The Daily Item, Sunbury, PA

Gary Grossman

November 17, 2013

Whose eye is on the sparrow?

“Socialism, as and when it comes to the United States, will not be the work of politicians, or professors. The real work will be done — is being done — by the corporation executives.” — John Kenneth Galbraith, in Episode 9, The Age of Uncertainty: The Big Corporations, 1977

Thirty years ago, John Kenneth Galbraith cast the trickle-down approach of Reaganomics as, “What an older and less elegant generation called the horse-and-sparrow theory: ‘If you feed the horse enough oats, some will pass through to the road for the sparrows.’”

Many years later, in 2007, when the horses backed up, the sparrows realized and experienced the precariousness of living on the trickle. By then, many of us had been globalized into two-wage earner families, often working more than one job each, with an ever-slipping grip on a middle class life.

Galbraith had earlier narrated and illustrated his book, “The Age of Uncertainty” into a 1977 television series, in which he explained (unknowingly) how what is happening this week to the Affordable Care Act — known as Obamacare — would come to pass.

“The large corporation is here to stay,” Galbraith said in Episode 9. “Those who would break it up and confine its operations within national boundaries are at war with history and the tyranny of circumstances. People want large tasks performed — oil recovered from the North Sea, automobiles made by the million to use it. Large tasks require large organizations. That is how it is.”

In those relatively embryonic days of money in politics — before super PACs, partisan cable networks, and the Citizens United ruling that spawned tax-exempt unincorporated associations organized under section 527 of the U.S. Internal Revenue Code — Galbraith issued a warning.

“The modern corporation also exercises power in and by way of government,” he wrote. “This too is agreed. Its payments to politicians and public officials are believed by no one except the recipients to be acts of philanthropy or affection.”

When President Barack Obama and his advisors invited large health insurance corporations and pharmaceutical giants to design the Affordable Care Act — a reach, which may have been both a practical necessity and a political opportunity — the virtues of access and affordability were suddenly subordinated to corporate needs for growth and profit.

The government promised not to use its purchasing and regulatory strength to regulate healthcare prices. Instead, the government promised to deliver 30 million previously uninsured healthcare customers by threatening them with crimes and fines.

Then, healthcare insurers would compete for that business with policies designed to deliver minimum standard care that included more complete — and mostly more expensive — protection.

Competition for customers would, theoretically, apply marketplace forces to costs, driving down premiums and co-pays to gain market share.

The theory exaggerated the amount of competition that would be interjected into an already insulated and protected healthcare economy and miscalculated the control exerted by too-big-to-fail corporations.

Instead of government taking over healthcare, the exemptions, prohibitions, terms and conditions attached to the ACA allowed healthcare corporations to take over the government, which is what we all heard last week when President Obama accepted responsibility for that surrender.

This, too, is an understanding of what is meant when the term “socialism” is tossed around in common discussion and heated debate. It is culturally regarded as an insult and often applied to the president of the United States, as it had been to presidents before him whenever the nation shoulders any great societal responsibility.

Unfortunately for President Obama, his biography — origin, race, education, occupation, intellect, accomplishments and demeanor — slip more readily into the pejorative stereotypical associations between individual and ideology.

So the president becomes, in the words of his political foes, “the socialist” driving us from free market capitalism to government-mandated socialism. A more probable picture of what has happened is that corporations applied monopolized and concentrated market power to leverage a politically weakened president into a legacy of unintended consequence and humiliation.

I read Galbraith’s books not because I was capable of understanding economics, but for his style of writing, which reduced big ideas to the good parts and ended on a funny note.

Barack Obama, however, was better equipped to grasp the economics.

 

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