Redirect


This site has moved to http://economistsview.typepad.com/
The posts below are backup copies from the new site.

September 12, 2009

Economist's View - 3 new articles

"The Recession's Racial Divide"

Race and the recession:

The Recession's Racial Divide, by Barbara Ehrenreich and Dedrick Muhammad, Commentary, NY Times: What do you get when you combine the worst economic downturn since the Depression with the first black president? A surge of white racial resentment, loosely disguised as a populist revolt. An article on the Fox News Web site has put forth the theory that health reform is a stealth version of reparations for slavery: whites will foot the bill and, by some undisclosed mechanism, blacks will get all the care. President Obama, in such fantasies, is a dictator and, in one image circulated among the anti-tax, anti-health reform "tea parties," he is depicted as a befeathered African witch doctor with little tusks coming out of his nostrils. When you're going down, as the white middle class has been doing for several years now, it's all too easy to imagine that it's because someone else is climbing up over your back.

Despite the sense of white grievance, though, blacks are the ones who are taking the brunt of the recession, with disproportionately high levels of foreclosures and unemployment. And they weren't doing so well to begin with. ... In fact, you could say that for African-Americans the recession is over. It occurred from 2000 to 2007, as black employment decreased by 2.4 percent and incomes declined by 2.9 percent. During those seven years, one-third of black children lived in poverty, and black unemployment — even among college graduates — consistently ran at about twice the level of white unemployment. That was the black recession. What's happening now is more like a depression. ...

Racial asymmetry was stamped on this recession from the beginning. ... People of all races got sucked into subprime and adjustable-rate mortgages, but even high-income blacks were almost twice as likely to end up with subprime home-purchase loans as low-income whites — even when they qualified for prime mortgages, even when they offered down payments. ...

Mortgage lenders like Countrywide and Wells Fargo sought out minority homebuyers for the heartbreakingly simple reason that, for decades, blacks had been denied mortgages on racial grounds, and were thus a ready-made market for the gonzo mortgage products of the mid-'00s. Banks replaced the old racist practice of redlining with "reverse redlining" — intensive marketing aimed at black neighborhoods in the name of extending home ownership to the historically excluded. Countrywide, which prided itself on being a dream factory for previously disadvantaged homebuyers, rolled out commercials showing canny black women talking their husbands into signing mortgages.
At Wells Fargo, Elizabeth Jacobson, a former loan officer at the company, recently revealed — in an affidavit in a lawsuit by the City of Baltimore — that salesmen were encouraged to try to persuade black preachers to hold "wealth-building seminars" in their churches. For every loan that resulted from these seminars, whether to buy a new home or refinance one, Wells Fargo promised to donate $350 to the customer's favorite charity, usually the church. ...
But you didn't need a dodgy mortgage to be wiped out by the subprime crisis and ensuing recession. Black unemployment is now at 15.1 percent, compared with 8.9 percent for whites. In New York City, black unemployment has been rising four times as fast as that of whites. By 2010, according to Lawrence Mishel of the Economic Policy Institute, 40 percent of African-Americans nationwide will have endured patches of unemployment or underemployment.
One result is that blacks are being hit by a second wave of foreclosures caused by unemployment. ... So despite the right-wing perception of black power grabs, this recession is on track to leave blacks even more economically disadvantaged than they were. Does a black president who is inclined toward bipartisanship dare address this destruction of the black middle class? Probably not. But if Americans of all races don't get some economic relief soon, the pain will only increase and with it, perversely, the unfounded sense of white racial grievance.


"Medicare for All"

George McGovern says there's a simple answer to out health care problems:

It's Simple: Medicare for All, by George S. McGovern, Commentary, Washington Post: For many years, a handful of American political leaders ... have been trying to gain passage of comprehensive health care for all Americans. ... In a presentation before a joint session of Congress last week, Obama offered his view of the best way forward.
But what seems missing in the current battle is a single proposal that everyone can understand and that does not lend itself to demagoguery. If we want comprehensive health care for all our citizens, we can achieve it with a single sentence: Congress hereby extends Medicare to all Americans.
Those of us over 65 have been enjoying this program for years. I go to the doctor or hospital of my choice, and my taxes pay all the bills. It's wonderful. ... I want every American, from birth to death, to get the kind of health care I now receive. Removing the payments now going to the insurance corporations would considerably offset the tax increase necessary to cover all Americans.
I don't feel as though the government is meddling in my life when it pays my doctor and hospital fees. There are some things the government does that I don't like -- most notably getting us into needless wars that cost many times what health care for all Americans would cost. Investing in the health of our citizens will enhance the well-being and security of the nation.
We know that Medicare has worked well for half a century for those of us over 65. Why does it become "socialized medicine" when we extend it to younger Americans?
Taking such a shortsighted view would leave nearly 50 million Americans without health insurance and without the means to buy it. It would leave other Americans struggling to pay the rising cost of insurance premiums. These private insurance plans are frequently terminated if the holder contracts a serious long-term ailment. And some people lose their insurance if they lose their jobs or if the plant where they work moves to another location -- perhaps overseas.
We recently bailed out the finance houses and banks to the tune of $700 billion. A country that can afford such an outlay while paying for wars in Iraq and Afghanistan can afford to do what every other advanced democracy has done: underwrite quality health care for all its citizens.
If Medicare needs a few modifications in order to serve all Americans, we can make such adjustments now or later. But let's make sure Congress has an up or down vote on Medicare for all before it adjourns this year. Let's not waste time trying to reinvent the wheel. We all know what Medicare is. Do we want health care for all, or only for those over 65?
If the roll is called and it goes against those of us who favor national health care, so be it. If it is approved, the entire nation can applaud.
Many people familiar with politics in America will tell you that this idea can't pass Congress, in part because the insurance lobby is too powerful for lawmakers to resist.
As matters now stand, the insurance companies claim $450 billion a year of our health-care dollars. They will fight hard to hold on to this bonanza. This is a major reason Americans pay more for health care per capita than any other people in the world. The insurance executives didn't cry "socialism" when their buddies in banking and finance were bailed out. But to them it is socialism if the government underwrites the cost of health care.
Consider the campaign funds given to the chairman and ranking minority member of the Senate Finance Committee, which has jurisdiction over health-care legislation. Chairman Max Baucus of Montana, a Democrat, and his political action committee have received nearly $4 million from the health-care lobby since 2003. The ranking Republican, Charles Grassley of Iowa, has received more than $2 million. It's a mistake for one politician to judge the personal motives of another. But Sens. Baucus and Grassley are firm opponents of the single-payer system, as are other highly placed members of Congress who have been generously rewarded by the insurance lobby. ...

And he didn't even mention how much tax cuts have cost relative to the cost of financing health care reform. Health care seems to be low on our priority list, below tax cuts, wars, and financial bailouts at least. Why? One reason is that most voters already have health care and their message is a simple one, reform is fine - we should cover everyone - so long as I don't have to pay more in taxes, my benefits aren't cut, and the quality of care isn't compromised (even those currently on Medicare might wonder if their benefits could be preserved at the current cost if the program was extended to everyone). I don't think people understand the extent to which employer based care will diminish in the future putting their care at risk, i.e. the risk that they face if we do not reform the system, so I don't think Medicare for all would survive this test in voter's minds. Whether it's true or not, they could be easily convinced that at least one of benefits, taxes, or quality would be compromised.


links for 2009-09-11

No comments: