By Marshall Auerback, a market analyst and commentator. Produced by Economy for All, a project of the Independent Media Institute
It is understandably tempting to drop all the blame for America’s catastrophic response to COVID-19 on the big desk in the Oval Office. But there’s more to the story than epic incompetence, grift and delusion at the highest levels of government. The stark divide in the level of health care from testing to treatment is divided by wealth and the legacy of systemic racism.
In the words of Ed Yong of the Atlantic: “Chronic underfunding of public health neutered the nation’s ability to prevent the pathogen’s spread. A bloated, inefficient health-care system left hospitals ill-prepared for the ensuing wave of sickness. Racist policies that have endured since the days of colonization and slavery left Indigenous and Black Americans especially vulnerable to COVID-19.” Yong could also add Hispanics to that list, along with virtually any person of limited economic means, regardless of race.
In the land of the free and the home of the brave, income and zip code determine everything. And this is not a new phenomenon. In a recent article in Le Monde Diplomatique, historian Thomas Frank quotes physician Dr. Michael A. Shadid, who was a longtime advocate for cooperative health care from the 1920s onward until his death. In his 1947 book, Doctors of Today and Tomorrow, Shadid made the case for socialized medicine on the grounds that “[p]oor people get sick quicker, stay sick longer, need medical aid most, get it least. Some are poor because they are sick. Others are sick because they are poor.”
Nothing has fundamentally changed since Shadid’s time. The United States continues to have the most expensive health care system in the world, yet a 2019 comparison of health indicators in the United States versus those of Organization for Economic Cooperation and Development member countries’ average reveals a system that persistently produces inferior outcomes relative to other nations (in spite of higher expenditures) and has done so for decades.
COVID-19 has both amplified and revealed these long-standing flaws, tragically reflected in its death count, but it is by no means a historical anomaly. Earlier pandemics reveal a similar pattern, suggesting a more widespread systemic problem: namely, that the high death counts relative to the rest of the world are an inescapable consequence of our for-profit, pervasively oligopolistic health care system. The problems of a for-profit health care system are exacerbated by the diversion of resources and skills into militarism, and unequal food distribution systems’ effect on diet and obesity. All of these pre-existing problems contribute to higher mortality rates, as does access to proper medical care, which is heavily circumscribed by income.
In terms of fatalities, COVID-19 now ranks as one of the most severe pandemics in modern history, according to the Centers for Disease Control and Prevention (CDC). The most deadly was the 1918 influenza pandemic: 50 million deaths globally out of a worldwide population of 1.8 billion, or 2.7 percent, while the U.S. recorded 675,000 fatalities, or 0.65 percent on a per capita basis out of a population of 103 million. The only “good” thing that can be said about the 1918 tragedy is that the United States fared relatively better than the rest of the world, by this measure.
By contrast, a notable feature of four major pandemics over the past 63 years* (the 1957-1958 H2N2 influenza virus, the 1968 H3N2 influenza virus, the 2009 H1N1 influenza virus or so-called “swine flu,” and COVID-19 today) is America’s persistent underperformance in terms of fatalities relative to the rest of the world in spite of the vastly higher sums the country devotes to health care expenditures (in both absolute terms and as a percentage of GDP). For all of the talk about American exceptionalism, the only thing “exceptional” about the U.S. health care system is this profound systemic failure.
The 1957 H2N2 flu virus caused 1.1 million deaths globally out of a worldwide population of 2.9 billion, or 0.038 percent on a per capita basis; whereas in the United States, it caused about 116,000 deaths out of a U.S. population of 178 million, or 0.065 percent on a per capita basis. The 1968 H3N2 virus resulted in 1 million fatalities worldwide out of a global population of 3.6 billion, or 0.028 percent on a per capita basis; in the United States, there were 100,000 deaths out of a population of 203 million, or 0.049 percent on a per capita basis. The 2009 H1N1 virus caused far fewer overall deaths both globally and within the U.S., with 284,000 fatalities globally and a mere 12,469 fatalities in the U.S.; per capita fatality rates were the same (.004 percent on a per capita basis). But COVID-19 has reflected the reversion to American underperformance: as of August 13, confirmed global fatalities (out of a worldwide population of 7.8 billion) were 749,776, or 0.0096 percent on a per capita basis, versus 169,488 deaths in the United States out of an existing population of 331 million, or 0.051 percent on a per capita basis.
Even more disturbing is that American fatalities are profoundly impacted by income disparities. Low-income communities and BIPOC (Black, Indigenous, and people of color) are experiencing substantially higher rates of mortality. Examining by zip code the geographic distribution of the segments of the population most likely to die from COVID-19—BIPOC, as well as people over the age of 65, and those of any age who are nursing home residents (other than those in luxury elderly care facilities)—these three overlapping segments account for most deaths. It may be that in the northern states these most vulnerable people are heavily concentrated in densely populated areas and thus are quickly exposed to infection and die relatively soon after COVID-19 starts spreading in their area. The New York experience validates that assessment.
In the southern and western states, these most vulnerable populations are more widely scattered across vast suburban and rural areas, which likely explains why the United States as a whole has experienced rolling hot spots, in which the more diffuse population centers become infected and die relatively later after the initial outbreaks of the virus that were largely experienced in heavily urbanized regions. We see this pattern manifested in a recent Arizona compilation of new cases by zip code, as AZ Family reports using analysis by CBS 5 Investigates. Arizona has been one of areas most badly affected by COVID-19 during the summer months, and the AZ Family report illustrates that the hotspots for new cases are dominated by zip codes with “large minority populations” living in areas that are rural or on the outskirts of urban centers.
Why is this significant? David Dayen of the American Prospect explains: “Rural hospitals… are in total crisis in the U.S., with 19 closures last year and 120 since 2010. As hospital networks consolidate and strive for ever-greater profits, rural hospitals that fail to bring in the necessary revenue fall away.”
In the same piece, Dayen quotes a study from Health Affairs, which reports that “49 percent of the lowest-income communities had no ICU beds… whereas only 3 percent of the highest-income communities had no ICU beds.” He highlights an extreme example of this problem, originally reported by the Houston Chronicle: the Rio Grande Valley, along the Texas-Mexico border, “home to 1.3 million residents… [with] no public hospital. Starr County is one of the only in America to have to resort to triage, choosing who to care for and who to send home to die.”
Dayen’s analysis illustrates the fundamental flaw in the system: Levels of provision are a function of profitability; they do not reflect health care priorities. Hence the lowest-income hospitals are often shut down, which means worse health care outcomes for residents in these poorly serviced areas.
The other problem in Texas is that the state historically has also featured a high concentration of undocumented (largely Hispanic) immigrants (the second-highest “unauthorized immigrant” population in the U.S., behind only California), who are being forced to work even when sick, since they are, by virtue of their undocumented status, largely excluded from any and all virus-relief economic aid and access to primary health care. As ProPublica noted: “Texas is also the largest state in the nation that refused to expand health insurance for low-income residents under the Affordable Care Act… Nearly a third of adults under 65 in Texas lack health insurance, the worst uninsured rate in the country, and more than 60% of those without health insurance in the state are Hispanic.”
Furthermore, living in crowded multigenerational settings, workers infected on the job come home and risk spreading the illness to their parents and grandparents (many of whom may also have problematic immigration status in the country and risk deportation if they seek to address their health issues). Consequently, Hispanics are now suffering some of the worst health outcomes in the U.S.
With this information in context, it’s clear the more we lay blame at Trump’s feet, the further we’re going to be from confronting that COVID-19 fits neatly into a decades-old pattern of pandemic response. American health care can literally impoverish its citizens even as it undermines their physical well-being. Breaking the pattern can only happen if Americans keep putting pressure on institutionalized racism, get serious about inequality, and flip the switch on our employer-based private health care system.
*Franklin “Chuck” Spinney provided research assistance on the compilation and analysis of the pandemic data.
I’m grateful for the article. I feel better prepared when I have exact coordinates; numbers.
But the only way to lose the Pin the Tail on the Donkey game is to be blindfolded.
A wonderful piece. A great article explains how and why. But you probably knew the sky is blue before you learned the word “blue.”
The USP of neoclassical economics – It concentrates wealth.
Let’s use it for globalisation.
Mariner Eccles, FED chair 1934 – 48, observed what the capital accumulation of neoclassical economics did to the US economy in the 1920s.
“a giant suction pump had by 1929 to 1930 drawn into a few hands an increasing proportion of currently produced wealth. This served then as capital accumulations. But by taking purchasing power out of the hands of mass consumers, the savers denied themselves the kind of effective demand for their products which would justify reinvestment of the capital accumulation in new plants. In consequence as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When the credit ran out, the game stopped”
Wealth concentrates until the system collapses.
“The other fellows could stay in the game only by borrowing.” Mariner Eccles, FED chair 1934 – 48
Your wages aren’t high enough, have a Payday loan.
You need a house, have a sub-prime mortgage.
You need a car, have a sub-prime auto loan.
You need a good education, have a student loan.
Still not getting by?
Load up on credit cards.
“When the credit ran out, the game stopped” Mariner Eccles, FED chair 1934 – 48
Einstein’s definition of madness “Doing the same thing again and again and expecting to get a different result”
What was supposed to happen?
That must be why Keynes added redistribution to the capitalist system.
I wonder what will happen if we take it out again.
It gets worse ……
The Americans wrapped a new ideology, neoliberalism, around 1920s economics and repeated the economic mistakes of the 1920s.
Policymakers couldn’t see what Glass-Steagall did, as they thought banks were financial intermediaries.
It separates the money creation side of banking from the investment side of banking, and stops bankers producing securities; they buy themselves with money they create out of nothing.
(There are intermediaries involved so it’s not obvious, but this is effectively what is happening)
The whole thing turns into a ponzi scheme and you get a 1929 or 2008 type event.
1929 and 2008 look so similar because they are.
At 18 mins.
1929 and 2008 – Minsky Moments, the financial crises where debt has over whelmed the economy.
They did save the banks this time, which avoided another Great Depression.
They left the debt in place, which caused a balance sheet recession.
As a CEO, I can use the company’s money to do share buybacks, to boost the share price; get my bonus and top dollar for my shares.
Share buybacks were found to be a cause of the 1929 crash and made illegal in the 1930s.
What lifted US stocks to 1929 levels in 1929?
Margin lending and share buybacks.
What lifted US stocks to 1929 levels in 2019?
Margin lending and share buybacks.
A former US congressman has been looking at the data.
“The Great Crash 1929” John Kenneth Galbraith
“By early 1929, loans from these non-banking sources were approximately equal to those from the banks. Later they became much greater. The Federal Reserve Authorities took it for granted that they had no influence over these funds”
He’s talking about “shadow banking”.
They thought leverage was great before 1929; they saw what happened when it worked in reverse after 1929.
Leverage acts like a multiplier.
It multiplies profits on the way up.
It multiplies losses on the way down.
Today’s bankers seem to have learnt something from past mistakes.
They took the multiplied profits on the way up.
Taxpayers picked up the multiplied losses on the way down.
Excellent explanations! Thank you.
So we’ll just wait a month to see how the “cleansing” works when redistribution dries up, taxpayers can’t get more credit and states and cities loll in fetid air. Gettin’ Greece-y. Which ticket has the best method of saving the filthy rich?
“U.S. share prices dropped earlier this week when Republican Senate Majority Leader Mitch McConnell and Democratic House Speaker Nancy Pelosi disclosed there were no coronavirus talks scheduled. Stocks also weakened on Friday on July retail sales data.
“But House Republican leader Kevin McCarthy on Friday contended that investors are looking for “surgical” action on coronavirus aid rather than the comprehensive approach sought by Democrats with the $3 trillion-plus Heroes Act the House passed in May.
“If we went forward with what the Democrats asked for in that $3 trillion? I believe the market would drop hard because it would put greater debt on all taxpayers,” McCarthy told CNBC.
I think that a lot of policymakers knew exactly what Glass-Steagall did and went ahead with the repeal anyway. Their donors, handlers and such told them that there would be benefits accruing to all and sundry, wink wink. There was a big shift toward pursuing big money to support the Dem Inner Party, led by that irrepressible Clinton family and abetted by the loathsome Phil Gramm and his fellow travelers. They bought the DIP.
“Levels of provision are a function of profitability; they do not reflect health care priorities. Hence the lowest-income hospitals are often shut down, which means worse health care outcomes for residents in these poorly serviced areas.”
Wall Street, being the most important organism in the USA, sees no problem here…
Indeed, what good are those social benefits to fringe areas if it can’t be hyper profitable to a corporate enterprise somewhere?
As the article notes, income disparities are a huge driver.
> In Los Angeles County, California, Latinos are getting most clobbered and also suffering the highest mortality levels. This maps onto income level data.
>Whites, Asians, and blacks under-represented and Latinos over-represented:
>Demographics by area poverty:
When people are crammed into unsanitary workplace factory and slaughterhouse floors, and jammed into over-crowded housing, there’s no way to avoid contagion. In California, at least, some undocumented immigrants were slated to receive a paltry $50, even as the system distributing the funds malfunctioned:
“Within minutes after the phone lines opened, many people reported they could not get through, and by 10 a.m., an hour after it opened, many of the phone lines crashed.”
The whole article is the usual “correlation = causation” followed by the equally usual “since we have identified the cause we must do something…”. Here are numbers: in 1910 there were 106 million Americans- 88% white, 11% black and 1% “other” (Asian and latin). Immigration and ethnic chance was a huge issue. WW I stopped stopped immigration in 1914. When the war ended much of the center of the country was in open revolt on the issue- Congress refused to reapportionment the house based on the 1920 census (and why isn’t that ever mentioned?). A 1924 bill ended mass immigration and “froze” the quotas based on “country of origin” to prevent immigration-based ethnic change. From 1925-1970 that was the situation. Then the “cheap labor”, “NYC must be saved” and pro- 3rd world lobbies slowly moved the needle (with no announcement to the public). Births went from 90% white to 50%. No population in history has ever volunteered for this. And (surprise!) each group still largely acts like they did “at home”. So the zip codes reflect population change and what Yves calls “problematic immigration status”. And finally, No; it isn’t in the Constitution. . The Court said IN THIS ONE CASE “is” = shall”. Welcome to the revolution.
There are other reasons for the birth rate changes – primarily that better educated people have less children. White people tend to be better educated than many minorities, so… The millennial generation, along with the generations that follow aren’t having kids because they can’t afford them.
To me it’s obvious that Covid-19 has made the strongest case for Medicare for All. Not until there is free and fast testing, treatment and health care, will this pandemic come under control.
All other advanced industrial countries that have brought this virus under control have national health systems. Without that the pandemic will plague our nation for decades, continue to destroy our economy, and more people will needlessly die. Then again that may not be a bug, but a feature.