The American Prospect’s Matthew Yglesias does a good job of covering some material I was planning to write up. Economic risk has become a hugely important policy issue:

RISK AND REWARD. Kevin Drum alerts us to the fact that Peter Gosselin‘s superb series on economic risk in America is now available in a convenient package. Give it a read, even if you’ve read it before. It pairs nicely with Brad DeLong‘s excerpts from today’s Wall Street Journal article, “In Bush’s ‘Ownership Society,’ Citizens Would Take More Risk.”

Putting the two together, the picture you get is this: Over the past 30 years, the American economy has become riskier for its participants. I think this is mostly a good thing, all things considered. The risk is largely a reflection of increased flexibility due to new technologies, a more competitive market dynamic, and an integrating global economy. It’s allowed us to put together a much larger economic pie than we used to have. But the higher risk is a real cost. It’s a cost that, fortunately, we can mitigate through public policy. A guarantee of a secure baseline for your retirement. A guarantee that no matter what happens, you’ll get treated if you fall ill. One could go on. Implementing these policies in a climate of increasing risk could give us a more dynamic economy overall while cushioning many of the problems it’s created.

The general direction of Bush’s plans is the reverse. Take an economic climate that’s getting riskier. Then implement a bunch of policies to make it even riskier. That’s an okay deal if your family’s got enough wealth and connections to bail you out after every failure in life, but for the average person it’s a terrible idea and there’s really no reason on earth to do it.

Let me add that Yale political scientist Jacob Hacker, a leading expert who is working on a book on the subject, has articles and data on his personal website that are also worth a look.