Wednesday 23 January 2008

Pic of the day: Boomtown, from the game City of Heroes. The American economy is not quite that bad, but it is definitely moving from boom to kaboom.

Death by recession

The American economy only amuses me because I am too far away to hear the screams of the dying.

Am I exaggerating? Here in Norway, a little economic stagnation or even recession would not mean the end of the world. Even in neighboring Sweden, where the GDP per head is noticeably lower than in the US rather than higher such as here, a moderate recession would be uncomfortable at worst. Yeah, a number of people would lose their jobs. They might not be able to go on that exotic vacation or trade up their car. But for the poor it would make little difference. They would still get their disability pension and their housing subsidies. If anything, the difference between them and their better-off neighbors would be lessened.

During the good times, the security net is a bit of a drag, and we should not deny this. Over time, a more pure capitalist country such as the USA grows faster, because rich and poor both have more motivation to work harder: The rich because they get to keep more of what they earn, and the poor because they don't want to starve. Unfortunately, during the hard times, wants have very little to do with it. The working poor tend to be among the first to feel the axe.

In all fairness, the average poor person in the USA is not badly off compared to their European or Asian brethren. The average poor lives in a fairly large apartment with two TVs and air condition, and her children actually eat more meat than their better-off classmates (although they go on less activities). While far more men of the underclass are in prison compared to Europe, it is rarely for stealing a loaf of bread.

The problem is not the average. The problem is that even among the poor, the variation is larger than in other democratic countries. And in particular the lack of socialized medicine, normally not a bad thing, can hit a small number of people extremely hard. There is after all no upper limit to exactly how many illnesses a person can pick up in a lifetime, as long as none of them is fatal. In a social democracy, once you've paid a certain amount for medication or consultations, you hit a limit and the state takes over. Whether the bill for the rest of the year is $100 or $100 000 does not really matter, you don't see it. In the USA, losing your job often means losing your medical insurance, and what was simply painful may become life-threatening because you cannot afford to treat it in time.

Strangely, the source of my information is not the mainstream media: Their leftist prattle has left me largely immunized. "Out to hunt conservatives again, are we?" would be my reaction. "Whipping up a little anti-American frenzy for fame and money, eh?" But alas, the forum that has informed me is largely my LiveJournal friends list. This blogging service is free and accessible and (as the name implies) well suited for the personal journal. It is the parents and grandparents of (a couple of) these people who have had to choose between medication and paying their rent, and obviously it is quite a stress for their family as well, who may not have the resources to help them. LiveJournal is probably most famous for young angst, but I think a bit of angst is allowed if you have chosen a less employable lifestyle and then your aging parents grow sick and die while you and they know that you could have kept them alive for quite a while if you had a good job.

Mind you, it is not like people live forever even in the worker's paradise of Norway. My mother in her time was sent home to die from melanoma metastasis on the brain while at the same time a treatment for her specific disease was being tested out in the same part of the country. She just didn't happen to be one of the chosen, I guess. And faceless government bureaucrats are not necessarily the ones I trust the most to allocate money where it is best needed. After all, I am technically a faceless government bureaucrat myself, and my coworkers which I have stopped writing amusing things about are too. We are all good people but we don't really love our neighbor like ourself: The death of our neighbor (not to mention countryman) is a lot less harrowing than the death of our own parent, not to mention ourself. But at least insufficient resources and less than perfect allocation of them does not selectively kill off the poorest. This may be a bad thing from a Darwinian point of view, but very few of us would volunteer to die for Evolution.

Don't get me wrong, I still think America needs a recession and should have taken it years ago. But I can understand why they try to push it ahead of them for as long as possible. After all, it is not just a matter of luxury, but of life and death. Still, there must be ways around this without dismantling the whole capitalist system. I have learned from more official sources that America already has something called "Medicaid", but evidently it is a bit patchy. Ah yes, Wikipedia to the rescue: "Medicaid is the United States health program for individuals and families with low incomes and resources. It is an entitlement program that is jointly funded by the states and federal government, and is managed by the states. Among the groups of people served by Medicaid are eligible low-income parents, children, seniors, and people with disabilities. Being poor, or even very poor, does not necessarily qualify an individual for Medicaid."

That is subtly different from here, I guess. In Norway and comparable countries, everyone is "insured" through the states. It is a universal entitlement for the citizens. As long as you have enumeration of those who qualify, weird things are bound to happen, which seems to be the case with Medicaid. On the other hand, it is less wasteful, which is a good thing for the vast majority who don't die screaming from lack of medical treatment.

In any case, my point is that because of this patchy nature, recession could actually cause people to die screaming in one of the world's richest countries. (In other rich countries, we have other reasons to die screaming, like limits on how many doctors can be educated in order to keep their salaries up. We had that in Norway until recently, perhaps we still have but now many young people study abroad. It will still be a while before we see them in the jobless line, I bet.)

If not for the dying poor, the upcoming recession would fill me with a deep and unbroken joy. It is the best thing that could happen to the country (and the world, I believe) at this time, although it would have been even better five years ago, in which case we would not have had the whole subprime mess and financial meltdown in the first place. More about that again and again, I suspect, although I already told you before it happened. But we should not underestimate the future disasters we avoid by taking this confrontation now, and the screams of the dying we can yet prevent by simply not being idiots again.

(It may bear mention that here in the worker's paradise of Norway, we are cheerfully trying to copy the excesses of our American big brothers, even while seeing day by day how it ended. Because we are, you know, special. Americans may be made in God's image, but the prevailing opinion here is that God is made in ours. It is a fascinating sight, kind of like watching a lemming look at the lemming in front of him plunging to his death and then deciding to walk on the air himself.)