Courageous and/or Calculating? For Real Change From Obama, Popular Pressure Required

With progressives unable to mobilize popular forces in huge numbers against bank bailouts, home foreclosures and plant closings or for a single-payer healthcare plan, Obama faces substantial pressure only from the corporate side, as social-movements scholar Frances Fox Piven argues in an interview in my forthcoming In These Times piece on healthcare reform.

Sometimes Obama’s ambivalence toward the needs of working America has been visible in his treatment of a single issue, like the ​“bailouts” of GM and Chrysler. Yes, Obama preserved two corporations central to the life of Midwest factory towns, but he also allowed his economic advisors to force the closing of dozens of U.S. plants. Moreover, Chrysler used bailout money to transfer work from Wisconsin to Mexico. As the result of the bailout’s terms, both auto firms will now rely on more cars produced offshore by cheap, repressed labor in China and Mexico rather than in the United States.

MIDDLEMEN OUSTED ON STUDENT AID, BUT NOT ON HEALTHCARE

But on the student loan issue, Obama boldly expelled bankers as useless middlemen and enacted a ​“single-payer” student loan system. Such a system will increase the effectiveness of every federal dollar given out in student, as well as reduce the bureaucratic hurdles families face in applying for loans.

On student loans, Obama showed his more populist face in fighting for the public interest against the concentrated power of the banking industry. He clearly laid out the need for having the federal government directly channel aid money to students rather than allowing bankers to skim off easy profits by unnecessarily getting a cut of the federal money before it reaches those in need.

“By cutting out the middleman, we’ll save American taxpayers $68 billion in the coming years,” Obama told his audience in Alexandria, Va.

The practical impact: Obama is holding down interest rates for students, providing aid to help more kids of low or moderate incomes to get an education, and easing the debt burden that they will face after graduation. As noted in these pages, there has been a burgeoning movement among students and unionized teaching assistants against the higher tuitions that are part of the increasingly ​“neo-liberal” university system.

Obama’s action on student aid will make a significant difference for poor and working class students, argues Jeff Cohen: ​“Direct lending by the government will cut out the middleman and save taxpayers, according to the Congressional Budget Office, $61 billion over 10 years - with $40 billion in savings being redirected to higher education in the form of more Pell grants, more aid to minority-serving colleges and more aid to lower-income graduates for paying off their student debt.”

But as Cohen noted, the application of these same single-payer principles of maximizing the value obtained by public spending and minimizing bureaucracy were somehow unacceptable when it came to the healthcare system. Thus in healthcare reform, Obama maintained the dominance of the for-profit insurers at the center of a system that is supposed ensure access to needed healthcare. While some significant (but loophole-riddled) insurance regulations were approved, funding for healthcare still gets funneled through the insurers whose inherent self-interest lies in minimizing care in order to maximize profits.

The fundamental problem is neatly summarized by Dr. Marcia Angell of Harvard Medical School: ​“Private insurers maximize profits mainly by limiting benefits or by not covering people with health problems. The United States is the only advanced country in the world with a health care system based on avoiding sick people.”

But Obama chose to accept and obscure this central reality, by insisting on the ​“individual mandate” without any effective controls over premium increases. Obama’s plan wraps up 34 million new government-subsidized consumers for the insurance industry, as Dr. Angell describes it.

Contrary to his stance on student aid, Obama insisted that when it came to healthcare, the middleman must be retained at all costs. While concerned with saving money on student loans, Obama abandoned the potential savings gained from cutting out the insurance bureaucracy, which would have been about $350 billion to $400 billion each year. He abandoned his former support for a single-payer or ​“Medicare for all” system he advocated as an Illinois state senator. He claimed that uprooting the insurers – whose basic motive is to maximize profit by minimizing care – must be kept in the system or too much disruption would result.

Dr. Angell correctly labeled this as a call for throwing at least $447 billion into a system that was a proven failure, yet expecting a successful outcome.

CONSERVATIVE ROOTS OF DEMOCRATIC HEALTH PLAN

Obama remained impervious to this virtual certainty of a deteriorating healthcare system, instead relying on the comforting assurances of insurers, Big Pharma, and elite political figures in both parties. However, congressional Republicans unanimously voted against Obama’s health plan, acting on a purely political basis and showing an extremely uncharacteristic degree of independence from their corporate sponsors in insurance and Big Pharma (the U.S. Chamber of Commerce and other more rightist business groups opposed healthcare reform.)

In fact, the Obama plan was largely shaped by a former Wellpoint insurance executive, contained many of the principles proposed by the insurance industry in 1992, and is similar to the Mitt Romney plan in Massachusetts. According to Nancy Pelosi, the Democrats’ healthcare bill actually drew on the far-Right Heritage Foundation for the basic principles.

Still, despite this strongly Republican-flavored bill, Obama hailed the Patient Protection and Affordability Act on Marcy 20 as ​“centrist: ​“This piece of historic legislation is built on the private insurance system that we have now and runs straight down the center of American political thought.”

While labor and progressives may be divided on how much value the new healthcare reform will have, there should be no confusion about Obama’s claim that it was geared ​“straight down the center.” Obama is correct only if one pays attention to elite corporate and media opinion and utterly discounts popular sentiment, as I have previously reported:

A January, 2009 CBS/NY Times poll showed 59 percent for a single-payer system described in vague terms. Business Week reported on a more specifically-worded question in a 2005 poll, which found ​“67 percent of all Americans think it’s a good idea to guarantee health care for all U.S. citizens, as Canada and Britain do, with just 27 percent dissenting.” The Annals of Internal Medicine reported on a survey showing 59 percent backing among physicians for single-payer.

But the public’s pro-single-payer sentiment, fueled by an ever-growing awareness of the insurance industry’s uncaring denial of treatments in order to enhance their profits, went largely untapped and was not registered by the mobilization of a mass movement. In contrast, insurers were portrayed by Obama as actual allies of reform, until late in the legislative process, when rhetorically pounding them became necessary for passing the Patient Protection and Affordability Act.

However, labor and progressives might best learn from the first 15 months of Obama’s presidency by spending less time analyzing Obama’s psychological makeup or campaign contributions, and instead figuring out why we’ve been unable to generate vibrant movements to channel public anger over growing inequality and corporate bailouts.