Book Review: The Great Risk Shift

Great_risk_shift
From the October 22, 2006, NYT:

The Economic Miracle as an Economic Mirage
By ROGER LOWENSTEIN

WHATEVER happened to the good old days of cradle-to-grave security — of a steady job, a lifetime pension and paid-for health care along the way? This is the question at the heart of “The Great Risk Shift: The Assault on American Jobs, Families, Health Care, and Retirement–And How You Can Fight Back, by the political scientist Jacob S. Hacker, and his answer is impassioned and angry.


As Mr. Hacker sees it, corporations with the aid of a now-neglectful federal government have offloaded their social responsibilities onto the average Joe and Jane. This has left the typical American ever more “insecure,” he writes, and put the lie to the rosy accounts of a prosperous and thriving America that one would get from the standard economic indicators.

To buttress his point, the author trots out a familiar-seeming list — of people who burned through their savings to finance a medical expense, or who retired only to see their corporate pension plan go bust, or who lost a job that was once secure. But as predictable and, at times, whiny as his examples seem, Mr. Hacker does make a contribution to our understanding.

By framing what usually are treated as distinct issues — pensions, health care, jobs and so forth — within a unified thesis, Mr. Hacker tells a coherent story about economic insecurity. And, by and large, the thesis is compelling. Do folks — even if they are richer — feel less secure these days? Probably yes.

Beginning with the New Deal and continuing for decades after it, employers backed by the government assumed the risk for just about anything that could go wrong: job loss, technological obsolescence, illness, disability or just plain old age. But over the last quarter-century — very good years as measured by the Dow Jones industrial average — the clock has been rolled back. Government programs are under attack, and corporate guarantees are being trimmed or brutally eliminated.

The upshot is that Americans, more than the citizens of any other developed nation, must fend for themselves. Sounding at times like a liberal Pat Buchanan, Mr. Hacker urges us to “get even” — to “fight back.”

Mr. Hacker pointedly italicized the latter phrase — his subtitle is “The Assault on American Jobs, Families, Health Care, and Retirement and How You Can Fight Back” — from which I infer that he believes there is something for us to fight against. It suggests that some deliberate and perhaps evil agent is the active force that is causing all these economic downers.

Mr. Hacker locates this agent in a rhetorical flourish. “What has changed?” he wonders: “In a word, ideology.” By this, of course, he means the right-wingers who have lately been running the show in Washington.

He is right that Republicans generally frown on entitlement payments, and that nothing so thrills some conservatives as plotting the demise of Social Security. But there is a problem with the way he sets up cause and effect, namely, with blaming ideologues for our soaring medical bills. The fact is, most of the ills that Mr. Hacker addresses are a result of changes in the private sector.

For instance, private employers are putting the knife to health care coverage and pensions. The government safety net has also been trimmed, but at least for people with jobs, the principal hallmarks — Social Security, Medicare, disability and unemployment insurance — are alive and, I would guess, are going to be around for a long time.

When Mr. Hacker highlights the phenomenon of workers who suffer “economic volatility” — meaning a sharp drop in income — it becomes clear that more than ideology is at play. Presumably, these workers were laid off, reassigned, downsized and so forth. And few would dispute that the economy has become less stable, and therefore less secure.

Had Mr. Hacker paid more attention to why the economy has become so changeable, his story might have been less a morality play and more a straightforward account of companies adapting to evolving times. One dynamic he all but ignores is globalization: companies competing in a world market simply cannot afford all the goodies that they once could.

The author often sounds nostalgic for that bygone era. “The traditional, lifetime employment relationship was like a marriage,” he observes. Now, “the risk is on workers.” He juxtaposes the supposedly heartless Wal-Mart with General Motors, which “paid its workers solidly middle-class incomes and provided generous benefits.” The problem, ahem, is that 80 percent or so of those swell G.M. jobs no longer exist. Could Mr. Hacker fail to have noticed?

Perhaps not. At the very end, when he turns to suggested remedies, he makes a daunting acknowledgment. Discussing a need for insurance that is “portable” — meaning that workers can take from job to job — he adds: “If this sometimes means corporations are off the hook, so be it.” That doesn’t sound like a marriage to me; it sounds like a one-night stand.

Though Mr. Hacker’s account is lively, he has a tendency toward pop-political-science clichés — what exactly is a “classic double bind”? — and toward overusing purple modifiers like “alarming,” “harrowing” and “shocking,” especially for findings that actually are unsurprising, such as that most people would encounter serious hardship within four months of losing their jobs.

NONETHELESS, he has some intriguing suggestions. On health care, for instance, he would extend Medicare to everyone under 65 and require that employers either finance a share of their workers’ participation or provide them with a private health plan that was at least as generous as the government’s.

No one will agree with all of Mr. Hacker’s proposals, but his account is provocative and worth reading. And it is chock-full of details that bolster his case that — in regard to risks that in other countries are handled by government and that in this country were once met by employers — Americans now must go it alone.

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