Winter of Our Discontent, The Rising Inequality of 2 Americas

November 26, 2007
By PAUL KRUGMAN
Op-Ed Columnist , NY Times

“Americans’ Economic Pessimism Reaches Record High.” That’s the headline on a recent Gallup report, which shows a nation deeply unhappy with the state of the economy. Right now, “27% of Americans rate current economic conditions as either ‘excellent’ or ‘good,’ while 44% say they are ‘only fair’ and 28% say they are poor.” Moreover, “an extraordinary 78% of Americans now say the economy is getting worse, while a scant 13% say it is getting better.”

What’s really remarkable about this dismal outlook is that the economy isn’t (yet?) in recession, and consumers haven’t yet felt the full effects of $98 oil (wait until they see this winter’s heating bills) or the plunging dollar, which will raise the prices of imported goods.

The response of those who support the Bush administration’s economic policies is to complain about the unfairness of it all. They rattle off statistics that supposedly show how wonderful the economy really is. Many of these statistics are misleading or irrelevant, but it’s true that the official unemployment rate is fairly low by historical standards. So why are people so unhappy?

The answer from Bush supporters — who are, on this and other matters, a strikingly whiny bunch — is to blame the “liberal media” for failing to report the good news. But the real explanation for the public’s pessimism is that whatever good economic news there is hasn’t translated into gains for most working Americans.

One way to drive this point home is to compare the situation for workers today with that in the late 1990s, when the country’s economic optimism was almost as remarkable as its pessimism today. For example, in the fall of 1998 almost two-thirds of Americans thought the economy was excellent or good.

The unemployment rate in 1998 was only slightly lower than the unemployment rate today. But for working Americans, everything else was different. Wages were rising, yet inflation was low, so the purchasing power of workers’ take-home pay was steadily improving. So, too, were job benefits, including the availability of health insurance. And homeownership was rising steadily.

It was, in other words, a time when Americans felt they were sharing in the country’s prosperity.

Today, by contrast, wage gains for most workers are being swallowed by inflation. In fact, the reality for lower- and middle-income workers may be worse than the official statistics say, because the prices of necessities like food, transportation and medical care are rising considerably faster than the Consumer Price Index as a whole. One striking statistic: the cost of a traditional Thanksgiving turkey dinner was 11 percent higher this year than last year.

Meanwhile, the percentage of Americans receiving health insurance from their employers, which began to decline in 2001, is continuing its downward trend. And homeownership, after rising for several years on a tide of subprime mortgages — well, you know how that’s going.

In short, working Americans have very good reason to feel unhappy about the state of the economy. But what will it take to make their situation better?

The leading Republican candidates for president don’t even seem to realize that there’s a problem. A few months ago Rudy Giuliani, denouncing Hillary Clinton’s economic proposals, declared that “she wants to go back to the 1990s” — as if that would be a bad thing.

In fact, memories of how much better the economy was under Bill Clinton will be a potent political advantage for the Democrats next year.

But simply putting another Clinton, or any Democrat, in the White House won’t ensure that the good times will roll again. President Clinton was a good economic manager, but much of the good news during the 1990s reflected events that won’t be repeated, including low oil prices and the great medical cost pause — the temporary leveling off of health care spending as a percentage of G.D.P. that took place in the 1990s despite his failure to pass health care reform.

And there are good reasons to think that the negative effects of globalization on the wages of some Americans are larger than they were in the ’90s. That’s a hugely contentious issue within the progressive movement, with no easy resolution. I’ll write more about it in the months ahead.

Despite these caveats, Democrats have every right to make a political issue out of the failure of the Bush economy to deliver gains to working Americans — especially because conservatives continue to insist that tax cuts for the affluent are the answer to all problems.

But Democrats shouldn’t kid themselves into believing that this will be easy. The next president won’t be able to deliver another era of good times unless he or she manages to tackle the longer-term trends that underlie today’s economic disappointment: a collapsing health care system and inexorably rising inequality.

Patients Without Borders

Note from Greetings: It's a sad statement when our country is in need of 3rd world services due to the inactions of this country

November 18, 2007

By SARA CORBETT, NY Times

Long before the dentists and the doctors got there, before the nurses, the hygienists and X-ray techs came, before anyone had flicked on the portable mammography unit or sterilized the day’s first set of surgical instruments, the people who needed them showed up to wait. It was 3 a.m. at the Wise County Fairgrounds in Virginia — Friday, July 20, 2007 — the start of a rainy Appalachian morning. Outside the gates, people lay in their trucks or in tents pitched along the grassy parking lot, waiting for their chance to have their medical needs treated at no charge — part of an annual three-day “expedition” led by a volunteer medical relief corps called Remote Area Medical.

The group, most often referred to as RAM, has sent health expeditions to countries like Guyana, India, Tanzania and Haiti, but increasingly its work is in the United States, where 47 million people — more than 15 percent of the population — live without health insurance. Residents of remote rural areas are less likely than their urban and suburban counterparts to have health insurance and more likely to be in fair or poor health.

According to the Department of Health and Human Services, nearly half of all adults in rural America are living with at least one chronic condition. Other research has found that in these areas, where hospitals and primary-care providers are in short supply, rates of arthritis, hypertension, heart ailments, diabetes and major depression are higher than in urban areas.

And so each summer, shortly after the Virginia-Kentucky District Fair and Horse Show wraps up at the fairgrounds, members of Virginia Lions Clubs start bleaching the premises, readying them for RAM’s volunteers, who, working in animal stalls and beneath makeshift tents, provide everything from teeth cleaning and free eyeglasses to radiology and minor surgery. The problem, says RAM’s founder, Stan Brock, is always in the numbers, with the patients’ needs far outstripping what his team can supply. In Wise County, when the sun rose and the fairground gates opened at 5:30 on Friday morning, more than 800 people already were waiting in line. Over the next three days, some 2,500 patients would receive care, but at least several hundred, Brock estimates, would be turned away. He adds: “There comes a point where the doctors say: ‘Hey, I gotta go. It’s Sunday evening, and I have to go to work tomorrow.’ ”