Hooverism

 A few months ago I posted some notes on a couple of semi-recent books, one of which was Ages of American Capitalism by Jonathan Levy.  One of the main takeaways from that book for me was the extent to which Herbert Hoover's ideology of the "associational state" continues to dominate the policy program of both political parties to this very day.  What that entails at its essence is: 1) an accession to the holders of concentrated wealth and their perogative to decide how capital should be allocated. 2) hoping that those decisions will sometimes accrue to the greater good if our elected representatives in government ask nicely.  Here's the same quote I pulled the last time I brought this up. 

On the telephone and at two White House conferences, the president personally pleaded with the corporate executives of the largest, most regulated industries to increase capital investment expenditures. In 1930 railroads and utilities obliged. Yet everywhere else, especially in residential construction, fixed investment kept falling. Hoover recognized that during the 1920s, corporate profits had run ahead of wages, and he believed that high wages would stabilize spending, a good thing. “The first shock,” he declared, “must fall on profits and not wages.” Whether because of Hoover’s promptings or not, the nation’s largest employers agreed not to slash wages, even as they continued to fire their less desirable employees, a pattern that would persist. Proudly, Hoover said the agreements were, “not a dictation or interference by the government with business.” Rather they were the result of “a request from the government that you co-operate in prudent measure to solve a national problem.” The president boasted, “This is a far cry from the arbitrary and dog-eat-dog attitude of the business world of some thirty for forty years ago.” Hoover believed his “associational state” transcended the Jacksonian sphering of public and private, state, and market, which under the banner of equal commercial opportunity, had withered state action throughout the Age of Capital. But he drew one line in the sand. He would not coerce capitalists to invest. 

To make the point about how little things have changed, I highlighted this statement from Joe Biden  shortly after Hurricane Ida. Biden publicly asked insurers and utitlity companies to please not exploit their policy holders and ratepayers in the wake of the disater.  

“I’m calling on the insurance companies at this critical moment. Don’t hide behind the fine print and technicality. Do your job. Keep your commitment to your communities you insure,” he continued. “Do the right thing. Pay your policy holders what you owe them to cover the cost of temporary housing in the midst of a natural disaster. Help those in need. That’s what all of us need to do.” 

Biden also expressed that, throughout the week, he’d expressed that same message to local officials and utility and energy company representatives during virtual meetings.

Like Hoover, however, Biden did not take any extraordinary steps to compel them.  

The reason I bring this up again today is because we read in this morning's news that a "frustrated" Governor Jeff Landry is taking a similar approach with Louisiana's out of control insurance rates. 

Landry, a Republican who took office in January, has convened lawmakers for three special sessions – on redistricting, crime and taxes – but hasn’t convened one for the insurance crisis.

In an interview, Landry said he’s open to holding another special session on insurance, but he has not seen a package of bills that would fix the problem. He called on insurers to offer up solutions that would lead to savings for homeowners.

The article goes on to point out that there are things the state could do in a legislative session to take on the problem. The easiest and least radical of these would be requiring insurers to discount homeowners who take advantage of a state subsidized fortified roof program.  (Those roof grants could be bolstered as well.) Alli pointed out last week that coastal Alabama's success at controlling insurance costs (relative to the rest of the Gulf South) is at least partially attributable to its fortified roof program. 

But so far, Landry would prefer that insurers "offer up solutions" themselves.  He does sound mad, though. 

Landry said he’s miffed that the package of bills pushed by the insurance industry that he signed in the spring hasn’t brought relief yet.

“I feel completely frustrated,” Landry said. “It leads me to believe the things the insurance companies told the commissioner of insurance, told the lawmakers, don’t seem to be coming to fruition.”

He means the package of bills that he himself signed at a high profile press event this spring.  The explicit purpose of those laws was to give insurance companies more power to raise rates and drop coverage without penalty. Could anyone have predicted this program would not produce fantastic results for Louisiana residents?  The Governor sure didn't.  Now he says he's miffed. Maybe someone should do something. Not him, though. Someone.  

While Temple supported bills to limit insurance companies’ exposure to lawsuits, Landry, who has support from prominent members of the trial bar, said insurers wouldn’t get sued if they didn’t delay and fight claims made by homeowners. And the governor said he’s open to a federal solution to the insurance crisis, given the global nature of the business that ties Louisiana premiums to reinsurers in London and Bermuda.

Gonna have to wait until we hear back from President Musk on that one.  In the meantime, we'll go back to asking the insurers to come up with solutions for us.  Maybe if we get them a nice Christmas card or something.