Sucks to Be American

Here it is almost three months later, and my "talking points" thing hasn't gotten off the ground. It's not like the Republican candidates for president care about logic or context or history or facts. Their supporters don't either. By the way, if all the participants in a debate agree on all the major points, is it really a debate? So let's take a detour to the real world. In Money Party news, there is a new irritant bubbling up from the underclass. I'm talking about the Occupy Wall Street movement, of course. The wealthy seem confused about how to handle them. There's no leader to attack. There are no talking points to trivialize. The attitude towards the poor, the near poor, the middle class--in fact, anyone who's not a millionaire--seems to be, "Let them eat cake or dirt as they wish, but I don't wish to hear their complaining." For the benefit of someone who doesn't have time to read all my earlier entries, the Money Party is my term for the top one tenth of one percent (one percent in OWS shorthand). These uber-rich have bought up all the influence on our federal government and most on the states. Under the banner of "government bad" they are ruining our schools, our infrastructure, and our regulatory system. With ownership of almost all the major media outlets, they are poisoning our public discourse. They are busily removing the last vestiges of democracy with unverifiable voting machines and voter restriction laws. Ordinary citizens in this country have ceased to matter except as profit generators. The only serious response to OWS from the Money Party, apart from having the police interrupt the protesters in their constitutionally protected protesting, seems to be a note from a futures trader in Chicago. The general tone of the note is threatening, but in an economic way--"you take away my job, I'll take both of yours." He points out that he works long long hours, which also illustrates his sociopathic pursuit of money. For some reason, though, he never explains why his job is so important. What is an important job? Take the oil industry. Someone looks for a possible oil deposit. Someone drills down to the pocket of oil and pumps it out. Someone refines the oil into gasoline. Someone sends it down a pipeline. Someone puts it in a truck. Someone drives the truck to a gas station. Other someones design and build the geological equipment, the oil rig, the refinery, the pipeline, the truck, the station, and all the other pieces and parts that keep the whole system going. All of those someones and pieces and parts make up the real economy. Our futures trader does nothing but move around virtual pieces of paper and associated piles of money. He does it so that the already wealthy people who buy and sell gasoline can have a slightly less volatile price at some point in the future. This kind of financial wheeling and dealing is not part of the real economy. Unfortunately, this bogus kind of wealth creation is now responsible for a larger portion of our gross national product than the real kind of wealth creation. It's important only because it makes the wealthy wealthier even faster. It's like a giant vacuum cleaner sucking all the money out of the country, leaving less and less for everyone else to use to keep the real economy going. If you want a simple answer, there it is. That's why America is in trouble, that's why people are angry, that's why there has to be an Occupy Wall Street.

Talking Points Destroyed: Unions

The Money Party's noise machine is burying the needle to get you numbed up for the next election. I'll be demolishing their talking points one at a time for the next few posts. First up, for Labor Day, unions. They're evil, of course, because they're corrupt. Well, corporations are corrupt, governments are corrupt, your local PTA is probably corrupt. Anyone with unchecked power becomes corrupt. Unions are different because they're supposed to be on your side. Have your ever tried to talk to your supervisor about unsafe working conditions? Probably not, because you know it's futile. You're outmatched before you even walk in the door. Who's on his side? The Chamber of Commerce. The Supreme Court. The Republican Party. Industry groups. The media. The stockholders. The list goes on and on and on. One way or another, the Money Party gives money to all of these groups. Who's on your side? Only you. You're on your own. There are supposed to be government agencies, such as OSHA, to help. Even talking to them can get you into trouble. Usually they don't get involved until someone gets hurt or killed. A company like, oh, British Petroleum, can push workplace safety to the back burner. The government agencies who are supposed to check up on oil rigs have their hands tied, with slashed budgets, congressional interference, and indifferent staff. The company itself pushes management to skimp on everything, including safety equipment, safety training, emergency manuals, and routine maintenance. If a situation has become obviously dangerous, employees are discouraged from complaining to their supervisors, the government, or the media. All these conditions come about because the company wants to make a few extra bucks, and they are deliberate. When an oil rig or a coal mine blows up and kills people, then, it's not entirely an accident. It's dangerous to work on an oil rig, or in a coal mine, or atop a skyscraper under construction. Some accidents are simply unavoidable, and people will die because of them. Some accidents are avoidable, but if you let management decide how much effort to put into avoiding them, they'll err on the side of profit, not safety. One reason the union is there is to protect you from avoidable accidents. Yes, that cuts into profits. The question here, though, isn't about whether employees will risk their lives. They do that every day. The question is about how much risk they're willing to take and about who decides on an acceptable level of risk. If you belong to a union, you have a seat at the table, and you can help make those decisions. If you don't belong to a union, you're on your own. You can take the risks your employer decides are acceptable, or you can look for another job. On the company's side, spending more on safety adds to the cost of drilling for oil or mining coal. The human cost of getting at those resources should be reflected in the total cost. If the cost of drilling a mile down in the Gulf of Mexico becomes prohibitive, then alternative energy sources become more attractive ... and that's exactly how free enterprise is supposed to work. Another reason for unions is to keep wages fair. If you ask your supervisor for a raise, you have no leverage, nothing to bargain with. As with safety, the deck is stacked against you, but with a union, you and your co-workers can negotiate as a group. You have a seat at the table. During the reign of the Money Party, we've seen productivity go up, which means profits have gone up. Wages, on the other hand, have stayed practically flat. I keep saying that the wealthy are greedy and short sighted. This is a prime example. Because they refuse to share their increased profits with their employees, the people who make those profits possible, they keep more money in the short run. At the same time, they tell their employees--in their own terms, economically--that there is no reason to work harder and increase productivity any further. Productivity levels off, profits level off, and they lose money in the long run. That doesn't sound complicated, does it? And yet it's a lesson they haven't learned in thirty years. What ya gonna do? Management and labor should be partners. Both are affected by decisions about the direction of the company. The employees in the trenches know how the industry works from the bottom up, while the officers see things from the top down. Putting those perspectives together can only help a company. Partners don't always agree, but they both want to advance their shared enterprise. By making the workplace safer and keeping wages in line with productivity, management and labor can both benefit in the long run, which also makes our country stronger.

Have a Cookie

Everyone's talking about the debt ceiling, as if this is somehow different from everything else government has done (or rather refused to do) lately.

They call Republicans the Party of No. In a two-party system, there is a place for conservatism, for a voice asking us to consider if we're going down the wrong track or moving too quickly. No doubt there are real conservatives out there. Today, however, we have a pack of spoiled children who are drowning out all the rational adult voices.

In a classic behavioral experiment, psychologists give children and adults a choice: they can have one cookie now or two later. Almost invariably the children take the single cookie, while the adults opt for two. They call the childish behavior "instant gratification" and the adult behavior "deferred gratification." Deferral is one of the bases of civilization. If you don't eat your whole crop during the year and set some aside, you can plant again next year. If you have extra money, you can loan it to someone who starts a new business, and later you may get your money back with interest. If everyone pays their fair share of taxes, the government will invest some of it in infrastructure and research, and later everyone benefits.

Today's Republicans appeal to the impulse for instant gratification. You should have your tax money now instead of waiting for it to bear fruit. You should run your business however you want now instead of coping with regulations. You should attack other cultures now instead of trying to learn about them or talk with them. We'll give you one cookie now if you'll sign over your interests in two future, and possibly imaginary, cookies.

They may not think that way, but they behave that way, and that's what counts. It's shameful, it's embarrassing for the grownups, but worst of all, it's helping to destroy our society and our country.

If it sounds like hyperbole, consider this. Since deservedly losing power in 2008, Congressional Republicans have accomplished nothing. Absolutely nothing. In the midst of the worst economy since the Depression, they've given up on their responsibilities to their constituents, to their country, and to their duly elected president. They behave like children who kick and scream because they don't get everything they want.

Republicans have managed to succeed at one thing: brainwashing. They've found a flaw in our democracy. To work properly, a democracy must have informed voters. For various reasons, though, Americans have mainly tuned out public matters. A good government is a boring government. A bad government gets certain people excited, and not in a good way. People make emotional decisions when they get excited, which is when they most need to make logical decisions.

So the Republicans tell the same lies as often and as loudly as they can. If they stir up greed, hatred, fear, anxiety, bigotry, if they make their opponents seem weak or indecisive, then they can always get certain segments of voters to the polls. It doesn't matter what we think we're voting for, just that we vote for them.

Here's something nobody talks about: why do Republicans want to get elected? They say government is the problem, so why become part of the problem? They say being an outsider is good, so why fight to become an insider? The truth should be obvious: they're lying. Their only goal is to gain power, and once they have it, to keep it. Once they have power, though, they don't know how to use it. They only know how to campaign. They become slaves of their wealthy contributors. The rhetoric and propaganda that got them into office make for lousy governance. Once the voters realize all that, they vote the Republicans out of office, and the cycle begins again.

That's where we are today, and that's where the real tragedy is. They never learn from their mistakes. Our country is facing problems that destroy livelihoods, families, institutions, even lives, and they do nothing but complain because they're not getting their way. The true work of a politician is to find workable compromises. These Republicans refuse to compromise. They have failed at their jobs and should resign.

Some call them zombies. Motivated by hunger, zombies have no conscience. Republicans have consciences, yet they choose to misinform, spread fear, block help for needy people, and funnel public money (your money) to those who already have too much. What they do is shameful. Even more shameful is that they get away with it so thoroughly. Apparently, though, shame in Washington became unfashionable after Joseph Welch called out Joseph McCarthy.

When children misbehave, they lie to hide it, and when they get caught, they lie to cover it up. The only difference here is that politicians are better liars. We the people need to be the adults and take back our country.

It's Not Really a Market, and It's Not Really Free

Nobody in the media talks about the basics of health care insurance. Of course, if you know the basics of economics, you have to start asking some difficult questions, and the media don't like difficult questions.

At the heart of economics is the transaction. You have a buyer, a seller, a product or service, and a medium of exchange. The seller gives the buyer an item or does something that benefits the buyer; in return, the buyer gives the seller money. The seller wants to charge as much as possible, but he knows the buyer can go to other sellers, who may have lower prices. The buyer also knows that there are other sellers, so he attempts to find the lowest price among them.

Almost too simple, right? But you can't even fit insurance into this model. How much does a policy cost? It depends on your age, your medical history, and other variables that they won't disclose. Once you have a quote, what are you buying? You don't really know, because they can rewrite the policy or drop it at any time, for any reason or for no reason. Once you have a policy, what is it worth? When (not if) you get sick, you don't know what they'll cover and what they won't, because they'll do anything to avoid paying a dime to the people who treat you. How does one policy compare to another, so that you know you've made a good deal? Well, you can't be sure of the cost, or the value, or even if you'll have a policy when you need it, so you'll never know if you got the best price. You can't make an informed decision about your purchase when you don't really have any information.

It gets worse. When you have health insurance, what exactly do you have? Nothing but a promise that, when you need medical care, someone else will pay the bills. Insurance is not a product or service in itself. The medical care you receive is a service, but you don't have the option of shopping for it, and you never really know what you paid for it. Insurance companies routinely force medical providers to take a lower fee for the promise of getting more customers. In another industry that would be called a kickback.

It gets worse. You've heard horror stories about people losing coverage, so there's no need to go into that here. If it happens to you, what do you do about it? In the classic transaction, if the buyer is cheated, he knows not to buy from the same seller again, and he will tell all his friends about the bad seller. The seller knows, even if he makes a short-term profit from cheating someone, his bad reputation will mean a long-term loss. If the insurer cheats you, though, where can you go? When your employer provides your coverage, you have no choice. It would be nice if your employer gave you some money and let you pick the insurer, but in some states that's illegal.

Suppose you could go to another company? Well, in most states, you only have one other major player. In 39 states, two insurers control more than half the action, and in Hawai'i the top two control 98 percent! You see plenty of ads for car insurance; you don't see many ads for health insurance because there's no point. In another industry that would be called monopolizing the market. The insurance companies write their own rules, though, so it's not only legal, it's mandatory.

Can it get any worse? Oh yes. We all know that the price of insurance is increasing much faster than inflation. Where does that money go? Before HMOs, and even as recently as 1995, about 96 cents of every premium dollar went to medical expenses. That's what you pay the premiums for, right? Today that number is closer to 80 cents. The difference goes, not into profits for the insurance companies, but into overhead and reserves. Insurers, as a matter of course, refuse to pay benefits. You have to dig up papers, fill out forms, make phone calls, all to get something you've already paid for and were promised you would get. They're wasting resources, you're wasting resources, and we're all paying for it. We pay twice as much for health care as civilized countries, and that's one big reason.

Another reason we pay more is because government tilts everything in their favor. Congress tried to pass a law requiring them to pay out a minimum percentage of premiums. They made sure it died.

The other expense is reserves, that is, money put aside to pay future claims. But insurance companies literally have so much money they don't know what to do with it.

There are two bottom lines. Economically, if you consider your health as an asset, you have to pay to maintain it, just as you would a car or a house. Here is the root of the problem: the term "health insurance" doesn't make sense. You buy insurance, not to maintain an asset, but to replace it. You can't replace your health. If you can't afford to maintain your house, then eventually it collapses, and you're left with nothing. If you can't afford decent health care, if you can't maintain your health, it will collapse.

Here's the other bottom line. If America considers itself religious at all, if we believe that human life is important at all, then we have a moral imperative to make health care available for everyone. Jesus didn't tell people to work harder and buy things, he healed them. People who support the current system either refuse to see how broken it is, or believe in an amoral capitalist system, or blindly follow demagogues who are profiting from disease and death.

Health insurance as we know it is inefficient, unfair, opaque to consumers, and basically a criminal enterprise. There is no free market.

What ya gonna do? The whole point of insurance is to pool the risk. A small but predictable fraction of people will need huge amounts of resources to deal with serious illnesses. A small fraction will need next to nothing. Everyone else will need occasional treatment and checkups. If everyone pays into the same pool, the payments are as small as they can get, and the risk is minimized. That is known as the single-payer system, but it was never seriously considered when they "reformed" the system in 2009-10.

Consequences

One of the major themes of this blog (if not the major theme) is that the wealthy control America, not the right or the left. On top of that, they're doing a pretty lousy job of running things. Their basic problem, I believe, is immaturity.

As parents, we have an impulse to shield our children from the unpleasant truths of life, for instance, that actions have consequences. Suppose you see your son spit chewing gum on the ground. A trivial thing, really, but what they call a "teachable moment:" you can take your son aside and explain why littering is wrong. It makes the area look bad; someone could step on the gum; a dog might eat it and get sick; and so on. Most of all, it gives you a chance to counteract the child's natural tendancy, which is to be lazy, sloppy, inconsiderate, and self-centered. Bad habits, like trash, tend to accumulate.

Suppose it's a few years later, and your son leaves his dirty clothes on the floor. Another teachable moment. There is a hygiene issue; taking a few seconds and using a hamper is not a hardship; someone eventually has to pick them up and wash them. You could even make him responsible for his own laundry. Suppose, though, that you let it slide. You now reinforce, not counteract, his childish tendencies. He does what he wants without consequence, knowing that you will take care of any messes he creates.

Suppose it's a few more years later. Your son has discovered cars, sex, drugs. A teachable moment at this point could involve a night in jail, and you don't want to do that to your little snowflake.

And now he's a trader on Wall Street. He's still lazy, making a living by moving around other people's money. He's still sloppy, using financial instruments he doesn't understand. He's still inconsiderate, not caring what could happen to others, to the economy. He's still self-centered, focusing only on his bonus. He's surrounded by people just like him, all reinforcing each other's behavior. When the economy crashes, it's not his fault, because nothing is ever his fault, he never learned that actions have consequences.

And you still have to clean up his mess. You can't possibly save his bank with your own money, so you go to the government and blackmail or bribe them into using public money.


Take a step back. Now you're a taxpayer again. You have to pay, with your taxes, even with your job, to clean up a spoiled child's mess. It's not just unfair, it should be a crime. Actions have consequences.

The wealthy, though, can make consequences go away. We all know there are two sets of laws in this country, one for them, one for the rest of us. They can commit crimes and force others to suffer the punishment. Make no mistake, someone always suffers.

Don't believe me? Look at our infrastructure. In the 1950s the federal government invested in the future by building a system of wide, uninterrupted, public roads: the Interstate system. At the time they knew that the materials they used wouldn't last more than 50 years. The clock is ticking. Like any other roads, Interstates need basic maintenance. To do all these repairs, refurbishments, and replacements would take manpower, thus providing jobs for the foreseeable future.

In the 1980s federal spending became unpopular. Other industrialized nations spend about 10% of the national budget on their roads; our share has drooped to 2%. The roads are in bad shape, and they will get worse. If we start work immediately, they will get even worse, but then they will get better. If we wait too long, they will become almost useless. Without the Interstates, trucks will have to divert to state roads, which are also poorly maintained. Goods will take longer to get to market--including basic goods like food, gasoline, clothing--and they will be more expensive. Travel will become more dangerous. Bridges will collapse, like the I-35 bridge in Minneapolis in 2007. And it will get worse before it gets better.


That's not quite what you expect if you believe in less government spending, is it? But actions have consequences. Less spending on infrastructure means less infrastructure. It's that simple.

The wealthy want you to believe in less government spending. That means they pay less in taxes. As a bonus, the government, starved of funds, can't regulate business properly--even more profit. They win, we suffer the consequences.