Friday, June 23, 2017

Book Review: 'The Great Risk Shift: The Assault on American Jobs, Families, Health Care and Retirement and How You Can Fight Back' by Jacob Hacker



Review by Laura Clawson
There are different kinds of book reviews, from the biting critique to the love letter to the essay taking a book as its starting point but moving far beyond the book for a meditation on something larger. What I'm doing here is barely even a review. Really I just want you to read this book, because it provides such an important view of the American economy as it affects the majority of the American people. In case you don't read it, though, I want you to have some understanding of that view; so call it a summary if you'd like.
Most people who read Daily Kos will be familiar with the extent of economic inequality in the US - that, for instance, "between 1979 and 2003 the average income of the richest Americans more than doubled after adjusting for inflation, while that of middle-class Americans increased by only around 15 percent." And most will be familiar with some or most of the following information on economic insecurity:
Personal bankruptcy has gone from a rare occurence to a routine one, with the number of households filing for bankruptcy rising from fewer than 290,000 in 1980 to more than two million in 2005....
Americans are also losing their homes at record rates. Since the early 1970s, the mortgage foreclosure rate has increased fivefold. From 2001 to 2005 an average of one in every sixty households with a mortgage fell into foreclosure a year....
Over a two-year period, more than 80 million adults and children - one out of three nonelderly Americans, 85 percent of them working or the kids of working parents - spend some time without the protection against ruinous health costs that insurance offers....
Twenty-five years ago, 83 percent of medium and large firms offered traditional "defined-benefit" pensions that provided a predetermined monthly benefit for the remainder of a worker's life. Today, the share is below a third....Between 1989 and 1998 - a decade in which 401(k) coverage exploded and the stock market boomed - the share of families whose pension savings allowed them to replace at least half of their prior income in retirement actually declined, as old-style guaranteed pensions rapidly became a thing of the past....
At its peak in the mid-1990s, income instability was almost five times as great as it was in the early 1970s. And while it dropped during the boom of the late 1990s, it never fell below twice its starting level, and it shot up again in recent years to three times what it was in the early 1970s.
In The Great Risk Shift, Hacker weaves together the erosion of health insurance and pensions, the rise of bankruptcy and foreclosure, and sharply rising income instability, revealing them as closely related phenomena which, rather than seeking to limit, the government and employers have actively increased despite the many costs to American families. He labels this effort to relocate risk onto individuals and families the "Personal Responsibility Crusade."
Again, we're familiar with the broad strokes of the Personal Responsibility Crusade: It's all on you, as an individual. Born into a poor family? Work hard and you'll make it! You worked hard and graduated from a good college, but with a lot of debt? Work hard and you'll make it! Why do you want health insurance? A Health Savings Account would be so much better, because you wouldn't be paying for healthcare you might never use. What, your daughter got sick and one month of her care wiped out your HSA? That's too bad, but I guess you should have been working harder and saving more. Keep working! It's still all on you!! (And your daughter, but we'll gloss over that part.)
But Hacker reveals the insidious long-term strategies beneath the apple pie, American values, and hard work surface of the Personal Responsibility Crusade:
Perhaps most important, advocates of private accounts believed that they would ultimately transform how Americans viewed government and each other. By encouraging Americans to rely on themselves, tax-favored accounts would also make people more deeply invested in the market, more distrustful of direct government programs, more reluctant to join broader risk pools - and more likely to vote for conservative politicians.
It is, in other words, the patient, steady, enactment of Grover Norquist's famous desire to "to get [government] down to the size where we can drown it in the bathtub," and Hacker methodically fills out the human implications of the drowning - not the hugely visible implications like post-Katrina New Orleans, but the day to day ones that rarely make the news, but ruin lives.
The first goal of the Personal Responsibility Crusade is rolling back the advances of the New Deal, so Hacker begins with those advances. This is a crucial step; if we're understand how to fight the PRC, we need to understand the origins of the social contract it seeks to undermine, and the origins of Social Security - a program so enduringly popular that even George W. Bush and a Republican Congress couldn't find the political strength to undo it. He covers the rise of private insurance and the creation of Medicare and Medicaid, and then the legal changes and political campaigns that began to shift risk back from these social insurance programs onto individuals.
Chapters dedicated to job insecurity, the risks specific to families, retirement, and healthcare present a stunning amount of evidence for Hacker's thesis of increasing risk:
In the three-year period beginning in 2001 - a period of economic recovery - more than a third of workers who lost jobs failed to find employment and 13 percent ended up in part-time jobs. Yet even full-time workers who found new full-time jobs - the best-case scenario, if you will - ended up earning around 17 percent less than they would have had they not lost their jobs.
Among insured Americans, 51 million spend more than 10 percent of their income on medical care. One out of six working-age adults are carrying medical debt, and 70 percent had insurance when they incurred it. Of those with private insurance and medical debt, fully half have incomes greater than $40,000, and of this group a third are college graduates or have had postgraduate education.
--snip--
Since 2000 the proportion of employers offering health coverage to their workers has fallen by nearly ten percentage points, and the proportion of employers that finance the full cost of coverage - once the norm - has plummeted, from 29 percent to 17 percent for individual health insurance and from 11 percent to 6 percent for family health premiums.
As is often the case, the And How You Can Fight Back part of the title is unfortunately not the strongest part of the book. The problem is vast, and as it is the result of a decades-long effort to change not just the laws but the culture, a similar effort will probably be required to shift back to a vision and a reality of an America in which people can expect a meaningful safety net. Hacker is clear-eyed about the impossibility of returning to a pre-global economy, and does not dismiss the importance of personal responsibility, but he identifies a fundamental part of the American dream that must be recaptured:
If you work hard and do right by your families, you shouldn't live in constant fear of economic loss.
It's a simple, modest goal. But it's one that the entire Republican party stands against, so it will take a fight to achieve. Hacker has a set of suggestions both for individual action to increase stability in the current, unsatisfactory system, and for systemic change. The first step is awareness, so just read the book.




Editor's note: This review was originally published at the Daily Kos, which notes that its "content may be used for any purpose without explicit permission unless otherwise specified." The original page can be found here. Like what you read? Subscribe to the SFRB's free daily email notice so you can be up-to-date on our latest articles. Scroll up this page to the sign-up field on your right. 

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