Debating "The Great Risk Shift"

Check out Mark Schmitt's contribution to the debate over Jacob Hacker's new book "The Great Risk Shift" sponsored by The American Prospect here. There are also links to the other contributors, including the Matthew Yglesias, Ezra Klein and of course Hacker himself. There is also a link to a review of the book by Robert Kuttner. But I link to Schmitt's responsed because to my mind he best encapsulates what the discussion is really all about. He notes: "If inequality of security matches and reinforces inequality of income, rather than countering it, it's a double hit. If inequality of income and security are further reinforced by widening inequalities in education and health care quality, and also by political inequality (and there's another book to be written on just that topic), then we will be, indeed, two nations.

The great achievements of American liberalism have all been achievements of security, not redistribution. No one ever moved up the socio-economic ladder because of welfare or even the EITC, and that's not the point. Instead, social insurance of various kinds, including welfare, gave people a platform of security that helped them find their own way in the economy. The great era of homeownership was made possible by FHA insurance, which in turn had a redistributive effect but was not explicitly redistributive. Unemployment insurance made it possible for people to weather the cyclical nature of employment in the auto and steel industries. Some of these measures of security have been taken away by the ideology of personal responsibility, while others have been eroded by shifts in the economy. But in either case, the platform of security that helps people make their way in the economy needs to be rebuilt, probably for a majority of American families, and Jacob's analysis is the first serious start in that direction.

Yglesias seems to be on the right track as well, which is suprising as I generally find fault with his anti-populist economic views. But he gets bonus points for his recognition that "[i]nequality is not the only thing that matters, and risk and security issues should be on the table as well, but anything that aims at further downplaying the extent to which the distribution of wealth and income is a legitimate subject of political controversy should be resisted."

Amen to that.