who ... ventures to live only by the aid of the Mutual Insurance Company

April 2, 2014 7:09 PM

Risk Sharing

The furious to-do about Obamacare has obscured a basic fact about modern Americans: most of us, certainly the middle class, are sheltered by a complex web of insurance. Some insurance coverage is privately provided, such as life, accident, fire, flood, travel, liability, burial, and consumer product insurance. And some is government-provided or -required: Social Security, Medicare, unemployment, bank deposit, car, health, mortgage, food, crop, disaster insurance, and so on. All of these, without which American middle-class life as we know it would not be recognizable, are relatively recent developments.

The Risk Ownership Society

It is cliché now to say that we live in a “risk society.” We simultaneously celebrate “risk-takers” and blame those who undertake “risky speculations” without much pausing over the contradiction. Freaks of Fortune, by Jonathan Levy, is a history of the United States refracted through Americans’ evolving conceptions of financial risk. “Risque,” according to Levy, evolved from an arcane term-of-art in maritime insurance to the very anchor of what it meant to be free in nineteenth-century America.

Risk as We Know It, by Jonathan Levy

Sometime during the 19th century it became all but impossible to imagine the modern condition without the word "risk." By 1871, Whitman was able to invest risk with great lyrical power. Capitalism—an economic system that thrives on radical uncertainty—was asserting control. Mean­while, men had begun to insure their own lives, brokers had begun to sell mortgage-backed securities, and farmers were beginning to buy commodities-futures contracts. Uncertainties and anxieties—some old, some new—had to be managed and coped with, perhaps even capitalized upon. Risk management was born.

Risk Is the Most Important Issue in American Politics

The Shrinking Safety Net

In “The Great Risk Shift,” he [Jacob Hacker] tells the story of the decline of economic security over the last 30 years. Each piece of the story — the slow death of guaranteed pensions, the erosion of health benefits, the time crunch faced by two-income families, the rise of layoffs — is familiar. But Hacker provides an overview, showing common causes and suggesting a solution that revolves around the simple idea of insurance. Just as groups of people, not individuals, bear the risks of hurricanes and car accidents, so should societies bear much of the cost of illness, old age and unexpected job loss. “Over the last generation,” he writes, “we have witnessed a massive transfer of economic risk from broad structures of insurance, including those sponsored by the corporate sector as well as by government, onto the fragile balance sheets of American families.”

Live At Your Own Risk - "Yale Political Scientist Jacob Hacker says the widening gap between rich and poor is a “great risk shift” from collective institutions to individuals." His book was reviewed by Crooked Timber
Jacob Hacker: The Privatization of Risk and the Growing Economic Insecurity of Americans

finally, A New Wall Street Looting Scheme: Disaster Savings Accounts

The title is from Thoreau's On the Duty of Civil Disobedience

posted by the man of twists and turns (15 comments total)

Disaster Savings Account? Something something and the horse they rode in on.
posted by tilde at 8:06 PM on April 2, 2014 [3 favorites]

Bootstraps, no matter how intricately woven together, make a terrible safety net.
posted by cacofonie at 8:11 PM on April 2, 2014 [19 favorites]

Great post. Thanks again, man of twists and turns.
posted by koeselitz at 9:09 PM on April 2, 2014 [1 favorite]

These are great links. Thanks, tmotat.

Within my lifetime being an American went from being a part of a Great Society where we all looked out for each other to being just another beast among the herd where nature — red of tooth and claw — sees to the halt and the lame.

Not that I'm bitter.

Sic transit gloria Civitatum Foederatarum.
posted by ob1quixote at 9:13 PM on April 2, 2014 [9 favorites]

Welcome to the plantation.

There will be no revolution to not televise.
posted by Pudhoho at 10:19 PM on April 2, 2014 [4 favorites]

Social Security and unemployment do not exist, really. It's a lie.
posted by KokuRyu at 1:05 AM on April 3, 2014

Social Security and unemployment do not exist, really. It's a lie.

Yesterday my wife and I were on the phone with our insurer to find out if our $18,000 worth of health insurance with blue cross blue shield would cover the vaccination tests/boosters required for our green card process. Their answer was a call center "we don't know". Our primary care physician doesn't know. The bloodwork clinic doesn't know. The INS certified physician doesn't know. So we have to get the treatments and hope they are covered in some sort of medicine version of roulette where we don't even get to see the wheel spin.

We can't even figure out the risk. It's as if the system is designed to induce anxiety. Which may or may not be covered.
posted by srboisvert at 5:40 AM on April 3, 2014 [11 favorites]

srboisvert - screw the call center, have them bump you up and talk to the ombudsman. You don't have to put up with that kind of crap.

Agreeing with this being a fantastic post, but makes me feel so helpless and bitchy.

I'm at the age where one should have 3x their annual salary in retirement savings already. My coworker joked she could do that easily; just quit and go work at a minimum wage job and she'd be there.

Gotta get beyond occupyxyz.
posted by tilde at 5:50 AM on April 3, 2014 [3 favorites]

Used to be that the 1% simply owned the collective institutions that sheltered the middle class from risk. Now what are they going to do with their money?
posted by mygoditsbob at 6:29 AM on April 3, 2014 [1 favorite]

I think the Disaster Savings Account is more about taking advantage of people's heightened awareness after a disaster and taking money from those who still have a house standing:

The DSA Act has been endorsed by Lowe's Home Improvement, The Home Depot ... National Association of Home Builders ...
posted by RobotVoodooPower at 7:07 AM on April 3, 2014

"Once risk is a thing that can be bought and sold" -- (from the "Risk Sharing" link)

It was TRUST that was also being bought and sold. Trust in markets and trust in insurance.

It would be a shame for the Park Avenue guys, if trust in markets was an inadvertent casualty of their attack on trustworthiness of government safety nets.
posted by surplus at 7:19 AM on April 3, 2014 [2 favorites]

I... I'm not sure this article has it right. I was under the impression that insuring cargo was a fundamental part of the economy since at least 14th century Italy, or perhaps even the Ottoman Empire. Anyone with more background than me know anything about that?
posted by ThatFuzzyBastard at 8:12 AM on April 3, 2014 [1 favorite]

"Sic transit gloria Civitatum Foederatarum"

I need this on a t-shirt, yesterday.
posted by PROD_TPSL at 9:26 AM on April 3, 2014 [2 favorites]

It's as if the system is designed to induce anxiety.

DING DING DING! We have a winnah!
posted by mikelieman at 9:06 AM on April 4, 2014

A Tattered Safety Net: Social Policy and American Inequality

Such policies provide individuals and families with protection against the uncertainty of the market by managing risks (unemployment or retirement, for example) or by shaping the distribution of incomes more directly—through the tax system, the provision of public goods and services (education, health care), and direct assistance (such as cash benefits or food stamps). In turn, the terms of these policies set social goals and priorities—for example by focusing their attention on those deemed especially deserving (mothers, children, veterans, the elderly), or by setting conditions on the receipt of assistance (such as getting a job or passing a drug test).

posted by the man of twists and turns at 8:05 PM on April 5, 2014 [1 favorite]