How long should we put up with the inherent conflict-of-interest in for-profit health insurance?

This is an excellent succinct history of for-profit health insurance. I never really grasped how recent it is -- that before Reagan, when the non-profit model of Blue Cross-Blue Shield prevailed, before many of the state organizations were bought out and transformed by profit-making enterprises like the notorious Wellpoint, only 12% of the marketplace was held by for-profit plans.

I especially like this simple description of the essence of the for-profit system for health insurance:

The health insurance model we live with now is patently absurd. They actually increase their profits by NOT providing services. In what way does that not stand capitalism on its head?
 
Think about it this way...
 
Imagine your brother-in-law came to you and said, "Send me $18,000 per year, and I'll keep it for you. Whenever you need money to spend, just come to me, and I'll pay the bill for you, as long as I approve of the item you plan to buy. Then, at the end of the year, whatever you haven't spent, I get to keep."
 
Would you take that deal, or would you laugh at him and suggest to your wife that he be committed?
 
The above example [is] almost exactly how health insurance works now. Our current health care financing system is wrong, and it will cripple our economy if we continue with it.

That seems to capture it in a simple way that shows how ridiculous in concept it is. Profits are great for wide swaths of an economy, such as generating new products and services. For making life-and-death decisions, not so much. The conflict-of-interest is palpable; whether it can ever be consistent with such decisions is questionable. It's not unlike the old private, for-profit fire-fighting companies. How did that work out, anyway?

Perhaps we could improve the model somewhat if health insurance companies had to build unbreachable walls between the finance and claims divisions of the company, such that regularity of relatively modest profits rather than go-go profit maximization were made the attraction for investors. No more super stock options to "align executive compensation with enhancing shareholder value." And how about adding this to the mix: the health insurance companies and their executives, as medical decision-makers, were required by law to subscribe in full to the Hippocratic Oath -- with complete (yes, uncapped) liability for injury arising from failure to adhere to the oath? Hmmmm.

Maybe Democrats prefer to be seen as the weak, silent type

P.S. on the Bush-Republican economic disaster (see yesterday's post below): Had you heard before specifically about the real decline of the private sector economy during the Bush years? Have you heard any Democrat draw a strong connection between that huge decline of the private sector and Republican policies from any Democrat? Have you heard from any Democrat a powerful philosophical attack on Republican economic policies -- i.e., one that will gain real traction with Americans who are losing jobs or are close to someone without a job but who still lean Republican?

I didn't think so. Maybe there aren't any national Democrats who actually believe that -- i.e., maybe there aren't any national Democrats who really believe anything. The only national figure who seems to do that to any extent is Krugman, and he's a mere pundit (and an economist at that).

Is "change" standing alone, without any readily-comprehensible theory about how and why things must change, the best argument we can make? (Hint: go read some FDR.)

Ponder the full extent of the Republican economic disaster

An article in Slate by Daniel Gross describing the implosion of the U.S. Chamber of Commerce (“The Chamber's Mistakes”) offers a description of the Bush administration that sums up the disaster succinctly. That Republican economic policies failed miserably is an understatement:

The Chamber of Commerce may not have ruled the country during the Bush years. But it had the next best thing: a Republican administration in the White House and Republican control of Congress for most of that period. The chamber applauded as they delivered cuts in marginal tax rates and in taxes on capital gains, dividends, and estates. The government was supportive of free trade and largely hostile to labor unions, which continually lost ground. We saw aggressive moves to outsource government functions and increase the use of private-sector contractors. We opened up energy resources to development. Interest rates were low. Regulation? Virtually nonexistent in many sectors. Business lobbyists were allowed essentially to write crucial legislation. These policies, the Bush administration economic team promised us, would be superior to the ones that prevailed in the 1990s. And the proof would be in the numbers: jobs, market performance, income, wealth.
But it didn't work out for anybody. By pretty much any measure, the years from 2001 to 2008 were lost ones. Job creation was extraordinarily weak by historical comparison. In September, on a seasonally adjusted basis there were 108.544 million private (nongovernment) payroll jobs, which is about the same number there were in June 1999. . . .."). Over the last 10 years, in other words, the private sector hasn't created a single job. That's pathetic, especially when you consider that the population grew 9 percent during those years, from 282 million in 2000 to 308 million today. Wealth didn't expand, either. In fact, . . . in this decade, income inequality rose, the percentage of people living below the poverty line rose, the number of people getting health insurance from their employers fell, and median income failed to budge. The stock market? Forget about it. Oh, and at the end of it, the financial system, which got precisely the regulatory environment it wanted from Washington, blew itself up, inflicting hundreds of billions of dollars of costs on taxpayers.

And he didn't even get to the part where a surplus that co-existed with low unemployment at the end of the Clinton – which should have been treated as an unexpected cushion for starting such necessary reforms as, ahem, universal health insurance -- was turned into a massive deficit that continues to make it harder to do things that would help us out of the current morass.

I would also hit more heavily the real meaning of zero private-sector job growth in absolute terms when population continues to grow as it always does. To be merely holding its own, the economy must add jobs in absolute numbers as fast as the population that needs a job is growing. The 9% figure for the whole population mentioned in the article is close to the growth rate in the working age population during the same period.

In real terms, in other words, private sector employment plummeted by almost 10%. That's more than pathetic, it's tragic, criminal and very scary. Figures seem to indicate that somewhere around 50% of college graduates are leaving the campus without a job waiting for them – far more than in the past. As someone said, a society that cannot employ it's youth is a society in deep, deep trouble. Fundamental things need to be done.

Deep Thought for New Jersians

I gather that the fall back health care plan the White House is now pushing is the opt-in plan, since they know that Lieberman, et al will filibuster and kill the opt-out plan -- that is if the public option gets in at all.

Now, for us guys from New Jersey, that means that if we get a Republican governor (as seems likely), we won't get a public option. Doesn't affect me personally since I'm on Medicare, but it does directly affect my wife, so we'll continue paying through the nose for private coverage for her -- almost $10,000 per year for a $10,000 deductible individual plan!

Wake up NJ, hold your noses and vote for Corzine!

New health insurance public option idea: BOTH opt-out and "trigger" -- in that order

The opt-out idea continues to gain major traction, with Pelosi and Reid both saying they can pass it and one major Democrat after another expressing support. However, the White House has yet to signal acceptance, with reports saying the administration still is leaning towards Olympia Snowe's "trigger" concept. If you haven't been following all this closely, the trigger most likely would consist of quantitative criteria of competitiveness in a market (a state) using the kinds of market-share analysis that are used in antitrust matters -- but it still means there would be no public option at the outset, but only if the trigger is activated. For that reason, it is utterly despised by virtually all public progressives and, it appears, most Democratic congresspeople, all of whom are insisting on a real non-profit, Federally-run public option to assure the most affordable insurance possible is available to those who need it. By setting a cost-pricing standard based on a huge pool, no profit component and use of Medicare rates in some fashion, it should also help force down insurance costs generally.

Since I'm making the still-unrebutted claim of being the first to introduce this concept into the national discourse back at the beginning of September, here's a new wrinkle for further isolating the public option opponents. To paraphrase my earlier challenge to objectors to the public option: "You want a "trigger"? OK, here's a trigger." Put them both in, but in a different order from the one contemplated by the current (tiny handful) of "trigger" aficionados. Yes, as proposed in the opt-out concept, a state by appropriate means (preferably a referendum) would have the right to opt out (a step I feel certain no state would ultimately have the guts to take), any opt-out actually implemented would itself be automatically invalidated if that trigger of well-defined criteria of non-competitiveness is tripped. In other words, the trigger is not a method of introducing the public option in a state, but could defeat the opt-out.

Hey, it's the best of all possible Democratic worlds: the state's opt-out right popular now with most Democratic legislators who have been exposed to it, and the trigger that only a Blue Dogs could love (and apparently a trembling, hand-wringing White House). That should shut them up for awhile -- maybe for good if we're lucky.

General Eaton rips Bush-Cheney MIlitary Competence

Retired General Paul Eaton served in the U.S. Army for more than thirty years, including two years he spent training Iraqi troops after the Bush Administration hastily moved troops and resources away from Afghanistan to pursue its war in Iraq. After his retirement in 2006, he wasn't exactly shy about criticizing the Bush Administration's tactics in Iraq.

Eaton is now a Senior Adviser to the National Security Network, and he's a little annoyed at Dick Cheney's recent remarks that President Obama ought to stop "dithering" about Afghanistan and get onto winning, what with the war still going on there as a result of Cheney's insistence on ignoring Afghanistan in favor of Iraq. Eaton had some sharp words for Cheney this morning.

The record is clear: Dick Cheney and the Bush administration were incompetent war fighters. They ignored Afghanistan for 7 years with a crude approach to counter-insurgency warfare best illustrated by: 1. Deny it. 2. Ignore it. 3. Bomb it.

Eaton is likely not alone

American journalism strikes out again

Is journalism today atrociously incompetent or what? Which organ has bothered to demand an answer from Snowe or any other opponent of the public option WHY from a policy standpoint they oppose it -- as opposed to shutting their traps the second one of these people says it's a "non-starter" or other such horse race non-responsive response? "I'm against it because it won't win." "I'm against it because I'm against it." Oh, OK, thanks for coming on the show and explaining your position.

Do you have the slightest idea what kind of answer to these fundamental questions the opponents would provide? Might any reporter have the guts or integrity to observe that opposing the public option seems to be siding with insurance industry profits and exorbitant CEO salaries against the best interest of the American people in the availability of the least expensive insurance possible? And then asking them to justify such a stance with whatever stammering answer they can muster? How have we come this far with not a one of our highly educated, well-paid national reporters asking such questions?

Get Off Obama's Back ...second thoughts from Michael Moore

October 10th, 2009 6:01 PM

Friends,

Last night my wife asked me if I thought I was a little too hard on Obama in my letter yesterday congratulating him on his Nobel Prize. "No, I don't think so," I replied. I thought it was important to remind him he's now conducting the two wars he's inherited. "Yeah," she said, "but to tell him, 'Now earn it!'? Give the guy a break -- this is a great day for him and for all of us."

I went back and re-read what I had written. And I listened for far too long yesterday to the right wing hate machine who did what they could to crap all over Barack's big day. Did I -- and others on the left -- do the same?

We are weary, weary of war. The trillions that will have gone to these two wars have helped to bankrupt us as a nation -- financially and morally. To think of all the good we could have done with all that money! Two months of the War in Iraq would pay for all the wells that need to be dug in the Third World for drinking water! Obama is moving too slow for most of us -- but he needs to know we are with him and we stand beside him as he attempts to turn eight years of sheer madness around. Who could do that in nine months? Superman? Thor? Mitch McConnell?

Instead of waiting to see what the president is going to do, we all need to be pro-active and push the agenda that we want to see enacted. What keeps us from forming the same local groups we put together to get out the vote last November? C'mon! We're the majority now -- the majority by a significant margin! We call the shots -- and we need to tell this wimpy Congress to get busy and do what we say -- or else.

All I ask of those who voted for Obama is to not pile on him too quickly. Yes, make your voice heard (his phone number is 202-456-1414). But don't abandon the best hope we've had in our lifetime for change. And for God's sake, don't head to bummerville if he says or does something we don't like. Do you ever see Republicans behave that way? I mean, the Right had 20 years of Republican presidents and they still couldn't get prayer in the public schools, or outlaw abortion, or initiate a flat tax or put our Social Security into the stock market. They did a lot of damage, no doubt about that, but on the key issues that the Christian Right fought for, they came up nearly empty handed. No wonder they've been driven crazy lately. They'll never have it as good again as they've had it since Reagan took office.

But -- do you ever see them looking all gloomy and defeated? No! They keep on fighting! Every day. Our side? At the first sign of wavering, we just pack up our toys and go home.

So, at least for this weekend, let us celebrate what people elsewhere are celebrating -- that America now has a sane and smart man in the White House, a man who truly wants a world at peace for his two daughters.

Many, for the past couple days (yes, myself included), have grumbled, "What has he done to earn this prize?" How 'bout this:

The simple fact that he was elected was reason enough for him to be the recipient of this year's Nobel Peace Prize.

Because on that day the murderous actions of the Bush/Cheney years were totally and thoroughly rebuked. One man -- a man who opposed the War in Iraq from the beginning -- offered to end the insanity. The world has stood by in utter horror for the past eight years as they watched the descendants of Washington, Lincoln and Jefferson light the fuse of our own self-destruction. We flipped off the nations on this planet by abandoning Kyoto and then proceeded to melt eight more years worth of the polar ice caps. We invaded two nations that didn't attack us, failed to find the real terrorists and, in effect, ignited our own wave of terror. People all over the world wondered if we had gone mad.

And if all that wasn't enough, the outgoing Joker presided over the worst global financial collapse since the Great Depression.

So, yeah, at precisely 11:00pm ET on November 4, 2008, Barack Obama won the Nobel Peace Prize. And the 66 million people who voted for him won it, too. By the time he took the stage at midnight ET in the Grant Park Historic Hippie Battlefield in downtown Chicago, billions of people around the globe were already breathing a huge sigh of relief. It was as if, in that instant, one man did bring the promise of peace to the world -- and most were ready to go wherever he wanted to go to achieve that end. Never before had the election of one man made every other nation feel like they had won, too. When you've got billions of people ready, willing and able to join a cause like this, well, a prize in Oslo is the least that you deserve.

One other thought. The Peace Prize historically has been given to those who have worked to throw off the yoke of racial discrimination and segregation (Martin Luther King, Jr., Desmond Tutu). I think the Nobel committee, in awarding Obama the prize, was also rewarding the fact that something profound had happened in a nation that was founded on racial genocide, built on racist slavery, and held back for a hundred-plus years by vestiges of hateful bigotry (which can still be found on display at teabagger rallies and daily talk radio). The fact that this one man could cause this seismic historical event to occur -- and to do so with such grace and humility, never succumbing to the bait, but still not backing down (yes, he asked to be sworn in as "Barack Hussein Obama"!) -- is more than reason enough he should be in Oslo to meet the King on December 10. Maybe he could take us along with him. 'Cause I also suspect the Nobel committee was tipping its hat to all of us -- we, the American people, had conquered some of our racism and did the truly unexpected. After seeing searing images of our black fellow citizens left to drown in New Orleans -- and poor whites seeing their own treated no better than the black man they had been raised to hate -- we had all seen enough. It was time for change.

Thank you, Barack Obama, for giving us the opportunity to redeem ourselves. Now for the tasks ahead. We need you to do all that you promised to do. We need it. The world needs it.

My prediction for the future? You become the first *two-time* winner of the Nobel Peace Prize!

Fred (that's Norwegian for "Peace"),
Michael Moore
MMFlint@aol.com
MichaelMoore.com

Outsourcing U.S. Chemists

Chemistss in the USA are perishing. Note the big layoffs by Big Pharma in the US. This has been going on now for some time. There are no job ads for industrial chemists in the U.S. for the last 5 or more years, just ads for faculty to train Chinese students to become Chemists in China, all paid with graduate stipends by the U.S. government.

Rise of foreign drug discovery services providers coincides with restructuring of R&D at major pharmaceutical firms

Jean-François Tremblay

Chemical & Engineering News

Piramal Healthcare

COMPETENT Foreign drug discovery services firms handle increasingly complex projects for big drug companies based in the U.S.

• View Enlarged Image

Sundia MediTech (both)

EQUIPPED Labs of contract research organizations in the East look as modern as their counterparts in the West.

ChemDiv

INTEGRATED More and more contract research firms in Eastern Europe, China, and India offer services ranging from discovery biology to clinical trials.

The Washington Post some time ago reported that the Freddie CEO fired their risk managers in 2004 when they were warning the Freddie CEO that subprime loans were already showing sign that they were not going to be paid back. This was a message that the Freddie CEO didn't want to hear since it affected revenues and his bonus. Is this FHA appointment like putting the fox inside the chicken coop? I’m sure that Mr Ryan, a 27-year veteran of Freddie was great at securitization, derivatives and other ‘financial weapons of mass destruction’ to parapharase Warren Buffet.

FHA Set to Hire Freddie Mac Official

The Federal Housing Administration plans to tap Bob Ryan, a longtime Freddie Mac executive, as its first chief risk officer, according to an internal Freddie Mac e-mail obtained by The Washington Post.

Ryan, a 27-year veteran of the McLean-based mortgage finance company, oversees the pricing, securitization and credit-portfolio functions within the single-family credit guarantee business. His last day at Freddie Mac will be Oct. 23, according to the e-mail from Donald Bisenius, an executive vice president at the company.

The FHA confirmed that Ryan will fill the newly created chief risk officer position but said his start date has not been determined.

FHA Commissioner David H. Stevens has said that the chief risk officer will oversee a division devoted to managing and mitigating risk to FHA's insurance fund. The agency insures loans so that private lenders are protected against default-related losses.

As FHA's volume of loans has exploded, some lawmakers have raised concerns about whether the agency has the resources or policies to track risk or weed out abusive lenders.

On Friday, the Inspector General of the Department of Housing and Urban Development, which includes FHA, said the agency lacks the ability to ensure that lenders meet its requirements.

The report also said that FHA did not obtain or consider negative information on lenders from other HUD offices, follow up on whether the required fees or documentation were collected, or properly dispose of lender application files containing personally identifiable information.

-- Dina ElBoghdady

Top aides to Obama upbraid Wall St.

Bonuses after the bailout 'A year ago . . . these institutions were teetering'

see http://www.washingtonpost.com/wp-dyn/content/article/2009/10/18/AR2009101802542_pf.html

Comment on the Post website:

Let us all applaud Ken Lewis as he retires from the Bank of America with his $70 million dollar retirement to join the ranks of American ARISTOCRATS who, together with their children and grandchildren, never have to work another day in their lives forever. America is truly the land of opportunity.

He really earned it in conning the government out of $45 billion. That accomplishment alone puts him second behind Bernie Madoff with his $65 billion Ponzi scheme. And we shouldn’t forget his central role in buying up bankrupt Countrywide Bank, the largest lender of subprime mortgages or in buying up failed Merrill Lynch, one of the largest sellers of collateralized mortgage obligations (CMO) and derivatives. Our pension funds are underfunded because of their investments in CMO debt. What accomplishments Lewis has!

These banks are too big to fail so let us stop talk about breaking them up. Why Lewis is an American genus, isn’t he?

Bring back American manufacturing the grass roots way

A physics teacher in high school, once told the students
that while one grasshopper on the railroad tracks wouldn't slow a train
very much, a billion of them will. With that thought in mind, read the
following, obviously written by a good American .

Good idea . . . one light bulb at a time .. .. . .

Check this out . I can verify this because I was in
Lowes the other day for some reason and just for the heck of it I was
looking at the hose attachments . They were all made in China . The next
day I was in Ace Hardware and just for the heck of it I checked the hose
attachments there . They were made in USA . Start looking .
In our current economic situation, every little thing we
buy or do affects someone else - even their job . So, after reading this
email, I think this lady is on the right track . Let's get behind her!
My grandson likes Hershey's candy . I noticed, though,
that it is marked made in Mexico now . I do not buy it any more . My
favorite toothpaste Colgate is made in Mexico now . I have switched to
Crest . You have to read the labels on everything .
This past weekend I was at Kroger. (Can be true for any
store.) I needed 60W light bulbs and Bounce dryer sheets . I was in the
light bulb aisle, and right next to the GE brand I normally buy was an
off brand labeled, "Everyday Value . " I picked up both types of bulbs
and compared the stats - they were the same except for the price . The
GE bulbs were more money than the Everyday Value brand but the thing
that surprised me the most was the fact that GE was made in MEXICO and
the Everyday Value brand was made in - get ready for this - the USA in a
company in Cleveland , Ohio ....
So throw out the myth that you cannot find products you
use every day that are made right here .

So on to another aisle - Bounce Dryer Sheets . . . yep,
you guessed it, Bounce cost more money and is made in Canada . The
Everyday Value brand was less money and MADE IN THE USA! I did laundry
yesterday and the dryer sheets performed just like the Bounce Free I
have been using for years and at almost half the price!
My challenge to you is to start reading the labels when
you shop for everyday things and see what you can find that is made in
the USA - the job you save may be your own or your neighbors!
If you accept the challenge, pass this on to others in
your address book so we can all start buying American, one light bulb at
a time! Stop buying from overseas companies!
(We should have awakened a decade ago . . . . . ... )
Let's get with the program . . . . help our fellow
Americans keep their jobs and create more jobs here in the U . S . A

Good old Max delivered the goods!

What can you expect from poor Max Baucus who comes from one of the richest families in Montana and who got millions from the healthcare industry for his re-election. He delivered the goods giving this industry 40 million new customers. His bill makes sure that premiums for all of us would be based on age so 50 and 60 year olds get ready for premium increases.

The table in today’s printed Post showed that buying insurance in the Baucus for- profit exchange plan would cost by CBO $14,400 for family coverage with no government subsidies. Compare this to the $8300 for the federal employee family Blue Cross Basic plan with employee and government premiums totaled. So the exchange option will cost over $6000 more for for-profit insurance with no government negotiation. This now on top of his double-dealing with Big Pharma! Talk about waste, fraud and abuse, Baucus is guilty on all accounts.

Democrats Question Baucus's $80B Deal With Drug Makers

By Ceci Connolly, Shailagh Murray and Lori Montgomery
Washington Post Staff Writers
Wednesday, September 23, 2009 12:35 PM

Senate Finance Committee Chairman Max Baucus (D-Mont.) faced an early test of his leadership Wednesday after fellow Democrats challenged the $80 billion deal he struck with drug makers to help pay for health-care reform.
Nearing the end of a 13-hour opening day of work on Baucus's bill to overhaul the nation's health-care system, several committee members pressed Tuesday night for an amendment extracting larger company rebates on medications the government purchases for low-income senior citizens.
The proposal jeopardizes an agreement that Baucus and the Obama White House struck to limit the drug industry's exposure over the next 10 years to $80 billion. Proponents said it would produce an additional $86 billion in revenue for federal coffers, money that could be dedicated to expanding the health bill in other areas. The money also would help efforts by the chief sponsor of the drug company amendment, Sen. Bill Nelson (D-Fla.), to reduce cuts to the Medicare Advantage private insurance program, which is popular with seniors in his state.
"This is a metaphor for where this bill is headed," said Sen. Charles E. Schumer (D-N.Y.), who supports the amendment and described it as a measure of "whose side you are on."
The lone committee Democrat to speak against the amendment was Sen. Thomas R. Carper (D-Del.), who said it "doesn't seem fair" to renege on an agreement struck many months ago. The pharmaceutical giant AstraZeneca is one of the top 10 employers in Carper's home state.
Baucus, who remained silent during the drug debate, postponed a vote on the amendment at least until Wednesday.
After the committee convened Wednesday, members spent the better part of the morning wrangling over an amendment offered by Sen. Jim Bunning (R-Ky.) stipulating that the "legislative language" of the bill and a final cost analysis by the Congressional Budget Office be posted online 72 hours before the committee votes on the package. Democrats called the amendment a delaying tactic that would force the committee to wait an additional two to three weeks before voting, and they argued that the panel traditionally has acted on the basis of "conceptual language," or plain English, about what proposed legislation means rather than the highly esoteric legislative language, with its numerous references to different parts of the U.S. code.
"It is gobbledygook to most people," said Sen. Kent Conrad (D-N.D.). "Anybody who thinks that would be transparent to the American people is really not telling it like it is."
Republicans insisted that the CBO needs final legislative language to determine precisely what provisions cost, and they complained that they were being rushed toward a vote. "What is the rush?" Bunning demanded. "Taking a few extra weeks will not kill me, I hope, or anyone else on this committee."
The Bunning amendment ultimately was voted down, mainly along party lines. A competing amendment offered by Baucus passed on a party-line vote. It required that "conceptual language in plain English" and a complete CBO cost analysis be publicly available on the Finance Committee's Web site ahead of a final vote to send the health-care reform bill to the full Senate.
Tuesday's debate over the deal with drug manufacturers capped a day that opened with battle lines clearly drawn. Democrats and Republicans both found plenty to criticize in the legislation, particularly its requirement that all U.S. citizens and legal residents must buy health insurance at potentially high costs.
Sen. Jon Kyl (Ariz.), a member of the panel and the Senate's No. 2 Republican, called the measure "a stunning assault on liberty" that would lead to higher taxes and less consumer choice.
But Baucus defended his work and urged his colleagues to "do our part to make quality, affordable health care available to all Americans."
Republicans outlined specific provisions they will seek to change or eliminate as the committee debates hundreds of amendments, a discussion that could stretch into next week. One target-rich area: the more than $500 billion in Medicare changes that the bill proposes, to squeeze waste from the insurance program for seniors. Another is the fine that the measure would impose on Americans who do not buy health insurance, which the GOP describes as a tax on the middle class. And they warn that the legislation's hefty new industry fees would be passed on to consumers.
Some Democrats, meanwhile, said they would press to further reduce costs for the millions of Americans who would be required to buy coverage.
Baucus revised his bill even before submitting it to the committee Tuesday morning, adding more aid for middle-class families and watering down a tax provision that could target a small number of union households.
The bill would help extend health insurance to an estimated 94 percent of Americans, including 29 million who currently have none. An estimated 11 million people would join Medicaid under the legislation, and 25 million others would gain access to a new private-insurance exchange, including 7 million people who currently buy their own plans or pay for expensive coverage through their employers.
Democrats' primary concern with the Baucus plan is that it would not adequately subsidize working-class and middle-class households, which could be required to pay 2 percent to 12 percent of their income toward insurance premiums. After Baucus's revisions, no person who receives coverage through the insurance exchange would pay more than $3,987 a year for deductibles and co-payments; families' out-of-pocket costs would be limited to $7,973.
His changes would also make it easier for people whose employers offer unaffordable coverage to join the exchanges. And he would lower premium costs for older policyholders: While his original proposal would have allowed insurance companies to charge people in their early 60s up to seven times as much as younger customers, his modified bill would bar them from making seniors pay more than four times the lowest policy cost.
Facing complaints about his primary source of revenue for the package -- a tax on expensive insurance policies -- Baucus has proposed adjustments. He would raise the tax from 35 percent to 40 percent but apply it to fewer policies, making exceptions for non-Medicare retirees, people with high-risk jobs, and others who pay higher premiums because of their age or occupation, not because their benefits are particularly generous.
To cover the cost of the new provisions, Baucus proposes reducing the surplus the bill would generate over the next decade from $49 billion to $21 billion. He would also change the tax treatment of medical expenses, barring people from claiming them as itemized deductions unless they exceed 10 percent of income, rather than the 7.5 percent of income in current law.
After an outcry by manufacturers of medical devices, Baucus said he would exempt low-priced consumer products such as cotton swabs from a $4 billion tax on that industry. He also would increase a fee on insurance companies. And he accepted a new provision offered by Sen. Maria Cantwell (D-Wash.) that would change the way Medicare reimburses doctors, to reward the quality of care in addition to quantity.
But some committee Democrats said they would offer further amendments aimed at making coverage more affordable. "I believe we need to continue to work on it," said Sen. Debbie Stabenow (Mich.). "We all have lists, and that's what this process will be about in the next few days."
Staff writer William Branigin contributed to this report.

CPC Sensible Health Care Proposal?

Congressional Progressive Caucus (CPC), has worked to muster support for a real and robust public option against a well-funded corporate opposition. We remain committed to a robust public option that:

• Enacts concurrently with other significant expansions of coverage and must not be conditioned on private industry actions.
• Consists of one entity, operated by the federal government, which sets policies and bears the risk for paying medical claims to keep administrative costs low and provide a higher standard of care.
• Be made available to all individuals and employers across the nation without limitation.
• Allows patients to have access to their choice of doctors and other providers that meet defined participation standards, similar to the traditional Medicare model, promotes the medical home model and eliminates lifetime caps on benefits.
• Has the ability to structure the provider rates to promote quality care, primary care, prevention, chronic care management and good public health.
• Utilizes the existing infrastructure of successful public programs, such as Medicare, in order to maintain transparency and consumer protections for administering processes, including payment systems, claims and appeals.
• Establishes or negotiates rates with pharmaceutical companies, durable medical equipment providers and other providers to achieve the lowest prices for consumers.
• Receives a level of subsidy and support that is no less than that received by private plans.
• Ensures premiums are priced at the lowest levels possible, not tied to the rates of private insurance plans.

Madoff Money

Erin Arvedlund

Where did all the money go?

After I wrote “Madoff: The Man Who Stole $65 Billion” this was probably the first question I received from almost everyone. And I am forced to tell the bizarre truth: there’s probably no money left.

This is the nature of what are known as “Ponzi” schemes, or a classic pyramid scheme–Bernard Madoff constantly had to raise money from new investors to cash out the old investors, or “redeem” them, as a traditional hedge fund or mutual fund would.

But Madoff was not running a traditional hedge fund–not at all. He was running a cash-in/cash-out fraud, using the London branch of his brokerage firm as the piggy bank where he would wire money to and fro to make it look like he was trading for the hedge fund.

But there was no hedge fund, and there was no $65 billion at the end. Madoff lied about the amount of assets he was overseeing.

So where did the money go?

Remember, the $65 billion was a phantom number: that included all the phony profits from over the decades (in my book, I write that the scam probably began in the early 1960s!).

Working backwards, let’s assume Madoff promised average returns of 10 percent a year, over a period of 35 to 40 years, and the true dollars invested–and therefore lost–is likely closer to between $10 billion-$20 billion.

That’s still a shocking amount–but at least it’s one that U.S. prosecutors and the Madoff trustee charged with cleaning up the mess and paying back investors can get their arms around.

Assume Fairfield Greenwich Group, one of Madoff’s infamous “feeder” funds, took out roughly $7 billion; Jeffrey Picower, Madoff’s favorite investor, took out $5 billion, and Stanley Chais, who raised money in Hollywood for Madoff, took over roughly $1 billion, and suddenly, $13 billion is accounted for.

So where is the rest?

It’s possible Madoff spirited away a few percent of the billions he stole, but even whistleblower Harry Markopolos, who stalked Madoff for nearly a decade and warned the U.S. Securities & Exchange Commission multiple times, has estimated Madoff likely only kept perhaps $350 million for himself.

In short, it would have been easier for Madoff to run a true, bona fide hedge fund than to create the millions of pages of phony statements, using an antiquated computer and old letterhead.

With the guilty plea of his lieutenant Frank DiPascali, we now know Madoff did not act alone. He lied about that just as he lied for so many decades. the question is: who else will be charged?

Erin Arvedlund is a journalist who has worked for Dow Jones, The Moscow Times, TheStreet.com, Barron’s and the New York Times. She is author of “Too Good to be True: The Rise and Fall of Bernie Madoff“. The opinions expressed are her own. -

New Study: Bush Blocked Efforts to Stop Predatory Lending

The game really began when John McCain's economic advisor Former Sen Phil Gramm from the great state of Texas proposed a bill to repeal the Glass Steagall Act in 1997 allowing investment bankers like Bear Sterns, Lehmann Bros etc to get into the mortgage and commercial banking business with Collateralized Mortgage bonds and Derivatives. Congress was then controlled by Republicans but Clinton signed the bill so it was a bipartisan effort to deregulate the banking sector. The Glass Steagall was passed early in the great Depression in 1930s to rein in speculation by Wall St Banks which was one of causes of the Great Depression in 1929. The present Wall ST. Bank connivery as we now have learned was one of causes of our current Great Recession. This was all aided and abetted by the free market, easy money policies of Bush and Alan Greenspan.

New Study: Bush Blocked Efforts to Stop Predatory Lending

By Ken Kupchik, Washington Post, Oct 7, 2009

A new report reveals some disturbing information about the Bush administration's handling of predatory mortgage lending practices which played an enormous role in the financial crisis.

The information obtained alleges that not only did the administration fail to enforce existing laws; it specifically weakened the regulatory agency responsible for ensuring compliance.

The study by the University of North Carolina Chapel Hill's Center for Community Capital shows that states with anti-predatory laws that placed more implicit regulations on issuing mortgages had fewer foreclosures. The connection by itself is not surprising, as it merely validates the very existence of such laws. It is the Bush administrations reaction to calls for stricter enforcement that is so appalling.

From The Raw Story

In 2004, the Office of the Currency Comptroller, an obscure regulatory agency tasked with ensuring the fiscal soundness of America's banks, invoked an 1863 law to give itself the power to override state laws against predatory lending. The OCC told states they could not enforce predatory-lending laws, and all banks would be subject only to less-strict federal laws.

This calls into question to what extent the Bush administration appeased powerful interests intent on thwarting attempts at regulation on the state level. Did the administration fully grasp the magnitude of predatory lending and the widespread implications it would have on the entire financial system?

Having spent my first nine months out of college working for a subprime mortgage company, I witnessed firsthand the profit motive of unscrupulous lenders and investors at the expense of unwitting homeowners seeking help with their bills and payments.

The mortgage industry now has strict regulations for documentation of income, assets and down payments, requirements that were not in place during the housing and refinance boom from 2002 through 2006. It is worth noting that these requirements are mostly self-imposed by the industry and market forces, as investors realize that loans not meeting these requirements end up being worthless.

The industry came to grips with some important the facts after subprime mortgages began defaulting at an alarming rate, and in the summer of 2007 abruptly discontinued subprime as fear spread through the markets, triggering the first stages of the global financial collapse.

While the Bush administration was busy ensuring it's banking interests, and continued profiting from endless mortgages repackaged as mortgage-backed securities which were then sold on Wall Street as sound investments, homeowners were swindled out of their homes.

So the question for Bush and his team: How much did you know and when did you know it?

Public option state "opt-out" gaining traction?

I actually conceived of this "states-rights" idea ("Dems Discussing Public Option With Opt-Out Clause: The Silver Bullet?") on my own and entered it as a comment in a prominent on-line publication over a month ago. Another commenter found it a stimulating idea and reinforced it in that publication. I revisited it a week ago in this blog when I saw that the same or a very similar idea was being bandied about by a Senator ("Validation: a public option George Wallace in his heyday could love"). I had never seen it before -- to be more accurate, I do not remember ever seeing it before -- and since I do a pretty good job of rotating through the main blogs on a daily basis, I am claiming sole credit until advised otherwise.

Whatever, it is getting some serious attention and I'm trying and failing to see any down side as a master stroke to break the Blue Dog impasse. Can Max Baucus or Kent Conrad really get away with denying New Yorkers or Coloradans something they want badly? So let the culture warriors debate in Austin or Little Rock whether they will let their citizens have the right to choose the public option. Let the GOP governors make fools of themselves. I'm betting it will go the way of the various governors threatening not to use stimulus funds. When citizens in the particular recalcitrant state realize it's just an option that is as far as you can get from a "government takeover" of healthcare -- and they will come to realize that when the debate is localized -- worries about private insurer profits from "unfair" Federal competition will dissolve with lightning speed.

Meanwhile, availability of the public option won't even be an issue in Northern tier states with about 70% of the U.S. population. Even if eligibility is limited to those who do not have viable plans available through an employer, that could mean 20, 30 or even 40 million million users. That's clout. Even with regional-compact non-profit plans -- e.g., five regions with a lot more bargaining power than most states on their own could muster -- the user base for each would still be huge.

Net: in the end, with Blue States adopting it without controversy and Red States falling in line when the people speak, it will be a nationally-available public option. Mission accomplished.

What is a health insurance exchange, anyway?

Here is the best description I've seen of how the insurance "exchanges" could work. The author of the piece in the Kaiser Health News makes the point that the powers of the exchanges to negotiate premiums with plans participating in the exchange may be as important as whether a public option is available or not.

The idea of an insurance exchange is relatively straightforward. If you work for a big company or, say, the federal government, every year you choose from among a set of insurance plans--all of them conforming to some minimal standard, all of them available to you regardless of pre-existing medical condition. They've been chosen by your human resources or benefit department, who--ideally--have some clue about what they're doing, more at least than you do.

If, by contrast, you work on your own or in a small company, then you may have just one choice--or no choice at all. Affordable coverage probably won't be available to you if you have existing medical problems; even if you're healthy, the coverage you get could have major gaps or be otherwise unreliable. It'd be good to know which policies work and which ones don't. But unless you happen to be an actuary or insurance broker yourself, chances are you're clueless when it comes to navigating this complex world.

It's you, the individual or small businessperson trying to buy insurance, for whom the exchanges are being created. They're basically regulated marketplaces, where you get to choose from among insurance plans more or less the same way folks in large companies do. Your premiums should be more affordable, since now you're part of a large bargaining group. You should be able to get coverage regardless of preexisting conditions, since insurers can't pick and choose which exchange customers to cover. And you should have the peace of mind that the coverage is good, since you know it's been screened by the exchange.

The concept has been around for a while, although it's gone under different names. The reform plan that Bill Clinton put forward in 1993 proposed to create health "alliances" that would serve roughly the same purpose. And while that vision never came to fruition, one state, Massachusetts, managed to create such an institution three years ago, when--as part of a more comprehensive health reform plan--it started a pair of insurance pools for small businesses and individuals who couldn't get coverage through employers.

The results, so far, are encouraging. People once unable to penetrate the private insurance market because of income or medical condition can now go online and select from a menu of insurance options--all of them covering essential services and providing solid financial protection, for rates not previously available. And although overall medical costs in Massachusetts have continued to rise, as they have across the country, premiums for what's known as the Commonwealth Care plans--the insurance option that the exchange manages most closely--have risen at a far slower rate.

Washington has taken notice. The bills moving through Congress all set up exchanges modeled more or less on what Massachusetts has done. But there are a few critical differences. Among the most important is a difference in how the exchanges would select which plans to offer people.

In the bills that passed three House committees and the Senate Health, Education, Labor, and Pensions (HELP) Committee, the exchange would be a "prudent purchaser." In other words, it would have a staff that bargained with insurers to bring down premiums--and that made sure all plans lived up to strict guidelines for coverage and customer service. In effect, any insurer that wants to offer coverage through the exchanges has to get the equivalent of a "Good Housekeeping Seal of Approval" from the administrators. This is precisely how it works in Massachusetts.

By contrast, the Senate Finance bill envisions much weaker exchanges. Instead of choosing which plans to make available, the exchange administrators would, by law, have to accept any plan that meets a relatively minimal set of standards.

Dad’s Life or Yours? You Choose

By NICHOLAS D. KRISTOF, NYT, 10/4/09
So what would you do if your mom or dad, or perhaps your sister or brother, needed a kidney donation and you were the one best positioned to donate?
Most of us would worry a little and then step forward. But not so fast. Because of our dysfunctional health insurance system, a disgrace that nearly half of all members of Congress seem determined to cling to, stepping up to save a loved one can ruin your own chance of ever getting health insurance. That wrenching trade-off is another reminder of the moral bankruptcy of our existing insurance system. It’s one more reason to pass robust reform this year.
Over the last week I’ve been speaking to David Waddington, a 58-year-old wine retailer in Dallas, along with his wife and two sons. I’d love to know what the opponents of health reform think families like this should do. Mr. Waddington has polycystic kidney disease, or PKD, a genetic disorder that leads to kidney failure. First he lost one kidney, and then the other. A year ago, he was on dialysis and desperately needed a new kidney. Doctors explained that the best match — the one least likely to be rejected — would perhaps come from Travis or Michael, his two sons, then ages 29 and 27. Travis and Michael each had a 50 percent chance of inheriting PKD. And if pre-donation testing revealed that one of them had the disorder, that brother might never be able to get health insurance. As a result, their doctors had advised not getting tested. After all, new research suggests that lack of insurance increases a working-age person’s risk of dying in any given year by 40 percent. “At the time David needed a transplant, the people closest to him couldn’t even offer a lifesaving donation — for insurance reasons,” said Mr. Waddington’s wife, Susan. Travis, who is living in New York and working toward a math doctorate, is anguished at having to weigh insurance obstacles against the chance to save his dad.
“Can you put a price on your father’s life?” he asked. “My brother and I talked it over privately, and agreed that we should both go ahead and get tested anyway. It seemed like the only course of action. We presented our plan to our parents, and of course Mom immediately shot it down, with Dad firmly behind her. “We had to respect their right to want to protect us. But it was enraging to be in that situation, and to be completely impotent to do anything to help. I told myself a number of times that we would reconsider the issue of testing if Dad’s dialysis stopped working before he got a transplant.” David Waddington finally got that transplant when a kidney from a deceased donor became available. But our insurance system has had other excruciating consequences for the Waddingtons. Though PKD has no cure as such, there are experimental medications that may delay kidney problems. To get access to the medications, a patient must be tested — and since Travis and Michael Waddington don’t dare get tested, they don’t have access to these medications. “The only way to do it is to lie about your name during testing, to use a fictitious name,” Susan Waddington said. “That was the advice we got from a major person in the field. We didn’t do that.” The Genetic Information Nondiscrimination Act, passed last year, should eventually help people get access to health insurance even if they have a genetic predisposition to a disease. But insurance companies will still be free to discriminate against people who show symptoms of those diseases. That’s what’s happening now with Michael. For years, he and Travis were afraid to mention to physicians their 50 percent chance of inheriting PKD, but recently Michael began suffering pains and went to the emergency room. After examining him and ordering tests, the doctor asked him, “Have you ever heard of PKD?”
“I felt the jig was up, and I could disclose my knowledge,” Michael said, so he told the doctor about his father. The broader problem is this: Our broken system leads Americans to spend 16 percent of our national income on health care, twice as much as in parts of Europe, yet with maternal mortality rates and child mortality rates twice those of the best-performing countries. Lack of insurance is linked to nearly 45,000 unnecessary deaths a year, according to a peer-reviewed study to be published in the December issue of The American Journal of Public Health.
None of this seems to move members of Congress who oppose health reform. They have first-rate health care for themselves and so perhaps don’t appreciate how their posturing forces people like the Waddingtons into impossible situations. Let’s hope they find it in their hearts to overhaul an existing insurance system that is the disgrace of the industrialized world.

Wanted: Leadership on Jobs

NYT, 10/4/09. By every meaningful measure, the weak job market deteriorated further in September. Federal stimulus spending has prevented an even worse decline. But that is cold comfort for the tens of millions of working men and women for whom conditions are bleak and getting bleaker, and for the millions more who are destined to lose their jobs — or to have their hours and compensation cut — in the months and years to come. Congress must enact emergency unemployment benefits without delay. Equally important, the Obama administration must flesh out its commitment to ensure that economic recovery does not leave middle-class and low-income families behind. September was the 21st straight month of job loss — the longest unbroken stretch of losses since record-keeping began in 1939 — bringing to 7.2 million the number of positions that have been axed since December 2007. And that understates the damage. During the recession, the economy has failed to create another 2.7 million jobs that were needed simply to employ new workers — like high school and college graduates, immigrants and stay-at-home parents who want to go back to work.

The unemployment rate for September — 9.8 percent — also understates the damage. It would have been higher but for the fact that 571,000 people dropped out of the work force last month — in general, it’s assumed, because they’ve despaired of finding work. If they had kept looking, they would have been counted as unemployed.

The combination of a rising unemployment rate and a quickening pace of labor-force dropouts is especially worrisome. In September, the employment rate for all workers — defined as the share of the population with a job — fell to 58.8 percent, its lowest level in more than 25 years. For adult men, who have been particularly hard hit by job loss in this recession, the employment rate fell to 67 percent, its lowest level since the government began keeping track in 1948. Before this recession, that rate had never dropped below 70.5 percent.

A shrinking labor force represents a tremendous waste of talent and potential, a loss of value that will not be entirely retrievable. Widespread joblessness among men is particularly devastating for the economy and many families, because men tend to earn more than women and to have jobs offering health insurance.

To make matters worse, unemployment among men and women is proving relentless. Of the 15.1 million people who are now officially counted as unemployed, over a third have been out of work for 27 weeks or longer, the highest percentage of long-term unemployment on record. By the end of the year, benefits will expire for more than one million unemployed workers. The House has passed a bare-bones extension of benefits; the Senate has a better bill, covering more long-term unemployed workers, and should pass it first thing this week.

The real work, however, lies ahead. Economic recovery will not automatically replace the jobs that have been lost so far in this recession. Nor will higher levels of learning and skill — necessary as they are — magically create jobs, especially in the numbers that are needed.

If successful, ambitious goals like health care reform and energy legislation may generate jobs, but officials have not persuasively linked them to job growth. Congress and the administration also have not done enough to directly create jobs. That could be done with more stimulus to spur job creation, or a large federal jobs program, or tax credits for hiring, or all three. Or surprise us. Just don’t pretend that the deteriorating jobs picture will self-correct, or act as if it is tolerable.

The Economy Loses 824,000 Jobs and the Washington Post Doesn't Notice

One of the big pieces of news in the September jobs report released by the Labor Department yesterday was that the Bureau of Labor Statistics' (BLS) preliminary benchmark revisions showed that job loss had been 824,000 greater through March of 2009 than had been previously reported. This is a really big deal. It means that job loss averaged almost 70,000 more than originally reported each month over the year from March 2008 to March 2009.
The monthly jobs numbers are based on a survey of 160,000 businesses and governmental agencies. While this is a large sample, it necessarily excludes newly created firms that cannot be included in the sample. This would lead the sample to have a downward bias in measuring job creation. On the other side, there are a large number of firms that go out business each month. Many of them may not feel the need to send back their survey to the BLS as they clean out their office. The non-response by firms shutting down could lead to an upward bias in measuring job growth. To correct for both these problems, the BLS includes an imputation every month for jobs created in new firms and jobs lost in firms that have gone out business. This imputation is based on a "birth/death" model that estimates the number of jobs missed by the survey based on recent economic growth and other variables. While the model produces reasonably reliable estimates in normal times, it has been notoriously bad in missing turning points, underestimating job growth during upturns and overestimating job growth during downturns.
Economists who follow the data closely noted that the monthly imputations from this model had been running at about the same level or even slightly higher during this downturn than in the corresponding months of the prior year. (The imputations are not seasonally adjusted so it is necessary to measure January against January, etc.) Since it was absurd to imagine that new firms were creating as many jobs in the six months when the economy was in a free fall (October, 2008-March, 2009) as in the corresponding months of the prior year, it was virtually certain that the imputation was leading to a substantial overstatement of job growth.
This suspicion has now been confirmed with the BLS benchmark revision. This revision is based on data from state unemployment insurance records. These data are almost a complete census of payroll employment since more than 99 percent of employees are covered by state unemployment insurance. As a result of the release of preliminary data on this benchmark revision, we now know that the job loss in this downturn has been far more severe than initially reported, unless of course we rely on the Washington Post for our news. (The final data, which will be incorporated into the establishment numbers in the January jobs report, always are close to the preliminary data.)
--Dean Baker, American Prospect

Even as layoffs persist, some good jobs go begging

Its a brutal job market, but jobs in nursing, engineering and energy research that pay $55-60,000 plus benefits go begging. Yet even with 15 million people hunting for work, even with the unemployment rate nearing 10 percent, some employers can't find enough qualified people for good-paying career jobs.

Ask Steve Jones, a hospital recruiter in Indianapolis who's struggling to find qualified nurses, pharmacists and MRI technicians. Or Ed Baker, who's looking to hire at a U.S. Energy Department research lab in Richland, Wash., for $60,000 each.

Economists say the main problem is a mismatch between available work and people qualified to do it. Millions of jobs with attractive pay and benefits that once drew legions of workers to the auto industry, construction, Wall Street and other sectors are gone, probably for good. And those who lost those jobs generally lack the right experience for new positions popping up in health care, energy and engineering.

Many of these specialized jobs were hard to fill even before the recession. But during downturns, recruiters tend to become even choosier, less willing to take financial risks on untested workers.

The mismatch between job opening and job seeker is likely to persist even as the economy strengthens and begins to add jobs. It also will make it harder for the unemployment rate, now at 9.8 percent, to drop down to a healthier level.

"Workers are going to have to find not just a new company, but a new industry," said Sophia Koropeckyj, managing director of Moody's Economy.com. "A fifty-year-old guy who has been screwing bolts into the side of a car panel is not going to be able to become a health care administrator overnight."

It's become especially hard to find accountants, health care workers, software sales representatives, actuaries, data analysts, physical therapists and electrical engineers, labor analysts say. And employers that demand highly specialized training — like biotech firms that need plant scientists or energy companies that need geotechnical engineers to build offshore platforms — struggle even more to fill jobs.

The trend has been intensified by the speed of the job market decline, Koropeckyj said. The nation has lost a net 7.6 million jobs since the recession began in December 2007. Yet it can take a year or more for a laid-off worker to gain the training and education to switch industries. That means health care jobs are going unfilled even as laid-off workers in the auto, construction or financial services industries seek work.

"So we have this army of the unemployed" without the necessary skills, Koropeckyj said.

Sitting in his office overlooking the Clarian Health complex, Jones leafed through some of the applications he's received. One came from a hotel worker who listed his experience as, "Cleaning rooms; make beds, clean tubes, vacuum." Another was from a fitness instructor whose past duties included signing up gym members.

Many of the jobless seem to be applying for any opening they see, Jones said.

"You just don't have the supply to fill those particular positions," he said of the more than 200 "critical" jobs he needs to fill at Clarian, including nurses, pharmacists, MRI technicians and ultrasound technologists.

Contributing to the problem is that in a tough economy, employers take longer to assess applicants and make a hiring decision. By contrast, "in a healthier economy, you don't wait around for the perfect person," said Lawrence Katz, a professor of labor economics at Harvard.

To be sure, employers in most sectors of the economy are having no trouble filling jobs — especially those, like receptionists, hotel managers or retail clerks, that don't require specialized skills.

But as more jobs vanish for good, the gap between the unemployed and the requirements of today's job openings is widening. Throughout the economy, an average of six people now compete for each job opening — the highest ratio on government records dating to 2000.

Sifting through applications for jobs at the U.S. Energy Department's Pacific Northwest National Laboratory in Washington state, Baker said he sees "people that have worked in other areas, and now they're trying to apply that skill set to the energy arena."

"Unfortunately, that's not the skill set we need."

The jobs opened up after the lab received federal stimulus money to research energy-efficient buildings. Baker needs employees with backgrounds in city management and a grasp of the building codes needed to design energy-efficient buildings. Yet even a salary of $140,000 for senior researchers isn't drawing enough qualified applicants.

Baker said he's getting resumes from well-educated people, including some from information technology workers who want to enter the green-energy field. But he said it could take a year to get an unqualified employee up to speed on all the building codes they need to know.

"We're running out of people to train" new employees, he said. "We simply cannot attract enough (qualified) people."

The lab has hired a recruiter for the first time to fill dozens of positions. Rob Dromgoole, the recruiter, is going so far as to make cold calls to college professors. He's also visiting academic conferences to pitch jobs.

The trend has left jobseekers like Joe Sladek anxious and frustrated. Sladek's 23 years in the auto industry haven't helped his efforts to land a job in alternative energy since he was laid off a year ago.

As a quality control engineer for auto supplier Dura Automotive Systems Inc. in Mancelona, Mich., he made about $75,000. Sladek would review technical reports to make sure the factory's auto parts matched the specifications of clients like General Motors and Toyota.

He hoped to parlay that experience into a similar job at a factory making windmill blades or solar panels. Several factories were hiring, and Sladek landed a few interviews. But he never heard back.

At PricewaterhouseCoopers in Chicago, there's a shortage of qualified applicants for management jobs in tax services, auditing and consulting. Rod Adams, the company's recruiting leader, said huge pay packages on Wall Street siphoned off lots of business school graduates earlier this decade.

"That made our pipeline more scarce," he said.

Some of the openings at PricewaterhouseCoopers pay around $100,000 and don't even require graduate degrees — just specialized accounting certifications or other credentials.

Formerly successful bankers or hedge fund managers don't necessarily qualify.

"We've gotten a lot more resumes, but they haven't been the right people," Adams said.

By CHRISTOPHER LEONARD, AP Business Writer Christopher Leonard

Cannot Live by GDP Alone

September 23, 2009

Emphasis on Growth Is Called Misguided

By PETER S. GOODMAN

Among the possible casualties of the Great Recession are the gauges that economists have traditionally relied upon to assess societal well-being. So many jobs have disappeared so quickly and so much life savings has been surrendered that some argue the economic indicators themselves have been exposed as inadequate.

In a provocative new study, a pair of Nobel prize-winning economists, Joseph E. Stiglitz and Amartya Sen, urge the adoption of new assessment tools that incorporate a broader concern for human welfare than just economic growth. By their reckoning, much of the contemporary economic disaster owes to the misbegotten assumption that policy makers simply had to focus on nurturing growth, trusting that this would maximize prosperity for all.
“What you measure affects what you do,” Mr. Stiglitz said Tuesday as he discussed the study before a gathering of journalists in New York. “If you don’t measure the right thing, you don’t do the right thing.”

According to the report, much of the world has long been ruled by an unhealthy fixation on swelling the gross domestic product, or the quantity of goods and services the economy produces. With a singular obsession on making G.D.P. bigger, many societies — not least, the United States — failed to factor in the social costs of joblessness and the public health impacts of environmental degradation. They allowed banks to borrow and bet unfathomable amounts of money, juicing the present by mortgaging the future, thus laying the ground for the worst financial crisis since the 1930s.

The report is more critique than prescription. It elucidates in general terms why leaning exclusively on growth as an economic philosophy may yield unhappiness, and it suggests that the incomes of typical people should be weighed more heavily than the gross production of whole societies. But it sidesteps the thorny details of slapping a cost on a ton of pollution or a waylaid career, leaving a great mass of policy choices for others to resolve.

Some Americans may reflexively reject the report and its recommendations, given its provenance: it was ordered up last year by President Nicolas Sarkozy of France, whose dissatisfaction with the available tools of economic assessment prompted him to create the Commission on the Measurement of Economic Performance and Social Progress. Tuesday’s briefing was held in an ornate room at the French consulate. The official French statistics agency is already working to adopt the report’s recommendations. Mr. Sarkozy plans to bring it with him to the G-20 summit meeting in Pittsburgh this week, where the leaders of major countries will discuss a range of policy issues.
But whatever one’s views on the merits of European economy policy, and wherever one sits on the ideological spectrum, these appear fitting days to re-examine how economists measure vital signs — particularly in the United States.

By most assessments, the American economy is now growing again, perhaps even vigorously. Many experts expect a 3 percent annualized rate of expansion from July through September. As a technical matter, the recession appears to be over. Yet the unemployment rate sits at 9.7 percent and will probably climb higher and remain elevated for many months. In millions of households still grappling with joblessness and the tyranny of bills, signs of health served up by the traditional economic indicators seem disconnected from daily life.

This was precisely the sort of contradiction Mr. Sarkozy sought to unravel when he created the commission, tasking it with pursuing alternate ways of measuring economic health.
To head the panel, he picked Mr. Stiglitz, a former World Bank chief economist whose best-selling books amount to an indictment of the Washington-led model of global economic integration. Mr. Sarkozy also selected Mr. Sen, a Harvard economist and an authority on poverty.

The resulting report amounts to a treatise on the inadequacy of G.D.P. growth as an indication of overall economic health. It cites the example of increased driving, which weighs in as a positive within the framework of economic growth, as it requires greater production of gasoline and cars, yet fails to account for the hours of leisure and work time squandered in traffic jams, and the environmental costs of pollutants unleashed on the atmosphere.
During the real estate bubble that preceded the financial crisis, the focus on economic growth helped encourage overbuilding and investment in real estate. Mr. Stiglitz argues that the single-minded focus on growth gave American policy makers a false sense of assurance that their policies were virtuous, as they allowed financial institutions to direct virtually unlimited sums of money into real estate and as consumer debt levels built with unrestrained momentum.

Credit enabled spending, and spending translated into faster growth — an outcome that was intrinsically good, and never mind how long it might last or the convulsions that would accompany the end of easy money.
A growth-oriented policy encouraged homeowners to borrow as if money need never be repaid, and industry to produce products as if the real cost of pollution were zero, Mr. Stiglitz added.
“We looked to G.D.P. as a measure of how well we were doing, and that doesn’t tell us whether it’s sustainable,” he said at the briefing. “Your measure of output is grossly distorted by the failure of our accounting system. What began as a measure of market performance has increasingly become a measure of social performance, and that’s wrong.”
Instead of centering assessments on the goods and services an economy produces, policy makers would do better to focus on the material well-being of typical people by measuring income and consumption, along with the availability of health care and education, the report concludes.

Many of these prescriptions will no doubt resonate with policy makers and ordinary people.
Indeed, the difficulty comes in turning these general principles into new means of measurement. The report notes that its authors concur on the big picture, but diverge on the methodologies to be employed when it comes to factoring in the value of a better education and cleaner skies. The old mode of measurement has taken a beating, and yet the new one, it seems, is still a work in progress.

Validation: a public option George Wallace in his heyday could love

Via Washington Post healthcare guru-pundit Ezra Klein, as reported in the Washington insider blog Politico, we see the possible compromise being bandied about in Congress of a “state's right” to opt out of the public option. This is a trial balloon being floated by Delaware Senator Tom Carper as an end run to break the public option blockage and give the Blue Dogs and the two sane Republicans the fig-leaf they need, while making the public option available to almost everyone -- indeed, probably in the end, to everyone.

Not to brag too much, and I neglected to enter it as a post on Scatablog, but I suggested the same thing a couple of weeks ago in a comment on another website. Nice to see my ideas reach into the U.S. Senate. It seems like a pretty good idea – allow opt-out by a referendum under state law -- and the reality is that no state in the end will opt out of simply having the option available. The voters will not give up that option. Meanwhile, I just think the politics of it -- hoisting them by their own petard -- is simply perfecto!

You want compromise?

OK, here's a compromise: let states opt out of letting the public option be made available to their residents. Disperse the battles. Limbaugh and Hannity can expend their energy trying to start and fan fires in Little Rock, Austin, Oklahoma City, Montgomery, Jackson, Atlanta, Columbia, Jackson, Baton Rouge, Lincoln and Salt Lake City.

Meanwhile, we in New York, Massachusetts, Connecticut, Vermont, New Hampshire, Maine, Rhode Island, New Jersey, Pennsylvania, Maryland, D.C., Virginia, Delaware, Ohio, Michigan, Wisconsin, Illinois, Iowa, Minnesota, Colorado, New Mexico, Nevada, California, Oregon, Washington and Hawaii will have the public option available to us. That's a decent-sized risk pool. Residents of the recalcitrant Red States can see the pop-up on the Exchange website, "Sorry, the Public Option is not available to residents of Mississippi, etc."

Of course, when the focus is on exactly what the public option is, the residents of the Red States are not going to support not even having the choice. The opposition will fizzle."

I suspect the present concept that the public option will really be available to only those who do not have coverage through an employer will remain in play. However, this does not seem objectionable in the real world (and may be necessary to close the deal) becausee employers will usually subsidize the premiums for plans they offer. It seems unlikely that the public option could be cheaper than subsidized workplace plans, so I doubt anyone covered through the workplace would prefer the public option anyway. Remember that all the bills establish minimum standards for all health insurance.