The Audacity of Hope - Barack Obama [84]
That’s what Social Security, the centerpiece of New Deal legislation, has provided—a form of social insurance that protects us from risk. We buy private insurance for ourselves in the marketplace all the time, because as self-reliant as we may be, we recognize that things don’t always work out as planned—a child gets sick, the company we work for shuts its doors, a parent contracts Alzheimer’s, the stock market portfolio turns south. The bigger the pool of insured, the more risk is spread, the more coverage provided, and the lower the cost. Sometimes, though, we can’t buy insurance for certain risks on the marketplace—usually because companies find it unprofitable. Sometimes the insurance we get through our job isn’t enough, and we can’t afford to buy more on our own. Sometimes an unexpected tragedy strikes and it turns out we didn’t have enough insurance. For all these reasons, we ask the government to step in and create an insurance pool for us—a pool that includes all of the American people.
Today the social compact FDR helped construct is beginning to crumble. In response to increased foreign competition and pressure from a stock market that insists on quarterly boosts in profitability, employers are automating, downsizing, and offshoring, all of which makes workers more vulnerable to job loss and gives them less leverage to demand increased pay or benefits. Although the federal government offers a generous tax break for companies that provide health insurance, companies have shifted the skyrocketing costs onto employees in the form of higher premiums, copayments, and deductibles; meanwhile, half of small businesses, where millions of Americans work, can’t afford to offer their employees any insurance at all. In similar fashion, companies are shifting from the traditional defined-benefit pension plan to 401(k)s, and in some cases using bankruptcy court to shed existing pension obligations.
The cumulative impact on families is severe. The wages of the average American worker have barely kept pace with inflation over the past two decades. Since 1988, the average family’s health insurance costs have quadrupled. Personal savings rates have never been lower. And levels of personal debt have never been higher.
Rather than use the government to lessen the impact of these trends, the Bush Administration’s response has been to encourage them. That’s the basic idea behind the Ownership Society: If we free employers of any obligations to their workers and dismantle what’s left of New Deal, government-run social insurance programs, then the magic of the marketplace will take care of the rest. If the guiding philosophy behind the traditional system of social insurance could be described as “We’re all in it together,” the philosophy behind the Ownership Society seems to be “You’re on your own.”
It’s a tempting idea, one that’s elegant in its simplicity and that frees us of any obligations we have toward one another. There’s only one problem with it. It won’t work—at least not for those who are already falling behind in the global economy.
Take the Administration’s attempt to privatize Social Security. The Administration argues that the stock market can provide individuals a better return on investment, and in the aggregate at least they are right; historically, the market outperforms Social Security’s cost-of-living adjustments. But individual investment decisions will always produce winners and losers—those who bought Microsoft early and those who bought Enron late. What would the Ownership Society do with