While I'm writing about building modern-day social equity in America, I might as well raise a related issue: the poor, without exception, hate the regressive tilt of the scores of different auto liability insurance laws in state to state across the country. Each year, folks beating their brains out just to survive (the poorest third), are bled white pouring close to a hundred billion dollars of their hard-won earnings into a patchwork auto-liability insurance system whose questionable social benefits are all but invisible and impalpable to them. Here, I'm not talking about those for whom this is no stretch; I'm talking about the verifiably poor who are obliged to greatly dilute their financial prospects to purchase this form of insurance.
Still others, too hard-up to afford both the very most basic things of life and auto liability insurance at the same time and dare to commute by car anyway - because living demands that they do - are lain in wait for by law enforcement, metaphorically speaking, as they attempt to commute back and forth without insurance between some hardscrabble line of work - if they're lucky enough to even have work - and the domicile they can barely hang on to. This dreary practice, as experience has shown, is more prevalent in poor, rural counties where law enforcement personnel are under less pressure to carefully prioritize in the deployment of time and resources and the locals defer more to official and economic rank. One little driving mistake or one dead taillight and the unlucky end up getting nailed with crippling fines that local municipalities are all too ready to use to fatten their coffers, but which also have the nasty side effect of further encumbering the already poor.
Other states, more systematically ruthless in their slavish sponsorship of big insurance and trial lawyers, make issuance of car tabs conditional on the prior purchase of liability insurance. Those states also tend to be the ones most rapidly dichotomizing into the few rich and the many poor.
Even before the collapse of the credit-driven economy I found the above to be a naked violation of the Equal Opportunity clause in the nation's constitution. No law that so disproportionately favors the rich while effectively criminalizing being very poor should be on the books in any state. Now that so many are being crushed by a flailing national economy and the terrors of personal destitution are daily fare in the news, I find it absolutely incredible that these laws still have their shameless, knee-jerk defenders, especially in view of the fact that excellent minds have repeatedly shown that far more comprehensive benefits and relief could easily be delivered, at a fraction of the current cost, by a user-friendly, federally-managed, single payer system funded by a small tax on BTU equivalents in motor fuels. Premiums would be based on a combination of existing industry information and miles driven (think of the way your household electricity bill is structured). In addition, if traffic safety is truly a state's pre-eminent objective, that cause is better served by spending money on more direct approaches such as safer roads, better signage and lighting, impact engineering in car design, vehicle inspections for safety defects, state-sponsored car repair loans, enforcement of bans on distracting activities while driving, mandated seatbelt use, shifting more freight haulage to trains and other such practical measures that are far more cost-effective than the indirect tempering action claimed (but not proven) by those who defend the usefulness to society of a high auto insurance threshold to owning and operating a car.
A moment's contemplation will reveal that the more excise and income tax revenues a state generates, the more capable it will be of implementing the sort of safety program mentioned above. The only kind of state that generates a big inflow of such revenues is one with a robust middle class - a condition demonstrably undercut by the drain on society levied by mandatory auto-liability insurance. That said, why would any state wanting to make substantive progress on road safety support an auto liability system that was compromising its ability to do so by weakening its revenue-producing middle class - especially when far more cost-effective, benefit-rich alternative systems have been identified?
The answer, I suspect, lies in the disproportionate hold that the insurance industry and trial lawyer groups have over who gets elected or unelected, as the case may be. Advocacy groups for the poor don't have that kind of clout when it comes to crafting legislation.
Unfortunately, well-meaning - overwhelmingly urbanized - environmental activists tend to give aid and comfort to those who oppose auto insurance reform, believing that anything that stands in the way of owning and operating any kind of vehicle must be in the interests of Nature. This highly subjective, intellectually limited point of view tends to evaporate rather quickly when you ask whether this also applies to the electric vehicles now coming to the market, especially those destined to be charged by PV panels on the roof of the residences and workplaces where they would end up being parked most of the day. Remember, the tax proposed would be on energy used - electrical included, regardless of its source. Key to getting this constituency to sign on to the issue of premium reform (so that young adults can become as economically-unencumbered as we need them to be) is the making of dramatic progress on non-polluting forms of personal transportation - something the federal government would be well-advised to get behind with all dispatch.
For right now, however, Americans are hurting for cost-of-life containment and hurting bad. It's a no-brainer that cutting their auto liability costs down to a tiny fraction of what they pay now would be a HUGE relief. So what are we waiting for? This sacred cow to die of old age? I'll tell you what we're waiting for; not better ideas - they already exist. The real reason that positive change is not in the offing, once again, is GREED, along with no small amount of fear on the part of insurance companies, many of whom, we should remember, gave us the present economic crisis by rushing into the credit default swaps market on the advice of financial "experts", only to be shot down in flames when collateralized debt obligations that had funneled so much easy money to them suddenly converted into a monster payout obligation on failed investment portfolios riddled with toxic assets cooked up by some of their former best buddies.
Anything that continues to deliver any kind of income to them at this time is lifeblood itself. Not squeezing that artery just because we empathize with them in their current predicament is a mistaken use of compassion. To be sure, they never felt any sense of common cause for the poor when those people were being squeezed between a rock and a hard place by premiums sucking the last juice out of their future prospects. Somehow, it never crossed the minds of movers and shakers in the insurance industry that people should not be forced to pay more for the mutual protection of their several interests than is absolutely necessary. The stakes for society and the economy are far too high for us to give insurance companies a free ride on the backs of the poor.
Auto liability premium relief would return the biggest influx of cash into the lower three income quintiles since the days of the War on Poverty under the Johnson administration. Perhaps more.
At times such as these, we survive only by adjusting old assumptions to be more in tune with current reality. Right now, we have to realize that old-fashioned style liability awards are a luxurious perk of the affluent society - one we can no longer afford. No society as economically distressed and debt-ridden as ours can properly be considered to be affluent. Underwriting the ease whereby people enjoy access to lavish awards in liability suits with regular infusions of our shrinking earnings - a big chunk of which people in the insurance and litigational business simply take home in the form of upper-tier pay - can only be considered a reasonable allocation of means when all are flush-to-overflowing with cash. Absent that blessed condition, it's just stealing from the baby to please the dog. Context is the determining factor. Such suits don't exist in poor societies where most people feel lucky to secure the basics and little else - increasingly, a fact of daily life in America for more of its citizens with each month that passes.
What once might have seemed axiomatic no longer applies. Right now, all bets are off.
The trouble in Paradise is that America has morphed into two societies living side-by-side, one steeped in all the expectations and delusions of affluence (both garish and discreet) that imagination can conjure up and the other living under the same unforgiving realities of true poverty that people in third-world countries face. The one critical difference that separates our poor and their poor is the sheer efficiency with which the poor in America are excluded from access to opportunity in this highly organized complex. Among those exclusions is the physical distance to which housing they can afford has been displaced from where acceptably paid work is to be had because of the diverse actions of the rich, both intentional and inadvertant.
This distance constitutes a gulf the poor must traverse, back and forth each day, mostly by car, if time is to be salvaged for other activities. For many, the cost of both surviving in such a way, and paying a premium for the privilege of being allowed to do so, is just one too many straws on a camel's back. Something's got to give and when that happens, the poor tend to demonstrate a better understanding of Maslow's Hierarchy of Needs than their more comfortably-set contemporaries. They've got to eat and to eat, they've got to work and that means having to drive; and so, they proceed to drive without insurance, taking the only chance open to them.
Still others, too hard-up to afford both the very most basic things of life and auto liability insurance at the same time and dare to commute by car anyway - because living demands that they do - are lain in wait for by law enforcement, metaphorically speaking, as they attempt to commute back and forth without insurance between some hardscrabble line of work - if they're lucky enough to even have work - and the domicile they can barely hang on to. This dreary practice, as experience has shown, is more prevalent in poor, rural counties where law enforcement personnel are under less pressure to carefully prioritize in the deployment of time and resources and the locals defer more to official and economic rank. One little driving mistake or one dead taillight and the unlucky end up getting nailed with crippling fines that local municipalities are all too ready to use to fatten their coffers, but which also have the nasty side effect of further encumbering the already poor.
Other states, more systematically ruthless in their slavish sponsorship of big insurance and trial lawyers, make issuance of car tabs conditional on the prior purchase of liability insurance. Those states also tend to be the ones most rapidly dichotomizing into the few rich and the many poor.
Even before the collapse of the credit-driven economy I found the above to be a naked violation of the Equal Opportunity clause in the nation's constitution. No law that so disproportionately favors the rich while effectively criminalizing being very poor should be on the books in any state. Now that so many are being crushed by a flailing national economy and the terrors of personal destitution are daily fare in the news, I find it absolutely incredible that these laws still have their shameless, knee-jerk defenders, especially in view of the fact that excellent minds have repeatedly shown that far more comprehensive benefits and relief could easily be delivered, at a fraction of the current cost, by a user-friendly, federally-managed, single payer system funded by a small tax on BTU equivalents in motor fuels. Premiums would be based on a combination of existing industry information and miles driven (think of the way your household electricity bill is structured). In addition, if traffic safety is truly a state's pre-eminent objective, that cause is better served by spending money on more direct approaches such as safer roads, better signage and lighting, impact engineering in car design, vehicle inspections for safety defects, state-sponsored car repair loans, enforcement of bans on distracting activities while driving, mandated seatbelt use, shifting more freight haulage to trains and other such practical measures that are far more cost-effective than the indirect tempering action claimed (but not proven) by those who defend the usefulness to society of a high auto insurance threshold to owning and operating a car.
A moment's contemplation will reveal that the more excise and income tax revenues a state generates, the more capable it will be of implementing the sort of safety program mentioned above. The only kind of state that generates a big inflow of such revenues is one with a robust middle class - a condition demonstrably undercut by the drain on society levied by mandatory auto-liability insurance. That said, why would any state wanting to make substantive progress on road safety support an auto liability system that was compromising its ability to do so by weakening its revenue-producing middle class - especially when far more cost-effective, benefit-rich alternative systems have been identified?
The answer, I suspect, lies in the disproportionate hold that the insurance industry and trial lawyer groups have over who gets elected or unelected, as the case may be. Advocacy groups for the poor don't have that kind of clout when it comes to crafting legislation.
Unfortunately, well-meaning - overwhelmingly urbanized - environmental activists tend to give aid and comfort to those who oppose auto insurance reform, believing that anything that stands in the way of owning and operating any kind of vehicle must be in the interests of Nature. This highly subjective, intellectually limited point of view tends to evaporate rather quickly when you ask whether this also applies to the electric vehicles now coming to the market, especially those destined to be charged by PV panels on the roof of the residences and workplaces where they would end up being parked most of the day. Remember, the tax proposed would be on energy used - electrical included, regardless of its source. Key to getting this constituency to sign on to the issue of premium reform (so that young adults can become as economically-unencumbered as we need them to be) is the making of dramatic progress on non-polluting forms of personal transportation - something the federal government would be well-advised to get behind with all dispatch.
For right now, however, Americans are hurting for cost-of-life containment and hurting bad. It's a no-brainer that cutting their auto liability costs down to a tiny fraction of what they pay now would be a HUGE relief. So what are we waiting for? This sacred cow to die of old age? I'll tell you what we're waiting for; not better ideas - they already exist. The real reason that positive change is not in the offing, once again, is GREED, along with no small amount of fear on the part of insurance companies, many of whom, we should remember, gave us the present economic crisis by rushing into the credit default swaps market on the advice of financial "experts", only to be shot down in flames when collateralized debt obligations that had funneled so much easy money to them suddenly converted into a monster payout obligation on failed investment portfolios riddled with toxic assets cooked up by some of their former best buddies.
Anything that continues to deliver any kind of income to them at this time is lifeblood itself. Not squeezing that artery just because we empathize with them in their current predicament is a mistaken use of compassion. To be sure, they never felt any sense of common cause for the poor when those people were being squeezed between a rock and a hard place by premiums sucking the last juice out of their future prospects. Somehow, it never crossed the minds of movers and shakers in the insurance industry that people should not be forced to pay more for the mutual protection of their several interests than is absolutely necessary. The stakes for society and the economy are far too high for us to give insurance companies a free ride on the backs of the poor.
Auto liability premium relief would return the biggest influx of cash into the lower three income quintiles since the days of the War on Poverty under the Johnson administration. Perhaps more.
At times such as these, we survive only by adjusting old assumptions to be more in tune with current reality. Right now, we have to realize that old-fashioned style liability awards are a luxurious perk of the affluent society - one we can no longer afford. No society as economically distressed and debt-ridden as ours can properly be considered to be affluent. Underwriting the ease whereby people enjoy access to lavish awards in liability suits with regular infusions of our shrinking earnings - a big chunk of which people in the insurance and litigational business simply take home in the form of upper-tier pay - can only be considered a reasonable allocation of means when all are flush-to-overflowing with cash. Absent that blessed condition, it's just stealing from the baby to please the dog. Context is the determining factor. Such suits don't exist in poor societies where most people feel lucky to secure the basics and little else - increasingly, a fact of daily life in America for more of its citizens with each month that passes.
What once might have seemed axiomatic no longer applies. Right now, all bets are off.
The trouble in Paradise is that America has morphed into two societies living side-by-side, one steeped in all the expectations and delusions of affluence (both garish and discreet) that imagination can conjure up and the other living under the same unforgiving realities of true poverty that people in third-world countries face. The one critical difference that separates our poor and their poor is the sheer efficiency with which the poor in America are excluded from access to opportunity in this highly organized complex. Among those exclusions is the physical distance to which housing they can afford has been displaced from where acceptably paid work is to be had because of the diverse actions of the rich, both intentional and inadvertant.
This distance constitutes a gulf the poor must traverse, back and forth each day, mostly by car, if time is to be salvaged for other activities. For many, the cost of both surviving in such a way, and paying a premium for the privilege of being allowed to do so, is just one too many straws on a camel's back. Something's got to give and when that happens, the poor tend to demonstrate a better understanding of Maslow's Hierarchy of Needs than their more comfortably-set contemporaries. They've got to eat and to eat, they've got to work and that means having to drive; and so, they proceed to drive without insurance, taking the only chance open to them.
The crime real lies not in their driving on the roads their taxes help build and maintain, but in the heartlessness of those who refuse to see why, even as they self-righteously crow about being able to walk or ride to work from close-in homes valued in the half-million range and up.
To many of the rich, of course, the uninsured poor who still cling to commuting by car are a scourge needing to be dealt with. Their presence is a blot on the face of what, otherwise, might have been a more pleasing social milieu; and a pain in the royal arse, to boot!
In its current form, the patchwork system of auto liability insurance we have across this country dumps the expectations of the affluent onto the fragile back of the beleaguered poor, over time, destroying the lives of a great many by disastrously undercutting whatever hopes of ever owning a home as they may have - along with the countless advantages that being able to do so brings within reach. In this, the rich act as if all Americans were in the same boat of financial privilege together and the playground of life were level - with spectacular disregard for truth or fair-play.
Over the years, under the spread of mandatory auto liability insurance from state to state, the shift in liquidity from payers living below what is broadly understood to be the middle class to recipients in the higher earning levels - for literally nothing gained as a bloc - has been truly staggering. In this state, Washington, alone, the amount shifted thus, each year, is currently around 2.5 billion dollars.
Small wonder then that there is so much well-heeled resistance toward scrapping the current system and instituting a system with a lower social cost/benefit ratio that puts concrete concerns like damage control and healthcare ahead of arbitrary elements like liability. 2.5 billion dollars is a lot of ill-gotten gains (there's no other way to characterize it) that some folks would have to part with if the system were to be scrapped. Besides, as the reader knows well, sacred cows of the American kind are nearly impossible to kill.
Incredibly, the preceding realities are simply shrugged off by those who believe that the rest of America should be entrained into the make-believe world of guaranteed ease they prefer to keep convincing themselves still exists in this country, even as the very fundaments of the economy crack and groan. Not for them the realities of America's overall downward spiral, these ones of the Marie Antoinette school of economics.
No, these plutocratic worthies prefer not to see the toll that blithe assumption exacts on the income ranks below them who are entrained in keeping the pampered expectations of the upper and upper-middle classes realized in the manner to which they have become accustomed.
I know that kind of blindness well: I didn't have the faintest clue about how hard it was for non-white South Africans when I was a pampered young white South African whose upbringing was being sponsored by the struggles of desperately poor non-whites all around me who had to carry identity passes to commute between the townships they were forced to live in and the white areas where they had jobs as domestics, gardeners and laborers. Not having your pass on you, when you were questioned by police, meant instant arrest and a hefty fine. I was on the political left, but wealth and privilege formed a veil through which the stark conditions they faced filtered only faintly.
Perhaps, now that America is anything but universally affluent, the rich will begin to downscale their expectations of others, especially notions of value far beyond utilitarian that they believe the rest of us should be expected to help underwrite - things like luxury brand value, show-off cache and accessories not crucial to a car's basic role as a means of transportation. Either this downscaling of expectations will occur, or we are going to crash into some nasty social reality checks; basically, escalating levels of class warfare.
As far as our government's role in this issue is concerned, I don't think we should wait for permission from the rich before we act to adapt. The poorer majority needs a break from being yoked to the richer minority's agendas right now.
Those who feel they need to be assured of a productive suit for damages in the event they are hurt by the driving of another, let them turn to their OWN resources to pay for that kind of insurance. That's what uninsured driver's insurance is for. If you are unwilling to buy it, you don't deserve the benefits in question, especially not on the backs of less fortunate others. And for those who deem uninsured driver's insurance too expensive to buy - that means the rest of us, me included - let them depend upon the normal process of suing for damages - that is, under no special condition of collective, state-conscripted, insurance blanket - just like any other area of liability in life. If that has to be the price many of us pay in exchange for having a shot at home ownership, dental care, health care and education, so be it. As a bloc, we'll come out ahead on the deal. In short, it's time for us to stop shorting the piggy bank to pay the candyman (and, later, the dentist).
In the end, one has to ask the pivotal question: what is the fundamental objective of society's coming together to finance, build and maintain the roads we own? Is it to create a human dog-and-pony show so we all can see who's on the up, who's got class, who's cruising in style, etc. or is it to get as many people and as much stuff as painlessly as possible from Point A to Point B so that life and commerce may get on with what life and commerce have to do for us to be viable as a society? The answer, I think is clear. Anything that impedes the latter objective needlessly should be fixed so that it doesn't. Ensuring that we do so in the most environmentally gentle way possible does not undo this truth. All it means is that we're going to have to be a lot more disciplined in how we think and act as a society - a challenge I believe we're well up to once we move the worst impeders to that process aside.
While it can't be denied that some with justified grievances are going to come up empty-handed every now and then, in the meantime, a thousand times their number will see their economic chances greatly advanced, over time, in the financial struggle to live a decent life side-by-side with others wealthier than themselves in the new, more restrained and disciplined (though potentially more enjoyable) America to come.
Think of the relief that would be offered. It wouldn't just be huge; it would be on a scale unprecedented since the New Deal in the 1940's. Compared to those infamous public-sector-starving tax cuts to the nation's wealthier set that the public hates so much, it would be like day is to night. If the Congress was able to ingest that little beauty without dying of shame, reforming mandatory auto liability ought to be a public relations coup.
Approving legislation to reform auto liability insurance - as one section of a panoply of "Obama Administration Equity Enhancement Package" reforms - might even be welcomed by Congress as a golden opportunity to redeem itself for having erred so badly, so often, in recent years.
As far as our government's role in this issue is concerned, I don't think we should wait for permission from the rich before we act to adapt. The poorer majority needs a break from being yoked to the richer minority's agendas right now.
Those who feel they need to be assured of a productive suit for damages in the event they are hurt by the driving of another, let them turn to their OWN resources to pay for that kind of insurance. That's what uninsured driver's insurance is for. If you are unwilling to buy it, you don't deserve the benefits in question, especially not on the backs of less fortunate others. And for those who deem uninsured driver's insurance too expensive to buy - that means the rest of us, me included - let them depend upon the normal process of suing for damages - that is, under no special condition of collective, state-conscripted, insurance blanket - just like any other area of liability in life. If that has to be the price many of us pay in exchange for having a shot at home ownership, dental care, health care and education, so be it. As a bloc, we'll come out ahead on the deal. In short, it's time for us to stop shorting the piggy bank to pay the candyman (and, later, the dentist).
In the end, one has to ask the pivotal question: what is the fundamental objective of society's coming together to finance, build and maintain the roads we own? Is it to create a human dog-and-pony show so we all can see who's on the up, who's got class, who's cruising in style, etc. or is it to get as many people and as much stuff as painlessly as possible from Point A to Point B so that life and commerce may get on with what life and commerce have to do for us to be viable as a society? The answer, I think is clear. Anything that impedes the latter objective needlessly should be fixed so that it doesn't. Ensuring that we do so in the most environmentally gentle way possible does not undo this truth. All it means is that we're going to have to be a lot more disciplined in how we think and act as a society - a challenge I believe we're well up to once we move the worst impeders to that process aside.
While it can't be denied that some with justified grievances are going to come up empty-handed every now and then, in the meantime, a thousand times their number will see their economic chances greatly advanced, over time, in the financial struggle to live a decent life side-by-side with others wealthier than themselves in the new, more restrained and disciplined (though potentially more enjoyable) America to come.
Think of the relief that would be offered. It wouldn't just be huge; it would be on a scale unprecedented since the New Deal in the 1940's. Compared to those infamous public-sector-starving tax cuts to the nation's wealthier set that the public hates so much, it would be like day is to night. If the Congress was able to ingest that little beauty without dying of shame, reforming mandatory auto liability ought to be a public relations coup.
Approving legislation to reform auto liability insurance - as one section of a panoply of "Obama Administration Equity Enhancement Package" reforms - might even be welcomed by Congress as a golden opportunity to redeem itself for having erred so badly, so often, in recent years.
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