Economics

It feels like a large splinter jammed under my left thumbnail. From my thumb and forefinger, the skin burns in a strip up to my elbow. Recent shoulder surgery has left nerve damage, not uncommon. During the day, it’s a distraction; at night, much worse. Before bedtime, I swallow two 5 mg oxycodone. At 3 or 4 AM I jolt awake—my arm has turned into an alien serpent, its fangs sunk in my shoulder. I gulp two more oxycodone, chase them down with a Heineken, slap an ice pack on my arm, and browse the Financial Times until the pain fades.

Hail to the god Morpheus, who gave poppies to our ancestors! Used with respect, opiates still provide the cheapest, safest, and most effective relief for serious pain. The only side-effects are constipation (guaranteed!), and for some, a warm, floaty feeling, drowsiness, slight nausea, and in a small minority, addiction. But compare that with those expensive, non-addictive wonder drugs, Celebrex and Vioxx, that turned out to cause heart-attacks and strokes! Or even compare that with Tylenol, often combined with oxycodone to make Percoset. Tylenol causes liver damage and doses not much higher than recommended for pain. (That’s why I requested oxycodone straight.)

Why do we Americans have such a thing about addiction to pain-killers? Nicotine is much more addictive. Alcohol can be addictive. Also sex—see DSK. Also caffeine, Spider, and Nutella. It’s true our poorer addicts (unlike Rush) lead a nasty life, constantly worried about where the next fix is coming from, whether it will be adulterated, whether they will be arrested… But the Swiss, Portuguese, British, Australians, and others have long since shown that given access to cheap, clean drugs through special programs, opiate addicts can lead normal lives, and even kick the addiction. Moreover, such programs help keep drugs out of the black market and away from children.

I feel a chill reading the latest alarmist accounts of opiate abuse, with calls for crackdowns on doctors who overprescribe. Will I be cut off? A recent story in the New York Times describes the dilemma of emergency room docs faced with patients demanding opiates. How utterly degrading for all three parties: the patients with physical pain trying to persuade the docs the pain is real, the addicts trying to persuade the docs the pain is physical, and the docs who can’t easily tell the difference. It’s like the cops in Arizona, trying to decide if a brown-skinned individual might or might not be an undocumented immigrant. US opiate policy traces back a hundred years to a campaign against Chinese immigrants. Today, hundreds of thousands of Americans suffer inadequate treatment for pain, hundreds of thousands of low-income addicts live as pariahs, and many a dedicated pain-specialist doc faces prosecution, loss of license, and even prison.

I’m lucky. After three months, the pain is starting to recede. I feel awkward asking Dr. Martin, our family physician, for yet another prescription. As I hand the pharmacist $5 for a month’s supply, I worry that Dr. Martin will suspect I’m becoming addicted.

For more thoughts on illegal drugs, see “Economics of Illegal Drug Markets: What Happens if We Downsize the Drug War?” (2005), and “What Drives the War on Drugs?” (2011).

(1) Misreporting Social Security: You may have noticed dire headlines about a recent report from the Obama administration about the (ill) financial health of Social Security and Medicare, e.g. the New York Times‘s Social Security’s Financial Health Worsens. There’s a great piece at the Campaign for America’s Future by RJ Eskow about how the media routinely misreport Social Security and Medicare’s financial situation, the causes, and the potential remedies:

Here are some headlines you won’t see after the government releases new figures on Social Security and Medicare later today:

“Social Security Trust Fund Even Larger Than It Was Last Year”
“Growing Wealth Inequity Will Lead to Social Security Imbalance Later This Century”
“For-Profit Healthcare Poses Threat to Medicare, Federal Deficit, and Overall Economy in Coming Decades”
“Public Consensus Grows For Taxing Wealthy to Restore Long-Term Entitlement Imbalance”

Instead here’s what we’ve already seen:

“Aging workforce strains Social Security, Medicare”

That headline’s completely wrong, and yet it’s been repeated in dozens of different news outlets (sometimes with minor variations) as they run an improved, but still misleading, news story on Social Security and Medicare from Stephen Ohlemacher at the Associated Press.

Read the full blog post here.  Eskow mentions a piece in the Columbia Journalism Review by D&S pal Trudy Goldberg on the same topic of media distortion.

Jared Bernstein has a piece in Rolling Stone about Security (Straight Talk on Social Security). It’s a pretty good piece, responding to some of the myths about the Social Security trust fund.  But when he comes to talking about alternative ways of funding Social Security over the next 75 years, he mentions lifting the cap on income subject to payroll taxes (which makes sense), but also changing the price index used to calculate benefits, and making employer-funded health benefits subject to payroll taxes. Why would he mention lowering benefits as an option, and if he’s going to mention employer-funded health benefits, I wish he’d take the opportunity to mention that we should have single-payer. And then he mentions raising the retirement age and reducing the benefits of the wealthy as other funding options.  Yikes!  Bernstein says he’s not in favor of raising the retirement age, because “increased longevity is a function of income” (I would say of class), but I wish he’d made a more forceful argument against raising the retirement age;  then he says nothing about why reducing the benefits of the wealthy is a rotten idea:  it turns Social Security into a means-tested program rather than a universal program, paving the way for it to be eliminated as people regard it as more like welfare.

(2) Philly Schools Dissolving: This is a shocking story–we’ll be covering the background on school “reform” (corporatization and privatization) in our July/August issue.  Meanwhile, here are some links:

• A news story about the proposed five-year plan, from Philly’s City Paper;
• Commentary by a parent, from the Philly education site The Notebook;
• A joint statement, from the Philadelphia Student Union and Students United for Change.
• A great post by Bruce Dixon at Black Agenda Report on why the closing of schools in Philly isn’t causing a national outcry among the black political class.

(3) Tuna Fish Economics: Hat-tip to Neal M.:  a great piece in the Harvard Crimson taking down the despicable Andrei Schleifer after he said some ridiculous things as a guest lecturer at “Ec 10″ (the intro economics course at Harvard). 

(4) Piling on Mankiw: Speaking of Ec 10, it’s always nice to see people criticize Greg Mankiw, the main lecturer for the course.  Josh Bivens, at EPI’s blog Working Economics, asks: Did Greg Mankiw really just brandish his $170 textbook as evidence of the benefits of unfettered competition?  And Bill Black writes on Mankiw’s Ode to the Governmental Competition that Made Romney Wealthy at UMKC’s New Economics Perspectives blog.  And it looks like Bill has started a contest to find the worst parts of Mankiw’s texbook; the contest is called Mankiw Mendacity and Morality; the prize is a t-shirt.

(5) Mary Mellor on “Handbag Economics”: Our new pal Mary Mellor sent the link to a Youtube video of a talk she gave at the recent Just Banking conference in Edinburgh. (I see that Steve Keen also spoke there–I haven’t viewed the video of his talk yet.)  She uses this great metaphor of the banks, or the financial sector as an abusive husband, where the public is his wife. He puts her on a stingy allowance, but of course makes her borrow lots of money, on his behalf, when he gets into trouble (gambling? drinking?), but then he punishes her and starves the children. She explains it better than I could:

Yves Smith reposted something by Morgan Sandquist of the OWS Alternative Banking group that uses a similar analogy–the banks are “addicted,” and in “denial,” and require an “intervention.” Here’s the link to the Naked Capitalism post.

(6) No Word for Welcome: Last but not least, D&S author Wendy Call is receiving Grub Street’s National Book Prize for her book No Word for Welcome: The Mexican Village Faces the Global Economy, which started as a D&S article! There will be a ceremony on May 5th at Grub Street in Boston; details here.

—Chris Sturr

The evening before Easter, well wined and dined at a fine Italian restaurant, we have returned to my mother’s house in DC. My brother and I are extracting our 92-year-old mother from his giant Chevy Tahoe. We turn, and there is my husband Tom, crumpled in the gutter, a pool of blood spreading under his head. Call 911! In five minutes, there are – count them – three police cars, two fire engines, and a passing Good Samaritan doctor. In another five minutes, a battered ambulance. In a flash, the medics have put a collar on Tom, strapped him to a board and scooted him into the ambulance. We’re off, siren screaming! Tom groans each time we jolt over a pothole. As I thank the cheerful medic, I can’t resist adding, “This is why we pay taxes.”
At George Washington University Hospital, Tom disappears beneath a trauma team scrimmage. They slice off his best (and only) tailored Brooks Brothers suit, and wheel him off for CAT scans and x-rays. Meanwhile, he’s registered as “Pearidge, Trauma.” Pearidge? The trauma department gives a unique computer-generated last name to each patient.
I just finished reading two books by old friends: 99 to 1 by Chuck Collins, and The Self-Made Myth by Brian Miller and Mike Lapham.
Collins’ 99 to 1, How Wealth Inequality Is Wrecking the World and What We Can Do about It, starts by refuting the conventional proposition that growing inequality in the US results from factors beyond our control, such as the failure of education to keep up with the demands of technology or the migration of jobs overseas. Rather, growing inequality results directly from intentional policies implemented over the last 40 years: the end of regulatory control including antitrust enforcement, large tax cuts for the wealthy together with an overall shift to much more regressive taxes, poorer public schools, more expensive colleges, and the now unchecked flood of corporate money into campaigns. These policy shifts have not only enriched the 1%, and even more, the .01%, – they have reduced wages and employment opportunities for the rest of us. They also generated the giant fraudulent real estate bubble that crashed the economy in 2008, and perversely, the rescue that further entrenched the too-big-to-fail banks. Fortunately, a mobilized 99% – and their sympathizers within the 1% – is organizing to fight back. Collins offers them a long and helpful menu of strategies for the fight.
Miller and Lapham tackle The Self-Made Myth and the Truth about How Government Helps Individuals and Businesses Succeed. In a recent speech, George W Bush claimed that “If you raise taxes on the so-called rich, you really raising taxes on the job creators.” That’s the self-made mantra: A small elite creates wealth and jobs by their brilliance and heroic efforts, unaided by government. Taxing them kills the goose that lays the golden eggs. To the contrary, write Miller and Lapham, successful entrepreneurs in the US and elsewhere depend heavily on high quality public services: good transportation, good laws honestly enforced, excellent public education for themselves and their employees. Beyond that, great success arises from hard work and extraordinary luck, especially the luck of being in the right place at the right time. According to Malcolm Gladwell’s book Outliers: The Story of Success, that’s the story of Bill Gates and the other early computer billionaires. Miller and Lapham present a number of case studies of successful entrepreneurs who openly credit their success to the public services they enjoyed. A sad note, however. Most of Miller and Lapham’s success stories eventually sold out to giant multinationals. That suggests there’s less and less room in this economy for the productive midsize corporations that provide so much of the innovation and employment.
Two hours after we arrive at the hospital, the docs reassure me and my sister-in-law that Tom will be OK. A nasty bump on the head from tripping over the curb in the dark. The next day, Tom has a blue and purple eye to freeze Medusa. I bring him home from the hospital in donated clothes, pant cuffs safety-pinned up 6 inches. We’re too late for the family Easter dinner, but deeply grateful for a vital public service that still works, that provides equally good care for Pearidge in his Brooks Brothers suit and the homeless drunk snoring on the next gurney.