Book Review : The Submerged State

Donald Trump’s spectacular healthcare debacle in the past month generated a remarkably improbable coalition of opponents, heralding the haphazardness, the callousness, and the sheer incompetence of both the conman and his cowardly rank-and-file. The laughable so-called freedom caucus objected because the replacement for the Affordable Care Act would still offer help to anyone at all; moderate Republicans feared increasing backlash as their constituents, Trump supporters included, have gradually come to discover just how essential elements of the bemoaned “Obamacare” are in meeting their medical needs; Democrats, appropriately, oppose the demise of what serious analysts continue to depict as Obama’s “signature domestic achievement;” liberals of course oppose funneling money away from healthcare for the poor upward to comfort the wealthy. One need only ponder the proposed replacement superficially to begin to understand clearly the rationale behind such astonishing obstruction.

Among the proposals are

  • Medicaid expansion freezes in 2018 or 2020, conspicuously following midterms,
  • elimination of mandate fees largely underwriting the program, indicative of a fundamental lack of understanding of how insurance, private or otherwise, is designed to work,
  • reduction or dissolution of other taxes paid by income earners over the $500K/yr threshold,
  • increases to tax rates on middle and working class people,
  • replacement of out-of-pocket assistance with a questionable age-based assistance framework, likely quite harmful to poor older Americans just below 65 years of age and younger Americans with chronic health conditions,

and the list goes on and on.

Rates of uninsured and overall cost of coverage are uncontroversially projected to increase under the Trump plan, though Secretary Tom Price of the Health and Human Services Department insists rather disingenuously otherwise. Speaker of the House Paul Ryan actually bested both Trump and Price by claiming, rather ludicrously, that loss of coverage and higher costs are qualitatively better, as they represent more “freedom” for Americans.

Though we’ll defer a thorough treatment of the hodge-podge mess that is the American for-profit medical insurance system for now, suffice it to say that our faltering system is a scandal among industrialized nations. Virtually every western democracy offers its citizens a better healthcare deal than does the United States of America; these deals are hardly utopian, but the margin for improvement in America is something of a chasm. Physicians for a National Health Program articulate a sound strategy for moving the United States’ system closer to that of the civilized world. More absurd and fantastic is the propaganda machine claiming hysterically that free market principles require special protection in a domain which would never have existed without immense government intervention, beginning in the 1930s with tax exemptions for Blue Cross and other institutions evolved from the American Hospital Association, continuing with tax policy intended to form an employment-based health insurance and pension systems, and crescendoing with Eisenhower extending tax exemptions to virtually all health insurance companies by signing the Revenue Act of 1954.

Medical research is topical of late, as Trump promises to vanquish the evil largesse of the National Institutes of Health. Astonishingly, an acquaintance and physician who receives NIH grants has applauded Trump’s proposed demolition of public health and medical research, disparaging the agency as liberal advocacy for (paraphrased) sickle cell anemics in the ghetto, fat diabetic thugs in the barrio, and alcoholic obese Indians rotting on the reservation, rather than those who “might contribute to society.” Setting aside the strawman that is the rather grotesque racist commentary and elitist assessment of what is and what isn’t good for society, his further remarks extolling privately-funded research dovetails with Speaker Ryan’s bizarre pronouncement that dying without medical care in bankruptcy is tantamount to dying with the dignity only the truly free can know. First, it’s important to note that much of private medical research is possible because of public subsidies, either in the form of tax policy, drug revenue through artificial constraints on Medicare’s ability to regulate drug prices, direct payouts, and transfer of the results of purely public, long-term, high-risk research into private hands once effectiveness is assured, all of which contradict directly the freedom argument. Further, as a public agency, answerable to the executive, Congress, and the American people, the NIH presents a distribution of grant topics each year, most of which aren’t a boon to what my friend may consider enemies of the American way of life. And though the balance of research and development between private and public organizations has shifted in recent years, the distinctions listed above stand, as well as a lack of public accountability and conceivably a greater susceptibility to bias in experimentation in private agencies beholden to quarterly shareholder reports.

This is but one of many examples worth examining as part of what Suzanne Mettler of Cornell calls the submerged state. Her eponymous text of said state discusses the often hidden roles the federal, state, and local governments play in everyday life, be it healthcare, infrastructure, business, education, or homesteading. Certainly the astonishingly large subsidies by the federal government in the high tech sector over the past several decades and throughout American history are among the best kept secrets from the population; for everything from telephony to airplanes to computers to highways to the internet, one can trace roots to very large public subsidies either into the university system, both government and private research labs, transfer of intellectual property and massive tax subsidies to large multinational corporations, among others. The balance of public investment has shifted over the past several decades as part of the larger propaganda around market systems. For instance, Eisenhower, a Republican president from 1953 to 1961, wrote to his brother Edgar in November 1954,

"Should any political party attempt to
abolish social security, unemployment insurance,
and eliminate labor laws and farm
programs, you would not hear of that party
again in our political history. There is a
tiny splinter group, of course, that believes
you can do these things. . . . [But] their
number is negligible and they are stupid."

Richard Nixon, perhaps the last liberal president yet also a Republican, directed the formulation of the EPA and the NOAA, targets of team Trump’s deregulation and anti-environmental fanaticism. Ronald Reagan stumbled to victory touting free market virtue, yet his administration was more protectionist than all post-war presidencies combined, as boasted in an understatement by James Baker; during his terms, transfer of public funds into real estate, insurance, and financial institutions freshly deregulated under Nixon skyrocketed, guaranteeing enormous gains for top income earners (Trump included). As usual, austerities associated with market principles apply only to the poor and those incapable of winning the game while nanny state protectionism, aptly named by economist Dean Baker, belongs within reach of the elite sectors. So why do so many in the population hold public institutions in such low regard, as frequently measured by polling agencies?

Mettler’s research is quite revealing of the shift in public attitudes on the role of government. In particular, citizens tend to be more aware of programs which affect them directly according to studies conducted by Mettler and Matt Guardino discussed at length in her book. Anecdotes aside (think of the citizen famously ordering Representative Robert Inglis of South Carolina to keep his “government hands off my Medicare“), poorer working class folks tend to understand the earned income tax credit (EITC), whereas they’re largely ignorant of the regressiveness of the home mortgage interest deduction (HMID) and retirement savings accounts deductions. Mettler concludes that presenting citizens with more information, irrespective of income level, tends to shift attitudes in favor of more egalitarian tax policy.

I should mention that the submerged state isn’t simply happenstance; at the conclusion of the second world war, virtually all economists subscribed to the Keynesian approach of “priming the pump;” that is, eliminate risk of further depressions and recessions with wealth circulation through massive government spending. Businessweek and the Wall Street Journal editorialized that of the two choices, social spending versus military spending, military spending was superior in that it suffered no democratizing effects while comfortably funneling public subsidies upward, as articulated by analyst Noam Chomsky.

Of the many examples Mettler gives, she includes a discussion of Obama’s 2009 stimulus package. Unknown to many working class people is that they received a tax cut that same year to push the economy forward; even more unknown is that the secrecy was intentional, as the Obama camp needed the working class people to spend the cut rather than save it, so the dispersal was gradual and almost imperceptible through the year. Obama seemed to follow in Lippman’s elitist tradition of aiding the “bewildered herd” and “meddlesome outsiders” while limiting direct participation since they’re unfit to make policy decisions themselves, yet this isn’t a law of nature. One can envision a system in which the public can make such decisions for themselves.

Mettler demonstrates, as suggested above, that exposure to more detail on regressive social spending reduces ignorance and bolsters support for more progressive measures; she cites earlier work by Michael X. Delli Carpini and Scott Keeter to further the claim that political literacy is by no means uniform, but rather correlates rather strongly with engagement; opinions shift freely in the presence of more detailed information, as confirmed by John Sides’ work on the estate tax. She also explains the remarkable reinstatement of direct government lending in student borrowing after the financial crisis, a progressive victory for American students. Indicative of the deeply embedded propaganda around markets and the role of government, Republican John Kline hysterically decried the measure as a “government takeover of our classrooms,” despite the near-constraint-free avarice of a runaway banking system pocketing enormous sums off of young working class people trying to better themselves with education. The reforms within Family Federal Education Loans (FFEL), according to Mettler, are substantial yet represent a missed opportunity for Obama to more publicly expose and diminish the submerged state; he spent more time persuading Americans, lobbyists, insurance companies, and the like to support the Affordable Care Act without drawing sufficient attention to other domestic achievements.

In summary, her book presents a thoughtful, well-documented analysis on both the deleterious effects of the submerged state (such as curtailed democracy, popular ignorance of policies, limited participation) and its antidote: increased political engagement. I’d certainly agree that’s a start.

2 thoughts on “Book Review : The Submerged State

  1. Tomy says:

    Trump/Ryancare was so bad that even the Teapublicans could not stomach it. Messing with medicare would be political suicide for them, also.


  2. npslagle says:

    Members of the far right have conspired to dismantle entitlements for a long time, catastrophizing hysterically about imminent insolvency. Newt Gingrich and Jesse Helms aimed for privatization before the Republican sweep in 1994, though they toned down the rhetoric slightly once they claimed Congress. George W. Bush aimed for partial privatization in his first term to no success, yet each subsequent party leader seems to target entitlements year over year, including Sam Johnson, a Republican representative from Texas, offering rather generously to increase minimum benefits for the poorest of Americans while slashing benefits for almost everyone else.

    The Republican party has become a “radical insurgency,” to quote Norman Ornstein and Thomas Mann, but the Democratic party has drifted so far to the right that most of Obama’s domestic accomplishments either are invisible (due to the submerged state phenomenon) or simply didn’t go far enough.


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