5 Enemies of a Decent Middle Class Existence in the US
One of the pleasures of a weekend away from the city is visiting with people who express points of view that are different from my own. A lot of them hate government. Their comments are sprinkled with colorful references to taxes, waste, and socialism.
Countering with facts and statistics doesn't seem to work. Instead, listening to their rants can be educational for a progressive, because the anti-government sentiment highlights the masterful job done by conservatives and the wealthy over the years, as they have basically convinced much of America to argue against themselves on matters of politics and the economy.
It would make more sense to take on the real villains.
1. Medical Providers
They're taking a lot more of our money than Medicare does. According to the Council for Affordable Health Insurance, medical administrative costs as a percentage of claims are about three times higher for private insurance than for Medicare. The U.S. Institute of Medicine reports that the for-profit system wastes $750 billion a year on waste, fraud, and inefficiency. As a percent of GDP, we spend $1.2 trillion more than the OECD average.
That's an amount equal to the entire deficit wasted on private medical care companies. One out of every six dollars we earn goes to doctors, hospitals, drug companies, and insurance companies. All good reasons to redirect our hatred.
2. Retirement Brokers
Various reports have concluded that administrative costs for 401(k) plans are much higher than those for Social Security -- up to twenty times more.
It would be difficult to find, or even imagine, any short-term-profit-based private insurer that is fully funded for the next 25 years. Social Security is. It works for all retirees while private plans work for a limited number of investors.
Government is often blamed for local budget shortfalls, but cities and towns around the country have been repeatedly victimized by a "bid-rigging" process that diverts billions of dollars -- a few thousand at a time -- from numerous unsuspecting communities to the accounts of a few big banks.
Individual homeowners, especially minorities, have also been victimized by the banks. Because of the housing crash and the corresponding decrease in home values, black households lost over half of their median wealth, and Hispanic households almost two-thirds.
There are scandals and scams galore: the privately run Mortgage Electronic Registration System (MERS) headed up the illegal foreclosure business; the banking association LIBOR was guilty of interest rate manipulation; and plenty of financial institutions have engaged in the subtle art of imposing hidden fees. Credit cards are loaded with "gray charges" like surprise subscriptions and auto-renewals that cost the average consumer $356 a year.
Yet we're forced to keep paying. Shockingly, it has been estimated that 40% of every dollar we spend on goods and services goes to banks as interest.
Public banks, on the other hand, focus on the needs of communities and small businesses rather than on investors. The most well-known example is the Bank of North Dakota (BND), which has successfully worked with local banks throughout the state, promoting business growth through loans that a larger bank might be reluctant to make, while managing to turn a profit every year for the past 40 years.
4. Higher Education Operators
Outside of the banking industry, there may not be a more egregious example of public abuse than the expropriation of higher education by profit-seekers who have subjected underemployed young people to years of student loan obligations. The collection of outstanding student debt is managed in good part by big banks like JP Morgan and Citigroup.
In most countries tuition remains free or nominal, but in America, as noted byNoam Chomsky, the belief that education strengthens a country is giving way to a philosophy of paying for your own educational benefits. Meanwhile, the "corporatization of universities" has led to a dramatic increase in administrators while relatively expensive programs like nursing, engineering and computer science are being cut.
But the easy loans keep accruing interest long after college ends. With a hint of foreboding, the Consumer Financial Protection Bureau and Department of Education reported that the student loan debacle has been fueled by the same forces that led to the subprime mortgage collapse.
5. Big Box and Fast Food Companies
Smaller government is promoted by the very companies that make record profits while forcing their employees to accept public assistance.
While McDonald's enjoyed profits of 130 percent over the past four years, and Yum! Brands (Pizza Hut, Taco Bell and KFC) made 45 percent, and while the Walton family made $20 billion in one year, the median hourly wage for food service workers and Walmart employees is about $9 an hour. Many workers are stuck at the $7.25 minimum wage, which according to the National Employment Law Project is worth 30 percent less than in 1968.
Food service and big box store employees, among the fastest-growing job segments in the nation, are making barely enough to stay out of poverty. And it's not just the employees who are subsidizing their bosses. We all are. Low-wage employees are more dependent on the food stamps and Medicaid that are paid for by our tax dollars.
Some Alternative Targets: Panic, Poison, Plowing, Postage, Prison
What is the incentive for private companies to deal with tragedies like Hurricane Sandy? The Pacific Standard aptly stated that "the free market doesn't want to be in the flood business."
What is the incentive for private companies to keep the poisons out of our drinking water? Without sufficient government regulations the Clean Water Act was violated a half-million times in one year.
What is the incentive for private companies to plow the county roads? Or to reduce the number of prisoners in profit-seeking prisons? Or to allow you to send a birthday card for just 45 cents? Or to simply treat its customers withrespect rather than as a source of profit?
The "invisible hand" of the free market is unable, or unwilling, to satisfy the needs of society in all these areas. For that it is worthy of our contempt.