The Health Bill and Monopoly

In Health Bill, Obama Attacks Wealth Inequality

By DAVID LEONHARDT

Published: March 23, 2010

For all the political and economic uncertainties about health reform, at least one thing seems clear: The bill that President Obama signed on Tuesday is the federal government’s biggest attack on economic inequality since inequality began rising more than three decades ago.

Over most of that period, government policy and market forces have been moving in the same direction, both increasing inequality. The pretax incomes of the wealthy have soared since the late 1970s, while their tax rateshave fallen more than rates for the middle class and poor.

Nearly every major aspect of the health bill pushes in the other direction. This fact helps explain why Mr. Obama was willing to spend so much political capital on the issue, even though it did not appear to be his top priority as a presidential candidate. Beyond the health reform’s effect on the medical system, it is the centerpiece of his deliberate effort to end what historians have called the age of Reagan...

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Ever play monopoly?

It takes hours to play, usually too long to hold most people's attention. But after 6 hours or so, one person is filthy rich and the rest are flat broke.

If allowed to go on unchecked, capitalism in the real world would have the same conclusion (although in a longer time frame, of course). A few filthy rich, everyone else poor. Think McDonald's or Wal-mart. Most of the employees make wages too little to support a family, but the higher-ups make a very comfortable salary.

To keep the game of monopoly going forever, the "richiest" players could slide a small percentage of their cash across the table to their broke opponents. Not enough to threaten their lead, but to keep someone "in the game." (In this metaphor, "in the game" means "not homeless")

David, I think you're worried because you think any level of redistribution will destroy the will to work, to innovate, and to compete. And I completely agree that too much redistribution would be devastating. It would be like playing Monopoly and every 3 hours the money and properties are gathered and divided evenly. What's the point, right? Why work hard if everyone's going to have same money and property?

That was the problem in communist USSR and I believe it's the problem is most public school classrooms across the country. I would fear a similar situation anywhere else!

However, I don't believe that our nation's economy is at that point, or even close to it. We're closer to the point of where the "have-nots" are living in the streets. The middle class is shrinking! Lack of healthcare or sufficient healthcare is the number reason one reason for bankruptcy, for home foreclosure, and for homelessness.

Will the healthcare bill redistribute wealth? Absolutely. I don't think anyone's arguing that. Will it redistribute to the point that working hard and competing will lose their appeal? I really, truly do not believe there's any truth in that.