Friday, February 09, 2007

Thomas Friedman explains Russia to us, and then Paul Krugman has some love for John Edwards. First up, Mr. Friedman:

Russia today is a country that takes three hands to describe.

On the one hand, it is impossible any more to call Vladimir Putin’s government “democratic,” given the way it has neutered the Russian Parliament, intimidated or taken over much of the Russian press, subordinated the judiciary and coercively extended its control over the country’s key energy companies.

On the other hand, it is obvious talking to Russians how much the humiliating and dispiriting turmoil that accompanied Boris Yeltsin’s first stab at democracy — after the collapse of Communism — left many people here starved for a strong leader, a stable economy and stores with Western consumer goods. Mr. Putin is popular for a reason.

And on the third hand, while today’s Russia may be a crazy quilt of capitalist czars, mobsters, nationalists and aspiring democrats, it is not the totalitarian Soviet Union. It has more than a touch of the authoritarianism of postwar Gaullist France and a large spoonful of the corruption and messiness of postwar Italy — when those countries emerged from World War II as less than perfect democracies.

But 60 years later, after huge growth in their per capita incomes, France and Italy now help to anchor Western Europe. For all of their shortcomings, their postwar governments provided the context for the true democratic agent of change to come of age — something that takes 9 months and 21 years to produce — a generation raised on basically free markets and free politics. I still think Russia will follow a similar path — in time.

“In historical terms, the transition will be very fast,” Boris Makarenko, deputy chief of Russia’s Center for Political Technologies, said to me. “But I am 47. I am in a hurry. I am very optimistic [though] for my daughter, who is 15. ... I can see the normal middle class rising here. It’s all about shape and pace. When will we get there, I don’t know — we will get there, but probably not fast enough for me to see.”

The Yeltsin democratic experiment is over, to be sure, added Rose Gottemoeller, director of the Carnegie Endowment’s Moscow office, “because it was delegitimized by the 1998 ruble crash and because it was a time of supreme corruption and dominance by oligarchs — but the Russian democratic experiment is not over because Russia is such a changed place.”

Ms. Gottemoeller, an American, told me she recently visited Ulyanovsk, Lenin’s birthplace, in the heart of Russia’s aging industrial rust belt, and went out to dinner with three Russian couples, all new entrepreneurs.

“After they plied me with drinks,” she recalled, “they said: ‘O.K., we have a question. We want to know how you define middle class’ — and did I think they were middle class? And that just flummoxed me. ... They wanted to know what middle class was in America. It meant a lot to them to think they were linked up to a broader community of middle class. ... [They] are not out in the streets with a banner, but their aspirations are huge and in the right direction.”

People who identify themselves as middle class often end up fighting for legal and civil rights to protect their gains, without even knowing they are fighting for them. That said, the pace of democratization here will most likely depend on three things.

One is whether this emerging middle class gets so preoccupied with material gains — thanks to the trickle-down of high oil and gas prices — that “it just disconnects from politics,” Ms. Gottemoeller noted. (Russia today has more cellphones than people!) Another is the genie of Russian nationalism, which can always pop up and derail democratization. Just down the street from my hotel, the Movement Against Illegal Immigration held a march denouncing Jews and immigrants.

Third is the price of oil and gas. Anyone who observes Russia can see that the price of oil and the pace of freedom here operate with an inverse correlation. As oil prices go down the pace of freedom goes up, because Russia has to open itself more to the world and empower its people to get ahead. As oil prices go up the pace of freedom goes down, because the government can get by drilling oil wells, rather than unleashing its people.

“When oil prices became higher, the reforms became slower,” said Vladimir Ryzhkov, a liberal Russian Duma member from Altay. “Russia became a more closed country with a more state-oriented economy. Last year we saw record oil prices and not one reform. [That is the] reason Freedom House last year proclaimed Russia a ‘non-free country. ’ ... The question for you Americans is: When will prices go down? It is the only hope for us Russian democrats.”

And now Mr. Krugman:

What a difference two years makes! At this point in 2005, the only question seemed to be how much of America’s social insurance system — the triumvirate of Social Security, Medicare and Medicaid — the Bush administration would manage to dismantle. Now almost all prominent Democrats and quite a few Republicans pay at least lip service to calls for a major expansion of social insurance, in the form of universal health care.

But fine words, by themselves, mean nothing. Remember “compassionate conservatism?” I won’t trust presidential candidates on health care unless they provide enough specifics to show both that they understand the issues, and that they’re willing to face up to hard choices when necessary.

And former Senator John Edwards has just set a fine example.

At first glance, the Edwards health care plan looks similar to several other proposals out there, including one recently unveiled by Arnold Schwarzenegger in California. But a closer look reveals extra features in the Edwards plan that take it a lot closer to what the country really needs.

Like Mr. Schwarzenegger, Mr. Edwards sets out to cover the uninsured with a combination of regulation and financial aid. Right now, many people are uninsured because, as the Edwards press release puts it, insurance companies “game the system to cover only healthy people.” So the Edwards plan, like Schwarzenegger’s, imposes “community rating” on insurers, basically requiring them to sell insurance to everyone at the same price.

Many other people are uninsured because they simply can’t afford the cost. So the Edwards plan, again like other proposals, offers financial aid to help lower-income families buy insurance. To pay for this aid, he proposes rolling back tax cuts for households with incomes over $200,000 a year.

Finally, some people try to save money by going without coverage, so if they get sick they end up in emergency rooms at public expense. Like other plans, the Edwards plan would “require all American residents to get insurance,” and would require that all employers either provide insurance to their workers or pay a percentage of their payrolls into a government fund used to buy insurance.

But Mr. Edwards goes two steps further.

People who don’t get insurance from their employers wouldn’t have to deal individually with insurance companies: they’d purchase insurance through “Health Markets”: government-run bodies negotiating with insurance companies on the public’s behalf. People would, in effect, be buying insurance from the government, with only the business of paying medical bills — not the function of granting insurance in the first place — outsourced to private insurers.

Why is this such a good idea? As the Edwards press release points out, marketing and underwriting — the process of screening out high-risk clients — are responsible for two-thirds of insurance companies’ overhead. With insurers selling to government-run Health Markets, not directly to individuals, most of these expenses should go away, making insurance considerably cheaper.

Better still, “Health Markets,” the press release says, “will offer a choice between private insurers and a public insurance plan modeled after Medicare.” This would offer a crucial degree of competition. The public insurance plan would almost certainly be cheaper than anything the private sector offers right now — after all, Medicare has very low overhead. Private insurers would either have to match the public plan’s low premiums, or lose the competition.

And Mr. Edwards is O.K. with that. “Over time,” the press release says, “the system may evolve toward a single-payer approach if individuals and businesses prefer the public plan.”

So this is a smart, serious proposal. It addresses both the problem of the uninsured and the waste and inefficiency of our fragmented insurance system. And every candidate should be pressed to come up with something comparable.

Yes, that includes Barack Obama and Hillary Clinton. So far, all we have from Mr. Obama is inspiring rhetoric about universal care — that’s great, but how do we get there? And how do we know whether Mrs. Clinton, who says that she’s “not ready to be specific,” and that she wants to “build the consensus first,” will really be willing to take on this issue again?

To be fair, these are still early days. But America’s crumbling health care system is our most important domestic issue, and I think we have a right to know what those who would be president propose to do about it.


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