18 of 19 people found the following review helpful:
5.0 out of 5 stars
Common Sense for Our Time, June 4, 2006
This review is from: All Together Now: Common Sense for a Fair Economy (BK Currents (Paperback)) (Paperback)
With “All Together Now,” Jared Bernstein follows in the footsteps of Tom Paine’s “Common Sense.” Before the publication of Paine’s 1776 pamphlet, colonists either could not imagine a government other than monarchy, or considered such thought premature. Within after, the Declaration of Independence was composed and signed. Much as “Common Sense” encouraged people to think creatively about and act on the possibility of liberty and self-government, “All Together Now” does so for social policy. Then monarchy held people’s minds in a straightjacket. In our era it is the extreme version now current of those venerable American ideals, the free market and rugged individualism.
The book begins with a delightful parable illustrating the difference between heaven and hell. They are identical except that in one, everyone looks out only for number one, while in the other, everyone helps one another. This story deftly distinguishes between the prevailing ideology of the last quarter century -- You’re On Your Own or YOYO – and Bernstein’s alternative -- We’re In This Together or WITT. It is also characteristic of the book’s style: minimal reliance on charts and numbers and such things as make my eyes glaze over (thus no need to add MEGO to WITT or YOYO), and maximal reliance on a breezy style that is easy to read, understand and stay with.
At a very abstract level, the difference between the two ideologies, YOYO and WITT, is how much risk should individuals have to shoulder on their own, and how much should we share across all of us. Risk is not used in its every day sense, the chance of a bad thing happening. It is used in its economic sense, the possibility of different things happening, some good, some bad, but where individuals have little control over which one actually does happen. The risks range from natural disasters and medical misfortunes to the vagaries of the business cycle and accidents of birth.
Over the last century, the type of bone-breaking, life threatening poverty still common in much of the world has become vanishingly rare within the developed economies. Consequently, the problems associated with how society responds to risk have moved to the fore. With YOYO, it is every pot on its own bottom. With WITT, many risks are shared to varying degrees by many or all members of society. This risk sharing is part of the glue that binds society together.
YOYO has many problems, the most severe being its strong favoritism toward those with the very deepest pockets at the expense of everyone else. Also mentioned is the increasing degradation of society and deterioration of the economy as those who make up “everyone else” fall farther and farther behind in education, training, skills and wealth.
There are several standard objections to WITT. With an economy that is more and more globalized, and the concomitant rise in competition of firms for markets and countries for investment and employment, society cannot afford a WITT approach. The race to the bottom associated with globalization will cause a WITT society to fall farther and farther behind in the competitive race. Even without globalization, the loss in economic efficiency that WITT entails would eventually lead to declining living standards as society and the economy stagnate.
Before addressing these objections, “All Together Now” first documents how institutions have changed over the last generation so that types of risk that used to be small have grown, and risks that individuals used to share with many others they must now face increasingly on their own or with just their families. The next chapter, chapter two, examines the ideological roots of these developments. The ultimate villain in the piece is the field of economics. Bernstein not only concurs with the following assertion, but also makes a strong case for its accuracy, in this instance at least:
“The ideas of economists and political philosophers, both when they are right and when they are wrong,
are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men,
who believe themselves quite exempt from any intellectual influences, are usually the slaves of some
defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some
academic scribbler of a few years back.” (JMKeynes)
Unfortunately, many of the economists in question are not even yet defunct. Even worse, they are too often wrong. (According to one physicist, long defunct, “Science advances obituary by obituary.” Bernstein is apparently unwilling to wait.) After laying out the economic arguments for YOYO and against WITT, this chapter examines them and finds them wanting.
Chapter 3 lays out an alternative policy agenda, a WITT agenda, and whether it is economically feasible. The bulk of the chapter makes the case that it is, that it will not only not break the bank, but that some parts of it will make the economy more efficient and globally competitive than it currently is. For certain risks, including those associated with retirement, insuring bad outcomes is more efficient when ever larger numbers of people are pooled together than when each individual is treated in isolation from all others. Other risks, including those associated with health and medicine, are more efficiently addressed by a non-profit monopoly than by many, competing, for-profit firms. In each case the arguments in support of these assertions are based not only on logic, but also on experience in the U.S. and other developed countries. The author is careful to say that with one exception, it is not necessary that government’s share of the economy rise in the WITT approach, and provides numerous examples documenting this.
The one exception is health care. This would increase total government spending, but based on many other countries’ experience:
‒ total spending on health care (private + public) would fall
‒ the percentage of people covered would rise
‒ the average quality of health care delivered would rise
‒ average health outcomes (life expectancy, infant mortality, etc.)
‒ the competitive drag of health insurance would be shifted from individual firms to the government (imagine the price of a Ford or GM vehicle without the cost of health-care factored in. WITT may be the latest and last example of “What’s good for General Motors is good for the rest of America.”)
‒ with health insurance not tied to one’s job, people would be willing to take jobs that more closely match their skills and interests, and short term unemployment would not be so disastrous
Chapter 4, humorously titled “How to Talk to a YOYO” deals with the issue of the WITT agenda’s political feasibility. Drawing on polls, recent political developments, and analysis of election results, it presents an argument that a political opening exists to enact the WITT agenda. It exists because the shift of risk from government and large private institutions to families and individuals is pervasive, and has become terribly burdensome to all but the richest among us. To the extent that large private institutions have not succeeded in shifting risk off their shoulders, they are staggering under the burden and slowly sinking beneath the waves. (Why is this? The economy has become much more risky for Americans since the quarter century following WW2, now regarded as some kind of golden era.)
Thomas Paine’s argument that dependence on the monarchy enslaved the colonists, whether they were fisherman or planters, convinced this diverse set of people that they had interests in common. Very quickly they were moved to act. The problems associated with YOYO agenda afflict large numbers of people from all economic classes, and all regions of the country and without consideration of race, creed, religion, gender or sexual orientation. Bernstein believes that these problems can serve the same role as the dependency on the monarch once did. All that is needed is a match to set the tinder on fire.
How will that happen? Since it has not yet occurred in this country, Bernstein cannot say for certain. He points to an example in the UK. He points to leading politicians (John Edwards, Barack Obama and Tom Vilsack) who have been raising just these issues. And, finally, he points to grassroots and student organizations (in particular ACORN and the Roosevelt Institution) that have been pushing parts of the WITT agenda at the local level. It is just a matter of time before common sense prevails.
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13 of 14 people found the following review helpful:
5.0 out of 5 stars
Short, clear, and convincing to the layman, May 19, 2006
This review is from: All Together Now: Common Sense for a Fair Economy (BK Currents (Paperback)) (Paperback)
I don't usually read books on economics, but I noticed Sen. John Edwards recommendation on the cover and after reading the opening I couldn't put it down. Yes, there are some numbers, and some charts and graphs, but in general it is a clear, concise (154 pages), and convincing argument that is also reasonably priced. After reading about two pages, I realized that Prof. Bernstein was articulating what I have been increasingly sensing over the last twenty years or so: that so called "neo-classical economics" are based on a series of false assumptions and only rarely describe how markets actually work. However, since their pronouncements can be used by corporations and the super-rich to accumulate more wealth (and feel virtuous at the same time) their largely unverified claims have become gospel constantly spouted throughout the media.
What Berstein does is examine the assumptions of those he calls "Your On Your Own" economists and the politicians who self-interestedly appropriate those economists' ideas to justify pro-corporate and pro-wealth market manipulations and contrast those with the more Kenyesian school of We're In This Together. In the war of acronyms, it's the YOYOs versus the WITTs. Berstein not only shows how the YOYO assumptions and theories are usually belied by actual economic performance, but he demonstrates why neoclassical or Keynsian economics becomes popular and powerful at a given time and why we are due (I would say overdue) for a change. His extreamly practical solutions to things like unemployment caused by globalization, ridiculously expensive healthcare, decaying infrastructure, and inequality in wealth and educational opportunity are both simple and cost effective. Does it mean higher taxes for corporations and the super-wealthy? Sure, but really no higher than they paid fifteen years ago, and many coporations and most individuals benefit from a stronger infrastructure, a more educated work force, and lower overall health care costs. Essentially, he brilliantly changes the question from "What actions can we take to diminish the role of government in our lives? to, How can we harness the power of government to solve the challenges we face?" (61). This is the first book in a long time that I've actually bought extra copies of to give to people. Honestly, progressives, libertarians, and even republicans will benefit from reading this book. Although it will challenge many of the ideas dear to these groups, it does so in a very healthy way.
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