Boots and Sabers don't know much about health care history

The Brawler has asked before why anyone reads Ole Lady Owen Robinson's Boots and Sabers blog given his nigh-invincible ignorance on virtually any issue he addresses (Did you know Israel kicked Hezbollah's ass last summer? That the elderly spent their last days in dignity during some pre-Social Security golden age? That Scott Walker is a man of enormous magnitude?)

Here's his Bancroft Prize-winning history lesson from June 26:

The current health care system is all kinds of screwed up.  One of the primary sources of this problem is our historical blunder into employer-provided health insurance.  This quirk of the system came about during FDR’s administration when he froze wages, so businesses were forced to offer other benefits in order to attract employees. 

The next day, in comments on another post, some poor soul actually asks Owen "Why do so many employers offer health insurance as a benefit?  Shouldn’t companies just offer more in salary and let us buy our own?"

Owen responds:

Actually, this is because of government tinkering with the private market.  In the 1942 Stabilization Act, the government limited how much employers could increase wages.  So employers could not attract needed workers with higher pay.  But they could offer extra benefits, like health insurance, to attract workers.  This is the kind of unintended consequence that can result when government meddles in the private economy.

For a rightist like Owen, this historical anecdote is manna from heaven. Government intervention in health care screws up health care. Therefore Healthy Wisconsin is a bad idea. Therefore we should trust our future to HSAs.

Unfortunately Owen has to engage in historic revisionism of the most extreme sort -- i.e. making shit up -- to make this point.

Even a casual whiff suggests argument reeks of mendacity. Why? Because in neither telling does Owen explicitly say what event drove FDR to "tinker with the private market" by capping wages. What was that event? Oh yes: World War II, the most economically stimulating event in U.S. history. The logic behind wage caps was to prevent runaway inflation from crippling the home front.

The fact that Owen would deliberately leave out this piece of context -- and omitting this piece of  context can't be anything but deliberate for a for a self proclaimed student of military history like Ol Lady Owen -- suggests that there's something deeper amiss in the argument.

And there is. Namely, far from "[coming] about" in 1942, employer provided health insurance had been on the rise and evolving for decades and its growth was accelerating.

Consider:

• Between 1928 and 1935, the proportion of large employers providing health insurance jumped to 34 percent from 16 percent.
• In 1937, 2.6 million to 3.6 million people were covered by some sort of commercial or private plan, including employer insurance. By 1940, approximately 12 million people -- one out of every 10 Americans -- were in some type of private health plan, half of them in Blue Cross (in which many large employers enrolled their employees).
• By 1939 unions were negotiating for health care benefits in collective bargaining.

(First two bullets from Jacob Hacker's "The Divided Welfare State." The third comes from "Harry S. Truman vs. the Medical Lobby.")

Employers offered these plans (and in the 1920s created corporate mutual benefit associations) to retain employees and to keep out unions -- increasingly a losing battle.

Now, the government's anti-inflationary actions might have accelerated the spread of employer-provided health insurance. After all, by 1945, 32 Americans were covered by some sort of private health plan (Hacker).

But significant proliferation likely would have occurred anyway. With a labor market tighter than the Ramones -- which is why blacks and women were being hired in droves -- workers, represented by a nascent labor movement, would have been in position to demand health insurance.

(Legalized extortion, Owen and his ideological fellow travelers might say. The making of the American Middle Class, the Brawler would respond.)

Also, Owen's argument ignores that 65 years have passed between 1942 and today. Certainly if American business wanted to reverse the wrong of employer-provided insurance they could have done something about it -- after all, the Republican congress curbed the expansion of organized labor with the Taft-Hartley act.

But of course, American business and its trade associations fought tooth and nail to preserve employer-based insurance after the war. Why? Because it was the preferable alternative to a national health insurance system proposed by Truman (Meanwhile union leaders, recognizing the unsustainability of employer-based insurance, supported a national plan.)

So, far from being an imposition, the employer-based insurance system was something created by and actively defended by employers.

Far from being a "quirk" of American capitalism -- or an "unintended consequence" of government intervention (man, rightists feel smart when they can drop the phrase "unintended consequence) -- it was a deliberate feature.

So, for those keeping score at home: Today's health care predicament can be blamed on the WMC and Owen Robinson's "intellectual" godfathers who got the system they wanted ... and bequeathed a smoking ruin to us. (Is that what people mean when they refer to a "conservative tradition"?)

And, yes, not for the first time reality contradicts Ol Lady Owen Robinson.

Comments

[John Foust]

Not only did I ask them why they wouldn't rather have money than benefits, I asked why they so eagerly surrender their almighty power of personal freedom to their employer when it comes to their "choice" of health care options. Lots of tooting about choice, yet no one mentions that elephant in the room. Their employer can "choose" another plan for them as often as they want, and they say "thank you sir may I have another." I might want to work for someone, but if I held personal choice paramount, why would I want them to choose my health care? What other personal decisions would they like to surrender to the boss?

As for causes, if I had to close my eyes and guess before researching, I'd guess there was an employer tax benefit for offering health care, so they certainly don't want to talk about eliminating that.