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i'd like some of my erstwhile neoliberal colleagues to explain why, if in 44 states shortfalls are ultimately paid for by tax payers, life insurance should remain a private for-profit industry rather than a service administered by the state? cf @ddayen.bsky.social prospect.org/2026/08/03/a...

Maybe the wrong question? Legislation could fix this, making state-backed guarantees available only if insurance company is a stand-alone corporation, or some variation thereof. The guarantee is valuable socially. It's the untoward use of it as a financial refuge that isn't.

the guarantee is essential. that’s not the issue. the issue is what role private investors serve given the necessity of the guarantee. they do not, cannot, bear the downside risk. why should they skim from the upside before any downside materializes? 1/

it doesn’t matter whether they are a standalone company or not (although obviously becoming a capital source for private equity is particularly abusive). the risk is borne either by the state or by policyholders if the state absented itself. 2/

you could have regulators insist on safe portfolios, but then what’s the advantage in having regulators make investment decisions indirectly vs a state-owned corporation making those decisions itself? /fin

It’s worked well in NY. Many insurance companies avoid ny because of regulation. Also, government has enough on its plate already. Insurance is a choice, not a part of the commons. Making it part of the government won’t inure it to corruption.

1) No, not right now The immensities confronting government now, whether Federal or state, don't leave room for much beyond a steadfast restructuring, none of which involve insurance other than health insurance. There's no Federal government any more, at least in the way

2) we think about it. State governments, at least the responsible ones, have to think through and develop the political will to replace what was once on the Federal menu. Your thoughtful idea stands far behind the priorities of electoral, judiciary, defense and public education

3) reconstruction/reform. Talk to me again after government has successfully found ways to political & criminal accountability, re-established the FDA, SEC, reinforced SS, expanded medicare and medicaid. Until that point, states won't have the luxury of doing anything else

“corruption” is the private sector baseline. we don’t usually call it that because taking advantage of opportunities for self-interested gain is what private sector actors are supposed to do. 2/

is it “corrupt” for PE people to notice there’s a channel for capital whose downside risks are clipped and try to make use of that? i think that’s a silly claim to make. 3/

Er...it's corrupt if they manage to use a publicly owned utility (your idea) for that purpose. Privately? Of course not. What's legal is legal.

our outrage should be directed at whatever is causing us to provide private investors with such a channel, if we don’t think whatever benefit we get is worth the cost of absorbing that risk. 4/