Tag Archives: America

Finally, the Perfect Healthcare System!

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Breaking news from Washington:

House of Representatives Republican leaders ripped the Affordable Care Act, known as Obamacare, and Majority Whip Kevin McCarthy, R-Calif., urged a “patient-driven health care system, not a government-driven health care system.”

So, House Speaker John Boehner, R-Ohio, was asked at a news conference, what does that mean?

“Well,” he said, “When you look at “Obamacare,” what you see is a government-centered health care delivery system. That’s not what the American people want.

“The American people want to be able to pick their own type of health insurance; they want to be able to pick their own doctor; they want to be able to pick their own hospital. That’s what a patient-centered health care system looks like.”

Asked if that was likely to come to a vote next year, Boehner said, “We’ll see.”

Finally, no more in-network-out-of-network! No more we-don’t-accept-Blue-Cross-Medicare-or-Medicaid! No more United-Healthcare-is-no-longer-offered-by-your-company! No more if-I-get-this-job-I’ll-get-health-insurance! No more reasonable-and-customary-charges!

The American people will be able to choose whatever doctor they want and any kind of health care insurance they want. It won’t matter if you’re homeless, you’ll be able to go to the best doctors on Park Avenue. If you stock shelves at Walmart, you’ll be able to get high-quality care at the Mayo Clinic. If your company offers health insurance plans A, B and C, you’ll be able to choose D.

It won’t make any difference to anyone how much doctors, hospitals or insurance companies charge, because the Republicans now have a plan, the ideal plan that nobody else had the courage or insight to propose. In retrospect, however, it’s clearly the only way to guarantee everyone’s right to whatever health care they want without interfering with the free market: 

Every American citizen will have an unlimited supply of money to spend on healthcare! It’s the MONEY IS NO OBJECT plan! (MINO, for short.)

It’s the perfect “conservative” free-market solution, since everything for sale in the healthcare marketplace will be as good as free for consumers, while providers will retain the right to make as much money as possible.

(Note: Aside from replacing the words “government-centered” with “patient-centered”, details of the plan are, to be polite, “sketchy”.)

Meanwhile, here on Earth, there is an informative article in a recent New York Review of Books called “Obamacare: How It Should Be Fixed”. It’s by Arnold Relman, Professor Emeritus at Harvard Medical School. Unfortunately, you have to pay to read the whole thing (after MINO is in effect, we’ll all be able to afford it). But Dr. Relman concludes that our best hope of getting a high-quality, affordable health care system would be a single-payer system built on Accountable Care Organizations, i.e. private medical groups that would be paid by the government, not for every service performed, but for their patients’ overall care:

The only type of ACO [Affordable Care Organization] that has been proven to satisfy patients and physicians is multispecialty group practice. According to the American Medical Group Association, there are now well over 430 such group practices and their number is increasing rapidly as more physicians seek group employment….

Data from the Medical Group Management Association indicate that average staff earnings in groups are fully competitive with earnings in solo or small partnership practice, particularly if the generous fringe benefits that groups usually offer are also considered (for example, office expenses, malpractice insurance, paid vacation, pension plans). And judging from their low turnover rate, physicians who choose employment in successful, well-managed groups are usually satisfied with their job.

However, only a few medical groups currently avoid the inflationary incentives of fee-for-service by contracting with insurance plans that pay them on a per capita basis for comprehensive care of some or all of their patients; and even fewer pay their medical staff by salary….

… I have described in detail how a single-payer system sponsored by the federal government would function when coupled with a reorganized medical care system based on independent multispecialty group practices with salaried physicians. Replacement of all public and private insurance and elimination of itemized bills with a public tax-funded system that simply paid medical groups per capita for comprehensive care would avoid much of the expense and many of the other problems with the current system. The enormous savings could ensure adequate compensation for all the facilities and physicians needed for universal care.

The loss of jobs in the eliminated private insurance industry would probably be more than compensated by increased employment in a greatly expanded public-payer system, and by the new jobs created by the emerging business opportunities created when employers no longer need to pay the health costs of their employees. Government would be able to contain the rise in total health expenditures by its power to set prices and determine the level of taxation required to fund the system, but it need not micromanage medical care. Medical decisions should remain in the hands of physicians and their patients, where they belong.

Most important, this revolution in our health care system would make universal access to good care affordable. It is a revolution that seems inevitable, even though it is not yet on the political horizon.

I’d say it’s far, far beyond the horizon, but at least it’s on planet Earth. Meanwhile, we’ve got the ACA, which is significantly better than what we’ve had.

End Poverty and Bring Back the 90% Income Tax!

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If you’re feeling too optimistic about the future and want a bracing jolt of economic reality, you might want to read Paul Krugman’s latest column. It’s called “A Permanent Slump?“

Professor Krugman considers the possibility that the normal state of our economy is now mild depression (what psychiatrists call “chronic dysthymia” in another context). He describes it as “a persistent state in which a depressed economy is the norm, with episodes of full employment few and far between”.

Krugman points out that the economy hasn’t done especially well for most people in recent decades, even when we were in the midst of a housing bubble and consumers were taking on increasing amounts of debt. By now, the economy should have recovered nicely from the financial crisis of 2007-2009, but it hasn’t. As he puts it:

The evidence suggests that we have become an economy whose normal state is one of mild depression, whose brief episodes of prosperity occur only thanks to bubbles and unsustainable borrowing.

I went out to rake leaves after reading this. It was a beautiful fall day, very conducive to deep thoughts about politics and the economy. After ruling out the violent overthrow of the government, I concluded that there are a couple of things we need to do.

1) Establish a guaranteed minimum income, like Switzerland is considering. If too many people can’t find a decent job in this country, let’s at least make sure the worst off have a reasonable amount of money to live on. Maybe we don’t need as many people working as we used to, back before the “Information Revolution” and the “Global Economy”. Danny Vinik of the Business Insider makes a strong case here. He argues, for example, that most people would still want to work. I think one important result would be that the economy as a whole would benefit if people with low incomes had more money to spread around.

2) Bring back the progressive income tax, like we used to have when this country worked well for the majority of people. As recently as 1963, the highest tax rate was 90%. Of course, that doesn’t mean that someone making a million dollars a year (who made that kind of money back then?) had to pay $900,000 in federal taxes. The 90% rate applied to income above a certain threshold. As recently as 1980, the highest rate was 70%. Now, after the “Reagan Revolution”, it’s 35%. We’re still waiting for the wealth to trickle down. It might be the case that lots of billionaires and multi-millionaires would move to the Bahamas. (Good riddance.) But it would allow us to move away from being a “Winner Take All Society“.

Who Would Ever Use Food Stamps?

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Funding for food stamps (the Supplemental Nutritional Assistance Program) was increased a few years ago as part of the federal stimulus package. Unlike temporary tax cuts and business subsidies, which tend to last forever, the temporary increase in SNAP funding ended November 1st. 

The average monthly benefit per household two years ago was $293. Now it will be about $278, down 5%.There is an article here with more information, including an interactive map that allows you to see the numbers for your state. In Arizona, for example, 1.1 million people are covered by SNAP, including 538,000 children. 

It’s easy to demonize people you don’t know. Who are these slackers and scam artists who use food stamps anyway?

Sometimes they’re people you know or even people just like you. One of them writes:

People tend to think of food stamp recipients as poor, unfortunate, lazy, things along those lines. Be aware that recipients are also people trying to better themselves, simply needing some assistance to do so. Case in point: There was a time in the past when I was studying towards a graduate degree on a scholarship. The scholarship wasn’t nearly enough to live on. I did odd jobs for faculty to earn some money to help with my cash flow situation, but I also qualified for food stamps. With my level of income, I was eligible to be subsidized at 50%. That is, I could buy $1 of food stamps for 50 cents, up to a certain total amount of stamps every week, essentially doubling the amount of food I could buy and allowing me to devote more time studying towards a degree.

At the food stamp office, there were some other younger folks like myself, but most people were clearly much more desperate: people weak and elderly, women tending to babies and young children, disabled people. Standing on line waiting your turn, you could hear the transactions at the counter ahead of you, and could hear that many of these people were subsidized at 100%. I can guarantee you it has never occurred to me they should not have received this assistance. Today, to hear people say that citizens in need should be denied this kind of support, which simply enables them to buy enough food, well, I can’t decide if it makes me sad, angry, disgusted, depressed or all of those things.

It’s all of those things.

Rentiers vs. Democracy

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The American political system is caught in a vicious circle (or cycle, or whatever you want to call it). The rich influence politicians, who then make it easier for the rich to influence politicians.

Economists call this process “rent-seeking”:

When a company, organization or individual uses their resources to obtain an economic gain from others without reciprocating any benefits back to society through wealth creation. An example … is when a company lobbies the government for loan subsidies, grants or tariff protection. These activities don’t create any benefit for society; they just redistribute resources from the taxpayers to the special-interest group. (Investopedia)

Joseph Stiglitz explains the effect of rent-seeking on inequality in an article about food stamps (being cut) and farm subsidies (not being cut):

As small numbers of Americans have grown extremely wealthy, their political power has also ballooned to a disproportionate size. Small, powerful interests — in this case, wealthy commercial farmers — help create market-skewing public policies that benefit only themselves, appropriating a larger slice of the nation’s economic pie. Their larger slice means everyone else gets a smaller one — the pie doesn’t get any bigger — though the rent-seekers are usually adept at taking little enough from individual Americans that they are hardly aware of the loss. While the money that they’ve picked from each individual American’s pocket is small, the aggregate is huge for the rent-seeker. And this in turn deepens inequality.

Economic rent-seekers are also known as “rentiers”, which can be confusing at first since “rentier” looks like “renter”. Rentiers, however, often own their own homes (in a nice neighborhood).

“Rentier” is an apt term, since it sounds classy (being French) and there is a rentier class. Earlier this year, Michael Lind wrote an interesting series of articles about America’s rentier class and what the rest of us should do about them: “Private Sector Parasites”, “How Rich Moochers Hurt America” and “Defeating Useless Rich People”. The titles are a little misleading, because not all rentiers are rich. Labor unions, for example, behave as rentiers if they use their position to extract unnecessarily high “rent” from the rest of society. But the rich rentiers are the ones wreaking havoc these days.

Lind points out that we need to distinguish between two different ways of making money:

Unfortunately, with the exception of some leftist and liberal economic thinkers who distinguish “rentier capitalism” or “financial capitalism” from “industrial capitalism,” conventional political discourse doesn’t distinguish between profit-earning “makers” and rent-extracting “takers.” Many progressives and populists indiscriminately denounce “big business” and “the corporations” as though a productive consumer electronics manufacturer were no different than a company that monopolizes the tolls from privatized municipal parking meters. At the same time, the center-left, whose upscale supporters tend to be credentialed upper-middle-class professionals, tend to ignore the antisocial aspects of the rent-extracting schemes of the professional guilds — medicine, law and the professoriate — as well as of their elite accomplices, the credential-granting universities.

On the right, the greatest triumph of the rentier interests has been to redefine “capitalist” to mean, not productive entrepreneur or successful industrial company executive, but “anybody who makes money” — a category that includes not only investors in productive enterprises but also rentiers and a third category of speculators in unproductive assets (Picasso paintings and Persian rugs, as opposed to machine tool factories). In today’s rentier-friendly conservative ideology, somebody who makes payday loans at usurious interest rates, gouges businesses with high insurance rates, or gets paid tolls from a privatized toll road is as much a “maker” and an “entrepreneur” and a “capitalist” as someone who puts together a team of inventors, engineers, workers and investors to apply [new technology].

It can be tricky, of course, to distinguish between producers and rent-seekers. Wealthy farmers provide an obvious service when they grow food that people need, but act as rentiers when they convince politicians to increase unnecessary food subsidies.

Lind argues for a variety of policies that would limit rent-seeking and foster productive economic activity, such as converting banks into low-profit, publicly-regulated utilities; making extraordinarily high interest rates illegal again; removing impediments to lower-cost health care; and increasing taxes on certain kinds of capital gains.

However, although he mentions campaign contributions in these three articles, Lind doesn’t emphasize how crucial it is to reduce the role of money in politics. Money, after all, is the principal resource small groups can use to get special treatment from politicians, because in our system of government anyone who wants to become a politician or remain one need lots of money.

But candidates and elected officials should not have to spend much of their time begging people for money to pay for their political campaigns. Voters should not be subjected to insane amounts of inane but expensive political advertisements. There should be greater restrictions on professional lobbyists. It shouldn’t be possible to leave Congress or a government agency and immediately take a high-paying job in the industry over which you had jurisdiction. Until our government isn’t for sale, it’s going to be extremely difficult to stop the vicious cycle (or circle) we’re in. We need to make it less appealing to be a rentier.

Whatever You Do, Please Don’t Watch This Movie

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It was Friday night and I was open to some mindless cinematic entertainment. That’s my excuse. But having wasted almost two hours of my life watching Olympus Has Fallen, the only thing I can do to partly redeem myself is to warn anyone who might be open to some mindless entertainment not to make the same mistake I did.

If only my curiosity about how they would end this thing hadn’t gotten the best of me.

The premise is that a bunch of well-armed, oddly-motivated Koreans take over the White House with the help of an ex-Secret Service agent who has “lost his way” (that’s an understatement). Their goal is to somehow reunite North and South Korea while destroying the United States. Lots of people are killed in the attack. Furthermore, the President, the Secretary of Defense and the Chairman of the Joint Chiefs of Staff – the three people who know the passwords that will blow up all of America’s nuclear missiles – happen to be at the White House and end up as hostages in the presidential bunker. There’s only one intrepid Secret Service agent left standing. Not only does he kill every bad guy he meets, he rescues the President and the President’s son, after which he stops the countdown to nuclear catastrophe with only seconds to spare.

It’s stupid, exceedingly violent, poorly-written and cliche-ridden, but it’s only a big-budget action movie. What bothered me was the idea that some people’s lives and suffering are much more important than everyone else’s. The President gives up secret codes, jeopardizing the whole country, in order to protect two people. The Speaker of the House (the Vice President is a hostage too) orders the Army and Navy to withdraw from South Korea, accepting the idea that he’s probably starting a war, in order to save the President’s life. Bodies are strewn all around the White House and the District of Columbia, but the President and his Secret Service pal crack jokes as they walk outside. The brain trust in the Pentagon’s command center is so happy when the President is rescued that they all stand and applaud, despite the fact that they’ve presided over the worst breach of security in the nation’s history, during which scores of innocent people were maimed and killed and the lives of millions of others were unnecessarily put at risk.

Really, if you’re a senior official who’s taken hostage, consider yourself expendable. You can be replaced.

By the way, Netflix claims that 900,000 people have given this epic an average rating of 4.2 out of 5, meaning the average viewer really liked it. Some people loved it. From the comments, some people even took it seriously. I’d tell you to judge for yourself, but that would be wrong.