What upsets me the most about the whole healthcare reform fight is this: in a year in which there were far bigger priorities, the Obama administration choose to make healthcare their signature issue. It’s actually infuriating. The biggest banking crisis in 80 years, the worst recession since the end of World War II. Eight million thrown out of work. Yes, healthcare is an issue, but it wasn’t the biggest issue.
So instead of really tackling those issues, he just had his Treasury Secretary conduct a white-wash of a stress test and threw money at the banks. He hastily concocted an $800 billion stimulus package, for whatever good that was. Congress pressured FASB to suspend mark-to-market accounting, the Fed open the liquidity floodgates, and everybody assumed the problems were solved, leaving Obama and the Democrats to chase their white whale, universal healthcare.
And that gave the Republicans their white whale, too, socialism. So everybody’s all geared up to fight this big, bothersome, distracting fight that’s an obsession for both sides, while the real issues, the broken regulatory system, the byzantine tax system, the massive debts at the personal, state and federal level, the deterioration of the middle class, get little more than jawboning.
Political capture. Remember that one.
Meanwhile, the problems aren’t being solved, and have moved up the food chain, from the individual level, to the corporate, and now to the state level. Regular readers of this blog won’t be surprised to learn that. But apparently, despite the spectacular meltdown in California last year, despite Detroit’s slide into oblivion, despite the massive budget shortfalls in New York and New Jersey, the scope of the problem hasn’t dawned on a lot of people. The NY Times’ Bob Herbert is one person, though, who gets it:
A story that is not getting nearly enough attention is the ruinous fiscal meltdown occurring in state after state, all across the country.
Taxes are being raised. Draconian cuts in services are being made. Public employees are being fired. The tissue-thin national economic recovery is being undermined. And in many cases, the most vulnerable populations — the sick, the elderly, the young and the poor — are getting badly hurt.
“We’ve talked in the past about revenue declines in a recession,” said Jon Shure of the Center on Budget and Policy Priorities, “but I think you have to call this one a revenue collapse. In proportional terms, there has never been a drop in state revenues like we’re seeing now since people started to keep track of state revenues. We’re in unchartered territory when it comes to the magnitude of the impact.”
America’s Greek crisis is already here. It may not get as bad here as in Greece, given that the states have the backing of the United States, while all the Greeks have are some squabbling neighbors and a seriously skeptical bond market. But this is a crisis all the same, with no easy solutions.