There’s nothing smart in surrendering bargaining power for policy details

While we are taking lessons from the ugly compromises FDR accepted in order to get Social Security passed, we might also consider other events. FDR, you probably don’t recall because it has oddly been erased from conversational history, pursued almost as an idée fixe a cap on incomes of $25,000 (call it $360K in today’s money). The idea was as divisive then as it would be today, and despite dogged efforts, the proposal did not succeed. But, as Sam Pizzigati reminds us

[T]he setbacks the Roosevelt administration had suffered on the $25,000 salary cap executive order, on pay-as-you-go tax forgiveness, and the Revenue Act veto were obscuring a much more fundamental reality…

Roosevelt’s relentless drive to make sure the war created “not a single war millionaire” had made an incredible difference. His refusal to take “no” for an answer on his $25,000 income cap proposal had kept the entire war finance debate revolving around the rich and how much they ought to be paying in taxes. Conservatives didn’t want that debate. They wanted a national sales tax that would shunt the war’s heavy burden onto average Americans, but FDR’s aggressive advocacy for equity never allowed a sales tax to gain traction. Roosevelt would not get all he wanted on the tax equity front. But he did get plenty, enough to deliver against plutocracy a staggering knockdown.

The odds of enacting decent single-payer health care in the United States, given the broad range of powerful and not always unsympathetic stakeholders in the current system, are modest. But a modest chance is very different from no chance at all. The deep aversion among current stakeholders that makes single payer politically hard also makes any chance it might happen a potent motivator for those same stakeholders to accept or even propose meaningful alternatives. Taking single payer off the table, promising to build from the status quo, leaves the comfortable with nothing to fear from the many people for whom American health care remains a nightmare. It strikes me as more a license for inaction than a sensible plan of action.

(Dean Baker has made a similar point.)


17 Responses to “There’s nothing smart in surrendering bargaining power for policy details”

  1. Dan Kervick writes:

    For progressives, the so-called “incremental strategy” has been a failure. The ACA was a modest win for equality, along with slightly increased taxes on the wealthy, but it was totally swamped by the continued growth of inequality and plutocratic gains elsewhere.

    Also, the notion that mainstream liberals actually have an incremental strategy, agreeing with progressives on the ultimate goals but disagreeing only in tactics and timing, is a fib. There is no mainstream liberal strategy for getting to socialized health care, socialized post-secondary education, a fully adequate national pension system, high returns to labor and reduced returns to capital, or a significant leveling compression of the income and wealth gap – incrementally or otherwise. Mainstream liberals policy wonks don’t share the social philosophy of the left: they instead tend to believe in a hierarchical meritocracy with significant income and wealth gaps, where equality is restricted only to equality of opportunity in reaching the upper ranks of the hierarchy. And recently, their commitment to democratic values and democratic society seems tenuous at best. Progressives should not fall for the idea that the liberals are just crypto-lefty”realists” with a canny long-term plan.

    The reigning Democratic policy philosophy is that one starts with a detailed policy document, crafted in Willy Wonk’s Legislative Sausage Factory run by a think tank, which has already been fully vetted and compromised into consensus by all the status quo “stake-holders”. Then one takes that multi-volume mountain of unintelligible detail into the public sphere and legislative process, where it is scrambled and watered down some more until there is almost nothing left.

    I like the idea of throwing 100 ambitious initiatives at the opposition at once while fighting particularly hard for a few, and pushing the Overton Window way back by mobilizing a general mass thrust for the overall themes.

  2. Bryan Willman writes:

    Why are you SO SURE that single payer is a better way? Medicare is already one of the largest single payer systems in the world, why is anybody excited about “medicare for everybody at all ages?”

    Also, why are you so sure that changing the payment system will cause health care to NOT be a nightmare? It is easy to imagine a single payer disaster of huge proportions…. Hard, at least for me, to imagine a single payer success…

  3. Bryan Willman writes:

    It does not help the “progressive cause” that Obamacare was sold with a variety of lies “if you like your policy you can keep your policy” and that it’s become very apparent that substantial numbers of people (a) cannot navigate it and (b) are simply ducking the mandate.

    Before you say “we’ll have a system financed by taxes, equal for all!” please explain to me where else in the American entitlement system that exists? Medicare elgibility depends on having paid medicare taxes (or having a spouse that did.) Social security is similar. Do you really think that a scheme that offers “1st class” medicine to everybody, whether they ever paid a dime of taxes or not, will fly in America?

    And that if it DID fly, that it would actually work better in the end? (As in, “yup, everybody has Medi-All, and there is at least one nurse’s aid in every county who will take it, but all really good medicine is paid for on the side or over the table…”)

    Note that some of entrenched stakeholders are very non-obvious. For example, Unions. In the modern era they really only get to negotiate for two things – defined benefit retirement plans and healthcare. A national healthcare system is likely to remove one of the last supports for Unions. Is that a progressive goal?

  4. Zach writes:

    It might not be better, but it might be. And if you’re a person that wants to try it taking it off the table limits outcomes in such a way that it makes it more likely that you will end up with something you don’t want.

  5. Just a guess: pragmatism rises in proportion to the representation of the other party in Congress. Just a guess.

  6. Bryan Willman writes:

    I suspect Thorton Hall guesses correctly about many things….

    I would point out that if something like single payer is on the table, the other sort of thing that should be on the table is a more abstract labor compensation system that treats independent labor, small firm labor, and large firm labor evenly.

    For example – firms are ONLY allowed to (a) pay money or (b) grant equity or options and (c) have a nice environment. No free food. No free bus passes. No more a zillion other schemes that let large entities raise effective compensation at low net costs, in effect putting small firms and independents at a structural disadvantage. The ENTIRE health insurance (and legal insurance, retirement investment, etc etc) would have to come out of employee pay, in a fashion directly visible to said employees. All health insurance is sold to members of one huge group called “residents of the United States” and all such residents contribute mandatory and if they wish optional payments to any of several pension funds. What health insurance you can buy, what pension system you can buy into, etc. are indepedent of what firm, or size of firm, you work for. Ideally independent of what state you live in.

    There would be choices, and the right to make changes over time.

    And the costs of things like healthcare more visible to the population, and thus one hopes at least somewhat more controllable.

    A tax funded single payer system might achieve some of this improved labor freedom, but I’d fear that it would be hidden in the general tax bill, hidden in an employer covered part of the bill, and that this resulting lack of transparency would distort healthcare markets as badly as they are now.

    I will also note that even with costly very good insurance, and fully adequate financial resources to cover colateral costs, healthcare is still very complicated, full of important choices that are hard to make, full of doubt about what to do. I don’t think that can ever go away, because it’s about selecting providers, selecting treatments, making bets on what is right for the patient. All independent of costs/money/insurance.

  7. vlade writes:

    Rule one of negotiation: ask for much more than you ever hope to achieve, unless you are absolutely totally sure the other party is coming to the table in good faith. Which can be easily established by asking for their goals – if they conform to the first part of Rule one, they are not.

  8. Quant1 writes:

    Precisely the logic the NRA uses when they oppose “reasonable” “common sense” gun legislation.

    So you agree with that huh?

    Didn’t think so. You’re just talking about a standard tactic in support, in this case, of your socialism, and passing it off as insight.

  9. Quant1 writes:

    And when republicans do it hypocrites like you call it obstructionism or much worse.

  10. Denis Drew writes:

    Three ways to take the money back from the oligarchs (especially that extra 10% of income share they have garnered since the ’70s which is responsible for permanently sluggish demand (secular stagnation — their lack of propensity to spend it):
    Tax it back — 50% tax incomes over $650,000 (the entry to the 1%), 90% tax over $2 million (just to pull numbers out of air);
    Collectively bargain it back — labor can squeeze for a bigger share of what the consumer pays for products and services produced stateside; leaving top exec pay untouched for products produced w/o bargaining in other economies;
    German style labor representatives on corporate boards could keep a sharp eye on exec overpay (CEO of Daimler Benz got a raise from $3 mil to $12 mil when they acquired America’s Chrysler).

    One way to get the power back:
    Union busting is a much more injurious crime (and it IS a crime, there’s just no just punishment) than union racketeering. Racketeering only bleeds off some of the bargaining strength of a union (and perhaps none of the political strength) — union busting deprives Americans of their entire economic and political mojo (sickening society across the board).

    HIgher local minimum wages supplement the inadequate federal level. And some states (CA — only one I have any specifics on) have seriously stronger reinforcements (relatively — w/o felony penalties) of organizing than the fed. Every other form of market warping is treated as a serious felony (try to take a movie in the movies and then tell them you were only kidding — a couple of years).

    States cannot subtract from federal protections but they can certainly add. So when are states with good progressive attitudes going to add — felony market warping protections (note bene: protecting market participation; not primarily jobs of organizers)? In Maryland for just one instance Democrats have a 33-17 edge in the State Senate and a 91-50 edge in the House. WA, OR, CA, IL, NY, anybody listening?

    It’s a matter of freedom as much as anything else. Why shouldn’t economic actors (employees) be able to just organized or join a collective bargaining unit if the just want to? What’s with all the heavy hands? They don’t do that kind of thing in any other civilized economies — it’s just not in anybody other first world country’s culture.

    Just about every problem we have in this country from street gangs to pharma gouging to trillion dollar student loans would not be happening if we had (German style?) high union density. SO (allow me to shout), WHEN ARE WE GOING TO (START — IN SOME STATES) MAKING UNION BUSTING A FELONY, ultimately backed by RICO prosecution for persistent violators (the gold standard to keep management from playing endlessly at the edge of union busting)?
    PS. Confiscatory taxation and/or German style worker reps may be only way to take back 10% of the 1%’s 20%. Mere collective bargaining stateside may not be sufficient to squeeze back enough labor share to do that. Ditto, for higher prices caused by higher wages taking much back from the 1% in the retail market place — if only because the 1%’s propensity to spend (the core of secular stagnation) is permanently below par.

  11. A writes:

    Denis Drew, that is a really perverse understanding of union racketeering. In such a case, the union becomes a source of rent extraction against everyone, including labor. That should be obvious unless you willfully ignore counterfactual labor sortings.

  12. peppermint writes:

    What, Obamacare was obviously intended to

    (1) Become law by any means necessary
    (2) Be a mess of lies and broken promises, while expanding Medicare
    (3) Force a switch to Medicare for everyone

    This was obvious at the time and everyone knew it. Everyone knew that ‘single payer is off the table’ meant ‘…for now’. The fact that you are pretending not to have known it makes you disingenuous, which is death to a no-name blogger. You should post this on Markos Zuniga’s site.

    So far, it is working, and unless the media and academia elite decide to permit politicians who will openly say that niggers shouldn’t have healthcare, socialists screw up the economy enough to force the government to defund the entitlement programs, or the media and academia elite become irrelevant sooner rather than later, it will work.

  13. peppermint writes:

    vlade writes:

    Rule one of negotiation: ask for much more than you ever hope to achieve, unless you are absolutely totally sure the other party is coming to the table in good faith. Which can be easily established by asking for their goals – if they conform to the first part of Rule one, they are not.

    Precisely. The Democrats rammed Obamacare through to disrupt the healthcare industry and prepare it for further socialization. Incidentally, one of the major talking points leading into Obamacare was that it would reduce healthcare costs by giving regular checkups to people currently without a healthcare plan, thus reducing their need for expensive treatments when they show up for free emergency room services. Which is an argument for socialization.

    By the way, if anyone wants to have affordable care, they should

    (1) start handing out more medical licenses. Getting into the medical profession is currently very difficult, almost certainly more so than necessary to maintain standards of care.

    Obamacare did include more funding for doctor training, but targeted as an affirmative action program, so the doctors’ union or whatever it’s called can’t organize against it.

    (2) do something about pharmaceuticals, which is a major cost center in medicine, with many prescriptions written just because people ask for pills or so the doctor can be seen to have done something, and currently spends a lot on advertising

    (3) hospitals need to inflate the prices of everything to cover their obligation to provide free emergency room services to people who can’t pay. Directly reimburse them or rescind the obligation.

  14. kellandros writes:


    2 of your points are actually in ObamaCare, in some form or other.

    1) More Medical Licenses
    It provided funding to help build small clinics, and also expanded the role and authority of nurse practitioners to provide basic care.

    The US has also been importing doctors for decades now.

    2) Pharmaceuticals
    This one I think should have been addressed more, but insurance companies have started pushing back on drug price negotiations. I just haven’t seen as much information on this side of things to answer better.

    3) Hospital Charges
    State governments had been reimbursing hospitals already, but budget cuts were limiting that.

    This is where the Medicaid expansion comes in. Rural hospitals have been shutting down because their costs were too high for the number of patients, especially those who couldn’t pay.

    States that accepted the expansion saw fewer rural hospital closures. State budgets also got to reduce their hospital reimbursement greatly, as most of those indigent patients were shifted onto Medicaid.

  15. Lars writes:

    What the fuck happened to this comment section? Too many links from places like Marginal Revolution?

  16. rsj writes:


    I don’t like asymmetric practicality. Also, I’m a big fan of Krugman, but he’s really the quintessential establishment technocratic centrist that he claims doesn’t exist anymore. But it’s for the Summers-Clinton-Rubin establishment that disintegrated as a result of well, the Summers-Clinton-Rubin policy agenda.

    He’s still out there, advocating for that agenda, saying that more radical approaches are unworkable even as everything becomes radicalized around him. Let’s not forget his 2008 support for Clinton over Obama, which was stronger than his 2012 support of Clinton over Sanders. I’m not sure whether he connects the dots from Bill Clinton’s trade liberalization, which he so stridently supported, and the radicalization of a shrinking white middle class, but on the big issues he continues to reason from the small.

  17. ibilln writes:

    FDR went to war with the establishment after he became president. Hillary, fyi, is not president yet.