Something happened last week which I find absolutely astonishing:
https://www.wsj.com/articles/fed-to-inject-1-5-trillion-in-bid-to-prevent-unusual-disruptions-in-markets-11584033537
The Federal Reserve said it would make vast sums of short-term loans available on Wall Street and purchase Treasury securities in a coronavirus-related response aimed at preventing ominous trading conditions from creating a sharper economic contraction.
The Fed’s promise to intervene substantially in short-term money markets together with a move that opens the door to a resumption of bond-buying stimulus known as quantitative easing, followed two days of trading in which market functioning appeared to have degraded.
- Wall Street Journal, 13th Mar 2020.
The US Federal Reserve spent $1.5tn in propping up the stock exchange.
Monday 9th March 2020 at the time was the biggest day's point drop of the Dow Jones Industrial Average. This was followed by the biggest day's point drop of the Dow on Wednesday 11 and then followed by an even bigger drop on Thursday 12th.
In terms of percentages, the 12th of March 2020 was the 4th worst ever trading day; only behind Black Monday in 1987 and the Great Crash of 1929.
If you don't understand $1.5tn does, here is a graph that illustrates what it actually did:
Basically, not much.
$1.5tn, that is $1,500,000,000,000, a number so comprehensively massive that it is hard to actually comprehend, could have paid for:
- The Entire Apollo Program
- The International Space Station
- All of the Eisenhower Interstate Highway System
- Ending Homelessness in the United States
- Ending World Hunger for a decade
... combined.
$1.5tn divided by 330 million people is $4545 per person. To put that in perspective, the average private healthcare premium in Australia per household is $2170. In the light of a public health care crisis, instead of doing something about healthcare, the United States was more worried about the health of the bank accounts of a select few number of people.
The United States actually dropped enough coin into the stock market, which had the net effect of correcting a trend line for less than two hours; when for less money it could have bought universal health care for every man, woman, and child. To say that the United States can not afford public health care is a total lie. Not only that, it is a deadly one. If you repeat this lie, then you are akin a mass murderer; you are a knave.
In twenty minutes, the United States spent more money than it cost for the International Space Station, The Entire Apollo Program, the Interstate Highway System, ending Homelessness in the United States, and ending all world hunger until 2030, combined.
Still, spending more in twenty minutes and watching it all vanish, just to prop up Wall St and the super rich, is better than universal health and actually addressing the issue of health care, right? If you are Wall Street and indeed most of the US Congress, then the answer is obviously 'yes' or else you'd have passed a universal health care bill some time in the past 76 years.
I did not make up that number. President Franklin D Roosevelt proposed universal health in his 1944 State of Union address and along with the 14th Amendment to the Constitution cheque which Martin Luther King Jr said was a "bad cheque", this is a cheque which has never even been presented.
The fact that the United States has spent more than seven decades deliberately avoiding the question and in many instances has actively railed against the question being uttered, is shameful. A wise man once said, that where your treasure is, there your heart will also. If this isn't an active demonstration of where America's heart lies, I don't know what is.
Seen in raw economic terms, a public health care system is really an insurance question. As such, it needs to be frame in such terms.
Insurance is a risk pooling arrangement where people pay into a pool of money, in the hope that if a catastrophic thing happens, they will be compensated for it. If that sounds like gambling, that's because it is. Insurance is people betting favour of their own misfortune while secretly hoping that it never happens, while the insurance companies collect all of the statistical data for that thing happening and then placing a different bet but pocketing the difference. Insurance companies hire actuaries to work out what the statistical likelihood of a thing happening is and then set premiums accordingly.
All of that sounds fine if you are talking about things with defined values and rates of catastrophe, which is why for insurance markets like car insurance and building insurance, letting the market decide the rates of premiums is entirely acceptable in my opinion. I do not have any objections to the market allocating prices and resources if that is appropriate.
I will ask though, what exactly is the value of a human life? If you think that healthcare should also be allowed to be priced and allocated according to the whims of the market, then you have tacitly decided that the value of a human life is both finite and small. Furthermore, you have made the moral judgement that healthcare can and should be excluded to people on the basis of their economic circumstances.
I think it interesting that during the Second World War, when Britain faced a common enemy, the rhetoric even coming out of the Conservative Party, changed from one of individual selfishness to that of collective responsibility. Collective responsibility implies that there should be some kind of collective action given to a very large collective problem. A national defence force is in principle the same kind of risk pooling arrangement on a very large scale as a public health system. The question then is whether or not you apply the same moral framework to the issue of healthcare as you do national defence.
The then Prime Minister Winston Churchill certainly saw the connection:
"The discoveries of healing science must be the inheritance of all. That is clear. Disease must be attacked, whether it occurs in the poorest or the richest man or woman simply on the ground that it is the enemy; and it must be attacked just in the same way as the fire brigade will give its full assistance to the humblest cottage as readily as to the most important mansion.
Our policy is to create a national health service in order to ensure that everybody in the country, irrespective of means, age, sex, or occupation, shall have equal opportunities to benefit from the best and most up-to-date medical and allied services available."
- Winston Churchil, to the Royal College of Physicians in London in March 1944.
The NHS in context forms two great immediate pillars of purpose. The first given the context of war was to provide fit, healthy people who would valiantly be blown to pieces, and secondly to provide fit and proper workers to work in factories.
That second point is quite interesting. The NHS in that role is about improving and maintaining the quality of the labour force. Labour being a factor of production is one of the inputs of generating income, wealth and future capital.
Admittedly, Churchill wasn't a one man army; nor was he a one man parliamentary democracy. Churchill had to be dragged to that position through the seriousness of total war. The Labour Party had already arrived at that point but the Conservative Party had to be shoved there.
The British public who had just been through that same total war, immediately kicked out the Conservative Government and voted for Clement Atlee's Labour Government who then set about trying to win the ensuing peace which followed. It is in that light that the Family Allowances Act 1945, National Insurance (Industrial Injuries) Acts 1946 and 1948, National Insurance Acts 1946 and 1949, National Health Service Act 1946, Pensions (Increase) Act 1947, and the Landlord and Tenant (Rent Control) Act 1949 were all passed. It also came with massive amounts of opposition from the British Medical Association and 'the city' generally.
America though, never actually arrived at that position and never really saw total war on its doorstep. For America, with the exception of war in the Pacific, the whole war was thousands of miles away and certainly there was never a shot heard within the 48 states.
America came out of the Second World War as the most prosperous nation in the world because it never really suffered the effects of either the First or Second World Wars. Admittedly it went through the Great Depression like everyone else but it didn't have to go to the effort of rebuilding infrastructure which had been physically destroyed because of war.
Britain on the other hand, commissioned British Liberal Party economist William Beveridge to write the "Social Insurance and Allied Services Report" (more commonly known as the Beveridge Report) during the midst of the Second World War because they didn't want a repeat of the effects which followed after the First World War.
Almost certainly the impetus for building the post war welfare state came out of the Beveridge Report; which contained the following things among a general program for nationalising critical infrastructure:
It is one part only of an attack upon five giant evils:
(1) upon the physical Want with which it is directly concerned
(2) upon Disease which often causes that Want and brings other troubles in its train
(3) upon Ignorance which no democracy can afford among its citizens
(4) upon Squalor ...
(5) and upon Idleness which destroys wealth and corrupts men.
...
The state in organising security should not stifle incentive, opportunity, responsibility; in establishing a national minimum, it should leave room and encouragement for voluntary action by each individual.
- William Beveridge, Social Insurance and Allied Services (Cmd. 6404) (1942).
I think that last note is quite instructive. Britain saw the perils of state communism as practiced by the USSR (which the name 'Soviet' should tell you that it wasn't really socialist because 'soviets' are literally boards of control which are unelected) and wanted to run a path closer in spirit to what the Scandinavian countries would eventually run on.
America on the other hand, was never going to do that because although America likes to tell itself that it is the land of opportunity, it in reality has always been controlled and run for the benefit of those people who control the most capital. The American Revolution, the Civil War, and indeed the Great Depression have at their heart the same root drivers; that is that those people who have things, want to write the rules so that they keep their things.
The 1945 Labour Party manifesto was a critique of British capitalism but everything that it said could have easily been said about the United States and more so:
http://www.labour-party.org.uk/manifestos/1945/1945-labour-manifesto.shtml
The people lost that peace. And when we say "peace" we mean not only the Treaty, but the social and economic policy which followed the fighting.
In the years that followed, the "hard-faced men" and their political friends kept control of the Government. They controlled the banks, the mines, the big industries, largely the press and the cinema. They controlled the means by which the people got their living. They controlled the ways by which most of the people learned about the world outside. This happened in all the big industrialised countries.
Great economic blizzards swept the world in those years. The great inter-war slumps were not acts of God or of blind forces. They were the sure and certain result of the concentration of too much economic power in the hands of too few men. These men had only learned how to act in the interest of their own bureaucratically-run private monopolies which may be likened to totalitarian oligarchies within our democratic State. They had and they felt no responsibility to the nation.
Similar forces are at work today. The interests have not been able to make the same profits out of this war as they did out of the last.
- 1945 Labour Party manifesto
Those words sound like they could have been written in 2020 and not 75 years ago.
For everything that Roosevelt was, he wasn't a magician and couldn't simply magic up the will of the American people to bother to care about each other. He certainly couldn't make Wall Street and the people sent to Washington care about the people either. His 1944 State of the Union address went unfulfilled and neither he nor Truman who came after him, could achieve it:
http://www.fdrlibrary.marist.edu/archives/stateoftheunion.html
We have come to a clear realization of the fact that true individual freedom cannot exist without economic security and independence. "Necessitous men are not free men." People who are hungry and out of a job are the stuff of which dictatorships are made.
In our day these economic truths have become accepted as self-evident. We have accepted, so to speak, a second Bill of Rights under which a new basis of security and prosperity can be established for all regardless of station, race, or creed.
Among these are:
The right to a useful and remunerative job in the industries or shops or farms or mines of the Nation;
The right to earn enough to provide adequate food and clothing and recreation;
The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;
The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;
The right of every family to a decent home;
The right to adequate medical care and the opportunity to achieve and enjoy good health;
The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;
The right to a good education.
All of these rights spell security. And after this war is won we must be prepared to move forward, in the implementation of these rights, to new goals of human happiness and well-being.
America's own rightful place in the world depends in large part upon how fully these and similar rights have been carried into practice for our citizens. For unless there is security here at home there cannot be lasting peace in the world.
- Franklin D Roosevelt, State of the Union Address 1944
As I write this in March 2020, the world is facing up to the pandemic of COVID-19. I will suggest that whatever policy that the United States adopts, it will be monumentally terrible and that people will needlessly die; by design and operation of the health care system.
It is already too late for many people who are living in the United States and I am sorry but the decision has already been taken, repeatedly, that the American people are simply not worth the effort. Furthermore, they have actively repeatedly voted for that to be the case.
The current clown who has been installed at 1600 Pennsylvania Ave is emblematic of the problem at the heart of the American people; it is fitting that elsewhere in the Anglosphere we also have clowns installed in executive government.
The root cause of why the current clown was installed at 1600 Pennsylvania Ave is the same root cause which lies at the heart of the human condition; selfishness, unchecked.
The political solution for the United States would be to elect Bernie Sanders as President (who isn't a Democrat) and then by 2022 at the absolute earliest, start flipping red states in the Senate. The political mechanics of this are such that in order to achieve something massive, one party needs to be in control of both houses and the White House.
If Sanders doesn't win the nomination though, then Joe Biden has stated that he would refuse to sign a Medicare For All Bill and that has all kinds of implications for how the political clock ticks.
Since the Republicans would refuse to pass a Medicare For All Bill, then the elections which become relevant are 2022 and 2028 (because Senators are on 6 year terms). Trump would absolutely be gone by 2024; which means that if Sanders doesn't win the nomination for 2020, then we'd probably have to wait the current backlog of candidates to clear and by then who even knows what the state of play would look like?
I do know that the current political response to the COVID-19 virus in the United States will be inadequate at a national level and as far as an individual who doesn't have health insurance is concerned (of which there are about 40 million people), then the response will be non-existent. I bet that's really galling when you consider that $1.5tn was burned to prop up the stock market... for 25 minutes.
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