“So, like, how screwed are we?”
That was the question that the presenters of “Planet Money,” the popular and humorous economics segment on National Public Radio, posed to a lively audience at UC Santa Barbara on Oct. 26.
Correspondents David Kestenbaum and Alex Blumberg did a live stage version of their popular NPR series, which launched in 2008 as a spinoff of “This American Life” episode on NPR called “The Giant Pool of Money.” Since then, the Planet Money team of economic journalists have explained the intricacies of bank bailouts, toxic assets and credit default swaps to their audiences in plain English.
The duo focused their UCSB show on two large and long-term issues facing the American economy: joblessness and rising health care costs. “We have stagnant unemployment and our health care expenses are on track to bankrupt the nation,” Kestenbaum said.
Economists for the past two years have been wringing their hands about the U.S.’ painfully slow economic recovery. Job creation and GDP growth usually pops back sharply after a deep recession, but not this time. “It is the longest and deepest recession since World War II,” Blumberg said.
“That’s how screwed we are,” Kestenbaum chimed in.
Unemployment, perhaps the most fundamental economic indicator, still hovers at 9.1 percent — well above the 4 or 5 percent that’s usual for a healthy economy. But joblessness doesn’t affect all Americans equally. Labor-intensive niche jobs such as drywall installers and stonemasons see about 25 percent unemployment in their industries, the two said, while dentists boast a joblessness rate of less than 1 percent.
“It tells us that there is this good economy still there that’s working and creating jobs,” Kestenbaum said.
“There’s the America of the stonemasons and the America of the dentists,” Blumberg said.
Despite the best efforts of many policymakers to close the gap by offering job training to low-skilled workers, the approach often doesn’t work, the two said. “Before you can even acquire the skills to work in this good American economy, you need other skills — soft skills,” Kestenbaum said.
The two presented research suggesting that early childhood education may be more important in the development of those soft skills than higher education. Youngsters often learn conflict resolution, how to share and how to handle their emotions during preschool. “Preschool is basically the best job training program we know of,” Kestenbaum said. “You’re basically learning the skills needed to operate in corporate America.”
One study they referenced tracked a group of boys and girls from preschool age through adulthood and found that those that had gone to preschool were significantly less likely to have been arrested and made an average of 50 percent more than their peers who had not attended preschool at a young age. Blumberg and Kestenbaum suggested that funding preschool may be a less expensive and more effective way for taxpayers to prepare a nation of people to be business leaders over the long haul.
Kestenbaum and Blumberg also discussed the implications of the ever-escalating cost of American health care, which is fast approaching one-third of U.S. GDP.
“When people are talking about deficits and debt, they’re really talking about health care,” Kestenbaum said.
The problem, the presenters said, is that the U.S. health care delivery system shields providers and consumers from seeing the true costs of that care. Because health insurance is usually provided through an employer, consumers are often far removed from the process — they have no idea how much treatment costs, much less how much it should cost.
And because hospitals and doctors are billing insurance companies or a government program, there’s little accountability for keeping costs down.
“It turns out we’re spending a lot, and we’re not getting much for it,” Kestenbaum said. U.S. life expectancy ranks in the bottom one-third of developed nations, but the country’s per-capita health care costs are near the top of that list.
“This is a system that is so screwed up, it can’t actually get much worse,” Kestenbaum said.
The two suggested that either a free-market approach to health care, the way Singapore does it, or one that has the government managing the entire system, as is the case in Great Britain, would be better.
“You know what a duckmobile is?” Kestenbaum asked the audience. “Like one of those boats that’s also bus and can drive on land and then go in the water?”
“Yes, yes,” the audience said. “We have one here in Santa Barbara!” someone from the crowd shouted out.
“Good, then you know what I’m talking about. Well, the U.S. health care system is like a duckmobile,” Kestenbaum said. “It’s like a really crappy bus, and it’s like a really crappy boat. And it would really be much better if it could just decide if wanted to be a bus or a boat.”