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  • Americans can’t cope?

    Posted by ken on October 6th, 2004 (All posts by )

    It’s interesting to see the other side state their basic assumptions explicitly. Usually, you have to divine their premises from their proposals and actions, and you sometimes sound paranoid when you do; not only that, they get to accuse you of lying about them, and point out that they never did come out and say the underlying assumption you think they’re using.

    Well, here it is, spelled out in black and white. In the middle of telling us about George W. Bush and the Republican evil plot to enrich the plutocrats at the expense of regular people, Jacob Hacker of The New Republic writes, and I quote:

    “Conservatives demand a go-it-alone world of personal responsibility. Yet, the truth is that Americans can’t cope with insecurity on their own. ”

    It doesn’t get much clearer than that. If you read the whole piece, it’s an attack on the very idea of transferring to individuals any of the responsibility for providing for their financial well-being. No replacing company store health plans with cash. No replacing pensions with 401(k)’s. No tax-deferred savings or health savings accounts. No expecting people to save for unexpected expenses or layoffs. All of these things transfer nothing but “risk” to ordinary people, while enriching the plutocrats. Apparently, average Americans can’t handle using plain old American dollars to meet their needs and provide for the unexpected, but need the guiding hand of Washington to look after them for the rest of their lives and see that they don’t get themselves into trouble.

    From that basic assumption he goes on to claim that Americans still have too much responsibility (or, as he puts it, “risk”), and outline a plan for “universal insurance”, whereby everyone “contributes” “premiums”, and anyone can get a payback if his income drops (for any reason?). He seems to notice (“To some extent”) that this has “moral hazard” written all over it, but then waves his hands and says that corporations have limited liability “to encourage risk-taking” (Actually, it’s to encourage investment – just imagine what life would be like if a judgement against any corporation represented in your 401(k) meant that the plantiff could go after all of your assets to pay for it…) and that ordinary American families need the same thing in order to preserve the dynamism of American capitalism. While risk-taking is certainly a big part of America’s success stories, I don’t see how encouraging people to risk other people’s money (without their consent) on prospects that they wouldn’t risk their own money on is supposed to be a winning proposition for us or for society.

    At any rate, all the hare-brained schemes that we find ourselves burdened with rest on the basic assumption, rarely stated so baldly, that Americans never actually grow up, that they need parental guidance and care for their entire lives, and that anyone who presumes to allow Americans any measure of liberty or ask them to assume any measure of responsibility for their own well being is on the same moral level as someone who would toss a small child out on the street and ask it to fend for itself. How they can possibly believe this about a population largely descended from individuals that willingly left everything and everyone they knew behind, crossed a major ocean, and eagerly fended for themselves in a strange new land escapes me, but there it is. That’s the proposition that we stand in opposition to, that’s the basic assumption of all of our opponents, and that’s the belief that we need to convincingly discredit in the minds of those with political power if we’re ever to reclaim the full measure of liberty that is the very purpose of this nation’s existence.

    (Link courtesy of The Three Toed Sloth)

     

    8 Responses to “Americans can’t cope?”

    1. Fritz Meyer Says:

      Don’t dismiss out of hand the safety-net issues the author was discussing. Fed Chairman Greenspan recently spoke of widening income gaps and remarked that he considers them troubling. There is no question that the US economy has done a 360 degree evolution back to an agrarian like workforce, we are all farmers now. Security of life long employment is gone, but that reality hurts the lower income groups much more than those of us with ample income to make necessary adjustments. The authors remedies, I agree, create bad economic moral hazards and does not focus on the problem causing the need for the safety-net. Greenspan when asked what was the cause, stated the obvious, K-12 education. The public delivery system of education has failed to generate in users, the skills necessary to expand towards optimal GDP. The politics of elementary education have made soccer moms the consumers and decision makers of curriculum, the rest of us dot.com investors. Compound this system with 2 large sub-cultures that are not conducive to excellence in education (African-American, Hispanic), the non-skilled labor pool swells lowering income levels even more. In California the concern over of an ever expanding pool of low GDP producers has put in doubt the future capability of per capita income growth. Some of the recommendations by the author will become necessary in the short-run, but it must be part of an overhaul and privatization of the delivery system of elementary education.

    2. David/California Says:

      Every utopian begins with the promise, “Just give me the power and I’ll take care of you.” And from that benign beginning we get concentration camps, state-sponsored famines, summary executions, forced sterilization and a litany of horrors that haunt our human history.

      I can think of no more damning or sinister act than to divorce a human from individual responsibility. Authority cannot be seperated from responsibility, and removing personal responsibility from our lives demands we abdicate authority over our lives. Jacob Hacker may not be a slavering, blood-thirsty fascist or jihadist, but the impact of the principles he supports would be indistinguishable from a new Stalin.

      “Hare-brained’ is a commendably mild description for this attack on what makes us America and Americans.

    3. Shannon Love Says:

      I think the major reason that Jacob Hacker resist viewing the average person as a capable and competent manger of their own risk/responsibilities is that in nation full of such people Jacob Hacker would have no special role to play.

      A hero needs someone to rescue. How can people like Jacob Hacker assert their intellectual and moral superiority unless the rest of us need them hold our hands?

    4. James Mack Says:

      Some of you would seem to be borderline sociopaths, assuming that there is inherent moral primacy in the capacities of individuals to act in their own best interests over the value of collectives of people, i.e. societies, making judgments about what is good to ensure the balanced well-being of the whole. You would have a point if, and only if, the allocation of ALL available resources of the society was decided upon by collective dscussion as represented in government mandate. Such being extremely far from the case, what is really the issue? Social security represents the collective choice of the nation to provide not limits on the welfare of its citizens in old age, but guarantees of acceptable minimum existence for each after his prime working years have ended. There is no stricture that it implicitly places on the accumulation of personal assets; no prohibiton against or discouragement of private investment that it makes. None of what social security offers takes away from either personal initiative or personal responsibility. Indeed social security is a reflection of a collective spirit of personal responsibility that says that all who dedicated decades of their lives to working hard – on behalf of themselves, their families and their communties – deserve, in spite of other vicissitudes good or bad of life, to have some minimum assured standard of support. Personal choice and responsibility are cherished qualities inherent in our society. However, all personal choice all of the time to the detraction from our collective responsibilities to each other is folly. We each were born singularly and shall each die alone, but that does not dictate that we need to live as if in total isolation as individuals rather than as communities of mutual support. This is the essence of Mr. Hacker’s argument. That purely free markets with unfettered choice are not up to accomplishing all that we, as a society, say that we value. Even as we all agree on letting markets work for each of us as much as they can, markets and market mentality alone are not enough. Cooperative methods have a definite role.

      James

    5. Jonathan Says:

      Let me get this straight. We’re all responsible for everyone else, but people you disagree with are “borderline sociopaths”? You don’t seem to share the trust in your fellow man that you criticize some of your fellow citizens for lacking.

      I don’t see why someone who thinks the Social Security program is flawed is necessarily immoral. I also don’t see why individuals are less-well suited to manage their own affairs than government bureaucrats are. You are throwing around quite a few unsupported assertions here. You also have your facts wrong: Social Security does indeed place strictures on personal assets and discourages private investments. It does this by depriving citizens of some of their assets. The fact that a political plurality of citizens approved the creation of the program cannot transform such a taking from being morally illegitimate to morally legitimate.

      Nor does Social Security guarantee any “minimum assured standard of support,” because it is not a contract. The rules can be changed at any time if Congress wants to, and they have already done so. (And they will probably do so again, since demographic trends will eventually make the current system unsupportable without either raising taxes or cutting benefits.)

      Milton Friedman once pointed out that Social Security combines a tax scheme and a subsidy scheme, which taken separately are nothing special but taken together are treated as sacred. If you pretend that they represent a pension plan (which they are not, and cannot be because the tax revenues are not invested), the expected rate of return for current workers is lousy.

      Why do you defend this lousy system against alternatives that give workers not only more control over their own pension assets, but also a substantially higher risk-adjusted rate of return?

    6. Tyouth Says:

      “inherent moral primacy”…….indeed, there is: It’s called “freedom” and “liberty” (and, although it is not as fundemental as the other two concepts, “self-reliance”).

      This is not to say that an argument can’t be made – that it’s in the general public intrest – to force individuals to save.

      GWB has very much the right idea. If you don’t want to be bothered with investing, stick with social security.

    7. Ginny Says:

      “Discontent is the want of self-reliance: it is infirmity of will.”

      “It is easy to see that a greater self-reliance,–a new respect for the divinity in man,–must work a revolution in all the offices and elations of men; in their religion; in their education; in their pursuits; their modes of living; their association; in their property; in their speculative views.”

      Or “society is a joint stock company” to which we give up some of our independence for security.

      Emerson’s “Self Reliance” was our text today – the humanities can be, of course, quite useful.

      Not that such study isn’t provocative as well: I have some doubts about Emerson’s optimism. When he says in the same essay “An institution is the lengthened shadow of one man” I am not so quick to see Wesley as an example.

    8. Ginny Says:

      Not elation but relation. Though Emerson often does seem evoke a certain elation.