Wednesday, July 25, 2012

Obamacare - love it or hate it.

I have been wondering why all the hatred for "Obamacare" (incidentally, the term Obamacare was thrown out there as a negative but pro health care folks have adopted it - much to the chagrin of the haters) and I have to conclude that most just hate it because it's Obama's.  They like the individual elements but "if Obama created it (which he actually didn't), it is bad. The most common complaint I hear is government takeover - which it's not. 

I found an organized report published by a right wing group calling them selves newworldorderwar. They give 20 reasons for hating the AHCA. 

Essentially it is a group of exceptions, unusual situations, where someone would be forced to pay for a program or participate in a program that they didn't like, as if a democratically established program was the only situation where one might have to go along to get along...or coexist. This compulsion exists with any kind of government or without any kind of government. I was against the Iraq invasion but I had to pay for it nevertheless. In reading the 20 reasons to hate Obamacare, it is clear that most of them are vacuous or misinterpret the elements of the law. Read them for yourself. I'll just look at one - the basis for the challenge to constitutionality of the law - the individual mandate. Ironically, this provision was a product of the republicans in years past.  It requires "freeloaders," as the republicans called them when it was their idea, to buy insurance on an exchange or be penalized in their tax requirements. The reason for the tax requirement is sound. Some of these "freeloaders" will require medical attention down the road and the tax provides a way for them to pay in advance - much as an insurance premium would. The remaining 19 items deal with even more isolated situations where a person could object. The same reply applies, in a democracy, the minority sometimes have to give up things for the good of the majority; for example, the inherent requirement that a bachelor with no intent to ever propagate help pay for pregnancies. The same argument has been made in taxing childless people for schools.  

Having considered the only argument against the law, I conclude that the AHCA is good for the vast majority of the people. It is not the best we could have done. Personally, I prefer a single payer or a government (which insurance companies know would end up in a single payer system because Medicare and the VA have proven that they can do it cheaper than private insurance companies. Here are the 18 most important elements. 

1. No More Denials For Pre-Existing Conditions: Health insurers cannot deny children insurance because of pre-existing conditions. A ban on the same discrimination against adults will take effect in 2014.
What's not to like about this unless you have been making money from selective insuring the people. Enforcement would be easy. 

2. Small Business Tax Credits: Businesses with fewer than 50 employees will receive tax credits covering up to 50 percent of employee premiums.
This may cost the tax payers some money  but the alternative is paying for uninsured patients from some other government source or letting them die. Opponents claim this is socialistic and will end our society as we know. This is what Reagan said about Medicare. 

3. Seniors' 'Donut Hole' Rebate: Seniors will receive a rebate to fill the "donut hole" in Medicare drug coverage, which severely limits prescription medication coverage of expenditures over $2,700. As of next year, 50 percent of the donut hole will be filled.

4. More Young Adults Covered On Parents' Plans: The cut-off age for young adults to continue to be covered by their parents' health insurance rises to age 27.

5. No Lifetime Caps: Lifetime caps on the amount of insurance payout an individual can receive will be banned. Annual caps will be limited, and banned in 2014.

6. Adults With Pre-Existing Conditions Covered: A temporary high-risk pool will be set up to cover adults with pre-existing conditions. Health care exchanges will eliminate the program in 2014
What's not to like about 3-6  Still no "governement takeover."

7. New Insurance Plans Must Include Preventative Care: New plans must cover checkups and other preventative care without co-pays. All plans will be affected by 2018.
This will save money in the long run as well as lives.

8. The End Of 'Recissions': Insurance companies can no longer drop someone when he or she gets sick.
Unless you are an insurance company or a major stock holder, everyone should love this one.

9. Transparency In Insurance Companies: Insurers must now reveal how much money is spent on overhead.
Now the insurance companies are getting angry!

10. Customer Appeals Process: Any new plan must now implement an appeals process for coverage determinations and claims.
And angrier!

11. Indoor Tanning Services Tax: A 10 percent tax is imposed on indoor tanning services. This tax, which replaced the proposed tax on cosmetic surgery, is effective for services on or after July 1, 2010.
Maybe this will keep some out of those cancer factories.

12. Enhanced Fraud Abuse Checks: New screening procedures will be implemented to help eliminate health insurance fraud and waste.
Motherhood and apple pie unless you cheat.

13. Medicare Expansion To Rural Areas: Medicare payment protections will be extended to small rural hospitals and other health care facilities that have a small number of Medicare patients.
Oh oh, here comes the government takeover.  More medicare!  But unless, you are a profiteer from health care, why is this bad?

14. Deductions For Blue Cross Blue Shield: Nonprofit Blue Cross organizations will be required to maintain a medical loss ratio -- money spent on procedures over money incoming -- of 85 percent or higher to take advantage of IRS tax benefits.
Feel the health insurance hatred! Damned government is trying to 

15.Nutrient Content Disclosure:  Chain restaurants will be required to provide a "nutrient content disclosure statement" alongside their items. Calories should be listed on both in-store and drive-through menus of fast-food restaurants.

16. Better Coverage For Early Retirees: The law establishes a temporary program for companies that provide early retiree health benefits for those ages 55‐64 in order to help reduce the often-expensive cost of that coverage.

17. Better Consumer Information On The Web: The Department of Health and Human Services will set up a new website to make it easy for Americans in any state to seek out affordable health insurance options The site will also include helpful information for small businesses.

18. Encouraging Investment In New Therapies: A two‐year temporary credit (up to a maximum of $1 billion) is in the law to encourage investment in new therapies for the prevention and treatment of diseases.
15 through 18 - nothing too exciting but healthful...and isn't that what the law is about? 

Monday, July 23, 2012

Romney's pride is inconsistent with his religion.

His shock and disgust at Obama's focus on working together, his "it takes a village" attitude is woefully contrary to what his religion teaches him.

We are taught, as are all Christian, that we cannot attain our most important goal, salvation, without the help of Jesus. We are also taught that a primary mission is to help others. If it is shameful to accept and acknowledge help from others, how can it be a requirement that we do so? Romney has said over and over how proud he is of his success in business. This is what his church leaders tell him about pride:

Thinking that we are better than others---the sin of pride and arrogance---can do eternal damage to our souls.

Apparently, he isn't really listening when he sings this old LDS hymn:

1. Have I done any good in the world today?
Have I helped anyone in need?
Have I cheered up the sad and made someone feel glad?
If not, I have failed indeed.
Has anyone’s burden been lighter today
Because I was willing to share?
Have the sick and the weary been helped on their way?
When they needed my help was I there?
Then wake up and do something more
Than dream of your mansion above.
Doing good is a pleasure, a joy beyond measure,
A blessing of duty and love.
2. There are chances for work all around just now,
Opportunities right in our way.
Do not let them pass by, saying, “Sometime I’ll try,”
But go and do something today.
’Tis noble of man to work and to give;
Love’s labor has merit alone.
Only he who does something helps others to live.
To God each good work will be known.

Text and music: Will L. Thompson, 1847–1909, alt.

Thursday, July 19, 2012

Don't blame Obama for the poor economy

The 2008 financial crash started years before Obama was elected…to anything.  It’s roots are in the neutering of the Glass Steagall act allowing unimpeded and irrational packaging of worthless mortgages and pedaling them, with the aid of bribed rating agencies, to investors who had more money than they could spend; this accumulation of  wealth at the top, we can thank the Bush tax cuts of 2001 and 2003.

As distasteful as it is to some people, TARP was absolutely necessary and saved the world financial system from total collapse that would have dwarfed 1929.  Credit to Bush for acting fast but more credit to Obama for adding some strings, albeit not enough. Republicans resisted this move as soon as Obama got involved.  When it was Bush’s plan, they were for it. They screamed that it would bankrupt the government.  As a matter of fact, the loan amount has been repaid and has created a surplus for government coffers. Unfortunately, this did nothing for small businesses and homeowners and the bankers immediately resisted all regulations which would prevent them from doing the same thing that nearly destroyed them and still refusing to make loans for small businesses.

Obama addressed this with the American Recovery and Reinvestment Act (ARRA) commonly called the Recovery Act or the Stimulus.  The act provided approximately $830 Billion over a ten year period. The Act included direct spending in infrastructure, education, health, and energy, federal tax incentives, and expansion of unemployment benefits and other social welfare provisions.  The plan was based on the Keynesian macroeconomic theory, proven in the Great Depression, which states that during slowdowns or disastrous economic rupture, the government could and should offset the lack of private spending with additional government spending.

The Act was resisted by the Republicans from the start.  Obama was criticized by most economists such as Paul Krugman because it was too small. It was too small. While it did succeed in stopping the hemorrhaging job picture, it failed to produce a flourishing economy and substantially reduce unemployment.  But before you come down too hard on the president, keep in mind that the republicans wanted it even smaller or not at all. The voting was along nearly unprecedented partisan voting.  Congressional negotiators reported that they had completed the Conference Report on February 11. On February 12, House Majority Leader Steny Hoyer scheduled the vote on the bill for the next day. On February 13, the Report passed the House, 246-183, largely along party lines with all 246 Yes votes given by Democrats and the Nay vote split between 176 Republicans and 7 Democrats.

The Senate passed the bill, 60-38, with all Democrats and Independents voting for the bill along with three Republicans. On February 17, 2009, President Barack Obama signed the Recovery Act into law. Wikipedia offers a complete history of negotiations and its provisions.  CBO estimated that in the fourth quarter of 2010 there were somewhere between 1.3 million and 3.5 million people who were then employed who would not have been had the stimulus not been enacted. “CBO estimates,” says the report, “that ARRA’s policies had the following effects in the fourth quarter of calendar year 2010: … Increased the number of people employed by between 1.3 million and 3.5 million.”

In 2009, Obama used nearly $25 Billion of the bank bailout funds to rescue two of the big three American automakers from impending bankruptcy.  In return for the loans they promised to produce more energy efficient autos and streamline the brands they produced and to consolidate operations.  Again, this met republican resistance and criticism, favoring letting them pay the price of inefficiency by going bankrupt; the hardship to employees and the negative effect on the economy notwithstanding.  Of course, their bottom line was, as it has been from the beginning, to sabotage Obama’s administration.

While GM’s success story is mixed and has come to too large an extent at the expense of the workers, it is a success story and the workers for the most part are happy.  As an aside one of the cost elements that have hurt the competitiveness of American auto makers is the cost of the health insurance they provide.  In most of the auto making nations, health care is provided by the government.  Many of us are disappointed in Obama’s failure to support a single payer system or even a government option.  This would have made American cars much more competitive pricewise.

Since the 2010 election which gave the republicans the majority in the house, along with the official declaration by Mitch McConnell that the number one goal of the Republican Party was to make Obama fail, they have blocked nearly every effort by Obama to create jobs and bring jobs back home.  For example, the Bring Jobs Home Act was defeated by filibuster even though a majority of legislators were in favor and they defeated a tax break for small business on a procedural issue even though this has been a long time republican position. 

Additionally, they have used the threat of refusing to raise the debt limit, which could result in financial disaster for the USA to gain concessions which limit Keynesian measures.

So, when you vote in November and the economy is important to you, remember the real reason it is slow and ask yourself where it would have been were it not for the Stimulus and think twice before electing a man who wants to return to Bush economics. 


Tuesday, July 10, 2012

Globalization on steroids!

In the 1992 election, one of the issues was NAFTA, the North American Free Trade Agreement.  The candidates of the major parties, Clinton and Bush were for it. Most logical politicians were for it.  Most economists, both professionals and amateurs (like me) were for it. The only candidate, a third party candidate, who opposed it was Ross Perot. He is the only one who recognized it as nothing more than a quest for cheap labor. He predicted a giant sucking sound as jobs went south.  Guess what, folks, he was right and all us economists, professional and amateurs have to admit it. And we ain't seen nothing yet!

Today, there is a group called TPP for Trans Pacific Partnership which includes the US and a group of nations; currently US, Australia, Peru, Malaysia, Vietnam, New Zealand, Chile, Singapore and Brunei Darussalam with the likelihood that they will soon be joined by Mexico, China, Japan and Canada who are planning our future.

The TPP negotiations have been going on for two years under extreme secrecy, but on June 12, a document was leaked to the watchdog group, Public Citizen, revealing the current US position and the reason for the secrecy. The contents are surreal, shocking and prima facia evidence for how corporations have become the master puppeteers of our government. The agreement would, in effect, put the US government under control in trade affairs of the foreign corporations. Specifically TPP, would:

  1. Severely limit regulation of foreign corporations operating within US boundaries, giving them greater rights than domestic firms; 
  2. Extend incentives for US firms to move investments and jobs to lower-wage countries; and 
  3. Establish an alternative legal system that gives foreign corporations and investors new rights to circumvent US courts and laws, allowing them to sue the US government before foreign tribunals and demand compensation for lost revenue due to US laws they claim undermine their TPP privileges or their investment "expectations."
In the above linked article by Brian Moench, Truthout, he states:
TPP is much worse than NAFTA, which eviscerated middle-class jobs and wealth in the US. And this sellout to foreign corporations is not just a rogue brain cramp of President Obama. Mitt Romney demanded this agreement be signed months ago, and the notorious "climate change denying" US Chamber of Commerce can't get it signed fast enough. Romney has called Obama's the most hostile administration to business in recent history. If the TPP trade agreement is "hostile" to business, god help us if we have an administration, presumably Romney's, "friendly" to business.
If you thought that with Citizens United we had hit rock bottom in surrendering our democracy to the power of money, this TPP "trade agreement" would throw our democracy into free fall. Foreign corporations will be allowed to feast like termites upon America's natural resources, trash our environment and public health, violate our rights as American citizens and make us pay them if we try to protect ourselves.
From Page 353, 254 of The Rise and Fall of the American Middle Class: 

The decision by the Supreme Court giving corporations all the privileges of being deemed a "person" without any of the responsibilities enabled them to funnel money into the electoral process and determine the outcome of elections.

We literally, now have a government at the federal level that is de facto owned by international corporations. With the weakening of our government as a protective entity, we are in real danger of becomng what Marc Bloch describes as a "feudal society" in his book by that name., with government by, for and of tghe rich.  It's a cold hard fact that there is no such thing as Laissez faire,  It can not exist for long.  Either you have a government that controls business or business that controls government.  A healthy stable economy requires a balance - as we had from the end of WWII until the slow dismantling of New Deal legislation and the rebirth of supply side economics.  Capitalism is a harsh appeal to selfishness and unchristian darwinistic survival of the fittest.  It's sole redeeming quality is that it has been very effective at producing goods and it will  only continue to do this as long as good government prevents it fropm emasculating itself.

Saturday, July 7, 2012

The Answer to Citizen's United? The Occupy Movement?

The slippery slope taking us into a new kind of corporate feudalism was accelerated to a free fall by Citizen's United. We are looking at the bleak possibility of WalMart or another mega business dictating to us; telling us who we work for (them), and how much we are paid (minimum wage).  Make no mistake about it, folks, that is where we are headed.

Downtown El Monte, California, 1950s
The era of the downtown shopping center where most of the businesses were owned and operated by your neighbors and staffed by your family and friends are gone forever!

I was just beginning adulthood in 1947 when I graduated from high school, went to work, became free for the first time since 1939 from the onus of living on welfare. I didn't like being on welfare. I pay taxes today, a  lot of taxes and don't mind helping others who needed help like my mother did; and I don't mind.  But that's another story.

After a stint in the army, I returned to my civilian job in construction.  This was 1953; the rise of the greatest middle class in history was well underway. I was making $7000 a year.  The first new home we bought cost $12,850 - less that two years wages. And I got a key to the front door for a down-payment of $350 and with payments of $67 a month. Of course, it wasn't a mansion but it was comfortable - and it was all we needed! I bought a new car for $2200 in 1954. It cost me less than 4 months wages.

Today, the average household earns a little over $3,400 a month.  A new home will cost them $160,000 - three and a half years wages.  A new car cost $29,000 - eight and a half month's wages.  Health care peaked coverage peaked and is rapidly on the decline today and wages have become flat. The middle class is dwindling.  The share of the pie going to the lower income groups is becoming less and less compared to that going to the upper income groups.

This has led to the diminishing purchasing power of the major consumer group and the concomitant recession. This disparity of income has been the result of the deregulation of business practices and restructuring of the tax structure favoring the very rich. The Citizens United decision seems to assure that government policy will increasingly favor corporations at the expense of the workers and consumers.

The recent Occupy movement provides the only hope to some, including me, for reversing this return to feudalism is the resurgence of the spirit of revolt that ended the Viet Nam War and led to the civil rights movement and successes of the 60s. We shall see.  There is no doubt that corporate spending kept an unpopular governor in office in Wisconsin. Can it put a president in office whose only agenda is a return to the Bush years?