The Body Economic

by Basu, Sanjay, Stuckler, David

  If we take the truly democratic option, the first step is to identify those policies that are supported by evidence, and those that are not. With stakes so high, we cannot entrust our decisions to ideologies and beliefs. As the mathematician W. Deming said: “In God we trust; all others must bring data.” Often politicians on both the left and the right peddle ideas based on preconceived social theories and economic ideologies, not facts, figures, and hard evidence. Only when citizens have access to, and can engage with, the data can politicians truly be held accountable for their budget decisions, and for the effects of those decisions on life and death. This book, we hope, is a first step to democratizing the health choices of the body economic.

  To break the cycle of radical austerity programs, we need a New New Deal. The data show that it worked the first time and the other times it has been tried under different names. Economies bounced back, and people’s health improved. Inherent in a New New Deal is a path away from austerity and toward a healthier body economic. To work, it must follow three key principles.

  “FIRST, DO NO HARM”

  “First, do no harm” is the ancient higher law of the healing professions. Because social and economic policies have collateral effects on health and sickness, the doctors’ mantra should become a requirement for all such policies. For democracies to work, we need to know the full consequences of our policy choices. We need to evaluate public policies with the same rigor that we use to evaluate new drug treatments and medical devices. Then we can make informed decisions about the trade-offs: would you prefer a 0.3 percent lower short-term budget deficit or 2,000 more dead Americans? If, during the Great Recession, our policy makers and politicians had done their austerity math in this brutally honest way, they would have likely chosen different priorities.

  To ensure that health is considered in all policies that affect it, we should establish public health review mechanisms. At the federal level, we could call it the office of Health Responsibility. There should be similar offices in government at almost every level. They would be similar to government agencies that protect the public from dangerous products and unsafe medications. The office of Health Responsibility would analyze government programs and disclose to the public how various policies affect public health.5

  SECOND, HELP PEOPLE RETURN TO WORK

  In hard times, having a stable job is often the best medicine. Unemployment and the fear of unemployment are among the most significant drivers of poor health that people face in an economic crisis. The stock market may be bullish again, but unemployment is still too high to constitute a truly democratic recovery—that is, recovery for all, not just a few. Innovative programs like the active labor market programs (ALMPs) help the unemployed stay active during recessions. ALMPs prevent depression and suicide among not just the unemployed but also the employed who may be worried about losing their job. But ALMPs can also get people back to work, thus saving the government money in unemployment compensation and also increasing the labor supply, an engine of economic growth and recovery.

  Jobs can be hard to find in times of recession, so economic stimulus is also needed to help create work. As Keynes argued, perhaps a bit tongue in cheek, it would be better to employ half the unemployed to bury fifty pound notes and the other half to dig them up again than to have people remain idle and on unemployment checks. If we wish to do more to activate workers and boost the economy, however, we have to enact the right kind of stimulus. Health, education, and social protection programs have among the highest fiscal multipliers. In the case of the health sector, public investment boosts the economy by more than three dollars for every dollar spent. Meanwhile, the fiscal multiplier for bank bailouts and defense spending is often negative. With this type of government spending, the economy shrinks, because the money tends to flow out of productive new business ventures that employ people, and to private bank accounts and offshore tax havens.6

  THIRD, INVEST IN PUBLIC HEALTH

  If any family member is sick and suffering, we do all we can to help. The same logic applies to the body economic. At a time when people are hurting from recession, politicians should act to protect people from the dangers of unemployment and poverty. They should enact laws that provide care based on people’s health needs, rather than their ability to pay. This approach would eliminate many costly hospitalizations caused by care provided too late—as with Diane. A recession may hurt people’s pocketbooks, but no one should lose their access to healthcare because of an economic downturn. As citizens we should call on our government to make decisions that safeguard public health. In the UK the opposite is being done, with the dismantling of the National Health Service.

  It is easy to lose sight of how important disease prevention programs are until it is too late. The US Centers for Disease Control and Prevention, and its counterparts in Europe, protect our communities from epidemics as varied as food-borne illnesses and tuberculosis, usually without any fanfare. The California Encephalitis Project helped Bakersfield curb its West Nile epidemic, but when a second outbreak happened in 2012, budget cuts left Bakers-field without critical assistance. This strong public-sector presence in health and healthcare is necessary to improve disease surveillance, speed up our response to epidemics, and prevent us from experiencing more tragedies. In the US, we have seen what happens when we cede health to the private sector. Public health departments are left to pick up the pieces when private companies fail to protect people during hard times. Public health programs need to be supported, not slashed, in times of great distress.

  To achieve a real, lasting human recovery, we must fundamentally change the way we think about what’s important. Economic growth is a means to an end, not the end in itself. This was Robert Kennedy’s fundamental insight in his 1968 presidential campaign speech. What good is an increased growth rate, he asked, if it is hazardous to our health?

  When we tell our children about the Great Recession, they will judge us not by growth rates or by deficit reductions. They will judge us by how well we took care of society’s most vulnerable, and whether we chose to address our community’s most basic health needs: healthcare, housing, and jobs.

  The ultimate source of any society’s wealth is its people. Investing in their health is a wise choice in the best of times, and an urgent necessity in the worst of times.

  NOTES

  PREFACE

  1. See Robert Wood Johnson Foundation. 2009. Breaking Through on the Social Determinants of Health and Health Disparities: An Approach To Message Translation. RWJF Issue brief 7. Of course, everyone must die of something, but decades of public health research have shown that over half of all deaths are premature, from diseases that could have been prevented. One study concluded that “in the United States, perhaps 10–15 percent [of preventable mortality], could be avoided by better availability or quality of medical care.” The other 85–90 percent are attributable to sociological factors such as the environment and smoking. See J. McGinnis, P. Williams-Russo, J. R. Knickman. 2002. “The Case for More Active Policy Attention to Health Promotion,” Health Affairs v21(2): 78–93.

  World Health Organization. 2013. The Determinants of Health. Available at: http://www.who.int/hia/evidence/doh/en/

  2. Source for Figure P.1: EuroStat 2013 Statistics. Gross domestic product is seasonally adjusted and adjusted by working days. Baseline is 2nd quarter of 2008.

  3. Source for Figure P.2: Adapted from: D. Stuckler, S. Basu, M. McKee. 2010. “Budget Crises, Health, and Social Welfare Programmes,” British Medical Journal v340:c3311. Social welfare in purchasing-power-parity adjusted, constant 2005 US dollars per head of population. Life expectancy is at birth.

  4. In the US, road traffic deaths fell to 60- year lows when people drove less for reasons such as having less money to pay for gasoline.

  5. The Gospel According to RFK: Why It Matters Now, edited with commentary by Norman MacAfee (New York, 2008), p. 45.

  INTRODUCTION

  1. Olivia was a patient seen by San
jay’s colleagues in the pediatrics department at a hospital in California. Her name and any potential details of her story that might identify her have been changed to protect her identity.

  2. About 770,000 additional Americans during the recession would binge on alcohol, as we found in Bor, et al. 2013. “Alcohol Use During the Great Recession of 2008–2009,” Alcohol and Alcoholism. Available at: http://alcalc.oxfordjournals.org/content/early/2013/01/28/alcalc.agt002.short

  3. Niki Kitsantonis, “Pensioner’s Suicide Continues to Shake Greece,” New York Times, April 5, 2012. Available at: http://www.nytimes.com/2012/04/06/world/europe/pensioners-suicide-continues-to-shake-greece.html?_r=1&

  4. Makis Papasimakopoulos, “Note Found on Syntagma Suicide Victim,” Athens News, April 5, 2012. http://www.athensnews.gr/portal/1/54580

  5. A. Kentikelenis, M. Karanikolos, I. Papanicolas, S. Basu, M. McKee, D. Stuckler. 2011. “Health Effects of Financial Crisis: Omens of a Greek Tragedy,” The Lancet 378(9801): 1457–58.

  6. M. Suhrcke and D. Stuckler. 2012. “Will the Recession Be Bad for Our Health? It Depends,” Social Science & Medicine v74(5): 647–53; C. Ruhm. 2008. “A Healthy Economy Can Break Your Heart,” Demography v44(4): 829–48; D. Stuckler, C. Meissner, P. Fishback, S. Basu, M. McKee. 2012. “Was the Great Depression a Cause or Correlate of Significant Mortality Declines? An Epidemiological Response to Granados,” Journal of Epidemiology & Community Health; K. Smolina, et al. 2012. “Determinants of the Decline in Mortality from Acute Myocardial Infarction in England Between 2002 and 2010: Linked National Database Study,” British Medical Journal v344:d8059.

  7. International Monetary Fund. Oct 2012. “World Economic Outlook, Coping with High Debt and Sluggish Growth.” Available at: http://www.imf.org/external/pubs/ft/weo/2012/02/pdf/text.pdf

  PART I: HISTORY

  Chapter 1: Tempering the Great Depression

  1. J. Burns, “Atos Benefit Bullies Killed My Sick Dad, Says Devastated Kieran, 13,” Daily Record, Nov 1, 2012. Available at: http://www.dailyrecord.co.uk/news/scottish-news/atos-killed-my-dad-says-boy-1411100

  2. “Public Sector, Welfare Faces budget Axe—Cameron,” Reuters UK, June 18, 2010. Available at: http://uk.reuters.com/article/2010/06/18/uk-britain-budget-cameron-idUKTRE65H5TC20100618; “Conservative Conference: Cameron in Benefit Cuts Warning,” BBC, Oct 7, 2012. Available at: http://www.bbc.co.uk/news/uk-politics-19864056. See Table 2: “Estimates for Fraud and Error by Client Group and Error Type and Error Reason—Overpayments (2011/2012).” Less than 0.1 percent of total fraud, totaling £2 million, were estimated to have arisen from fraud surrounding conditions of entitlement. In Department for Work & Pensions. Fraud and Error in the Benefit System. Available at: http://statistics.dwp.gov.uk/asd/asd2/index.php?page=fraud_error; M. D’Arcy, “Protests Against Paralympics Partner Get Senior Support,” 2012, Public Service UK. Available at: http://www.publicservice.co.uk/news_story.asp?id=20757

  3. Atos newsroom website: “The Department for Work and Pensions Awards Two of the PIP Assessment Contracts to Atos.” Available at: http://atos.net/en-us/Newsroom/en-us/Press_Releases/2012/2012_08_02_01.htm and http://uk.atos.net/en-uk/careers/career_directions/systems_integration/default.htm; R. Ramesh, “Atos Wins £400m Deals to Carry Out Disability Benefit Tests,” The Guardian, Aug 2, 2012. Available at: http://www.guardian.co.uk/society/2012/aug/02/atos-disability-benefit-tests

  4. “Work Test Centres ‘Lack Disabled Access’,” BBC, Nov 21, 2012. Available at: http://www.bbc.co.uk/news/uk-politics-20423701; Burns, “Atos Benefit Bullies.”

  5. See also J. Ball, “Welfare Fraud Is a Drop in the Ocean Compared to Tax Avoidance,” The Guardian, Feb 3, 2013. Available at: http://www.guardian.co.uk/commentisfree/2013/feb/01/welfare-fraud-tax-avoidance; Atos’s official response was that “We do not make decisions on people’s benefit entitlement or on welfare policy but we will continue to make sure that service that we provide is as highly professional and compassionate as it can be.” Cited in M. D’Arcy, “Protests Against Paralympics Partner Get Senior Support,” Public service UK, 2012. Available at: http://www.publicservice.co.uk/news_story.asp?id=20757

  6. Just as the writings of John Maynard Keynes and John Kenneth Galbraith came back into popularity, so too did other histories of the Depression—such as that of Milton Friedman, a conservative free-market economist. Whereas Keynes had been a proponent of government spending to stimulate demand in the economy, Friedman emphasized the role of monetary policy—to lower interest rates and increase the money supply, so that people would resume borrowing and the market would start moving again. Friedman’s school of thought emphasized the importance of the market. For the market to work, it would be necessary for those who made bad decisions to suffer the consequences.

  7. M. Thoma, “Too Much Too Big to Fail,” Economist’s View, Sept 2, 2010. Available at: http://economistsview.typepad.com/economistsview/2010/09/too-much-too-big-to-fail.html

  8. S. Fleming, “UK Hit Hardest by Banking Bailout, with £1 Trillion Spent to Save the City,” Daily Mail, Dec 17, 2009. Available at: http://www.dailymail.co.uk/news/article-1236800/UK-hit-hardest-banking-bailout-1trillion-spent-save-City.html; see also http://www.pbs.org/wnet/need-to-know/economy/the-true-cost-of-the-bank-bailout/3309/. Government bailouts saved many corporations, and by 2013, many had paid back the loans, with interest. L. Vo and J. Goldstein, “Where the Bailouts Stand, in 1 Graphic,” NPR Planet Money, Oct 9, 2010. Available at: http://www.npr.org/blogs/money/2012/09/10/160886823/where-the-bailouts-stand-in-1-graphic; “AIG Subsidiary Parties in Style in OC, Two Weeks after Bailout,” Orange County Register, Oct 2, 2008. Available at: http://taxdollars.ocregister.com/2008/10/02/after-federal-bailout-aig-fetes-in-style-in-oc/; M. Wolfe, “Keynes Offers Us the Best Way to Think About the Financial Crisis,” Financial Times, Dec 23, 2008. Available at: http://www.ft.com/intl/cms/s/0/be2dbf2c-d113-11dd-8cc3-000077b07658.html#axzz2IArd1Y5r

  9. P. Krugman, “Inflation Lessons,” New York Times, Aug 25, 2012. Available at: http://krugman.blogs.nytimes.com/2012/08/25/inflation-lessons/

  10. P. Krugman, “Soup Kitchens Caused the Great Depression,” New York Times, Nov 3, 2012. Available at: http://krugman.blogs.nytimes.com/2012/11/03/soup-kitchens-caused-the-great-depression/

  11. D. Stuckler, S. Basu, M. McKee, M. Suhrcke. 2010. “Responding to the Economic Crisis: A Primer for Public Health Professionals,” Journal of Public Health v32(3): 298–306. Available at: http://jpubhealth.oxfordjournals.org/content/32/3/298.short; T. Pettinger, “UK National Debt,” Economics: UK Economy Statistics, Jan 23, 2013. Available at: http://www.economicshelp.org/blog/334/uk-economy/uk-national-debt/

  12. J. Hardman, “The Great Depression and the New Deal. Poverty & Prejudice: Social Security at the Crossroads.” Available at: http://www.stanford.edu/class/e297c/poverty_prejudice/soc_sec/hgreat.htm; D. Stuckler, S. Basu, C. Meissner, P. Fishback, M. McKee. 2012. “Banking Crises and Mortality During the Great Depression: Evidence from US Urban Populations, 1927–1939,” Journal of Epidemiology and Community Health v66:410–19.

  13. Increasing investments, typically by the wealthiest, caused the average stock to quadruple in price between 1921 and 1929. The super-rich, including the Rockefellers, Fords, Carnegies, and Vanderbilts, helped drive a real estate bubble. Sellers would reap small profits quickly by turning over properties to the next buyer in a high-demand marketplace; John Kenneth Galbraith, The Great Crash: 1929 (Boston, 1988); see also E. N. White, “Lessons from the Great American Real Estate Boom and Bust,” National Bureau of Economic Research, 2009, Working Paper 15573. Available at: http://www.clevelandfed.org/research/seminars/2010/white.pdf. Most people who bought land never set foot in the state they were buying in. Instead, real estate speculators hired young, attractive men and women to advertise the land and accept down payments on an ad hoc basis.

  14. Hardman, “The Great Depression and the New Deal. Poverty & Prejudice”; T. H. Watkins, The Great Depression: America in the 1930s (Boston, 1993).

  15.
Racial tensions also escalated: in 1933 alone, twenty-four lynchings of black Americans were officially reported—likely to be an underestimate as few lynchings were ever addressed by the police at the time. Centers for Disease Control, “CDC Study Finds Suicide Rates Rise and Fall with Economy,” April 14, 2011. Available at: http://www.cdc.gov/media/releases/2011/p0414_suiciderates.html. See also “Did Investors Really Jump out of Windows?” Available at: http://news.kontentkonsult.com/2008/10/did-investors-really-jump-out-of.html; George H. Douglas, Skyscrapers: A Social History of the Very Tall Building in America (London, 2004).

  16. “Death Rate Drops in North America: Mortality Figures for This Year Show Lowest Level for the United States and Canada,” New York Times, Oct 26, 1930. As the New York Times further reported that year, “the country was in the grip of the most serious industrial depression in a generation. No large area was exempt from its effects. Town and country, farmer and mechanic, East and West, North and South all were affected. Everywhere poverty was accentuated. Family budgets had to be sharply reduced. Men and women skimped their own rations to provide for their children. The demands on charitable organizations were without parallel, coming often from families who never before knew the meaning of want. By all the signs and all the precedents, hard times so seriously prolonged should have brought in their train disease and death. Actually, 1931 was one of the healthiest years in the history of the country. The evidence is overwhelming.” Cited in “No Slump in Health,” New York Times, Jan 5, 1932. For further contemporary analysis see “Sees Public Health Unhurt by Slump,” New York Times, Oct 30, 1931.