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Boomer Retirement Roundtable
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FROM: Phillip Longman
TO: Clive Crook, Megan McArdle
SUBJECT: Megan McArdle's Jan/Feb article
DATE: January 1, 2008

Because Clive was rushing off to Africa [Clive Crook drafted his second contribution to the discussion just before taking off for a trip to Tanzania. Read about the trip he took last year to Namibia or watch a slideshow of his photos], he didn’t have time to look up the percentage of American elders who receive care from their children, but guessed it was low. It’s not. The pertinent statistics are these:

At age 65, the chances of eventually requiring some form of long-term care are roughly 70 percent, according the American Society on Aging. Women are roughly twice as likely as men to need such care.

According to a GAO estimate, 60 percent of the disabled older adults living in communities rely exclusively on their families and other unpaid sources for their care.

The imputed economic value of this support, according as a study in Health Affairs in 1999, is more than three times what Medicaid spends on its long-term care program, which requires beneficiaries to be indigent.

These facts suggest that family support is still vital to today’s elderly, and that the large share of Boomers without children will be in for an especially hard time in later life even if there is a major expansion in edibility to long-term care benefits. Many Boomers already are experiencing this reality. Largely because of spreading obesity and sedentary lifestyle, disability rates among the middle-aged started rising dramatically in the '80s and 1990s—by 50 percent among those 30-39 at the time. Today, the majority that survived the early onset of debilitating conditions are approaching early old age already unable to perform one or more crucial activities of daily living.

Though there is wide diversity in health status among aging Boomers, I do not share the commonplace view that this generation as a whole will be healthier in old age and therefore more independent, of either family or government, than today’s elders. Fewer will die in their early 60s from smoking-related disease, but many, many more will spend years and decades beset by chronic long-term conditions such as diabetes, which has reached epidemic proportions. Just look around you. Every time I go to Wal-Mart these days, I find myself dodging very larger Boomers who are cruising the aisles on motor scooters.

The solution to this rising morbidity throughout the population, as I’ve argued in a recent book, is to reorient the U.S. health-care system toward integrated, coordinated care, with a heavy emphasis on prevention and disease management. The Veterans Health Administration has become a world leader in this model of care, which relies heavily on electronic medical records to coordinate care among specialists and involve patients in their own care, while also providing population-level data about what drugs and procedures work best. In a recent issue of the Washington Monthly, I’ve laid out a plan for giving far more Americans access to the VA model of care, which would both reduce costs and improve health-care quality.

Is that politically possible? Not yet. But the staggering cost that U.S. health care imposes on active workers and employers is already rapidly changing the politics of health-care reform. So is another factor. Both Clive and Megan, along with many other Americans, seem to assume that the elderly will enjoy increasing political power as they become a larger and larger share of the population. But that is quite likely not going to happen. As the brilliant, late economist Mancur Olson noted, there is a logic to collective action that benefits narrow special interests, but that undermines them if they grow larger.

Narrow special interests don’t have to share their spoils widely, which gives individual members a strong incentive to invest their time and money in the cause, whether it's support payments for cotton growers or depletion allowances for oil companies. But in broader alliances, the incentive for individuals to participate diminishes because, even if the group collectively wins a very large share of GDP for itself, the gain has to be spread thinly. Looked at another way, politicians can win deep support from narrow interests by spending only a tiny fraction of the public purse. By contrast, they can spend impossible amounts on large groups and win very little loyalty because each individual member will receive only a token benefit.

I think we are already beginning to see this logic of collective action apply to the politics of aging. The Gray Lobby today has nowhere near the clout it had in the 1970s and '80s. In 1972, for example, when the elderly were a far smaller and slower growing percentage of the population, the Gray Lobby won both a 20 percent increase in Social Security benefits and automatic cost of living adjustments even as younger Americans suffered stagflation and downward mobility. Into the 1980s, there were militant groups like the Gray Panthers, James Roosevelt’s Save our Social Security, and the many others who gave politician fits. In 1989, the powerful Chairman of the House Ways and Means Committee, Dan Rostenkowski, found himself literally attacked on the streets of Chicago by a mob of cane swinging elders. They where upset with his support for a new program that expanded Medicare coverage for “catastrophic” expenses but that required middle-and upper-income seniors to pay part of the cost. The program was soon repealed.

Since then, total spending on the elderly has increased enormously, but almost all of that is due to the increasing cost of health care and the rising population of seniors, not because of Gray Power successes in expanding benefits. In the 1980s, groups like the AARP pushed hard for and almost won a new universal entitlement to long-term care; now, though the need is more pressing than ever, long-term care is not even on the nation’s policy agenda while expanded Medicaid coverage for children very much is. The one seeming exception to this trend, the new Medicare prescription drug benefit, was brought to you not by senior activists, but by drug companies  who made sure the bill would prevent Medicare from negotiating for lower drug prices. And this time, there was no fuss about the fact that the elderly would have to pay for much of the cost of their own benefits. As the ranks of the elderly have increased, their political power has diminished and I see no reason why this trend won’t continue. Only a fantastic increase in national wealth would change the balance, and aging itself works against that scenario.

As to Megan’s optimism about improving race relations in an aging society, I can only hope she is right. But if The Atlantic had paid for her to travel to Europe, she would have found deepening resentments between native born whites and darker hued immigrants, particularly in places like the France, where, in reaction to rioting Muslim youths, the country has recently elected a Nixon-like “law and order” President, Nicolas Sarkozy. Since the 1990s, far-right parties have been on the rise in nearly every country in Europe, fueled mostly by resentment of immigrants. Aging societies may have an especially acute need of immigrants, but for that very reason resent them even to the point of exclusion. Tellingly, the United States slammed its immigration door closed in the 1920s, a time when falling birth rates among country’s native-born stock prompted deep concern about “race suicide” among both elite “eugenicists” and the masses of white, Protestants who joined a resurgent Ku Klux Klan movement. The gate stayed shut until 1965, by which time most people figured that that native-born baby boom would go on forever and there was no danger of being outbred by swarthy immigrants. For those who can bear to learn more of this relationship between aging, race, and immigration, I humbly suggest my book, The Empty Cradle, large parts of which can be read for free online at Google Books.

I’ve very much enjoyed this discussion, but midnight nears and now it’s time to raise a glass and remember my own years gone by. Happy New Year!

Page 1: Phillip Longman launches the discussion
Page 2: Clive Crook reacts to McArdle's piece and responds to Longman
Page 3: Megan McArdle responds to Longman and Crook
Page 4: Clive Crook responds to McArdle