Flint Water Crisis: Let Them Eat Pollution?

By James K. Boyce

The tragic crisis in Flint, Michigan, where residents have been poisoned by lead contamination, is not just about drinking water. And it’s not just about Flint. It’s about race and class, and the stark contradiction between the American dream of equal rights and opportunity for all and the American nightmare of metastasizing inequality of wealth and power.  Cross-posted at the Institute for New Economic Thinking and Triple Crisis

The link between environmental quality and economic inequality was spelled out more than two decades ago in a memorandum signed by Lawrence Summers, then chief economist of the World Bank, excerpts of which appeared in The Economist under the provocative title, “Let them eat pollution.” Starting from the premise that the costs of pollution depend on “the forgone earnings from increased morbidity and mortality,” Summers concluded that “the economic logic of dumping a load of toxic waste in the lowest-wage country is impeccable and we should face up to that.”

A different logic is supposed to underpin U.S. environmental policies. The Federal Water Pollution Control Act mandates that water quality standards should “protect the public health” – period. Its aim, as former EPA administrator Douglas Costle once put it, is “protection of the health of all Americans.” Under the law, clean water is a right, not something to be provided only insofar as justified by the purchasing power of the community in question.

Even when cost-benefit calculations are brought to bear on environmental policy, the EPA uses a single “value of a statistical life” – currently around $8.7 million – for every person in the country, rather than differentiating across individuals on the basis of income or other attributes.

In practice, however, the role of costs and benefits in shaping public policies often depends on the power of those to whom they accrue. When those on the receiving end are poor, their interests – and their lives – often count for less, much as the Summers memo recommended. And when they are racial and ethnic minorities, the political process often discounts their well-being even more.

So it was that Flint – the city with the second highest poverty rate in the nation (surpassed only by Youngstown, Ohio), where more than half the population is black – wound up with lead in its water supply up to 866 times the legal limit. The levels in some residents’ homes were high enough for the EPA to classify the water as “toxic waste.”

The contamination was a result of budget-cutting measures imposed by the city’s “emergency manager,” who was installed by Michigan Governor Rick Snyder with power to override the elected city council. To save money, the city’s water supply was switched to the heavily polluted Flint River in 2014. At the same time, officials stopped adding treatment chemicals to control corrosion in the system’s old lead pipes. When residents complained about the discolored and foul-smelling water coming out of their taps, and researchers found evidence of lead contamination, their concerns were brushed aside by state officials.

Governor Snyder denies that environmental racism has anything to do with the plight of Flint’s residents. There are still some people who will tell you that the Earth is flat, too.

In a lead editorial, the New York Times accused the governor of “depraved indifference” toward Flint’s residents. But the roots of the tragedy go deeper than the failings of individual politicians or officials. What we’re seeing today in Flint is an outcome of depraved inequalities – inequalities are corroding the body politic nationwide along with the water pipes in Flint.

Flint wasn’t always like this. When I lived there as a kid in the early 1950s, its workers earned the highest industrial wages in the nation. The American dream was alive. But in ensuing decades the city was ripped apart by macroeconomic policies that decimated America’s manufacturing industries, the failure to construct a national health system to relieve employers of the soaring costs of private insurance, and the debilitating racial and fiscal politics of metropolitan segregation.

It is only a small step from the emergence of “sacrifice zones” at the losing end of America’s widening economic and political chasms to the systematic violation of the right to a clean environment that we see in Flint. It is not enough to pass legislation to protect the public health of all Americans. Good laws that are not enforced are no more than good intentions. For a functioning government – even, it turns out, a functioning water system – we need a functioning democracy.

The poisoning of Flint is a symptom of this deeper inequality crisis that affects us all. And it’s a timely wake-up call as we embark on the 2016 election season.

James K. Boyce is a professor of economics at the University of Massachusetts-Amherst. 

Chelsea Clinton Is Confused about Single Payer

By Gerald Friedman

Yes, Chelsea, President Sanders would dismantle Obamacare, the CHIP program–and, indeed, the entire system of private health insurance.  And good riddance to it. Instead of relying on a patchwork of programs and a leaky safety net, under the Sanders plan, everyone would have health insurance, guaranteed regardless of employment, without copayments or deductibles, and with free choice of provider. Instead of begging for health care from insurers, pharmaceutical companies, and other for-profit businesses, we would all have access to care as a right of citizenship. Just like people in every other advanced capitalist country.

Under Senator Sanders’ proposal, the United States would pay for universal access to health care because we would no longer be wasting money on the inefficient and bloated private insurance system. Simplifying the administration of payments by replacing multiple insurers with a single government agency, like Medicare, would save nearly $200 billion. Billing activities would also be enormously simplified in providers’ offices and hospital billing departments because all bills would go to one insurer, saving another $200 billion. While a system of thousands of competing private insurers cannot stand up against powerful drug companies and must-have hospitals, a single payer system like that proposed by Senator Sanders would wring monopoly profits out of our health care system. If we paid only as much as Canadians or Europeans pay for drugs, only as much as does the Veteran’s Administration, then Americans would save over $100 billion on their prescriptions.

In all, Senator Sanders’ proposal would save us well over $500 billion in the first year with growing savings thereafter while the single-payer agency restrains the continuing accumulation of monopolistic profit and bureaucratic bloat. These savings would allow us to provide access to health care to the millions who remain without insurance, and the millions more who remain underinsured by policies with such large deductibles or cost-sharing that they remain vulnerable to financial ruin.

For the privilege of receiving inadequate health insurance through private companies, Americans can expect over the next decade to pay over $13 trillion in, what amounts to, private taxes imposed by insurers on behalf of the government that mandates that we have health insurance. Add to this, another $5 trillion that under the Clinton health program we can expect to pay in out-of-pocket spending for medical costs not covered by health insurance.   Instead, with Sanders’ single payer plan, we would save enough in reduced administrative waste and monopoly profits that we could cover everyone’s medical needs and still take home savings of over $1,700 per person per year for the next decade.

Better health care at a lower cost: why isn’t Hillary Clinton campaigning for single payer?