Thursday, April 8, 1943. Roosevelt freezes wages, prices, and jobs. The law of unintended consequences.

USS Tuscaloosa (CA-37) steaming at high speed through heavy seas off Cape Hatteras, April 8, 1943.

Franklin Roosevelt instituted wage and price controls in an effort to combat inflation, and froze employment in place.  The move, of questionable constitutionality, had a permeant, unintended impact on the U.S. economy.

While wages and prices were frozen, benefits, including health insurance, were not. That's because many employers didn't offer it until this time.  Unable to induce workers to switch from one employer to another, they switched to offering benefits, such as health insurance, although Roosevelt's order also precluded workers from switching jobs.  Employees required permission to move employment, and unions lost the ability to bargain for higher wages in an era when wages were rising, but the benefit inducements came in none the less.

We pick that story up here, from a prior thread:

Americans like to think we have a fee market health care system, but we do not and haven't since World War Two.  What we really have is a health insurance based system, although it's breaking down by anyone's measure..  Prior to WWII, most Americans just paid as they went for health care, which had the collateral effects of making health care generally very service oriented on a person to person basis.  I.e., "family" doctors were the majority of doctors not just because of the times, but because if mostly "health care consumers" were average folks with average wages, that's where the work was, and it wasn't going to pay all that well as a rule either.  That doesn't mean that there weren't surgeons, etc., of course, and it doesn't mean the level of care, where received, wasn't very good.  Anyhow, the switch to an insurance based system, with health insurance companies regulated on a state by state basis, alters the free market system as the carriers determine what benefits exist and what they regard as a fair price, based upon actuarial concerns and analysis.  Whatever that price may be, it's not the same as an average person going in to the doctor, and of course people who are covered can go in for much, much more than they otherwise would be able to afford.

Health insurance existed prior to World War Two, but most people didn't have it. But when wages were frozen during the war, for the first time a lot of companies started offering health insurance as a company benefit.  The law didn't allow employers to increase wages to compete with other employers, but they could sweeten the pot by offering health insurance.  For a long time after WWII health insurance benefits and retirement benefits were American employer norms for their employees.  Health insurance actually became increasingly common following the war, and was very common by the 1970s, as an employee benefit.  That's passing away now, however, as its become increasingly expensive for employers to provide.

In contrast to the US's history in this area, Germany introduced a type of national health insurance in the Bismarck era as a type of industrial insurance to combat the rising influence of Socialism and to acknowledge the increased danger of industrial work. The German model of health insurance is the model for at least one states Workers Compensation law, my state's, which provides it as a state benefit (no private carrier) and taxes employers accordingly.  The Germans seem to like their system, but there's always a lot of complaining about the same basic type of system here in the state, even though it actually runs fairly efficiently and pays for a lot of horrific injuries and their medical treatment.  It's interesting to note here that the Germans, whose political history is extremely different from ours, introduced national health insurance to combat socialism, when here its generally regarded as a type of socialism. That doesn't mean it is or isn't, but it's interesting to note that Bismarck took that approach in an effort to take the wind out of the sails of his primary opponents.  It worked fairly well too, in that the Socialist did not take over in Germany until the Weimar Republic, at which time they were the first, and ineffectual, party to govern under the Post World War One parliamentary system that fell in 1932.

The British NHS system, which most Britons seem to be quite proud of, also came about due to World War Two, sort of.  It was first proposed in its current form by the Labor Party in its 1945 platform.  As we all know, Churchill lost his position in 1945 at a time when most Britons believed a return to the Depression was inevitable.  Indeed, that was a very current view all over the world and generally assumed to be almost a certainty.

Stating that "Victory at war must be followed by a Prosperous Peace" the Labor Party proposed:

"By good food and good homes, much avoidable ill-health can be prevented. In addition the best health services should be available free for all. Money must no longer be the passport to the best treatment.

In the new National Health Service there should be health centres where the people may get the best that modern science can offer, more and better hospitals, and proper conditions for our doctors and nurses. More research is required into the causes of disease and the ways to prevent and cure it.

Labour will work specially for the care of Britain's mothers and their children - children's allowances and school medical and feeding services, better maternity and child welfare services. A healthy family life must be fully ensured and parenthood must not be penalised if the population of Britain is to be prevented from dwindling.

Sort of interesting, therefore.  Germany's national healthcare system came about when it was becoming a modern industrial power, in an effort to tamp the socialist down.  The US system came about as a way to skirt the wage freezes imposed during World War Two in order to attract workers.  The British NHS came about when Labor successfully argued that it could better protect the British against what was thought to be an almost certain return to Depression economic conditions.   Whether Labor successfully ran the government after the war is another question, but the NHS remains today and no British political party is going to touch it.

A national health care system was first proposed in the United States during the Truman Administration, but it failed to get very far.  Truman's presidency came hard upon the heels of FDRs and at the time the New Deal was pretty much accepted as having saved the United States from full economic collapse during the Great Depression. That proposition wasn't debated much (although it was always debated by Hoover, who remained a dedicated public servant even after the loss of the election to FDR) but it isn't nearly as accepted now, and really hasn't been since the rise of modern Conservatism starting in the late 1970s.  Even at that, however, Truman wasn't able to pass a national health care bill. The concept revived from time to time, under both Republican and Democratic administrations, without getting very far. Prior to Bill Clinton's attempt during his administration, spearheaded by his wife Hillary, the last really serious attempt had been under Richard Nixon.

Prior to Barack Obama's presidency nobody got very far with such ideas, as noted, in part because Americans were basically satisfied with the existing health care system, which had roots predating World War Two, but which had been heavily impacted by it, as noted.  People might asked what changed between 1970 and now, or 1990 and now, and the answer probably would be "personal experience."  And what that personal experience would likely reveal is a change in culture and in technology.

Prior to World War Two the country was much more rural than it is today.  Indeed, the rural nature of the country, which was predominate up through World War One, has declined steadily since that time and is mostly a memory, if that, for most people now. But that isn't that long ago in historical terms, and its an important aspect of this story.  "Rural" doesn't mean "everyone lives on a farm" like people tend to believe.  But agriculture heavily impacts everything about a rural society, and part of what that impacts is the nature of towns and cities in rural areas.

In that more rural era, doctors were principally general practitioners and generally had solo practices.  Over time this has steadily changed to where today group practices are likely the norm.  At any rate, in that earlier time, health care was very direct and personal.  It was also much less technical. Given that, being that it was less technical and more direct, it was priced accordingly.

That doesn't mean everything was wonderful.  Less technical equates with an era when a great deal less was known on every medical topic.  My grandfather, for example, who was born on this day, died from a stroke when he was 47 years old. There was just nothing that could be done for his condition.  He had high blood pressure and that equated with a type of death sentence really.  One of my partner's father's shared the same fate.  Today, they'd probably both have lived on a great deal longer.

At any rate, technology and an evolving practice model, funded mostly by insurance, has provided us with wonderful health care, but it's also become very expensive.  From World War Two, and increasing on through the 1970s, this was largely funded by health care which was purchased by employers. Some people bought their own health insurance, which was affordable at the time. Those without insurance paid as they went, which was inconvenient for most, and bad for some, but generally workable.

Now, expenses have reached the point where many cannot afford to pay themselves and health insurance has gone from being a workplace benefit to a near necessity for most.  People actually keep jobs just for the insurance.  I've known, for example, of one person who kept a job she wanted to leave to return to school for just that reason.  As a practical matter, the government has become the insurer of last resort for many who have no insurance and who end up using the hospital, in emergencies, as their health care provider.  Increased private medical competition, in the meantime, has become an increasingly common feature of health care as the large dollar amounts that are present in the industry naturally has resulted in private competition.  County and state facilities, therefore, end up in competition with each other, with the practical result of that often being that county and state facilities end up becoming more and more in the nature of public clinics in some ways.

And people have an expectation of health care, which is not abnormal, nor greedy, in a generally affluent society.  That's true of our views on a lot of various things, and its particularly true of health care.  People generally feel that anyone ought to, and even should, seek the health care that they need, when they need it, and there's a feeling of distress when a certain percentage of the population cannot afford it.  Put another way, back in the 1940s if a person was afflicted with a stroke died, it was probably the case that this would have occurred no matter what.  If they were unable to secure health care for some reason for that condition, the result probably would have been the same as if they did.  This would not be true, of course, for every sort of condition, but what that does mean is that there was an overall greater acceptance that if economic conditions prevented treatment, that this was part of the nature of life, rather than being something that would be regarded as deeply unfair. And, for that matter, the medical community made a dedicated effort to include those who could not pay in their practices. They still do, but the nature of that society wide had become different.

I note all of this not to promote or discredit any particular health care system.  It does, however, inform a bit of the background of the debate, and it might explain why the system that is presently being debated is an insurance based system.  That is, the AHCA is actually an insurance centric national system, which was probably a natural route given our history in this area, although its certainly been a controversial one.

Preventing workers from moving from one job to another was frankly a shocking move, in the modern context.  It effectively imposed a type of conscription, or even darned near slavery, upon the civilian population during the war.   Employees could move jobs if they secured permission, but it required that.

The 1943 NFL draft was held.

French actor Harry Baur died shortly after being released by German authorities, having been tortured by the Gestapo after his arrest which stemmed from his efforts to secure the release of his wife, Rika Radifé.  A Turkish actress, she had been arrested on charges of espionage and would survive the war.

I guess on this one, I should ponder what this meant for my family.  My grandfather owned his own business, a meat packing business, so the order wouldn't really apply to him, save for the fact that it did for his employees, which must have been an odd experience.