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Friday, July 31, 2009

Health Care Realities

Published: July 30, 2009

At a recent town hall meeting, a man stood up and told Representative Bob Inglis to “keep your government hands off my Medicare.” The congressman, a Republican from South Carolina, tried to explain that Medicare is already a government program — but the voter, Mr. Inglis said, “wasn’t having any of it.”Times Topics:

It’s a funny story — but it illustrates the extent to which health reform must climb a wall of misinformation. It’s not just that many Americans don’t understand what President Obama is proposing; many people don’t understand the way American health care works right now. They don’t understand, in particular, that getting the government involved in health care wouldn’t be a radical step: the government is already deeply involved, even in private insurance.

And that government involvement is the only reason our system works at all.

The key thing you need to know about health care is that it depends crucially on insurance. You don’t know when or whether you’ll need treatment — but if you do, treatment can be extremely expensive, well beyond what most people can pay out of pocket. Triple coronary bypasses, not routine doctor’s visits, are where the real money is, so insurance is essential.

Yet private markets for health insurance, left to their own devices, work very badly: insurers deny as many claims as possible, and they also try to avoid covering people who are likely to need care. Horror stories are legion: the insurance company that refused to pay for urgently needed cancer surgery because of questions about the patient’s acne treatment; the healthy young woman denied coverage because she briefly saw a psychologist after breaking up with her boyfriend.

And in their efforts to avoid “medical losses,” the industry term for paying medical bills, insurers spend much of the money taken in through premiums not on medical treatment, but on “underwriting” — screening out people likely to make insurance claims. In the individual insurance market, where people buy insurance directly rather than getting it through their employers, so much money goes into underwriting and other expenses that only around 70 cents of each premium dollar actually goes to care.

Still, most Americans do have health insurance, and are reasonably satisfied with it. How is that possible, when insurance markets work so badly? The answer is government intervention.

Most obviously, the government directly provides insurance via Medicare and other programs. Before Medicare was established, more than 40 percent of elderly Americans lacked any kind of health insurance. Today, Medicare — which is, by the way, one of those “single payer” systems conservatives love to demonize — covers everyone 65 and older. And surveys show that Medicare recipients are much more satisfied with their coverage than Americans with private insurance.

Still, most Americans under 65 do have some form of private insurance. The vast majority, however, don’t buy it directly: they get it through their employers. There’s a big tax advantage to doing it that way, since employer contributions to health care aren’t considered taxable income. But to get that tax advantage employers have to follow a number of rules; roughly speaking, they can’t discriminate based on pre-existing medical conditions or restrict benefits to highly paid employees.

And it’s thanks to these rules that employment-based insurance more or less works, at least in the sense that horror stories are a lot less common than they are in the individual insurance market.

So here’s the bottom line: if you currently have decent health insurance, thank the government. It’s true that if you’re young and healthy, with nothing in your medical history that could possibly have raised red flags with corporate accountants, you might have been able to get insurance without government intervention. But time and chance happen to us all, and the only reason you have a reasonable prospect of still having insurance coverage when you need it is the large role the government already plays.

Which brings us to the current debate over reform.

Right-wing opponents of reform would have you believe that President Obama is a wild-eyed socialist, attacking the free market. But unregulated markets don’t work for health care — never have, never will. To the extent we have a working health care system at all right now it’s only because the government covers the elderly, while a combination of regulation and tax subsidies makes it possible for many, but not all, nonelderly Americans to get decent private coverage.

Now Mr. Obama basically proposes using additional regulation and subsidies to make decent insurance available to all of us. That’s not radical; it’s as American as, well, Medicare.

Thursday, July 30, 2009

NPR: What matters is who's up and who's down

To all you fans of NPR out there who think your're getting thoughtful coverage, I think this comment on a blog is pretty dead-on:

Listening to NPR’s coverage of healthcare reform over the last few months, I think I’ve heard about five stories that cover the story in terms of “what failing to pass reform will do to Obama’s poll numbers” for every one that actually tries to explain the details of the competing plans being proposed. And that’s NPR, arguably the most thoughtful and “intellectual” MSMer out there.

If you think you're getting something different and more accurate on NPR, keep this in mind. NPR is itself dominated by "horse race" political journalism. Maybe it's only 80% compared to 95% for the private big media electronic outlets, but it's still 80%. All that policy stuff is so boring, and everyone I know has health insurance so what's the big deal?

Wednesday, July 29, 2009

Canadian Union Writes Obama & Congress Defending Canada’s Healthcare

The President of the National Union of Public and General Employees (NUPGE), one of Canada's largest unions, has written President Barack Obama and all members of the U.S. Congress asking them to look past the "malicious misrepresentations and scare tactics" in the current debate over American health care reform and see the true value of Canada's single-payer health system.

James Clancy, NUPGE President, said he felt obligated to write to the U.S. legislators after conservative Prime Minister Harper and Health Minister Aglukkaq refused to step in and counter the anti-Canadian propaganda being spread by private health care interests battling health care reform in the United States.

Clancy said a multi-million-dollar tidal wave of special-interest propaganda is trying desperately to obscure the fact that Canada's single-payer health care system has been "a triumph of values and economics" for more than 40 years.

Clancy wrote that his country’s health outcomes, on almost every critical measure, are among the best in the world, and Medicare covers all Canadians at substantially less cost than U.S. citizens pay for a system that leaves millions without coverage.

"It's totally unthinkable to Canadians to experience bankruptcy due to medical bills, as do over one million Americans every year. Unlike in the U.S., not a single Canadian who is unemployed has lost the ability to access health care during the current economic recession."

The National Union of Public and General Employees (NUPGE) is one of Canada's largest labor organizations with over 340,000 members.

Monday, July 27, 2009

Crazy Wingnut Healthcare Attacks Exposed

Bob Cesca, Political Author, Blogger, and New Media Producer Posted: July 22, 2009 04:29 PM

The other day, I overheard a random "Republican analyst" on MSNBC's The Ed Show suggest that the public option should never be implemented because of the DMV. This was her whole thing. The DMV. According to her logic, the DMV, which is run by state governments, is really slow and awful and therefore the public option would force us to wait in line for medical treatment.
My first reaction was that this lady has clearly never been to an emergency room. When I crashed while cycling last year, I waited in an ER exam room with a fractured T10 for nearly two hours before a doctor popped into the room. And I was pretty lucky to be seen so quickly. Contrastingly, I've never once waited in line at a DMV for any longer than 10 or 15 minutes in my entire life.

The last time I renewed my driver's license, it took less than five minutes. If I ever have the privilege of sitting in a doctor's office waiting room and, subsequently, the exam room, for less than five minutes I'll voluntarily pay triple the fee and send the doctor an enormous gift basket filled with, you know, a Lexus.

All in all, we can only wish that private healthcare was as efficient and speedy as the DMV.

But this DMV crap on a stick is only one of many crazy attacks against the president's healthcare reform agenda and the public option. Predictably, as healthcare reform grows larger in the window, the claims from the far-right are becoming increasingly bizarre and ridiculous, topping, in some cases, the psychotic claims of, say, the Obama birthers.

Political race-baiter (and, somehow, CNN contributor) Alex Castellanos wrote a memo for Republicans about how to attack the president's healthcare reform agenda. In it, he suggested that Republicans use the line: "The Obama Experiment with our health could change everything we like about our health care -- and our economy." Within hours, Michael Steele who, by the way, can't recall who his health insurance provider is, used the word "experiment" 30 times in a single speech. 30 times. Naturally, "experiment" is designed to scare you into believing the president will replace your doctor with, I don't know, Dr. Giggles who will steal your DNA in a nefarious attempt to clone a race of pig men.

In non-wingnut reality, of course, the public option would function similarly to Medicare, which is hardly a spooky or unfamiliar program, and I challenge anyone to produce a single human being who would willingly give up his or her Medicare coverage. More on Medicare presently.

Meanwhile, Sean Hannity and other Republicans are suggesting that, according the incomplete scoring of the Kennedy HELP healthcare bill, something like 20 million Americans would be stripped of their private health insurance policy and forced to accept the public option. Last week on his show, Hannity tried to pass this one off on guest Tom Arnold who managed to debunk many of Hannity's lies about healthcare reform to Hannity's face.

As Matthew Yglesias pointed out the day the partial CBO report was released, 10 million people would voluntarily leave their private insurer in favor of the HELP Committee's version of the public option. Hannity deliberately inflated the number to 20 million and overlooked how and why people would leave their private plans. But I don't think he expected Tom Arnold to be the one to call him on his lies.

And then there's Glenn Beck who, on his radio show Tuesday, said that healthcare reform is actually the president's attempt to legislate reparations for African Americans. I'm not making this up. Beck tried to conflate ACORN, healthcare reform and reparations into some sort of racist, conspiratorial wingnut cocktail.

Those of you who have seen Beck's television show are probably familiar with a regular bit called "In A Nutshell" in which he strings together various "villains" and, without evidence, forms all new conspiracy theories. It's like a googly-eyed, punch-me-face version of the Kevin Bacon game. Recently, for example, he claimed to have connected ACORN to Judge Sotomayor.

So I tried my hand at the Glenn Beck "In a Nutshell" game, and, without much effort, I was able to connect Glenn Beck with the tragic death of a little dog named "Snuggles". Here's how. Glenn Beck's radio show is carried by Premiere Radio Networks. The network also carries On Air with Ryan Seacrest. Ryan Seacrest took over hosting the American Top 40 which was previously hosted by (Lebanese evildoer) Casey Kasem. And Casey Kasem once had a meltdown while broadcasting a story about the death of a little dog named "Snuggles". Is Glenn Beck responsible for the death of "Snuggles"? Is Don on the phone?! You decide.

As I was researching the topic of crazy wingnut healthcare arguments, I thought perhaps Michele Bachmann would have an insane healthcare quote on the record for me to exploit and debunk. I was wrong. It turns out that Bachmann's most recent healthcare reform attack accidentally underscored the leading argument in favor of the public option.

Approximately 114 million Americans are expected to leave private health insurance. Why? Their employers will drop the insurance because the taxpayer-subsidized plan will be 30 to 40 percent cheaper.
Up to 40 percent cheaper? That's amazing. I've heard estimates of around 30 percent, but 40 percent is even better. Make sure to tell your Republican friends that The Michele Bachmann Unit says that the public option will be 40 percent less expensive than private health insurance.

As for the "114 million Americans" part, Bachmann is getting her information from a Lewin Group report (the Lewin Group, by the way, is wholly owned by UnitedHealth Group, a private insurance mega-corporation) that suggests all employers would eventually be allowed to provide their employees with the public option rather than more expensive, cost-prohibitive private insurance policies.

First, no one in the government would mandate this switch. Only business owners would pull the switch. Second, business owners wouldn't be able to specifically offer the public option alone but, instead, they could choose to buy into a Health Exchange, which would contain both private plans and the public option from which to choose. In other words, you would be able to select from either a Health Exchange private plan or the public option. And here I thought Republicans were in favor of allowing entrepreneurs to decide how to run their own businesses. I suppose the Republicans aren't so opposed to socialism after all.

But back to "40 percent cheaper." I ran some numbers today and came up with the following. I clicked over to one of those health insurance shopping websites, entered my family's information (family of three, non-smokers) and the top rated, best selling plan listed on the site for my family showed a $476 monthly premium with a $250 deductible, 10 percent co-insurance, and $20 doctor's visits.

A government plan that's 40 percent cheaper, as Bachmann noted, would cost around $286 per month -- a $190 discount. The government plan, though, wouldn't exclude us for preexisting conditions. It wouldn't randomly deny us coverage. It wouldn't conspire to cancel our coverage as soon as we got sick. It wouldn't jack up our premium for no reason. And we could take it with us wherever we go.

However, the public option would function similarly to Medicare which carries a $96 monthly premium per person for a married couple making less than $170,000 a year. There's a $135 deductible and a 20 percent co-insurance. (Incidentally, the absolute most expensive Medicare premium is $308 per person -- paid by couples earning a massive $500,000 a year.)

But the public option isn't just about the low premium, it's about the security. It's about knowing that you're paying into a system that will always be there.

No matter how the Republicans, Blue Dogs and the establishment media try to come at this thing, they're only really left with arguments that are easily shot down, arguments that inadvertently endorse the most positive aspects of healthcare reform, or arguments that are just insane. And that's mainly because the money being pumped into the effort to kill healthcare reform doesn't come along with a mandate for veracity or sanity in order for the checks to be cut. The private healthcare industry is buying whatever scares people. Whatever confounds the facts. Whatever kills healthcare reform and the public option by a thousand cuts. Whatever works.

Health Insurance “Innovation

The This American Life crew, once again proving that they can cover any topic they want better than anyone else in the media,* has a segment in this weekend’s episode on rescission of health insurance policies – insurers’ established practice of looking for ways to invalidate policies once it turns out that the insured actually needs significant medical care. (The segment is around the 30-minute mark; audio should be available on that page sometime on Monday.) The story describes a couple of particularly egregious cases, such as a woman who was denied breast cancer surgery because she had been treated for acne in the past, and a person whose policy was rescinded because his insurance agent had incorrectly entered his weight on the application form.

The legal basis for rescission is that when you sign an insurance application, you are warranting that the information on the application is true; if it turns out not to be true, the insurer can get out of your insurance contract. It’s particularly nasty in practice because the insurer does not immediately investigate your application to determine if it is accurate before selling you the policy (that would be impractically expensive); instead, the insurer waits – years, in many cases – until you actually need expensive health care, and then does the investigation, which at that point is worth it because of the payments the insurer could potentially avoid. Also, you can lose your coverage for innocent mistakes, which are easy to make since the application form asks you if you have ever seen a doctor for any one of a long list of medical conditions that you are certain not to recognize or understand. (In a Congressional hearing, the CEO of a health insurer admitted that he did not know what several of the conditions listed on his company’s application were.)

This reminded me of nothing so much as all of those “innovations” created by credit card companies, such as universal default, penalty rates, and double-cycle billing, which are really just ways to generate fees that you are unlikely to accurately estimate at the time you sign up for the card. It’s legal; it makes more money for the insurer (or credit card issuer); once one company does it, other companies have to, or they won’t be able to compete; it’s disclosed in such a way that customers don’t understand what they are getting into; it nails you when can least afford it; and it even has a plausible economic justification. Credit card issuers claim that their arsenal of hidden fees makes the cost of credit more closely reflect the riskiness of the borrower, and without the fees they would have to charge higher interest to everyone; health insurers claim that rescission is necessary to deter fraudulent applications, and presumably without it they would have to charge higher premiums to everyone.

Also, it’s definitely an innovation. I’m sure health insurers have always had fraud investigation units, which looked for red flags on new insurance applications to identify suspicious customers. But the idea that you should (a) target customers precisely because they get sick and need health care and (b) go after them for innocent mistakes is not an inherent part of the insurance business, and is something that some clever person came up with as a way to make more money – not a way to provide more coverage or better service to customers at lower cost.

And it’s terrible. Basically, anyone who had to fill out a medical underwriting application to get health insurance (this is basically the individual market, not the group market that people are in if they get insurance through their employers) is at risk of finding out that that insurance doesn’t actually exist precisely when he or she needs it most. The insurers claim that rescission is very rare; at the Congressional hearing, two of three industry representatives said it happens to less than 0.5% of policies per year. But that is a deeply misleading number. That means that if you are in the individual market for twenty years, you have a 10% chance of your policy being rescinded; 30 years, and it goes up to 14%. There is a big difference between health insurance and a 90% chance of having health insurance. And remember, insurers only try to rescind policies if you turn out to need them; so the percentage of people who lose their policies when they need them is even higher. (The denominator should exclude all those people who never need expensive medical care, at least not before 65 when they go onto the single-payer system.)

I know that rescission does not logically prove that some private health insurance system cannot work. For one thing, Congress could simply pass a law banning the practice except in cases of intentional misrepresentation (although the free marketers would complain about increasing government interference in the “free market”). But it is evidence that the private health insurance system we have does not work. Yes, it’s just the individual market, but it’s the individual market that’s growing, not the employer-based market. And the system we’ve got, like the credit card industry, is one where the name of the game is finding ways to make the product you sell worth less to the customer than the customer thinks it is worth. (The more common way this is done is by burying exclusions and limits in the fine print.)

This is the system that the politicians who are dug in against health care reform – and everyone knows who they are – are defending. I’d like to see them try to defend it openly, instead of hiding behind the tattered banner of fiscal responsibility.

* OK, that may be a bit of an exaggeration.

Friday, July 24, 2009

Conventional wisdom and health insurance

Everyone seems to assume that a big part of the excess cost of our medical system is excessive prescribing of tests or expensive procedures by doctors -- either to squeeze more money out of insurance companies or to protect themselves against malpractice suits, I guess. All I've ever heard, though, is surmise or some anecdote here and there. Is there any reasonably persuasive evidence that this, in fact, is measurable in the first place, and if so, that it is taking place, and if it is, how much various proposals would reduce it? Basing national policy on the premise that professionals are routinely violating their ethical principles – which unnecessary procedures would be -- seems like a frail reed to me.

Too many are trying to throw in everything but the kitchen sink in order to "reform the healthcare system." How about starting with administrative waste, and one obvious candidate for that is focusing on reforming the insurance system. When Duke University reports that its hospitals has 900 billing administrators and 900 beds, there's a hint.

Why does Duke need 900 billing clerks for a 900 bed hospital? It's the insurance, stupid, or the lack therof. For the healthcare provider, it's the threat that a bill, especially a really big bill, will not be paid -- and that bill, of course, is bloated in the first place to cover those 900 billing administrators (and the independent-contractor collection agency). For employers that are being asked to shoulder the insurance burden, its the threat of an ever-escalating cost of benefits that makes hiring employees more and more problematic, not to speak of the possibility that some of those they have are holding onto the job solely not to lose the benefits, and therefore may not be operating, shall we say, at maximum productivity. For people, and that means virtually all people from upper-upper-upper middle class to low income, it's the lack of insurance, that is, either actual now or threatened in the future. It is this single most gaping hole in the safety net, plus the fact that the beleaguered employers aren't hiring, that makes the future hard to believe in.

Could these problems be a gigantic drag on the economy? Does this affect everyone, no matter how good their insurance is now? Get it now?

Thursday, July 23, 2009

A word of explanation

Some people have wondered why I haven't been actively posting since Obama won the White House.

a) The original reason why I started this endeavor was that there was almost no real news coming from the major media sources (which were exclusively mouthing Bush propaganda) and few other places where a busy person could actually learn what was really going on. Since I wasn't that busy, I felt I could take the time to sort through the news, boil things down into bite sized bits and put them where anyone who wanted could see them. At this point, the media are somewhat better, there are plenty of other bloggers, and there just didn't seem to be the same level of need.

b) I have been very uncomfortable with much of what Obama has been doing, particularly as regards his positions on Bush's power grabs. He seems to want to keep most or all of the powers that Bush claimed (e.g., indefinite detention of anyone the president wants to detain, signing statements noting his refusal to accept certain elements of laws passed by congress, refusal to release White House logs, etc.) I also think he's been too slow and passive in pushing his agenda, letting Congress screw it up before he tries to step in to fix it (see stimulus, health care, don't ask don't tell, Guantanamo...) If I were blogging regularly, I would be screaming bloody murder about these things, but I decided I should at least give him a few months to get things right before mouthing off about it. I'm still waiting for him to get things right. Doesn't seem to be happening, but we'll see.

c) I got busy writing a book (now complete), which is for family consumption only.

d) All of the above.

I have raised my head a bit for the past day or two but it's going to disappear tomorrow probably until Fall as I am off on a string of trips until then. After Labor Day, I may return to the internet tubes, as Ted Stevens might put it. Stay tuned.

Obama's Waterloo?

From Reuters:

WASHINGTON – Senate Democratic leaders on Thursday abandoned plans for a vote on health care before Congress' August recess, dealing a blow to President Barack Obama's ambitious timetable to revamp the nation's $2.4 trillion system of medical care.

Senate Majority Leader Harry Reid, D-Nev., delivered the official pronouncement, saying, "It's better to have a product based on quality and thoughtfulness rather than try to jam something through."

My bet is there will be no health care bill. I'm not out buying health insurance and pharmaceutical stocks right now, but I'm not selling either.

Sophistication and Finesse

The Republicans are once again trying to demonstrate their sophistication and finesse.

Total Immersion

One thing we have learned recently is that Mormons don't believe in total immersion for baptism.

Wednesday, July 22, 2009

GOP Disgracefull Sabotaging of HC Plan: Bad economics=Bad politics

Appalled by the GOP smear of the HC proposal, espicially the 13-10 House Finance Comm. vote on absolute party lines shows GOP myopia or ingenuousness or both in ignoring the tie of the future of US business competitiveness to passage of HC proposal? We have estimated that the HC proposal will reduce the average cost of a car by $2500, that's about 14%. Use of less than precise numbers done here does not change the overall conclusion. Be my guest to demonstrate otherwise. Let's say that the cost savings for all industries is lower, say 10%, because they are less capital intensive on average than autos.Therefore, all industry could cut price 5% and increase margin 5%. If price elasticity is 1.5, that would roughly increase sales by 7.5%. Say aggregate sales are $7T, that's a sales increase of $525 B and a profit increase of about $79B (Sales X old margin of .10 plus added margin of .05) If the accelerator is .5, that's $263 B additional investment (525. X investment multiplier of 1.5) or about $394B. At one incremental job per added Bil $ of revenue, that's 525000 new jobs. Additional Federal taxes on the added $79B at an average corporate tax rate of 25% is $19.8B. Additional personal tax revenue is 525,000 new jobs at a conservative average income of $30000 per year is $7.5 Bil in added wages at an average personal income tax rate of 15% is $1.13B. $19.8+1.13 is about $21B in new taxes which would fund a substantial percentage of the cost of the HC plan. Therefore, the relatively small marginal cost of the HC plan net of new taxes generated would substantially improve U.S. business performance. By opposing the HC plan, the GOP and shown to be hypocritical (surprise) in their posturing as the party of business. Blue Dog Democrats are on the verge of falling into the same position if they don’t get the President’s message.

Deep Thought

Can a black man ever be a citizen of the United States? And, if not (as the whackos on the right seem to think -- see Lou Dobbs among others), is the term "African-American" an oxymoron?

Tuesday, July 21, 2009

Internal RNC Memo: "Engage In Every Activity" To Slow Down Health Care Reform

Sam Stein | HuffPost Reporting 07-21-09 11:05

A private memo distributed by the Republican National Committee calls for like-minded advocates to help defeat President Barack Obama's health care proposals by delaying its consideration.

The memo, which was obtained by the Huffington Post from a Democratic source, provides the clearest illustration to date of the political playbook being used to stop Democratic attempts at a health care overhaul. Much of the material mirrors the speeches and presentations made by conservatives both inside and out of elected office to date. Obama's plan for health care is deemed an "experiment" and a "risk" that could bankrupt the country and dangerously change the doctor-patient relationship.

In particular, the 12-page memo makes the case that it is a Republican priority to slow down the consideration of health care reform before it can become codified.

"The Republican National Committee will engage in every activity we can to slow down this mad rush while promoting sensible alternatives that address health care costs and preserve quality," the memo affirmatively declares.

The Unusual Detractors

Alan Keyes, appeared on CNN to debate the issue. Keyes and Birthers hit in “Wingnut Watch” segment on the Campbell Brown show earlier in the week and counter their claims alongside New York Daily News columnist Errol Louis.

Before going on air, Keyes had his eyes closed as if in prayer while Taitz was jumpy and pie-eyed, like a patient off her meds. Anchor Kitty Pilgrim then went through a thorough 3-1/2 minute dismantling of the Birther arguments, including the long-ago issuance of Obama’s August 1961 certificate of live birth, its validation by Hawaii’s Republican Gov. Linda Lingle, and two birth announcements published in August 1961 in Honolulu papers. (Both and Snopes have published detailed investigations and refutations of the non-scandal.)

Asked what more he needed to be convinced, Keyes’ response was an instant classic in the clueless overconfidence of conspiracy theorists: “Some evidence.”

Keyes can be considered patient zero in the spread of Obama Derangement Syndrome. The one-time protégé of Reagan U.N. Ambassador Jeane Kirkpatrick and three-time presidential candidate was recruited to run against then-state Senator Barack Obama in 2004 for the Illinois U.S. Senate seat, despite the fact that Keyes lived in Maryland. (That the GOP could not find an African-American candidate to run in all of Illinois is its own evidence in the Party of Lincoln’s fall.)

Friday, July 17, 2009

Follow the money

“The Quiet Coup,” an article in The Atlantic by Simon Johnson, former chief economist at the International Monetary Fund and now a professor at MIT's Sloan School of Business, is a must-read for understanding where we are, how we got there, and roughly what we must do to get ourselves out of it. It's all about the power – who holds it, how they use it, and echoing Schumpeter's observation that there is always an elite that is more powerful than the rest of society, how much or little they are willing to share it. In a nutshell:

. . . . Naturally [for trying to solve the problems of a country applying for IMF help], the fund’s economists spend time figuring out the policies—budget, money supply, and the like—that make sense in this context. Yet the economic solution is seldom very hard to work out.

No, the real concern of the fund’s senior staff, and the biggest obstacle to recovery, is almost invariably the politics of countries in crisis.
Typically, these countries are in a desperate economic situation for one simple reason—the powerful elites within them overreached in good times and took too many risks. Emerging-market governments and their private-sector allies commonly form a tight-knit—and, most of the time, genteel—oligarchy, running the country rather like a profit-seeking company in which they are the controlling shareholders. When a country like Indonesia or South Korea or Russia grows, so do the ambitions of its captains of industry. As masters of their mini-universe, these people make some investments that clearly benefit the broader economy, but they also start making bigger and riskier bets. They reckon—correctly, in most cases—that their political connections will allow them to push onto the government any substantial problems that arise.

Economist Max Sawicky uses this article to make the point that it is not just the “irrationality of markets,” currently a popular formulation to rebut the notions of the dominant classical economists who failed so miserably to warn us what was coming, but the distribution of power. (Also courtesy of Kevin Drum:

Arguably, however, both ways of putting it are trying to accomplish the same purpose. The distribution of political power is a form of irrationality not acknowledged in classical economics that likes to elevate itself to the status of a true science, and discard the word “social” as in the messy social sciences, by treating the economy as a closed system of rational actors that is quantifiable and put under mathematical algorithms without consideration of the political environment in which it operates. Unquestionably, however, although the "irrationality" formulators may be on the side of the good guys, it lets the bad actors off the hook -- as in the classic "mistakes were made" excuse -- while the power-distribution perspective is far more trenchant as an analytical formulation and for getting us thinking in the right direction of what needs to be done.

As we lose all manufacturing, rely more and more on services to define our economy, and fall behind other advanced industrialized countries in healthcare, public transportation, public infrastructure and per capita wealth -- all the while, wallowing in the pride that we can blow anybody up that we want to -- we should ask whether it is a mere coincidence that this began occurring in earnest during the Reagan administration that re-distributed money and power back to the monied classes (and for that matter, embraced wholeheartedly the Military-Industrial Complex that his former party leader warned us about).

A successful democracy depends on having an elite that understands the necessity for its own long-term good of not hoarding the maximum possible of either wealth or power. Everyone thriving and feeling confident of the future is what makes for a successful social contract and a healthy economy that benefits everyone, including, ironically, even the wealthy themselves. We had that roughly from the late 30s through the 1970s. Since then we have lost it, and it is right-wing conservative philosophy that is directly responsible for that loss. It would be good for Obama to begin articulating that vision as the basis for the policies he is pursuing, rather than, as seems to be too much the case now, assuming that everyone gets it even though it has been undermined by right-wing governance philosophy for the past 30-plus years. It's time to identify that philosophy and its failures clearly, root it and get rid of it. We will continue to lurch from crisis to crisis in ever descending stages until we do.

Tuesday, July 14, 2009

Republican Myths About the Stimulus Packae

July 10, 2009 by Faiz Shakir, Amanda Terkel, Matt Corley, Benjamin Armbruster, Ryan Powers, and Nate Carlile, Progress for America

The Obama administration has been making an aggressive push to explain the realities of the $787 billion stimulus package, in the face of aggressive Republican misinformation. Vice President Biden, for example, traveled to Ohio yesterday, forcefully backing the recovery bill and asking for patience from the American public. "Remember, we're only 140 days into this deal. It's supposed to take 18 months," he said. Only $60 billion of $175 billion allocated to federal agencies so far has been paid out. Earlier this week, President Obama took time out of his trip to Moscow to discuss the recovery. "There's nothing that we would have done differently," he told ABC News. "We needed a stimulus and we needed a substantial stimulus." Republicans, who overwhelmingly voted against the recovery act in Congress and have offered no new ideas, are now trying to sow public dissatisfaction. In fact, the "plans" that Republicans have been offering are largely the same ones that put the country into the current economic mess. To create confusion, the GOP has had to resort to sloppy attacks and inaccurate myths. A look at some of what the right wing is spinning:

MYTH #1 -- ELECTORAL CONSIDERATIONS ARE DRIVING THE DISBURSEMENT OF FUNDS: This myth popped up most prominently in a USA Today story yesterday, with the headline, "Billions in aid go to areas that backed Obama in '08." According to this USA Today analysis, "Counties that supported Obama last year have reaped twice as much money per person from the administration's $787 billion economic stimulus package as those that voted for his Republican rival, Sen. John McCain." Naturally, the right wing immediately picked up this report as evidence of malevolent political manipulation by the Obama administration. Fox News host Stuart Varney devoted an entire segment to it, and Sean Hannity blasted it out to his nearly 30,000 Twitter followers. If they had read the whole story, however, the likes of Varney and Hannity would have discovered that there was nothing there. In fact, in the second paragraph of the piece, reporter Brad Heath wrote, "Much of it [the stimulus funds] has followed a well-worn path to places that regularly collect a bigger share of federal grants and contracts, guided by formulas that have been in place for decades and leave little room for manipulation." These formulas are largely based on where the need is greatest. Adam Hughes of the non-profit OMB Watch said that "it would be almost inconceivable for [the spending imbalance] to be the result of political tinkering."

MYTH #2 -- NO NEW JOBS HAVE BEEN CREATED: "How can we sit here and claim success when people are hurting out there?" House Minority Whip Eric Cantor compassionately complained on MSNBC last month. "We already know, as of now, at the rate that we lost jobs last month, over eight people a minute in America are losing their jobs. That's eight families without a paycheck." Similarly, in a New York Daily News op-ed he wrote, "To put it generously, the $787 billion bill has not been the 'temporary, targeted and timely' job-creating machine the public was sold." House Minority Leader John Boehner (R-OH) has called the recovery package nothing short of "generational theft," and declared, "When it comes to slow-moving government spending programs, it's clear that it doesn't create the jobs." These claims are false. In fact, the recovery act is creating jobs right in their districts. And it's important to remember that the purpose of the legislation was also to save American jobs. Even Boehner has had to admit these facts. In a little-noticed press release, the Minority Leader highlighted the Obama administration's recent order that the Ohio Department of Transportation (ODOT) redirect $57 million to shovel-ready projects. He said that he was "pleased" that the funds would "create much-needed jobs." A few weeks later, when Boehner was back to lashing out at the stimulus, the ODOT actually came out and criticized him. ODOT's spokesman called Boehner's inaccurate statements "disappointing" and pointed out that the agency had just approved "six more stimulus road projects, which will cost about $43 million." Cantor's hypocrisy has also been highlighted by the media, who have noted that he is a backer of using stimulus funds to bring high-speed rail to Virginia because it would

MYTH #3 -- THE RECOVERY IS A TOTAL FAILURE: The Republican National Committee released a new web ad yesterday, declaring the stimulus a "failure." But leading economists agree that it's too early to make any such determinations. The non-partisan Congressional Budget Office estimated that "about a quarter of the money would be spent by year's end, and that about 75 percent would flow by the end of 2010." In other words, as Center for American Progress Senior Economist Heather Boushey has explained, "the largest job gains from [stimulus] spending were projected to occur in the late fall through 2010." So far, the spending appears to be on track. The health care and education sectors, both of which received stimulus money, have shown net job gains since the recession began. Furthermore, Obama noted that infrastructure projects were always going to take "six months to eight months to get that money actually into the ground because that's the nature of big infrastructure projects."

Saturday, July 11, 2009

Mother Nature's Nuclear Holocost

John McConnico / AP Climate change poses a catastrophic threat for all G-8 nations, writes the former Democratic nominee for president in a security memo he likens to President Bush’s pre-9/11 warning.

On August 6, 2001, President George W. Bush famously received an intelligence briefing entitled, “Bin Laden Determined to Strike in U.S.” Thirty-six days later, al Qaeda terrorists did just that.

Today, as the leaders of the G-8 and the members U.S. Senate simultaneously debate climate-change policy shifts, scientists tell us we have a 10-year window—if even that—before catastrophic climate change becomes inevitable and irreversible. So I’ve put together the briefing that needs to be read by every American—before it’s the Day After.

Climate Change Poses Stark National Security Threat to U.S.

The scientific community agrees that climate change is real, human activity is contributing to it, and the window for doing something about it is closing rapidly.

Shifting weather patterns may turn the American “breadbasket” into a dustbowl.

Atmospheric carbon-dioxide levels have risen 38% in the industrial era, from 280 to 385 parts per million (ppm). Scientists have warned that anything above 450 ppm—a warming of 2 degrees Celsius—will result in an unacceptable risk of catastrophic climate change.

The truth is that the threat we face is not an abstract concern for the future. It is already upon us and its effects are being felt worldwide, right now. The Arctic will be ice-free in the summer of 2013, not 2030—and the loss of summer ice will accelerate warming because dark water absorbs more sunlight than snow and ice do.

Meanwhile, the ocean, which acts as a natural sink for carbon dioxide, is losing its ability to absorb emissions. This means that the impacts of climate change are being felt stronger than expected, faster than expected.

A recent study of the Siberian Shelf found that columns of methane bubbles—another greenhouse gas 20 times more damaging than CO2—are rising from the sea floor as a result of warmer ocean waters in the Arctic.

The science is unequivocal. The question is no longer whether or not climate change is happening, it’s whether we’ve passed the climate-tipping point.

The stakes could not be clearer. Look at the tiny coastal village of Newtok, Alaska. Citizens there recently voted to move their village nine miles inland because melting ice shelves made their old home too dangerous. Anyone who doubts the reality of climate change should go to Alaska and see the melting permafrost for themselves, or listen to the state’s two U.S. senators tell worrisome stories about climate change’s current—not future—impact on their state.

The challenges will only grow more severe, however, if we do nothing to address climate change. Dramatic sea-level rises could result from glaciers melting in Greenland and Antarctica, shifting weather patterns may turn the American “breadbasket” into a dustbowl, and increased periods of drought will lead to political instability and population migrations around the world, including in our own hemisphere.

Because of the magnitude of the consequences facing us, the national-security community has begun to take note. In 2007, 11 retired American admirals and generals issued a report from the Center for Naval Analyses warning that “Climate change can act as a threat multiplier for instability in some of the most volatile regions of the world, and it presents significant national-security challenges for the United States.” In 2008, the final national-defense strategy of the Bush administration recognized climate change among key trends that will shape U.S. defense policy in the coming years. And the National Intelligence Council—the U.S. intelligence community’s think-tank—has concluded “global climate change will have wide-ranging implications for U.S. national-security interests over the next 20 years.”

Nowhere is the connection between climate and security more direct than in South Asia—home to al Qaeda. Scientists now warn that the Himalayan glaciers which supply fresh water to a billion people in the region could disappear completely by 2035. Think about what this means: Water from the Himalayans flows through India and Pakistan. India’s rivers are not only vital to its agriculture but are also critical to its religious practice. Pakistan, for its part, is heavily dependent on irrigated farming to avoid famine. At a moment when the U.S. government is scrambling to ratchet down tensions and preparing to invest billions of dollars to strengthen Pakistan’s capacity to deliver for its people—climate change could work so powerfully in the opposite direction.

Worldwide, climate change risks making the most volatile places even more combustible.

The bottom line is that failure to tackle climate change risks much more than a ravaged environment: It risks a much more dangerous world, and a gravely threatened America.

* *

There’s much more to the climate-change challenge—threats to our military bases at home and abroad, threats to our allies, threats to stability in regions of the world the United States has invested billions of dollars and the lives of its sons and daughters.

Unfortunately, not everyone in Congress appreciates the stakes. It’s tragic that we live at a time when if one were to dismiss the threat of terrorism, you’d be run out of Washington in the next election. But there are no similar political consequences if you dismiss the science and the facts about the threat posed by climate change.

In less than six months, delegates from 192 nations will gather in Copenhagen to create a new global climate treaty. Between now and then, the United States Congress is expected to act on climate legislation. The decisions we make in these six months will determine whether we meet this challenge head-on and prevail or if we are to suffer the worst consequences of a warming planet.

This is our warning memo, America.

Thursday, July 09, 2009

Jobs and healthcare

Time to join the fray again, I guess. I'm obsessed with the need for a well-targeted national health insurance program. Here is a comment I made on another site about the connection between real recovery in the job market and health insurance reform. None of the big progressive insurance pundit honchos seem to get how the game will be changed totally: for one thing, how massive administrative waste, will be swept out of the system once healthcare providers always -- always -- know they will be paid at least most of a large bill. We will also reduce national healthcare costs massively by collectively sharing the risks of exposure to very large claims. Sharing such risk through our government will take out of aggregate national cost the need to plan for (charge for) the worst case scenario that a single private insurer with an uncertain risk pool must do, and will remove the profit on that coverage of a for-profit private insurer.

Recovery in jobs will be retarded until fear of disastrous liability for healthcare costs on the part of individuals and employers is removed from the national equation, and until healthcare providers can massively reduce their worthless administrative costs by knowing at the outset of treatment they will be paid for their services and by whom. Until we achieve a decent healthcare plan successfully divorcing at minimum catastrophic health insurance from retention of a job, confidence in the economic future, the sine qua non of a thriving economy, will keep hitting an unsatisfactory ceiling as it did during the anemic Bush “recovery.”

This is the single most important point, the macro of macro effects. Yet even though virtually all Americans will get it once these simple dots are connected, Obama is failing to say it. I’m not sure he or his people get it, or even Bernie Sanders or the most progressive of the rest of Congress. This is not just about the unfairness of people being uninsured, but is fundamentally about removing the fear of potential disaster that haunts everyone, even those with an occupation that provides five-star insurance today.

This does not even get to the huge reduction in premiums for the remaining "gaps" that putting a cap on the insurance company's exposure will cause, and the hundreds of billions that will be freed up for other more productive purposes; or the stronger international competitive position of American companies freed from fear of huge and ever-escalating costs; or the ability for such companies facing smaller and more predictable benefits costs to begin hiring again, and hiring actual employees instead of quickly expendable temps.

Will Democrats ever see the forest instead of the trees.

Tuesday, July 07, 2009


From 1998 to 2005, ExxonMobil directed almost $16 million to a network of 43 lobbying groups in an effort to confuse Americans about global warming. After being criticized by the Royal Society in 2006, the oil giant promised to stop funding groups that denied the science behind climate change. In May 2008, ExxonMobil again pledged to cut funding to groups that "divert attention" from the need to develop and invest in clean energy. Yet, in 2008, while cutting contributions to the most extreme groups, the company still funded other groups. Indeed, London's Daily Telegraph reported last week that "[c]ompany records for 2008 show that ExxonMobil gave $75,000 to the National Center for Policy Analysis (NCPA) in Dallas, Texas and $50,000 to the Heritage Foundation in Washington. It also gave $245,000 to the American Enterprise Institute for Public Policy Research in Washington." Similarly, ExxonMobil has devoted millions to ad campaigns touting clean energy without actually investing significantly in renewable energy. In 2007, for example, ExxonMobil spent $100 million on advertising and "green-washing" campaigns in an attempt to exaggerate its commitment to renewable energy. Meanwhile, ExxonMobil spends just $10 million per year on renewable energy research -- a tenth of the amount it spent talking about investing in clean energy. This latest evidence of ExxonMobil's continued opposition to clean energy comes less than a month after the American Petroleum Institute released a report revealing just how little the top Big Oil companies invest in renewable energy -- and how far they'll go to claim otherwise.

Thursday, July 02, 2009

The ugliness of the GOP's empathy gap

by kos
Wed Jul 01, 2009 at 09:16:03 AM PDT

I've clearly been a bit obsessed with the political value of empathy, and the central role it has played in the current troubles of the GOP (here, here, and here).

[Progressive values of] community, opportunity, and investing in people stem in large part from "empathy". They are the antithesis of selfishness and looking out only for oneself. Empathy means putting ourselves in other people's shoes, and being progressive means acting on that empathy. So we do what we can to level the playing field so children who aren't born into privilege can still have many of the opportunities enjoyed by trust fund babies. It means understanding the pernicious effects of discrimination and working to mitigate and eliminate them. It means realizing that the law should be applied to all Americans, and that none should be denied equal protection because of majoritarian intolerance.

As I systematically lay out in those three posts linked above, the GOP's empathy gap is a large reason for its troubles with the young millennial generation, women, and ethnic and racial minorities. Furthermore, the conservative base now blames "compassionate conservatism" in large (if not total) part for George Bush's failures as president. And what was "compassionate conservatism"? Karl Rove's attempt to negate the GOP's empathy gap with swing and independent voters in 2000. "Compassion" is a synonym for "empathy".

I thought of all that when reading this by Ta-Nehisi Coates:

Think about this statement which Steve Benen flagged from Liz Cheney:

We've now seen several different occasions when he's been on the international trips, where he's not willing to say, flat out, 'I believe in American exceptionalism. I believe unequivocally, unapologetically, America is the best nation that ever existed in history, and clearly that exists today.' Instead we've seen him do what we saw him do in the speech in Cairo, which is sort of, 'on one hand this, on the other hand that,' and then attempt to put himself sort of above it all. I think that troubles people. The best nation that ever existed in history. No conservative skepticism. No Niebuhrian humility [...]

What you have [...] is a hustle, a bait and switch, in which one claims to be hawking patriotism, but in fact, is selling jingoism. If patriotism is love of country, then much of the unquestioning GOP rhetoric fails on the rudiments. Is love of kin, love of siblings, love of spouse, telling your beloved, that they are the best person that's ever existed in history? Or is that sycophancy, fast talk proffered by loose friends, who in your darkest hours, appeal to your worst self.

The religious right isn't what's wrong with the GOP. It's the pervasive, unthinking, unreflective nationalism. It's the arrogance of thrice-divorced adulterers reaching for the banner of traditional families, and it's the arrogance of men who prosecuted a poorly planned war, on weak intelligence, presuming to lecture us on national security.

Or, you can distill that all down to "lack of empathy". Liz Cheney honestly thinks it would be in America's interest for its president to swagger around the world telling people they aren't as good as America because we are the best EVER, so screw you! The slightest shred of empathy would help you understand how counterproductive and potentially destructive such an approach would be, and Obama was elected, in large part, on the promise of a more humble and understanding foreign policy. People got tired of an administration that couldn't understand why torturing and indiscriminately starting wars was destroying our global reputation. We're the best bleeping country ever! America, bleep yeah!

I'm proud to be Latino, but I don't think Latinos are the best ethnic group in world history. I adore my kids, but ... yeah, you're shit out of luck there. I got the best ever. But aside from those two bundles of perfection, there's the obvious realization that I love my dearest family members and friends not because they are the best that have ever existed, but because they are wonderful people in their own rights. There is no need for me to create a hierarchy and judge people against each other.

But conservatives obviously do, whether it's their nationalistic jingoism, or their creepy Ronald Reagan obsession, they create artificial ideals and worship at their altars. There is always someone who is "the best", which is why Judge Sonia Sotomayor is a racist affirmative action nominee who isn't as good as "the best man for the job". That pathological lack of empathy further extends from the hypocritical moralizing (failing to accept that we are all imperfect and capable of moral failings), to the vicious homophobia.

It's ugly, and as long as the Republican Party maintains an allegiance to this pathology, its electoral path will be difficult at best.