking about the politically untouchable destitute, Bush awed op-ed columnists in a way Gore would not have been able to do, by busting one of his party's stereotypes.
This is an essential irony of current American politics: when Democratic politicians bust their party's stereotypes, like Clinton did in 1992 by refusing to accept Jesse Jackson's entreaty for the vice-presidency in front of the Rainbow Coalition or by having a mentally retarded death row inmate executed in Arkansas, it's often ugly stuff, carried out at the expense of the "others" -- the demographic and interest groups that Democrats support and rely on but that "average Americans" (the desperately needed working and middle class whites) don't relate to. (To be fair, neither of the last two Democratic campaigns, for all their faults, engaged in this sort of symbolic severing behaviour, even in comparison to Bush.) Bush's politicial genius has been in engaging in the reverse of this: busting his party's uglier, more divisive stereotypes in word while never deverting from the standard pro-business supply-side program in deed. Where the Democrats break down the stereotypes of their coalition, invoking separation and independence, Bush's stereotype-busting chases its opposite, creating a phony notion of social concensus out of the divisiveness beneath, soothing the nerves of those who might traditionally lean GOP but be put off by the party's Reagan-Buchanan antisocial, antimodern edge. This is enormously effective. The power of rhetoric, the power to advance your plan in a uniting, spectrum-spanning way, is in fact the alternative to triangulation: a meeting in the rhetorical rather than the governing middle.
This is all very depressing. But the second important point of Hacker's analysis is the potential remedy to the first: it's the simple fact that the Democrats need to re-embrace the role, and potential positivity, of government (not "big government", but active, responsible government.) This is, of course, not a stereotype-buster. It's riskier, but much less divisive, than that: an attack on a stereotype, on the EPI's finding that "the government is corrupt and neither trustworthy nor a source of solutions." As Hacker points out, "Students of public opinion have long marveled at Americans' seemingly inconsistent celebration of government insurance programs, on the one hand and the ethic of rugged individualism on the other. Americans are "operational liberals" and "philosophical conservatives," public opinion analysts Lloyd Free and Hadley Cantril once argued." (Just as a digression, Free and Cantril's dichotomy is also one of Bill Clinton's favourite sayings).
The Democratic rhetorical breakthrough needs to come in reconciling these two facets of Americans' view of government. Even while embracing the desperately poor, the changing economic times, and certain types of multiculturalism, the neoconservatives have never dropped their ranting against government and against the Democrats' supposed hatred of individual freedom of economic choice -- it's the one thing that stays true in the conservative message. And its the one thing that has to be countered in the liberal message, especially given Republican hypocricy on the matter. Bush has railed against government intrusiveness through two campaigns and four and a half years of governing, even as he has swelled the ranks of the federal bureaucracy and run up enormous debts that will someday have to be paid off with taxdollars. Bush (and the Delay Congress) is the reason Americans see government as corrupt and wasteful -- and the irony is that, as Hacker points out, this helps them so long as they paint themselves as the party of less government.
This is the sort of catch-22 that has to be confronted, not evaded. The message (in Hacker's context; there are additional arguments in favour of government as a counterweight against private profit-seeking industry) is simple. The private sector cannot provide universal insurance; it can't guarantee our ability to live with some basic dignity behind the veil. There is no private entity that could attempt such a thing profitably or fairly. Government, because of its universality, can fill that gap. Elected government is the representative body of the people; it's the only entity that can really provide social insurance by spreading risk across the population in ways that have remained popular from 1935 to this day.
Risky? Of course. But the Democrats need both to do something brave and offer up a message that is universal and intellectually engaging. Defending the philosophical, as well as the practical, role of government-provided social insurance is the best and truest thing we've got to offer.
Although the Depression was a watershed in liberal thinking about the economy, there was nothing automatic about the reforms eventually embraced. Nor did the New Dealers simply dream up a coherent program once the scope of the disaster became clear. Instead, they drew on a wide range of often well-established ideas and precedents, guided by an abiding conviction: Capitalism needed to be "made good."
Making capitalism good implied many things: public employment, the taming of monopolies, relief for the destitute. Yet the most important ideal--and certainly the most enduring--was insurance. The word is familiar today, but, in the 1930s, it had a radical air. Insurance was an affirmation of free will over fate. If not an effort to stay the hand of God, it was an attempt to soften His blow. And it rested on modern actuarial science. The genius of insurance, especially when coupled with the power of the state to require participation, was that it could transform individual misfortunes into social costs distributed broadly across the citizenry. "Social insurance," as it came to be called, transformed the dislocations of modern capitalism into risks that could be managed and redistributed, rather than blows of fate that could only be feared and suffered.
In this passage and those that follow, Hacker gets at several points that are vital to the current political debate, both over specific programs like Social Security and over the broader role of government as society's insurer. First, he correctly points out that the beauty and endurance of the New Deal programs is that social insurance is simultaneously a progressive and a conservative idea. Its progressivism is obvious. Its conservatism rests on several facts. For one thing, it involves minimal governmental oversight and interference, its core programs providing simple income transfers rather than the type of in-kind provision of services (like housing or health care) that traditional liberals have long championed. Neither does social insurance propose or entail radical redistribution across socio-eonomic or ethnic classes. The philosophy of insurance rests on our shared uncertain expectations as citizens beginning life, not on the actual lifecycle realizations that fate hands us. Ex-ante, we're all together in the same boat; ex-post, anybody can fall onto hard times, illness or destitution through no fault or small fault of their own. And insurance provides those who fall a level of protection befitting their previous contribution to society as measured through wages. Because of this philisophical reliance on the Rawlsian "veil of ignorance" where uncertainty is universal and payouts are proportional, the New Deal social insurance programs entailed few of the normative choices about who "deserves" extra protection, or an extra economic boost, that hurt much of the Great Society liberal programs like AFDC.
Second, support for broad-based social insurance -- unemployment insurance, Medicare, social security, and supplemental security income -- actually rests on an appeal to the best in citizenry, our sense of and respect for an commitment to society, shared experience and public good. This too is tradtionally conservative, in the same sense that veneration of national service, and shared sacrifice in hard times, is traditionally a conservative (now a neoliberal) phenomenon. Making a personal sacrifice for the State in wartime, or even showing solidarity with for other States faced with national disasters or unavoidable military engagements, has a powerful draw for Americans: witness the extent to which military families supported the Iraq war early on, or the outpouring of private resources into the recent East Asian tsunami relief funds. Demanding a few dollars off your paycheck, roughly the same few dollars everyone pays, to support the "society" that supports you, is a politically supportable, even appealing, request, particularly when, as is the case with Social Security proper, the main deprivation being insured against-- old age -- is one that everybody in society eventually faces with an almost 100% probability.
Hacker's major theme is that the need for social insurance is actually greater today, in the post-welfare-capitalist society, than it has been at any point since the Great Depression, and that this fact retains enormous political power:
Against this backdrop, it's little wonder Americans remain so pessimistic about the economy. President Bush keeps saying the "economy is strong, and it's getting stronger." But Americans don't believe it. Unfortunately, Americans also don't believe that government can effectively address the problem of rising insecurity. In a recent series of focus groups, the Economic Policy Institute (EPI) found that middle-class Americans "believe traditional relationships that formerly provided some security are disappearing." Yet they also believe that "government is corrupt and neither trustworthy nor a source of solutions." The middle-class response to rising insecurity, according to the EPI's focus groups, is blunt and resigned: "It's up to me."
All of which suggests that there may well be a method to the madness of Bush's calls for an "ownership society." The Republican agenda is to replace existing protections with highly individualized private accounts and then let the chips fall where they may. This strategy may help the affluent and fortunate, but it won't provide strong guarantees of economic security to most Americans...Yet, while the ownership society can't guarantee economic security, it fits perfectly with the idea that "it's up to me"--that Americans are on their own in the new world of work and family. And, the more Americans believe that, the more likely it is that they will support conservative politicians who want to shift even more risk onto their shoulders. Call it the vicious cycle of insecurity--if Americans feel no one can help them, they will back leaders who won't. In the '30s, Democrats saw economic security as the keystone of a broad coalition in support of their party. Today, Republicans appear to see economic insecurity in much the same way. [Emphasis mine.]
There's a lot more to Hacker's piece (and his earlier, pre-election one on the same topic) but the highlighted bit gets to two of the major political realities facing liberal politics and politicians in the US. The first is a problem: that Bush and the Republicans understand Americans' sense of insecurity, and its sources, as well as the Democrats do, but, for various reasons, are willing to talk about it more plainly at crucial moments. Hacker quotes Bush's 2004 nomination speech at the start of the piece:
"The times in which we work and live are changing dramatically. The workers of our parents' generation typically had one job, one skill, one career, often with one company that provided health care and a pension. And most of those workers were men.
Today, workers change jobs, even careers, many times during their lives. And in one of the most dramatic shifts our society has seen, two-thirds of all moms also work outside the home.
This changed world can be a time of great opportunity for all Americans to earn a better living, support your family, and have a rewarding career. And government must take your side.
Many of our most fundamental systems -- the tax code, health coverage, pension plans, worker training -- were created for the world of yesterday, not tomorrow. We will transform these systems so that all citizens are equipped, prepared, and thus truly free to make your own choices and pursue your own dreams.
Essentially, Bush could acknowledge the fact of a changing, postindustrial society because his party is the party of conservatism, despite the fact (maybe even because of the fact) that his policy prescriptions are terrible, exacerbating the very problems he was addressing. Kerry, fronting the (comparative) party of modernity and of progressive change, had no big rhetorical breakthrough to make on the topic of change, even though his policy solutions were closer to the ones needed to mitigate working and middle class insecurity. In tangling with the concept of American angst in the face of modernity, Kerry would have endured all of the risk of upsetting potential supporters but reaped none of the gain of breaking a political taboo. This was the same crack logic behind Bush's famed embrace of the poor -- of the nun washing the feet of the homeless -- in his 2000 nomination address. Bush wasn't actually proposing to do anything for the desperately poor except rhetorically encourage the provision of private charity on their behalf. The Democrats weren't really proposing anything either -- their welfare policies were accessible through participation in the tax system -- but as the (comparative) "party of the poor", neither did they have any mileage to make in acknowledging the existence of those who existed outside that system. By merely talking about the politically untouchable destitute, Bush awed op-ed columnists in a way Gore would not have been able to do, by busting one of his party's stereotypes.
This is an essential irony of current American politics: when Democratic politicians bust their party's stereotypes, like Clinton did in 1992 by refusing to accept Jesse Jackson's entreaty for the vice-presidency in front of the Rainbow Coalition or by having a mentally retarded death row inmate executed in Arkansas, it's often ugly stuff, carried out at the expense of the "others" -- the demographic and interest groups that Democrats support and rely on but that "average Americans" (the desperately needed working and middle class whites) don't relate to. (To be fair, neither of the last two Democratic campaigns, for all their faults, engaged in this sort of symbolic severing behaviour, even in comparison to Bush.) Bush's politicial genius has been in engaging in the reverse of this: busting his party's uglier, more divisive stereotypes in word while never deverting from the standard pro-business supply-side program in deed. Where the Democrats break down the stereotypes of their coalition, invoking separation and independence, Bush's stereotype-busting chases its opposite, creating a phony notion of social concensus out of the divisiveness beneath, soothing the nerves of those who might traditionally lean GOP but be put off by the party's Reagan-Buchanan antisocial, antimodern edge. This is enormously effective. The power of rhetoric, the power to advance your plan in a uniting, spectrum-spanning way, is in fact the alternative to triangulation: a meeting in the rhetorical rather than the governing middle.
This is all very depressing. But the second important point of Hacker's analysis is the potential remedy to the first: it's the simple fact that the Democrats need to re-embrace the role, and potential positivity, of government (not "big government", but active, responsible government.) This is, of course, not a stereotype-buster. It's riskier, but much less divisive, than that: an attack on a stereotype, on the EPI's finding that "the government is corrupt and neither trustworthy nor a source of solutions." As Hacker points out, "Students of public opinion have long marveled at Americans' seemingly inconsistent celebration of government insurance programs, on the one hand and the ethic of rugged individualism on the other. Americans are "operational liberals" and "philosophical conservatives," public opinion analysts Lloyd Free and Hadley Cantril once argued." (Just as a digression, Free and Cantril's dichotomy is also one of Bill Clinton's favourite sayings).
The Democratic rhetorical breakthrough needs to come in reconciling these two facets of Americans' view of government. Even while embracing the desperately poor, the changing economic times, and certain types of multiculturalism, the neoconservatives have never dropped their ranting against government and against the Democrats' supposed hatred of individual freedom of economic choice -- it's the one thing that stays true in the conservative message. And its the one thing that has to be countered in the liberal message, especially given Republican hypocricy on the matter. Bush has railed against government intrusiveness through two campaigns and four and a half years of governing, even as he has swelled the ranks of the federal bureaucracy and run up enormous debts that will someday have to be paid off with taxdollars. Bush (and the Delay Congress) is the reason Americans see government as corrupt and wasteful -- and the irony is that, as Hacker points out, this helps them so long as they paint themselves as the party of less government.
This is the sort of catch-22 that has to be confronted, not evaded. The message (in Hacker's context; there are additional arguments in favour of government as a counterweight against private profit-seeking industry) is simple. The private sector cannot provide universal insurance; it can't guarantee our ability to live with some basic dignity behind the veil. There is no private entity that could attempt such a thing profitably or fairly. Government, because of its universality, can fill that gap. Elected government is the representative body of the people; it's the only entity that can really provide social insurance by spreading risk across the population in ways that have remained popular from 1935 to this day.
Risky? Of course. But the Democrats need both to do something brave and offer up a message that is universal and intellectually engaging. Defending the philosophical, as well as the practical, role of government-provided social insurance is the best and truest thing we've got to offer.
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