Барак Обама - The Audacity of Hope

But this compact also rested on an understanding that a system of sharing risks and rewards can actually improve the workings of the market. FDR understood that decent wages and benefits for workers could create the middle-class base of consumers that would stabilize the U.S. economy and drive its expansion. And FDR recognized that we would all be more likely to take risks in our lives — to change jobs or start new businesses or welcome competition from other countries — if we knew that we would have some measure of protection should we fail.

That’s what Social Security, the centerpiece of New Deal legislation, has provided — a form of social insurance that protects us from risk. We buy private insurance for ourselves in the marketplace all the time, because as self-reliant as we may be, we recognize that things don’t always work out as planned — a child gets sick, the company we work for shuts its doors, a parent contracts Alzheimer’s, the stock market portfolio turns south. The bigger the pool of insured, the more risk is spread, the more coverage provided, and the lower the cost. Sometimes, though, we can’t buy insurance for certain risks on the marketplace — usually because companies find it unprofitable. Sometimes the insurance we get through our job isn’t enough, and we can’t afford to buy more on our own. Sometimes an unexpected tragedy strikes and it turns out we didn’t have enough insurance. For all these reasons, we ask the government to step in and create an insurance pool for us — a pool that includes all of the American people.

Today the social compact FDR helped construct is beginning to crumble. In response to increased foreign competition and pressure from a stock market that insists on quarterly boosts in profitability, employers are automating, downsizing, and offshoring, all of which makes workers more vulnerable to job loss and gives them less leverage to demand increased pay or benefits. Although the federal government offers a generous tax break for companies that provide health insurance, companies have shifted the skyrocketing costs onto employees in the form of higher premiums, copayments, and deductibles; meanwhile, half of small businesses, where millions of Americans work, can’t afford to offer their employees any insurance at all. In similar fashion, companies are shifting from the traditional defined-benefit pension plan to 401(k)s, and in some cases using bankruptcy court to shed existing pension obligations.

The cumulative impact on families is severe. The wages of the average American worker have barely kept pace with inflation over the past two decades. Since 1988, the average family’s health insurance costs have quadrupled. Personal savings rates have never been lower. And levels of personal debt have never been higher.

Rather than use the government to lessen the impact of these trends, the Bush Administration’s response has been to encourage them. That’s the basic idea behind the Ownership Society: If we free employers of any obligations to their workers and dismantle what’s left of New Deal, government-run social insurance programs, then the magic of the marketplace will take care of the rest. If the guiding philosophy behind the traditional system of social insurance could be described as “We’re all in it together,” the philosophy behind the Ownership Society seems to be “You’re on your own.”

It’s a tempting idea, one that’s elegant in its simplicity and that frees us of any obligations we have toward one another. There’s only one problem with it. It won’t work — at least not for those who are already falling behind in the global economy.

Take the Administration’s attempt to privatize Social Security. The Administration argues that the stock market can provide individuals a better return on investment, and in the aggregate at least they are right; historically, the market outperforms Social Security’s cost-of-living adjustments. But individual investment decisions will always produce winners and losers — those who bought Microsoft early and those who bought Enron late. What would the Ownership Society do with the losers? Unless we’re willing to see seniors starve on the street, we’re going to have to cover their retirement expenses one way or another — and since we don’t know in advance which of us will be losers, it makes sense for all of us to chip in to a pool that gives us at least some guaranteed income in our golden years. That doesn’t mean we shouldn’t encourage individuals to pursue higher-risk, higher-return investment strategies. They should. It just means that they should do so with savings other than those put into Social Security.

The same principles are at work when it comes to the Administration’s efforts to encourage a shift from employer- or government-based health-care plans to individual Health Savings Accounts. The idea might make sense if the lump sum each individual received were enough to buy a decent health-care plan through his employer, and if that lump sum kept pace with inflation of health-care costs. But what if you work for an employer who doesn’t offer a health-care plan? Or what if the Administration’s theory on health-care inflation turns out to be wrong — if it turns out that health-care costs aren’t due to people’s cavalier attitude toward their health or an irrational desire to purchase more than they need? Then “freedom to choose” will mean that employees bear the brunt of future increases in health care, and the amount of money in their Health Savings Accounts will buy less and less coverage each year.

In other words, the Ownership Society doesn’t even try to spread the risks and rewards of the new economy among all Americans. Instead, it simply magnifies the uneven risks and rewards of today’s winner-take-all economy. If you are healthy or wealthy or just plain lucky, then you will become more so. If you are poor or sick or catch a bad break, you will have nobody to look to for help. That’s not a recipe for sustained economic growth or the maintenance of a strong American middle class. It’s certainly not a recipe for social cohesion. It runs counter to those values that say we have a stake in each other’s success.

It’s not who we are as a people.

FORTUNATELY, THERE’S AN alternative approach, one that recasts FDR’s social compact to meet the needs of a new century. In each area where workers are vulnerable — wages, job loss, retirement, and health care — there are good ideas, some old and some new, that would go a long way toward making Americans more secure.

Let’s start with wages. Americans believe in work — not just as a means of supporting themselves but as a means of giving their lives purpose and direction, order and dignity. The old welfare program, Aid to Families with Dependent Children, too often failed to honor this core value, which helps explain not only its unpopularity with the public but also why it often isolated the very people it was supposed to help.

On the other hand, Americans also believe that if we work full-time, we should be able to support ourselves and our kids. For many people on the bottom rungs of the economy — mainly low-skilled workers in the rapidly growing service sector — this basic promise isn’t being fulfilled.

Government policies can help these workers, with little impact on market efficiency. For starters, we can raise the minimum wage. It may be true — as some economists argue — that any big jumps in the minimum wage discourage employers from hiring more workers. But when the minimum wage hasn’t been changed in nine years and has less purchasing power in real dollars than it did in 1955, so that someone working full-time today in a minimum-wage job doesn’t earn enough to rise out of poverty, such arguments carry less force. The Earned Income Tax Credit, a program championed by Ronald Reagan that provides low-wage workers with supplemental income through the tax code, should also be expanded and streamlined so more families can take advantage of it.