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Forum Post: robert reich on the public good

Posted 11 years ago on Jan. 8, 2012, 6:51 p.m. EST by flip (7101)
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The Decline of the Public Good

Meryl Streep’s eery reincarnation of Margaret Thatcher in “The Iron Lady” brings to mind Thatcher’s most famous quip, “there is no such thing as ‘society.’” None of the dwindling herd of Republican candidates has quoted her yet but they might as well considering their unremitting bashing of everything public.

What defines a society is a set of mutual benefits and duties embodied most visibly in public institutions — public schools, public libraries, public transportation, public hospitals, public parks, public museums, public recreation, public universities, and so on.

Public institutions are supported by all taxpayers, and are available to all. If the tax system is progressive, those who are better off (and who, presumably, have benefitted from many of these same public institutions) help pay for everyone else.

“Privatiize” means pay-for-it-yourself. The practical consequence of this in an economy whose wealth and income are now more concentrated than any time in 90 years is to make high-quality public goods available to fewer and fewer.

In fact, much of what’s called “public” is increasingly a private good paid for by users — ever-higher tolls on public highways and public bridges, higher tuitions at so-called public universities, higher admission fees at public parks and public museums.

Much of the rest of what’s considered “public” has become so shoddy that those who can afford to do so find private alternatives. As public schools deteriorate, the upper-middle class and wealthy send their kids to private ones. As public pools and playgrounds decay, the better off buy memberships in private tennis and swimming clubs. As public hospitals decline, they pay premium rates for private care.

Gated communities and office parks now come with their own manicured lawns and walkways, security guards, and backup power systems.

Why the decline of public institutions? The financial squeeze on government at all levels since 2008 explains only part of it. The slide really started more than three decades ago with so-called “tax revolts” by a middle class whose earnings had stopped advancing even though the economy continued to grow. Most families still wanted good public services and institutions but could no longer afford the tab.

Since the late 1970s, almost all the gains from growth have gone to the top. But as the upper middle class and the rich began shifting to private institutions, they withdrew political support for public ones. In consequence, their marginal tax rates dropped — setting off a vicious cycle of diminishing revenues and deteriorating quality, spurring more flight from public institutions. Tax revenues from corporations also dropped as big companies went global — keeping their profits overseas and their tax bills to a minimum.

But that’s not the whole story. America no longer values public goods as we did decades ago.

The great expansion of public institutions in America began in the early years of 20th century when progressive reformers championed the idea that we all benefit from public goods. Excellent schools, roads, parks, playgrounds, and transit systems would knit the new industrial society together, create better citizens, and generate widespread prosperity. Education, for example, was less a personal investment than a public good — improving the entire community and ultimately the nation.

In subsequent decades — through the Great Depression, World War II, and the Cold War — this logic was expanded upon. Strong public institutions were seen as bulwarks against, in turn, mass poverty, fascism, and then communism. The public good was palpable: We were very much a society bound together by mutual needs and common threats. (It was no coincidence that the greatest extensions of higher education after World War II were the GI Bill and the National Defense Education Act, and the largest public works project in history called the National Defense Interstate Highway Act.)

But in a post-Cold War America distended by global capital, distorted by concentrated income and wealth, undermined by unlimited campaign donations, and rocked by a wave of new immigrants easily cast by demagogues as “them,” the notion of the public good has faded. Not even Democrats any longer use the phrase “the public good.” Public goods are now, at best, “public investments.” Public institutions have morphed into “public-private partnerships;” or, for Republicans, simply “vouchers.”

Mitt Romney’s speaks derisively of what he terms the Democrats’ “entitlement” society in contrast to his “opportunity” society. At least he still envisions a society. But he hasn’t explained how ordinary Americans will be able to take advantage of good opportunities without good public schools, affordable higher education, good roads, and adequate health care.

His “entitlements” are mostly a mirage anyway. Medicare is the only entitlement growing faster than the GDP but that’s because the costs of health care are growing faster than the economy. That means any attempt to turn Medicare into a voucher — without either raising the voucher in tandem with those costs or somehow taming them — will just reduce the elderly’s access to health care. Social Security hasn’t contributed to the budget deficit; it’s had surpluses for years.

Other safety nets are in tatters. Unemployment insurance reaches just 40 percent of the jobless these days (largely because eligibility requires having had a steady full-time job for a number of years rather than, as with most people, a string of jobs or part-time work).

What could Mitt be talking about? Outside of defense, domestic discretionary spending is down sharply as a percent of the economy. Add in declines in state and local spending, and total public spending on education, infrastructure, and basic research has dropped from 12 percent of GDP in the 1970s to less than 3 percent by 2011.

Only in one respect is Romney right. America has created a whopping entitlement for the biggest Wall Street banks and their top executives — who, unlike most of the rest of us, are no longer allowed to fail. They can also borrow from the Fed at almost no cost, then lend the money out at 3 to 6 percent.

All told, Wall Street’s entitlement is the biggest offered by the federal government, even though it doesn’t show up in the budget. And it’s not even a public good. It’s just private gain.

We’re losing public goods available to all, supported by the tax payments of all and especially the better off. In its place we have private goods available to the very rich, supported by the rest of us.

Even Lady Thatcher would have been appalled.



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[-] 3 points by beautifulworld (23744) 11 years ago

Great post, flip. I am so sick of hearing about so-called "entitlements." The foil of the "opportunists," so-to-speak, is very apropos.

[-] 1 points by flip (7101) 11 years ago

did you see what elizabeth warren said along the same line

[-] 1 points by beautifulworld (23744) 11 years ago

Yes. I think you sent me the link.

[-] 3 points by ithink (761) from York, PA 11 years ago

wow, well written. I don't usually make it through the long ones. very good food for thought and backed up by facts to boot.

[-] 3 points by JadedCitizen (4277) 11 years ago

Awesome article flip.

Romney would think me a sissy for being afraid of his privatized free market vision of America, where he will continue to uphold this opportunistic environment where the brave and the bold may thrive.

I would say to Romney, "Bravery & stupidity often occupy the same spaces".

[-] 3 points by flip (7101) 11 years ago

made that same comment today in a different venue - on a tennis court!

[-] 2 points by JadedCitizen (4277) 11 years ago

In tennis, risk taking & bravery are great for the spirit - I'm sure I would even stand up and applaud it - but in real life, I think safety programs are smart, after all, I've never heard a single story of someone starving to death on a tennis court!

[-] 2 points by flip (7101) 11 years ago

in my mind taking risks means losing more often than winning as opposed to percentage play. if playing in a risky manner means losing more points than you win then it is probably not a good idea - that was the conversation - going for that big shot or charging a machine gun nest may be brave or maybe just stupid - i teach tennis for a living so that is why i am not starving to death!

[-] 2 points by shoozTroll (17632) 11 years ago

Well written, straight forward and spot on.

Thanks flip.

I think Maggy would have applauded though.

[-] 1 points by flip (7101) 11 years ago

really - i thought maggie was a rotten bitch - see the movie "brassed off"

[-] 1 points by shoozTroll (17632) 11 years ago

Indeed, she was.

She would have been cheering for more of the same.

[-] 0 points by headlesscross (67) 11 years ago

"Public institutions are supported by all taxpayers, and are available to all. If the tax system is progressive, those who are better off (and who, presumably, have benefitted from many of these same public institutions) help pay for everyone else."

What a load of fucking Utopian,Leftist bullshit!!

[-] 1 points by flip (7101) 11 years ago

yes you are right - let's go back to the 1820's or maybe even feudalism mr headless -private school for you sweetie?? you must be young -not only because you are stupid but you don't remember the 50's and 60's when life was better for everyone except the super rich - oh, it was ok for them, of course but not like today - headless - very apt don't you think?