Economic segregation, health insurance, and the “big sort”

In addition to gubernatorial races in New Jersey and Virginia, several major cities elect mayors tomorrow (including New York, Houston, Charlotte, Detroit, Boston, and Seattle; see the U.S. Conference of Mayors for a complete list). This blog has already noted the “glocalization” theory, which posits that cities are nimbler and better able than states or nations to come up with innovative policies. At the Center for Community Progress, Alan Mallach argues that cities have no choice but to do more on their own. “There will be no Marshall Plan for the cities, or for anyone else,” he writes, since the federal government has too much of its budget committed to “mandatory” spending (primarily Social Security and Medicare) to make significant improvements to urban education, transportation, or housing.

Barack Obama may be the most city-friendly president ever, but rural areas still have disproportionate power in Congress, and rah-rah stories about the comeback of urban centers (including Washington, D.C.) don’t make Republicans any more sympathetic toward places that never give them many votes. Big-city mayors, however, have to govern beyond their newly upscale downtowns. Democrat Bill de Blasio has made the economic inequality in the “two cities” of New York the chief issue of his mayoral campaign, and the hollowing-out of the middle class is the biggest challenge facing municipal leaders.

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Two stats illustrate what de Blasio is talking about. John Cassidy of The New Yorker: “Last year, the poorest twenty per cent of the city’s households earned, on average, $8,993, and the richest five per cent earned, on average, $436,931.”And Business Insider’s Harrison Jacobs: “In 1970, 65 percent of [American] families lived in middle-income neighborhoods; by 2009, only 42 percent of families lived in such neighborhoods.” (Hat tip: Kevin Drum.)

Economic segregation could be part of the “Big Sort,” the term coined by Bill Bishop to describe the phenomenon of Americans moving to “ideologically inbred” neighborhoods that reflect their values and political beliefs. (This is similar to the “voting with your feet” idea that’s been discussed on this blog.) What a big-city mayor can do about the shrinking of the middle class—and the disappearance of mixed-income neighborhoods—is difficult to figure out. De Blasio is proposing a tax hike on annual incomes over $500,000 in order to increase spending for education, but that’s not a practical option (even when it’s a legal one) for cities that don’t have so many millionaires.

Health insurance for your own kind

A “Big Sort” may appeal to opponents of the Affordable Care Act (“Obamacare”). It’s what an unregulated health insurance market is bound to produce: healthy young men in low-premium gated communities that keep out the old and sick. And no girls allowed.

I’m still gobsmacked that so many opponents are whining about having to buy insurance that covers maternity care. In a post titled “The Humanitarian Shortcomings of the Affordable Care Act,” Reason’s Sheldon Richman sighs, “bureaucratic rules thus take precedence over personal preferences” because “regardless of an applicant’s preferences or situation, all coverage must include, among other things, maternity and ‘mental health’ benefits.” (The scare quotes around “mental health” is a nice retro touch, reminiscent of Tony Soprano’s longing for a simpler time when more American men were like Gary Cooper: the “strong, silent type.”)

Fox News’s John Stossel went further, saying on air, “Women go to the doctor much more often than men. Maybe they’re smarter, or maybe they’re hypochondriacs. They live longer. But if it’s insurance, you ought to be able to charge the people who use the services more, more.” So guys should be able to live in an insurance neighborhood that keeps out their mothers, wives, and sisters. By this logic, women should have to pay higher payroll taxes, since, on average, they receive a bit more in lifetime Social Security and Medicare benefits. This is the kind of argument that helps conservative media outlets get bigger and more loyal audiences but is of no help whatsoever to Republicans trying to win elections.

The Washington Post’s Ezra Klein identifies what may be the biggest perception problem with the Obamacare rollout: “people in the individual market right now are paying less because of discrimination against the old and sick. When that discrimination ends, a lot of them will end up paying more.” And a lot of them will end up on Fox news.

But Talking Points Memo’s Sahil Kapur quotes Washington and Lee University’s Tim Jost as saying that the cost shift is a feature, not a bug, of health care reform:

The whole idea here is we’re trying to create a community—a system based on mutual aid rather than everybody paying for exactly the care that they are likely to need in the next few moments.

Kristol can’t lose in Virginia

TheWeekly Standard’s William Kristol says it’s “striking” that Democrat Terry McAuliffe’s lead over Republican Ken Cuccinelli in the Virginia gubernatorial race has slightly shrunk in some polls as Obamacare dominates the national political news. In case there’s an upset, he wants to make sure the race has national implications:

[If] I controlled a few hundred thousand dollars, I would robocall and leaflet every home I could in the state […] making clear that a vote for McAuliffe is a vote to extend, expand, and entrench Obamacare in Virginia, and that, conversely, a vote for Cuccinelli is a vote to begin to limit, repeal, and replace Obamacare.

This is a no-lose argument for Kristol, as he admits that “it’s late in the day” for this strategy. If Cuccinelli loses, Kristol can argue that his campaign’s big mistake was in waiting too long to focus on Obamacare.

Comments are automatically closed two weeks after an article's initial publication. See our comments policy for more.
J Cosgrove
4 years 1 month ago
Mr. Sullivan, You should get around more. Your choice of sites is revealing. I would recommend Charles Murray's Coming Apart to understand part of the increasing stratification of the US and a lot of the Western World. The factors identified in Murray's book have always been at work since the beginning of time but have been accelerated in the last 50 years. It is not going away and we will only get more stratification, not less. There is nothing nefarious going on, just people "doing what comes naturally." You cannot repeal human nature. When will the progressives ever learn this lesson.
Stanley Kopacz
4 years 1 month ago
One thing cities do or did is to bring labor and resources together for intense manufacturing. American cities have been economically eviscerated by the wholesale export of manufacturing jobs. What does that leave for the city? They can't grow enough of their own food. They can't provide enough of their own energy. Perhaps the large cities need to become smaller. And small cities and towns become larger. Tie in to the local land and glean energy from the sky. But can this but remain a pipedream in the midst of our present neoliberal economic chaos? Look at all the movement of the poor in Mexico caused by NAFTA, resulting in increased urbanization.

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