Friday, December 25, 2009

Will the health care bill destroy the conservative movement?

Nathan Newman thinks the health care bill will destroy the conservative movement "[b]ecause trying to repeal it will tear the movement apart and it will be the platform to destroy conservative anti-tax politics."


The Randian/Soylent Green faction of the capitalist ruling class hated social security too, and that didn't destroy their movement. The Randian faction doesn't need either social security or universal health care to go away, they need it to not expand, and to the extent that it does expand, the expansion needs to be under the direct control of the capitalists, not the government. They're not sadistic, they're just indifferent to the well-being of the people.

Their primary goal is to preserve and enhance their power and privilege as a ruling class. The health care bill as it exists today does little to diminish their power and privilege, and may (as Robert Reich notes) actually enhance it. Their goal, which is largely complete, is to destroy Keynesian economics (and its advocates in the Democratic party), which supports the economic demand of the working and middle classes.

Liberals and progressives — even smart ones — are just as capable of wishful, magical thinking as any Christian.


  1. Dude, I'm confused why you don't think this bill is Keynesian. As I understand it, tax revenues are used to subsidize health insurance for working class and middle class peeps. This would presumably free up some of their cash to spend on other shit. That sounds pretty Keynesian to me.

  2. I'm reading more about Keynes right now; my opinion may change.

    It's kinda-sorta economically Keynesian: we are using tax dollars to stimulate demand, but a fair bit of the spending will go not towards increased production of health care services, but rather increased profits for pharma and insurance companies, a re-allocation of existing services and a decline in health-care workers' real wages.

    It's not at all Keynesian in "spirit", which is to reinforce the demand of the people at the expense of the demand of the capitalist class. "Spiritual" Keynesianism IMHO consists of making the capitalist class larger, but diminishing the demand of individual capitalists, for a net decrease in capitalist class demand. The health care bill does not seem at all Keynesian in this spiritual sense.

  3. It's kinda-sorta economically Keynesian: we are using tax dollars to stimulate demand, but a fair bit of the spending will go not towards increased production of health care services, but rather increased profits for pharma and insurance companies, a re-allocation of existing services and a decline in health-care workers' real wages.

    I'm not an economist, so it is hard for me to assess these matters. My understanding, however, is that the health-care reform bill *will* likely lead to increased production of health care services, and that the total profits of the medical industry may increase--because more people will be using and paying for their services--but profit margins will not. Whether this will affect health-care worker wages I have no basis for opining.

    This dude, Nate Silver, who blogs at apears to make sense to me, and he concludes that the health-care bill is essentially Keynesian in effect. I'd be interested in your analysis of his analysis.

  4. I'll have a look, but he's written a lot on the bill. Can you point me to a few specific posts?

  5. These two are decent summaries of his perspective on both the substance and the politics:

  6. Interesting. Silver makes a good case that the bill is good enough to pass, but I've never disputed that.

    My big point is that this bill does not mark a "triumph" (in Krugman's words) for Keynesians or progressives nor does it sow the seeds of the destruction of the Randian faction.

    First, there's the economic question. Silver says, "the bill is and always was a big bleeping social welfare program. Indeed, it's almost without doubt the biggest bleeping social welfare program that liberals have had an opportunity to pass in a generation." Perhaps so, but that just indicates the Keynesians are not dead yet.

    Silver says, "But the [insurance] industry's profits are low: only about 3.3%." However from the same source, REIT - Healthcare Facilities profits are 24.6%, Major Drug Manufacturer profits are 16.5%, Drug Delivery profits are 13.5%. Furthermore, insurance company stocks are rising, indicating that investors at least believe insurance industry profits are due to increase.

    Also: a lot of excess health care costs are indirect; a lot of hospitals are run nominally as non-profits, which means that a lot of income is shunted off to salaries (especially to administrators), which are accounted for as costs, not profit.

    More importantly: Obama and the Democratic party have spent almost all their political capital on the worst possible plan that could be legitimately called a health care bill, a bill that will not even begin to take effect until long after the mid-term elections. What is worrisome is that the Democrats gave up a lot of ground that could have been fought for.

    Let me reiterate my football analogy: The Democrats have (apparently) kicked a successful field goal, and 3 points is 3 points. Kicking a field goal is acceptable in a way that it isn't acceptable to give the opposing team three free points when they're 3rd and long on their own 20 (i.e. the 2007 Iraq war defense authorization bill) because you're afraid they might score a touchdown.

    Furthermore, it looks like the Democrats kicked it in on 1st and 10 on the opponent's 20 yard line without even running a play, because the Republicans threatened to blitz and your own tight end refused to block for the quarterback.

    Health care reform should have been a "gimme". Indeed the Republicans let it pass only because a) they didn't believe they could block it completely and still survive and b) the insurance companies, pharma and hospitals were going to get fucked without some sort of government subsidy since unemployment will stay very high through 2014.

  7. It's difficult, I think, for us modern Americans to really understand how radically the Democratic party and Keynesian capitalists radically transformed US capitalism, taking it from something whose only virtue was that it was slightly better than monarchism to something that didn't completely fuck 60% of the population, and had a reasonable chance of becoming something resembling real socialism.

    Even after twenty years of Reagan and post-Reagan open, relentless enmity and take-no-prisoners ruthlessness, the Democratic party and the Keynesian faction of the capitalist ruling class still do not seem to comprehend or take seriously the dedication of the Randian faction to restore Gilded Age capitalism. Or perhaps they do understand it and take it seriously, and they think they have a better chance defecting to the winners while bullshitting the people as long as they can.


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