Economics, politics and psychological practice

By Ronald E. Fox, Psy.D., Ph.D.
January 1, 2006 - Last updated: May 31, 2011

Like many of their fellow citizens, psychologists often are content with the “spin” coming out of Washington about a growing economy and the prosperity that is predicted to follow. Such Pablum is the kind of nonsensical, non-critical thinking that we can no longer afford, either as a country or as a profession. Too many psychologists claim to be much too busy with their practice to worry about economics or the endless clamor of Washington politics. They could not be more mistaken.

It is true as the current administration claims that the United States is in a period of economic growth. However, that “growth” has not made us more prosperous. We are not experiencing the kind of growth that makes for better, less stressful living, happier citizens and better health. All of us, psychologists included, need to take a careful look at what our government is doing to bring about the kind of economic growth that does not trickle down.

Research has shown that despite periods of tremendous growth from 1973 to 2000, the average real income of the bottom 90 percent of taxpayers fell by 7 percent. Think about that. Fully 90 percent, virtually all of us, saw our fortunes decline during some of the greatest periods of economic growth in our history. Political decisions are creating enormous tax advantages for wealthy individuals and corporations at the expense of everyone else. Fifty-three percent of the benefits of capital gains and benefits go to individuals with incomes greater then $1 million. The average benefit of tax breaks for those with incomes of more then $1 million is $35,491. Those with incomes between $50,000 and $200,000 get $112 and those with incomes under $50,000 get all of $6! A friend in congress who is a former professor of political science says we are witnessing one of the largest transfers of wealth from the bottom to the top in the history of western civilization. How can such “growth” be a good thing?

The wealth of our country is not infinite. We cannot afford to fund a war, pay for natural disasters, provide unprecedented tax breaks for the rich, allow corporations to avoid their fair share of taxes by exploiting increasingly favorable loopholes while receiving unneeded government incentives without shortchanging other sectors of the economy. Psychologists see the cumulative effects of such policies in its effect on health care, to take one obvious example. We deal directly with people’s inability to afford needed care and the government’s failure to provide the leadership to create a more equable health care system.

Recent studies are documenting the alarming consequences of misplaced budget priorities on health care. One of them compared the costs of health care in 30 European and industrialized countries. This study found that although the United States has the most expensive system, countries with equal or better care pay thousands of dollars less per individual. The study also concluded that it is not malpractice claims or greater access to care that is driving up our costs as many have claimed. U.S. malpractice awards amounted to only $16 per capita compared to $12 in the United Kingdom and $10 in Australia – and the $16 we pay for malpractice claims is only a small fraction of our total per capita costs of $5,267.

Health spending in America accounts for 14.6 percent of our gross domestic product. Only two other countries exceeded 10 percent and even those two were well below us. The highest estimate of defensive medicine costs in the United States is 9 percent, a small fraction of our 140 percent differential in spending over the median of all the other countries. Nor is there evidence that we spend more for care because we get more services. Other countries are outstripping us by a good margin in that respect as well. It is true that in some countries, people are forced to wait for some health services, but the per capita spending in seven countries in the study that did not have waiting lists is $2,500 less than in the U.S.

Another recent survey of nearly 7,000 sick adults in the U.S., Australia, Canada, New Zealand, Britain and Germany found that Americans were the most likely to pay at least $1,000 in out-of-pockets expenses. More than 50 percent of Americans went without needed care because of cost and more than one-third endured mistakes and disorganized care when they did get treated. Both of these figures were much higher than those of the other countries. In short, we pay more and get less. The health of our country is suffering because our government is not willing to pay the political and economic costs to overcome the vested interests that prefer the status quo. Our country has other priorities.

Consider what our “improving” economy has brought us: We are dead last among developed countries in fighting poverty, the same thing in the number of Americans living on less than half of the median income, last in functional literacy, a lower life expectancy than all industrialized countries except Ireland and Denmark, number one in percentage of population without access to health care, hunger in American households that has risen by 43 percent over the last five years and we’re at the bottom of the pile in terms of life expectancy in the developed world. In the face of all this, our financial security and social safety net is under increasing attack by the nation’s majority party in Congress.

The current proposed Senate budget increases burdens on seniors by raising Medicare premiums, reduces the affordability of housing, cuts both Medicaid and Medicare services and provides more tax breaks for the wealthy. The House version is considering cuts in student loans, food stamps, child support and foster care – and even deeper cuts in health care.

Our spending priorities have given us a population in which 10 percent suffer from depression and over 13 percent from an anxiety disorder in a given year. We may be the world’s richest nation but we are struggling to keep it together. A truly prosperous nation ensures the greatest benefits to the greatest number of people. Our economy is creating too many casualties and as health care professionals, we know that to be true.

Talk about economic growth in the U.S. has become conflated with a garden variety of pro-rich policies which include privatization, deregulation, reducing taxes to squeeze government, downward pressure on wages and less corporate accountability. But economic competitiveness is also as much about technological know-how, greater investment in the public sphere (especially education), research and development and infrastructure as it is about growth per se. It is not socialism to recognize that the worst excesses of capitalism must be curbed if the many are to prosper.

Many Americans are stressed out, tired, depressed, on drugs and poorly equipped to meet the increasing demands of a highly competitive world economy. Psychologists cannot help but see the price our citizens are paying for misguided policies.

We know the shaky reasoning and false logic underlying some of the nostrums that are being promulgated by the government. We need to be advocating for our patients and opposing the scare tactics of the prevailing political fashion. A truly prosperous and just society ensures the greatest benefits to the greatest number of people, which also makes for better health, less stressful living and happier families. We do not have such a society now, but we could. And psychologists should work to help make it happen.


Ronald E. Fox, Psy.D., Ph.D., is executive director of The Consulting Group in Chapel Hill, N.C., and is a past president of the APA. He can be contacted via e-mail at:

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