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Henry Wallace Cover of Time Sept 30, 1946

Oliver Stone’s ten part documentary which aired on Showtime, “The Untold History of the United States,” which I have commented on previously, reminds us of a long forgotten missed opportunity to reduce or eliminate the Cold War and perhaps avoid dropping the two atomic bombs on Japan, justified at the time by Truman to save a costly invasion of the Japanese mainland. Oliver Stone and Peter Kuznick (history professor, American University) collaborated for the series, which hypothesizes that our postwar history might have played out very differently if Henry Wallace had continued to serve as FDR’s running mate and vice president rather than Harry Truman in FDR’s last Presidential run in 1944. Wallace served as FDR’s vice president from 1940-1944 and he was wildly popular with convention delegates at the time of the 1944 Democratic convention. Indeed he was arguably the most popular politician with the exception of FDR himself, both as secretary of agriculture (1933-1940) and vice president. Furthermore, his popularity spread to the international community, in part because he advocated issues that resonated with poor farmers and workers. But party bosses and Southern political leaders did not like Wallace—he represented a nightmare candidate for them, since he had been speaking out against race and gender inequity and was very much opposed to Henry Luce’s (the publisher of Time and Life) idea that the 20th Century should be an American Century fully decorated with American hegemony—Luce favored the formation of the empire we have today, even though those that run it refuse to call it as such.

Henry Wallace was like no other politician in our history. He was an Iowa farmer who carried out scientific experiments related to crop improvements and became secretary of agriculture under FDR, a department he ran with great energy and efficiency. Wallace was undoubtedly the best secretary of agriculture in the history of our country. I planned on writing a post describing my impressions of Henry Wallace, as I am currently reading “American Dreamer: A life of Henry A. Wallace,” by John C. Culver and John Hyde. However writer Peter Dreier did it for me a few days ago in his excellent summary of Henry Wallace posted in Truthout. In reading about Wallace, you cannot help but think how much better off we would be if we could only attract more people like Wallace into politics. He was a bit naive perhaps, but I think our political landscape would be vastly improved with a few more knowledgeable dreamers to replace the overcrowded DC rooms filled with ideologues, lobbyists and outdated Republicans. Wallace came into politics through the back door at a time when science and farming were just beginning to intertwine into a common set of objectives and practices. He not only facilitated this transformation, but he began a hybrid seed company  the”Hi-Bred Corn Company,” which generated more productive hybrid corn seeds, provided financial security for his family, made him rich, revolutionized agronomy and was eventually bought by DuPont in 1999 for $ 9.4 billion. While secretary of agriculture under FDR, he established the school lunch program, food stamps and facilitated better farming practices to avoid wide swings in farm commodity prices. As a farmer, he had been raised to believe that proper farming required cooperative interactions among farmers to succeed. Coming from a traditional Republican family, he broke with this tradition and sided with FDR for the election of 1932. That year the normally Republican state of Iowa went for FDR, who picked Wallace for his secretary of agriculture.

As romantic as we might want to be about Henry Wallace, strongly promoted by Oliver Stone’s documentary, others have been more critical of Stone and Kuznick’s interpretation. Historian Sean Wilentz has accused Stone and Kuznick of “Cherry-Picking our History,” published in the New York Review of Books.  Wilentz points out the downside of Wallace as a politician and challenges the interpretation of Stone and Kuznick. As vice president (1940-1944) Wallace was the presiding officer of the Senate and through his aloof character, and his push to end segregation, he managed to offend almost everyone in that body and, according to Wilentz,  he became a political liability for Roosevelt who migrated to a position of indifference towards him as a running mate. Furthermore, as a candidate for the Presidency in 1948, Wallace allowed members of the Communist party to become entrenched in his organization and even Eleanor Roosevelt spoke out against his candidacy (she had been strongly supportive of Wallace in the FDR administration). The progressive movement was divided on how it viewed the Soviet Union. More romantically inclined liberals saw Stalin as a savior of his country during WWII and were willing to overlook or minimize the brutality of his dictatorship. Other progressives drew the line and could not tolerate the Soviets, not just because of Stalin’s atrocities to his own people–but because they did not see Communism lying within the spectrum of liberalism as a form of government. Indeed, this view of liberalism drew the line on Communism, whereas the more romantic view allowed democracy and Communism to be a continuum at different ends of the political and socioeconomic spectrum. Wallace had adopted the more romantic view of Communism, which he promoted during his 1948 campaign.  Even journalist I.F. Stone wrote in 1948 “the Communists have been the dominant influence in the Progressive Party [referring to Wallace who ran on the Progressive party ticket]…. If it had not been for the Communists, there would have been no Progressive Party.” Henry Wallace eventually separated himself from the Communists, when, in 1952 he wrote “Where I was Wrong” and explained that he had not been properly informed about Stalin’s crimes and concluded “More and more I am convinced that Russian Communism in its total disregard of truth, in its fanaticism, its intolerance and its resolute denial of God and religion is something utterly evil.” Nevertheless, I find Wilentz’s views on Wallace to seriously under represent his contributions to Federal policies, even during and after the 1948 election. Had Wallace been the vice president and ascended to the presidency in 1945, I doubt that we would have had the Cold War and perhaps we would have avoided the use of militaristic prisms that we use to view the world around us today.

This view of the influence of the Communist party in the 1948 election is somewhat narrowly focused by Wilentz’s critique. There were many reasons why the Communist party had followers and one prominent reason related to the Spanish Civil war in the 1930s. The elected government in Spain was besieged by Franco who wanted to establish a fascist state. Mussolini and Hitler supported Franco with men and material and Hitler’s Luftwaffe honed their skills by bombing Spanish cities, including Guernica, which led to Picasso’s famous painting under the same name (displayed at the 1937 World’s Fair in Paris). Russia on the other hand supported the government (Republicans), while Roosevelt refused to support them in part because of their alignment with Russia. This led many sympathizers in the U.S. to either join the Communist party and fight with the Republicans in the “Lincoln Brigade” or make donations to the party in support of the Republican cause. Many who joined the Communist party or gave donations would later be black-balled through the machinations of McCarthyism and/or the actions of the House UN-American Activities Committee (HUAC). Thus their support of the democratically elected government of Spain led to their personal ruination once McCarthyism took hold of our national psyche.

The debate about who started the Cold War is as old as the Cold War itself. Could Wallace, as the alternative vice president, elevated to the Presidency by FDR’s untimely death, have changed the course of history and created a different world, one which did not allow the retention of the old colonial systems of Britain and France? Would that have eliminated our future engagement in Vietnam? When we started the war in Vietnam were we merely defending French colonialism? Was Ho Chi Minh a nationalist and not a communist? FDR spoke often of his distaste for colonial rule and Wallace shared in this attitude and no doubt influenced Roosevelt’s opinion on the matter. Wallace was the principle architect of the new deal and continuously emphasized the creation of jobs as a much needed mechanism to avoid militarism after the war. He published a book in 1945, illustrating how the country could create 60 million jobs to transition between a wartime economy and a peace-economy.

I do not believe that Truman really had much choice but to go along with dropping the atomic bomb on Japan. Everything I have read points to people like General Leslie Groves, who said they would use the bomb, not to end the war against Japan, but as a warning to the Russians, who had clearly established themselves as a contending superpower in the post-war era. Within the Truman administration you had different opinions as to why we dropped the atom bomb on Japan, but because Truman had control of the bully pulpit, we inherited his interpretation—it was done to avoid shedding more blood by an invasion of the mainland. But, if we hadn’t dropped the bomb, and did as the scientists suggested—share atomic “secrets” with the Russians, then relationships between the two systems would surely have taken a different course, perhaps a vastly different one. I also believe that our adoption of Cold War tactics prolonged the demise of the Soviet Union dictatorship because our confrontational posture fostered the continuation of hardline leadership in the Soviet Union.  And we must never forget that during the Cuban Missile Crisis, we came within a whisker of a nuclear war, perhaps followed by a nuclear winter and then surely followed by a long decline in the human condition, if humans even survived such a calamitous event. I do not believe it would have taken much to unwind the militarists who wanted empire over a more peaceful planet. Those that promoted the turn towards militarism after the war were mostly unelected officials, including James Forrestal (a rabid anti-communist who because secretary of defense under Truman and later committed suicide), James Byrnes (a hardliner who became secretary of state under Truman).  The militarists got their way and we continue to have alternative attitudes towards other countries such as China, which is either a military threat and must be contained, or is one of our largest trading partners who happens to own a significant part of our national debt.

I side with Stone and Kuznick: if Wallace had been picked as vice president in 1944, the election of 1948 would likely have been between Thomas Dewey and Henry Wallace and it would have been that election which determined whether the hardline attitude towards the Soviets would win out over the more conciliatory posture that Wallace preferred. The Russians were not a military threat at the end of WW II. Their country had been shattered during the war and they were in the process of demilitarizing to rebuild their country—they lost 27 million people in WW II. Just imagine what we would have done after such a disastrous loss—we surely would have been more focused on repairing our country than conquering new ones. But we would also demand security on our borders, especially since we won the war. Suppose Mexico has been one of the attacking forces aligned against us. After winning the war against them wouldn’t we demand that Mexico become more pacified and neutralized such that they could never again mount an attack against us? That is how Stalin viewed Poland. Russia’s demand for border security is precisely what we would have demanded after such a horrific conflict. In addition, FDR had established a good relationship with Stalin and referred to him as “Uncle Joe.” The documentary films we made during the Second World War, Why We Fight, directed by Frank Capra, eulogized the Russian contribution to the war and helped to establish Russia as an important ally in the struggle against fascism and in the minds of American citizens. If we had more clearly articulated recognition that it was the Russian army that won the war, the Russian army that saved American lives from a more devastating loss of life, we could have helped persuade the American electorate that there was no point in establishing a confrontational policy against the Soviets. We had promised to give $ 6 billion in aid to Russia, which Truman denied them at a point where such aid could have gone a long way to help the Russian people restore their badly torn country.

Truman was far more naive than Wallace about the ingredients needed to successfully steer the nation after the close of the war. Indeed it was Truman’s naivete that led to the Cold War and started us on a pathway to the state of militarism we find ourselves in today. It was Truman who naively got us into the Korean War as he slowly learned that America could never win a land war in Asia. For a more complete description of how Truman’s naivete helped create the Cold War, see here and here. The election of 1948, in which momentum had started to swing towards the attitudes that would cement us into the Cold War, Wallace’s challenge to Truman was the last stage in which we had an open discussion of the Cold War policies generated by the Truman administration before the door slammed on the alternative pathway to avoid the state of militarism that we have inherited from their Cold War policies. Truman stamped the American electorate with his own naive view of the world and sealed forever our reactionary impulses to foreign policy challenges. Although Truman started the process, it was unfortunate to see how easily Americans incorporated “anti-communism” into our national DNA. As one might predict for a country that chooses military might over more peaceful strategies, the slaying of the Communist dragon did not bring us a significant peace dividend. We still insist on American hegemony as our most prominent reflex when confronted with foreign policy challenges.With the invention of cyber warfare perhaps our future battles will take place with software rather than human lives and expensive hardware.

RFM

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From Hacker Pierson Winner Take All

After WW II,  Middle Class Americans came into prosperity through the power of labor unions and Federal policies that supported higher education, largely through the GI Bill, passed  in 1944. Twelve years later, when the Bill ended, 2.2 million GIs had taken advantage of the program and obtained a college education, while another 6.6 million had received some kind of job training benefit. A college benefit was also made available to Korean war veterans, though it was a bit less generous than that for WW II soldiers. These programs, coupled with New Deal policies favorable to the working class and labor unions,  helped generate the Middle Class out of the whole cloth of American workers, many of whom had struggled in poverty before the war during the Great Depression: it was an astonishing achievement the likes of which had never been seen before in American history: we created a new, wealthier Middle Class.  The birth of The New Deal under FDR seemed like a new era in political support for the American worker had arrived. The GI Bill was directly responsible for producing an educated American work force that was in the fire-when-ready-mode when the Russians launched Sputnik in 1957;  many of the children from this newly formed Middle Class, obtained doctorate degrees in a huge array of subjects and formed the foundation for the Golden Era of the American Research University, which lasted from 1958-1968. The Middle Class responded to this new challenge and proved that there was true genius among them, something we should never forget. It was during that period that science funding and Federal support for graduate programs, with fellowship and infrastructure support, emerged in a significant way for the first time in American history. This revolutionary period established the American Research University as among the premier research institutions in the world, until the neoliberals began to define a different agenda, characterized by disinvestment and the destruction of our education system, from K-12 to higher education and beyond. And let’s face it: they are winning this undeclared war.

Right now we are in a deep recession, one which has too many components to resolve itself quickly, but in essence, this recession has been building for the last 40 + years. The housing bubble merely represented the last log our economy could put on the fire before the long history of dismantling The New Deal came home to roost. Now, there is no quick fix for what ails us—we have to build a new economy from the ground up.  And we are not getting enough help to get the job done. Central to our economic problems is that the Middle Class has been deprived of wage increases that used to be strongly coupled to improvements in worker productivity. The accompanying graph (same as that in a previous posting) illustrates  income growth in 2008 dollars, from 1970 to 2008 for the bottom 90 percent of wage earners (light green line), compared to the top 1 percent (dark green line). Despite an increase in worker productivity (illustrated in the graph below) wages for the bottom 90 percent of Americans have seen no growth from 1970 through 2008 and as of 2006, wages and salaries for workers dropped to their lowest level as a percentage of the GDP since the government started keeping records in 1947.  The resulting stagnation in wage growth is a major reason why there is insufficient demand to pull our economy out of the serious recession we are in, particularly since we have become a far more of a consumer-based economy than we were immediately after WW II, when we had an economy based more on exports.  When worker productivity was not rewarded with parallel wage growth, Americans started borrowing, often using credit cards,  and Middle Class households discovered that a single wage-earner was no longer sufficient to maintain household expectations, one component of which was an affordable college education for their children. But, as Middle Class income stagnated and college costs skyrocketed,  it was necessary for their children to borrow in order to pay for college; today we have passed the $ 1 trillion mark for school loan debt. Excessive student debt was one of the major themes of the Occupy Wall Street (OWS) movement last year and this issue will be with us for a very long time. The jobs that are coming back now are low-paying jobs with no benefits—they are the jobs of the temp worker.

From NYT

Things changed beginning in the late 1970s and early 1980s, as the neoliberals gained momentum in turning back the wage increases that labor generated in the postwar period. The mortal enemy of capitalism is labor and the neoliberals set about to dramatically change the relationship between labor and business, to enhance short-term profits and improve the value of the company stock. The emphasis on the gold watch as a symbol of a quality CEO performance, was transformed into the golden parachute for the CEO and his select, executive companions. The failure of the public to denounce the leverage-buyout mania of the 1980s, helped accelerate inefficiencies in American manufacturing (because more focus and money was spent on acquisition than plant improvements) and gave birth to the private equity firms who make money from destroying the American manufacturing base.  Today, union membership in the private sector has fallen to about 7 percent, compared to the 35-40 percent during the peak period of union influence. These are levels that have not been seen since 1932. The decline in the unionized workforce was part of a deliberate strategy by the neoliberals to reduce the cost of labor and it worked, in part by creating a labor surplus, especially evident with today’s high unemployment levels but also generated by shipping jobs overseas as we sold manufacturing equipment and transferred jobs to India and China. We must also be aware of job loss through technological improvements and computerized functions which have displaced American workers. Just as one example, grocery stores used to have stock boys to make sure stock was ordered and displayed, but the computerized check-out and scanning system has eliminated their positions with more automated ordering. America is now the home of wealthy companies like Apple who design their products in America, but manufacture them in China or other Asian locations. How many jobs losses Mitt Romney presided over at Bain Capital has, to my knowledge, not been calculated, in part because the toxic version of capitalism that resides in America today doesn’t want anyone to know the answer. Perhaps during this election season we may see a number.

The figure to the right shows three different panels related to American wages and corporate profits. This article appeared in the New York Times in 2006, written by Stephen Greenhouse and David Leonhardt. The upper panel shows wage and salary growth, corrected for inflation from 1947 to 2006, at which point wages were at the lowest percentage of the GDP compared to any other time since the government started tracking this kind of data in 1947. The picture is slightly better when you look at overall compensation, adding benefits to the picture, but this is a bit misleading because it largely reflects the huge increase in health insurance costs, rather than something that went into the worker’s pockets. The lower graph of the upper panel shows that by 2006, corporate profits were at the highest level as a share of GDP since the 1960′s. The panel on the lower left shows wage and salary compensation for workers age 18 to 65 since 1974 expressed as a percent of income increase over the year before. This illustrates a very bumpy road of income growth with many negative periods, indicating a net loss of income. In contrast, the panel on the lower right shows productivity changes from previous years and illustrates only four years of negative change compared to 15 such years for wage growth. Clearly, the American worker has not experienced rewards for the increased productivity related to his/her work. According to economist Richard Wolff, the loss of compensation for increased productivity that began in the 1970′s was the first time in American history that wages did not track productivity.

Symbolically, the most prominent attack on labor was initiated under Ronald Reagan when he fired 13,000 air traffic controllers in 1981 and destroyed their union, the  Professional Air Traffic Controllers Organization (PATCO), which was eventually decertified. This cleared the way for business to fire employees who attempted to form unions with little or no protection from the weakened National Labor Board.  Everyone now recognizes that poor income levels among the Middle Class have served to push many of them into impoverished living conditions, forced them into foreclosure on their homes and worsening their debt load, which in turn has led to decreased demand in our consumer-based economy. We need to restore both the income level and confidence in the American worker to insure that his/her compensation includes a sensible plan for retirement (not a 401K, but a retirement fund contributed by employer and employee) that cannot be touched through corporate buyouts. Given the importance of labor unions and their historic role in generating improvements in wages and working conditions, it might seem plausible that we should wait around and do everything we can to give labor unions a chance to rebuild themselves and return to a more dominant role in wage negotiations, especially if we can rebuild the economy with a strong manufacturing base. But such a recovery is likely to take decades and we are so far down the road of financialization of our economy, that the prospects for achieving a short-term solution through this pathway seems very remote.

Yet, there’s a shorter, better way, one that we could implement almost overnight. The concept is referred to as Back to Full Employment. The idea of full employment came out of the Great Depression as a Keynesian concept. In those days, most economists thought that the purpose of macroeconomics was to steer economic policy and growth towards full employment. How times have changed: that concept of course was abandoned by the neoliberals who currently command our economic steering mechanisms. The first paper describing this strategy was by Polish economist Michal Kalecki, who wrote the article in the 1940s; The Monthly Review reprinted it a few years ago. In 1976 economist James Galbraith served on the staff of the House Banking Committee and worked to produce what, two years later became the Humphrey-Hawkins Full Employment and Balanced Growth Act. The bill had as its core, “full employment,” “balanced growth” and “reasonable price stability.” Included in the bill were amendments which instructed the Federal Reserve to report regularly to Congress about its progress on the full employment objective. Unfortunately, the Federal Reserve amendments are the only part of the bill that survived: every 6 months the head of the Federal Reserve sits before Congress and reports on the status of the economy; this is the only opportunity the Fed has to reveal its intentions in a public forum. The goal of the Humphrey-Hawkins Bill was to establish unemployment at 4 percent, with 3 percent inflation. Unfortunately, the Fed was run by Paul Volcker who followed a very strict policy of monetarism, driving the unemployment level to 11 percent in the early 1980s.

One of the most outspoken advocates of returning to the strategy of full employment is economist Robert Pollin who has just released a new book, “Back to Full Employment.“ You can also see him interviewed on the subject with Laura Flanders on GRITtv.org. In addition, the Boston Review in their January/February 2011 issue featured this topic with Pollin and several others, including James Galbraith. According to Pollin, right now you can make a case that the unemployment level is close to 20 percent, when you include those that have stopped looking for jobs and the underemployed. This is an unsustainable rate for any country, but in the past, our country has been at full employment, with unemployment levels at 4 percent or below; that’s were we should aim and not be satisfied until we get there. Full employment is the unwritten part of America’s social contract with its labor force. Pollin’s argument is that once you get to an unemployment level of 4 percent or below, the labor market acquires a new dynamic and wages are bargained upwards: in 1998 the unemployment rate fell below 3.9 percent and wages started to rise rapidly, particularly for the lower income workers. According to Pollin, we can get to that level without new legislation through the authority of the Federal Reserve, a component of which was recently decided when Ben Bernanke announced that the Fed would buy mortgages and mortgage-backed securities. By the way, the full employment strategy is good for business because demand goes up and business income can flourish.

The neoliberals have given us one bubble after another as a method for stimulating our economy and the evidence is all around us how poorly this strategy has worked. No rational person can imagine that experiencing  bubble after bubble is a sensible way to build an economy, yet that is precisely what the neoliberals have in store for us. We have only to ask when the next one will be? We should recognize that the Federal Reserve can grow employment without the need for new legislation. But the success of that spending depends on where the money goes. According to Pollin, for a million dollars spent on education, public or private, twenty-seven jobs are created; if you spend the same amount on the military, about eleven jobs are created. So success at job creation depends a lot on where you spend the money. This simple fact tells us that Obama could significantly enhance the jobs picture by transferring money out of the military, into education, just for starters; imagine how much more our society would benefit by boosting education as opposed to putting more money in the military, where job creation gives us much less bang for the buck. A lot of these changes can be achieved without reducing our military preparedness, but let’s face it, we have nearly as large a military budget as the rest of the world combined. Do we really need to dominate the world, especially if doing so is costing us a robust domestic economy? The enemies we face are the enemies we created. But there is a lot more to the concept of “Back to Full Employment.” Right now we are laying off a lot of teachers, nurses and firefighters because local governments are under severe budgetary constraints. We have supposedly ended the war in Iraq and in the process of ending it in Afghanistan: the cost of those two wars was $ 88 billion this year; we should be able to take that chunk of money and feed it into local budgets to maintain important employment at the state and local level. The total budget deficit for all state and local governments is about $100 billion. Transferring the $ 88 billion could cover a big part of this deficit, which must be solved in order for a robust economic recovery to take place. A very large part of Obama’s stimulus package was tax cuts, so Obama did not hire lots of people as FDR did in the 1930s. It’s quite a different stimulus package when it’s loaded with tax cuts rather than a jobs program. But then too we have the banks, who, right now, are “hoarding” $ 1.6 trillion in cash at the central bank, not in some other country’s bonds. According to Pollin, this $1.6 trillion is 10 percent of the American economy and this is the money that banks get for free—zero interest rate. The reason banks are not investing in the American economy right now is that they rate it as too much of a risk. But we know that the current crisis is because of a lack of demand in a consumer-based economy. So why not use that $1.6 trillion to feed investments into our economy by rebuilding our infrastructure and shoring up things like education which will repay us in the form of good job creation with benefits. As Pollin says “there’s nothing unhealthy about running a big fiscal deficit in a recession.” We suffer from amnesia by not remembering how we recovered from the Great Depression—it was government spending, as we fused emerging from the Depression with ending the Second World War. If you are a young person just entering the work force with or without a college degree, the situation is hopeless, though it is not the same in every field or specialty. There is a minimum reserve requirement for the Fed’s $1.6 trillion, but if you say that $ 600 billion should be enough, it still leaves $1 trillion dollars available for spending on programs to enhance our work force and insist on full employment. A combination of massive spending to create jobs and extension and a loan guarantee for small business loans (right now small businesses are being denied loans because the banks do not want to take the risk. Federal intervention to provide small business loan guarantees would go a long way towards solving this dilemma). The third thing we must do is stop the austerity program—it is helping no one but the neoliberals who are out of touch to say the least with the American worker.

We know that the back to full employment movement will not resonate with Republicans. They were opposed to it when it was first brought up during the Great Depression.  One can almost visualize Paul Ryan’s facial contortions if someone presented this plan as a new election ploy for the Republicans. But if they came on board for this plan, they just might get elected. Pollin has also had contact with the Obama administration and when he suggested the idea, they too were opposed to it. Both parties are currently to the right of the American public and things will stay that way until we recognize that politics is not a game you can play by simply electing better officials–it’s become a contact sport! Besides the better public officials rarely run for office anymore and if they do, they will eventually need large sums of money to fund there campaign and we have only one funding source left for the kind of money required to run a vigorous campaign—everyone needs help from Wall Street. But, full employment should at the very least become a subject of public discussion. And if both political parties are against it, how can it enter into the public arena and acquire speech? The answer is through the Occupy Wall Street movement.

Think Progress Image

It has only been a year since that group first occupied Zucotti Park and already they have given us the “99 percent” as a symbolic way of characterizing income inequality in America and what they first pointed out is only getting worse. Most of the jobs coming back do not provide a liveable wage. Before the OWS movement, income inequality was not a subject of discussion and you didn’t see much of it in the newspapers. Now it is a major topic, though you don’t hear much about it during this Presidential election, perhaps because both political parties endorse the “steady as she goes” policies practiced by the Obama administration since their first attempt at stimulating the economy; these policies, where politicians seem to be trapped between the obvious need for a Federal stimulus and the Republican criticism about the debt. These factors add up to the state of paralysis we see in Washington about creating good jobs. If Romney is elected, his plan is to make things worse, but even if Obama stays on for a second term, he will not respond on this issue until public demands force him into action—that much is already clear.   When the OWS movement first started, it generated issues that deeply resonated with most Americans who felt a kinship to the concepts and the movement. The OWS movement identified a core problem and an element of great distortion if not disintegration within our economy and society. The 1 percent have been identified as the central cause of many of our problems, though they command great influence throughout our political institutions. But while the OWS movement properly identified a grave problem in America, they did not offer a clear pathway out of our dilemma, except they denounced both political parties and did not endorse any political movement. The full employment option is one way that the OWS movement can propose a solution to the problems they so effectively demonstrated about the 1 percent who flourish, while the rest of the country is faced with a long period of substandard living with little hope for the future of their children and grandchildren. A national discussion of Full Employment is one way to approach this issue and the OWS movement naturally comes to mind.

RFM

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Relative Healthcare Costs as a % of GDP

I am sure you have all read/heard or speculated about the many different scenarios that could unfold should the Supreme Court nullify all or part of the Patient Protection and Affordable Care Act, passed as the signature legislative achievement during the first term of President Barack Obama. Whether Obama has a second term might well depend on the outcome of the Supreme Court decision and, if negative, his reaction to it.  Many have argued that if the “individual mandate” of the law is declared unconstitutional, many other valuable features of the bill will still remain intact. The “individual mandate,” which forces individuals to purchase insurance if they don’t have it through their place of employment, will be part of a $477 billion government subsidy to the insurance companies and without that critical source of funds, the entire healthcare plan could easily unravel. While this healthcare bill is projected to provide health insurance for 30 million Americans who lack this fundamental component of a civilized society, it will still leave about 20 million Americans without health insurance; it is thus an incomplete solution to our problem. Yet, isn’t it odd how things have been twisted, as the Democrats are now hoping that the Supreme Court will not rule against a bill that just a few years ago was a Republican plan for national healthcare, not a Democratic solution.

I can personally see the rationale for declaring the bill unconstitutional because the individual mandate forces people to buy insurance from a private company, thereby subsidizing their profits and insuring corporate survival by a mechanism different from the “free market.” We have a 5/4 “free market” Supreme Court, but in this case it’s hard to know how the court will react because government support of corporations is a big, non-verbal part of our “free market economy” (consider for example the government-subsidized military industrial complex or our government subsidies to oil companies that make obscene profits). In contrast to the new healthcare legislation, our other social programs, such as Medicare and Social Security, are government-run organizations, paid for through payroll deductions, not through subsidizing private companies. The Patient Protection and Affordable Care Act was conceived by the Heritage Foundation and its 2000 pages were written by corporate lobbyists representing them–it was designed to meet the needs of the for-profit health insurance industry. When the law was first passed, the stock value of the for-profit healthcare organizations went up–it was perceived as a victory for them by their investors.

There is another downside and inefficiency to the new healthcare law: it doesn’t separate us from our employment. The new law will still connect our healthcare to our jobs and if you lose your job, you lose your healthcare and have to replace it with something else, hopefully something less expensive than the nightmare, very costly alternatives we have now: we still don’t know how well that component will work, as it is not yet part of the system in motion. As we expand government subsidies to the private healthcare industry, we will make them more profitable and more effective in lobbying Congress to chip away at the healthcare laws and rules to make these healthcare giants ever more profitable. We have a history that includes the inability to resist that kind lobbying, particularly in the current iteration of our government: indeed that’s how our system works.  Money means influence and more money means more influence.  Just as we don’t want financial institutions that are too big to fail (even though we have them), we don’t want private healthcare providers to become so rich that they have ample profits to spend money on lobbying against our own healthcare laws. Remember, these companies describe themselves as healthcare organizations and no matter what their ads say, they are determined to get more profit and to do so by minimizing the care they deliver–it’s in their DNA.  Buried in those 2000 pages of the new healthcare bill are exceptions and exemptions that companies can use to deny care in the interests of profits. It is simply not possible to have a national healthcare system where one of the main components is trying to maximize its profits and compete against the interests of a population trying to get decent healthcare.  It’s not that these companies should be regulated more effectively–they should be eliminated as obstructionists to a decent healthcare system. The mere existence of these for-profit health insurance companies will pose a constant threat to our healthcare system, no matter where the Supreme Court decision on this bill should fall.

Chris Hedges, writing in Truthout, visited the demonstrations held outside the Supreme Court building when the debate was going on. There were those supporting what has become known as Obamacare while the right-wing was entrenched against it and refers to it as socialism (despite its Heritage Foundation origins).  But there were also a small number of thoughtful people, with whom Chris identified, including Dr. Margaret Flowers, who is a well known healthcare activist,  lobbying for the destruction of Obama’s individual mandate and replacing the entire Obamacare with a single payer system that would gut the for-profit healthcare industry and replace it with “Medicare for all.” They have a single payer website which you can visit, join and help advance the cause for a more rational healthcare system. Margaret Flowers’ point is this (quoted from the Hedges article): “If you are trying to meet the goal of universal health coverage and the only way to meet that goal is to force people to purchase private insurance, then you might consider that it is constitutional,” Flowers said. “Our argument is that the individual mandate does not meet the goal of universality. When you attempt to use the individual mandate and expansion of Medicaid for coverage, only about half of the uninsured gain coverage. This is what we have seen in Massachusetts.” Thus the healthcare system in Massachusetts, which has implemented basically the same healthcare system we plan to put in place under the new law, by experiential history , does not lead to universal coverage, something that should be the goal of any national healthcare system. Many people who support this bill believe it’s a start, that an early beginning can lead to later expansion of the system to cover all Americans. I don’t believe that will happen–I think it’s more likely that we will have a two tier system that won’t change for many years, simply because we are too divided as a country to agree on something as profound as universal healthcare–that has to happen through a surging political mandate. The cost factor of our present system is also problematic and seemingly doesn’t get fixed with the new healthcare law and we already top the charts compared to other countries (see chart): currently, our healthcare system costs twice as much as that of most other countries (as a percentage of our GDP) and one reason is the administrative costs incurred by the for-profit system as well as the many unnecessary medical procedures created from the profit motive. If you paid doctors a salary, like the Mayo Clinic and Cleveland Clinic do, you could reduce the motivation behind unnecessary medical procedures. When you consider that we already have the most expensive medical care system in the world, but still leave 20 million uninsured, you have the ingredients of a very sick system, even if the new law gets full backing from the Supreme Court.

But, suppose the Supreme Court rules against the healthcare system? Then imagine that Obama, faced with the reality of a Supreme Court, whose ideological composition may be in place for many years and motivated by public outrage at the Court’s decision, decides to campaign for a single payer system embodied in “Medicare for All.” Although polls show that the majority of Americans are opposed to the Patient Protection and Affordable Care Act, many of them are opposed to it because it doesn’t go far enough in support of a single payer option. Many of us were very unhappy when Obama didn’t give the single payer option more of an opportunity to resonate with the American people before it got pushed aside as an option that couldn’t be passed. Obama’s failure to give the public option more support served as one of the first disappointments in what turned out to be a long string of triangulating and seemingly cowardly attempts to placate the right at a time when everyone but the White House knew that they would not compromise. Not a single Republican voted for the Patient Protection and Affordable Care Act.  Obama has faced this problem for his entire Presidency.  But, the polls show that when the polling questions are formulated properly, the majority of Americans favor a single payer system. The bill that was proposed in favor of such a system was written on a single page, containing a few sentences describing who would be included in Medicare–all those between birth and death. What could be simpler; Medicare already works and has been serving people for more than fifty years. There is enough money to support this system, but part of it must be removed from the expensive, absurd costs of supporting for-profit healthcare and the excessive costs of drugs for seniors passed by a Republican congress and signed into law by GW Bush.  And we should not forget, that by making the for-profit healthcare companies even wealthier, we will be setting the stage for the lobbyist erosion of the best parts of the Affordable Care Act, because those parts will mean less profit to the healthcare corporations and serve as the first targets of their lobbying efforts. These efforts are already underway–these companies will forever be sending lobbyists to Washington to chip away at our healthcare system in order to enhance their profitability. When Bush announced his perception of candidates for the “axis of evil,” he forgot to include medicine for profit in the mix. I for one would be energized if the Supreme Court declared “Obamacare” unconstitutional.What about you?

RFM

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