Risk shifting: the long con
Great article by Jared Bernstein
Such observations seem particularly germane as the 115th Congress gets seated and team Trump prepares to take the reins. Which begs the question: how could a significant (albeit minority) share of the electorate thats increasingly exposed to and suffering from the long risk shift possibly elect leaders that threaten to exacerbate and hasten the shift?
In part, because the salesmanship behind the shift has been highly effective in convincing people that bigger risks mean bigger rewards. Why settle for a stodgy old fixed pension when you can play the market, just like Trump and his merry band of billionaire cabinet appointees? You dont want government health care; you want to shop for your own health care with your own skin in the game, right? And lets dispose of that hammock of a safety net so youll have the incentive you need to get out and take one of the excellent jobs thats just waiting for you.
Forget minimum wages and overtime standards they just hold you back. Your freedom requires liberation from such regulations! A consumer protection bureau?! What kind of bold, adventurous shopper would ever need such patronizing hand-holding?
A regular job with an employer?! How constraining. You need a gig job where youre your own boss.
That ideology carries over into financial markets in a particularly interesting way. Here the sales job maintains that market regulations stifle investors animal spirits, crush innovation and overprice risk. Get rid of the oversight, and watch the innovators come up with all kinds of sexy trades, so complex that even they dont understand them!
...
I see all of this happening now in real time, with Congress preparing to repeal Obamacare. The Affordable Care Act is an anti-risk-shifter, a policy designed to shift the locus of the insecurity of no or inadequate health coverage back onto the government sector, which, due to its power to pool and regulate, is the far better sector to place that risk (which is why Id lower, not raise, the Medicare eligibility age).
https://www.washingtonpost.com/posteverything/wp/2017/01/04/the-risk-shift-revisited/?utm_term=.63ba92964308