Submerging Unemployment Insurance in Savings Account as a Way of Making UI More Difficult, Cumbersome

Neoconservative governance is hard to carry out.  For a group of people who have very little faith in the ability of the government to do things, implementing the things that the broad (neo)conservative movement wants the government to do is quite difficult.  Preventative war, indefinite occupation and rebuilding a country is very hard.   The mass incarceration of over 1% of our population, the surveillance of all overseas communications for potential terrorist ties, etc. are all expensive and difficult to figure out how to do properly.  These all are prone to failure and severe abuses in the execution and when they go wrong the consequences are huge.

Meanwhile, on the liberal side, income maintenance, as best observed in the 1935 Social Security Act, is easy.  Extremely so, and only getting easier.  It turns out that a governance program of “under conditions X someone should get a $Y dollars check” is very easy to carry out.  Cash transfer programs where income is taken in through taxes and then sent out to targeted individuals is highly efficient as a technical matter – Social Security’s administrative costs are in the range of of 0.9%, significantly below your favorite free-market, voluntary mutual fund.

Of course, like choosing who to preemptively invade or isolate from the population, choosing the X’s and $Y’s isn’t easy.  When should people be eligible for retire?  How long and at what level should the unemployed get insurance benefits?  What kind of aid should be available to families with dependent children?  What are the benefits and costs with a level of funding and the tax burden to go along with it?  But unlike conservative governance, once those decisions are made it is trivial to actually carry them out.

Our current unemployment insurance is both efficient as a technical, accounting matter and it is also highly efficient as a practical, lived-experience matter.  It is something that just works, existing in the background and kicking in as insurance when it is needed by people.  It isn’t a mental or technical burden that needs to be consistently fretted about by people who may use it someday.

One thing an “unemployment insurance savings account,” which we discussed the other day, would do in practice besides eliminating the insurance concept is make the experience of UI far more cumbersome.

Corey Robin wrote about this idea in relation to unemployment insurance accounts in his blog post One Less Bell to Answer:

…there is a deeper, more substantive, case to be made for a left approach to the economy. In the neoliberal utopia, all of us are forced to spend an inordinate amount of time keeping track of each and every facet of our economic lives. That, in fact, is the openly declared goal: once we are made more cognizant of our money, where it comes from and where it goes, neoliberals believe we’ll be more responsible in spending and investing it…

The dream is that we’d all have our gazillion individual accounts—one for retirement, one for sickness, one for unemployment, one for the kids, and so on, each connected to our employment, so that we understand that everything good in life depends upon our boss (and not the government)—and every day we’d check in to see how they’re doing, what needs attending to, what can be better invested elsewhere…In real (or at least our preferred) life, we do have other, better things to do…

What’s so astounding about Romney’s proposal—and the neoliberal worldview more generally—is that it would just add to this immense, and incredibly shitty, hassle of everyday life. One more account to keep track of, one more bell to answer. Why would anyone want to live like that? I sure as hell don’t know, but I think that’s the goal of the neoliberals: not just so that we’re more responsible with our money, but also so that we’re more consumed by it: so that we don’t have time for anything else. Especially anything, like politics, that would upset the social order as it is.

In talking with my wife Laura after I posted this, she commented that the whole neoliberal project was about outsourcing state functions onto the individual…But there’s a whole dimension of outsourcing that gets lost in this discussion. And that is what Laura was referring to: all the time and energy we as individuals now have to devote to doing the things that the state used to do for us. The right thinks of that as freedom—they hear the words “state is doing for you” and they imagine patients etherized on a table—but I think of it as tyranny. In fact, one of my FB friends wrote tonight to say, in response to this post, “Freedom is, in part, freedom from the tyranny of choice (as imposed by the market).” Indeed.

Great stuff.  I think this explanation also puts another puzzle piece for why people identify taking advantage of the “submerged state” as not using government services on the table.  Even if there are generous tax subsidies for all and matching for the poor in these unemployment insurance accounts it is still work done (and anxiety held?) by the individual in relationship to their personal budget and their boss, rather than work done by the government and insurance pooled among citizens.

I also need to read Randy Martin’s The Financialization of Daily Life. For those of you who have read it, how does this specialized attack on the New Deal safety net work with Martin’s thesis about everyone as their own CEO of their household?

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8 Responses to Submerging Unemployment Insurance in Savings Account as a Way of Making UI More Difficult, Cumbersome

  1. greghrose says:

    I would go back a little further and remind people of Bowling Alone. We were ingrained to think government isn’t the solution based on the Constitution and over time and Americans have always been somewhat individualistic. We like responsibility and taking care of things.

    I do think Corey Robin is right when he says the neo-liberal view would add to the struggles of every day life. But people either don’t see it that way, or don’t want it to be that way.

    • Blissex says:

      «were ingrained to think government isn’t the solution based on the Constitution and over time and Americans have always been somewhat individualistic. We like responsibility and taking care of things. »

      But curiously when the benefits of welfare and unionization went mostly to white working and middle class workers (typically italian/jewish/irish ones) most USA voters were really happy with them. Having the government look after you was quite a good “New Deal” as long as it excluded colored minorities.

      The working and middle classes turned their back on all that when the same privileges were extended to the underclasses, especially the colored middle classes. In particular Reagan very effectively raised the issue of the system having become a free for all for the welfare queens and the strapping young bucks leading a life of idle luxury on the back of the hard working classes. With the idea that the workers were not exploited by the virtuous rich, but by the parasitic poor.

      This has been somewhat mentioned by Brad DeLong here:

      «As I see it, back in the 1960s, 1970s, and 1980s the spinmasters for Goldwater, Nixon, and Reagan rooted the Republican Party in three beliefs:

      1. the government is not on your side–the government is on the side of the Negroes»

  2. Misaki says:

    …For a group of people who have very little faith in the ability of the government to do things, implementing the things that the broad (neo)conservative movement wants the government to do is quite difficult. Preventative war, indefinite occupation and rebuilding a country is very hard. …

    Only for the US government, haha.

    Let’s pretend my cousin is a dolt. Let’s pretend he hasn’t been working with bridges for over 17 years. Let’s pretend he didn’t work on replacing at least 20 of the 133 bridges damaged during the first Gulf War. Let’s pretend he’s wrong and the cost of rebuilding this bridge is four times the number they estimated- let’s pretend it will actually cost $1,200,000. Let’s just use our imagination.

    A week later, the New Diyala Bridge contract was given to an American company. This particular company estimated the cost of rebuilding the bridge would be around- brace yourselves- $50,000,000 !!

    Something you should know about Iraq: we have over 130,000 engineers. More than half of these engineers are structural engineers and architects. Thousands of them were trained outside of Iraq in Germany, Japan, America, Britain and other countries. Thousands of others worked with some of the foreign companies that built various bridges, buildings and highways in Iraq. The majority of them are more than proficient- some of them are brilliant.

  3. Jim says:

    Sorry, unemployment insurance doesn’t “just work”. You don’t know if it’ll work for you until you’re unemployed and you don’t get any because your employer claims you were dismissed for cause, or you filed late, or there was a problem with your form, or whatever else. Since your insurer is the government your fate depends on how the electorate was feeling during the last election. You don’t have any kind of property right to your benefits, and they aren’t worth enough to sue over.

    • Patrick E. says:

      But there are appeals in the system, and ways to get through that system. In most states, even though an employer can make it difficult, the UI system is predisposed to favoring employee claims.

      I don’t know what UI system you’ve had experience with, but even getting fired “for cause” does not get you out of the unemployment system in most states, and late filing will most likely just delay benefits.

      And it doesn’t even matter how the electorate was feeling during the last election, unless you’ve been unemployed for more than 26 weeks, since the UI system is paid out by insurance premiums paid (mostly) by employers. So I’m confused by your comment.

    • John Ryan says:

      Great points. Unemployed are political pawns.

  4. John Ryan says:

    I like that spin on freedom: freedom from tyranny of choice. I’m an intelligent professional with a terminal graduate degree and even I am challenged from the pressures of all the decisions we are called on to make for our medical, financial and social lives. It IS time consuming and requires mental and emotional space and actual time that I often don’t have because I work, and work hard. Maybe this freedom thing is actually a jobs program for financial counselors, medical counselors, organizational counselors, etc. Ahhh, now it all makes sense!

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