Brooks and Krugman

Bobo has noticed that the American health and pension systems are coming apart at the seams, and he thinks someone from the Heritage Foundation has the solution.  Mr. Krugman points out that Gen. Petraeus has a history of making overoptimistic assessments of progress in Iraq that just happen to be convenient for his political masters.  Here’s Bobo:

In 1942, Franklin Roosevelt imposed wage controls on American companies. Unable to lure workers with higher salaries, many employers began offering health insurance and other benefits. Then, in 1952, officials at the Internal Revenue Service ruled that these benefits wouldn’t count as taxable income.

And so, accidentally, the modern American health and pension system was born.

The system, in which families received social protections through their employers, worked well for decades. But now it’s coming apart at the seams. The proportion of people insured is falling. Rising health care costs burden employers. Workers can’t chase opportunities because they can’t bring their health insurance packages with them.

As Jason Bordoff points out in the current issue of Democracy, the old employer-based social contract is eroding and the central domestic policy debate of our time is over how to replace it.

Some liberals, believing that government should step in as employers withdraw, support a European-style, single-payer health care system. That would be fine if we were Europeans. But Americans, who are more individualistic and pluralistic, will not likely embrace a system that forces them to defer to the central government when it comes to making fundamental health care choices.

And so some distinctly American social contract is going to be required. Beneath all the fluff of the campaign season, that’s what the domestic side of the presidential race is about. In early, halting and half-formed ways, several candidates are offering broad visions of a new social contract and plans married to those visions.

Few have thought about these matters as long or as well as Stuart Butler of the Heritage Foundation. Butler grew up in Shrewsbury, England, got a doctorate in American economic history in Scotland and became a U.S. citizen in 1996. As a result, he’s acutely aware of what makes American civilization unique, and which policies fit the national character.

As you read his work, you quickly see what priorities the new social contract should embrace. It should offer basic security, so Americans will feel comfortable enough to move around and seize new opportunities. It should demand reciprocity; if you contribute to society, you’re protected from catastrophes no one can control. It should foster personal responsibility, stimulating private savings and self-insurance among those who can afford it.

Finally, it should foster self-sufficiency; if people do slip and require government support, they should be induced to rebound and take care of themselves. If you are fortunate enough to be upper-middle class, you shouldn’t be rigging the game so you grab benefits that should properly be allocated to the needy.

Butler is no libertarian. He doesn’t believe individuals should just be given Health Savings Accounts and then sent off to shop for health care. Nor does he believe that the primary social relationship is between individuals and government.

He sees America as a thick society, and believes that unions, churches and community groups should be involved in health care and social support. He sees America as a decentralized society. The worst thing we could do is get the smartest people in a room and build one system from Washington. Instead, Washington should set parameters and states should be left free to innovate and compete.

He also sees society as a continuum between the dead, living and unborn. We shouldn’t disrupt the lives of those who are happy with the insurance they have. On the other hand, it’s immoral to shift the costs to our children and grandchildren. Long-term expenses should be calculated into every decision we make.

Butler’s specific health care plan is well-summarized at the Web site of the Hamilton Project. First, he would create tax-exempt “insurance exchanges.” These would be sponsored by trusted agents — unions, churches and other social groups. Organized like the Federal Employees Health Benefits Program, they would offer menus of coverage choices and create diverse risk pools.

Second, employers who did not offer their own coverage would oversee payroll deductions and tax withholdings, but they would no longer have to sponsor programs or make choices for employees. Third, Congress would offer a health care tax credit to families making up to 200 percent of the poverty level, and would tighten benefits for the affluent. Fourth, states could come up with their own ways to regulate this system.

This isn’t the laissez-faire social contract of the 19th century. But neither is it the centralized, big bureaucracy contract of the 20th century. It’s a contract that envisions society as a dense but flexible web of social networks, the perfect vision for 21st-century America.

Here’s Mr. Krugman:

Here’s what will definitely happen when Gen. David Petraeus testifies before Congress next week: he’ll assert that the surge has reduced violence in Iraq — as long as you don’t count Sunnis killed by Sunnis, Shiites killed by Shiites, Iraqis killed by car bombs and people shot in the front of the head.

Here’s what I’m afraid will happen: Democrats will look at Gen. Petraeus’s uniform and medals and fall into their usual cringe. They won’t ask hard questions out of fear that someone might accuse them of attacking the military. After the testimony, they’ll desperately try to get Republicans to agree to a resolution that politely asks President Bush to maybe, possibly, withdraw some troops, if he feels like it.

There are five things I hope Democrats in Congress will remember.

First, no independent assessment has concluded that violence in Iraq is down. On the contrary, estimates based on morgue, hospital and police records suggest that the daily number of civilian deaths is almost twice its average pace from last year. And a recent assessment by the nonpartisan Government Accountability Office found no decline in the average number of daily attacks.

So how can the military be claiming otherwise? Apparently, the Pentagon has a double super secret formula that it uses to distinguish sectarian killings (bad) from other deaths (not important); according to press reports, all deaths from car bombs are excluded, and one intelligence analyst told The Washington Post that “if a bullet went through the back of the head, it’s sectarian. If it went through the front, it’s criminal.” So the number of dead is down, as long as you only count certain kinds of dead people.

Oh, and by the way: Baghdad is undergoing ethnic cleansing, with Shiite militias driving Sunnis out of much of the city. And guess what? When a Sunni enclave is eliminated and the death toll in that district falls because there’s nobody left to kill, that counts as progress by the Pentagon’s metric.

Second, Gen. Petraeus has a history of making wildly overoptimistic assessments of progress in Iraq that happen to be convenient for his political masters.

I’ve written before about the op-ed article Gen. Petraeus published six weeks before the 2004 election, claiming “tangible progress” in Iraq. Specifically, he declared that “Iraqi security elements are being rebuilt,” that “Iraqi leaders are stepping forward” and that “there has been progress in the effort to enable Iraqis to shoulder more of the load for their own security.” A year later, he declared that “there has been enormous progress with the Iraqi security forces.”

But now two more years have passed, and the independent commission of retired military officers appointed by Congress to assess Iraqi security forces has recommended that the national police force, which is riddled with corruption and sectarian influence, be disbanded, while Iraqi military forces “will be unable to fulfill their essential security responsibilities independently over the next 12-18 months.”

Third, any plan that depends on the White House recognizing reality is an idle fantasy. According to The Sydney Morning Herald, on Tuesday Mr. Bush told Australia’s deputy prime minister that “we’re kicking ass” in Iraq. Enough said.

Fourth, the lesson of the past six years is that Republicans will accuse Democrats of being unpatriotic no matter what the Democrats do. Democrats gave Mr. Bush everything he wanted in 2002; their reward was an ad attacking Max Cleland, who lost both legs and an arm in Vietnam, that featured images of Osama bin Laden and Saddam Hussein.

Finally, the public hates this war and wants to see it ended. Voters are exasperated with the Democrats, not because they think Congressional leaders are too liberal, but because they don’t see Congress doing anything to stop the war.

In light of all this, you have to wonder what Democrats, who according to The New York Times are considering a compromise that sets a “goal” for withdrawal rather than a timetable, are thinking. All such a compromise would accomplish would be to give Republicans who like to sound moderate — but who always vote with the Bush administration when it matters — political cover.

And six or seven months from now it will be the same thing all over again. Mr. Bush will stage another photo op at Camp Cupcake, the Marine nickname for the giant air base he never left on his recent visit to Iraq. The administration will move the goal posts again, and the military will come up with new ways to cook the books and claim success.

One thing is for sure: like 2004, 2008 will be a “khaki election” in which Republicans insist that a vote for the Democrats is a vote against the troops. The only question is whether they can also, once again, claim that the Democrats are flip-floppers who can’t make up their minds.