Tim Winton has checked his privilege and rather likes it -- Is social class important in Australia?
Prominent Australian novelist Tim Winton has a very long winded article in "The Monthly", Australia's premier Marxist magazine. Marxists of course obsess about social class and that would seem to be why Winton appears in that magazine -- because his article is all about class. Wordy as it is however, there is not much you can pin down in the article as a firm claim. It is more a collection of soliloquies and anecdotes. I reproduce just his conclusion below as that seems to be as near he gets to saying something definite. My own investigations into social class were rather more numerate.
Winton concedes that class has become much less important in recent decades but probably overestimates how important it used to be. He sees his own emergence from a working class background in the '70s as a sort or rare good fortune. It was not. My days at university were a decade before his. I was there in the '60s to his '70s and I had no barriers in my way at all. I came from a background as least as working class as Winton's (my father was a red-headed lumberjack who liked a drink and was ready with his fists) but I was a beneficiary of the Commonwealth Scholarship Scheme initiated by that great conservative Prime Minister, Robert Menzies. That gave free university education plus a living allowance to the top third of High School graduates, reasonably regarded as the population slice most likely to be able to absorb a university education. It was a lot more generous than the present HECS-HELP arrangements.
My studies were largely untroubled and I had a lot of fun as a conservative student activist. Where most students were marching in anti-Vietnam demonstrations, I joined the army (Reserves). I guess I was brought up in a psychogically healthier home than Winton was -- one that did not seethe with resentment of other people's good fortune -- which appears to be Winton's background, according to his account.
And after an interlude of just one year I went into academe, got tenure and stayed there until I retired. Obviously I had the brains to do that but my point is that that was all it took. Social class at no point entered into it.
In conclusion, I am amused that Winton is happy with his own lot and seems to have no resolve to do anything personally in aid of the poor. He and I have that in common. But he thinks that "something should be done" about the poor, while I think that nothing more can be. But his thinking gets acclaim while mine gets obloquy. Fortunately not much bothers me. I am pleased that a very great Rabbi agrees with me though. See the Gospel of John 12:8
Where once Australia looked like a pyramid in terms of its social strata, with the working class as its broad base and ballast and the rich at the top, it’s come to resemble something of a misshapen diamond – wide in the middle – and that’s no bad thing in and of itself. I say that, of course, as a member of the emblematically widening middle. The problem is those Australians the middle has left behind without a glance.
At the bottom, of course, there are the poor, who make up almost 13 per cent of Australia’s population. The most visible of them will always be the welfare class: the sick, the addicted, the impaired and the unemployed, who only exist in the public mind as fodder for tabloid TV and the flagellants of brute radio. But if ever there was a truly “forgotten people” in our time it must be the working poor. These folk, the cleaners and carers and hospitality workers, excite no media outrage. They labour in the shadows in increasingly contingent working situations. Described as “casuals”, the only casual element of their existence is the attitude of the entities that employ them. Often on perpetual call or split shifts, their working lives are unstable. Many of them women, a significant proportion of them migrants, they have little bargaining power and low rates of union representation. As Helen Masterman-Smith and Barbara Pocock vividly document in their 2008 study, Living Low Paid, these people work in hospitals, supermarkets and five-star hotels. They mind the children of prosperous professional couples and wash their incontinent parents in care for an hourly rate most middle-class teenage babysitters can afford to turn their noses up at. It is upon these citizens’ low pay and insecurity that the prosperity of safer families is often built.
For these vulnerable Australians, there is little mobility. And precious little of what mobility affords – namely, confidence. The cockiness that irritates the old middle class when they encounter fly-in, fly-out workers with their Holden SS utes and tatts and jetskis is rare among the labouring poor. For years I worked in a residential high-rise where the looks on people’s faces in the lifts and on the walkways ranged from wry resignation to unspeakable entrapment. Single mothers on shrinking benefits, injured workers on disability allowances, middle-aged people stocking supermarket shelves at night. Even the most functional and optimistic of them seemed tired. They were not exhausted from partying, from keeping up with all their dizzying choices; they were worn out from simply hanging on and making do. As an accidental tourist in their lives, I was struck by this weariness. And I felt awkward in their presence. Their faces and voices were completely familiar. They smelt like the people of my boyhood – fags, sugar and the beefy whiff of free-range armpit – but despite the cheerful, non-committal conversations we had on our slow ascents in the lift, I felt a distance that took many months to come to terms with. Like the expatriate whose view of home is largely antique, I was a class traveller who’d become a stranger to his own. For all my connection to family, for all the decades I’d spent in fishing towns among tradespeople and labourers, the working class I knew was no more. My new neighbours were living another life entirely.
The sociologist Zygmunt Bauman writes about the contrast between the “light, sprightly and volatile” working lives of mobile citizens at the top of society and those who are largely without choice and prospects. Comfortable, confident people, heirs of the new individualism, often view strangers in cohorts below them in astoundingly superficial terms, as if they have adopted a look, chosen an identity as they often do themselves, as if life were a largely sartorial affair. Faced with your own surfeit of choices, it’s easy to assume everyone has so many. The “liquid” elite understands exotic poverty – it rallies to it tearfully – but it often fails to recognise domestic hardship: poverty of choice, poverty born of constraint, the poverty that is working servitude or the bonded shame of unemployment. Despite the angelic appeal of market thinking, there is no gainsaying the correlation between success and certain family backgrounds, geographical locations, ethnicities and schools. Pretending otherwise isn’t simply dishonest, it’s morally corrosive.
The culture that formed me was poorer, flatter and probably fairer than the one I live in today. Class was more visible, less confusing, more honestly defined and clearly understood. And it was something you could discuss without feeling like a heretic. The decency of our society used to be the measure of its success. Such decency rescued many of us from over-determined lives. It was the moral force that eroded barriers between people, opened up pathways previously unimagined. Not only did it enlarge our personal imaginations but it also enhanced our collective experience. The new cultural confidence this reform produced prefigured the material prosperity we currently enjoy. It was government intervention as much as the so-called genius of the market that underpinned our current prosperity, and it amazes me how quickly we’ve let ourselves be persuaded otherwise.
I have no illusions about overcoming class distinctions completely. Nor am I discounting the role that character plays in an individual’s fortunes. But it disturbs me to see governments abandoning those at the bottom while pandering to the appetites of the comfortable. Under such conditions, what chance is there for the working poor to fight their way free to share in the spoils of our common wealth? No one’s talking ideology. There is no insurrection brewing. For many Australian families, a gap in the fence is all the revolution they require. But while business prospers from the increased casualisation of its workforce, and government continues to reward the insatiable middle, the prospects of help for the weakest and decency for all seem dim indeed.
Australia's scientists forced to rely on pseudo-science to be taken seriously in Canberra
For once I agree with journalist Gareth Hutchens below. He sees an estimate in dollar terms of the worth of science to Australia as hocus pocus, with its dubious economic models. Will he also pour scorn on the similar Warmist models? Not by his track record.
He is probably also right that the conservative Abbott government is less than worshipful of science. He does not expore why, however. Virtually all conservaytives can see the hokum in Global Warming while also noting extensive scientific support for it. That will prove in time to have done lasting harm to the reputation of science
Australia's well-regarded Chief Scientist, Professor Ian Chubb, released a report last week that was soaked in good intentions.
It was called "The Importance of Advanced Physical and Mathematical Sciences to the Australian Economy", and it estimated how much Australia's economy has benefited from the past two decades of scientific research.
It was the first time anyone has attempted to do such a thing in Australia.
It showed "advanced sciences" contribute more than $145 billion directly to the economy each year, or roughly 11 per cent of GDP, and employ more than 760,000 people.
It said its conclusions were probably conservative.
I wrote a story about it last week because Professor Chubb is someone of distinction who put some resources into the effort, and it was a dual-project with the Australian Academy of Science, which is the country's leading scientific academy.
They both obviously felt that certain governments in Australia, and their talkback radio mates, have forgotten the real value of science and needed reminding.
Fair enough. I agree with them about that.
But their report should make people uncomfortable. It shows lofty science has started to behave like less noble lobby groups.
They have hired for the first time an economic consultancy firm to put a dollar value on science's contribution to the economy because they obviously understand that they need to put a price tag on things – the environment, the planet, human life, science itself – to get taken more seriously in Canberra.
It's a sorry sight.
The economics firm they hired developed an economic model to show how many jobs are created by science in Australia, and how much science contributes to our GDP.
It is a favourite tactic of groups like the Minerals Council, the Business Council of Australia, the Australian Chamber of Commerce and Industry, the Housing Industry Association.
And how did the economics firm pull it off? To its credit, it took the job seriously.
It held a two-day workshop with top scientists from maths, physics, statistics, and nuclear and earth sciences, and asked them to think seriously about the last two decades of scientific research and how that research has become "embodied" in economic inputs (labour, capital and systems).
(The workshop was lots of fun apparently. The mathematicians claimed they were responsible for everything).
After the workshop, the firm then talked to various industries to find out what kind of contribution they felt advanced science made to their daily working lives.
Then, using the ABS's 2006 ANZSIC industry classification system that divides the Australian economy into 506 industry classes, it identified 158 industry classes that are "science-based".
That list of industries includes oil and gas extraction, general insurance, iron ore mining, wired telecommunications, pathology and diagnostic services, banking, fossil fuel electricity generation.
Then the firm developed a computerised general equilibrium (CGE) model, based on the publicly available MMRF-NRA model that was developed by the Productivity Commission, which is an impossibly complicated model to use.
It provides a detailed account of investment, imports, exports, changes in prices, employment, industry activity, and household sending and savings; it accounts for differing economic fundamentals in every state and territory; it can produce results on employment and "valued added" at the regional level, and it can be run in static or dynamic mode, with the dynamic version tracing impacts over time as the economy adjusts to changes in policy and activity.
Feel your head whirring? You're not alone.
I like to think of the model as a big rig of pulley wheels and ropes. If you pull on one rope the whole apparatus will hiss steam, and starts lifting different weights and buckets into the air, all at different levels.
It has hundreds of thousands of different combinations, and buckets can fly every which way.
But for the model to actually work, the economics firm had to figure out how each scientific discipline contributes to every industry.
And that's where the main problem comes in.
That process was largely a normative one – scientists and industry types would basically have to guess when they assigned a proportion or percentage to each discipline.
So, when it comes to beer manufacturing, say, how much do you think science contributes?
Well, the model reckons science accounts for 10 per cent of the industry's gross value added, with maths (0.3) and chemistry (0.7) sharing that 10 per cent load unevenly.
And those proportions were largely guesswork.
Now repeat that process hundreds of times as you go through every industry.
That's how Professor Chubb's headline figures were created: "Advanced sciences" contribute more than $145 billion directly to the economy each year, or roughly 11 per cent of GDP.
Despite its honest and worthy intentions, it's sad that the Academy of Science felt that it had to play a magician's game, like every other lobby group, to get Canberra to take them more seriously and stop cutting funding.
It's also dispiriting to think that it had to rely on pseudo-science to remind policymakers not to take real science for granted. How have things come to this in Australia?
Wind farms in trouble in Australia
The article below sees that as a tragedy. By any rational and fully informed calculation, however, it is a Godsend for Australian public finances
Banco Santander, a major investor in renewable energy, will sell its only Australian wind farm and exit the local sector because of policy uncertainty that has dragged the industry into crisis.
Santander will seek a buyer for its 90 per cent stake in the 106.8 megawatt Taralga wind farm near Goulburn, which is not being included in the renewable energy fund it set up late last year with two Canadian pension giants because of the perceived poor prospects for the sector in Australia, say sources.
David Smith, executive director of Santander in Sydney, declined to comment.
Australia's renewable energy sector has been left in limbo by the political debate surrounding the country's 2020 renewable energy target. The government and Labor Opposition agree the 41,000GWh target for large-scale renewable energy needs to be reduced to suit the downturn in total power demand from the grid, but have been unable to agree on a compromise.
As of last week, the government was proposing a 2020 target of 32,000GWh, while Labor wants a target in the high 30,000GWh range. A compromise suggested by the Clean Energy Council at 33,500GWh, up from the current level of about 17,000GWh, has failed to find backing.
Investment in large-scale renewable energy collapsed by almost 90 per cent in 2014 as a result of the deadlock, which has been criticised by several large foreign investors in the local renewable energy sector, including GE, Spain's Fotowatio Renewable Venture and Infigen Energy cornerstone shareholder, the Children's Investment Fund. They have all warned of the harm to Australia's sovereign risk, which will deter long-term infrastructure investors.
In December, Santander struck a deal with the Ontario Teachers' Pension Plan and the Public Sector Pension Investment Board in Canada to transfer its portfolio of renewable energy and water infrastructure assets into a new company owned equally by all three parties. But despite the partners having an appetite for other infrastructure assets in Australia, the wind farm was excluded from the $US2 billion-plus ($2.6 billion) portfolio of assets in the new company because of the uncertainty around the RET and the decision by the Coalition government to ditch the carbon tax, say sources close to the company.
The new company will, however, invest in Brazil and Mexico, which are seen as offering better prospects for renewable energy investors than Australia.
"It is quite clear that the uncertainty around the RET and other changes to policy that have occurred over the past few years has created a lot of uncertainty for investors in the renewable energy space," said Richard Pillinger at BlueNRGY LLC, which owns 10 per cent of the Taralga wind farm.
The Taralga wind farm, which has a 10-year contract to supply power to EnergyAustralia, was financed with about $280 million from Santander, CBD Energy, Danish export credit agency EKF, ANZ and the federal government's Clean Energy Finance Corporation. Production of electricity from the first of the 51 wind turbines began in December.
CBD Energy has since gone into administration and been acquired by US-based BlueNRGY LLC.
Santander is closing the Sydney office for its equity investment arm, which focuses on renewable energy, in mid-2015.
Freedom of Speech and Tanya Cohen
by Sean Gabb
I have been directed to this article, published today: "Australia Must Have Zero Tolerance for Online Hatred", by Tanya Cohen of something called The Australian Independent Media Network. It is a very long article, and I will begin my response by quoting the passages I find most objectionable.
1. “…it’s just common sense that freedom of speech doesn’t give anyone the right to offend, insult, humiliate, intimidate, vilify, incite hatred or violence, be impolite or uncivil, disrespect, oppose human rights, spread lies or misinformation, argue against the common good, or promote ideas which have no place in society. We all learned this in school, and it’s not something that’s even up for debate. Hate speech is not free speech….”
2. “…even right-wing libertarians were outraged that anyone would propose watering down laws against hate speech.”
3. “There are two sides to the free speech debate in Australia: the people who believe that all offensive or insulting speech should always be illegal (the vast majority of Australians), and the people who believe that only racial vilification or incitement to hatred should be illegal (the far-right, ultra-libertarian free speech fundamentalists).”
4. “You simply cannot call yourself a progressive in Australia unless you support the outlawing of all un-progressive speech. One of the most fundamental goals of the Australian progressive movement is ensuring that anyone who voices un-progressive ideas is aggressively prosecuted, and this is something that all Australian progressives firmly agree with.”
5. “What I propose is something called a Human Rights Online Act. This Act would not only make it a severe criminal offence on the federal level to publish, distribute, promote, or access hate speech online, but would also implement a federal Internet filtering system to protect Australians from being exposed to hate sites run out of the US. The Internet filter should block access to all hate sites, and anyone who tries to access any hate sites should be sent to gaol, much like people who access child pornography. In keeping with other human rights legislation in Australia – like the proposed Human Rights and Anti-Discrimination Bill, which was unfortunately narrowly defeated by the efforts of the far-right – anyone accused of offending, insulting, humiliating, or intimidating other people should be required to prove their innocence or be declared guilty automatically, and this should also apply for anyone accused of publishing, distributing, promoting, or accessing online hatred. The principle of guilty until proven innocent is the only principle that really works when it comes to cracking down on hate speech….”
6. “Internet filtering should not just filter out hate speech. It should filter out anything that violates human rights and/or poses a danger to society. Our Australian Classification Board bans any film, video game, book, or other form of media if it offends against community standards, contains content harmful to society, or is demeaning to human dignity. If a book, film, or video game contains content that degrades human dignity, then it therefore constitutes a violation of human rights, since human dignity is a fundamental human right that all civilised governments are tasked with upholding.”
7. “All Australian websites should be required to register with the Australian Human Rights Commission in order to ensure strict compliance with human rights. If any websites contain content that opposes human rights, then they should be shut down immediately and their owners sent to gaol. In addition, all Australian websites should be required to promote human rights. Any website found to inadequately promote human rights should be shut down by the Australian Human Rights Commission, and the owner fined or sent to gaol.”
As I read through the article, I kept asking whether Miss Cohen really existed, or if this was a satire on the modern left. Quotation (4) – about banning anything “unprogressive” – does verge on the Swiftian. So does the indefinable but “fundamental” right to “dignity” that is given precedence over the traditional rights to freedom of speech and association and to the requirements of natural justice. Sadly, she does appear to exist, and this does appear to be an honest statement of what she believes.
This being so, you can take the quotations given above as part of her article’s refutation. Miss Cohen is calling for the censorship of any opinion that she and her friends find disagreeable. She wants to punish not only those who write and publish such things, but also those who read them. She believes in reversing the burden of proof, so that those accused of writing or publishing or reading shall be made to prove that they have not done as accused – to prove this out of their own resources against a prosecution with bottomless pockets and skilled lawyers. She also believes in licensing the media, so that disagreeable opinions will not be published.
There is nothing unusual about the substance of her demands. I first came across their like in the early 1980s, when I was at university. It struck me then as a scandalous misuse of words to make human rights of censorship and unlimited state power – me and the older lefties who had not caved in to the neo-Marxists. But that was then. We live today in a world captured and increasingly reshaped by Miss Cohen and her friends. All I find unusual now is the honesty of her demands. It may be that she really is a clever satirist. Or perhaps she is just stupid. But I am used to a more sophisticated defence of locking people away for their opinions, and without a fair trial.
I will deal with two of her specific claims. The first is that “right-wing libertarians” do not mind the banning of “hate speech.” The second is that “Hate speech is not free speech.”
I am undoubtedly a libertarian. I am probably a right-wing libertarian. I believe that people should, at the minimum, be free to say whatever they please about alleged matters of public fact. I am sceptical about the justice of the laws covering libel and confidentiality and copyright and official secrecy. But, so long as these are confined to achieving their traditionally stated ends, I will, for present purposes, leave them to one side. I will also leave aside photographic displays of sexual activity not limited to consenting adults. Yet, even at its minimal definition, the right to freedom of speech covers every class of utterance that Miss Cohen wants to censor. So far as libertarians, almost by definition, believe in freedom of speech, either she is mistaken about the meaning of libertarianism, or she is playing with the meaning of words.
I turn to her claim about the nature of “hate speech.” The term is designed to bring into mind ideas of inarticulate screams, or of simple orders to kill or to hurt. In fact, every act of “hate speech” I have seen punished or denounced has involved the same combination of propositions and inferences I see anywhere else.
Let us, for example, take these two cases:
1. Bearing in mind differences of population and wealth, the Great War was less destructive to England than the civil wars of the seventeenth century. Proportionately, fewer men were killed, and the economic costs were lower. Yet the physical effects of the civil wars drop out of view after 1660, and those of the Great War were a national obsession until 1939, and are now widely seen as the greatest single cause of our national decline. Therefore, anyone who accepts the consensus view of the Great War as a catastrophe is mistaking symptoms for causes. Whether or not going to war was an error, a fundamentally healthy nation could have shaken off the losses of the Somme and Passchendaele in a decade at most. That we did not indicates that there was already something wrong with us by 1914.
2. There are measurable differences between racial groups. Some of these are of intellectual capacity. Others are of propensity to crimes against life or property or both. Even otherwise, there are differences of outlook that show themselves in how the members of one group relate to each other and to members of other groups. These differences have been uncovered and confirmed by more than a century of research. They have also long been accepted as matters of common sense. Therefore, racially homogenous countries are well advised to keep out immigrants of other races. Where a country is already mixed, it makes sense to segregate each racial group so far as possible, and to govern each by different laws, or to apply the same laws with different effect to each group.
I give no opinion on the truth of these cases. The first I have just made up. The second I have distilled from my reading of various nationalist blogs and journals. Whether they are true is beside my present point. My point is that each case begins with factual claims, from which inferences are then drawn. If you disagree with either, it seems obvious to me that the proper mode of disagreement is to show that the factual claims are untrue, or that the inferences are not validly drawn. Calling in the police is at best unlikely to advance our understanding of the world.
I suppose Miss Cohen would argue that the first case, if accepted, will have no obvious effects on what is done in the present, but that the second, if accepted, will lead to ethnic cleansing or apartheid. She would infer from this that laws against advancing the second case are needed to stop a great evil from being committed.
I agree that, if we accept the racial nationalist case, difficult questions come onto the agenda. In the same way, however, if my gold crowns wear out this year, I shall not be able to afford a family holiday. The unpleasantness of the apodosis has no bearing on the truth of the protasis. Suppose the racial nationalists are right. Suppose that what they advocate is the lesser of evils in the long term. Or suppose that they are right in their factual claims, but that there are alternative and less alarming inferences to be drawn from these. This would surely be worth knowing. I say that, once a case has been stated with any show of evidence, and certainly once it has gained any body of support, it needs to be contested in open debate, not silenced by the State.
Furthermore, where written arguments are concerned, readers are generally alone and have ample time to think before taking action. This must be considered a new intervening cause in any course that leads from the communication of ideas to actual violence. If Miss Cohen wanted laws against street agitators, she might have a case. Censoring the written word is plain suppression of debate.
The main focus of Miss Cohen’s article is on those who dissent from the present discourse on race and immigration. Looking at Quotation (6), though – “Internet filtering should not just filter out hate speech. It should filter out anything that violates human rights and/or poses a danger to society.” – we can see that she wants to shut down debate on every leftist claim. She would not allow any dissent on the nature and extent of climate change, or on what is happening in the Middle East – she is a pro-Palestinian, not that I think better or worse of her for this – or on how dangerous drinking and smoking are to health. Indeed, we seem to be at the beginning of a change in the consensus on diet and health. For about forty years, we have been told that fat is bad for us, and that we should eat a lot of carbohydrate. It may be that we are about to be told that fat is good for us, and that sugar is the main cause of obesity and diabetes. Had her proposed law been in place across the world, this debate would have been flattened by claims of “social danger.”
I could say more, but will not. I will conclude by suggesting that you should read Miss Cohen for yourself. You decide whether she is a satirist of genius, or an embarrassment to the modern left by virtue of her blundering honesty.
Собственный сельскохозяйственный сектор обеспечивает Израиль продуктами питания на 95 %, при этом большое количество продукции экспортируется.
От детей сапожников и профессоров, до детей министров и собственников крупнейших компаний.
- The Eurozone is suffering from structural stagnation that is driven by the lack of investment, anaemic domestic demand and policies, including taxation and enterprise regulation, that reduce entrepreneurship and make jobs creation and productivity growth (especially Total Factor Productivity) excessively costly.
- Overall household and corporate indebtedness in the Euro area remain high despite several years of deleveraging.
- Bank lending markets fragmentation contrasted by booming equity and bond markets shows that the problem is not in the lack of liquidity, but in over-leveraging present in the economy.
- Japan, the US, and the UK experiences with QE show that monetary policies are useful to the real economy only when they are combined with either expansionary fiscal policies or real investment increases or both.
- Even in such cases where QE has been successful, sustainability of QE-triggered growth has been weak in the presence of structural debt overhangs (Japan) and had to rely on structural drivers for growth present prior to the deployment of QE (the UK and the US).
- In the Euro area, the idea is to combine QE with austerity policies and in the presence of dysfunctional financial markets. Such a program could increase misallocation of resources via bidding up financial assets prices over and above their long term fundamentals-justified levels.
- Bank of England created £375bn over the course of its QE programme. By the Bank of England’s own estimates, QE in the UK pushed up share and bond prices by around 20%. But because around 40% of stock market wealth is held by the wealthiest 5% of households, QE has made that wealthiest 5% better off by around £128,000 per household.
- You might want to check this post on the potential effects of QE on the real economy: http://www.zerohedge.com/news/2015-03-28/finally-very-serious-people-get-it-qe-will-permanently-impair-living-standards-gener
- The funds are taxable income, so there is a benefit to the Exchequers, allowing the governments to engage in expanded investment programmes or more efficiently close some of the budgetary gaps, while buying more time to implement structural reforms.
- The funds (net of tax) can be used by households to accelerate debt deleveraging and/or repair their pensions funds and/or fund consumption.
- As the result, “QE for the People” will stimulate domestic demand (consumption, investment and Government investment), while increasing the rate of debt deleveraging.
- In addition, “QE for the People” can help improve banks’ balancesheets by increasing loans recovery (as households repay loans). In contrast, ECB QE will not have such an effect as it will be taking off banks balancesheets zero risk-weighted Government bonds. Thus, “QE for the People” can be seen as a more efficient mechanism for repairing financial system transmission mechanism than ECB own QE policy.
- The quantum of stimulus implied by the “QE for the People” proposal is significant. Take Ireland, for example. “QE for the People” means annual benefit of around EUR8 billion in direct stimulus (depending on how Ireland's share is estimated). In 2014, Irish Final Domestic Demand grew by EUR6.15 billion. So the direct effect of this measure for just one year would be equivalent to more than full year worth of real economic growth.
Now that we've demonstrated that the passage of the Affordable Care Act has resulted in a declining quality of life for average Americans since 2009, we thought we'd next discuss how that outcome came to pass, but first, we thought we'd first illustrate the trade off that American consumers are being forced to make using a production possibilities frontier curve - perhaps the first time in living memory that such a curve has been developed using real life data!
A generic version of this curve is often presented in basic economics textbooks, where it is often referred to as the "Guns and Butter" curve, which is used to illustrate the trade offs that consumers have to make when they have limited resources and are forced to choose how much of two very different goods they can afford to obtain based on their cost.
We bet you never expected the choice to be between health insurance and entertainment! As the chart reveals, consumers in recent years have found themselves in the situation where they are being forced to give up entertainment because of the rising costs of health insurance. Because entertainment is always a voluntary expenditure, which people choose to do in their leisure time as they engage in their preferred activities, anything that negatively impacts their ability to consume entertainment-related goods and services can be considered to be something that negatively affects their quality of life.
In this case, the negative impact upon their quality of life is the result of the passage of the Patient Protection and Affordable Care Act (PPACA), which is alternatively known as just the Affordable Care Act (ACA) or more popularly as "Obamacare".
We'll demonstrate how the passage of Obamacare has resulted in a decrease in the quality of life for average Americans with the next several charts, in which we'll track how and why health insurance expenditures have changed in the period from 2005 through 2013. We selected this specific period of time because online health insurance brokerage firm eHealth has consistently published data indicating the average premiums that individuals have paid for their health insurance coverage by age group over this time, which helps explain the specific dynamics of why the cost of health insurance has increased so much following the passage of the Affordable Care Act into law on 23 March 2010.
Our first chart shows the annual average premiums for health insurance for the Age 18-24, Age 25-34, Age 35-44, Age 45-54 and Age 55-64 cohorts for each year from 2005 through 2013 - the typical costs paid by the non-Medicaid and non-Medicare eligible portion of the U.S. population who chose to buy health insurance policies for Single coverage during these years.
In this chart, we see that the cost of health insurance is age dependent, with the youngest Americans paying the least and the oldest Americans in the market paying the most. That makes sense not just because the oldest age group of Americans will typically have health care expenses that are six times those of the youngest age group of Americans, but also because this demographic group has the third highest incomes and also the greatest wealth by a wide margin.
Never the less, we see that except for a brief decline from 2005 to 2006, the cost of health insurance has increased for each age group.
But as we'll show next, it has risen more for some age groups much more than others.
In this chart, we've calculted the percent change in Individual health insurance premiums that have been recorded since 2005. What we find is that in the years from 2005 through 2009, the cost of health insurance paid by all age groups ranged from a low of -7% to -8% in 2006 to fall in a band from 0% to +7% in 2009.
But beginning in 2010, which saw the passage of the ACA in the first quarter of the year, the cost of health insurance began to increase greatly, as health insurers moved to comply with the new requirements imposed upon them by the law.
In explaining why so many people during this time had their previous health insurance coverage cancelled, attorney Jason Cheung of LegalMatch explains the aspects of the Affordable Care Act that really jacked up the cost of health insurance in the U.S. during these years:
Why Has My Insurance Policy Been Cancelled?
Under the Affordable Care Plan, health-care insurance plans must meet a minimal standard of coverage. In order for an insurance plan to legal under the Affordable Care Act, the insurance plan must contain essential health benefits and it must have limited cost-sharing. If a plan does not meet either of those requirements, that plan is subject to cancellation.
What Are Essential Health Provisions?
The essential health provision requires that the insurance plan must at least contain the following benefits:
- Ambulatory Care
- Emergency Care
- Maternity Care
- Substance Abuse Treatment/ Rehabilitate Services
- Laboratory Services
- Prescription Services
- Children’s Dental and Vision Care
- Mental Health Care
- Preventative Services and Chronic Disease Management
- Coverage of Hospitalization
The Affordable Care Act requires that all preventative services be covered with no out-of-pocket costs and that the mental health and substance abuse treatments meet federal standards. In addition, insurance companies cannot impose annual dollar limits on the coverage of any benefit considered "essential."
Many of these "essential" benefits are actually unnecessary for many patients. Men typically do not want maternity care; some people will never have children, while some patients will never abuse substances. Many state plans do not include a benefit or two even though the benefit is considered "essential." If you feel that an "essential" benefit is not needed, you can either seek a grandfather plan exception or move to another state.
Mandated to provide previously unwanted levels of coverage to all health insurance policy holders, health insurers passed along their higher costs to health insurance consumers.
But that burden wasn't equally shared by all health care consumers. As our chart above confirms, the Age 55-64 cohort saw their health insurance costs go up the least during this time, which is due to another mandate in the law: the "community rating".
Here, the law was set up so that the highest premiums that would be paid by health insurance policy holders could be no more than three times the amount charged to those with the lowest premiums. As we noted early, the Age 18-24 group has the lowest premiums and the Age 55-64 group pays the highest premiums.
But to stay within that limit, health insurers had to increase the amount of premiums paid by all younger groups to compensate for the greater amount of health care consumed by this oldest age group. Our next chart reveals the ratio of each age group's health insurance premiums with respect to those paid by the Age 18-24 age group, who collectively pays the lowest premiums.
Here, we see that the health insurers satisfied the law's requirements for the community rating by a small margin (we should note that these ratios are based on average health insurance premiums paid - to stay inside the law's community rating mandate without triggering government penalties, health insurers would need that margin to accommodate their most costly policies.)
But because the premiums paid by those consuming the most health care services (the Age 55-64 group), satisfying the Affordable Care Act's community rating mandate requires health insurers to further jack up the costs paid by younger Americans - adding to their increased costs. This is very specifically why U.S. health insurers jacked up the cost of health insurance for the Age 18-24 group as sharply as they did after 2011.
That's how the implementation of Obamacare decreased the quality of life for average Americans by driving up the cost of health insurance. By forcing average American consumers to only be able to choose policies with unnecessary and bloated coverage and by forcing them to subsidize the demographically higher income and the wealthiest consumers of health care services through their premiums or else pay higher income taxes, the ACA is costing tens of millions of Americans hundreds and thousands of dollars each that they can no longer spend how they would rather choose.
No matter how you slice it, the passage of the Affordable Care Act has reduced both the quality of life and standard of living for average Americans. As we've just shown, the younger you are, the worse off you are.
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