Corporate-Managed Democracy

        There are few things quite as depressing as the chasm between public opinion and not-so public policy in “the world’s greatest democracy,” the United States. Contrary to American punditocracy’s routine description of the U.S. as a “center-right nation,” the U.S. citizenry’s majority attitudes on many key policies and societal values and arrangements stand well to the left of both dominant U.S. parties and the nation’s political class and “mainstream” media. (For a summary of key data, see Street, “Americans’ Progressive Opinions v. The Shadow Cast on Society by Big Business,” ZNet Commentary, May 15, 2008). President Obama’s carefully calibrated identification with “hope and change” certainly helped him win. Similar identifications helped Democrats Jimmy Carter and Bill Clinton win the White House in 1976 and 1992, respectively. But so what? The populace’s beliefs are largely irrelevant once the latest “quadrennial, candidate-centered electoral extravaganza” (Noam Chomsky’s excellent phrase) is concluded. Obama has increased the “defense” budget and implemented massive taxpayer bailouts for giant financial and insurance firms deemed “too big to fail.” In the May 2009 edition of the centrist magazine the Atlantic, Simon Johnson, former chief economist of the International Monetary Fund (IMF), observed that the Obama administration was in Wall Street’s pocket. In an article titled “The Quiet Coup,” Johnson argued that (in the words of the Atlantic’s editors), “the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform.” Noam Chomsky rightly saw this as chilling confirmation of 18th century economist and philosopher Adam Smith’s warning that “the architects of policy protect their own interests, no matter how grievous the effect on others.” “And they are the architects of policy,” Chomsky added. “Obama made sure to staff his economic team with advisors from [the financial] sector” (“Crisis and Hope: Theirs and Ours,” Speech to the Riverside Church, New York City, June 12, 2009). Mildly left-liberal economists (e.g. Joseph Stiglitz, Paul Krugman, James Gailbraith, and Dean Baker) were for all intents and purposes “blacklisted” from the start by “Team Obama.” The new “change” White House prefers to take direction from the same Wall Street coterie (represented by top economic advisor Lawrence Summers and Treasury Secretary Timothy Geithner) that did so much to push the economy over the cliff in the first place. Tellingly enough, Obama’s mild “economic stimulus” included no mention of the urgently required labor law reform on which he campaigned, the Employee Free Choice Act (EFCA). The EFCA promised to restore organizing power to the labor movement, accurately described by doomed candidate John Edwards as “the leading anti-poverty program in American history.” Having sparked large-scale business class opposition, EFCA was kicked to Washington’s curb with no relevant protest from the White House, which has also made no effort to fulfill the president’s campaign promise to “renegotiate NAFTA” to include new labor and environmental protections. (During the campaign, Obama’s then economic advisor, neo-liberal University of Chicago economist Austan Goolsbee, was caught telling conservative Canadian politicians not to worry about the next president’s rhetoric on NAFTA, designed as it was to win the votes of bitter and idiotic rust-belt proletarians with no place else to go other than the Democrats.) Meanwhile, Goldman Sachs has reported record profits and a return to stratospheric 2007 compensation levels, as the official unemployment rate heads past 10 percent (an honestly tabulated rate would be closer to 20), and economic destitution spreads across the land, exacerbated by a 1990s welfare “reform” that Obama has long praised as a bipartisan policy triumph. The trillions of taxpayer dollars being spent to prop up and concentrate the wealth of dominant surviving financial firms could have significantly ameliorated the desperate situation of the rising unemployed, foreclosed, and evicted—with stimulatory consequences for the broader economy. Nothing doing. As bailouts combined with growing poverty exposed the chasm between the investor classes and the broad citizenry, Americans have “learned a blunt lesson about power, who has it and who doesn’t.” The “government has plenty of money to spend when the right people want it” (William Greider in the Washington Post, March 22, 2009). Washington under Democratic rule (since January 20, 2009) provides evidence for left-liberal political scientist Sheldon Wolin’s take last year on the chances for progressive change under the United States “corporate-managed democracy” and “one-and-a-half party system.” As Wolin predicted in his book Democracy Incorporated: Managed Democracy and the Specter of Inverted Totalitarianism: “Should Democrats somehow be elected, corporate sponsors [will] make it politically impossible for the new officeholders to alter significantly the direction of society…. Afterwards, post-election politics of lobbying, repaying donors, and promoting corporate interests—the real players—takes over. The effect is to demobilize the citizenry, to teach them not to be involved or to ponder matters that are either settled or beyond their efficacy.” It doesn’t help that only a minority of progressive citizens possess both the will and the capacity to act in significant political ways beyond voting in the nation’s narrow-spectrum election “extravaganzas.” Or that progressive citizens commonly lack information about how widely held their progressive policy attitudes are. Many Americans think that their opposition to business domination and/or militarism and/or low wages and/or ecological destruction and/or (fill in the blank) is off the national opinion charts. They are unaware that many millions of fellow citizens think the same. Also depressingly notable is the absence of strong identification between majority progressive policy attitudes and left-progressive ideological self-identification—a sense that those attitudes are consistent with a political standpoint to the left of the nation’s dominant political institutions and political class. The progressive-majority populace’s likelihood of making that ideological connection and acting on it in relevant ways is reduced by the dominant media’s restriction of acceptable policy debate to a narrow, one might even say totalitarian, big business-friendly spectrum.

Advancing Corporate Health Care

The democracy-disabling madness is evident in the case of health care. Majority progressive U.S. sentiment on this issue is clear:

  • 64 percent would pay higher taxes to guarantee health care for all U.S. citizens (CNN Opinion Research Poll, May 2007)
  • 69 percent think it is the responsibility of the federal government to provide health coverage to all U.S. citizens (Gallup Poll, 2006)  
  • 67 percent “think it’s a good idea [for government] to guarantee health care for all U.S. citizens, as Canada and Britain do, with just 27 percent dissenting” (Business Week, 2005)
  • 59 percent support a single-payer health insurance system (CBS/New York Times poll, January 2009)
  • 59 percent of doctors back a single-payer system (Annals of Internal Medicine, April 2008)
  • 73 percent feel that health care is either in a “state of crisis” or has “major problems” (Gallup, November 2007)
  • 71 percent feel that we need “fundamental changes” or to have the U.S. health system “completely re-built,” compared to just 24 percent who wish only for “minor changes” (Pew Research Center, 2009)

The popularity of single-payer is appropriate and unsurprising. Single-payer would evict the nation’s remarkably unpopular insurance firms from their parasitic, cost-driving role in health care. The best estimates show that for-profit health insurers saddle the U.S. health-care system with an unnecessary $400 billion in annual administrative overhead costs and profit. Administrative costs make up nearly a third of all U.S. health expenditure. By contrast, Canada spends only 12 percent on administration under a single-payer model in which provincial governments are the sole insurers and where everybody is guaranteed quality coverage regardless of their wealth and status. As U.S. Senator Bernie Sanders (I-VT) notes, “the function of a private health insurance company is not to provide health care; it is to deny health care.” Obama has consistently refused to advance the obvious cost-cutting and social democratic health care solution: single-payer (“improved Medicare for all”) and has in fact “methodically erase[d] single-payer advocates from the picture” (Glen Ford in Black Agenda Report) of the “mainstream” health-care debate. He has instead advanced a tepid, business-friendly “reform” that leaves private insurance corporations in power alongside an unimpressive new “Medicare-style” plan or “public option” for people unable to afford private insurance. As the left-progressive labor journalist and policy analyst Roger Bybee has shown in a series of cogent critiques published in late 2008 and early 2009, Obama’s proposed “Guaranteed Choice” plan has four basic problems not present in a single-payer system: Adverse Selection.Private insurers, who would continue to provide most of the nation’s health coverage by far under Obama’s scheme, would be permitted to use “denial of authorization” for treatments to push “costly” (older and sicker) patients into an over-burdened public option plan. Those insurers would also use advertising and perks (e.g. free health-club memberships) to attract the healthy and keep them out of the public option. That option would then be saddled with a disproportionate share of the sick, which would in turn raise the “public plan’s” premiums, helping make private plans more attractive to healthy people. Lost Administrative Savings. By retaining for-profit insurers, Obama’s plan “forsakes almost all of the potential $400 billion a year in excess administrative overhead that could be eliminated by a single-payer system. Private insurers with their huge overhead costs devoted to a strategy of ‘denial management—paying as few claims as possible—would remain in operation,'” Bybee notes. “Also still intact would be the overhead costs hospitals and doctors pay to deal with securing payments from patients and multiple insurers with intricate differences in coverage.” Absent Cost Control. Obama’s plan contains no effective measures to prevent insurers from boosting profits by continually raising premiums—something that insurers will be certain to do with great frequency in response to the Obama plan’s denial of insurance corporations’ right to deny coverage on the basis of pre-existing conditions. Obama’s “health reform” also contains no provision to prevent insurers from continuing their practice of “improperly allocating all kinds of administrative costs as medical expenses for anything than can be labeled an effort to improve quality and cut costs.” Unaffordable Mandates. The Obama plan’s requirement that all individuals who can “afford” to do so buy health insurance, or pay a financial penalty, ignores the fact that private health insurance premiums are typically too high for many working people. As has been seen in the handful of states (Massachusetts, Tennessee, Minnesota, Oregon, Washington, and Vermont) with “universal plans” based on individual purchase mandates (with penalties for those who do not buy in), the outcome is often “coverage without care” and a tendency for many to tragically identify “universal coverage” not with “government help” but rather with “government coercion.” As originally conceptualized and floated in 2008 and early 2009, the president’s health scheme is a potential disaster for serious reform. Bybee has worried that Obama’s “plan, manacled to private insurers, may ultimately deepen public cynicism about the possibility of any substantive help with their increasingly desperate health care situation.” The plan has often seemed fated to repeat the experience of “HillaryCare” during the 1990s, when the Clinton administration’s scheme for national coverage crashed and burned, discrediting the cause of reform for many years. When Obama gave an uninspiring prime-time press conference in support of Democrat-led health reform last July, much of the public didn’t follow his logic on why it should support his curiously corporate-captive version of “change.” All too common was the reaction of Rowena Ventura, 44, an uninsured worker who had just moved her ailing mother into a house she shared with her disabled husband. “You see,” she said, gesturing at the president on her television, “he’s saying he wants to continue private insurance, but then he says they’re part of the problem. Well, which is it? It’s just ridiculous” (K. Sack, “For Public, Obama Didn’t Fill in Health Blanks,” New York Times, July 23, 2009). Paralyzed by the Unelected Dictatorship of Money Yet even Obama’s tepid plan has proved too “radical” for key segments of the U.S. political and media order. The president’s mild “public option” has been regularly slammed on Fox News and by the Republican right as an example of 21st century Bolshevism. Obama has been accused of advancing Communism with a devious scheme for “government-directed” care and even “socialized medicine.” Opponents of “ObamaCare” have spent $9 million on a partly successful television and radio campaign claiming that Americans are largely satisfied with the existing U.S. health system and portraying the president’s “overhaul” as “a government takeover that would prevent people from choosing their own doctors” (New York Times, July 30, 2009). Those false and preposterous charges have not elicited generalized howls of laughter and derision from the supposedly “liberal,” “left,” and “mainstream” news and commentary media. Instead, dominant media has significantly played along with “Blue Dog” Democrats and Republicans by raising alarms about the “high costs” of Obama’s plan—originally pegged at $1 trillion over 10 years beginning in 2013—while saying little about the massive administrative overhead costs that could be overcome by single-payer. It deletes the interesting fact that the federal government spends the same amount ($1 trillion) annually on the bloated U.S. “defense” budget. At this writing in early August 2009, the New York Times reported that the drug industry’s leading lobbyist, the legendary Washington deal-maker Billy Tauzin, had compelled the White House to explicitly acknowledge that it had cut an advance behind-the-scenes deal with Big Pharma “to block any Congressional effort to extract cost savings from them beyond a previously agreed-upon $80 billion.” Tauzin told the Times that the drug makers already have a “rock-solid deal” whereby the White House and top legislative Democrats agreed to “move away from ideas like the government negotiation of prices or the importation of cheaper drugs from Canada” (New York Times, August 6, 2009). At the end of the July, 2009, the New York Times matter-of-factly reported that the nation’s health “reform” was being “carved out at a table for six” millionaire Senators (all white and all but one male) seeking a “grand bargain” in the office of Senate Finance Committee chair, Max Baucus (D-MT). The Senators joining Baucus were: Charles Grassley (R-IA), Kent Conrad (D-ND), Olympia Snowe (R-ME), Jeff Bingaman (D-NM), and Michael Enzi (R-WY). By Times reporters David Herszenhorn and Robert Pear’s account, Obama’s “public option” was falling to the committee’s killing floor, along with the notions of taxing the wealthy to pay for extended coverage and of requiring employers to provide coverage: “The battle over health care is all but paralyzed as everyone awaits the outcome of their talks. “Already, the group of six has tossed aside the idea of a government-run insurance plan that would compete with private insurers, which the president supports but Republicans said was a deal-breaker. They have also dismissed the House Democratic plan to pay for the bill’s roughly $1 trillion, 10-year cost partly with an income surtax on high earners. The three Republicans have insisted that any new taxes come from within the health care arena. “The Senate group also seems prepared to drop a requirement, included in other versions of the legislation, that employers offer coverage to their workers. ‘We don’t mandate employer coverage,’ Senator Olympia J. Snowe, Republican from Maine and one of the six, said” (New York Times, July 28, 2009).        The Times deleted the important fact that the six Senatorial health “reform”-crafters (or diluters) had collectively received $9.1 million in campaign contributions from the health-care sector and $3.2 million from the insurance industry since the beginning of the 2008 election cycle. Max Baucus, the convener of the “grand bargain” meetings, raised a remarkable $3.5 million from the health sector and $1.5 million from the insurance industry during and since the last election cycle. The Times also did not note that the senators at Baucus’s table had each received a disproportionately high share of the astonishing $178,252,901 that the health sector has poured into congressional and presidential campaigns, of the $52,739,320 invested in the same outlet by the insurance industry, and the nearly $32 million contributed by the pharmaceutical industry. Obama also received more that $19 million from the health sector and $2.25 million from the insurance industry in the last election (data from the Center for Responsive Politics “Open Secrets” website). If history is any guide, Obama should be expected to approve a watered-down bill that largely abandons his alleged “top priorities” and dismisses his “progressive base.” Eager to put some kind of health reform on his historical résumé and insisting as usual (as throughout his political career going back to Harvard Law) that Republicans be mollified in the name of “bipartisanship,” the president will in all likelihood acquiesce as Republican and “moderate” (“blue-dog”) legislators—themselves leading recipients of campaign largesse and lobbying attention from the medical industrial complex (the “health care sector” spent $134 million lobbying the federal government in just the first quarter of 2009)—shred even his mild public option. Surely such “radical” policy proposals as Obama’s “public plan” must be sacrificed for the common good. Single-payer (popular with most Americans) is beyond serious consideration except by dangerous and dysfunctional “populists” who do not share the president’s commitment to the “pragmatic” building of “consensus” across the timeworn lines of obsolete “ideology”—as media elites worry that the recession is putting Medicare and Social Security’s trust funds at “risk of insolvency,” possibly requiring cutbacks and privatization. If current trends continue and the plutocracy’s grip on “health reform” is not challenged by a significant popular rebellion, it appears that U.S. citizens will be stuck with more overpriced, wasteful care, endless premium inflation, cringing dependence on the employer class for health care, mandated coverage without affordable care for many, the constant fear of losing coverage, and recurrent private and public battles with insurers and their tyrannical, costly, profit-protecting bureaucracies and outsized political influence for years to come. Without rebellion, such is the reality of health reform in “the best democracy that money can buy,” where “politics,” as John Dewey noted early in the last century, “is the shadow cast on society by big business.”



Paul Street’s publications include Empire and Inequality: America and the World Since 9/11 (Paradigm, 2004); Racial Oppression in the Global Metropolis (Rowman & Littlefield, 2007); and Barack Obama and the Future of American Politics (Paradigm, 2008).