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Health Care and the 'Predator State'
It is corporate power, not the government, that we need to worry about.
In June 2008, I used this space to call on then-Sen. Barack Obama to add economist James K. Galbraith's book, "The Predator State," to his reading list. As an account of the capture of government by private interests, I thought it would make a far more useful guide to contemporary political economy than the market-glorifying texts that were still in fashion in those days.
I don't know if Mr. Obama ever took my advice.
But Iowa Republican Sen. Charles Grassley apparently did. During a debate last week over two Democratic proposals for a health-care bill featuring a "public option"—a government-run alternative to private health insurance—the senator announced he opposed the idea because, as he put it, "Government is not a fair competitor. . . . It's a predator."
The word "predator" seems to have become something of a Republican talking point. Mr. Grassley's colleague from South Dakota, John Thune, went on the record in July to warn that, when government goes into business, it "becomes not a competitor but a predator."
Have these two august men of the right secretly become fans of Mr. Galbraith, one of our leading liberal economists?
If so, they need to go back over "The Predator State" a second time. Although they have snapped up Mr. Galbraith's catchy title, they have misunderstood his message.
What makes government predatory, Mr. Grassley seems to believe, is its public-mindedness. Were government to offer health insurance to everybody without the industry's many devices for excluding risky individuals, some seem to fear, it might be able to offer consumers a price too fair for the profit-minded sector to match.
This is a curious reversal for a movement that ordinarily celebrates Darwinian struggle and the destruction of the weak by the strong. Just think of the conservative caricatures that must be inverted for this argument to work: All those soft liberal bureaucrats? Ferocious man-eaters. The welfare state? Law of the jungle.
And the actuarial-minded hardliners of the insurance biz, the ones who deny your claim or cancel your policy? A gentle but endangered species that needs our nurturing, sort of like panda bears.
Mr. Galbraith's point was the opposite: That government becomes a "predator" when it adopts the agenda of the private sector, when it comes under the control of business interests. According to Mr. Galbraith's book, these interests seek to "control the state partly in order to prevent the assertion of public purpose and partly to poach on the lines of activity that past public purpose has established."
A good example of this predatory "poaching" is the 2003 expansion of Medicare to include a prescription-drug benefit. "[T]he program was done in such a way as to make payments to drug companies as large as possible," Mr. Galbraith wrote, mainly by denying itself the power to negotiate discounts. Thus it "helped to ensure that a monopoly price on pharmaceuticals would be paid, while shifting the burden of paying it, in part, to the general taxpayer."
I emailed Mr. Galbraith to get his thoughts on Mr. Grassley's novel use of his idea. "[T]he concept of the 'Predator State' is not quite as Senator Grassley describes," the economist replied. "Social Security isn't predatory. . . . Back before they were privatized, Fannie Mae and Freddie Mac weren't predatory. Ginnie Mae still isn't. And a public option for health insurance isn't predatory either."
"The 'predator state' describes what happens when chicken coops are given over to foxes," Mr. Galbraith continued. "When consumer protection, worker protection, environmental protection, and policing against fraud are handed over to lobbyists. And when health care is run for the benefit of private insurance companies, whose business model . . . is to target coverage on the healthy and delay payments to the sick."
That is predation. Public service is its opposite. And thus we come to the subtle part about Mr. Galbraith's theory, the catch that seems to have confused his potential admirers on the right: Government isn't simply "a predator" by definition, as Mr. Grassley would have it. Yes, it has been predatory in recent years, but for much of the last century it wasn't.
However, it is easy to see how a "public option" might be transformed into another opportunity for predation. With a little George W. Bush-era ingenuity, some future administration might decide to install insurance lobbyists at its helm. Future Congresses might require that its duties should be contracted out to existing insurance companies and then sign away their own power to supervise those companies' behavior.
I am happy to report, though, that a solution to such a problem is incredibly simple, and it is largely within the power of Mr. Grassley and his colleagues to deliver it: Don't let insurance industry lobbyists give you advice. Don't take their money. Just say no.
- Posted in
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60 Comments so far
Show All"Just say no". This is an idea they will never try. Until then, maybe we should just say no when the tax man cometh. Imagine that kind of mass protest. At least we could stop wondering when the jackboots would start marching.
Both the right and the left hate taxes, for different reasons. The left because too much of it is spent on war. The right because too much of it is spent on everything else.
I beg your pardon hamster! I'll have you know my Senator, Carl Levin (D) is the Chair for the Arms Committee. He's Jewish and he so dedicated to the war he sells weapons around the world for a living. Now I take it you know that the American dollar is based on oil and weapons. We can never spend too much on war, it's our livelihood, our bread and butter, even though it does nothing for us except make us feel falsely secure from fabricated fear. It's as American as apple pie. America loves war so much we start factitious wars and we hire fake soldiers who can do anything they want, break any law they want. It’s a loophole and it works, we imagine. American’s are crafty and creative, particularly Democrat’s, for the moment. You see, we’re stuck with them.
Now the right, simple, their nut's and proud of it. I'm sure they're busy working on a whole new level of crazy and we'll be bedazzled sometime down the road. All they have to do is figure out how to nab homeless, near dead people to get out and vote for them and their in. Reasonablely soon, they will be the majority of the US population.
I could make a pretty good argument that the founding fathers anticipated the public option by quoting the Declaration of Independence and the Constitution. Obama is edumacated, why doesn’t he make that argument to the Palen redneck tea baggers. Obama is the Predator State in sheep’s clothing.
The 2003 drug legislation mentioned in the article was boutique corporate welfare that accelerated health care costs and will saddle US taxpayers for decades to come.
Obama's "health care reform" is shaping up to be big box corporate welfare that will further accelerate health care costs, make US business less globally competitive, and saddle US taxpayers for the next century.
the healthcare debate has demonstrated how backward and utterly ignorant this country is
folks say - quite ignorantly and ill-informed of course as usual - they don't want the "government" to come between them and their doctor
well first off - 47 million have no doctors and no healthcare so forget them - and a huge bunch of the rest have third rate overpriced care which means that the only person who comes between them and their doctor is the minimum waged uneducated schlep with the head phones who sits in the call center reading scripts that mostly say - sorry you aint covered fer that
hardly a sacred relationship
as the good ship lollypop with captain ahab obama at the helm drifts off to the horizon instead of reform with a public option we get reform as a cash cow for big business
and the campaign contributions flow to the bought and paid for congress to make sure the cash keeps comin'
i don't know of there is a word for this abortion we cal the government but it sure aint any of these: democratic, progrsseive, fair, decent, or moral
"as the good ship lollypop with captain ahab obama at the helm drifts off to the horizon instead of reform with a public option we get reform as a cash cow for big business"
What a great picture! Thanks for brightening my day!! I will think of the "good ship lollypop" with Shirley singing it every time I hear someone pushing this very bad bill.
The more hypocritical and anti-social Republicans (and nearly all Democrats as well) are, the better they feel about themselves. Because then they know they're serving their real constituents--the corporations. And they aren't about to start saying "no" to the liars, cheats and thieves who bought their seats in Congress. Otherwise, Frank has deftly described the conniving venality of creeps like Grassley and Baucus in making absolutely certain that no health care bill of any substance ever passes, since they exist only to insure the longevity of the insurance and pharmaceutical industry's adventures in greed.
Where will we be a year from now, when there is NO CHANGE in our thoroughly broken and universally discredited health care system, bill or no bill, and Obama is even more cowed than he is now by Glenn Beck and Co., the Republicans are about to make huge electoral gains in the House and Senate, and we have Sarah Palin or Newt Gingrich to look forward to in 2012? Will we still be arguing about health care? Or will we finally be storming Washington and dragging these bastards into the streets to face some real justice, for the first time in their lives?
"Or will we finally be storming Washington and dragging these bastards into the streets to face some real justice, for the first time in their lives?"
Won't happen. Grown men will still be more concerned about the score of some dumbass football game, grown women will still be more concerned about who was on Oprah, and kids will be more concerned about the latest edition of Sony Playstation than what's being done to them by their "leaders". That's not to say the the populace has no opinion on issues like health care, food safety, war, etc. - it's just that they are too apathetic and too distracted to actually do anything about the opinions that they hold.
Of course you're right. And so we'll deserve the fate awaiting us.
One thing I will say, amongst activists, I am hearing more and more say they don't care if they throw their vote out in the next election. They aren't going to vote along party lines. Personally, I think most of those old geezers in DC today are expecting to be tossed out.
Does Max Baucus act like he cares? Now if that guy isn't the poster person of the one who has one too many flu shots who is? My Senator's and Congress idiots don't care. I come from one of those states who have succeeded in electing nothing but useless dead weight officials. When Senator Debbie Stabenow talks we shutter. It's like one's grandmother who always has a plate of cookies in her hands ready as the fix to every problem. Useless! And Carl Levin, come on! He’s the number one salesman for American weapons in Israel. How in the heck did that guy go from being the person who was trying to get Bush to end the war, to being the Chair of the Arms Committee after Obama was elected?
They know what they're doing, they’re all on the same page. Washington DC is one giant good ole boy club, and their mission, to destroy the country as fast as they can.
Holy Carp batman! An article like this on the opinion page of the WS Journal? This most have come from some parallel universe where the WS Journal is a liberal rag. Simply amazing!
Wow. I was just sitting here thinking: too bad you won't read this in the MSM. I totally missed that this in the WSJ. Thanks for pointing it out, Tom. So... what gives? Has hell frozen over?
"Tom. So... what gives? Has hell frozen over?"
Your best bet is to check with old Dick Cheney on the status of what is going on down there. He has a lot more connections with that end of the afterlife than I do. ;-)
As T.R. Reid points out in his most excellent book The Healing Of America: A Global Quest For Better, Cheaper, and Fairer Health Care, a government's intervention in health care can, instead of being predatory, be most beneficial to the health of its citizens. While the Republicans seem to have misconstrued Galbraith's The Predator State, it should be next to impossible for politicians on both sides of the aisle to not understand, as Reid points out, that the health care system in this country has been an enormous failure, with the citizens of this country bearing the brunt of that failure, while every other industrialized country on earth has had the wisdom of implementing a universal health care system in their country, with the result being that the basic health care of its citizens has been met while none of its citizens has ever gone broke because they were unable to pay their medical bills. Unfortunately, the US is the only democratic country in the world that can lay claim to those two tragic statements.
The Healing of America-a book that should be required reading for every thinking American in this country.
Nothing gives me a greater sense of confidence than hearing these right-wing morons moan about how a public option would be "unfair competition." That argument is CHECK MATE for the insurance companies. It takes only minimal unpacking to make the argument blow up in their face. Essentially they are saying "Look, the insurance corporations just can't make the profits they need to make if the government comes along and offers a better version of the same product WITHOUT throwing risky people out of the pool, WITHOUT hiking premiums 119% over the course of ten years."
They are 100% right. The private insurers won't be able to compete with a legitimate public option. Nobody is going to keep buying shitty, $1000 deductible policies with thousands of dollars of out of pocket expenses, that MIGHT get cancelled when you need them most, if they can simply buy into Medicare for cheaper.
Health care is not a consumable product that matches up to elastic supply and demand. It is a critical public good that cannot be succesfully provided by the free market. They can only increase their profits by denying care to people who need it. In order to satisfy their corporate CEO's and investors, they must raise their premiums at 4 times the rate of inflation and kill 45,000 people a year. Of course they can't "compete" with a government run plan which exists soley for the purpose of providing health care, instead of for the purpose of padding hedge funds.
Let's make sure we ECHO this absurd argument. The private health insurance corporations can't compete. They offer one of the most faulty consumer products in the history of commerce. If they hadn't managed to place themselves between Americans and their doctors, their own avarice and ineptitude would have put them out of business years ago. If we provide another way to get Americans to their doctors, then certainly the frauds in the insurance industry will go the way of the horseless carriage industry.
Briggs Seekins
briggsseekins.wordpress.com
I agree. The free market uber alles types have always shouted that private corporations are much better, more efficient, than government, than public services.
Now, they admit that actually, those corporations can't compete. Inefficient. This should be repeatedly pointed out, and shoved in their faces.
Briggs Seekins, your argument is logical, lucid, well stated, and dead on accurate.
Overruled.
When the people fear their government there is tyranny,
when the government fears the people there is liberty.
~ Thomas Jefferson
I'm sure Mr. Frank doesn't really believe that Grassley and Thune "have misunderstood (Galbraith's) message." Rather, they've sensed, as true predators do, the potential power of the argument and are trying, like a pair of hyenas, to hamstring it and make a meal of it.
That said, I share the general amazement at such a piece appearing in the WSJ. Is Murdoch losing his grip?
Yes, there's a Bidness Roundtable think tank somewhere that saw the word "predator" as a danger and set out to preempt its meaning. Not the first time. The ultimate language hijack is how conserves like to say the US is a Republic, not a Democracy and that democracy is mob rule. This is never followed by who they see ruling their Republic.
The healthcare industry has become the bloated mess it is today precisely because of heavy government subsidies and "reform" is merely an expansion of the same. I think WSJ is, like MSNBC with Dylan Ratigan, trying to let off a little steam, a little limited hang out of our discontent. The predators will acknowledge our plight just so long as we have no power to change it.
It's not that unusual for a piece like this to pop up in the WSJ. Frank publishes there periodically, as several other lefties have for years. Alex Cockburn had a column there back in the '80s for a while. They give a little more space to leftist comment than most other outlets, including the NY Times, which won't go any further to the left than Frank Rich and Krugman, who are usually good but pretty mainstream liberal. Once Tom Frank crosses a boundary in his opinions, as Cockburn finally did, the WSJ will give him the boot and look around for a fresh, less threatening voice from the fringes.
Lets not forget that Mr. Grassley received over $2,300,000.00 from Health related organizations just in the 2008 election cycle (re: opensecrets.org) That couldn't possibly explain anything could it? Everyone needs to be armed with contribution figures when discussing this "reform". Who are the predators?
The part that hurts the brain the most is that universal health care for all Americans is clearly a no-brainer, yet we passively watch as our 'leaders' publicly accept bribes in exchange for turning universal health care into some sort of government mass murder/anti-freedom conspiracy.
Key word: publicly. It used to be mostly backroom, all these pay-for-play deals against the interests of The People - but now, it's right out in the open, reported in detail, sometimes just minutes after the bribes change hands.
And yet, here we are, pretending to have a real debate over whether over-the-top profiteering off of our pain and suffering is a better system than a non-profit universal health care system covering all Americans...
We are such a f@#king twisted people...
frank1569:
You said it well!
How complacent and docile are the people?
Before everyone sets sail on the "Good ship,lollipop" (thanks lebeau) it would be good to remember that the taxes and the reduction in Medicare benefits start right away, while the bill doesn't kick in till 2013.
What happened to the folks that needed care "right now"?
This is a bad bill, public option or no public option, the Corps win with this one. The deals are already made if you want to take the time to look them up.
Henry8:
I agree with you. Meaningful, progressive legislation is "off the table," now a cliche, but fact of Congressional life.
Mr Grassley knows exactly who he's talking to, the GOP sheep who swallow the 'government as predator' cr*p that Limbaugh and Beck and O'Reilly put out as daily bread. These people don't seem to understand the 'democracy' part of our democracy. We need a time machine set to 'Stalin' or 'Pol Pot' to give them a little 'government as predator' experience.
Franks sarcasm is lost on such people. They can be wound up and paraded at various tea parties to provide populist cover for corporate misdeeds. And they don't read Galbraith because many of them don't read. And if Frank isn't talking to them, or to Grassley, he's talking to the choir: those of us who do read. And so it goes with the national conversation...
We can't have a populist revolution without a population, and that means talking to the people currently coopted by Limbaugh, O'Reilly, and Beck. These people are scared and increasingly aren't listening. Remember, the corporations don't care how society works out. All power is relative and wealth is as easily taken as grown. They are amoral. Its up to us people to talk to each other and convince each other that we can be true to the philosophy of individualism while empowering the government 'predator' to reign in the REAL predators among us before they eat us all. As scary as gov't can be, it's still, at the end of the day, composed of US. The election of Obama should have proved that, if nothing else.
"...gov't...at the end of the day, composed of US."
Is that as in "We have met the enemy and he is us"? (Pogo)
Nice article. Galbraith's "predator" metaphor is not quite accurate. A more fitting one would be "Vampire State" or "Parasite State". A predator in the wild kills only what it needs to survive, the corporate state is a PARASITE that slowly sucks the lifeblood from the people, in order to prosper; more like ticks, leeches, vampires, tapeworms etc. The host has two choices: remove and destroy the parasite, or die a slow and painful death.
Many here believe there are no differences between Dims and Repugs but I believe some discernible difference exists. The Dims try to keep the host alive (US middle class) as long as possible so as to better serve their masters, the parasites, over the long term. The Republicans appear to be more focused on short-term objectives, ignoring the poor health of the host and helping the parasites engorge themselves now while preparing to scavenge what they can when it succumbs and perishes.
Well put. And so accurate.
See, Arktig October 7th, 2009 1:20 pm.
The difference between Ds and Rs is that the former will throw a bone to the working class every now and then, while the latter save the bones for their attack dogs.
I think you're seeing differences that aren't really there, as when someone sees two lumberjacks as different because they're pulling their ends of the saw in opposite directions.
*snort*
People complain a lot about politicians, and with good reason. How many people of good conscience want to get involved in such an impenetrable, corrupt system? Politics attracts corrupt people. It's easy for them-- they don't have to read the bills or work very hard-- they just do whatever the people who pay the most want them to. Those few brave souls who try to do the right thing are often marginalized or worse.
They appeared to differ on Social Security and the minimum wage as well as the amount and availability of educational loans, for starters. I am not saying that the Dims are not on the corporatist payroll, but just that they appear to try to give the middle class/working class just enough to hang on, which certainly some of the elite parasites, those more interested in feeding off a US host in the long term, would prefer. But of course it is a complex picture, with a wide variety of characters involved, and any simple characterizations are as much for amusement as for enlightenment.
"The word "predator" seems to have become something of a Republican talking point." --- it's because the left is not talking about predator financing or predator financial system or predator globalization or predator free trade. Don't blame the Republicans, the Democrats tacitly agree with them, promoting their message.
What has to be said about health care is that it's not a market, there is no product to chose, etc. The entire current system is a giant conflict of interests. Only public funding with enough quality and cost controls can fix it. Neither party will do it.
Watching the debate in the Senate Finance Committee many of the issues which came up could have been avoided by simply expanding Medicare to all. And often enough each issue, as reflected by a proposed amendment, created an added complication. And was totally unnecessary.
As nearly all of us know on this site, the Republicans are not interested in universal healthcare. Their arguments merely attempt to pick apart, often spuriously, the Democrats' proposals. And the so-called "debate" doesn't express their eagerness to make healthcare available to all. For they lack all eagerness or true sense of necessity. At least some of the Democrats, if not all by a long shot, do see the urgency and necessity. And would agree with Thomas Frank. Who, as usual, has presented a brilliant analysis of what's going on out there.
I suspect Obama is on the fence now because the vote is so close. And he wants to salvage a bill no matter what comes out, unless, of course, it is apparently terrible. Expanding Medicare to all (single payer) would be the best course. Lacking that there is the public option. If the public option is shot down there are still many positive legislative changes which can be salvaged, such as eliminating "pre conditions" from private insurance policies. I think this and other "reforms" are what Obama may want to salvage. The vote, at this moment, is simply too close to call.
This is, after all, the United States of America. The land of the free where "government is the problem, not the solution." So powerful is our Capitalist orthodoxy here in the United States that a sensible, relatively simple solution to a major national problem - such as single payer - is seen as radical and "socialist." Whatever that means. Which is nothing, since the word is used as a pejorative. A fright word. One to remind our fellow citizens to kneel more closely and snugly in their Capitalist pews, to strengthen the orthodoxy.
Actually, they are making it compliated because they're getting all twisted up serving the insurance companies while trying to appear like they're really working for us. An impossible task.
They'll give us the shaft, as they always do.
Expect to hear Harry Reid's mantra, "We didn't have the votes" when this baby's over.
The tenor of the Republicans' amendments in the Finance Committee were basically negative. They do not support reform so their changes reflected and will reflect on the Senate floor their unbudging desire to kill this thing. There were, in truth, Democrats on the committee who hoped for genuine reforms.
They "give us the shaft, as they always do?" And what about past progressive reforms? SCHIP is a recent example. There have been others. "Always?"
It's easy to be negative about negative attitudes - the "boost don't knock" types always complain about negativity as they, the "boost don'k knock" types, drive us off a cliff.. But it is also easy to be negative expecting nothing but universal bad faith and failure. To a degree such a know-nothing objection to any endeavor will be vindicated. But it is still a sweeping and lazy condemnation without taking into consideration how complicated an issue can be. And how varied attitudes are. And not everyone involved only participates in bad faith, in order to "give us the shaft."
kivals "The Dims try to keep the host alive (US middle class) "
--------------------------------------------------------------
Glaringly wrong! The Repubs are for the super rich, the Dems are for creating more and poorer poor. Both try to get rid of the middle. The Dems want stupid and poor people who would vote for them, the rich want the same kind of people to exploit. Nobody wants independent and thinking populace. The parties play the stick and carrot game, the Republicans bang the stick, the Democrats pull the carrot always out of reach, the final destination is serfdom, middle ages, third world... The Democrat's "care" of the poor is of the self-fulfilling prophecy kind... Think Vietnam, shooting people, then giving them first aid... This is what the health care legislation does... just read it... it pushes everyone towards the bottom... It is social engineering, obvious and undeniable.
Arktig, I can't agree with you. No one since FDR and LBJ has cared a rag about the poor. They don't vote.
Both parties run around every 4 years kissing voters asses and the rest of the time whoring after corporate money. It's as straight as that.
When the people fear their government there is tyranny,
when the government fears the people there is liberty.
~ Thomas Jefferson
"No one since FDR and LBJ has cared a rag about the poor. They don't vote."
I agree. And they do not send in campaign contributions either.
You actually agree with me. "care" meant taking care that the poor stay poor or poorer.
Any government not responsive to the needs of its people has no reason to exist. I voted for Obama for change, just as he promised.
All that happened was that we exchanged one crime family for another. There is no difference between the taxes I pay and the protection money organized crime collects.
If I don't pay I am singled out as an example of what can happen to any other similarly foolish freedom hound.
If I do pay my money is used to keep me in line.
Nietzche:
Don't feel bad about your vote. Many liberals and progressives fell for the "hope" and "change" jargon and did likewise.
I never trusted Obama, watched him during the campaigning and "make-believe" debates with the other Dim candidates and saw through him soon enough.
The masters of the universe on Wall Street, big pharma, the death and destruction industry of the Pentagon, plus the insurance industry, campaigned hard with financial contributions and the daily propaganda machine of the corporate MSM made Obama a demigod and the voting public looking for change swallowed the bait with naive sincerity.
Republicans have been using this tactic for a long time:
They accuse their opponents for what they themselves are most guilty.
A little late and partisan here aren't we Mr. Frank? Ok, I love your books on populism and all but you're getting too partisan here. The Democrats took single payer off the table and started out with a lame version of "public option" which was very little of a threat to Big Insurance. Now that the "health care reform" package is getting all watered down with "public option" nearly dead, what's left to fight for? I am sorry but the Democrats are just as much against true health care reform as are the Republicans. You were wise to open your heart and mind in 2000 and vote Nader because you knew Algore was just another DLC pig like his boss. Please open your heart and mind once again and do not be afraid to think outside the two-party box.
Not true.
What you miss in your thinking is that there are different types of Democrats.
(different factions of Democrats)
True Liberal Democrats are a minority.
The more conservative Democrats (such as the "Blue Dog" Democrats) are against "Single Payer" health insurance.
However..... Liberal Democrats (such as Dennis Kucinich, Barbara Boxer, etc.) very much want "Single Payer" health insurance.
The problem is that there are not enough true Liberals in Congress to get what they want.
And President Obama is definitely not a Liberal, but is a Centrist. As we know, The President does swing a lot of weight, which also worked against the true Liberal minority in Congress getting their way.
Would 0 were centrist. He's right right right. Look at the policies!