System Failure | The Nation


System Failure

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As an illustration, consider the following hypothetical.

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Christopher Hayes
Christopher Hayes
Chris Hayes, Editor-at-Large of The Nation, hosts “All In with Chris Hayes” at 8 p.m. ET Monday...

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The streets of Ferguson are not safe for those who would report the chaos. 

Dr. Joep Lange believed that if he could gather the necessary political resources, he could help erradicate the AIDS epidemic wihtin a generation. He perished tragically on his way to a conference where he planned to share his vision. 

You're a social worker or a parish priest in a poor urban neighborhood that lives under the malignant, if stable, stewardship of an organized-crime protection racket. The small business owners all have to pay a protection fee, which most of them can afford, but a significant portion of bodegas and nail salons operating on razor-thin profit margins struggle to come up with the money. When they fall short (which is often) they are subjected to beatings, harassment, vandalism and other petty cruelties.

Now, it turns out that you can raise enough money through your organization so that you can reliably cover the protection fees for the struggling shop owners operating on the margins. Whenever they can't come up with enough money, you can make up the difference. The improvement to residents' lives would be massive: no longer forced to live in fear, they would be allowed to transact their business and go about their lives free from the constant, degrading fear of physical violence. But by taking this action you would also be channeling revenue into the pockets of the protection racket and, perhaps more insidious, further entrenching its power by conceding its central premise: that all local businesses must pay up in order to survive.

This is, in rough allegorical fashion, the dilemma at the heart of the recent intra-left battle over the Senate version of the healthcare bill. Those arguing that the bill will be a massive step forward in reducing the misery of the uninsured are for the most part right. And those arguing that the Senate version of the bill is a grotesque sellout to Big Pharma and, to a lesser extent, Big Insurance, are more or less correct as well. When the White House used its muscle to kill a bipartisan amendment that would have allowed reimportation of drugs, it was as if our fictional social worker or priest took to shaking down shopkeepers to stay in the good graces of the local thugs. For what it's worth, I'm generally in the pay-off-the-thugs camp, because of the concrete benefits it would provide (Medicaid expansion for 15 million) but also because by enshrining the notion that the government is responsible for managing the healthcare system, the crimes of the insurance racket can now be laid at the feet of our politicians. In the short run, that accountability may spell political trouble; in the long run, I'm hopeful that it will force the government to crack down.

That said, the whole system that produced this legislative approach sucks, and recalls nothing so much as the Bush/GOP passage of Medicare Part D.

In the abstract, the putative goal of Medicare Part D was laudable (even if it was driven by Karl Rove's crass desire to curry favor with an important electoral demographic): reduce the cost of prescription drugs for seniors on Medicare. The method of achieving this laudable social end, however, was repugnant. Medicare was statutorily barred from using its market share to negotiate lower drug prices, thereby ensuring hefty (and largely unearned) profits for Big Pharma in perpetuity. Drug reimportation was off the table as well. And since Republicans don't believe in taxes, and our political institutions are increasingly incapable of raising revenue, none of it was paid for. One Democratic Senate aide told me that right before his boss voted for final passage of the bill, the senator turned to him and said, "So, I guess I have to go vote for this piece of shit."

At the time, Medicare Part D looked like the nadir of GOP governance, but two things have happened in the interim. One, the program, despite early chaos, has become quite popular: seniors like getting cheaper drugs. And two, the basic policy approach has been adopted, in somewhat altered form, by the Obama administration. We are all Medicare Part D now.

There's a word for a governing philosophy that fuses the power of government and large corporations as a means of providing services and keeping the wheels of industry greased, and it's a word that has begun to pop up among critics of everything from the TARP bailout to healthcare to cap and trade: corporatism. Since corporatism often merges the worst parts of Big Government and Big Business, it's an ideal target for both the left and right. The ultimate corporatist moment, the bailout, was initially voted down in the House by an odd-bedfellows coalition of Progressive Caucus members and right-wingers.

In the wake of the healthcare sausage-making, writers from Tim Carney on the right (author of the provocative Obamanomics) and Glenn Greenwald on the left have attacked the bill as the latest incarnation of corporatism, a system they see as the true enemy. There is even some talk among activists of a grand left-right populist coalition coming together to depose the entrenched interests that hold sway in Washington. Jane Hamsher of Firedoglake touted her work with libertarians to oppose Ben Bernanke, more AIG bailouts and the Senate healthcare bill ("What we agree on: both parties are working against the interests of the public, the only difference is in the messaging"); David McKalip, the tea-party doctor who got into trouble for forwarding an image of Obama with a bone through his nose, wrote an open letter to the netroots proposing that they join him in fighting the "real enemy," the "unholy corporate/government cabal that will control your healthcare."

I don't think that coalition is going to emerge in any meaningful form. The right's anger is born largely of identity-based alienation, a fear of socialism (whatever that means nowadays) and an age-old Bircher suspicion that "they" are trying to screw "us." Even in its most sophisticated forms, such as in Carney's Obamanomics, the basic right-wing argument against corporatism embraces a kind of fatalism about government that assumes it will always devolve into a rat's nest of rent seekers and cronies and therefore should be kept as small as possible.

But the progressive critics hold that we can and should do better. The Medicare Part D model is a terrible way of running a government for a number of reasons. First, and most practical, it's expensive. When paying off protection rackets is the price of passing legislation, you have to come up with a lot more money. Allowing Medicare to negotiate drug prices would have saved the government as much as $30 billion a year. The strong public option would, according to the Congressional Budget Office, save $85 billion over ten years. Once everyone has laid claim to their vig, you soon find yourself tapped out.

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