From the Left...

July 05, 2009

From Angry Bear...

An imaginary conversation with my family doctor

by reader Denis

(lots of links)



Me: $1.2 million is the average income for top 1 percentile households (2006 figure). You must have made at least a couple of million last year, right? I mean you are a doctor – and you are with Columbia Presbyterian hospital.



Doctor Levine: “[Laughs].”



Me: You mean that the 15% of share of income (correction from GDP) that slipped out of the pockets of bottom 90 percentile earners and into the buckets of top 1 percentile earners over the past few decades slipped right past you doctors?



Doctor Levine: “[Smiles ruefully].”



Me: Still, with the US having 135% of the per capita GDP of comparable modern economies we should no trouble devoting 15% of GDP [.15 X 1.35 = .2025] to health care, right (note parallel with 15% of income shifted to pockets of folks who earn lots more than doctors)? Unless we have too deeply gutted much of our workforce’s pay – with something like 30% of families living below the poverty line.



A plausible poverty line for a family of three (on the "minimum needs" table on p.44 of the 2001 book Raise the Floor) is $33,345 in 2008 dollars -- if health care is otherwise covered(not the $20,000 government calculation based on three times the price of an emergency diet – premiums alone exceed $12,000 yr.!). If you look at the Census, median family income is about $62,000. The real minimum needs line would hover somewhere around 37 percentile – 37 percentile if we didn't count families with paid health insurance. Knock off 7 points (guesstimate) for families on the top end with paid insurance (not those on the bottom with Medicaid) and we can reckon – it turns out very reliably -- about 30% of American families’ incomes are below minimum needs without government helps like food stamps.



Sounds like a quarter of the country must be earning less than the minimum wage or something equally crazy, right? Nearly a quarter of the workforce is earning less than the minimum wage – if we are talking about Lyndon Johnson’s 1968 minimum wage of $10/hr [$1.60/hr adjusted] – back when average income was half today’s. (FYI, tech improvement, like how much better today’s Timex is, generally not counted in inflation estimates.)



Doctor Levine: “How can something like this happen; why can’t we straighten it out?”



We can straighten out our labor market any time we wish – nothing like this happens anywhere else in the first-world. Simply institute the same labor market structure in place in virtually every modern economy (and many not so modern like Argentina and Indonesia): sector-wide labor agreements – wherein everybody with the same job description within the same locale works under identical collectively bargained terms with all the different firms – legislation required. [Note: check out French-Canadian “lite” version.]



Medical Doctor (not psychiatrist) Levine: What is holding back our big wig progressives from pushing – or at least mentioning out loud – such apparently badly needed and promisingly efficacious labor market changes?



Me: Something I call “pack check.” Males instinctively check in with what everybody else is thinking on any economic or political – or metaphorical “hunting pack” -- issue. And as long as they stay fix-focused on what everybody else is thinking it can seem impossible to them to make headway in an entirely new policy direction: so many different people require so many different approaches – and whom did we ever convert before with our most reasonable (we thought) arguments. Impostavazoo!



Sociobiology time – my lay opinion anyway: chasing wild pigs (what human males evolved doing) required a kind of perfect awareness of what every other hunting pack member was doing (pigs, as anyone who owns one can tell you, are not stupid) – was an essential survival mechanism. Without awareness of the need to break free from this innate focus-on-everybody-else’s-focus, at least for short breaks, all the economic male geeks in all the world may never initiate any new solution to the uniquely lop-side bargaining power ruining the American labor market – nor anything else – no matter how obviously practical, no matter how desperately (!) needed.



Human males are not so much pig headed as we are “pig-chase” headed.



Doctor Levine: “[Makes excuse; finally escapes].”

by Rdan (noreply@blogger.com) on July 05, 2009 03:10 PM

From Angry Bear...

Embassy building is big bucks in ME

rdan



Pentagon's list shows 865 military bases worldwide, plus bases in Iraq and Afghanistan. There is current funding to build a giant fortress in Islamabad, Pakistan on the order of the 'embassy' in Iraq to the tune of 785 million USD (corrected number..rdan) (cost overuns excluded but guanteed so perhaps about 1 billion USD). The US spends about 102 billion/year USD on maintaining bases throughout the world.



Could someone explain to me the rational for this kind of military base/embassy? How does it accomplish whatever goals it is designed for?

by Rdan (noreply@blogger.com) on July 05, 2009 03:03 PM

July 04, 2009

From Angry Bear...

Fox Noise on Canadian private insurance boom

By: Divorced one like Bush



This is a heads up. Fox news has a report out that there is a rise in private insurance activity in Canada. The article suggests that it is because of all the wait time that people are tired of do to a shortage of doctors and possibly the low fees. And, that may be true, especially being there was a Quebec Supreme Court ruling on it.



If you google the headline, you will find many a posting touting this article as a sort of proof that the Canadian system really is bad stuff.



But, and with Fox there is always a butt, what they do not tell you is that their article is based on a report in the CMAJ – JAMC article from 2008: Canada Health Act breaches are being ignored, pro-medicare groups charge

Private for-profit medical clinics are proliferating across the country, according to a detailed report by pro-medicare groups.

The number of such clinics has increased significantly over the past 5 years and there's evidence "to suspect that 89 for-profit clinics in 5 provinces appear to be in breach of the Canada Health Act," states the 169-page Eroding Public Medicare: Lessons and Consequences of For-Profit Health Care Across Canada report.

But federal and provincial officials "have fallen down in their responsibility to protect patients against extra billing and 2-tier care," says report author Natalie Mehra, director of the Ontario Health Coalition.


The Fox article quotes the same Natalie, but not those quotes.



The CMAJ article continues:
Researchers also found evidence of physicians practising in hospitals but referring patients to their private for-profit businesses, where medically necessary services would be provided more quickly, for an out-of-pocket fee...


So, some illegal stuff is going on (boom in private activity), the government was suppose to do something about it, but it didn't. Can you say “conservative, Milton Freedmon governance”?



Continuing:
In 1995, then-federal health minister Diane Marleau issued a policy interpretation letter calling on provinces to introduce “regulatory frameworks” to govern the operation of private clinics, and make illegal the “facility fees” charged by private clinics which provide publicly-insured services.




Basically as I read the real article, the boom is actually starting to create what we have here in the USA. A two class society regarding health care access with rising expenditures as doc's have the market opportunity to charge more via cash deals. Kind of a black market situation? Is the solution to be more like us, or is the solution to solve the bottle neck of not enough doctors? Or maybe the problem is that once you let people who can pay for them self do so (choice?), you begin the destruction of what was a system that treated everyone equally. That is, for a basic human need such as health care, everyone is of the same stature.



We have a great opportunity here with Canada. What happened in our banking system is what has happened to Canada's health care funding system. Same ideology implimented, same distruction for the benefit of the few.



We are seeing the effects of what happens when the ideology of individual freedom is made predominat in an economic system that assured equality regarding basic needs. That is the key: Basic Needs. Not wants, not money beyond autonomous consumption, but money at autonomous consumption. It is libertarian economics vs Jefferson democracy economics. Personal economic freedom for needs funnels down the benefits of human progress to fewer people instead of expanding the benefits to every more people.



There was one letter responding to the CMAJ article. An open letter to the minister of healthPaul C. Hébert, MD MHSc, Editor-in-Chief

After more than a decade, the health system has not fully recovered from the last round of federal cuts in the mid-1990s. The large reduction of about 10% in federal funding for health forced provincial governments to axe many health care programs, close some hospitals and reduce the number of beds in the remaining institutions, as well as slash training positions for physicians and other health care providers... Provincial governments have become much more autonomous and, in many instances, unwilling to adopt new programs and standards in the interest of all Canadians. The ongoing jurisdictional battle between federal and provincial governments, whether over First Nations health, public health, access to care and expensive medications or the setting of national standards, suggests that the federal government has little influence on Canada’s health systems. The ability of the provinces to offer private services1 and mount administrative barriers to portability of services without consequences is a constant reminder of this weakened federal authority...Canada’s health care systems seem to be moving further and further away from fulfilling the promise of the Canada Health Act.



The reason for limited progress is an erosion of national leadership in health. Successive federal governments have either decreased investments or, through inaction, allowed health to be a purely provincial matter. Despite the importance of health in the minds of the voting public, we remain very concerned that health has slipped entirely off the federal agenda.


Get it? What is actually happening in Canada is the results of the Grover Norquist training manual for conservative governance, the goal of which is the drowning of anything that suggests a social conscience.

by Divorced one like Bush (noreply@blogger.com) on July 04, 2009 07:36 PM

From Lean Left...

Happy 4th

by Kevin on July 04, 2009 03:58 PM

From Lean Left...

Independence Day

This video has become a tradition. Enjoy your holiday!

by tgirsch on July 04, 2009 02:31 PM

From Angry Bear...

Open thread July 4, 2009

by Rdan (noreply@blogger.com) on July 04, 2009 09:16 AM

From Angry Bear...

Happy July 4th

rdan



by Rdan (noreply@blogger.com) on July 04, 2009 09:00 AM

From Angry Bear...

SILOs --more action needed?

Tax advantaged "sale-leasebacks" with strapped-for-cash municipalities (SILOs, in the ever-present tax acronym set) came back to light when the Washington Metro train crashed a week ago. The cars were ones that were involved in the metro authority's SILO deals with various banks, and the authority didn't have any spare cash left to fund replacements. See this A Taxing Matter posting on the Metro SILOs, Jun 25, 2009.



I won't rehash the entire discussion of SILOs covered there. Just note that the transit SILO deals were contrived to permit banks to "buy" the federal income tax depreciation deductions on municipal equipment. The municipalites couldn't use the deductions, since municipalities are tax-exempt entities. The buying corporations were subject to US tax (usually, a bank) and they were looking for every way possible to avoid paying tax--they would essentially pay a fee to the municipalities, sharing part of their tax savings, for serving as an accommodation party in these deals. They "purchased" the municipalities' property with nonrecourse debt, and then had "lease income" that was offset by both interest deductions and depreciation deductions, generating artificial losses from the accelerated depreciation. Most of the purchase price was set aside to defease the seller's obligation under the lease, with the excess the fee for accommodating the tax shelter.



Jim Lehrer covered transit agency SILOs in the March NewsHour, depicting many of the transit agencies as motivated by their desperate need for capital--and encouraged by the federal Dept. of Transportation to use these means to get some. So there is a vicious double circle of irony here, that as states and localities cut taxes during the GOP years, under the flawed assumption that lower taxes means higher revenues, the states and municipalities also cut back on the funding needed by these important public service agencies, and an arm of the federal government encouraged these transit agencies to enter these deals, and at least 30 of them did, serving as accommodation parties in tax shelter deals with banks, so that banks would pay even less taxes than they already did.



Future SILOs were generally undone by new section 470, one of the few revenue raising provisions in the 2004 tax act. (The 2004 Act otherwise amounted to a pile of tax breaks for US corporations, such as the rate cut on repatriating offshore profits. It was misleadingly labeled the "American Jobs Creation Act" to signal the purported justification for all the corporate tax breaks. It didn't lead to the creation of many jobs.) The new section disallowed to U.S. taxpayers a "tax-exempt loss", defined as the excess of deductions other than interest and interest deductions allocable to tax exempt use property over the aggregate income from the property. Exceptions allowed certain "true" leases--essentially, ones in which the obligation of the seller-renter had not been defeased by the payment from the buyer and where the buyer had actually put some equity into the deal (the provision requires only 20% of genuine, at-risk equity). There are fewer tax benefits to true leases, so even with the exception, the provision deters leasing deals.



One hitch--the act only applied prospectively, and the transit deals (just one of the varieties of SILOs that were being done at the time of the 2004 change) got special treatment, in that any deals in the pipeline were allowed to be grandfathered in as long as they were done by 2006!



The IRS pursued the old deals with pre-2004 Act tools and won SILO (and LILO--the earlier "lease in, lease out" deals) cases against Fifth Third Bank, BB&T, PNC and other banks. See, e.g., IRS Wins AWG SILO Tax Shelter Case, TaxProf Blog (May 28, 2008) (dealing with the Ohio court's decision in 2008-1 USTC 50,370, in favor of the IRS in a SILO case involving two US national banks' "purchase", with nonrecourse loans from German banks whose proceeds were used by the "seller" to defease the lease obligation,
of a German waste facility used to acquire beneficial tax deductions); Ohio Judge Rejects Tax Claims on $423 Million Alleged Purchase of German Facility Made by Cleveland & Pittsburgh-Based Banks, DOJ (May 30, 2008); DOJ, Ohio Jury Finds Cincinnati-based Bank not Entitled to $5.6 Million Tax Refund (LILO transctions); BB&T Corp, 2008-1 USTC 50,306 (4th Cir.) (striking down tax treatment of financial service company's lease of Swedish wood-pulp manufacturing equipment as a LILO shelter); DOJ, Statement of Assistant Attorney General Nathan J. Hochman on Today's Decision in BB&T Corporation v. United States (Apr. 29, 2008).



After the court victories, the IRS offered a SILO settlement for these deals that permitted them to keep 20% of their claimed tax losses and waived the penalties, if they terminated the transactions. IRS Commissioner's Remarks Regarding LILO/SILO Settlement Initiative (Aug. 6, 2008); Donmoyer, IRS Offers to Settle 45 leasing Tax-Shelter Disputes, Bloomberg.com (Aug. 6, 2008); Service Launces LILO, SILO Settlement Initiative, J. Acct. (Oct. 13, 2008). It later announced that "hundreds of taxpayers settled similar cases involving tens of billions of dollars." DOJ, Justice Department Highlights FY 2008 Tax Enforcement Results (Apr. 13, 2009). On leaving office, Korb statedthat "taxpayers representing over 80 percent of the dollars involved have elected to take advantage of the settlement initiative." See Korb Interview. (Dec. 19, 2008).



The settlement offer required taxpayers to terminate the transactions by Dec. 31, 2008, else they would be deemed terminated by that date, with taxpayers still able to claim the partial loss benefit through the actual termination date if they terminated the transaction by Dec. 31, 2010. That's a fairly strong incentive for termination, but the municipalities may be on the hook for hefty termination payments under their contracts. Even worse, the AIG situation provided a perfect trigger for causing a technical default to apply. AIG guaranteed these deals, so when its credit rating went down, the transit agencies are in technical default and liable for hefty penalty payments. (see NewsHour video, above).



There are real problems here, including the idea of one agency of the government supporting its "clients" (transit agents of municipalities) entering into deals like this that result in corporate tax cheats robbing the government of important revenues. Another problem is the idea of the banks that were instrumental in causing the fiscal crisis--by risky, speculative behavior that disregarded the systemic risks--using AIG's collapse because of that fiscal mess as an excuse to get municipalities that are especially cash-strapped because of the fiscal crisis (and finding their ability to borrow or get tax revenues severely restricted) to pay over large penalty amounts under their shelter contracts. It seems like an unfair windfall for tax cheating Big Banks at the cost of the people.



And of course, just extending the 2004 provision to make grandfathered SILO/LILO transactions illegitimate and their tax deductions disallowed doesn't solve this problem, since these are windfalls that the tax cheaters would get under their "lease" contracts.



Rep. Menendez of NJ has proposed a potential solution--the "Close the SILO/LILO Loophole Act" S. 1341, introduced in late June. His bill, he says, would "help protect WMATA and other transit agencies who are being threatened by banks seeking to gain a windfall from the current economic climate while potentially putting transit agencies at risk." See press release, As Lease-Back Deals Are Raaised as an Issue in Metro Crash, Menendez Says legislation Can help Unwind Deals, PolitickerNJ.com (Jun 26, 2009); Davis, Bill Would Tax Banks that Sue Agencies , Star Ledger (Jun 24, 2009); Letter from Menendez to Hoyer (Jun 26, 2009) (noting a need to "protect transit agencies from banks who are seeking to exploit a technicality that would result in agencies having to pay banks millions of dollars that could otherwise be used to shore up equipment and ensure safe operations, even though they have not missed a single payment to the bank"). The bill imposes an excise tax equal to 100% of any "ineligible amount" collected by "any person other than a SILO/LILO lessee" as a party to a SILO/LILO transaction. Ineligible amounts are proceeds from terminations, rescissions, or remedial actions in excess of those under defeasance arrangements. The bill also would deny deductions for attorney fees and other costs attributable to seeking to recover ineligible amounts.



It's messy, but it does end up with the right results, it seems. I note, though, that there are no additional co-sponsors at this time. Doesn't look like Congress is hopping on the bandwagon.

by Linda Beale (noreply@blogger.com) on July 04, 2009 01:11 AM

July 03, 2009

From Lean Left...

A Heartbreaking Loss

When the uber-inconsistent Suppan gives up just 1 run, and does it against Zambrano, you’ve got to win that game for him. You sure as hell can’t walk in the winning run. That’s the sort of thing a third or fourth place team does. Which is where I expect Milwaukee will end up, the way they’ve been playing for the last month.

by tgirsch on July 03, 2009 09:42 PM

From Angry Bear...

"Too Shy" Sarah to run for President in 2036?

Given that Kajagoogoo is reforming this year, that is the only possible conclusion from this so far best reaction to the news out of Alaska.



by Ken Houghton (noreply@blogger.com) on July 03, 2009 09:22 PM

From Angry Bear...

Open thread July 3, 2009 with GW

by Rdan (noreply@blogger.com) on July 03, 2009 09:00 PM

From Lean Left...

Quote of the Day, 2009-07-03

Well, not exactly a quote. From last night’s Colbert Report, during “The W0rd” segment, Colbert asked, “Do you know what puts out fires?” And the text to his right read:

In New Haven, Not Black People

Bwah! The whole thing is below:

The Colbert Report Mon - Thurs 11:30pm / 10:30c
The Word - Ban de Soleil
www.colbertnation.com
Colbert Report Full Episodes Political Humor Jeff Goldblum

by tgirsch on July 03, 2009 08:50 PM

From Angry Bear...

Obama Economic Forecast

The right is having a lot of fun commenting about the economic forecast by the Obama team being too optimistic.





[unemployment+graph.bmp]



I guess they are right, Obama along with everyone else has massively underestimated the damage Team Bush did to our economy.

by spencer (noreply@blogger.com) on July 03, 2009 07:26 PM

From Angry Bear...

Kennedy-Dodd HELP Bill with CBO Scoring

by Bruce Webb



I haven't gone through the text or the numbers, make of this what you will. But at least we can start with some actual numbers attached.

McClatchy: Kennedy-Dodd unveil cheaper health care bill



Bill Text: SHORTTITLE.—This Act may be cited as the ‘‘Affordable Health Choices Act"



CBO Score





Excerpts and updates may be added under the fold as discussion goes on.



Note 1: Read these tables with care! Page 1 compares currently non-elderly insured to projected non-elderly insured. This is how you end up with 97% of Americans with insurance in 2019 even as that drops to only 90% for non-elderly American citizens. 21 34 million uninsured still seems too high to me but as footnote 'd' indicates this includes people eligible for but not enrolled in Medicaid.

"

by Bruce Webb (noreply@blogger.com) on July 03, 2009 03:53 PM

From Angry Bear...

Open thread July 3, 2009 without

by Rdan (noreply@blogger.com) on July 03, 2009 03:14 PM

From Angry Bear...

Federal pre-emption of bank regs curtailed by Supreme Court

rdan



Seeking Alpha notes a Supreme Court ruling on federal pre-emption of state regulation of banks. Google on Angry Bear OCC for posts on the issue.



In a surprising 5-4 vote, the Supreme Court ruled that national banks are still subject to the laws of the states they operate in. What made the ruling unusual is that Justice Scalia wrote the opinion and the other four conservative judges were in dissent (Roberts, Thomas, Alito and the normal swing vote Kennedy).



The ruling overturned an appeals court ruling that said that state attorneys general cannot investigate banks if they operate in more than one state.



The case in question involved the enforcement of fair lending laws in N.Y. State, specifically allegations that some banks were charging minorities higher interest rates. Instead, even though these are state laws, the appeals court had said that only the Office of the Comptroller of the Currency (OCC) had the power to investigate. In practice, this means that the laws were null and void, since the OCC has a lousy track record on such issues.



Enforcing state laws is simply not a priority for a division of the Treasury Department. While clearly there can be a problem if multiple agencies have jurisdiction in regulation, allowing things to slip through the cracks, there can also be problems when there is only one regulator and that regulator is in the pocket of the regulated. It is harder to capture all 50 state attorneys general and the OCC, than it is just the OCC alone. Make no mistake, the head of the OCC, John Dugan, a holdover from the last administration, is very much a creature of the big banks he is supposed to be overseeing. The OCC ranks just behind the OTS in being an ineffectual regulator during the bubble.



While the state attorneys general will not be able to issue subpoenas on their own authority (they need approval from a state judge), it does mean that they do not have to sit on their hands if they think the banks are breaking the law. It also will mean a more fair application of the law.




Update: Remember that John Dugan is the regulator who insisted it was the job of banks to validate their own risk models.

by Rdan (noreply@blogger.com) on July 03, 2009 12:14 PM

From Angry Bear...

A different sort of crowding out

rdan



Money Central presents a dilemma for shareholders in goods and services:



The old notion that profitable companies with good growth prospects should have rising share prices -- and that failures like GM should be gone, or at least trading in the pennies -- is history.



Today, a hedge fund investing billions using a quantitative formula can stall a stock; a couple of hedge funds aligned can turn a profitable company into a Dow laggard. Toss in a few short sellers and you have the great Wall Street collapse of September 2008.



It wasn't always this way. Before the machines and the shorts took over Wall Street, stocks were evaluated by an underlying company's prospects. Buy-and-hold investing ruled the day. Investors such as Warren Buffett and Bill Miller were the models.



Those fellows are a far cry from this generation's masters of the universe. Traders are in charge now. They rule the market. They dominate volume. That stock you bought because you thought the company was in good shape? It's a pawn in the hands of a computer model or some supertrader like Steven Cohen at SAC Capital Partners or Bridgewater Associates' Ray Dalio.



To move a security, they don't need to own it. They can have a short position. They can put an order to sell 1 million shares in a dark pool, those anonymous marketplaces that operate outside the walls of the exchanges. They can own options or futures contracts. Buy enough GM puts and watch the price begin to fall under the pressure.




Obvious, but plays havoc with the investing side of the tax cut and savings equation meme.

by Rdan (noreply@blogger.com) on July 03, 2009 09:34 AM

From Lean Left...

Calm, Civil Discourse on Health Care Reform

Via LarryE:

One of the ways the proposal is being attacked and tamed is by looking to “cut costs” in order to bring the price down to under $1 trillion over ten years.

Well, fuck that. I don’t want to hear one single goddam [sic] word about the cost from any GOPper, any Blue Dog, anybody who voted for money for the Iraq War. Not. One. Single. Word.

They were prepared to spend, in fact they demanded we spend, well over $100 billion a year on the war in Iraq (as well as scores of billions more for the war in Afghanistan). You were an un-American terrorist-lover if you objected. At no point during those years, at no point in the face of the repeated off-the-budget “supplemental appropriations,” at no point as the costs spiraled higher with no end in sight, not once did they go around gnashing their teeth and wailing “Oh dear God, the cost! How are we ever going to find the money?” No, it was just the money had to be found. Somehow.

Well, dammit, if they can demand somehow finding the money to spend $100 billion a year to kill people in Iraq, they fucking well can accept somehow finding the money to spend that same amount to keep people alive here. And if they can’t, I’d say they were un-American.

If there’s one thing I admire about LarryE, it’s his stoicism. :) Seriously, though, I agree with everything he wrote in that excerpt, and the last paragraph in particular.

Footnote: On the overall content of his original post (above the footnote I excerpted here), I’d normally fear that his preferred course of action would make the perfect the enemy of the good, as the saying goes. Suffice it to say that while my preference is toward a single payer system (think France or Switzerland; don’t think UK), if we can get something done that gets virtually everyone covered, that’s a huge step in the right direction, and one I’m willing to take. I don’t make care about the how.

Now, in past instances where my pragmatism has been pitted against his idealism, he’s tended to point that “stoicism” in my direction, with me responding in kind. It hasn’t been pretty. But in this case, I think he’s right: starting from a position of compromise is never a good thing (and it’s a very different thing from showing a willingness to compromise), and Obama has thus far done too much of that. He’s offered far too many concessions to political opponents who obviously aren’t arguing in good faith in the first place. I’ll admit, this frustrates the hell out of me. So, again, I’m right there with him on a subject I normally wouldn’t be.

by tgirsch on July 03, 2009 03:34 AM

July 02, 2009

From Angry Bear...

Rumours of "Green Shoots" are Exaggerated: Illinois

After my previous posts on Georgia, it seems only fair to note the bank closings in Illinois today.



There have been 13 bank closings posted (as of right now, about 6:50pm) in the state of Illinois since last March. That alone is significant—but, even more interesting, six of them occurred today. This exceeds the previous record for a state, Georgia's five last week.



Three (in Elizabeth, Oregon, and Danville) are in the NW part of the state. The other three are located near Chicago (Worth, in Cook County), Urbana (Clinton), and Springfield (Winchester).



Only two of those cities (Worth and Danville) are in the Top 200 cities by size in the state, so it's difficult not to suspect that their location had a lot to do with the closing of at least four of the banks.



Again, the same as the Georgia question, why Illinois? And, most especially, given the past two weeks, why are there multiple state closings now?

by Ken Houghton (noreply@blogger.com) on July 02, 2009 11:17 PM

From Angry Bear...

The Problem with Macro is Micro

John Quiggin makes the broad case (link fixed).



If you are then stuck with trying to present a Grand Unified Field Theory, you will inevitably lose (or, at best, reduce) the importance of all the agglomerations that follow from the presumption that the Rational Actor is the mean performer—ignoring that no one, including the economists themselves, believes that to be true in their own lives, let alone the lives of others.



Micromotives and Macro Behavior indeed. But no molecular biologist (or even biologists) would try to build on the Phlogiston Theory.

by Ken Houghton (noreply@blogger.com) on July 02, 2009 08:51 PM

From Angry Bear...

Thinking on Health care funding. It's getting wacky!

by Divorced one like Bush



So, American's put an intellectual in the president's seat. It's been called pragmatism. We cheer the return of science and thus critical thinking to our politics. Yet, here we are at the cusp of the next great societal character development issue since we figured out after the depression there was class war in the US and we get this:

"If you establish a public option at the forefront that goes head-to-head and competes with the private health insurance market ... the public option will have significant price advantages," she said.

Yes, Maine's finest: Olympia Snowe as she argues against making the public option available at the get go.



But, this concept is not new. It dates back to 2006 when the Council for Affordable Health Insurance presented a 17 page report suggesting the same thing. And!, now we have the Heritage foundation dittoing the same report. (More on that coming at AB by the other bloggers here.)



But, never fear, Sam's got you covered. He explains the appropriateness of Olympia's thinking.

by Divorced one like Bush (noreply@blogger.com) on July 02, 2009 07:57 PM

From Angry Bear...

The second part of the trade deficit: oil

rdan



Finfacts



From 1995 to 2008, the annual US trade deficit with China grew from $34 to $266 billion, accounting for virtually all of the increase in the US non-oil deficit from $44 to $282 billon.



Imported oil petroleum contributes significantly to the US trade deficits. From 1995 to 2008, the petroleum deficit increased from $34 to $386 billion. This huge deficit is caused primarily by the failure to impose higher mileage standards on automobiles, implement other fossil-fuel saving technologies, and to develop US domestic oil and gas resources.



Together, imports of oil and from China account for 90 percent of the US trade deficit, and that deficit has averaged more than 5 percent of GDP over the last five years.



In theory, increased imports of manufacturers from China and petroleum should shift US employment from import-competing industries to export activities. Since export industries create about 10 percent more value added per employee and undertake more R&D than import-competing industries, this would raise US productivity and GDP growth. Those are the expected gains from expanding trade based on comparative advantage.



Instead, large trade deficits shift U.S. employment from trade-competing industries into nontrade-competing industries. Trade-competing industries create at least 50 percent more value added per employee, and spend more than three times as much R&D per dollar of value added, than nontrade-competing industries. By shifting labor and capital into nontrade-competing industries, chronic trade deficits have reduced U.S. economic growth by at least one percentage point a year, or about 25 percent of potential GDP growth.*



Lost growth is cumulative. Had trade deficits been significantly smaller over the last two decades, U.S. GDP would likely be $3 trillion or 20 percent greater than it is today.

by Rdan (noreply@blogger.com) on July 02, 2009 02:23 PM

From Angry Bear...

EMPLOYMENT REPORT

By Spencer



The June employment report sent a clear message to expect more of the same. It showed essentially no signs of improvement as payroll employment fell -467,000 and the unemployment rate rose to 9.5%



The average work week -- considered a leading indicator of employment growth -- dropped to 33.0 hours and the index of aggregate hours worked fell 0.8%. In the fourth quarter of last year hours worked fell at a -7.4% annual rate. In the first quarter they fell at an -8.9% rate and in the second quarter the index fell at a -7.9% rate.





Both hours worked and employment indicate that this is the worse recession since WW II and show few signs that the recession is ending.



Moreover, growth in average hourly earnings continue to slow sharply.





Consequently, average weekly earnings growth slipped to 0.36%, the smallest gain on record.



However, because of tax cuts and other government transfer payments total nominal income growth is rebounding strongly and providing essentially the only reason to expect economic growth.



But so far most of the tax cuts have gone into the rebound in the personal savings rate. This can be viewed several ways. One, there is normally a lag between income increases and spending growth. But this probably accounts for only a very small share of the savings growth as higher savings are dominated by individuals need to rebuild their balance sheets. Two, the tax cuts are financing the savings increase and preventing a much more severe drop in consumer spending. I personally favor this view and see it is part of the story that as in Japan's lost decade this fiscal stimulous prevents the economy from sinking into a depression but does not stimulate much growth. I have believed for a long time that the US has slipped into an environment much like Japan's lost decade and just continue to see developments reinforcing that belief.

by spencer (noreply@blogger.com) on July 02, 2009 02:13 PM

From Lean Left...

Real Health Reform?

Maybe:

Democrats on a key Senate Committee outlined a revised and far less costly health care plan Wednesday night that includes a government-run insurance option and an annual fee on employers who do not offer coverage to their workers.

The plan carries a 10-year price tag of slightly over $600 billion, and would lead toward an estimated 97 percent of all Americans having coverage, according to the Congressional Budget Office, Sens. Edward M. Kennedy and Chris Dodd said in a letter to other members of the Senate Health, Education, Labor and Pensions Committee. The AP obtained a copy.

By contrast, an earlier, incomplete proposal carried a price tag of roughly $1 trillion and would have left millions uninsured, CBO analysts said in mid-June.

So, with the more progressive plan, we can cover 97% of the country for less than the bank bailouts and keep the current system of employment based insurance (this is not something I care about, but it does allow people to keep their current plans.) The “moderate” plan cost 1.6 trillion dollars and did not provide a real choice for people.

Now, the details will be important. It sounds like companies might be allowed to drop employees and just pay a 750 dollar fine per employee per year. The AP says that provision will work to prevent companies from dropping employees, but I don’t see how. The subsidies for people who cannot afford insurnce are important, as well s the details of the public plan. The TNR health blog likes the plan, but seems to think that the public plan would be state based, something that scares me. But t the end of the day, this appears to be a giant step in the right direction and a strong rebuke to the so-called moderates who would charge more for much less in defense of insurance company monopolies.

It appears that Kennedy, the old liberal lion of the Senate, had at least one more roar in him.

EDIT:

Looks like a national plan, so the bargaining power and thus the full benefit of the plan remain in place.

by Kevin on July 02, 2009 11:03 AM

From Angry Bear...

Morici and US trade deficits (China and oil)





Peter Morici gets to the point in this paper in Finfacts on the first half of what we need to face. I hear little from naysayers of 'protectionism' on this point of manipulating trade advantages.



Fixing credit markets and energy policy are largely domestic challenges, whereas recalibrating trade with China requires cooperation from Beijing. However, such cooperation requires fundamental changes in Chinese industrial policies and a departure from maintaining an undervalued yuan to spur industrial development.

...



The United States has engaged in high level talks with China since negotiations for its entry into the World Trade Organization. Most recently, the Strategic Economic Dialogue was launched in 2007.



Throughout this process the United States has encouraged China to more substantially raise the value of the yuan, which would require Beijing to purchase fewer dollars and other currencies to sustain its value. Instead, China has increased its foreign exchange market intervention as the gap between the official value of the yuan and its fundamental value has widened. This has exacerbated the damage to the U.S. economy and China's other trading partners.



The United States has three broad policy options to leverage change.

First, the United States could bring a complaint in the World Trade Organization. China's currency policy policies create a WTO illegal subsidy on exports, and subvert the benefits its trading partners expected when they acceded to China's entry into the world trade body.



Were the United States to bring such a suit, other WTO members would likely join the petition. If they prevailed, either China would have to stop intervening in currency markets, or face tariffs--approved by the WTO and imposed by WTO members participating in the complaint--to redress the trade imbalance. Those tariffs would be strictly temporary and removed when China complied with the WTO decision, ended currency market intervention, and let the yuan rise in value.



Second, the United States, consistent with its WTO obligations may impose tariffs on imported goods that receive government subsidies, if those goods harm U.S. industries when they enter U.S. markets. Until 2006, the United States did not apply the subsidy and countervailing duty law to commerce with China, but in a case regarding imports of Chinese paper, the Bush Administration changed that policy. However, in addressing the domestic industry's petition, the Bush Administration denied application of the subsidy and countervailing duty law to China's undervalued currency.



Bills sponsored by Senators Jim Bunning (R-KY) and Debbie Stabenow (D-MI) in the Senate and by Representatives Tim Ryan (D-OH) and Tim Murphy (R-PA) would make more likely the subsidy implicit in an undervalued currency were included in the computation countervailing duties in both dumping and subsidy cases, when a "fundamental and actionable misalignment" is present. Such circumstances would be determined by a standard consistent with International Monetary Fund guidelines.

Third, Americans need to accommodate to the fact that China is much less a market economy, either by design or by policy, than North American and Western European economies.



Its financial system may not be able to sustain an unmanaged floating exchange rate; however, China can manage the value of the yuan at 4 as easily as it does 6.8. In fact, it would be a lot easier to manage a value closer to balance of payments equilibrium.

by Rdan (noreply@blogger.com) on July 02, 2009 09:03 AM

From Lean Left...

Where We Begin To Find Out

Despite the fact that my Brewers are in first place to start July, I can’t shake the feeling that they’re just not a very good team. In fact, to borrow a phrase, I think they’re probably the worst team in the NL Central, except for all the other ones. That said, the divisional pecking order should start to sort itself out over the next three weeks. In that span, the Brewers play 17 games, 14 of them against divisional rivals, including four at the Cubs (currently 3.5 games back), three hosting the Cardinals (1 game back), four at Cincinnati (3 games back). During the same span, the Cardinals play 12 games total against division rivals, all on the road: 3 each at Cincinnati, at Milwaukee, at Chicago, and at Houston.

Now it’s possible that these teams will just beat up on each other and resolve little. In fact, that wouldn’t surprise me at all. But I can’t shake the feeling that one or two teams are going to fall off the map a little bit. The Brewers, Cubs, and Reds all have that kind of fade potential. And don’t forget the Astros: they’ve been quietly sneaking up on everyone in the division.

Anyway, it should be an interesting few weeks of baseball.

P.S. Note to the Brewers: When your pitching staff gives up 1 run on 5 hits at home, you really ought to win that game. Payback for what we did to the Cards’ pitchers earlier in the year, I guess.

by tgirsch on July 02, 2009 04:19 AM

From Angry Bear...

Those Who Think the "Left of Center" is Too Tough on N. Gregory Mankiw

should read Sensible Centrist J. Bradford DeLong on the difference in forecasting between the current Administration and the CEA under N. Gregory Mankiw.



Romer/Bernstein/Kreuger et al., 2008-9 edition:

As I understand matters, last December the median private-sector forecast had the unemployment rate topping out at 9% in the second half of 2009. The incoming Obama administration simply adopted that forecast. At the time I thought that was a mistake: (I thought that was a mistake: I thought they should have made a bifurcated forecast with a "good case" 80th-percentile scenario and a "bad case" 20th-percentile scenario; they should then have stressed that in the bad case we would need a large stimulus indeed to prevent high unemployment, and that in the good case we could restrain inflation via monetary policy.)




Mankiw et al., 2003 edition:

it would make it extremely difficult for things to happen like what happened to the Mankiw CEA over the winter of 2003-2004, when high politics appears to have reached down into the forecast, changed the table for payroll employment (and only payroll employment: the rest of the forecast is not out of line with contemporary professional forecasts), and produced an estimate for December 2004 (a) inconsistent with the rest of the forecast, and (b) high by 2.3 million in its estimate of payroll employment--all because Karl Rove and company thought it important to avoid headlines like "Bush administration forecasts 2004 payroll employment to be less than when Bush took office." (link from original)




The positive-spin version is that Mankiw plays politics better than the Obama Team.



UPDATE: Kauffman Foundation invitee Mark Thoma adds to the fun.

by Ken Houghton (noreply@blogger.com) on July 02, 2009 04:14 AM

From Lean Left...

After the Rapture…

…who will take care of your pets?

Problem solved!

by tgirsch on July 02, 2009 02:47 AM

July 01, 2009

From Lean Left...

Barbie Hates On The FDA

Over at Secret Lives of Scientists, friend-of-the-blog Shoothouse Barbie shits purple nickels over an FDA panel’s recommendation to revise the guidelines for acetaminophen (aka Tylenol) and related products. While she was at it, she ranted against the 2004 ban of ephedra in dietary supplements. This has led to a, how do you say, spirited debate betwixt the two of us, in which I suspect there’s a whole lot of talking past one another going on. After a back-and-forth exchange that has gradually moved back in the general direction of civility, I’m still not exactly sure just what her bag is, as her opinions on the matter haven’t exactly struck me as being particularly internally consistent.

Meanwhile, Vinny takes CNBC to taks for one of their talking heads’ similar rant.

Anyway, go forth and check it out, and feel free to jump in.

by tgirsch on July 01, 2009 09:20 PM

From Angry Bear...

Canadian Independence Day Daytime Movie Lineup

  1. Candian Bacon (certainly Michael Moore's best work of fiction), starring John Candy

  2. So I Married an Axe Murderer / Mike Meyers

  3. Airplane! / Leslie Nielsen

  4. Chain Reaction / Keanu

  5. Bright Lights, Big City / Michael J. Fox (who has no Elvis in him, but does good work)


I think they're trying to convince everyone to be outside.



More Canadian Content here, via my Loyal Reader.



UPDATE: The NYT honours the day. Highlight from Malcolm Gladwell:

In history class, in seventh grade (or as we like to say in Canada, grade seven) we learned the story of the American Revolution...Turns out you were all a bunch of ungrateful tax cheats. And you weren’t very nice to the Loyalists. What I miss most about Canada is getting the truth about the United States.


He's got a point there, except about the Loyalists. And that the "tax cheats" were really fighting the East India Company (think Wal-Mart with a British accent).



Also, we had Stevie Wonder last night and you didn't. The bad news is it was the night before a National Holiday in a relatively large city and a free concert. So most of couldn't get within five blocks of it.

by Ken Houghton (noreply@blogger.com) on July 01, 2009 07:52 PM

From Lean Left...

And Yet, It (Still) Moves

Utterly cool geek-project: the Galileoscope! 2009 is the official “International Year of Astronomy”. In support, the International Astronomical Union (major professional organization for astronomers) has designed and manufactured super-low-cost small refractor telescopes similar to Galileo’s original (but corrected for chromatic aberration - so even better!), for wide distribution to encourage interest in astronomy. The ’scopes are designed to be assemblable and usable by young children, but are more-than-decent quality. They have cheap but well-designed plastic tubes and good multi-element lenses - they’re not the crap spyglass ’scopes you find in toy stores. (Though, to be sure, there’s a limit to what you can expect from them.) They even have tripod mounts.

Cool thing is, you can not only buy one for yourself for $15 plus shipping, but you can also donate one at $12.50 and free shipping; IAU will bundle the donated ’scopes up and distribute them to places that can put them to good use, especially schools and third-world communities.

Great program. Great price. Check it out.

by KTK on July 01, 2009 06:34 PM

From Angry Bear...

Bernie Sanders Draws the Line on Health Care

by Bruce Webb



Sanders makes the case I have been thinking of making (bolding mine):

Bernie Sanders Demands Democrats Commit To Stopping Health Care Filibuster

One of the Senate's most vocal progressives is demanding that the Democratic Party commit to voting against filibustering health care legislation now that, with the impending arrival of Al Franken, the party has 60 caucusing members.



Sen. Bernie Sanders (I-Vt.), called on the White House and Democratic leadership in Congress to ensure that party members agree unanimously to support cloture on legislation that would revamp the nation's health care system. Democratic senators on the fence, he added, could still oppose the bill. But at the very least they should be required to let the legislation come to an up-or-down vote.



"I think that with Al Franken coming on board, you have effectively 60 Democrats in the caucus, 58 and two Independents," Sanders said in an interview with the Huffington Post. "I think the strategy should be to say, it doesn't take 60 votes to pass a piece of legislation. It takes 60 votes to stop a filibuster. I think the strategy should be that every Democrat, no matter whether or not they ultimately end up voting for the final bill, is to say we are going to vote together to stop a Republican filibuster. And if somebody who votes for that ends up saying, 'I'm not gonna vote for this bill, it's too radical, blah, blah, blah, that's fine.'"



"I think the idea of going to conservative Republicans, who are essentially representing the insurance companies and the drug companies, and watering down this bill substantially, rather than demanding we get 60 votes to stop the filibuster, I think that is a very wrong political strategy," Sanders added.
There is nothing in the Constitution that suggests that ordinary legislation or amendments thereto should require a 60 vote super-majority to move to a vote. But the filibuster exists and the majority cannot deny the minority some opportunity to demand debate (not that the filibuster ever is actually used to honestly debate anything). Still enough is enough. The Senate has never had the Whipping system of say the British Parliament, indeed its tradition allows leading members to buck Leadership and the White House on final legislation. However extending that principle to the point that unless everyone capitulates to every demand of the most center-right member of the caucus every time is to make a mockery of the Constitution itself. Exactly when did we decide to turn total power over to Ben Nelson?



Time to play hardball. Nelson doesn't have to be a good soldier every time, he can vote against every bill that violates his conscience or ideology or that goes against the interest of his state. But there have to be sanctions for going AWOL time after time and even more severe sanctions for giving Aid and Assistance to the Enemy. Currently Ben Nelson sits on four powerhouse committees: Agriculture, Appropriations, Armed Services, and Rules. First offense? Lose Rules. Second offense? Off of Appropriations. What's his recourse? Becoming the permanent Mr. No as the junior member of the Republican caucus?



Look we are not looking for a blood oath here, just an agreement to let legislation go to an up or down vote. Time to get things which have majority support among the American people and the US Senate done.

by Bruce Webb (noreply@blogger.com) on July 01, 2009 04:35 PM

From Angry Bear...

US federal deficits, debt, and conversation starters

Instapundit offered a chart on the growth of actual and projected Federal government budget deficits a couple months ago:







Treasury lists the numbers of the on-going rise in debt as well. The new ceiling for spending is 12.1 trillion USD, but we are close to that now at an estimated 11.3 trillion USD.



09/30/2008 10,024,724,896,912.49

09/30/2007 9,007,653,372,262.48

09/30/2006 8,506,973,899,215.23

09/30/2005 7,932,709,661,723.50

09/30/2004 7,379,052,696,330.32

09/30/2003 6,783,231,062,743.62

09/30/2002 6,228,235,965,597.16

09/30/2001 5,807,463,412,200.06

09/30/2000 5,674,178,209,886.86



CBO provides various snapshots as well.



My take on posts and comments on other blogs have included these observations:



1. There are plenty of partisan viewpoints about responsibility for this deficit and debt situation. This usually starts out with comments about who is responsible for the spending (with a hat tip to the Bush eight years of war and military spending funded by the mechanism of tax cuts), or blaming the Dem congress of the last two years as controllers of spending, or Obama for extending the Bush policies under TARP and military spending, but then adding "stimulus" and health care costs on top of everything else.



2. Technical arguments about some forms of 'crowding out' of private investment or not with the caveats of how money is spent domestically on public works, and which companies are favored in which administration (Cheny vs. Immelt?)



3. Policy memes centered around domestic savings and consumption, fiscal responsibilty, stimulus spending and 'multipliers', and how tax cuts will pay for current spending habits or allowing the sunset of the Bush tax cuts. Little discussion of raising taxes so far.



4. Consideration of the current 'US trade deficit with the world' as an underlying driver of our problems appears to be a somewhat marginal consideration in the current public debate except as part of 'we are financed by foreigners' or protectionism is bad,



5. With little discussion of how we are to prepare ourselves for a future role in the world that involves less dominance, less consumption, better exports to imports ratios from a US perspective, and what kind of jobs are thus created.



What could be re-worded or has been left out in broad strokes...obviously much detail and scope of particular interest? Five posts overall, with posts from Bears and guests to add proof and detail?

by Rdan (noreply@blogger.com) on July 01, 2009 10:57 AM

From Angry Bear...

Who Are You and What Have You Done With Paul Krugman II

Robert Waldmann



Paul Krugman thinks that a US politician is excessively opposed to tariffs.



End of days near.



I think the president has this wrong:



President Obama on Sunday praised the energy bill passed by the House late last week as an “extraordinary first step,” but he spoke out against a provision that would impose trade penalties on countries that do not accept limits on global warming pollution.


[snip]



The truth is that there’s perfectly sound economics behind border adjustments related to cap-and-trade.







Krugman goes on to make a perfectly convincing case (click the link) but would the Krugman of 1992 have discussed this in public with protectionist politicians listening ?



Already Krugman has shocked DeLong by agreeing with Reich.

by Robert (noreply@blogger.com) on July 01, 2009 01:56 AM

June 30, 2009

From Angry Bear...

Examining The Damage to the NYC-area Economy

Being a seven-hour drive away, I don't have as much direct knowledge of the NYC economy as I did a year or so ago. So I have to rely on Different Metrics.



Here is one DrektheUninteresting (see #6) (of Scatterplot and Total Drek fame) will love, when he resurfaces.







For those who want a contemporary view of how bad things have gotten in the U.S. economy in general and NYC, just check out the result of this eBay auction.



The winning bid was $10,250. The last time this item was auctioned, a mere six months ago (though in Los Angeles), it went for $12,000.



And a mere three years ago, the item was sold, in NYC, to two separate bidders (it being relatively non-rival), for $20,000 each.



Forget housing prices. If you want a metric to judge the decline of the NYC-area economy, just consider the decline in bidding even as the value of the underlying has gone up.

by Ken Houghton (noreply@blogger.com) on June 30, 2009 10:57 PM

From Angry Bear...

CBO: Long Term Budget Outlook Part 3-Yes it is the Medicare/Medicaid

by Bruce Webb



In comments on the last post MG was challenging 2Slugs contention that the real issue was Medicare, while BuffPilot was accusing me of ignoring Obama spending. Well I am on my way out the door and will let the CBO do the talking for me:





That near term temporary light blue peak? Obama stimulus spending. That rising tide of deep blue? Medicare and medicaid.



QED.



Discuss.

by Bruce Webb (noreply@blogger.com) on June 30, 2009 06:44 PM

From Angry Bear...

Strangely, CATO missed the AZ, IN, and MS budget crises

CATO was making much hay a few days ago about budget problems in California, New York, and New Jersey, which can be explained, respectively, by the Governor's veto of an Assembly-passed budget a few months ago, the decline in tax revenues from financial services firms and continuing loss of upstate industry, and underfunded pension obligations whose origins date back to Christie's cocaine-inspired budgets of the mid-1990s.



Strangely (via Dr. Black), they missed the crises in a few other states, most especially including the state governed by Republic hero Mitch Daniels:

Republican Gov. Mitch Daniels has warned residents that most of the state's services -- including its parks, the Bureau of Motor Vehicles and state-regulated casinos -- would be shuttered unless a budget is passed today.


Closing down the casinos? Now that is extreme.



Mitch Daniels, doing for my old home state what he did for the country.

by Ken Houghton (noreply@blogger.com) on June 30, 2009 05:20 PM

From Lean Left...

American Torture

Herbert asks the most important question:

No one seems to know how old Mohammed Jawad was when he was seized by Afghan forces in Kabul six and a half years ago and turned over to American custody. Some reports say he was 14. Some say 16. The Afghan government believes he was 12.

… The treatment of the young captive was so egregious that the decorated U.S. Army officer assigned to prosecute him — a man gung-ho to secure a conviction against a defendant he believed had committed a serious crime against the American military — ended up removing himself from the case and declaring that he could no longer “in good conscience” participate in the military commissions set up to try accused terrorists.

… In a sworn affidavit, Colonel Vandeveld said, “This abuse included the slapping of Mr. Jawad across the face while Mr. Jawad’s head was covered with a hood, as well as Mr. Jawad’s having been shoved down a stairwell while both hooded and shackled.”

Jawad’s account had the ring of truth. As Colonel Vandeveld said in the affidavit, the interviewer “later testified as a defense witness … that Mr. Jawad’s statement was completely consistent with the statements of other prisoners held at Bagram at the time and, more importantly, that dozens of the guards had admitted to abusing the prisoners in exactly the way described by Jawad.”

Proud of that, are you? Proud of the US torturing children and then keeping them locked away forever? Is that your idea of strength? Is that your idea of justice and the American way? If it is, then know yourself for the thumb-sucking, wetting-yourself coward that you most certainly are. Anyone who justify that kind of treatment is a coward, so afraid of the bogeymen they have built up in their own mind that they are willing to throw away American prestige, the rule of law, common sense and basic human decent. Bin Laden has already beaten those people. The Obama Administration should know better than to listen to them.

When you become a monster fight a monster, all you get is another monster.

by Kevin on June 30, 2009 01:42 PM

From Lean Left...

Ins. Companies Fear Competition

GOP senators seem to think that a public health insurance option would be unfair competition. But how can we take that concern seriously when so few insurance companies actually face any competition at all?

Defenders of the status quo on health care like to point out that a public option will destroy the system of robust free-market competition that currently exists.

Sen. Richard Shelby (R-AL), speaking earlier this month on Fox News, called President Obama’s plan the “first step in destroying the best health care system the world has ever known.” A public option, Shelby added, would “destroy the marketplace for health care.”

But the notion that most American consumers enjoy anything like a competitive marketplace for health care is flatly false. And a study issued last month by a pro-reform group makes that strikingly clear.

The report, released by Health Care for America Now (HCAN), uses data compiled by the American Medical Association to show that 94 percent of the country’s insurance markets are defined as “highly concentrated,” according to Justice Department guidelines. Predictably, that’s led to skyrocketing costs for patients, and monster profits for the big health insurers. Premiums have gone up over the past six years by more than 87 percent, on average, while profits at ten of the largest publicly traded health insurance companies rose 428 percent from 2000 to 2007.

Part of me wonders why the Obama Administration doesn’t ask the DOJ anti-trust lawyers to look into these situations. It might be because the anti-trust law is now so weak that these monopolies and near-monopolies are not actually illegal. It might be that the Obama Administration sees that moves as a kind of nuclear option. It might be that the move would be counter-productive.

One of the surest ways for an insurance company to remain profitable is to become as large as possible. Now, this is obviously true of almost every business, but it is exceptionally true in the insurance business. Insurance companies can keep costs down and thus profits up by denying care, by becoming more efficient, by spreading risk and by negotiating lower costs. Becoming huge is a massive advantage in all but the first option. The last, in particular, is critical: insurance companies do best either when they can guarantee that their clients will not use the services. Short of a crystal ball, one of the best ways to get to that point is to have a large enough pool of clients that the odds are the mass will pay in more than they take out in services. So if you break these companies into smaller units, you might have the effect of driving prices even higher.

A health insurance market, then, might not be possible absent a real public option. Because of the odd requirements of an insurance market, it may not be possible for real competition to exist without a government plan and thus impossible for the market to do anything but exacerbate and already bad situation. In order to have a market in health insurance, then, we may need quite a bit of government participation.

by Kevin on June 30, 2009 12:45 PM

From Angry Bear...

Unsolicited Advice to Makers of Computers

by cactus



Unsolicited Advice to Makers of Computers - From a Heavy User



I have three Windows based PCs, and the ex-GF has a Mac. One of the Windows based PCs is a desktop, all the rest of our machines are laptops. One is a mini purchased three months ago, and the oldest machine (the desktop) is two years old. All but one are name brands... and a few months ago there was another (name brand) machine that has since died. Until recently I was a consultant, so there was a need for much number crunching in our household.



But here's the thing - not one of the machines is fully operational. Peripherals don't work, or don't work with the machine, or don't work reliably. We're not computer geeks in this household, but we're not exactly ignorant either. I spent a summer working in a computer repairshop and I have no problems opening up a machine and poking around if need be. I've even been known to do some prodding and the occasional fondling when the situation called for it. The ex-GF is more the help-desk type, and I've been forced to deal with that lately too. It usually doesn't help. Its not helping the ex-GF either; her machine just came back from the "Genius Bar" and I wouldn't be surprised if it goes back pretty soon.



I realized that maybe as recently as four or five years ago, every computer I bought lasted four or five years or more, and usually gave me no problems. On the rare occasions when I had to call the help desk, it solved the problem once and for all. I'm about to take the new mini to repair shop and tell them a) to do something about the the wireless modem turning itself off at random times for a week at a time and b) make the $#%^ cd reader I bought work with the thing. I'm prepared to pay as much as the mini itself cost me just to have it working once and for all and never again have to deal with the tech support people. I estimate I've spent about eighteen hours trying to fix these two problems myself (with and without tech support) and I'm tired and aggravated. My time is worth something, and avoidance of aggravation is worth more.



I was kvetching to my Dad, but his response was: "How many other industries are there which produce such complex pieces of equipment so cheaply?" I guess when you grew up with punch cards, you bring a different perspective to the table. And he's right - you can't build something this complex for this little and expect it to work. But computer makers aren't advertising their machines as being any less reliable than the machines that a decade ago were being engineered to be dropped from a third story window and still function as if nothing happened.



All this got me thinking about the 1968 Buick Skylark I drove while I was high school and college. It was older than I was (I'm a 1970 model year, having, rolled off the assembly line in late 1969), and you had to fill it up every time you left the house, plus once more on the way back. And it could take a beating; a woman ran into me once with a Lincoln, and while I would not be surprised if that was the end of the Lincoln, I fixed the damage to the Skylark with a hammer. No amenities except an ashtray, but the damn thing worked for twenty five years. Which means it was still running long after most of the Buicks made in the 1970s and 1980s had been scrapped. (I don't have statistics to back up that statement, but like everyone else, I've been in Buicks made in the 1970s and 1980s.) On paper Buicks from the 1970s and 1980s were much better vehicles, coming with fancy features such as shoulder restraints, automatic windows, better mileage, and a suspension system that didn't allow the $#%^ing boat to rock for a twenty-three minute window after every turn.



My guess is that the 1970s and 1980s models were also better for GM's profitability, at least at first. After all, they had to be replaced a lot sooner, which meant more cash flow. At least at the time. But eventually, people stopped buying American vehicles. I had three American cars before I called it quits. The aggravation of dealing with all the little things that went wrong wasn't worth the hassle. Its not just that the vehicles themselves had issues; the dealers I dealt with weren't much better. All sorts of bits and pieces like vent covers and knobs fell off my then brand-new Camaro, and the windows never sealed properly from day one, but none of the dealers ever fixed these problems.



As I see it, computer manufacturers today are emulating GM in the 1970s and 1980s. They're starting the process of driving away their customer base. What makes their situation, for now, better than GM's in the 1970s and 1980s is that it seems like all the computer makers are doing it. There is nobody out there producing quality machines, even at slightly higher prices. I suspect there is a market for more reliable machines - even if that reliability comes at the expense of a few features or a higher price, provided its advertised and sold that way. It doesn't have to be engineered to take a bullet, but it does have to work. All the time. Convince me that it does and I'll pay a premium. And I suspect there are a lot of people like me out there.

___________________________________________

by cactus

by Rdan (noreply@blogger.com) on June 30, 2009 11:31 AM

From Angry Bear...

In Which Gred Mankiw Displays Alarming Ignorance about that Giant Glowing Red Triangle Across the River

Robert Waldmann



Suggests that serious readers go read Brad Delong's comment on Greg Mankiw's comment on Paul Krugman's assertion that George Will and Gred Mankiw are "either remarkably ignorant or simply disingenuous." Totally asking for it, Mankiw also commented on Krugman's post referring to DeLong and Krugman as a tag team.



I just want to note that Greg Mankiw chooses a very odd example to illustrate his ignorance of basic economic theory.



He wrote



[Obama's] economic logic regarding the public option is hard to follow. Consumer choice and honest competition are indeed the foundation of a successful market system, but they are usually achieved without a public provider. We don’t need government-run grocery stores or government-run gas stations to ensure that Americans can buy food and fuel at reasonable prices..."



Mankiw chose to talk about the market for gasoline !







OK prof Mankiw I have a proposal. This evening get out of Your office, get on Mass Ave and drive South. You will see a river. Across that river you will see a huge red glowing triangle. Do you know what that triangle advertises ? Yes it's the Citgo sign. It avertises a publicly owned oil company and chain of gas stations.



So if you have no problem with a public provider of gasoline, why are you opposed to a public provider of health care ?



Somewhat more importantly, the idea that the market for gasoline shows that we can trust the private sector to give us "Consumer choice and honest competition" is beyond bizarre. Ever heard of Standard Oil professor Mankiw ? The fact is that it requires constant struggle to preserve competition and a market based approach of offering a public plan has advantages compared to a litigation based approach.



It just so happens that the health insurance market is not at all competitive in many regions, that profits of large health insurance companies have exploded and that the fraction of money paid to health insurance companies which they send on to health care providers have plummeted. Sort of like the market for gasoline that the private sector gave us before massive public intervention.



America's health insurance companies had better decide if they prefer a public option or actual enforcement of the Sherman antitrust act. Splitting up health insurance companies (what was done to achieve competition in the market for gasoline) would be rather more disruptive to policy holders (and executives) than allowing the medicare administration to compete with them.



I'd say Mankiw has a point. Health insurance is like gasoline in the sense that the market has failed -- that profit seeking corporations have managed to reduce competition to levels such that their profits explode. The main differences are that it's the 21st century and the President is using a market based rather than a punitive approach to the problem.



Claiming that there is currently a competitive market for health insurance in the USA is like claiming that they sky is green.



by Robert (noreply@blogger.com) on June 30, 2009 12:35 AM

June 29, 2009

From Lean Left...

Definition of the Day, 2009-06-29

Vinny:

anecdotal evidence : evidence that supports the other guy’s position

Ha!

By the way, if you’re not, you really should be reading Vinny’s blog. He blogs sporadically (not that we have much room to talk), but when he does, it’s almost always worth reading. Vinny, if you’re seeing this plug, please consider this a formal request for you to revive your “CNBC Dumbass of the Day” series.

by tgirsch on June 29, 2009 07:49 PM

From Lean Left...

Good Work, Senator Corker, You Dumb*ss

I hope Bob Corker enjoyed his fifteen minutes of fame, becasue it seems like it might have cost his constituents some good jobs:

DETROIT — General Motors is expected to announce as soon as Friday that it will reverse plans to close two plants near Detroit after Michigan won a three-state battle to be the site where G.M. will build a new small car.

G.M. chose to make the car at its Orion Township assembly plant, which was scheduled to close in September, over plants in Janesville, Wis., and Spring Hill, Tenn., a person with knowledge with the decision said Thursday.

A metal-stamping plant about five miles away from Orion in the city of Pontiac will stay open to supply the Orion plant. The two plants employ about 5,000 people.

Remember when the auto industry went to the Bush Administration and asked for help because the entire economy had melted down and no one was buying cars? Remember how Corker demanded the executives and workers take significant penalties to get even a smidgen of help? And remember when Corker voted for the wall Street bailout — a bailout more than ten times the size of the auto industry bailout — that included precisely zero restriction or penalties for Wall Street bankers? Well, it certainly seems like people at GM do.

by Kevin on June 29, 2009 06:38 PM

From Angry Bear...

Possibly a Great Paper.

I subscribe to too many RSS blog feeds. So everyone once in a while one pops up and I think, "Should I drop this"?



And so it is with Evolutionary Economics, which occasionally seems like a self-parody of what would happen if you recited Economics 101 cant with an added, even-less-scientific, "evolutionary psychology" glean to it.



However, they occasionally publish interesting work, such as this.



And then there's the paper they describe as "in Japanese." Unfortunately, they mean Hiragana script, which thoroughly defeated my efforts in the early 1990s. And while Babel Fish is willing to try, the result is less than encouraging:

ら哲学者や為政者を解放した。また,顕示選好理論によれば,個人の選択を観察すれば,

そのような行動が導かれる効用関数が存在する。効用の個人間比較が問題にならない状況


becomes

...[a]nd others the philosopher and the administrator were released. In addition, according to revelation preference theory, if selection of the individual is observed, the use function where that kind of conduct is led exists. The circumstance where comparison between the individuals of use does not become problem


which has a few verb problems, I suspect.



Anyone want to read and translate and do a guest-post about this one?

by Ken Houghton (noreply@blogger.com) on June 29, 2009 06:06 PM

From Angry Bear...

More from CBO's 'Long Term Budget Outlook'

by Bruce Webb



In a previous post I highlighted the chapter of CBO's Long-Term Budget Outlook that pertained to Social Security. But the Report goes beyond that and in fact focuses on two different possible scenarios outlined in the following Table:



The shorthand way of defining 'extended baseline' is 'Bush tax cuts expire on schedule' while 'alternative fiscal' equates to 'extending tax cuts'. There are additional components like AMT and physician compensation which have been consistently adjusted to avoid the impacts of then current law projections (feel free to expand on this in comments) but the real question boils down to 'sunset tax cuts' or 'extend them'. So what would be the consequences? More figures under the fold.





Under 'extended baseline' the deficit in 2035 projects to be 5.6% of GDP. Is this good? Well no, I don't think it is even acceptable. But it is a lot better place to start that the 14.6% of GDP deficit we get from 'alternative fiscal'.



Now the above are snapshots. What if we aggregate this over 25, 50, and 75 year intervals? Well you get Box 1-1.





Now these annual and aggregated deficts all need to get financed by borrowing. How does that shake out?



So if we let the Bush tax cuts sunset we buy ourselves about 20 years to figure out what to do long-term. If we extend them we are looking at a situation by 2037 where debt held by the public is a full 200% of GDP as opposed to 75% under current law (i.e. tax cuts sunset).



So those people who are attacking Obama spending effects on the deficit over the next 10 to 20 years using CBO numbers need to confront the fact that there is a lot more long term impact from the foolish policy of tax cuts on top marginal rates.



Let the hot, hot fun begin!

by Bruce Webb (noreply@blogger.com) on June 29, 2009 05:34 PM

From Angry Bear...

WTO signals backing for border taxes

rdan





Finacial Times
points us to WTO thinking on trade issues and cap and trade agreements. (log in required)



Countries implementing cap-and-trade systems for greenhouse gases may be able to use border taxes to protect domestic industries, after the World Trade Organisation gave a cautious nod to such measures.



In a report to be published on Friday, written jointly with the United Nations Environment Programme, the WTO said it was possible to implement border measures for environmental reasons under its rules.



EDITOR’S CHOICE

Europe moves to reduce pollutants - Jun-26EU invests in China carbon capture facility - Jun-25Carbon credits placate US farmers - Jun-25Australia delays vote on carbon trading - Jun-25

by Rdan (noreply@blogger.com) on June 29, 2009 03:44 PM

From Lean Left...

Not Acceptable From Bush, Not Acceptable From Obama

The Obama Administration looks as if it is heading down the same destructive path as the Bush Administration when it comes to Gitmo prisoners:

Obama administration officials, fearing a battle with Congress that could stall plans to close the U.S. prison at Guantanamo Bay, are crafting language for an executive order that would reassert presidential authority to incarcerate terrorism suspects indefinitely, according to three senior government officials with knowledge of White House deliberations.

Such an order would embrace claims by former president George W. Bush that certain people can be detained without trial for long periods under the laws of war. Obama advisers are concerned that an order, which would bypass Congress, could place the president on weaker footing before the courts and anger key supporters, the officials said.

… The other half of the cases, the officials said, present the greatest difficulty because these detainees cannot be prosecuted in federal court or military commissions. In many cases the evidence against them is classified, has been provided by foreign intelligence services or has been tainted by the Bush administration’s use of harsh interrogation techniques.

I realize that the Obama Administration is in a very difficult position. In many cases, the Bush Administration tortured and otherwise abused these people. Trying them may be impossible with that evidence — since, obviously, evidence obtained under torture is of exactly the same quality as the evidence provided in Soviet show trials. That does not excuse the Obama Administration’s rumored plans. Hilzoy says it better than I:

I also don’t envy him the politics of it. Obviously, if some released detainee commits an act of terror against the US, all hell will break loose. And the costs of that will not be purely political: people might not get health insurance, or we might be unable to act on global warming, if some released detainee decides to blow himself up in an American city. I wish that my fellow citizens were also moved by the wrongness of keeping people who might be innocent locked up without recourse, but apparently not enough of them are.

But that doesn’t make it right. Obama does not have to do this. The rule of law is one of our most basic values. It underwrites the freedoms that we go on and on about, but are apparently unwilling to risk much of anything to preserve.

Shame on him if he does this. And shame on us.

There must be another option aside from the destruction of the presumption of innocence and the Great Writ. I haven’t heard, for example, why these people cannot be held as prisoners of war. In any case, no matter how difficult it is, no matter how deeply Bush and Cheney poisoned the process, it is the Obama Administration’s responsibility to find a way out of Bush’s mess without jettisoning the rule of law.

I don’t care if the task is hard. They knew, or should have known, it would be hard going in. If they didn’t want this responsibility, they shouldn’t have taken the job.

by Kevin on June 29, 2009 03:23 PM

From Lean Left...

Liberals, Conservatives, and Sex Scandals

Krugman makes some astute observations:

First of all, there’s a difference in what bothers them. When a liberal politician engages in sexual betrayal, what bothers his erstwhile supporters is the betrayal. When a conservative politician does it, what bothers the supporters is the sex.

And after watching a series of scandals unfold, I’ve come to the conclusion that the liberal reaction — that the hypocrisy of the moralizers undermines their cause — just doesn’t come to grips with the conservative worldview.

From their point of view the cause, the need to police what people do in bed, is, by definition, right, because it’s literally God-given. So the fact that some of those trying to police what other people do in bed are themselves doing nasty things does not reflect on the cause itself — on the contrary, it shows just how necessary more bed-snooping is.

It’s also notable that conservatives are, in practice, more forgiving of their politicians’ sins than liberals. John Edwards and Eliot Spitzer ended their political careers; Ensign and Vitter are still in the Senate, and Newt Gingrich is out there on the Sunday shows, speaking for the GOP. Why? Because where liberals see gross hypocrisy, conservatives see men doing the Lord’s work — which partially excuses their own failings. Liberals think that a man who has an affair is worse if he preaches moral values; conservatives think he’s better. You might say that as they see it, if he interferes with what enough other people do in bed, it doesn’t matter what he does himself.

[Emphasis mine.]

by tgirsch on June 29, 2009 02:13 PM

From Angry Bear...

Deja Vu Health Care Reform: Hillary Care is the wrong feeling

by: Divorced one like Bush







Ok folks. It's real, this familiarity with the health care reform debate. It is a real memory you are experiencing, that deja vu feeling. Only, the reason it seems so much as deja vu is because what your being told is the trigger of the deja vu is not the real memory. Hillary Care is not the correct memory for the current debate and thus it "feels" like you have been there before: deja vu. However, you really have been there before, and thus it is a real memory, not a similar feeling. It was Nixon, 1971. And, the experience of the mind games that are being tempted upon you are as real and cautioning a memory as having burned your hand on a hot pan, or caught a knief falling.





February 17, 1971



Ehrlichman: We have now narrowed down the vice president's problems on this thing to one issue, and that is whether we should include these Health Maintenance Organizations like Edgar Kaiser's Permanente thing.

Nixon: Now let me ask you...You know I'm not to keen on any of these damn medical programs.

Ehrlichman: This is a private enterprise one.

Nixon: Well that appeals to me.

Ehrlichman: Edgar Kaiser is running this Permanente deal for profit. And the reason that he can, the reason he can do it...I had Edgar Kaiser come in, talk to me about this. And I went into some depth. All of the incentives are toward less medical care. Because the less care they give them, the more money they make.

Nixon: Fine

Ehrlichman: ...and the incentives run the right way.

Nixon: Not bad.



February 18, 1971

Nixon's Special Message to Congress proposing a National Health Strategy



I'm going to start with his last paragraph:

Nineteen months ago I said that America's medical system faced a "massive crisis." Since that statement was made, that crisis has deepened. All of us must now join together in a common effort to meet this crisis--each doing


Going forward, I only excerpted the parts related to insurance because the truth now as then is that the real issue when this nation talks about health care reform, is that we are only talking about how the money will travel to pay for it. Cost controls are always second and presented as a results of how the money will travel. Improved outcomes are always third and a result of how the money will travel. Tort reform equals how the money will travel. More people having access? Again a result of how the money will travel.



What follows are Nixon's arguments for keeping a private system. The points should all sound very familiar. There are a few items however that might surprise you as to him being a republican compared to today's “republican”. In the end, it is still the republican (and now also DLC) ideology of free market rhetoric supporting a discussion of what I consider the false market in “health care reform”: The third party, the middleman.



This is long after the jump. Please take the time to read Nixon's words. Reading such history first hand is the only means we have for growing a more mature social personality.



As you read, pay attention to the reasoning and expected results, then compare them to today. Today, is the actual results. The results are what we are living.



Recognize the sales pitch. Recognize the appeal to humanistic needs as part of the pitch for the product. Nixon was not trying to sell a better America. That was just jive talk to sell HMO's. Recognize such in today's presentation.



Continuing Nixon's presentation:

Our record, then, is not as good as it should be. Costs have skyrocketed but values have not kept pace. We are investing more of our nation's resources in the health of our people but we are not getting a full return on our investment.



This new strategy should be built on four basic principles.

1. Assuring Equal Access

2. Balancing Supply and Demand.

3. Organizing for Efficiency. There are two particularly useful ways of doing this:



A. Emphasizing Health Maintenance. In most cases our present medical system operates episodically--people come to it in moments of distress--when they require its most expensive services. Yet both the

system, and those it serves would be better off if less expensive services could be delivered on a more

regular basis... In short, we should build a true "health" system-and not a "sickness" system alone. We should work to maintain health and not merely to restore it.

B. Preserving Cost Consciousness. As we determine just who should bear the various costs of health care, we should remember that only as people are aware of those costs will they be motivated to reduce them. When consumers pay virtually nothing for services and when, at the same time, those who provide services know that all their costs will also be met, then neither the consumer nor the provider has an incentive to use the system efficiently.



4. Building on Strengths. We should also avoid holding the whole of our health care system responsible for failures in some of its parts. There is a natural temptation in dealing with any complex problem to say: "Let us wipe the slate clean and start from scratch." But to do this-to dismantle our entire health insurance system, for example--would be to ignore those important parts of the system which have provided useful service...



One of those strengths is the diversity of our system--and the range of choice it therefore provides to doctors and patients alike. I believe the public will always be better served by a pluralistic system than by a monolithic one, by a system which creates many effective centers of responsibility--both public and private--rather than one that concentrates authority in a single governmental source.



A. REORGANIZING THE DELIVERY OF SERVICE



In recent years, a new method for delivering health services has achieved growing respect. This new approach has two essential attributes. It brings together a comprehensive range of medical services in a single organization so that a patient is assured of convenient access to all of them. And it provides needed services for a fixed contract fee which is paid in advance by all subscribers.



Such an organization can have a variety of forms and names and sponsors. One of the strengths of this new concept, in fact, is its great flexibility. The general term which has been applied to all of these units is "HMO"--"Health Maintenance Organization."

The most important advantage of Health Maintenance Organizations is that they increase the value of the services a consumer receives for each health dollar. This happens, first, because such organizations provide a strong financial incentive for better preventive care and for greater efficiency. A fixed-price contract for comprehensive care reverses this illogical incentive. Under this arrangement, income grows not with the number of days a person is sick but with the number of days he is well. HMO's therefore have a strong financial interest in preventing illness, or, failing that, in treating it in its early stages, promoting a thorough recovery, and preventing any reoccurrence. Like doctors in ancient China, they are paid to keep their clients healthy. For them, economic interests work to re-enforce their professional interests.



...So is this administration. That is why we proposed legislation last March to enable Medicare recipients to join such programs. That is why I am now making the following additional recommendations:

2. To help new HMO's get started-an expensive and complicated task--we should establish a new $23 million program of planning grants to aid potential sponsors--in both the private and public sector.

At the same time, we should provide additional support to help sponsors raise the necessary capital, construct needed facilities, and sustain initial operating deficits until they achieve an enrollment which allows them to pay their own way. For this purpose, I propose a program of Federal loan guarantees which will enable private sponsors to raise some $300 million in private loans during the first year of the program.
(In 2009 dollars that's: $1,594,443,347.32 using the Consumer Price Index, $1,270,112,394.52 using the GDP deflator, using value of consumer bundle, $1,572,128,637.06 using the unskilled wage, $2,589,331,122.17 using the nominal GDP per capita, $3,796,805,962.20 using the relative share of GDP)



F. A NATIONAL HEALTH INSURANCE PARTNERS HIP

In my State of the Union Message, I pledged to present a program "to ensure that no American family will be prevented from obtaining basic medical care by inability to pay." I am announcing that program today. It is a comprehensive national health insurance program, one in which the public and the private sectors would join in a new partnership to provide adequate health insurance for the American people.



In the last twenty years, the segment of our population owning health insurance has grown from 50 percent to 87 percent and the portion of medical bills paid for by insurance has gone from 35 percent to 60 percent. But despite this impressive growth, there are still serious gaps in present health insurance coverage. Four such gaps deserve particular attention.
(Ok, well this has definitely been reversed.)

First--too many health insurance policies focus on hospital and surgical costs and leave critical outpatient services uncovered... Because demand goes where the dollars are, the result is an unnecessary--and expensive--- overutilization of acute care facilities. The average hospital stay today is a full day longer than it was eight years ago. (Yup, fixed that one.)



A second problem is the failure of most private insurance policies to protect against the catastrophic costs of major illnesses and accidents. Only 40 percent of our people have catastrophic cost insurance of any sort and most of that insurance has upper limits of $10,000 or $15,000. This means that insurance often runs out while expenses are still mounting. For many of our families, the anguish of a serious illness is thus compounded by acute financial anxiety. Even the joy of recovery can often be clouded by the burden of debt--and even by the threat of bankruptcy.

A third problem with much of our insurance at the present time is that it cannot be applied to membership in a Health Maintenance Organization--and thus effectively precludes such membership. No employee will pay to join such a plan, no matter how attractive it might seem to him, when deductions from his paycheck--along with contributions from his employer--are being used to purchase another health insurance policy.



The fourth deficiency we must correct in present insurance coverage is its failure to help the poor gain sufficient access to our medical system. Just one index of this failure is the fact that fifty percent of poor children are not even immunized against common childhood diseases.
(We are above 80% now.) The disability rate for families below the poverty line is at least 50 percent higher than for families with incomes above $10,000.



Our National Health Insurance Partnership is designed to correct these inadequacies--not by destroying our present insurance system but by improving it. Rather than giving up on a system which has been developing impressively, we should work to bring about further growth which will fill in the gaps we have identified. To this end, I am recommending the following combination of public and private efforts.



1. I am proposing that a National Health Insurance Standards Act be adopted which will require employers to provide basic health insurance coverage for their employees.
(Guess that answers the question of why we have an employment based system. Oops! Hey, no Walmart then either.)



2. I am also proposing that a new Family Health Insurance Plan be established to meet the special needs of poor families who would not be covered by the proposed National Health Insurance Standards Act--those that are headed by unemployed, intermittently employed or self-employed persons.

Accordingly, I propose that the part of Medicaid which covers most welfare families be eliminated. The new Family Health Insurance Plan that takes its place would be fully financed and administered by the Federal Government. It would provide health insurance to all poor families with children headed by self-employed or unemployed persons whose income is below a certain level. For a family of four persons, the eligibility ceiling would be $5,000.
(I'll say it for Fox News: Democrat President Nixon today proposed...)



Our program would also require the establishment in each State of special insurance pools which would offer insurance at reasonable group rates to people who did not qualify for other programs: the self-employed, for example, and poor risk individuals who often cannot get insurance. Did I hear something about co-ops?)



I also urge the Congress to take further steps to improve Medicare. For one thing, beneficiaries should be allowed to use the program to join Health Maintenance Organizations. (Well it took 30+ years, but they got that: Medicare Advantage.)



...To begin with, there simply is no need to eliminate an entire segment of our private economy and at the same time add a multibillion dollar responsibility to the Federal budget. Such a step should not be taken unless all other steps have failed.

More than that, such action would be dangerous. It would deny people the right to choose how they will pay for their health care. It would remove competition from the insurance system--and with it an incentive to experiment and innovate...There is a better way--a more practical, more effective, less expensive, and less dangerous way--to reform and renew our nation's health system.




38 years since this speech. A speech that has all the same talking points regarding a private, free market based system as we heard with Hillary Care and today. We did the employer based HMO version of private insurance after the other version (BCBS employer based) did not work including the HMO medicare experiment in this decade. We are worse off than ever by all reports from all parties. It was not “ a better way--a more practical, more effective, less expensive, and less dangerous way...”. It has failed. People are in more danger today. All other ways have failed: a no health insurance system, an employer based non-profit private system, an employer based for profit private system and privatizing a single payer, government run system. The time has come. We have met the exception that Nixon gave the nation. We can now prove or disprove that there is such a creature as the “rational consumer”.



Ehrlichman: Edgar Kaiser is running this Permanente deal for profit. And the reason that he can, the reason he can do it...I had Edgar Kaiser come in, talk to me about this. And I went into some depth. All of the incentives are toward less medical care. Because the less care they give them, the more money they make.

Nixon: Fine

Ehrlichman: ...and the incentives run the right way.

Nixon: Not bad.

by Divorced one like Bush (noreply@blogger.com) on June 29, 2009 01:17 PM

From Lean Left...

Corrupt to the Core

This is inexcusable:

As financial markets tumbled and the government worked to stave off panic by pumping billions of dollars into banks last fall, several members of Congress who oversee the banking industry were grabbing up or dumping bank stocks.

Anticipating bargains or profits or just trying to unload before the bottom fell out, these members of the House Financial Services Committee or brokers on their behalf were buying and selling stocks including Bank of America and Citigroup — some of the very corporations their committee would later rap for greed, a Plain Dealer examination of congressional stock market transactions shows.

Financial disclosure records show that some of these Financial Services Committee members, including Ohio Rep. Charlie Wilson, made bank stock trades on the same day the banks were getting a government bailout from a program Congress approved. The transactions may not have been illegal or against congressional rules, but securities attorneys and congressional watchdog groups say they raise flags about the appearance of conflicts of interest.

No member of Congress should be allowed to own stock in any company that participates in an industry he or she oversees. Congress people should be forced to put their assets in a blind trust, and the first action of that trust should be to swap out assets for ones of similar value so that the Congressperson doesn’t know what industries, if any, their actions could be benefiting. The only way to stop this kind of corruption is to make it has close to impossible as we can.

Anyone caught doing this should be expelled from the Congress. They won’t be, of course, because ethics is just another partisan weapon and the notion of Caeser’s wife is s dead as, well, Caeser. It is not that most members of Congress are corrupt. Most almost certainly aren’t — people with the talent to rise to a seat in the House or the Senate are generally talented enough or connected enough to have gone into much more lucrative businesses. But they swim in a sea of corruption. Their elections are dependent upon raising more money than Midas and the, as this scandal proves, there are far too many ways for them to come across opportunities to be corrupt. This has to change. We cannot have a functioning democracy was institutions that are as compromised as ours are.

by Kevin on June 29, 2009 12:11 PM