Just in time for Halloween (and of course, the midterms) the White House Council of Economic Advisers is stirring up a red scare. At least, that’s the clearest takeaway from a report on the “opportunity costs of socialism” released Tuesday. The most charitable reading of the report suggests the CEA doesn’t know much about socialism, and knows even less about the high costs of working-class life in America. Less charitably, the report deliberately misrepresents socialist ideas, and builds a glowing, if fatally flawed, case for American capitalist superiority.
First, the definitional problem. Socialism, in the CEA’s view, invariably favors top-down, totalitarian government. But the CEA’s definition doesn’t bear much resemblance to Marxist thought, at least as it influences the democratic socialism of politicians like Bernie Sanders, Rashida Tlaib, or Alexandria Ocasio-Cortez. Socialism doesn’t just demand the redistribution of resources, but of power, so socialist goals aren’t limited to the expansion of welfare. But power is a topic the CEA’s report diligently avoids. Socialism offers a political solution to economic inequality, but America, as the CEA constructs it, doesn’t have a problem with inequality at all. Many Americans would disagree. According to one Gallup poll released in March, only 32 percent of Americans say they’re satisfied with the nation’s distribution of income and wealth.
Historically, hyperbole and disinformation have been key to fearmongering about socialism. For socialism to be malicious, American capitalism must deserve salvation from it. As apologia is wont to do, the report promotes a second fantasy in order to counter its first. The CEA’s version of America is a seductive one: U.S. incomes are higher than those in Nordic countries; our cancer survivors live longer; more Americans receive tertiary education. The CEA’s America is so broadly prosperous that socialism threatens everyone, not just millionaires and billionaires.
This America sounds wonderful, but like many myths, it doesn’t survive scrutiny. This is particularly apparent in the CEA’s section on health care, which takes aim at Medicare for All and, more broadly, the notion of universal health care itself. On page 45, the report cites a 2010 study to assert “that the U.S. outperforms many European countries in the longevity of individuals age 75 and higher.” That claim is technically true, but it elides the fact that same study also says that “between ages 40 and 75, US all-cause mortality rates are among the poorest in the set of comparison countries.”
To further develop the argument that universal health care actually contributes to negative outcomes, the report cites another study to claim that “U.S. cancer patients live longer than cancer patients in 10 countries that belong to the European Union, after the same diagnosis, due to the additional spending on higher-quality cancer care in the U.S.” Death rates from cancer have certainly dropped in the U.S. But that doesn’t necessarily mean that Americans feel those gains equally across racial and socioeconomic divides. In fact, we don’t. “In one of the most recent papers on socioeconomic and racial disparities in cancer mortality, published in the Journal of Environmental and Public Health in 2017, researchers found that areas of the US that are more affluent, along with groups with higher levels of education and income, have lower cancer mortality than their poorer, less educated counterparts,” Julia Belluz reported for Vox. The CEA focuses solely on the quality of American health care, which is clearly important, but socialists are also concerned about access.
Data collected by researchers from Princeton University, the University of Zurich, and Panthéon-Sorbonne University reveals that though both France and the U.S. made gains in reducing mortality across income percentiles from 1990 to 2010, the U.S. retained a steeper gap between rich and poor. The difference was most evident in rates of infant mortality. In France, the rate stayed relatively flat across percentiles; in the U.S., the poorer a baby was, the more likely it was to die before its first birthday. The U.S. infant mortality rate has dropped since 2010, but the sharpest drops are concentrated in states that expanded Medicaid under Obamacare — more evidence in favor of redistribution.
But the report tries to dodge the reality of American inequality. American incomes, on average, are high, as the CEA report says. In 2017, a Pew Research Center analysis found that while the American middle class is smaller than the middle classes of most Western European countries, its income tends to be higher. But as Pew is careful to note, standard of living and quality of life are different measures. “To the extent that governments in Western Europe are more likely to provide services to households that may not be captured in household income, such as the National Health Service in the UK, it is possible that differences in the quality of life between the U.S. and Western Europe are narrower,” Pew stated. The comparatively small size of the American middle class provides another clue. In the U.S., wealth is extremely concentrated. A World Economic Forum report released in 2017 rated the U.S. 23rd out of 30 developed nations on its Inclusive Development Index, making the U.S. one of “three advanced economies with the highest levels of poverty and income inequality.”
Which country topped the index? Norway, one of the Nordic countries that the CEA report repeatedly targets for having comparatively lower income rates. Here, the report becomes particularly confused. In an attempt to explain why the authors believe that an output gap between Nordic countries and the U.S. is even greater than has been reported, the report credits American nonmarket household production to comparatively higher rates of homeschooling and in-home child care. Families homeschool for different reasons — religion being a popular justification — so setting that aside, America’s higher rate of in-home child care should have provoked the report’s authors to ask one obvious question. How much does American child care cost? CNN reported in 2018 that the average American family spends about 25.7 percent of its income on child care; single American parents spend about 52.7 percent of their incomes on the same need. Danish couples spend about 10.7 percent, single Danish parents spend 2.9 percent, and couples in 30 wealthy nations measured by the Organization for Economic Cooperation and Development spend 15 percent on average. CEA never mentions that disparity, focusing instead on incomes and tax rates.
A reader can only conclude that relatively expansive welfare states are the real target of CEA’s ire. But elsewhere in the report, CEA decries Medicare for All on the basis that it will inevitably result in cuts to entitlement programs. So which is it? Is welfare bad, or is it good? The CEA doesn’t provide an answer. Perhaps it isn’t even interested in the answer. The report is more a defense of the American status quo than it is anything else. Even as a purely ideological exercise, it lacks substance. Score one for the reds.