The New Insecurity

In a 1938 address on the third anniversary of the Social Security Act, Franklin Roosevelt declared, "There is still today a frontier that remains unconquered an America unclaimed. This is the great, the nationwide frontier of insecurity, of human want and fear. This is the frontier the America we have set ourselves to reclaim." And reclaim it FDR and his fellow thinkers did.

In the three decades after Roosevelt's words were spoken, the great "frontier of insecurity" shrank dramatically. A massively expanded Social Security program, the GI bill, disability insurance, Medicare and Medicaid all expressed a commitment to protect Americans against what Roosevelt had once called the "hazards and vicissitudes" of modern industrial life.

Corporate America also got into the act. Employers constructed vast structures of security from guaranteed private pensions to generous health and life insurance that shielded millions from uncertainty and fear.

If the debate over Social Security suggests anything, it is that today's "pioneers" are moving sharply in the other direction. Those government programs of shared insurance are under sustained, and sometimes successful, assault. Those elaborate corporate systems of social protection are in steady decline. The political consensus that once helped pushed back the boundaries of insecurity has come undone, leaving Americans exposed to the vagaries of a harsh 21st century capitalism.

Riding the Economic Roller Coaster

The evidence of this Great Risk Shift is everywhere. Some 1.5 million Americans file for bankruptcy each year, more than half because of medical causes. Levels of consumer debt are at an all-time high. In 2003, 45 million Americans lacked health insurance, up more than 5 million since 2000. Those lucky enough to have a pension plan at work are less likely to get a guaranteed benefit. Even the great engine of economic growth in the 1990s, the hot job market, has cooled.

Seemingly overnight, Americans are experiencing the roller-coaster ride of life on the other side of insecurity's frontier. The instability of families' incomes has increased dramatically over the last 20 years. The typical family doesn't rise steadily to greater heights on the economic ladder, but like a volatile stock, its income oscillates wildly from year to year. And when families fall, they fall farther and faster, and government and the private sector do less to slow their descent.

The causes of the Great Risk Shift are complex and multiple. The popular answer is "globalization," which suggests a trend beyond human control. Another part is the changing family: the simultaneous movement of women into the workforce, and the growing fragility of traditional family structures. But what's crucial is that these forces don't preordain the new financial order with which Americans now cope. It's within the power of political and corporate leaders to help Americans deal with these new and newly intensified risks. Yet neither has stepped up. As a result, Americans' basic assessments, expectations, and values have been thrown into a blender of conflicting perceptions and ideals, from which only political turmoil has emerged.

After World War II, the expansion of economic security laid the groundwork for reigning assumptions about economic and family life. Companies provided relatively stable employment. Standards of living rose. Two-earner families were a luxury, not a necessity. And when disaster struck, government and the private sector were there to cushion the fall. Today, Americans' expectations are conflicted, as are the nation's fierce debates over how government and business should respond. You rise and fall on your own, the devil on one shoulder says. Why support institutions of common protection? We are all in this together, the angel on the other shoulder retorts. How can we not have such institutions?

The trends seem to point in both directions at once. In a world of growing insecurity, we need insurance against catastrophic events more than ever. And yet the experience of Americans screams out "you're on your own" more than ever.

Old assumptions are dying hard. But most Americans still remain stubbornly reluctant to embrace the tough-minded alternatives offered in their place as the public hostility to a Social Security overhaul vividly shows. Opinion surveys show levels of public concern about economic security that were not seen even during the bad old economic days of the late 1970s and early 1980s. Yet the same polls also show a complete and total lack of confidence in American political institutions and leaders to address this problem.

The Social Security fight is a metaphor for the entire nasty struggle. Defenders of Social Security point to the huge costs of a transition to private accounts, the benefit cuts that would be implied, the gamble that the stock market represents. Yet their defense is mostly about a program, not about a principle. It is about what government does and should continue to do, not about what government should stand for in an era of increasing economic insecurity. On the other side, the principles are clear and far-reaching. The call for reform is the call for personal responsibility, for the rugged individualism that FDR's rhetoric about insecurity placed squarely in the nation's past. It is the past made future the old assumptions reborn but this time in the fancy new mantle of the "ownership society."

Say Hello to Personal Risk

Say this for advocates of fundamentally revamping American social protections: They know where they want to go. President Bush's message is that government should establish the basis for financial independence and then let the chips fall where they may. Ownership means personal responsibility. Ownership means personal reward. And ownership means personal risk.

Americans like the first part of the message. But they remain skeptical of the second half, that misfortune is almost always a personal rather than a social problem. Scratch the surface of public opinion on almost any contested issue surrounding economic risk from health insurance to unemployment protection to retirement security and you find a complex picture that defies easy ideological summary. Americans may be rugged individualists when it comes to upward mobility, but they are committed social reformers when it comes to downward economic loss.

The challenge for those who hope to stoke this lurking reformist spirit is to develop an agenda that threads between the uncritical embrace of the old and the thoughtless celebration of the new. President Bush was right when he said, in his convention speech, that Americans' most basic social protections were constructed for a previous era, when work and family were more stable and certain.

And yet, the road map that Bush and his allies seem to pull from this reality that we should work to make Americans' economic lives even more unstable and uncertain is the opposite direction we need to head in. Adaptation to a tumultuous new world does not mean capitulation to its darkest manifestations. It means reclaiming a role and place for basic economic security in a world in which such security has become harder and harder to find.

The potential blueprints are many: universal savings accounts, expanded health insurance, a system of catastrophic income protection for American families. They will remain blueprints, however, until truth is spoken to power on one of the most pressing domestic challenges America faces. Perhaps then we can once again look back with satisfaction on FDR's prediction that economic insecurity is the last great frontier that "we have set ourselves to reclaim."