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 rates have 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....
The bill is the most sweeping piece of federal legislation since Medicare was passed in 1965. It aims to smooth out one of the roughest edges in American society — the inability of many people to afford medical care after they lose a job or get sick. And it would do so in large measure by taxing the rich.
This is the real reason that Republicans were so outraged about the bill. They argue that this legislation is socialism, that it's un-American to provide medical care to the less-well-off by taking money from the well-off. Some nutjobs around my school even argue, seemingly counterintuitively, that it's un-Christian to do so—since it forces individuals to give to charity, an act that should be chosen freely.
Such criticisms are grounded in a central misconception (and perhaps a willful one) about the nature of our society and our economy. Republicans love to talk about the free market, as if it's simply a state of nature that government interferes with at its peril.
But in fact the "free market" is a human construction that has evolved over centuries and is constantly being tweaked and manipulated by human beings. The invention of money, the system of lending, the Federal Reserve bank—all of these types of things are specific human inventions that have been designed to engineer an economy. There's no such thing as the "free market." There's just a series of rules and practices that have been set up to encourage individuals and corporations to make exchanges in order to provide our society with what it wants and needs. And those rules and practices are constantly being refined and adapted.
At various points in our history, the government has stepped in to refine the rules of our economy when the wealthy get too powerful. The most stark instance of such an intervention, as I discussed here, was when the government abolished slavery, thus taking away much Southern wealth and delivering it to former slaves.
Southerners, some of whom didn't even own slaves, considered this transfer of wealth to be tyranny. John Wilkes Booth, after shooting Abraham Lincoln, referred to him as a tyrant. Plenty of Tea Party types these days are calling Obama a tyrant.
It wasn't tyranny, though. Our society, through its elected leaders, made a decision to shape our economy this way—guided as well, perhaps, by moral principles. And we've made other choices over the decades: child labor laws, public schools, Medicare, tax breaks for homebuyers. The recent Supreme Court decision about corporations and campaign contributions was a decision that affects the economy as well.
The "free market" is constantly being shaped and re-shaped. Politics is mostly about how it will be shaped. Contrary to the ridiculous demagoguery of the Republicans in the final hours of the health care debate, all that's happened here, really, is American politics as it was designed to operate: after years of leaders who chose to shape the economy to concentrate wealth toward the top, the American public elected a group of leaders (Obama most powerfully) who wanted to tip things back the other way.