OP-ED

Us and Them-Ism

Us and Them
And after all we’re only ordinary men

The wanna-be congressman appeared with his neat hair and pressed suit, a competent yet compassionate expression on his face.  ”The first thing I am going to do when I get to congress is to work to repeal Obamacare,” he said, expression growing subtly angry.  ”I will do everything I can to give you back the care you need from those who think big government is the solution to every problem.”

My wife grabbed my arm, restraining me from throwing the nearest object at the television.  I cursed under my breath.

No, it’s not my liberal ideology that made me react this way; I’ve had a similar reaction to ads by democrats who demonize republicans as uncaring religious zealots who want corporations to run society.  I am a “flaming moderate,” which means that I get to sneer at the lunacy on both sides of the political aisle. I grew up surrounded by conservative ideas, and probably still lean a bit more that direction than to the left, but my direction has been away from there to a comfortable place in the middle.

It’s not the ideology that bugs me, it’s the use of the “us and them” approach to problem solving.  If only we could get rid of the bad people, we could make everything work.  If only those people weren’t oppressing us.  If only those people weren’t so lazy.  It’s the radical religious people who are the problem.  It’s the liberal atheists.  It’s the corporations.  It’s the government.  All of this makes the problem into something that isn’t the fault of the person making the accusation, conveniently taking the heat off of them for coming up with solutions to the problems.

Taken to its logical end, the “us and them” mentality leads to concentration camps, the Spanish inquisition, the gulag, or McCarthyism.  The problems this state of mind creates are much bigger than the ones it is trying to avoid in the first place.  Hate crimes are committed against people who aren’t like us, while others are demonized for voicing an opinion that go against the “right” way of thinking.  Both of these reactions are extreme, and both of them push us further from the solutions to any problem.

Us and them-ism is also a prominent feature in medicine.  Drug companies are evil, Medicaid patients are scum, doctors are too busy counting their money to care, and patients don’t listen to what their caring doctors say.  My conservative patients come in to the office assuming that all of the problems in health care are obviously caused by Obama, just as the liberals blamed it all on Bush four years ago.  They worry about me leaving medicine because of the passage of the ACA, not really knowing what kind of impact it actually has on primary care physicians.  Ironically, the one thing both conservatives and liberals agree on is term limits for congress members, as we all see that the “bad” special interest groups are controlling congress.  Maybe that’s more of the us and them-ism, but I can get anyone to laugh at a joke with a congressman at the butt.

“When you don’t have blood going to your head,” I explain, “you pass out so the blood can get to your brain easier.  Getting blood to your brain (and your heart) is pretty much essential…unless you are a member of congress, where having a brain or a heart seems to be a liability.”  I’ve gotten laughs from the right and the left on that one.

We unfortunately are soon to experience the pinnacle of us and them-ism: a presidential election.  Those who govern us leave governance and embrace pure politics. If Obamacare was the best possible law, the republicans would demonize it anyway to avoid giving the president the political upper hand.  The same would happen if there was a republican president; this is bipartisan power lust with no apology.

Yet the problem in my exam rooms remains: care is too expensive, there is more red-tape and less good care, more patients have no insurance than ever before, and doctors are getting really, really tired of dealing with this mess.  Patients die due to poor access to care (far more than most people realize), and many grow rich off of a system which pays more attention to shareholders of device manufacturers than to the patients with the devices in their bodies.

The intersection between health care and politics is the place where I lose my temper.  Politicians playing the power game with the lives of my patients are my arch nemesis.  This is insane.  This has to change.

When I was a medical student I did a cardiology rotation.  I had a patient who had a heart attack and was sent to the floor, seemingly stable.  I met her and her family, getting to know the situation as well as could be understood by a student.  I heard the overhead page for the code on the ward she was in, so I ran to see if it was her who had suddenly crashed.  My heart sank when I came to her room and saw a flurry of activity around her doorway, with her family somberly standing outside while people hurried in and out of the room.  Her husband’s eyes were tearful as I came up to the doorway.

“It’s Maria,” he said to me, “She just stopped breathing.”

I gave a weak smile to try to comfort him. “I’ll go and find out how she’s doing.”

She wasn’t doing well.  Her heart rhythm was nothing I had ever seen before and her face was ashen.  The respiratory therapist was assisting her breathing using a bag-mask and the nurses were attending to her IV.  The cardiology fellows I was working with on the rotation were in a corner, far away from the woman, arguing with each other.

“I think it’s a junctional rhythm with PVC’s,” said one with passion.

“No, it’s clearly a left bundle with a-fib,” argued another, with derision in his voice.

As the argument went on between the doctors, the woman grew more pale.  She was obviously dying.  I thought about her husband, not able to be with his wife as she lay dying in bed, away from him, instead being the subject of an academic debate about heart rhythms.

I felt sick.

The rhetoric on health care seems eerily similar.  The patient is laying on the bed dying while the politicians are vying for the upper hand in the debate.  The patients are ignored, though, serving as a tool with which to smear the other side.  Just like I felt when I was a medical student, I feel powerless to do anything while a tragedy unfolds before my eyes.

With, without
And who’ll deny that’s what the fightings all about
Get out of the way, it’s a busy day
And I’ve got things on my mind
For want of the price of tea and a slice
The old man died

Rob Lamberts, MD, is a primary care physician practicing somewhere in the southeastern United States. He blogs regularly at More Musings (of a Distractible Kind) where this post first appeared. For some strange reason, he is often stopped by strangers on the street who mistake him for former Atlanta Braves star John Smoltz and ask “Hey, are you John Smoltz?” He is not John Smoltz. He is not a former major league baseball player.  He is a primary care physician.

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35 replies »

  1. Steve H–

    This is all true. Many Democrats favored some form of tort reform.
    And in order to pass the legislation, Democrats compromised on many
    points, and included Republican proposals in the final legislation.

    But Republicans were adamant: there would be no Republican votes for the bill. I’m told that what they did to Olympia Snowe and one or two others who seemed inclined to stray was frightening.

  2. I’ve heard that the Democrats offered to include tort reform as part of the ACA if Republicans would agree to vote for the bill. They were told by their Republican colleagues that no matter which Republican amendments were included (and there were many that made it into the final bill) there wouldn’t be any Republican votes for the bill.

  3. Barry–

    In theory safe harbor proection is a good idea, but we don’t have a lot of
    “comparative effectiveness reserach” that would apply to “failure to diagnose.”

    Failure to diagnose is usually about “not doing something” Most recently,here in NY a little boy went to the ER, and the lab failed to tell the ER doctors that his tests showed a seriious infection.This doesn’t have anything to do with
    practicing evidence-based medicine.

    Failure to diagnose has more to do with: failing to take a good patient history;
    failing to really listen to the patient; jumping to a conclusion. There are no evidence-based rules as to what tests a primary care doc should order when
    a patient comes in complaining of stomach cramps. There is no
    comparative effectiveness research to protect the radiologist who fails to
    see the signs of cancer in the mammogram.

    Far and away the best safe-harbor protection I have heard of involves
    shared-decisionmaking. If a doctor follows the decisoin-making protocol (which is quite specific for many elective tests and surgeries) he explains the
    potential risks and benefits of the treatment. He explains that there are no
    clear answers (in most cases) as to whether the patient should undergo this
    test or treatment. In other wrods, he shares the “uncertainty” of medicine with the patient.

    The state of Washington has passed legilsation which makes it quite difficult to sue a doctor if he does this. I would like to see more states pass similar
    legislation.

    Finally, I would like to think (and do think) that as doctors become more aware of comparative effectieness reserach, they will follow it, not to protect themselves in a lawsuit, but to protect their patients.

    As for fraud– whether they are poor or rich, a certain number of people will lie and cheat.

    I dont’ think the poor are any more dishonest than the rest of us. If they’re under financial pressure, they might be inclined to lie about income when applying for a subsidy or Medicaid. But frankly, they don’t have the tools (lawyers, accountants, and schemes) that wealtheir people use when they cheat.

    Medicaid fraud is generally not designed by patients, but by doctors and businessmen. Patients become their tools, but patients don’t make the big money.

  4. Rob–

    I completely understand that few people have the time to wade through the
    legislation and absorb the details.

    As you say that is what I do for a living.

    But the main point of your post seemed to be that most politicians– Republicans and Democrats alike–were failing to represent the best interests of patients. You then went on to say that if only Democrats had been more
    inclined to compromise, it would have been a better bill.

    Now you’re saying that you really don’t know a great deal about the specifics of the bill.

    So how can you simultaneously say that Democrats who forged the legislation were doing patients a disservice?

    As I said initially, I usually enjoy your posts, but usually you write about medicine.

    In this case, you make have taken on a subject that you don’t know the way you know medicine–the legislation, how it was put together, and legislators, staffers, and people in the administratoin(HHS, Medicare) who worked long and hard to incorporate so many details from the MedPAC reports — planks in the legislaton that will help patients.

    Bottom line: Knocking the legislation, and those who created it, without knowing what’s in it seems unfair.

  5. Maggie: I am not here to argue specifics on the bill, especially with someone who does that sort of thing full-time. My expertise (as I said in other comments) is that of a clinician who has to live with the consequences. Would you care to argue clinical medicine with me? I am disappointed that you ignore the entire point of what I said, which is trying to look at the forest and not debate the trees.

  6. Maggie –

    The trend toward fewer malpractice suits is all well and good and so is the trend among hospitals to disclose errors and learn from them. However, if we want doctors to follow evidence based guidelines where they exist and even to push back against patients who think more care is better care even when it isn’t, the least we can do is give them safe harbor protection from failure to diagnose lawsuits when they didn’t order the extra test because the evidence based guidelines didn’t call for it. We’re not talking about wrong site surgery here. We’re talking about not ordering a PSA test and the patient later develops prostate cancer or not ordering the MRI and patient with the headache turns out to be the one in 10,000 that has brain cancer. Politicians who won’t vote for safe harbor protection care more about protecting the income of trial lawyers than reining in the growth of healthcare costs.

    As for the assorted poor people you describe, I’m not suggesting they’re rich or even middle class though some of them may be middle class if they have two or three modest incomes contributing to the same household. Many of these people are already either on or eligible for Medicaid even before health reform which is the underlying issue here. To the extent that a significant portion of their modest income is unreported to tax authorities, the IRS will determine that they are eligible for a larger subsidy than they would have received if they were completely honest and assuming they make too much to qualify for Medicaid.

    Just because you’re struggling economically doesn’t mean you’re not cheating or otherwise gaming the system which winds up costing honest taxpayers more than it should. I know that many liberals consider fraud mere collateral damage that we should just accept and tolerate but it erodes political support for well meaning and well intentioned programs and contributes to the perception that government can’t run these programs efficiently and loses way too much to fraud.

  7. Rob– I asked if you could give an example of something that the Democrats should have compromised on, and you replied: “I’m not specific here about the bill because I don’t think I need to.”
    Wel I guess that ends the discussion.

    Southern Doc– good point!

    Barry–I’m relieved to know you weren’t talking about a ‘flat tax.”
    I’m sorry I misread your comment.

    Since you brought up malpractice: did you know that both the number of malpractice cases, and the size of awards has shrunk significantly each and every year for the past 8 years?

    It’s become increasingly difficult to find a lawyer to take a malpractice case because it’s so expensive. There are many fewer plaintiff’s attorneys doing medical malpractice than there used to be. So-called tort reform has capped damages in some places, and created other obstacles to brining a case. (I’m now writing a post about this, and will provide evidence there.)

    The good news is that hospitals in Massachusetts are now following the enlightened strategy pioneered in Michigan: Rather than “deny and defend” they are choosing “full disclosure” of what happened, and if mistakes were made, compensation, without delay. They also apologize. .

    But honesty–and compensation– are what are most important.
    Patients are compensated both for economic damages and
    emotional suffering . This is far less expensive than stonewallling patients and families, and forcing their lawyers to go through a year or two of “disclosure” while they try to find out what happened.

    Most importantly, when hospitals, doctors and nurses freely disclose what happened they can then talk about what to do to make sure it doesn’t happen again. .

    If you read the newspapers you realize that reports of avoidable and tragic medical mistakes continue to mount. We must reduce medical errors, but to do that we must first report the errors. Nurses know what is going on. Many would like to talk. But in too many hospitals, the administration doesn’t
    want to hear what they have to say.

    On whether statistics on income distribution are misleading: I would have to see some evidence to believe that a significant percentage of the people that the statistics say are poor are in fact, lilving with adult children for free,
    making large amounts of money in an undeground economy, or are children filing taxes because they have investment income, etc.

    The evidence I do see– all around me– is that a great many people bagging groceries, working in car washes, delivering furniture, washing dishes etc. here in Manhattan are, in fact, poor. Many people just don’t see them. They don’t look at their faces. They’re the invisible poor.

    Then there are the poor that are harder to ignore– in the South Bronx, in parts of Brooklyn, in many towns in upstate New York. As I have mentioned,
    my daughter taught in a public school in the South Bronx for several years, and now teaches in Brooklyn.

    Probably you don’t spend much time in these places, but if you did, I think you would have a hard time believing what you say.

    On the “underground economy”–At one point, my husband owned a restaurant, and so I knew many young waiters and waitresses. When I was young I myself worked as a waitress, and back then knew many older professional waitresses working in a mid-priced restaurant.

    None of the waiters and waitresses I knew made even median income.
    The older waitresses worked until they died or became very sick. They couldn’t afford to retire. They looked (and were) run-down. They woudl talk about money– wanting to visit adult children, but couldn’t afford the the busfare, etc.

    The younger people I knew working in my husband’s relatively upscale
    restaurant were living on a shoestring, usually with roommates.

    In the restaurant business, the people who profit from the fact that it can be a cash business are wealthy restaurant owners who don’t pay sales taxes
    on their revenues. But these days that’s hard to do becuase most people pay via credit cards.. ( Once you take credit cards, there is a paper trail, and eventuallythe government is likely to catch up with you.

  8. Rammed through? I thought they voted on it according to the rules of the House and Senate. My mistake.

  9. Margalit_

    You wrote:

    “Perhaps you should care, because health and health care are inexorably connected to poverty, and poverty is rising at alarming rates….
    I don’t see the irony in any of this. I do see tragedy though. ”

    Yes, I totally agree.

    And you also are right that the majority of Democrat failed to adrress ther rise in poverty.

  10. Margalit –

    While I don’t have any magic bullet to fix the economy either, there are a few things I wish we could do that wouldn’t raise a huge amount of money but would improve the optics and make most people perceive that the playing field isn’t quite as tilted against them as it appears to be now. Specifically, if it were up to me, I would at least do the following: (1) as an alternative to Obama’s proposed “Buffett Rule,” and until we can get broader tax reform, I would include income from capital gains and qualified dividends as part of the base for calculating the Alternative Minimum Tax which it was prior to 1986. That means high income people would pay a 28% rate on such income as compared to the current 15% rate. (2) Tax hedge fund and private equity “carried interest” as ordinary income instead of capital gains as it is now. (3) Rein in CEO compensation. While I don’t know exactly how this could be implemented, I think CEO compensation is far in excess of what it needs to be to induce them to work hard on behalf of shareholders. I think it’s especially galling when they haul in huge pay for lousy performance. Even when they get sacked, the exit packages are enormous. It doesn’t look good even to me.

    Separately, if we can figure out how to bend the medical cost growth curve, there would be more money available for raises for the average worker. Unfortunately, none of this is easy. If it were, we would presumably have done it a long time ago.

  11. Barry, I hope you know that I also appreciate and respect your opinions, and I I consider plenty of fiscal conservatives part of my “us”.

    I know and appreciate that the reasons for the increasing disparities in wealth are many and are very complex. Nevertheless disparities are now higher than ever before in this country and this was never a good thing for either citizens or the economy. Certainly “fixing” the economy should help, but I am not sure we can “fix” the economy without addressing the root causes for disparities first, and even if we could, I am not sure what “fixing” would mean to 90% of Americans if they continue to see no benefit to themselves in increased wages and/or increased household wealth.

    Greg Mankiw wrote a blog a while ago reasoning how undue tax increases would reduce his productivity by reducing his motivation to write (work). I think stagnating wages, combined with visible, egregious and constant transgressions by the 0.1% are not exactly motivational for most of the country.
    I don’t think the US economy can be “fixed” by “job creators” for whom job creation is just one means of profit creation for themselves, and it seems that nowadays there are much better ways to create profits.
    The economy will need to be “fixed” by the people, and a government that truly represents the people, with the explicit goal of benefiting the people. All people.

  12. Margalit –

    While I know we disagree more often than not, I appreciate and respect your viewpoint.

    As I noted earlier, a key reason for the increase in inequality over the last 30-40 years is the sharp rise in the stock market as the wealthy own a disproportionate share of stocks. Another stock market crash would reduce that inequality considerably but the consequences wouldn’t be pleasant for the middle class or for many state governments, especially CA, which depend on a small sliver of wealthy taxpayers for a huge percentage of their income tax revenue.

    You may not be aware that the issue of who actually pays the corporate income tax is highly controversial among academics. Some, including many Republicans, think the owners of capital pay it. Others think it is at least partly pushed back on wage earners in the form of lower wages than would otherwise be paid. Still others think it is incorporated into the price of the products and services the corporation sells. I’m in the third camp. I note that prior to the passage of the Tax Reform Act of 1986, the U.S. corporate profits tax was 52% and was reduced to 35% by the legislation. Profits went up somewhat at first but over the following two years or so, the benefit of the rate cut was competed away in the form of lower prices and / or more service so the after tax returns on capital and equity for our largest companies did not change significantly from where they were prior to the tax reform legislation.

    At the same time, the employer share of FICA taxes is widely considered by economists to be paid by employees in the form of lower wages than they would have been paid in the absence of the tax while property taxes are passed through to tenants of rental property or incorporated into product prices by corporate owners of property that they occupy or use themselves.

    The broad stock market averages are no higher now than they were in the late 1990’s so there is really no more inequality now than there was then. However, when the economy was strong and the unemployment rate was low, there was more opportunity, jobs were easier to find, house prices were still rising and everyone felt better. Since we’re not likely to tax wealth (as opposed to income) anytime soon, at least until death, I think we would be better served if we try to fix the economy and get the federal government onto a more sustainable fiscal track.

  13. I think our differences stem from different definitions of “us” and “them”. At this point, I regard all politicians from both parties (with few notable exceptions) as “them”.

  14. Just a small point here, Barry, about the “ramming through”: If Obama would have stuck to his (our) guns and indeed rammed through a public option, I would understand your frustration. This thing that passed is in my opinion nothing more than corporate welfare and it is largely due to Obama & Co. trying to compromise with the other side of the house, similar to what Rob thinks should be done, I guess (maybe not).

  15. The irony is there because the rhetoric on the discussion became “us and them” rhetoric.

    I care about poor people, but the point of this post is not a discussion about poverty, but a comment on how politicians take my patients’ health (both rich and poor patients) and turn it into a political football they use for their advantage. I am an expert on what the patient in the exam room looks like. I am an expert on patients being injured, and even killed because of our system. My expertise comes from my face-to-face encounter with it every day. I know how bad care is, and how egregious the harm caused by bad laws can be.

    I am not, however, a political pundit, and know little about economics. Any comment I would make on the subject would be out of my league.

  16. Rob –

    I agree again.

    One issue Democrats could have tackled was sensible tort reform. Specifically, safe harbor protection from failure to diagnose lawsuits for doctors who follow evidence based guidelines where they exist would have been helpful. Of course, that would have meant taking on the trial lawyers, a key Democratic constituency. That wasn’t going to happen, especially in the Senate where they knew they needed 60 votes to pass anything.

    I think the biggest problem with the health reform law was its timing coming soon after the late 2008 financial system meltdown and the deepest recession since the great depression of the 1930’s. Even Chief of Staff Rahm Emanuel advised Obama to defer health reform in favor of trying to fix the economy.

    One can only wonder what might have been if 9/11 never happened and the wars in Iraq and Afghanistan never happened and the economy continued to grow at a respectable pace. There might have been money for health reform without busting the budget and there might have been a bipartisan consensus to do something substantive beyond the passage of Medicare Part D in 2003 which was implemented in 2006.

    In 1974, when Democrats made huge gains in the Congressional elections, a serious recession had set in just before that and even they recognized that there was no longer any money for new entitlement programs despite having been close to a health reform deal with then President Nixon the year before. Organized labor nixed the deal because they thought they could get a single payer system after November 1974 and pass it even over Nixon’s veto. Nixon, of course, resigned in August, 1974 and the recession killed prospects for any health reform at that time.

    Major new programs from Social Security to Medicare to tax reform are usually bipartisan and contain a reasonable blend of ideas from both parties. Obama and his party rammed this program through and now they wonder why it’s unpopular and they’re not getting more credit for it.

    Finally, the subsidies are likely to cost far more than the so-called experts at the Congressional Budget Office (CBO) project. I alluded to the underground economy and unreported income earlier but with significant subsidies in the offing, people will have even more incentive to minimize the income they report to the IRS which will be tasked with determining how much in subsidies each eligible individual is entitled to. Moreover, even at 400% of the Federal Poverty Level (FPL) income, subsidies will be substantial. At 401% of the FPL, they will be zero. This has budget buster written all over it.

  17. “Regarding the rich and the middle class, which is where all of the irony seems to be located, I don’t care a whole lot.”

    Perhaps you should care, because health and health care are inexorably connected to poverty, and poverty is rising at alarming rates.

    I don’t see the irony in any of this. I do see tragedy though. This is not about Democrats and Republicans because both parties are equally at fault for failing to represent the interests of the majority of people who elected them to office. This is not about liberals and conservatives either.
    This is about a small moneyed elite which is extracting inordinate benefits from this country, its infrastructure and its citizens.

    Barry, you may want to examine Google’s and other enlightened corporations tax avoidance activities. You may also want to examine Apple’s, and practically everybody else, globalization activities which translate not into plain expansion of skilled labor pools, but into brand new labor pools where no labor laws exist, so profits can be increased by exploiting children and other hungry human beings.

    The wealth disparity in this country is only comparable to the Robber Barons’ era and it is larger than any other, so called, developed country. OECD reports show that the US, compared to other developed countries, has the largest disparities in health care services as well.

    There is not going to be any coming together and holding hands as long as this greedy and selfish minority insists on its “rights” to exploit the remainder 300 million people living in this country (along with many more around the world), and history is replete with examples of what can happen when weak governments allow stuff like this to get out of control. Ironic? After almost a quarter of a millennium of trying to do the right thing, perhaps so.

  18. I am largely in agreement with you, but I think you miss a few things. CEO/management now makes about 20 times more than it did 30-40 years ago. We have not seen this same disparity in other countries. There is something unique about the US, and it is not that these execs are producing 20 times the results for their companies.

    It is also fairly clear that we have decreasing returns on labor. Not all of this is due to globalization. Much of it is also redistribution to management and to the financial sector.

    http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/07/27/corporations-are-saving-more-and-paying-less/

    http://www.livingstandards.org/wp-content/uploads/2012/02/Decoupling-of-wages-and-productivity.pdf

    Steve

  19. Democrats are not the only ones with good ideas. I would expect that people from both sides looking seriously to fix the system, both willing to give up on issues to get something that was a health care bill, not a political bill, would make something far better than bills that “survive” our political process. In general, creating good through cooperation is a far better way to make something than to make through a nasty game. I am not being specific here on the bill because I don’t think I need to. Surely you don’t think our political process is the best way to create good. Obviously there is compromise in the current system, but the compromise is more to avoid the sharp shooters on the other side of the political aisle than to make something for all people. Each group wants to please their constituents as much as possible rather than do what’s better the majority. Republicans help corporations to the detriment of the non-rich, while the democrats pander to labor and minorities, creating systems that don’t think about the financial consequences of these programs. I believe each side is untenable on its own, and only through compromise can we get something that will work.

    I believe the best bills are the ones everyone is equally happy and unhappy about.

  20. “Meanwhile, you would have everyone pay the same tax rate on all of their income –whether their household takes in $800,000 a year or $40,000?”

    Maggie –

    If you read my comment carefully, you would see that I never said any such thing. I said the top rate in the 1986 Tax Reform Act was 28%. There were rates starting at 15% at the lower end, 25% in the middle and 28% at the top after subtracting personal exemptions, the standard deduction or itemized deductions for the minority of taxpayers who itemize (30% these days as I noted previously).

    The income distribution statistics are distorted on four counts. First, there are millions of tax returns filed on behalf of children who have investment income that is relatively small but enough to require the filing of a tax return and above a very low threshold, taxes are due based on the parent’s rate, not the child’s. Second, there are lots of low income elderly people who are living with adult children or other relatives and thus have no housing costs. Many millions more own their home free and clear. With fully grown children, a debt-free home and no job related expenses, it takes a lot less money to support a middle class lifestyle than for a young family who just bought a home, has children to feed and educate and job related expenses. Third, the underground economy is all around us. Everyone from waiters and waitresses to small business owners to people in personal service businesses who don’t get W-2 forms have ample opportunity to hide income and they do. Whatever they report on their tax return, if they file at all, does not fully reflect the resources available to support their lifestyle. Fourth, living costs, especially for housing, vary enormously around the country. While living costs are very high in Manhattan where you live, there are lots of places where a decent house can be had for less than $100K and even a $10 an hour Wal-Mart sales clerk can afford a one bedroom apartment well outside of major cities where most of its stores are located. It’s not the income that you make that counts but the lifestyle that you can afford from the income you earn whether you report it or not and the cost of living in your area.

    Most tax experts, including those who worked on the Simpson-Bowles Commission, think we would be better off if we reformed our tax structure in a way that greatly broadened the base and lowered the rates, including the top rates while taxing capital gains and dividends as ordinary income. If the top rate were 28% or less, it would be perfectly fine to do this, in my opinion. On the other hand, if we had a top marginal rate of 45% or 50% or more as some liberals would prefer, it wouldn’t be fair to tax a business owner who built a business over decades and then sold it as he approached retirement and treated the gain from 30 or 40 years of value creation as though it were all earned in one year. At the same time, I think conservatives who resist higher rates on capital gains and dividends because it would hurt job creation are full of it. President Obama, for his part, is disingenuous when he tries to suggest to the middle class that if we just soak the top 2% of the income distribution, it would solve our fiscal problems. It’s not true and he knows it.

  21. Rob–

    I’m wondering where liberals could have “gotten better results” if they
    “moved further to the right”?

    What should they have given up on?

    I’m asking this seriously. From a doctor’s perspective, where (on what issue?) do you think they could have benefited patients, and wound up with a better piece of legislation if they went along with Republicans?

    (In particular, where did you the leadership ( Reid & Pelosi) held out for sometihing where they should have compromised? )

    As you say, Republicans simply did not want to hand Obama a huge
    legilsative victory. As Mitch McConell has said, there top priority was to make sure that he was a one-term presdient. And a signifcant percentage of
    Republican legislators (and Republican voters) don’t think that all Americans have a “right” to health care. Thus they don’t favor universal coverage.

    As a result, they were not ready to vote for the legislation even if Democrats
    compromised on more points. They didn’t want the legislation to pass– period.

    So I don’t see how Democrats could have turned this into a bi-partisan piece of legislation.

  22. Rob –

    I agree with you.

    The problem with our politics, as I see it, has two parts. First, in the House, computerized gerrymandering has created more safe seats that we’ve had historically which reduces the incentive to compromise from what it once was. Second, it seems to me that way to much of the electorate at election time rewards pandering, demagoguery, and negative campaigning while they penalize honest, straight talk about the difficult choices we face. We wouldn’t see so much negative campaigning if it weren’t rewarded. In short, we’ve met the enemy and it’s us.

    Separately, one more reason for wage stagnation over the last 30 years or so is the rapid increase in the cost of health insurance as healthcare costs escalated faster than both inflation and economic growth year after year until very recently. Total compensation grew faster than wages but health insurance gobbled up a bigger and bigger piece of total pay.

  23. Barry–

    The “middle-class” is, by definition, a band of people clustered around median
    income. Today, for a household, that is roughlly JOINTincome of $60,000– before taxes. Half of all households earn less; half earn more.

    So statisticaly speaking , couples with joint income of roughlyl $50,000 to $70,000 constitute the middle class .

    Sit down and try to calculatet necessary expenses for two adults and just one
    child (rent or mortgage) food, utilities, transportation to work, since public transportaiton is not available in most of the country, this usually means gasoline, care repair, auto insurance ) medical insurance, childcare while parents work (middle-class mothers cannot afford to stay at home.) property insurance clothing, Internet access, household items that need to be replaced over time(from sheets and towels to major appliances) , property taxes (whether they pay them directly or through their rent), home repairs,. etc. you will find that a middle-class family with, say, $40,000 to $55,000 in
    after-tax income has very, very little left to put into a savings account for a child’s college education—or his or her own retirement.

    And you would like to raise this family’s income taxes?

    You would take away his mortgage deduction? (Without that deuduction very, very few Americans earning less than $100,000 a year would be able to even
    consider owning a home.

    You might ask: “Why should they have a home?” It’s hardly a “right.”
    The answer is that in many parts of the country, rents are now unaffordably high— and constitute a poor use of money.

    .In addition, middle-class families, like wealthy families, aspire to having a small backyard where children can play safely, a swing set, etc.
    Finally, middle-income and low-income rental properties in this country are generally very poorly maintained by their landlords.(My 33 year old son just bought an inexpensive house. Before that, he was renting for 12 years in various parts of the country: Upstate New York, Baltimore, North Carolina. I saw where he lived, and how the apartments were maintained.)

    Meanwhile, you would have everyone pay the same tax rate on all of their income –whether their household takes in $800,000 a year or $40,000?

    This would make us the only country in the developed world that didn’t have a progressive tax rate. Perhaps all of those other countries are wrong, but I don’t think so.

    As to “where the money is”: ” In 2010, the median family had assets (including their house but subtracting their mortgage) of $77,300. The top 10% had almost $1.2 million, or more than 15 times as much.”

    As for income, the top 10% took in roughly 47% of all income– up from roughly 32% of all income in 1980.
    Within that group, Those in the top 10%-5% had incomes of $108,000 to $150,000 while those in the 5-1% (showed incomes between $150,000 and $352,000)The top 1% earned over $352,000.

    Barry– that’s where the money is. The top 5% to 10% should be paying more in taxes to help support those not only at the bottom, but in the middle of a ten-rung wealth and income ladder

    Notice I’m not saying that the top 1% should absorb all of the increases, or even the top 2% to 3% — though they are paying such low rates (by historiocal standards) and have amassed so much of the nation’s wealth that they definitely should see rate increases.

    The top 5% can afford to contribute more — maybe the top 7% to 8%– and now we’re talking about a sizable group of people.

    The broad middle class cannot pay for health coverage etc. for the broad middle class becuase that is NOT where the money is. They can barely
    maintain their households.Meanwhile, saving for college or retirment is becoming tougher and tougher.

    Wealth and income inequality is undermining not only the society, but the
    economy. Compare the U.S.economy today to the economy in the mid 50s to 60s when wealth, income and taxes were distributed far more equitably.

    Finally I agree, capital gains should be taxed at the same rate as earned income. (I would tax dividends at a lower rate in order to encourage people to invest for dividends rather hoping to strike it rich with capital gains. Investing for dividends is much safer for most people, and it encourages companies to pay out dividends . . )

  24. You guys do pick up the irony of some of these comments in light of the subject of the post, don’t you? This is the unfortunate thing that happens in politics. While I agree with Maggie that the passage of the ACA was momentous, it would have been far better and sweeping if democrats and republicans were not so bent on winning political battles. Again, re-election seems more in the minds of our politicians (as well as the party head count in congress) instead of crafting something that has bits from both sides. Nobody on the right wants to be identified as the one who went with Obama (those who have tend to lose in their primaries), nor would the democrats move to the right to get better results. As it stands, politicians must fall on their swords if they want to accomplish something that is not polarizing. My point regarding the political ad in the beginning of the post is that a republican is campaigning not on what he will do, but what he will undo, and that’s infuriating. It’s not that I like the ACA so much, it’s that campaigning based on doing less than nothing is now a viable choice.

    Regarding the rich and the middle class, which is where all of the irony seems to be located, I don’t care a whole lot. That’s an issue outside of my interest because I am writing about health care, and am seeing the damage on individuals (more poor than wealthy, but plenty of harm to go around) in my exam rooms. Some of my Medicaid patients are milking the system, but not all of them. Some of my wealthy people act like I’m their servant, but not all. The painting of people (and political views) in absolutes is far more damaging than the harm done by the people on the extremes. The problem is that we are becoming increasingly extreme in our politics – the one thing that should bring the two sides together. Right?

  25. Margalit –

    I think you’re off base on this one. I don’t see how mega wealthy people like Warren Buffett, Bill Gates and the founders of Google and Facebook among others have “extracted all the wealth for themselves.” Since the early 1980’s, the Dow Jones Industrial Average went from around 800 to over 13,000 while wages in the middle and lower middle made little progress, in large part, because of globalization driven by education abroad and technological advances that built so much technology into machinery and equipment that many jobs were effectively de-skilled and performable by millions of people around the world who couldn’t do them previously. Stock prices went up due to a combination of economic growth and interest rates coming down from double digits to the mid-single digits by the end of the 20th century and then to the record low rates that we have today.

    Corporate executives, for their part, derive most of their compensation from stock options and restricted stock awards which, by the way, are largely paid for by shareholders in the form of earnings per share dilution rather than by customers in higher prices.

    If you’re referring to supposedly greedy bankers, nobody forced people to buy houses that they couldn’t afford or refinance them multiple times while extracting cash when house prices were rising in the belief that they would continue to go up forever. I’ve never heard of a homeowner who sold his house for, say, a $100K profit going to the bank that provided mortgage financing and said here’s $10K for the bank. Thanks for your help. Homeowners and individual speculators and house flippers all thought they were geniuses when prices were rising but, as we say on Wall Street, “no tree grows to the sky.” There was plenty of blame to go around for the collapse in housing prices including our politicians.

    With respect to health insurance companies specifically, even if the top 25 or even 50 executives of every health insurer all worked for free and the savings were passed on in lower insurance premiums, rates would be reduced by a fraction of one percent at most.

  26. I’m sure “the broad middle class” would be happy to pay for “the broad middle class” if the minuscule upper class wouldn’t extract all the wealth for itself in the first place and push the “middle” into outright poverty.
    As strange as it may seem, you still can’t have the cake and eat it too….

  27. Maggie –

    I think way too many people, especially in the broad middle class, want more from government at all levels – federal, state and local than they are willing to pay for. They want someone else, presumably the rich, to pay but they don’t want to pay any more in taxes even if they strongly believe that everyone should have access to health insurance and know it would cost more to achieve that. With respect to the PPACA specifically, the taxes that were raised such as extending the Medicare tax to investment income of people who earn more than $200K (single filer) and $250K (joint filer) starting in 2013 only apply to the top 2% or so of the income distribution. The so-called taxes on drug and device manufacturers and insurers will just be passed through in higher prices one way or another.

    Suppose there were a summit to deal with the federal fiscal imbalance and all the interest groups were called in to device a solution. I think you would be hard pressed to get farming interests to propose cuts in farm subsidies, defense contractors to accept cuts in defense spending, the AARP to accept phasing in a later retirement age or other benefit adjustments or the broad middle class to accept higher taxes even if taxes at the top of the income distribution were raised back to the Clinton era rates.

    I’ve said before that, if it were up to me, we would go back to the 1986 Tax Reform Act rates where all income, including capital gains and dividends, were taxed at the same top rate of 28% even though I benefit from the current 15% top rate on capital gains and qualified dividends. I would also like to see the tax base broadened significantly by phasing out the tax preference for employer provided health insurance and the mortgage interest deduction. That would further support lowering the rates for the broad middle class and / or increasing the standard deduction which is already used by 70% of all filers.

    That all said it’s also important to note that taxes at the state and local level have gone up a lot in recent decades. In NJ where I live, for example, the top income tax rate is 8.97%. We didn’t even have an income tax until 1976. We didn’t have a sales tax until 1966. Property taxes have also skyrocketed. The property tax on the house I live in was $450 per year when it was built in the early 1960’s. Now it’s $8,500 and the average NJ resident pays 11% of income in property taxes. The Consumer Price Index during that period is “only” up about six fold or so. The bottom line here is that too many of us are just selfish and hypocritical including lots of those who congratulate themselves for advocating for warm and fuzzy ideas like universal health insurance. As I’ve noted many times, in the end, the broad middle class has to pay for the broad middle class because that’s where the money is.

  28. Rob–

    I totally agree that one cannot generalize about groups of people. (Italians, Irish, New Yorkers, Californians, etc._)

    But when people are not just born into a group as children, but choose to identify themselves as part of a group when tney are adults (calling themsevles conservatives, libertarians, progressives) this tells you what they believe in.

    It’s worth pointing that not all wealthy people are conservatives who are reluctant to pay taxes. Think of Warren Buffet. He chose to take liberal position on taxes–everyone has that choice.

    Finally, I agree with you that the “present group fo polticians” in Congress is “much more geared twoward political ends than good governance”

    But what I view as a pretty mediocre Congress (the legislators in office in 2010)
    managed, against great odds, to produce the first health care legislation that his country has ever seen, that guarantees nearly universal coverage.

    For decades some very good men and women tried to achieve this, and were
    defeated.

    People like Nancy Pelosi and Harry Reid– as well as other politicians — realy stuck their necks out to make this happen. As a result, Pelosi lost her position as speaker of the House (she knew this would happen ) and Reid i nearly lost his seat in Congress (he also knew this was a serious risk, but nevertheless, went ahead and supported universal coverage.)

    Finally, at a time when the U.S. has a higher percentage of children living in poverty than any other developed nation in the world, and when wealthy conservatives still rail against raising taxes on people earning over $200,000 a year to late 1990 levels, I think that “uncompromising idealism” is necessary.

    I particularly admire progressive politicians like Elilzabeth Warren who has been described as “unyielding and fearless” in a piece that quotes David Axelrod: :

    “What stood out to me was an unstinting sense of advocacy,” said David Axelrod, a top White House adviser when Warren was in Washington. “She really had a very strong identification with the struggles of everyday people.”

    Of course, this has made some people angry. But the truth is that you cannot compromise with people who believe it is right to let credit care companies
    cheat and gouge middle-class consumers, particuarly at a time when American’s middle classs (couples earning joint medain income of roughly
    $60,000) have a hard time raising a family.

    When it comes to health care reform, I didn’t think progressives should try to hold out for single-payer. Most Americans don’t want single-payer; it would never pass Congress, and as a practical matter it would be extremely difficult to pull off.

    . But I did think that liberals should hold out for preventive care without co-pays, full coverrage of essential benefits, the indivdual mandate, and insist that insurers could no longer discimrinate against people suffering from
    pre-existing conditions.

    They did all of that. This wasn’t playing an “us” vs. “them” game at
    the expense of your patients. They were representing your patients.

    They also raised taxes, provided funding to double the capacity of community health centers, and greatly increased funding for scholarships for med students willing to “go where few will go” back to pre-1980 levels. (Those scholarhips were cut after Reagan came to office and that funding was not restored until now. These scholarships will make it possible for many med students coming from low-income families to go to med school, and then
    go back in work in the communities where the grew up– poor rural communities, inner cities. )

    I think of “us” as men of good will, who possess the imagination to think
    collectively — and to realize “that there but for fortune . . ” Unfortunately, there are people in this country who are extraodinarily greedy, selfish or simply mean-spirited. Some are racists. Some are misogynists. Some feel no compassion for the poor.

    If its “divisive” to say to stand up against these people, so be it. Some things are simply wrong.

  29. Excellent post, and excellent reply to mm. She can’t abide having both sides attacked because one of the sides if hers.

  30. I am not saying I don’t see anyone as “them,” but simply saying I am not going to group all conservatives or liberals as “them.” I am angry at politicians who play the “us vs. them” game at the expense of my patients. This is a rant, so obviously I have a strong opinion.

    I think the present group of politicians are much more geared toward political ends than good governance. Governance takes compromise and pragmatism over uncompromising idealism. I see both democrats and republicans falling frequently to the partisan trap. The democrats who see republicans as only problems, or vice versa, are ignoring the fact that we are an “us” in a bigger sense. “Us” is both democrats and republicans, all of us. Politicians should lead us in this way, not embarrass us with their partisan divisiveness.

  31. Rob–

    I generally like your posts, but this one is a bit confusing.

    You begin by suggesting that you’re a moderate–in the middle– and don’t view anyone as “them”.

    But by the end, it is clear that there are “them’s”– Peopce who care more about the shareholders of device companies than patietns with devices embedded in their bodies, politicians playing power games with your patients, uncaring egotistical doctors who are far more concerned about being right than comforting a patient . . .

    Finally, you seem to think that all poiticians really care about nothing except power. Do you honestly believe that Ted Kennedy, Jay Rockefeller Elizabeth Warrne—- just to name three — do not care about people on Medicaid, or dio not believe that everyone should have healthcare, even if that means that most of would have to pay higher taxes?

    At this point in time, both politicians and the Americans they represent are, to a greater degree than ever, divided into two groups: those who believe that
    we should think collectively, about what would be best for all of us, and those who believe that our primary reponsiblity is to worry about “myself and my family.”- (I am not my brother’s keeper.)

    Those two very different philosophies represent two very different sets of values. One group values egalitarianism, the other group puts individual freedom first.. .

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