San Pedro, CA – Mitt Romney’s selection of Paul Ryan as his running mate will have profound implications for the upcoming election – as well as what happens afterwards. But the broad nature of those implications is largely dependent on what President Obama decides to make of them. He could take Ryan’s claim-to-fame budget plans seriously as a further indication of the direction that Romney wants to take the US – a direction that would the country virtually without a federal government by 2050, except for healthcare, Social Security and military spending according to Congressional Budget Office analyses in 2011 and 2012.
Attacking Romney/Ryan on these terms would turn this election into a grand referendum on what sort of country we want the US to be – a broadly inclusive one, or a country of the 1 per cent.
Or Obama could take the cheap-and-easy way out, highlighting Ryan’s role as a loyal Republican foot-soldier during the Bush years, turning rare budget surpluses under Clinton into towering mountains of debt, even before the Great Recession hit.
The later choice deeply appeals to Obama’s desire to make conservative arguments his own. How much fun to attack the GOP VP nominee as the budget-busting big spender his congressional record so clearly shows him to be? Yet, winning the election on those terms would leave Obama with no real room to maneouver if he really wants to get the US back on track for the long haul.
|Paul Ryan’s speech at Norfolk, Virginia|
Winning on a message of “I’m a better conservative than you” leaves Obama where he spent most of his first term -repeatedly trying and failing to find a position conservative enough for Congressional Republicans to support, while leaving his base dispirated at best. What’s more, the former choice – striking hard at the Ryan Budget Plan – is well in keeping with the strategy that’s been working for Obama so far. As Jonathan Chait recently wrote:
The Republican plan is to leverage public discontent over the current state of the economy into an election victory they can use to push through sweeping changes to public policy. Obama wants the electorate to vote on that instead. Now he has a good reason for wanting this: The entire thrust of the Republican plan, to cut tax rates for the rich and cut the social safety net, is highly unpopular.
Ryan’s role as running mate only makes this even clearer. And, indeed, there was every reason to believe that Obama’s strategy was already working. The Talking Points Memo poll average showed Obama’s lead over Romney expanding from 1.8 per cent to 6.0 per cent from July 24 to August 9.
Obama would have to be foolish to move away from a message that’s already working for him, rather than doubling down on it. And yet, Obama still yearns to reach out to everyone, to be a unifying leader. There is a way for him to do that, even as he runs hard against Romney/Ryan.
The great risk shift
To understand how, let me take you back to early 2008. I was not a fan of Obama’s presidential candidacy, because I found it so lacking in policy flesh and bones. Many people attacked me for being “so negative” – I didn’t support anyone else, either – and I responded by offering a couple of big-picture policy platforms that I thought Obama could comfortably embrace, precisely because they had broad popular potential, and spoke to remedying people’s feelings of disempowerment.
In short, they seemed right in line with “hope” and “change”. I wrote about one of them in a diary at Open Left, “The Great Risk Shift – A Substantive Fight That Obama COULD Make His Own”.
I proposed that Obama could address a wide range of economic insecurity threatening the American Dream using a well-developed argument by Jacob S Hacker, a Yale University political scientist, in his 2006 book, The Great Risk Shift: The Assault on American Jobs, Families, Health Care, and Retirement – And How You Can Fight Back.
Hacker argued that the greatest economic challenge facing Americans at that time was the shifting burden of economic risk from large institutions capable of handling it onto individuals and families who are not. He further argued that what’s most needed in the 21st century is a new orientation to bringing risk back under reasonable control – an “insurance and opportunity society” that would provide the economic security needed for people to invest in, and build their dreams.
|Paul Ryan tapped as Romney’s running mate|
Contrary to the conservative equation of “security” with protecting economic “losers”, Hacker argued that security is an essential foundation for productive and creative risk-taking – as opposed to mere gambling. His analysis pointed to a fundamental reframing of economic discourse, with the growing insecurity of average Americans at its core.
His book came out when the economy still superficially seemed okay, two years before the financial crisis. But it presented a picture of tremendous economic distress as the new normal – a picture that cried out for bold, progressive action in response to decades of neglectful policy drift, if not deliberate undermining of most American’s financial security.
The figures Hacker cited were staggering. First, regarding basic economic security: Personal bankruptcies increased from 300,000 in 1980 to 2 million in 2005 – a 567 per cent increase. The chance that an average American’s income will drop 50 per cent or more over a two-year period increased from 7 per cent in the 1970s to 17 per cent in 2002 – a 143 per cent increase. Long-term unemployment (more than 6 months) at the peak of the business cycle is triple what it was in the 1960s.
Second, regarding health security: The number of Americans without health insurance was 46.6 million, up from about 24 million in 1980. The decline was entirely due to cuts in employer-provided health coverage. Worse still, over 80 million Americans lack health insurance over some time during a two-year period.
Third, regarding retirement security: The percentage of large and medium-sized corporations offering traditional “defined-benefit” pensions, with a guaranteed monthly benefit for life, fell from more than 80 per cent in 1980 to less than a third in 2006. And 401(k)s that replaced them? There’s a reason folks call them 201(k)s now.
Fourth, the burden was particularly hard on families with children, whom conservatives claim to care about most. Their bankruptcy rates are twice that of childless couples.
These are just a few of the frightening figures Hacker cited, and in every case, he argued, the basic cause was the same: risk had been systematically shifted from large institutions most capable of handling it onto the shoulders of the most vulnerable. This was largely a result of a rhetoric of “personal responsibility”, but what was actually being shifted was not responsibility, but risk.
The risk-shift Ryan plan
So what does all that have to do with Paul Ryan? Simple: Ryan’s infamous budget plan has many well-known problems with it, but it would also vastly intensify the Great Risk Shift, as Democratic strategist Mark Schmitt cogently pointed out in April 2011 (“The Ryan Plan: The Biggest Risk Shift Ever“).
“It’s not just that Ryan slashes spending,” Schmitt wrote, “he places the burden of risk on American families’ shoulders.” That’s precisely what the Great Risk Shift has done step-by-step over the past 30 years. With the Ryan plan, the process would be dramatically accelerated.
| Inside Story US 2012 – Will rising poverty
affect the US election?
In one concise paragraph, Schmitt summarised Hacker’s point about the true value and function of welfare state that America’s elites have been gradually dismantling since the 1970s:
The achievement of the New Deal and the Great Society was not primarily in providing benefits to the poor and the old, although that’s often how both liberals and conservatives talk about it now. What those programmes did best was to reduce risks for individuals by sharing them across society. Whether it was health insurance through Medicare and Medicaid, insurance against poverty in old age through Social Security, federal mortgage insurance that made homeownership possible, or the Federal Deposit Insurance Corporation that enabled people to save for the future with confidence, when government absorbed and shared some of the risks of life, individuals were able to take chances and make the most of their potential.
And, in contrast, he noted:
Today, though, the only risks we’re sharing are the wrong ones: Wealthy investors are protected by real or implicit guarantees such as “too big to fail,” while the risks that should shared, through social insurance, are instead privatised – that is, pushed down the line onto us as individuals.
Just to take one example, voucherising Medicare is one of Ryan’s key proposals – forcing seniors to buy private healthcare insurance (assuming that anyone will sell it to them). Ryan’s idea is this will make them more responsible consumers. But the US’ private healthcare market is the reason we have so many millions uninsured in the first place – as well as contributing to 700,000 medical bankruptcies per year.
Before Medicare existed, there was no such thing as private healthcare insurance for seniors. Private companies couldn’t make a profit at it. The only thing that Ryan’s plan would guarantee is that now they could make a profit at it – thanks to a government subsidy! Whether seniors could actually get the healthcare they need is not even part of the conversation, as defined from Ryan’s point of view.
But that point of view is precisely the problem. It’s the viewpoint that created the Great Risk Shift in the first place. It deliberately excludes the ordinary citizen’s perspective, what serves them and what disserves them.
What happens when you do include that perspective? Well, for one thing, a CBO analysis (described here) shows that new enrollees under Ryan’s plan would receive $5,900 to $8,000 (35 to 42 per cent) less in 2050 than under current law.
That’s not asking them to take responsibility. It’s asking them to take a sucker’s bet. And taking the US’ side against a sucker’s bet is precisely where a unifying political figure should want to be.
Paul Rosenberg is the senior editor of Random Lengths News, a bi-weekly alternative community newspaper.