Mortgage Meltdown Recovery: Economics, Waste, Imbalance, and Unbalanced Economists

ECONOMICS: How Economists downplay substitution on the supply side, and discount American Innovation, American Ingenuity and American Temerity. Bad policy from flawed measurements. Flawed Measurements from biased, agenda-based ideology.

“The central problem confronting the new President is not the political issues of conflicting ideology nor the “choices” presented by well-intentioned economists; the real issue is leadership in seeing what economists call “waste” and imbalance” as opportunity.”

Empty steel and auto-making plants have an unequalled opportunity of leveraging an existing infrastructure to manufacture wind generators, new concept products and most importantly cars that are far ahead of the curve and exactly what consumers want.

Phoenix Motors Cars and other new entrants into the race for longer range high speed all-electric vehicles that can be recharged in minutes on the road, or with a few solar panels during the day at home have taken the ultimate risk and ultimate plunge and are doing very well in their development stage vehicles.

Too much wheat? Create incentives to find other uses. Of course we can help feed the world, but there are hundreds of other uses to produce energy, manufacture goods, create new products for building materials and dozens of possibilities that are probably lingering in the heads of some farmers right now. Those expensive subsidies could be turning a profit for government and farmers and provide an opportunity for small farmers to make money no matter how much surplus wheat is grown.

Subsidies: Whether it is for individuals going through rough times, businesses going through rough times, businesses being incentivized, there is an important element of risk that is being reduced for the recipients. This reduction of risk is worth a great deal of “value” to the recipients. What are they paying for it? If it is individual there are all kinds of community service that can be worked into almost anyone’s schedule. If it is a business, this value can be passed on to consumers in reduced prices or greater benefits. The point here is not to prescribe specific methods of payments but only to say that ANYONE who gets a benefit from the government should be paying for it through taxes, giving back to the community or providing financial or non-financial benefits to the marketplace and society. 

That corn is being diverted to production of ethanol is a political pandering of the worst sort. What politicians and economists have both missed completely is not just that there are much better energy efficient alternative products from which to refine ethanol (cane sugar, cellulose, wheat etc) but that since we are able to produce so much corn, we can lower its price, keep the farmers happy and substitute uses such that farmers are making a good rate of return on VOLUME.  This brings down food costs which increase the opportunities for consumers to pay their bills, save money and thus provide the capital that is currently being “borrowed” from other countries by issuance of increasingly worthless American paper, once called money.

Economists fail to recognize on the supply side that certain substitutions will routinely provide segments or tranches of demand for products wherein the exchange value might be low but the use value may be high. Taken collectively, this represents opportunity for even the smallest farmers and manufacturers.

Corn is a bastardized example of this process and a poor model, mostly because business schools, media and modern economists are not teaching substitution as a general application. They teach substitution only on the demand side where the inventiveness of the American consumer to adapt to changing quality and prices is assumed but the ingenuity and inventiveness of the American producer is dismissed.

Too much interest expense? This curse dating back to the early 1970’s has robbed the country and its citizens of much needed capital for savings, investment and consumption of goods and services that drive our economy. Government’s complicity in making legal (usurious rates and fees) what was always illegal and even criminal needs reversal.

Current plans to reduce mortgage payments and mortgage interest to the teaser rates that were forced down the throats of unsuspecting borrowers using the money from unsuspecting investors, reducing credit card interest and fees, banning payday loans that roll over into 450% loans etc.,. are all steps in the right direction of redirecting capital to where it needs to go without robbing the capitalists from receiving a fair return.

Reasonable minds may differ but they can come to agreement on a fair rate of return which maintains financial market liqudiidty without windfall profits to credit card issuers, payday lenders, oil companies, health-care, health insurance and drug companies.

These are the things that central bankers and investors around the world are watching and waiting for and it is only through aggressive innovation, which requires aggressive, innovative education techniques, that good old American ingenuity will once again save the day and the dollar.

Democracy Inaction: Bill Moyers Speaks the Truth

EXPLAINING MORTGAGE MELTDOWN, IRAQ AND INEQUALITY OF WEALTH AND OPPORTUNITY

The truth we don’t want to hear is the same truth we shout down as unpatriotic. It is the essence of patriotism and good journalism to speak the truth and to back it up with solid facts that are congruent with the reality we experience in our daily lives. This piece by Moyers is the one of his best, and worth reading and re-reading.

Moyers: ‘Democracy in America Is a Series of Narrow Escapes, and We May Be Running Out of Luck’

By Bill Moyers, Doubleday
Posted on May 17, 2008, Printed on May 18, 2008
http://www.alternet.org/story/85521/

The following is an excerpt from Bill Moyers’ new book, “Moyers on Democracy” (Doubleday, 2008).

Democracy in America is a series of narrow escapes, and we may be running out of luck. The reigning presumption about the American experience, as the historian Lawrence Goodwyn has written, is grounded in the idea of progress, the conviction that the present is “better” than the past and the future will bring even more improvement. For all of its shortcomings, we keep telling ourselves, “The system works.”

Now all bets are off. We have fallen under the spell of money, faction, and fear, and the great American experience in creating a different future together has been subjugated to individual cunning in the pursuit of wealth and power -and to the claims of empire, with its ravenous demands and stuporous distractions. A sense of political impotence pervades the country — a mass resignation defined by Goodwyn as “believing the dogma of ‘democracy’ on a superficial public level but not believing it privately.” We hold elections, knowing they are unlikely to bring the corporate state under popular control. There is considerable vigor at local levels, but it has not been translated into new vistas of social possibility or the political will to address our most intractable challenges. Hope no longer seems the operative dynamic of America, and without hope we lose the talent and drive to cooperate in the shaping of our destiny.

The earth we share as our common gift, to be passed on in good condition to our children’s children, is being despoiled. Private wealth is growing as public needs increase apace. Our Constitution is perilously close to being consigned to the valley of the shadow of death, betrayed by a powerful cabal of secrecy-obsessed authoritarians. Terms like “liberty” and “individual freedom” invoked by generations of Americans who battled to widen the 1787 promise to “promote the general welfare” have been perverted to create a government primarily dedicated to the welfare of the state and the political class that runs it. Yes, Virginia, there is a class war and ordinary people are losing it. It isn’t necessary to be a Jeremiah crying aloud to a sinful Jerusalem that the Lord is about to afflict them for their sins of idolatry, or Cassandra, making a nuisance of herself as she wanders around King Priam’s palace grounds wailing “The Greeks are coming.” Or Socrates, the gadfly, stinging the rump of power with jabs of truth. Or even Paul Revere, if horses were still in fashion. You need only be a reporter with your eyes open to see what’s happening to our democracy. I have been lucky enough to spend my adult life as a journalist, acquiring a priceless education in the ways of the world, actually getting paid to practice one of my craft’s essential imperatives: connect the dots.

The conclusion that we are in trouble is unavoidable. I report the assault on nature evidenced in coal mining that tears the tops off mountains and dumps them into rivers, sacrificing the health and lives of those in the river valleys to short-term profit, and I see a link between that process and the stock-market frenzy which scorns long-term investments — genuine savings — in favor of quick turnovers and speculative bubbles whose inevitable bursting leaves insiders with stuffed pockets and millions of small stockholders, pensioners, and employees out of work, out of luck, and out of hope.

And then I see a connection between those disasters and the repeal of sixty-year-old banking and securities regulations designed during the Great Depression to prevent exactly that kind of human and economic damage. Who pushed for the removal of that firewall? An administration and Congress who are the political marionettes of the speculators, and who are well rewarded for their efforts with indispensable campaign contributions. Even honorable opponents of the practice get trapped in the web of an electoral system that effectively limits competition to those who can afford to spend millions in their run for office. Like it or not, candidates know that the largesse on which their political futures depend will last only as long as their votes are satisfactory to the sleek “bundlers” who turn the spigots of cash on and off.

The property qualifications for federal office that the framers of the Constitution expressly chose to exclude for demonstrating an unseemly “veneration for wealth” are now de facto in force and higher than the Founding Fathers could have imagined. “Money rules Our laws are the output of a system which clothes rascals in robes and honesty in rags. The parties lie to us and the political speakers mislead us.” Those words were spoken by Populist orator Mary Elizabeth Lease during the prairie revolt that swept the Great Plains slightly more than 120 years after the Constitution was signed. They are true today, and that too, spells trouble.

Then I draw a line to the statistics that show real wages lagging behind prices, the compensation of corporate barons soaring to heights unequaled anywhere among industrialized democracies, the relentless cheeseparing of federal funds devoted to public schools, to retraining for workers whose jobs have been exported, and to programs of food assistance and health care for poor children, all of which snatch away the ladder by which Americans with scant means but willing hands and hearts could work and save their way upward to middle-class independence. And I connect those numbers to our triumphant reactionaries’ campaigns against labor unions and higher minimum wages, and to their success in reframing the tax codes so as to strip them of their progressive character, laying the burdens of Atlas on a shrinking middle class awash in credit card debt as wage earners struggle to keep up with rising costs for health care, for college tuitions, for affordable housing — while huge inheritances go untouched, tax shelters abroad are legalized, rates on capital gains are slashed, and the rich get richer and with each increase in their wealth are able to buy themselves more influence over those who make and those who carry out the laws.

Edward R. Murrow told his generation of journalists: “No one can eliminate prejudices — just recognize them.” Here is my bias: extremes of wealth and poverty cannot be reconciled with a genuinely democratic politics. When the state becomes the guardian of power and privilege to the neglect of justice for the people as a whole, it mocks the very concept of government as proclaimed in the preamble to our Constitution; mocks Lincoln’s sacred belief in “government of the people, by the people, and for the people”; mocks the democratic notion of government as “a voluntary union for the common good” embodied in the great wave of reform that produced the Progressive Era and the two Roosevelts. In contrast, the philosophy popularized in the last quarter century that “freedom” simply means freedom to choose among competing brands of consumer goods, that taxes are an unfair theft from the pockets of the successful to reward the incompetent, and that the market will meet all human needs while government itself becomes the enabler of privilege — the philosophy of an earlier social Darwinism and laissez-faire capitalism dressed in new togs — is as subversive as Benedict Arnold’s betrayal of the Revolution he had once served. Again, Mary Lease: “The great evils which are cursing American society and undermining the foundations of the republic flow not from the legitimate operation of the great human government which our fathers gave us, but they come from tramping its plain provisions underfoot.”

Our democracy has prospered most when it was firmly anchored in the idea that “We the People” — not just a favored few — would identify and remedy common distempers and dilemmas and win the gamble our forebears undertook when they espoused the radical idea that people could govern themselves wisely. Whatever and whoever tries to supplant that with notions of a wholly privatized society of competitive consumers undermines a country that, as Gordon S. Wood puts it in his landmark book The Radicalism of the American Revolution, discovered its greatness “by creating a prosperous free society belonging to obscure people with their workaday concerns and their pecuniary pursuits of happiness” — a democracy that changed the lives of “hitherto neglected and despised masses of common laboring people.”

I wish I could say that journalists in general are showing the same interest in uncovering the dangerous linkages thwarting this democracy. It is not for lack of honest and courageous individuals who would risk their careers to speak truth to power — a modest risk compared to those of some journalists in authoritarian countries who have been jailed or murdered for the identical “crime.” But our journalists are not in control of the instruments they play. As conglomerates swallow up newspapers, magazines, publishing houses, and networks, and profit rather than product becomes the focus of corporate effort, news organizations — particularly in television — are folded into entertainment divisions. The “news hole” in the print media shrinks to make room for advertisements, and stories needed by informed citizens working together are pulled in favor of the latest celebrity scandals because the media moguls have decided that uncovering the inner workings of public and private power is boring and will drive viewers and readers away to greener pastures of pabulum. Good reporters and editors confront walls of resistance in trying to place serious and informative reports over which they have long labored. Media owners who should be sounding the trumpets of alarm on the battlements of democracy instead blow popular ditties through tin horns, undercutting the basis for their existence and their First Amendment rights.

Bill Moyers is the author of “Moyers on Democracy” (Doubleday, 2008) and the host of the PBS show, Bill Moyers Journal.

Healthcare: Oxygen Price Gouging (Is anyone outraged YET?)

If nothing else this story demonstrates the literal death grip at the throats of you and your relatives. If you or someone you know uses oxygen, they do so to stay alive. But the decision on what to offer, how to offer it, and how much it will cost is left in the hands of small and large “entrepreneuers” who are charging, like the Pharmaceutical companies on Medicare Part D, whatever they want depending upon how much they lost at the casino last night or some other irrelveant issue. 

Many of these people who need oxygen (remember, we are talking just breathing here) are on fixed income and are getting bills that are mounting as co-pays, deductibles and payments allowances spin out of control. That is the result of having an insurance mentality inserted in between the person who needs medical attention and the people who provide it. Insurance companies provide NOTHING to the system of value.

They have increased the cost of medical care, prices of drugs, products and services to heights far beyond any other modern nation. A trillion dollars or more is available to the U.S. economy if we dissasociate ourselves from the insurance middleman. And the lives of millions of patients, and millions more as the baby boomers get older depend upon fundamental reform of this system. 

Companies like Praxair, Apria and dozens of other medical supply stores act as middlemen in delivering lquid oxygen to immobile patients at home charging around 12 times the cost of doing so. That is the result of allowing the “free market” to operate without a government referree. It is inevitable. A one-payer system (call it socialized medicine or whatver you want) would give these providers a fee for distribution and pay for or arrange the delivery of oxygen for distribution all for about 15% of what is being charged.

Meanwhile back at the ranch, treatments that could get people off of oxygen are either banned, not covered by insurance or medicare, or the physician is an NMD, homeopath or some other licensed medical provider who cannot get paid because THEIR practice is mostly preventative and does not involve, for the most part, writing prescriptions for the drugged out civilized population on earth.

Insurance companies and medicare (after you pay the rising “GAP” that is not covered by your secondary insurance as many hapless patients have found out after the fact) will quickly pay for a lung transplant and the 50-60 pills per day that are required, costing millions of dollars because the pharmaceutical companies and insurance companies like a treatment that is intervention rather than prevention and which results in high cost continued maintenance, even if it might shorten the life of the patient. 

But they won’t pay for cell therapy (performed over the border for a few hundred dollars) that gets people off of oxygen and medication, at least for a few years, they won’t pay for stem cell therapy, and they won’t pay for chelation, IV treatments, diet supplement pills, vitamins etc. that are “legend drugs” under FDA rules or proposed FDA rules all of which leave the patient in better condition and are among the only therapies that “first do no harm.”

A Living, Breathing Lobby
Oxygen-Supply Firms Turn to Customers for Help on the Hill
By Jeffrey H. Birnbaum
Washington Post Staff Writer
Tuesday, May 6, 2008; D01

 

The air we breathe may be free. Oxygen is not.

Just how much it should cost is pitting the multibillion-dollar industry that supplies oxygen to medical patients against a large number of lawmakers andMedicare, which said it was being charged many times more for oxygen equipment rentals than the actual cost.

About 1.2 million people use oxygen with help from Medicare. The price for taxpayers: $2.7 billion a year. Pending legislation to reduce reimbursements for oxygen has prompted the medical-device lobby, which spent $29 million on Capitol Hill last year, to ramp up its efforts.

Last week, patients hooked up to oxygen machines subsidized by a major medical supplier came to Washington from across the country to lobby against the payment cuts. Smaller equipment companies, which operate in nearly every congressional district, have been pressing lawmakers as well, while political donations from people involved with the medical-device industry have reached record highs.

Medicare officials said the patients, who are by far the most effective lobbyists against the cuts, argued against their own best interests. A 2006 study by the inspector general of the Department of Health and Human Services showed that Medicare pays 12 times as much for the rental of oxygen equipment, called an oxygen concentrator, as its actual cost. The patients are billed for out-of-pocket payments that are more than twice the cost of a new concentrator, $587.

“This program is outrageously overpaid,” said Corinne Hirsch, spokeswoman for the White House’s Office of Management and Budget.

Government officials have been complaining for two decades that the medical-device lobby has managed to keep reimbursements for that service too high. Last year, the Democratic-controlled House passed a bill that would have slashed oxygen payments, but the Senate did not act. Kerry Weems, acting administrator of the Centers for Medicare and Medicaid Services, said Congress could lower payments sharply and still provide profit to the companies and full service to patients.

But the American Association for Homecare, the main lobbying group for the home medical industry, rejected the government’s study about costs under Medicare. The association said the assessment ignored the cost of servicing oxygen equipment. In addition, it said, steep reductions could harm patient care.

To make its case, the industry has the assistance of patients groups, including the National Emphysema/COPD Association, the group that had 14 people on oxygen roaming the halls of Congress last week. The association claims 1,000 paid members and reaches 325,000 oxygen users through its newsletter. The group, based in New York, advocates primarily on behalf of patients with emphysema and other chronic lung diseases.

“We work closely with those groups,” said Tyler Wilson, president of the American Association for Homecare.

Barbara Rogers, a 61-year-old New Yorker who heads the patients association, spent a day last week visiting five congressional offices to urge them not to approve cuts in Medicare payments for oxygen. “They were very receptive,” Rogers said. “Nobody wants to hurt Medicare patients.”

She and her fellow oxygen users — as well as some family members along to help — held nearly 100 meetings with lawmakers and their staff members. These lobbyists-for-a-day said the uncertainty created by the pending reductions could endanger the ability of oxygen users to get reliable treatment and up-to-date equipment. They also said they wanted to make sure that any cutbacks would not come at the expense of proper care.

“We don’t know how these are going to impact us,” Rogers said. “It’s time for patients to take these issues into their own hands.” She and the other members of her lobbying team came from all over the country, including California, Florida, Texas, Arizona and Arkansas.

Members of Congress have grown accustomed to patients groups descending on Washington to echo the views of industry. “It’s a gimmick the providers have used for years. I think it’s hokey,” said Rep. Pete Stark (D-Calif.), chairman of the health subcommittee of the House Ways and Means Committee. “I like to think we are able to make an objective decision based on facts. I don’t want to make these decisions based on an emotional appeal.”

Still, the industry has found that patients make effective lobbyists. “Members of Congress and their staffs will always care more about patients than providers,” said Frederick H. Graefe, a lobbyist for Invacare, a large medical-device manufacturer.

Rogers said that her colleagues were not paid by any industry group to lobby and that their views were entirely their own.

But the group was not without industry support. Apria Healthcare, a major home-health-care company, gave Rogers’s lobbyists free oxygen, a subsidy that made the event financially feasible, she said. Apria is a member of the two largest oxygen lobbying groups, the American Association for Homecare, which highlighted the patients’ visits on its Web site, and the Council for Quality Respiratory Care.

In addition, health-care lobbyists said the industry regularly collaborated with groups like Rogers’s, briefing them about legislation and regulations in the hope that the patients would be able to get a more sympathetic hearing.

The home-medical-supply industry is made up mostly of small companies, many of them family-owned. The American Association for Homecare says there are 20,000 such firms that sell and rent medical devices. A handful of national companies are also in the business, including Apria and Lincare. The industry also includes manufacturers of medical equipment. Some of the largest are Invacare, Pride Mobility Products, Inogen and Respironics.

The medical-device industry is a significant contributor to federal election campaigns. Donations from people involved with medical-supply companies have risen steadily in the past decade and have reached $2.7 million in the current election cycle, according to the nonpartisan Center for Responsive Politics.

The American Association for Homecare normally has one “fly-in” a year that brings owners and managers of medical-supply companies to the capital from more than 20 states. This year’s event, in March, was its largest ever, with 350 people from 35 states. Attendees heard speeches from prominent federal officials, were briefed about the issues affecting them in Congress and traveled to Capitol Hill to lobby their elected representatives. So much is happening that the association is holding a second fly-in this month.

The industry is stepping up its professional lobbying, as well. “The oxygen guys have hired every lobbyist in town,” Stark said. Pacific Pulmonary Services, an equipment provider in California, plans to open a lobbying office in Washington soon.

Between fly-ins, the association keeps in steady contact with lawmakers through its smaller member companies. Stark even had a visit last week from a long-lost cousin — who is a medical supplier in Tennessee.

“There are oxygen suppliers in almost every district, and members of Congress hear from them,” said Weems, Medicare’s acting administrator. Although he wants to see reimbursements reduced, he said, “This will be a heavy lift.”

 

American Meltdown: 3AM or 8PM—Emergency vs Urgency

Thomas Friedman, in Michael Moore -like frankness, doesn’t make a case, create a sound bite, or try to get elected. Here he simply tells the facts. 

If all Americans could compare Berlin’s luxurious central train station today with the grimy, decrepit Penn Station in New York City, they would swear we were the ones who lost World War II.

People want to do nation-building. They really do. But they want to do nation-building in America.

Any one of the candidates can answer the Red Phone at 3 a.m. in the White House bedroom. I’m voting for the one who can talk straight to the American people on national TV — at 8 p.m. — from the White House East Room.

millions of Americans are dying to be enlisted — enlisted to fix education, enlisted to research renewable energy, enlisted to repair our infrastructure, enlisted to help others. Look at the kids lining up to join Teach for America. They want our country to matter again. 

MOST OF ALL WE NEED TO STOP VOTING BECAUSE SOMEONE SCARED THE CRAP OUT OF US OR APPEALS TO BASE PREJUDICE. WHEN WE DO THAT WE ARE VOTING AGAINST OURSELVES, OUR CHILDREN AND OUR GRANDCHILDREN.

The emergency is that the fiscal fiasco of the last 7 years is frightening larger than any public figure has stated. Who will tell the people? The reason why you hear scattered comments about this period being comparable to the great depression is that we have dug a real hole for ourselves, so big, so deep, that we can’t see the bottom anymore.

  • Buffett and others are admitting it — economists are slyly predicting it without being accused of starting riots and panic. There is general agreement that the housing market could have another 20% correction from current levels.
  • 20-30 million American homes will have greater mortgage indebtedness than they are worth within 12-14 months.  The same people are mired in credit card debt carrying interest and fees that assures( or at least threatens) the virtual permanent enslavement of a significant portion the American people. Americans spend more money on debt service (interest payments and principal) than many countries do on EVERYTHING. 
  • We have locked ourselves into an energy policy that allows both domestic and foreign enemies of freedom almost unfettered control over our property, our food, our lives and our civil liberties. We have done this while having the technology and knowledge to reduce our oil and gas consumption to a negligible amount, forever abandoning foreign policy based upon foreign fuel supplies. 
  • Inflation is already five times higher than the manipulative government statistics reported and it is increasing. 
  • Joblessness is five time higher as well. 
  • The Iraq war will take at least 7 years — our longest war.
  • Our healthcare system is in the death grip of a few people who have turned our vulnerability into an excuse to rob the public treasury and the private finance of every individual.
  • 1929? — we already there and headed downward, burdened in more debt than any country or its people have acquired in the world history.
  • And in world opinion our stock of confidence has never been lower and is clearly declining every other day, as the dollar goes lower and lower and the world’s central bankers look for alternatives for their currency reserves — anything other than the plummeting dollar. They know we caused, allowed and promoted the worst outbreak of financial fraud in history and that the measurement of the scope of the fraud keeps growing every day by trillions of dollars.

So there is the emergency. The urgency is that there is hope.

The Mortgage Meltdown was the trigger, the wake-up call that the fundamentals of our policy, our society and our economy were all wrong. The people know it, with 4 out of people asserting we are headed in the wrong direction.

We emerged from the Great Depression and we can emerge from this too, perhaps a little battered and wiser but still standing tall. The way we can do that is through ruthless truth, a tolerance for ambiguity, transcending our fears, acceptance of failure, determination to succeed, and persistent pursuit of the core values expressed, although unevenly lived, in our Declaration of Independence and our U.S. Constitution. 

MOST OF ALL WE NEED TO STOP VOTING BECAUSE SOMEONE SCARED THE CRAP OUT OF US OR APPEALS TO BASE PREJUDICE. WHEN WE DO THAT WE ARE VOTING AGAINST OURSELVES, OUR CHILDREN AND OUR GRANDCHILDREN.

May 4, 2008
OP-ED COLUMNIST

Who Will Tell the People?

Traveling the country these past five months while writing a book, I’ve had my own opportunity to take the pulse, far from the campaign crowds. My own totally unscientific polling has left me feeling that if there is one overwhelming hunger in our country today it’s this: People want to do nation-building. They really do. But they want to do nation-building in America.

They are not only tired of nation-building in Iraq and in Afghanistan, with so little to show for it. They sense something deeper — that we’re just not that strong anymore. We’re borrowing money to shore up our banks from city-states called Dubai and Singapore. Our generals regularly tell us that Iran is subverting our efforts in Iraq, but they do nothing about it because we have no leverage — as long as our forces are pinned down in Baghdad and our economy is pinned to Middle East oil.

Our president’s latest energy initiative was to go to Saudi Arabia and beg King Abdullah to give us a little relief on gasoline prices. I guess there was some justice in that. When you, the president, after 9/11, tell the country to go shopping instead of buckling down to break our addiction to oil, it ends with you, the president, shopping the world for discount gasoline.

We are not as powerful as we used to be because over the past three decades, the Asian values of our parents’ generation — work hard, study, save, invest, live within your means — have given way to subprime values: “You can have the American dream — a house — with no money down and no payments for two years.”

That’s why Donald Rumsfeld’s infamous defense of why he did not originally send more troops to Iraq is the mantra of our times: “You go to war with the army you have.” Hey, you march into the future with the country you have — not the one that you need, not the one you want, not the best you could have.

A few weeks ago, my wife and I flew from New York’s Kennedy Airport to Singapore. In J.F.K.’s waiting lounge we could barely find a place to sit. Eighteen hours later, we landed at Singapore’s ultramodern airport, with free Internet portals and children’s play zones throughout. We felt, as we have before, like we had just flown from the Flintstones to the Jetsons. If all Americans could compare Berlin’s luxurious central train station today with the grimy, decrepit Penn Station in New York City, they would swear we were the ones who lost World War II.

How could this be? We are a great power. How could we be borrowing money from Singapore? Maybe it’s because Singapore is investing billions of dollars, from its own savings, into infrastructure and scientific research to attract the world’s best talent — including Americans.

And us? Harvard’s president, Drew Faust, just told a Senate hearing that cutbacks in government research funds were resulting in “downsized labs, layoffs of post docs, slipping morale and more conservative science that shies away from the big research questions.” Today, she added, “China, India, Singapore … have adopted biomedical research and the building of biotechnology clusters as national goals. Suddenly, those who train in America have significant options elsewhere.”

Much nonsense has been written about how Hillary Clinton is “toughening up” Barack Obama so he’ll be tough enough to withstand Republican attacks. Sorry, we don’t need a president who is tough enough to withstand the lies of his opponents. We need a president who is tough enough to tell the truth to the American people. Any one of the candidates can answer the Red Phone at 3 a.m. in the White House bedroom. I’m voting for the one who can talk straight to the American people on national TV — at 8 p.m. — from the White House East Room.

Who will tell the people? We are not who we think we are. We are living on borrowed time and borrowed dimes. We still have all the potential for greatness, but only if we get back to work on our country.

I don’t know if Barack Obama can lead that, but the notion that the idealism he has inspired in so many young people doesn’t matter is dead wrong. “Of course, hope alone is not enough,” says Tim Shriver, chairman of Special Olympics, “but it’s not trivial. It’s not trivial to inspire people to want to get up and do something with someone else.”

It is especially not trivial now, because millions of Americans are dying to be enlisted — enlisted to fix education, enlisted to research renewable energy, enlisted to repair our infrastructure, enlisted to help others. Look at the kids lining up to join Teach for America. They want our country to matter again. They want it to be about building wealth and dignity — big profits and big purposes. When we just do one, we are less than the sum of our parts. When we do both, said Shriver, “no one can touch us.”

Clinton’s Healthcare Sell-Out: Watch Out for this Lady — She wants to be President more than she wants to be a great president

THE PROBLEM WITH AMERICAN HEALTHCARE

AN UNAVOIDABLE TRUTH — IT DOESN’T WORK

When Marianne Falacienski’s husband started a new job, the family could not afford the health plan. Ms. Falacienski, 32, found individual coverage only for him and their daughter, Gabrielle.

WHY OBAMA HAS THE RIGHT APPROACH:

INCREMENTAL STEPS TO ELIMINATING MIDDLEMEN WHO ADD COST BUT NO VALUE

THE REASON WHY HEALTHCARE COSTS ARE SO HIGH: We let it get that way because we thought we were not paying for it. We were lulled into this fraudulent situation by the presence of “insurance” which was just a hidden tax which we call “PRIVATE TAXATION.” This opened the door for the profit motive to dominate healthcare.  The inevitable result was cutting costs by delivering less care, increasing revenues by increasing premiums, and avoiding delivery by small print. 

THE EFFECT ON AMERICAN HEALTH: Americans are dying younger, with higher infant mortality than 40 other countries, and living lives of quiet desperation and stress locked in by a system that requires us to choose between life and death, between quality of life or suffering, and between being overmedicated into virtual stupor or becoming our own physicians and deciding what medications we need.

WHO CONTROLS OUR OPTIONS: The presence of insurance along with government complicity has interfered with the normal market forces found in every other country on the planet. Examples abound where the cost of a medication is $120 per month here whereas it could be as little as 5 cents elsewhere. 

The pharmaceutical industry dictates medical protocol: the profit motive requires them to present protocols that require long-term constant daily medications which now average 8-10 pills per day for many people. 

The pharmaceutical industry controls the FDA (virtually all FDA employees have worked for Pharma, are working for Pharma or will work for Pharma and Pharma literally pays most of the budget of the FDA). 

Any protocol that is preventative is opposed by Pharma and opposed by the insurance companies because revenues would decline, costs would decline and thus the need for expensive insurance premiums would also decline. 

Any intervention protocol is likewise not covered by insurance and declared “placebo” or “experimental” unless it is accompanied by a protocol of 53 pills per day for life as in the case of a lung transplant. 

The inescapable conclusion is that the insertion of insurance into our lives has increased our effective rate of taxation without us realizing it was a tax, it has reduced the level, quantity, availability and quality of care, and is responsible for half of all bankruptcies filed.

Obama’s plan, while it continues to include the insurance infrastructure, loosens the death grip of the insurance-Pharma cartel. It can lead to continued enhancements of the system and eventually to a single payer system which is what everyone else in the world has. 

Mandatory insurance is a sell-out for continuation of the current system regardless of what sound bites are attached to it. Obama is once again taking the courageous position of recognizing the nuance and complexity oft he situation and taking hits for not “mandating” insurance for everyone. The Clinton-Edwards “mandatory” plan is good politics, bad economics and unworkable.

Mandatory health insurance is a tax pure and simple. Except by inserting private insurance companies into the mix it adds between 100% to 500% to the costs of healthcare. Mandatory insurance is a wealth transfer system and anyone who promotes it is either purposefully or inadvertently playing into the hands of the few people who benefit financially from this corrupt system while the rest of us continue our lives of quiet desperation and stress.

 

May 4, 2008

Even the Insured Feel the Strain of Health Costs

By REED ABELSON and MILT FREUDENHEIM

The economic slowdown has swelled the ranks of people without health insurance. But now it is also threatening millions of people who have insurance but find that the coverage is too limited or that they cannot afford their own share of medical costs.

Many of the 158 million people covered by employer health insurance are struggling to meet medical expenses that are much higher than they used to be — often because of some combination of higher premiums, less extensive coverage, and bigger out-of-pocket deductibles and co-payments.

With medical costs soaring, the coverage many people have may not adequately protect them from the financial shock of an emergency room visit or a major surgery. For some, even routine doctor visits might now take a back seat to basic expenses like food and gasoline.

“It just keeps eating into people’s income,” said James Corbin, a former union official who works for the local utility in Tucson.

Mr. Corbin said that under their employer’s health plan, he and his co-workers are now obliged to pay up to $4,000 of their families’ annual medical bills, on top of about $1,600 a year in premiums. Five years ago, they paid no premiums and were responsible for only about $2,000 of their families’ medical bills.

“That’s a big jump,” Mr. Corbin said. “You’ve just lost a month’s pay.”

Already, many doctors say, the soft economy is making some insured people hesitant to get care they need, reluctant to spend a $50 co-payment for an office visit. Parents “are waiting longer to bring in their children,” said Dr. Richard Lander, a pediatrician in Livingston, N.J. “They say, ‘The kid isn’t that sick; her temperature is only 102.’ ”

The problem of affording health care is most acute for people with no insurance, a group expected to soon exceed 48 million, but those with insurance say they too are feeling the pain.

Since the recession of 2001, the employee’s average cost of an annual health care premium for family coverage has nearly doubled — to $3,300, up from $1,800 — while incomes have come nowhere close to keeping up. Factor in other out-of-pocket medical costs, and the portion of the average American household’s income that goes toward health care has risen about 12 percent, according to the consulting and accounting firm Deloitte, and is now approaching one-fifth of the average household’s spending.

In a recent survey by Deloitte’s health research center, only 7 percent of people said they felt financially prepared for their future health care needs.

Shirley Giarde of Walla Walla, Wash., was not prepared when her husband, Raymond, suddenly developed congestive heart failure last year and needed a pacemaker and defibrillator. Because his job did not provide health benefits, she has covered them both through a policy for the self-employed, which she obtained as the proprietor of a bridal and formal-wear store, the Purple Parasol.

But when Raymond had his medical problems, Ms. Giarde discovered that her insurance would cover only $22,000, leaving them with about $100,000 in unpaid hospital bills.

Even though the hospital agreed to reduce that debt to about $50,000, Ms. Giarde is still struggling to pay it — in part because the poor economy has meant slumping sales at the Purple Parasol. Her husband, now disabled and unable to work, will not qualify for Medicare for another year, and she cannot afford the $758 a month it would cost to enroll him in a state-run insurance plan for individuals who cannot find private insurance.

She recently refinanced her car, a 2002 Toyota Highlander, to help pay for her husband’s heart medicines, which cost some $400 a month.

Experts say that too often for the underinsured, coverage can seem like health insurance in name only — adequate only as long as they have no medical problems.

“There’s a real shift in the burden of health care to people who happen to be sick,” said Paul B. Ginsburg, the president of the Center for Studying Health System Change, a research group in Washington.

Companies and policy makers have yet to focus on what the faltering economy means for employees’ medical care, said Helen Darling, president of the National Business Group on Health, a Washington association of about 200 large employers.

“It’s a bad-news situation when an individual or household has to pay out-of-pocket three, four or five times as much for their health plan as they would have at the time of the last recession,” she said. “Americans have been giving their pay raise to the health care system.”

Sage Holben, a 62-year-old library technician with diabetes who is active in her local union in St. Paul, says that in 2003 union members agreed to a two-year freeze on wages to protect their health care coverage. But for the union, which will begin talks on the next contract this fall, it may be difficult to continue that trade-off, Ms. Holben said. “It’s at the point where we’re losing, anyway,” she said.

“I live paycheck to paycheck,” said Ms. Holben, who makes close to $40,000 a year at Metropolitan State University.

When she took the job in 1999, she says, the health benefits required no co-payments for doctor visits. Now, her out-of-pocket cost per visit is $25, and she pays $38 a month for her diabetes medicine. She has not been to the eye doctor in two years, even though eye exams are crucial for people with diabetes and she knows she needs new glasses. Nor does she monitor her blood sugar as regularly as she should because of the cost of the supplies.

“It’s not an extravagant expense,” she said. “It just adds up.” And it comes atop the increasing cost of utilities, gasoline and food — and the few hundred dollars of repairs her 1994 Chevrolet Cavalier needs.

Many employers do recognize that their workers are struggling financially even as they are asking them to pick up more of their health-care bills.

“It makes the work we have to do even more challenging,” said Anne Silverman, the vice president in charge of benefits in North America for the publishing company Reed Elsevier. “Employees are being stretched in terms of their disposable income.”

Even so, more companies may see themselves as having little choice but to require employees to pay even more of their health expenses, said Ted Nussbaum, a benefits consultant at the firm Watson Wyatt Worldwide. And when a weak economy undermines job security, he said, workers may simply have to accept reduced benefits.

While Mr. Nussbaum and other consultants say it is unlikely that significant numbers of employers will simply drop coverage for their workers, the weak economy could prompt more of them to push for so-called consumer-driven plans. Such plans tend to offset lower premiums with higher annual deductibles.

And while these plans often allow employees to put pre-tax savings into special health care accounts, they typically end up forcing the worker to assume a bigger share of overall medical costs. About six million people are now enrolled in these medical plans.

Among employers, the hardest pressed may be small businesses. Their insurance premiums tend to be proportionately higher than ones paid by large employers, because small companies have little bargaining clout with insurers.

Health costs are “burying small business,” said Mike Roach, who owns a small clothing store in Portland, Ore. He recently testified on health coverage at a Senate hearing led by Ron Wyden, Democrat of Oregon.

Last year, Mr. Roach paid about $27,000 in health premiums for his eight employees. “It’s a huge chunk of change,” he said, noting that he was forced to raise his employees’ yearly deductible by 50 percent, to $750.

Around the nation, some workers are simply priced out of their employee health plans.

After Brian Falacienski of Milton, Fla., was laid off last year from his job as a surveyor for a construction company, he found another position. But the cost of his new health plan — $800 a month for coverage with a $1,000 annual deductible — was beyond the means of Mr. Falacienski, 38, who is married and has a 2-year-old daughter.

His wife, Marianne, started researching individual insurance policies and was able to find policies for her husband and daughter offering basic, if minimal, coverage, costing $161 a month for father and daughter. But Ms. Falacienski, 32, who has arthritis and the severe digestive disorder Crohn’s disease, is now uninsured. Because of her conditions, she said, four major insurers rejected her.

“I even applied for Medicaid,” she said, “but I wasn’t low-income enough.”

Bill Clinton Economics vs Hillary Clinton Economics

For all the talk about how similar they are, the differences have largely been overlooked. The main difference I see is that Obama has a broader understanding of macroeconomics — which means that he understands that if you push here then something else pops up there. He understands nuance and complexity in a highly ambiguous world.

Once you get past sound bites and continuous loop feeds of irrelevant chatter, and then do some research you find two things: Bill Clinton’s policy advisors agree with Obama, not Hillary. And virtually 100% of all economic advisers score Obama’s proposals as having economic merit vs. Hillary’s proposals which contain solely political appeal. 

The inescapable irony is that if you want the “good ole days” of Clinton economics and prosperity, vote for Obama. If you want narrow carefully orchestrated proposals that will fail for lack of support (like healthcare in 1993), then go ahead and vote for Hillary. 

 

May 4, 2008

For Democrats, Instincts Differ on Economics

As they traveled across Indiana and North Carolina over the last few days, trading charges and countercharges about the wisdom of suspending the federal gas tax for the summer, Senators Hillary Rodham Clinton and Barack Obama were really having a larger fight.

They were arguing over who had better economic instincts.

For all the similarities between the two Democrats, there is also a core thematic difference between them. Mrs. Clinton tends to favor narrowly focused programs, like the gas-tax holiday, that speak to specific voter concerns. By suspending the tax and replacing it with a new tax on oil companies, Mrs. Clinton told a rally in Hendersonville, N.C., on Friday, she was standing with “hard-pressed Americans who are trying to pay their gas bills.”

Mr. Obama, on the other hand, leans toward broader programs meant to help nearly all middle- and low-income families. At a steel factory in Northwest Indiana on Friday, Mr. Obama called the tax holiday a “gimmick” and said he instead favored a cut in the payroll tax, which finances Social Security, of up to $1,000 for middle-class households “to offset the costs not only of gas, but also of food.”

The dueling instincts do not explain all the differences between the two Democrats. They also disagree about a health-insurance mandate (Mrs. Clinton favors one) and the capital-gains tax (Mr. Obama has indicated he would raise it more than Mrs. Clinton would). Mr. Obama is open to increasing the amount of income subject to the Social Security payroll tax; Mrs. Clinton has been critical of that idea.

But their contrasting approaches do extend to a range of issues, including the current economic slowdown, the mortgage crisis and retirement savings. The contrast has been present since before the primaries began — when Mr. Obama announced his middle-class tax cut, for example, and when Mrs. Clinton took out a whimsical television advertisement in which she was labeling Christmas gifts as if each were a specific policy proposal.

“Where did I put universal pre-K,” Mrs. Clinton asks herself, looking around. “Ah, there it is!”

The contrast between their approaches also highlights what many economists consider to be the biggest weakness of each candidate’s plan.

As the economy has slowed, Mrs. Clinton has released a series of proposals — to stimulate growth, stem home foreclosures and, most recently, reduce energy costs — that have helped burnish her image as the candidate most in touch with the specific concerns of working families. Yet policy experts say these proposals have generally made for better politics than economics.

“I was appalled by Hillary going with the gas tax,” said Alice M. Rivlin, a budget director under former President Bill Clinton who supports Mrs. Clinton for the nomination. It “looked like pandering,” Mrs. Rivlin said.

An open letter signed recently by more than 100 economists said the proposed tax holiday would do little to reduce gas prices. In part, that is because a fall in prices would lead to more demand, which would cause prices to return to their earlier level. The result would be that overseas oil-producing governments would get money now flowing to the United States government in gas taxes.

Along similar lines, Mrs. Clinton’s proposed stimulus plan was widely considered to be more complex and less effective than Mr. Obama’s suggestion of quick tax cuts, which was the same approach Congress and the White House ultimately took.

But Mr. Obama gets lower marks from budget experts for fiscal discipline. His package of tax cuts and new spending would cost roughly $300 billion a year, while Mrs. Clinton’s would cost less than $250 billion. Economists said they were skeptical he could pay for his program without increasing the deficit.

“Obama has a shorter list of tax breaks,” said Leonard E. Burman, director of the Tax Policy Center in Washington, “but has some really big items on it.”

Policy analysts specifically criticize Mr. Obama’s proposal to eliminate income taxes for senior citizens with up to $50,000 in income. Thanks to Social Security and Medicare, the federal government already spends a large amount of resources on older citizens.

“The tax system already does a pretty good job of protecting poor and near-poor seniors,” said Richard Kogan, a senior fellow at the Center on Budget and Policy Priorities in Washington.

Both campaigns defend their proposals. Mr. Obama’s advisers say he would pay for his plans by, among other things, raising the capital-gains tax more than Mrs. Clinton would and doing more to crack down on corporate-tax evasion. His broad cut in the payroll tax is an aggressive response to middle-class income stagnation, they say, and, because most senior citizens do not pay payroll taxes, they need additional help.

“I’m the only candidate who’s proposed a genuine middle-class tax cut,” Mr. Obama said Saturday in Indianapolis, “that’s paid for in part by closing corporate loopholes and shutting down tax havens.” He also talked about his support for a tax credit to help homeowners who do not itemize their taxes and thus do not benefit from the mortgage deduction.

Clinton advisers say that her remedies to the economic slowdown have been more focused than Mr. Obama’s and that, early on, she correctly identified the housing market as needing specific help. Her economic plans would provide short-term relief to families in the months and years before her longer-term plans — on energy conservation, for instance — would have an effect, the aides say.

Mrs. Clinton often talks about other countries, like Germany, that have created jobs and cut their reliance on imported oil by investing in alternative energy.

“We lost 20,000 jobs last month, and people are saying, ‘Well, that’s better than we thought,’ ” she said at a John Deere sales center in North Carolina on Friday. “I don’t accept that at all.”

The Clinton and Obama approaches still have many more similarities than differences. Whether through focused tax breaks or sweeping ones, both candidates would reduce taxes on middle-class households and raise taxes on those making more than $250,000 a year.

Senator John McCain, the presumptive Republican nominee, by contrast, would make permanent nearly all of the Bush tax cuts, including those on high earners. McCain advisers say allowing taxes on high earners to return to their pre-Bush levels would damage the economy when it is already vulnerable.

Both Democratic candidates have also promised to regulate corporate America more closely than President Bush has and to spend more than $100 billion a year on an overhaul of the health-care system.

The one major difference between their health plans has received more attention than it deserves, economists say. Although opinion is divided, they generally favor the Clinton policy, which would require all Americans to have insurance, potentially making the health-care system more efficient. But health analysts say the Clinton campaign has falsely suggested the Obama plan would exclude people who wanted to sign up for insurance.

Despite the individual criticisms of the two agendas, policy experts praise both candidates for an unusually substantive primary campaign, each having come forward with detailed plans to address climate change, the middle-class squeeze and the decline of company-provided health insurance.

Mrs. Clinton and Mr. Obama have also been more forthcoming than Mr. McCain about how they would pay for their plans. Mr. McCain has proposed almost $300 billion a year in new tax cuts, on top of President Bush’s cuts, but has offered little detail about how he would pay for them.

Douglas Holtz-Eakin, the McCain campaign’s top economic adviser, has said Mr. McCain would later offer more details and that the tax cuts would spur economic growth, reducing their cost.

Perhaps the most important question, policy analysts say, is how Mrs. Clinton’s and Mr. Obama’s different approaches would affect their governing style.

On many budget matters, Mrs. Clinton’s instincts seem similar to her husband’s. Both favor carefully crafted tax credits that can help people who most need it, that come with relatively modest price tags and that seem likely to survive a divided Congress.

Mr. Obama sometimes talks of his vision of an “iPod government,” with simple programs that people can understand. He also talks of persuading voters and members of Congress, including Republicans, to support his plans.

Either way, the debate may not last much longer. No matter which Democrat is nominated, the disagreements with Mr. McCain are likely to be far larger.

Patrick Healy and Jeff Zeleny contributed reporting.

Clinton Scheme Blows Up: Barbara Reynolds Set Up Wright Press Club Appearance

May 3, 2008: Two interesting things about this posting.

The first is that while I posted it many days ago it has been the number one posting on this site every day.

The second is that it obviously attracted the attention of the Clinton attack machine who have tried to get me to allow comments that suggest that this entire story, which has done so much obvious damage to Obama, was actually a plot by Obama.

I almost let it go up as a comment until I heard the exact same words spoken by Clinton surrogates on TV. I concluded it was a plant and I rejected it. I also concluded that Errol Louis might have stumbled onto something important and that the thought of having the Clintons back in the White House is not nearly as appealing to me as it was a few months ago.

ALSO SEE 

http://www.nydailynews.com/opinions/columnists/louis/index.html

New York Daily News columnist Errol Louiswrites:

The Rev. Jeremiah Wright couldn’t have done more damage to Barack Obama’s campaign if he had tried. And you have to wonder if that’s just what one friend of Wright wanted.
Shortly before he rose to deliver his rambling, angry, sarcastic remarks at the National Press Club Monday, Wright sat next to, and chatted with, Barbara Reynolds.

A former editorial board member at USA Today, she runs something called Reynolds News Services and teaches ministry at the Howard University School of Divinity. (She is an ordained minister).

It also turns out that Reynolds – introduced Monday as a member of the National Press Club “who organized” the event – is an enthusiastic Hillary Clinton supporter. …

I don’t know if Reynolds’ eagerness to help Wright stage a disastrous news conference with the national media was a way of trying to help Clinton – my queries to Reynolds by phone and e-mail weren’t returned yesterday – but it’s safe to say she didn’t see any conflict between promoting Wright and supporting Clinton.

Reverse the Federal Deficit without Taxation— PRIVATE TAXATION MUST GO !!!

Every one of the facts stated here are verifiable from multiple sources and are NOT disputed. The only policy question that is relevant is WHETHER WE PUT PEOPLE OR BIG BUSINESS FIRST in our priorities. The rest is obvious. HERE ARE SOME EXAMPLES:

1. HEALTHCARE: (AT LEAST $1 TRILLION IN DIRECT AND HIDDEN FAT IN THE SYSTEM). The U.S. health care system is a wealth transfer scheme, which takes money from the pockets of ordinary citizens and puts it in the hands of a few people who do nothing to earn it. This is a PRIVATE TAX that only exists because the government has interfered on behalf of big business starting with Keiser Permanente.

          a. We spend, on average anywhere from 5 to 40 times what other countries spend on drugs for two reasons (1) we are prescribed too many drugs and (2) we pay much higher prices from the same companies that sell the same drugs in other countries.

Instead of the money going through the government to the insurers, pharmaceutical companies and medical service providers, the government mandates the money go directly to these cartels.

These companies have applied a substantial portion of their excess profits towards placement of “news stories”, advertisements and other propaganda that have convinced most Americans that the U.S. health care system, while faulty, is still better than other countries. THIS IS A LIE. Check it out using any statistic you like.

  • THE U.S. SPENDS 15.4% OF ITS GDP on heath care plus capital expenditures for equipment and buildings which brings it to around 18.5%. The amount of money spent is therefore $2,400,000,000 ($2.4 trillion dollars).
  • U.S. patients take 65% more medication than any other country on earth because only our system allows access and payment for INTERVENTION and allows nothing for for PREVENTION and MAINTENANCE. Most of these medications eventually increase the risk of death and/or other diseases. The Food and Drug Administration is staffed by and funded by Pharmaceutical company employees (either past, present or future). Access to PREVENTATIVE protocols is denied by the FDA, insurance company and the propaganda disseminated by the medical industrial cartel.
  • Not only is there sufficient funding already in the system to provide health care to every man, woman and child, along with social services that would reduce living stress and increase productivity, hope and innovation in the U.S. economy, there is actually about $400 billion dollars left over to contribute to other social programs (education, police, fire) that would make it possible for every man, woman and child at any age to be educated and trained to be competitive in the global economy. 
  • NO OTHER COUNTRY IN THE WORLD SPENDS MORE THAN 11% OF ITS GDP ON HEALTHCARE. 
  • ALMOST EVERY OTHER WESTERN COUNTRY (INCLUDING THOSE WITH NATIONAL UNIVERSAL HEALTHCARE) HAS MORE PHYSICIANS AND MORE HOSPITAL BEDS PER PATIENT THAN THE U.S.
  • THE DEATH RATE, INFANT MORTALITY RATE, “UNNECESSARY” DEATH RATE, AND EVEN HEIGHT IS WORSE IN THE U.S. THAN, ON AVERAGE, 40 OTHER MODERN WESTERN COUNTRIES. (we have lost three years of longevity in the last 50 years and we have lost one inch of height).
  • NO OTHER COUNTRY ALLOWS PRIVATE INSURANCE AS THE MIDDLE MAN BECAUSE INSURANCE AND MANAGED HEALTHCARE PLANS ADD NO VALUE.
  • EVERY OTHER COUNTRY EMPHASIZES PREVENTATIVE HEALTHCARE AND GIVES BONUSES TO HEALTHCARE PROVIDERS WHO IMPROVE THE HEALTH OF THEIR PATIENTS.
  • The only rational conclusion is that by deleting private insurance as the middle man in providing access to a public need (like education, police, public libraries and fire) and enabling a single payer to negotiate reasonable prices, the problem, and the deficit caused by healthcare spending would be eliminated. 

2. CREDIT AND DEBT: The U.S. credit and monetary system is a wealth transfer scheme, which takes money from the pockets of ordinary citizens and puts it in the hands of a few people who do nothing to earn it. This is a PRIVATE TAX that only exists because the government has interfered on behalf of big business starting with the credit card associations and companies that provide network access to credit imposing interest rates that have been known and understood for centuries to result in permanent debt.

It was once called USURY. Now it is called liquidity. The laws that made it illegal to charge rates of 35% on credit cards and 400% on payday advances were changed. So now it is still a crime under natural law but not under our legislative system. It’s government backed and therefore it is a PRIVATE TAX.

  • Government spending, government subsidies to big business, and government laws allowing big business, large unregulated, to charge exorbitant interest rates has resulted in unprecedented consumer and government debt — Federal, State, local and individual — requiring SOMEBODY (either us or our children, grandchildren and great children) to pay interest amounting currently to more than $3 trillion dollars per year plus the loss of social services and safety nets that have existed for more than 50 years. 
  • All of this debt has been funded by issuing U.S. currency equivalents that are now held in foreign investment vehicles, foreign exchange reserve accounts in central banks concentrated in the hands of China, South Korea and other countries whose commitment to the sovereignty and nationals security of the United States is best questionable.
  • At least $1 trillion of interest, fees and costs associated with excess interest and/or excess debt could be eliminated from the expenditures of U.S. spenders, producing substantial capital for improvements to infrastructure, jobs, increased revenues from income taxes, sales taxes, excise taxes,etc., without raising the rate of taxation on any of these sources of revenue.
  • The Mortgage Meltdown could be stopped by a commitment to keep people in their homes, preventing abandonment of homes that are not maintained. This would stop an ever-decreasing spiral of housing prices caused by REO homes coming onto the market at rates that demand could not possibly meet, reinstate the balance sheet of lenders and thus improve their capital position, and reinstate the balance sheet of investors who were tricked into buying junk securities which, with a little help and cooperation from business, government and people could be converted into ratable securities. 
  • Devaluation of the dollar and inflation caused by devaluation would be slowed, stopped or even reversed if the U..> showed its resolve to responsible economic policies and responsible monetary management and responsible regulation of “securitization” which is merely a unregulated method of increasing monetary supply despite declining demand for the U.S. dollar.
  • Reducing the debt service BY LAW to sustainable levels that would enable debtors to eliminate their debt. Banning advertisements that encourage consumers to buy goods and services they don’t need, or could wait to buy through savings, would convert a debt economy to a solid foundation of  savings economy. like many other countries in the world.
3. OIL, COAL and GAS: The average American family spends more than $800 per month in direct costs on fuel related services and probably another $600 per month in indirect costs associated with delivery and production. This is apart from Federal, State and local spending related to various social services and maintaining government facilities. In other words, we can safely say that at $15,000 per year comes out of the pocket of each taxpayer. This means we are spending $1.5 trillion in fuel costs plus the cost of vacation and business travel and sundry other matters.   OF THIS AMOUNT,WINDFALL PROFITS TO OIL COMPANIES AND OTHER MIDDLE MEN AMOUNTED LAST YEAR TO APPROXIMATELY $700 BILLION.
  • THAT OF COURSE IS JUST THE TIP OF THE ICEBERG. BECAUSE WE HAVE HAD THE TECHNOLOGY FOR 40 YEARS TO CONVERT TO ALTERNATIVE SOURCES OF ENERGY THAT ARE RENEWABLE AND LESS EXPENSIVE, AND WOULD NOT REQUIRE US TO MAINTAIN A FOREIGN MOLICY THAT MEDDLES IN THE AFFAIRS OF OTEHR COUNTRIES AND THUS LEADS TO PERIODIC WARS.
  • THE REAL SHAME ON US IS THAT MORE THAN 2 MILLION JOBS COULD HAVE BEEN CREATED IN PRODUCING AN MODERN INFRASTRUCTURE FOR THE POWER GRID AND TELECOMMUNICATIONS. TESE HIGH PAYING JOBS WOULD AND COULD INCREASE THE WEALTH OF THE MIDDLE CALSS, INCREASE TAX REVENUES WITHOUT RAISING RATES, AND RESTORE U.S. LEADERSHIP IN INNOVATION AND RESEARCH. 
  1. If the Clinton years showed us anything, it was that by encouraging entrepreneurship, which produces 80% of our jobs the entire country is lifted. 
  2. Another thing Clinton proved is that by increasing the number of people in social services (police, fire etc) we increase employment, tax revenues and economic activity.
  3. The other thing Clinton proved unwittingly is that treaties like NAFTA are inherently unworkable because they are used by big business to side-step the advances in product safety, worker safety and benefits that America spent the better part of 100 years inventing and maintaining. 
  4. Thus we end up subsidizing slavery in other countries, and reducing the quality of products and services to American citizens. 
The money is already there in the “budget” when you include the PRIVATE TAXATION items. There are many more examples. If we can stop tripping over our ideological divides, the graft paid by big business and elect people who start with the premise “first do no harm”, the country could be thriving again. 

 

 

The New York Times

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April 27, 2008

3 Candidates With 3 Financial Plans, but One Deficit

The Republican and Democratic presidential candidates differ strikingly in their approaches to taxes and spending, but their fiscal plans have at least one thing in common: each could significantly swell the budget deficit and increase the national debt by trillions of dollars, according to tax and budget experts.

The reasons reflect the ideological leanings of the candidates, with Senator John McCain proposing tax cuts that go beyond President Bush’s and the Democrats advocating programs costing hundreds of billions of dollars. But for fiscal experts concerned with the deficit, both approaches are worrisome.

With the national debt soaring to $9.1 trillion from $5.6 trillion at the start of 2001, in part because of the Iraq war and Mr. Bush’s tax cuts, a crucial question about the candidates to succeed him is “whether they are helping to fill the hole or make it deeper,” said Robert L. Bixby, executive director of the Concord Coalition, a nonpartisan organization that advocates deficit reduction. “With the proposals they have on the table, it looks to me like all three would make it deeper.”

Representatives of all three campaigns disputed such assessments, questioning the accounting methods analysts used to calculate the growing debt and saying they could enact their plans without making matters worse.

Mr. McCain’s plan would appear to result in the biggest jump in the deficit, independent analyses based on Congressional Budget Office figures suggest. A calculation done by the nonpartisan Tax Policy Center in Washington found that his tax and budget plans, if enacted as proposed, would add at least $5.7 trillion to the national debt over the next decade.

Fiscal monitors say it is harder to compute the effect of the Democratic candidates’ measures because they are more intricate. They estimate that, even taking into account that there are some differences between the proposals by Senators Hillary Rodham Clinton and Barack Obama, the impact of either on the deficit would be less than one-third that of the McCain plan.

The centerpiece of Mr. McCain’s economic plan is a series of tax cuts that would largely benefit corporations and the wealthy. He is calling for cutting corporate taxes by $100 billion a year. Eliminating the alternative minimum tax, which was created to apply to wealthy taxpayers but now also affects some in the middle class, would reduce revenues by $60 billion annually. He also would double the exemption that can be claimed for dependents, which would cost the government $65 billion.

“High tax rates are driving many businesses and jobs overseas — and, of course, our foreign competitors wouldn’t mind if we kept it that way,” Mr. McCain said, laying out his economic plan this month in Pittsburgh. “We’re going to get rid of that drag on growth and job creation.”

On the expenditure side, Mr. McCain has called not only for continuing an open-ended deployment of troops in Iraq, but also for spending $15 billion annually to expand the Army and the Marine Corps and to improve health care for veterans, among other programs.

Mr. McCain’s advisers have said the new tax cuts would be paid for by eliminating earmarks and making large spending cuts, but they have not identified specifics. And they have spoken vaguely about making entitlement programs like Social Security and Medicare less costly for the government. Mr. McCain’s chief economic adviser, Douglas Holtz-Eakin, said the campaign had simply presented its vision of what the tax code should look like and noted that some of the proposals would be phased in.

“I think what they ought to do is remember that the proposals are going to engender economic growth, which is the best thing you can do for near-term budget improvement,” Mr. Holtz-Eakin said, adding that Mr. McCain believed spending restraint was possible.

That vision for the tax code includes making permanent the Bush tax cuts, set to expire in 2010, which Mr. McCain once opposed in part because they were not accompanied by sufficient spending cuts.

“I voted against the tax cuts because of the disproportionate amount that went to the wealthiest Americans,” Mr. McCain said in 2004. “I would clearly support not extending these tax cuts in order to help address the deficit.”

In 2001 and 2003, Mr. Bush pushed through Congress tax cuts totaling nearly $2 trillion. The first set lowered income and estate taxes, and the second focused mostly on capital gains and dividends.

The McCain campaign does not figure the costs of extending the tax cuts into its deficit projections, although the Congressional Budget Office estimates that it would cost an extra $2.2 trillion over the next decade.

When Mr. McCain outlined his tax cut plan, he backed away from his pledge to balance the budget during his first term, but said that he would do so by the end of his second term. And in an interview last Sunday on “This Week With George Stephanopoulos” on ABC, Mr. McCain said he would push ahead with his tax cuts even if Congress did not approve his spending cuts.

Some conservative economists say that increased deficits in the short run are an acceptable tradeoff for tax cuts that they say will promote economic growth in the long run. And many liberal economists say that some of the Democratic spending proposals, like addressing the affordability of health care or improving education, are long-overdue investments that pay off handsomely even if they entail more red ink.

Mr. Obama and Mrs. Clinton have acknowledged that their various new programs would be costly but have outlined how to pay for them. But some fiscal monitors say they may be relying on overly rosy projections of how much savings their proposals would actually yield.

Mrs. Clinton has calculated that her universal health care plan would cost about $110 billion a year, while Mr. Obama’s somewhat more modest proposal would cost up to $65 billion annually, his advisers say. Both candidates have also talked of new government incentives and investment to encourage the development of alternative sources of energy, which would cost about $15 billion a year.

The Democratic candidates have suggested that they could finance these and other programs by allowing parts of the Bush tax cuts to expire. That, however, ignores projections of the Congressional Budget Office, which has already assigned those savings to deficit reduction.

In other words, unlike Mr. McCain, both Democrats say they would revoke the Bush tax cuts for the wealthy. “At a time of war and economic hardship, the last thing we need is a permanent tax cut for Americans who don’t need them and weren’t even asking for them,” Mr. Obama said.

But they would retain those reductions meant to benefit poor and “middle-class” families, which they defined as the 97 percent or so of the population that lives on less than $250,000 a year, and they would count the estimated $50 billion generated by higher taxes on the wealthy as new revenue.

“Remember, you can only use this money once,” said Mr. Bixby of the Concord Coalition, “and with all the Bush tax cuts scheduled to expire, that money is already scheduled to come into the Treasury. But on the campaign trail, this has become a source of new spending.”

Mrs. Clinton’s aides have been perhaps the most specific in explaining how they would offset the costs of their proposals, and her campaign speaks of moving toward balanced budgets. “We’re not going into debt for the war in Iraq and tax cuts for the wealthiest of Americans,” Mrs. Clinton has said, “but instead we are taking care of the needs of our people at home.”

Regarding gas taxes, Mr. McCain has proposed a one-time “tax holiday” for the summer. Mrs. Clinton also calls for suspending it in a new advertisement in Indiana, while Mr. Obama says that is a “bad idea” but opposes any increase in the tax.

On the spending side, Mr. Obama has argued that ending the Iraq war is one way to pay for some of the new programs, including creating a national infrastructure investment bank and increasing the foreign aid budget. But such savings, which Mrs. Clinton does not count on, would not immediately make their way into the Treasury, and some experts say it is not clear whether they would be sufficient to finance all the programs Mr. Obama has enumerated.

Mr. Obama has talked of spending that money on a variety of initiatives whose costs amount to about one-third of the war’s estimated annual cost of $150 billion. “It is clear that there ought to be some distinction between a candidate who says a withdrawal should start immediately and a candidate who says let’s maintain the war at the highest level,” said Austan Goolsbee, Mr. Obama’s senior economic adviser.

The fiscal outlook has been made even murkier by the explicit “no new taxes for the middle class” pledge that both Democratic candidates made at their debate in Philadelphia this month, exempting taxpayers making $250,000 a year or less from new levies.

Hearing such a promise “makes you very sad,” said Len Burman, director of the Tax Policy Center. “First of all, we don’t have enough revenue coming in to pay our bills.” In addition, he said, the notion that all the revenue that would be lost in a middle-class tax freeze can be made up by higher taxes on the wealthy “is not tenable.”

Economic Meltdown and Moral Constipation = POLITICS and MSM

I would give credit for the term “moral constipation” but I can’t remember where I heard it. I invite all who read this to give me the creator’s name so I can correct this blog and give him the attribution he deserves. 

It appears that we can all agree on one thing regardless of which candidate, party or ideology we subscribe to — The United States of America is on a path of moral bankruptcy, where ethical concerns and choices between right and wrong have been shoved off the table and instead convenience and self-aggrandizement is accepted by “we the people” with far more tolerance than is acceptable to me.

There is practically nothing so dear to me as my own opinion of my own intelligence. And yet I am dumfounded by the lack of outrage as corporate America and Government join hands in our pockets, in our lives, in our families, and in our minds. Protests erupt about the Olympic flame — but where is the outrage, the “I’m mad as hell and I won’t take it anymore” about the following:

  1. Diesel fuel is $4 per gallon here but across the border in Mexico it is $2. Anyone care?
  2. Real inflation for the Average American is in excess of 15% and climbing. Anyone interested?
  3. Exxon made $11 billion last quarter. The rest of us made less at the end of the month because the money went to Exxon. Is there any connection between that fact and the Presence of an Oil man in the White House/ How about a vice President that headed up the very company that profited the most from the Iraq war? Is this so boring that MSM should be ignoring it just because nobody seems to want to anything about it?
  4. By 2009, 1 person in 10 will be on food stamps in the United States. Shouldn’t that be interesting to both sides of the “Aisle?”
  5. The average person in the United States is in debt on credit cards and other consumer and real estate loans in an amount that they can never repay, whereas no other modern country has that problem. Why?
  6. Interest on debt accounts for more expenditure by government and individuals than anything else in the United States. Trillions of dollars of transfered wealth from those who now can’t eat to those who don’t know what to do with the money. What is being done about interests rates that guarantee non-payment and assure financial enslavement? (By the way medical care is second is now touted to be the “employer of last resort”).
  7. Houses were appraised at $500,000 and within days were revealed to have values of less than 70% of that. People were prompted, tricked and coerced into signing mortgage documents they didn’t understand, in violation of law (not that anyone has been prosecuted), and now the borrowers are blamed for a scheme they still don’t understand. Now millions of American citizens are or will be broke, homeless and jobless. We know who did it and how it happened but MSM doesn’t care about that.
  8. All of MSM (Main Street Media) is now controlled by a handful of people who let us hear only the things they want us to hear and only in the ways they want us to hear it. If you want news, go to the Internet, if you want infotainment watch TV or listen to radio. 
  9. How many flag draped coffins can be hidden from view to keep the Iraq war “sanitary” and keep the public distanced from the gruesome reality of war, death, disfigurement, famine, disease and moral decrepitude? And why is MSM going along with  the ban on pictures of coffins? Isn’t the death of young loved members of families who made the ultimate sacrifice worth reporting?
  10. How many veterans need to be homeless and wandering through the streets with head injuries before we think to ourselves “you know, there is something not quite right about this.”
  11. We have outsourced the most sensitive manufacturing of top secret defense components to China which just happens to be the only real military threat to our national security. And we have financed their military expansion by encouraging their economic growth to the point where they now have a  stranglehold on our country — they own most of our debt, they manufacture most of our goods, they process most of our food, and they are the most prolific source of spying in the United States. Thus whatever they don’t get legally, they get illegally. 
  12. MSM (main Street Media) has virtually eliminated their staff of reporters, because they get everything off the newswires and they make up the rest. Most of the time spent on “news” channels consists of opinions about gossip. Interesting, perhaps, but useless for those of us who would like to evaluate our options on voting on issues and candidates.
  13. It is illegal to counterfeit money unless you are a foreign country (North Korea for example) or you are a Wall Street investment banking firm that creates money supply by calling them “derivatives, collateralized debt obligations” and such. Between North Korea’s supernote and and the $500 trillion (yes with a “T”) in derivatives, credit swaps etc. out there it can be no surprise that no government can control the effects on world monetary supply —- that has been outsourced to the private sector as well. 
  14. MSM (Main Street Media) now presents us with pretty faces, some nice looking legs, a tempting bust line, and a teleprompter written by people who have not researched the validity of the reports in 10 years.
  15. Prescription medications are “so dangerous” that you can’t get them without seeing a doctor, but they are advertised directly to consumers. Is this what we want our children to hear and see? You can get a Bud Lite or a Absolute martini without a doctor’s prescription and drink all you want. It’s only when you kill or main people with your driving or other physical abuse that you are held accountable. 
  16. MSM (Main Stream Media) provides us with pundits and moderators who are undereducated, and inculcated with the sole core value of saying something that will increase the ratings and thus revenues of the media in which their comments appear. 
  17. Prescription medications cost $20 per pill here and as little as $0.50 in other countries easily accessible from the U.S.
  18. The total expenditures for medical care, drugs, products and associated services is around 2-3 times the amount spent by any other country or group of countries. The average U.S. Citizen is in constant danger of dying for lack of medical care because he/she is probably not covered entirely for the medical event, because he/she was never given a preventative regimen that is regularly followed in other countries, or because they are simply barred from access to medical system. 
  19. Despite the amount we spend per person, we get less care, and suffer from shorter longevity, higher infant mortality, shorter height, than at least a dozen other countries and sometimes as high as 40 other countries depending upon which metric you are interested in. To say we lost our “lead” is not the point. 
  20. The average person educated in the U.S. has slipped from 1st in world ranking to around 20th. Does that bother anyone?
  21. Bullying has spread through every school, public and private and is spreading into the marketplace. Hello? Anyone there?
  22. We have lost our way. We worship money in all its forms more than we worship God. Every day we perform acts that involve our worship, use and belief in money. Most of us spend at best one day per week for a couple hours worshipping God.
  23. MSM (Main Street Media) thrives on conflict over minutia (bullets in Bosnia, a flag pin probably made with lead in China, and statements of “associates” that are made into controversial “positions”) rather than actual issues and characteristics about the candidates themselves. We allow this by talking about that the pundits tell us to talk about. And what we talk about causes us to vote against our own interests.  
  24. When we tried importing from China and India the prescription drugs at a fraction of the cost that the drug companies were charging us, the government stepped in and said it was unsafe and  could result in tainted drugs. Now the drug companies have eliminated American jobs and outsourced the manufacture of the drugs to where? — India and China — and we have what — tainted, deadly drugs of dubious value to begin with and with side effects that include anal leakage and death. 
  25. How many times do we need to hear that pharmaceutical companies spend $5,000 on every man or woman doctor in the U.S. to push their stuff before we make THAT an issue?
  26. The war on drugs is making a fortune for people on both sides of the law, including the privatization of prisons and huge profits from private ownership of prisons, 75% of the inmates of which are there because of minor drug charges. There is no war on drug use and there is no war on drug supply. That is why we have drugs in America.
  27. How many times do we need to be disappointed in a politician, whom we knew was taking money from the medical- pharma complex, insurance companies, oil companies and credit card companies? What makes us vote for these people?
  28. Where is MSM “keeping them honest” by reporting discrepancies between promises and action?
  29. How many dogs need to die before we accept that they are the canary in the mine shaft and that the rest of us are just as much at risk because the tainted, poisoned food is all coming from the same place now?

I could go on, but I invite you to add your own comments to the list. And while you are at it, why not answer this question: What specifically are you going to say to your friends and family about these issues and how will you vote?

Irrational Economics: What You Should know About Money

Gambling establishments know it, amusement parks know it, retailers know it — anything that separates your perception of spending your own money from the reality results in your spending more. And in the case of the American consumer, we are spending consistently more than we earn and more than we could ever pay back. 

 

We are all participating in a Ponzi scheme, relying on the next influx of credit from our home, credit card, auto loan or other lending scheme to pay the minimum payment on past debts. Meanwhile when we use chips at the gambling casino, we are not spending “money” so we spend more of it. When we use credit cards, we are not spending “money” so we spend more of it. When we use debit cards, we are not spending money so we spend more of it.

 

The result is that we walk out of the casino either broke or possibly in financial ruin. We get the credit card bill at the end of the month and we didn’t realize how much we spent. We see “over-limit” fees, late fees, and all kinds of interest and fee items that result in a “minimum payment” that is guaranteed to keep us in debt for life. We get our bank statement at the end of the month and for the 20% of us who even look at it, we get the same surprise — we spent more than we realized using our debit card, in stores and on the internet. We borrow on our home equity credit lines and increase our monthly payments to a level that is out of reach, or in the case of most Americans, to a level that is simply more out of reach that before (what’s the difference, I can’t pay it anyway).

 

For those of you who revel in conspiracy theory, here is one that is true. The deck is stacked against everyone by a tacit agreement between government and business. They want us stupid and ignorant. The Government, the retailers, the gaming establishments, the banks, the banking networks, non-bank credit card issuers and others on the receiving side of the dollars you spend all want you to avoid paying actual cash. Because they know that if you have cash in your hand you will regard it as yours, as you will be less inclined to part with it. They know that at the end of the month, if you are spending actual currency, you will be the one with money in your pocket and not them. 

 

Millions of Americans are steadily increasing their spending on credit cards, because they have no other place to go for the money to pay for their normal monthly bills — groceries, utilities, etc. Many are taking down the full amount of their home equity lines of credit for fear that these sources of credit will be frozen — a trend that is growing in the industry. People are taking this money and socking it away in investment accounts, which I hope are in Euro’s because the dollar is going to continue taking a major hit and inflation, while it is a global problem, is headed for far worse territory than most other places on the planet. 

 

The United States is a place of negative savings (i.e., debt) from top (Federal government) to bottom (you). And nobody is going to help you or your children or grandchildren because all the players have a vested interest in lying to you, misleading you and encouraging you to look at your finances as something other than your future wealth and security. If you are looking for help, look only to yourself and your family members. Get yourselves together and decide on how you are going to navigate the this mess. 

 

Here are some tips that will help:

 

  1. If you must use credit cards to “make the month” then you are headed for a disaster. So plan for the disaster instead of burying your head in the sand. Get one card that you bring the balance down to zero and use it sparingly, making payments exactly on time and allowing the revolving credit option to be used. So you don’t want to pay the card in full each month, you want to pay it in two or three months. Get a new telephone line and give out the number to your friends. Put the old line on voice mail and unplug it, because the creditors are going to be calling. If you don’t hear the call, it will be less stress. Most card companies do not sue, they hound you through collection agencies. So don’t enter into payment  arrangements with them, and don’t use bankruptcy just because you piled up credit card debt. 
  2. For Debt that you already have incurred and will incur in the near future, keep this in mind. You can game the system just like they have gamed you.  Inflation normally is not a  major factor in long term debt. But it is now. If you put off paying the debt, whether it is fixed or revolving, as long as possible, it is VERY possible that inflation will outpace the interest charges. There is no guarantee on this, but at this moment it looks highly probable. So if you pay these debts in 3-5 years it might cost you a fraction of the VALUE of what you owe now. 
  3. Pay in cash for the things you are buying if at all possible. It will keep you focussed on what you are spending and if you put the known expenses in envelopes at the beginning of the month, you will still have money at the end of the month.
  4. Your mortgage or rent payment takes priority. if that means not paying a credit card, so be it. Keep your house. It is the one non-dollar denominated asset you have. It is your inflation hedge.
  5. If you can’t pay the minimum on the credit card, don’t pay it at all. It doesn’t make any difference.
  6. Credit card payments should be the last thing on your list to pay after food, housing, medical etc. 
  7. If you think you are headed for bankruptcy try to hold out until the next congress gets to work. It is highly probable that the Republican changes will be reversed and that the old rules will return along with higher exemptions. 
  8. If you can’t get to an ATM to withdraw the cash and spend cash, then  use the debit card and your PIN, knowing that this is coming out of your bank account. But remember that each time you use that plastic card, you are one step removed from the financial decision as to whether to spend. The one who ends up holding the bag is you.
  9. Take advantage of credit card balance transfers with zero interest wherever you can. Play the game. 
  10.  If you owe taxes, make some minimum payment that you choose arbitrarily. Don’t enter into an agreement or make contact with the IRS unless they contact you.
  11.  If you are falling behind in your mortgage or under stress, don’t wait until the breaking point. Call your mortgage company NOW and tell them you need an accommodation. Get a moratorium on part or all of the payments. Even skipping one payment might make all the difference in the world.
  12.  Do NOT overdraft your account and do NOT go for a payday loan. There is NO benefit for you to do either. Both put you in the hole deeper. Work out something with your utility, borrow from a relative (AND PAY IT BACK!), but don’t go for these short-term options. All they do is take more money out of your pocket. 
  13.  If your credit score is very high, but YOU know you are headed for disaster, then get as many cards as you can and use them judiciously, keeping in mind the above. If you are screwed anyway, the amount does not make any difference. 
  14.  GAME THE SYSTEM: Think of your own ways to “Create” money or money supply in your life. Have Plan B for when you lose that job — what business could you get into on your own that takes very little money to start and which will give you SOME income. Look around and see what people need. You’d be surprised at what people are willing to pay for if it involves making their life easier, or making something convenient — like shopping for seniors etc.
  15.  Eat Healthy and exercise: It will reduce your stress level and bring more oxygen and nutrients to your brain. You are going to need your brain for everything it is worth to game the system and escape from the trap that was paid for you and the rest of us. 

 

These tips are contrary to what you will hear from Suze Orman and other people. They are controversial. While I believe this is the best advice, I could be wrong. Use your own brain and when you consult with others remember the 80-20 rule. 80% of the people you ask, don’t know much and will give you stock answers. Those are the people that will end up broke when this is all over. But by all means seek out the smartest people you know and talk about these things. 

Mortgage Meltdown + Inflation + Dollar Devaluation

Trouble for American Consumer is building and the perfect storm threatens our tenuous economy. 

DEEP RECESSION LOOMS WITHOUT FUNDAMENTAL CHANGE IN OUR POLITICS AND ECONOMIC POLICIES

 

The inevitable outcome was always the same: eventually we would hit the the top, like in any Ponzi scheme. 

Consumers, who maxed out their credit cards, and maxed out their borrowing on their homes, and maxed out on their purchasing power which has declined significantly over the same 25 year period, and who are vastly unemployed or underemployed (further decreasing their wages and purchasing power), and maxed out their borrowing from consumer finance, and even maxed out their short-term borrowing through pay day lending and overdraft privileges and eliminated their savings plans, have reached the point where (1) they can’t buy anymore “stuff” and (2) they don’t want to. 

 

The end result is that we have spent ourselves and our country into a hole, diminished our standing in the world, and we continue to insult the world by asserting a dominance that was once real, but isn’t anymore. And the world is telling us as politely as possible to shove it. 

The strength of the Euro, the movement amongst the oil producing countries to create a unitary currency for the Gulf countries and other trends around the globe all spell the same thing: everyone is looking for an alternative to the U.S. dollar and an alternative to the U.S. altogether. We have brought ourselves and the world to neither peace nor prosperity, and neither security nor safety. 

 

Asian inflation which is gearing up to be as bad as we have seen in any emerging economy is starting to hit wholesale prices. Rising costs due to rampant and growing inflation in countries that had before been “cheap” producers is hitting hard on products purchased here in the U.S. 

 

Add to that the more or less daily devaluation of the dollar and the effect is multiplied. Add to that mixture the further devaluation of the dollar caused by the mortgage meltdown where central bankers are converting their dollar reserves to Euros and the effect is further increased.

 

The headlines in most papers is the end of the free ride we had for a long time where the dollar was king and we could purchase imports more cheaply because dollars were in great demand. 

Our headline here is that we are headed for the deepest recession since the greatest depression

 

The reasons are many but all fairly simple. The United States converted from being a nation of production to a nation of consumption. The final nail in the coffin of this unfortunate conversion was the advent of credit cards — not at their inception — and the high interest rates that were institutionalized during the double digit prime rate days 25 years ago. The theory was that the credit card companies were under hardship because it cost them more to get capital to lend than they could get under usury laws, once you factored in defaults and the extremely high interest rates that the issuers had to pay. But when rates went back down to modest figures of around 7% prime rate from highs of 22% credit card companies were allowed to keep their rates at 21-22% and eventually raised those rates to as high as 35%. Adding insult, the issuers now have fee schedules that add to the absurd payments. 

 

This “free money” craze coupled with stupendous profits earned by credit card issuers caused a huge but temporary surge in consumer sending encouraged by government, business and lenders. Everyone liked it because for consumers they were getting more “stuff”, for government they could claim better economic performance, and for credit card companies, they had a stranglehold on an economy that was now addicted to credit card and home equity loan consumer spending. As with the mortgage meltdown, nobody thought it through. 

 

Our economy became addicted to, dependent on and under the control of consumer spending, which up till now has accounted for around 70% of our entire economy.

 

The inevitable outcome was always the same: eventually we would hit the the top, like in any Ponzi scheme. Consumers, who maxed out their credit cards, and maxed out their borrowing on their homes, and maxed out on their purchasing power which has declined significantly over the same 25 year period, and who are vastly unemployed or underemployed further decreasing their wages and purchasing power, and maxed out their borrowing from consumer finance, and even maxed out their short-term borrowing through pay day lending and overdraft privileges and eliminated their savings plans, have reached the point where (1) they can’t buy anymore “stuff” and (2) they don’t want to.

 

Alan Greenspan is now defending his record of relying on the marketplace to work things out. Free market ideologies, like the one Greenspan relied on, are like all other theories in economics. They seem to work for a while and then they don’t. Ideology does not govern how people act. People act as they choose to and the way they choose is based upon mostly subjective factors at the time of their decision. That is a lot messier than the neat and clean theories and policies, indexes and measurements that have been used in determining economic policy, foreign policy, and domestic agendas for decades. 

The underlying flaw in all currently used economic theory is that people are not theoretical. They are real and they are complex. 

This is not a new observation. Plenty of brilliant analysts and thinkers have known this for thousands of years. Just look at some of the most recent contributions from Rothbard and von Mises and you’ll see that the idea that human motivation and human thought process as the real issue has been around for a very long time, well understood, and pointing toward policy mechanisms that were based in reality rather than the mythical world where everyone behaves according to the “plan.” 

 

The problem is that economics and politics are inseparable — like time and space. You cannot define one without reference to the other. And in politics, the goal is to get elected and stay in power. You are playing to an audience with precious little time to get the finer points of economics, personal finance and monetary policy. 

 

People are too busy trying to make ends meet, getting the kids off to school and after-school activities, and working a two-income family schedule with increasingly longer working hours. Up until now, buying “stuff” has been a recreational outlet and they had the “free money” to do it. Now they can’t even pay the “minimum payment” without borrowing more and they can’t borrow more.

 

You don’t get elected giving people bad news — especially the news that things will get worse before they get better. So politicians create agencies to give them reports, indexes, median incomes, and unemployment data that provides them a reference point from which to pontificate about things these “leaders” actually know nothing about. They create slogans and “programs” that will never happen to give the potential voter a reason for putting them or keeping them in office. 

 

The end result is that we have spent ourselves and our country into a hole, diminished our standing in the world, and we continue to insult the world by asserting a dominance that was once real, but isn’t anymore. And the world is telling us as politely as possible to shove it. The strength of the Euro, the movement amongst the oil producing countries to create a unitary currency for the Gulf countries and other trends around the globe all spell the same thing: everyone is looking for an alternative to the U.S. dollar and an alternative to the U.S. altogether. We have brought ourselves and the world to neither peace nor prosperity, and neither security nor safety. 

WHAT DO WE DO? BITE THE BULLET, GIVE UP IDEOLOGY AND GET REAL

If you want to stop the mortgage and credit crisis, go with Barney Frank’s plan which takes blame out of the equation and simply stops the worst from happening. It gives everyone an opportunity to recover and it is the only way to do it — taking everyone’s interest into account rather than one group over another. 

 

If you want to stop foreclosures and evictions, change the rules of civil procedure in each state and in federal bankruptcy court that enables cram-down procedures and mediated results that allow for the same outcome as Barney Frank’s plan. Home values were inflated far beyond fair market value. Everyone should share in the loss and everyone should share in the potential recovery. 

 

If you want to stop the health care crisis and the economic nightmare created for our citizens, take insurance out of the equation, wind down the current system and move relentlessly toward a single payer system that pays medical service providers well, does not subject them to liability for bad results, and gives them incentives to get their patients healthier. That is what other countries do and what we should do here. 

 

Eliminate the restrictions on so-called “alternative care.” Those protocols have been around a lot longer than allopathic medicine. End the hegemony of allopathic medicine, provide incentives for preventative lifestyles and care, and the costs of health care will drop like a stone while the prospects for a longer, productive, happier life will rise. Reinstate the basic pledge “First do no harm.”

 

If you want to create a country with solid economic foundation, we need savings. To create savings, people must have the financial resources to cover their expenses and set aside money for the future. Take credit card debt and other forms of predatory lending off the table. Change the “no end in sight” vision to a light at the end of the tunnel. Stop telling people to spend money when you know they don’t have it. All you are doing is making things worse when you could be leading them out of the darkness.

 

If you want an economy that has solid prospects and good earnings potential for its citizens and the country as a whole, change the direction of innovation from getting our own people to part with their money to buy “Stuff” and make innovation work to produce things the rest of the world values. In other words shift back from the consumer driven economy to production. The products might be the same, similar or entirely different as before. 

 

BRING BACK UNIONS: Stop trying to minimize costs and start working to maximize revenues. Anyone can eliminate their costs by simply going out of business. A business is worthless without growth and strength in the marketplace. By eliminating our production capacity, we have effectively relinquished our sovereignty. Have government intervene wherever necessary to prevent dominance that results in imbalance — encourage the start-up of new small businesses and create a level playing field for them to compete. 

 

If you want to reassert America’s place in the world give the world a reason to respect and honor us besides our military power. Raw power is a transient commodity. Eventually it ends. If you want to retain sovereignty over our economic affairs and avoid becoming a satellite of China or a junior member of the European Union then demonstrate the power of the American worker and the attractiveness of living and working here. 

 

If you want communities to prosper allow community banks and credit unions the same access to providing financial services as the megabanks, where centralization has shifted local deposits into faraway investments of dubious value to anyone. State and Federal programs should be deposited into local banks rather than national or international combines. The infrastructure already exists without any changes required to enable this to happen. What is necessary is for State regulatory authority to become more active and more focussed on their own State’s economy.

 

As the song goes, these are a few of my favorite things. What are yours?

Healthcare Madness and Private Taxation

Healthcare Madness: Stem Cell Furor

You must remember the simple American health care formula: if insurance covers it, it gets done. Insurance only covers it if the overall revenue and profit picture for big Pharma and insurance is maintained or enhanced.

The big LIE in the United States that we have all subscribed to until recently is that single payer systems would vastly increase our costs and decrease the quality and availability of health care producing long waits for appointments and treatments. 

The TRUTH is that of all the countries in the world, the United States pays more per citizen for health care and many, if not most, of its population is ineligible to receive it. Long waits for appointments and treatments under most HMOs exceed any waiting period in England, France and Canada. Check it out. 

In short, we are already paying for socialized medicine but we are not getting it — just like the education we pay for that is not delivered to our children and requires us to seek private school alternatives. 

And under Medicare Part D, the public has been frightened into taking a plan that drains more money from them than before — AND they can’t shop around for better prices. Worse yet, most people after going to the doctor under Medicare get billed for the part that Medicare didn’t pay. One can only wonder why AARP endorsed Part D. 

AND that secondary insurance they pay for every month somehow never seems to cover the shortfall, which is MORE expense (private tax) to the citizen providing a benefit that is 90% oriented to the sellers of insurance, the providers of drugs, and medical service providers. There again we are paying for socialized medicine, and not getting it. It is capitalist medicine disguised as socialized medicine. How about the real thing, since we are already paying for it?

The problem with ANY proposal that keeps the insurance companies in the mix is that while it makes it look like we are not going to a political extreme” (socialized medicine), we are going to pay for it anyway, and guarantee that prices will remain high, costs of providing healthy care will remain out of reach and will burden taxpayers with far more than they are paying right now. 

We are already paying double what we should be paying. All of the difference is going into the pockets of large corporations controlling our government policies. It is not politically feasible for any candidate to come right out and say we should convert to a National Healthcare System because too many people have blindly accepted the disinformation disseminated by drug companies, insurance companies and medical associations. So until we educate ourselves we are stuck with this ridiculous system.

EDITOR’S COMMENT: STEM CELL IS A HOT TOPIC. I knew that when I wrote the piece.

The comment from “watchdogonscience” contains inaccurate facts resulting from disinformation from the pharmaceutical companies and from lobbyists working for medical service providers. Cell treatment isn’t the end of disease or dying, but it is the largest advance in medical care we have achieved in human history

Only some of the bone marrow transplant has worked and none of it has worked for lung disorders. It also is quite troublesome on the issue of rejection when the marrow comes from another human being. It is not yet “quite successful” because of a variety of absurd and sometimes dangerous side effects (cancer etc). 

Embryonic stem cell research, still in its infancy is far more promising under the latest advances. It avoids the pitfalls and pain and risks of bone marrow extraction, and allows true differentiation into specific organs which in many countries has resulted in the regeneration of organ function and sometimes the organ itself. 

The comment about the drug companies wanting stem cell therapy is wrong. Drug companies want any therapy that requires purchases from them on a regular basis at prices controlled by the seller in protocols that are written by the sellers themselves and which medical providers blindly follow. 

This is why almost every recent medication requires a constant regimen for life rather than a defined course of treatment over a specified period of time. The oath to “first do no harm” is completely ignored by the drug companies because it doesn’t apply to them. And doctors, afraid of liability, must stay with “conventional protocols, which as it turns out were written by the drug companies. It is a perverse cycle. Thus they want gene therapy but not stem cells. 

Stem cell therapy and other forms of cell therapy from animals threatens drug revenue far more than any regulation or other external event. By getting Bush to veto stem cells in this country the drug companies shot themselves in the foot. The protocol is now developed in the UK, China, Venezuela, Costa Rica, Mexico and several other countries. 

The price structure has been developed without any input from the major drug companies. Hence a person receiving a successful stem cell treatment and eliminating, for example, diabetes from their current health condition is likely to avoid more than $200,000 in health care costs mostly including medications from pharmaceutical companies. The cost of stem cell therapy varies from $15,000 to about $45,000 and the cells themselves cost only around $7,000. 

It is not hard to see why the pharmaceutical companies are putting out disinformation about stem cells and stoking the religious fires to maintain opposition. 

Stem cell therapy, far from “making the pharmaceutical companies richer” threatens their legislative and market dominance. And insurance companies and government health care programs, faced with decreasing health care costs, will be under pressure to reduce premiums. Thus revenues of insurance companies are threatened as well. And fewer visits to doctors’ offices, urgent care and hospitals does the same.  

You must remember the simple American health care formula: if insurance covers it, it gets done. Insurance only covers it if the overall revenue and profit picture for big Pharma and insurance is maintained or enhanced. 

The TRUTH is that the United States pays more per citizen for health care and many, if not most, of the population is ineligible to receive it. Long waits for appointments and treatments under most HMOs exceed any waiting period in England, France and Canada. Check it out. In short, we are already paying for socialized medicine but we are not getting it — just like the education we pay for that is done delivered to our children and requires us to seek private school alternatives.

Mortgage Meltdown and Credit Crisis: News and Comment 4-2-08

U.S. economy in ‘very difficult period,’ Bernanke says

By Greg Robb

Last update: 9:30 a.m. EDT April 2, 2008

WASHINGTON (MarketWatch) – The outlook for U.S. growth has worsened since January and the possibility of a recession can’t be ruled out, Federal Reserve Chairman Ben Bernanke said Wednesday. “It not appears likely that real gross domestic product will not grow much, if at all, over the first half of 2008 and could even contract slightly,” Bernanke said in testimony prepared for the Joint Economic Committee of Congress. “Clearly, the U.S. economy is going through a very difficult period.” His testimony supports the view that the Fed is not done cutting interest rates. The central bank has lowered its target overnight lending rate to 2.25% from 5.25% last fall, the largest percentage decline on record. Bernanke suggested the central bank is slowing down the pace of its rate cuts. “Much necessary economic and financial adjustment has already taken place, and monetary and fiscal policies are in train that should support a return to growth in the second half of this year and next year,” he said. Inflation remains a concern, he noted, and some signs indicate that the public expects prices to continue rising. 

EDITOR’S NOTE: State Department Overview of Global economic transactions needed, along with a department of trained, serious, non-political economists who can report the actual effects and trends of global commerce on our foreign relations.

 

  1. According to the Secretary of State and the National Security Council, counterfeiting undermines currency and constitutes an ACT OF WAR if sanctioned or promoted by one government to the detriment of another. 
  2. By promoting the expansion of “money” supply through the latest “funny money schemes” of Wall Street, the United States has been the source of counterfeiting “cash equivalents” which are currently only part of the way through the process of undermining the financial strength, viability, social services and credibility of local and federal governments around the world. 
  3. These cash equivalents (derivatives) are the modern day equivalent of counterfeiting. 
  4. While it is not likely that a military response is on the horizon, it IS likely that economic and political responses will be coming from countries that include our friends and allies. 
  5. The effect on our foreign relations is immeasurable right now. 
  6. The effect on our own economy is understated intentionally by government reporting agencies: food prices in Arizona are up 19% (demonstrating that the true rate of inflation of geometrically higher than what the government is reporting). 
  7. Food and oil and other necessities are rising sharply in the U.S. because the dollar is sinking to new lows every month. Citizens must be made aware that the economic policies and choices we make, right down to individual purchases at the grocery store or other retail locations has a direct impact on the statement we are making in our foreign relations.
  8. Paulson’s “sweeping” proposals do nothing except sweep the problems under a rug too small to hold the debris. 
  9. What must be included in any plan for changes in how the government plays referee in in the marketplace (i.e., regulation), is a new division of the State department that assesses the impact of global economic commerce and recommends policy adjustments to heal and promote our relationships with sovereign nations. 

Swiss finance minister reportedly expects tax shortfall due to UBS

Switzerland’s finance minister Hans-Rudolf Merz expects the country to receive 1 billion Swiss francs, or $1 billion, less in taxes for 2007 as a result of the crisis at UBS AG (UBS: UBS Ag he told Swiss daily Tages-Anzeiger in an interview published Wednesday. See full story

By Polya Lesova MarketWatch 4/2/2008 9:06:00 AM Crude-oil futures rise modestly as traders look to data on U.S. petroleum inventories and eye strength in the dollar. See full story 

[EDITOR’S NOTE: Somehow people must be educated to understand the relationship between a weak dollar caused by excessive borrowing and flooding the marketplace with “funny money” and the price of gas at the pump. As the value of U.S. currency declines, more of it is required to purchase anything on the world market, including oil. If OPEC follows through on converting from dollars to Euros the effect will be magnified and the price of gas at the pump could easily exceed $10 per gallon same time next year. Wake up, America!]

Wider access to high-risk currency trading lures more investors

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By Gergana Koleva MarketWatch4/1/2008 7:33:00 PM

With over $3 trillion worth of foreign currencies changing hands every day, a growing number of retail investors who seek a boost to their portfolios and a hedge for the falling dollar are viewing the high liquidity of foreign exchange trading as a tonic for troubled times. See full story

National City mulling deal with KeyCorp: report

BOSTON (MarketWatch) — National City Corp. (NCC:

National City Corporation which has seen its stock battered due to its exposure to troubled loans and softening real estate markets, is contemplating a plan to sell itself to KeyCorp (KEY: KeyCorp (New) The Wall Street Journal reported Wednesday.

Fannie Mae revises standards for mortgages: report

Fannie Mae (FNM: Fannie Mae has told lenders it will require a credit score of at least 580 for most individual loans as part of the latest move to make its standards more stringent for mortgages it buys or guarantees, according to a report Wednesday in The Wall Street Journal. See full story 

[EDITOR’S NOTE: Talk about locking the barn door after all the horses are gone! What is needed besides changes in future regulation is a solution now, today, to the massive credit crisis which now extends to all new loans including auto loans. 

 

  • The solution does NOT lie in piecemeal, patchwork of rule changes by different agencies that will conflict with each other, congressional legislation that will conflict with other federal and state legislation, or bailouts of certain players because they are either more important or less “culpable” in the eyes of the beholder. 
  • What is needed is a fast consensus of ALL the players, agencies and leaders from across the spectrum from homeowners and borrowers, through lenders, appraisers, mortgage brokers, investment bankers, retail securities sales, and investors in derivatives to 
  • STOP foreclosures and evictions, 
  • KEEP homeowners in homes unless they can’t even afford to maintain them, 
  • RESTORE the balance sheet of investment bankers and investors, and 
  • HEAL the wounded dollar and staunch the bleeding — by reducing payments on al forms of excessive debt (caused either by artificially — i.e., manipulated — higher housing prices during 2001-2006, or caused by the nearly $1 trillion drain on credit card revolving debt that was promoted in every conceivable way despite interest rates so high that any financial planner or economist could tell you that the average person would NEVER pay it all back]. 
  • IMMUNIZE EVERYONE from civil and criminal action to get their cooperation (yes, Amnesty. It is more important to save our economy and standing in the world than to see a few “examples” in jail, or millions of people out on the street. We need no homeless people not a surge in their number. We need stable, rising house prices, not a view with “no end in sight.”).
  • EDUCATE the American public that this crisis transcends ideology and politics. Whatever your feeling about “entitlements”, personal responsibility and suffering the consequences, we are all bearing the brunt of this crisis every time we go to buy food, gas or other necessities. We are all bearing the brunt of this every time we expect social services like education, fire, police or paramedical help — and they are diminished because the local treasury has been depleted by losses in CDOs/CMOs and by inflation. We are all putting the burden on our children, grandchildren and great-grandchildren for spending money we didn’t need to (like over paying for medical care and drugs compared to all other countries and going to wars to protect an interest in oil which should have been abandoned long ago as a fuel source)

Obama comes closest in his proposals. But even he has failed to grasp all the horns of the bull]

Manhattan apartment sales fall most in 18 years as buyers wait

Manhattan apartment sales plunged the most in 18 years last quarter as buyers faced the prospect of a recession and job cuts at Wall Street securities firms. See full story at Bloomberg.com

Paulson says Treasury `flexible’ on housing measures

Treasury Secretary Henry Paulson indicated the Bush administration is willing to consider congressional plans to stem foreclosures by expanding government guarantees for mortgages. “I think you will continue to see flexibility as we learn and go forward,” Paulson said in an interview with Bloomberg Television in Beijing. See full story at Bloomberg.com

Lehman in market abuse claim

Lehman Brothers (LEH: Lehman Brothers Holdings Inc  on Tuesday said it had sent information to the Securities and Exchange Commission about possible abusive short-selling in its shares in recent days. Erin Callan, Lehman chief financial officer, said the SEC was examining whether hedge funds acted in concert to drive down the bank’s share price in the days following the near collapse of Bear Stearns. Such behavior could constitute market manipulation, subject to civil and criminal sanctions. See full story at FT.com

Private Taxation — American Healthcare

The answer to our unique American set of issues is not a single issue proposed solution, but a sea change in our premise: either we are a nation of people and laws to protect, defend and promote the health, safety and welfare of all our citizens or we are a vehicle for corporate interests that will do anything to maintain their positions of power and profit. Getting rid of the influence of lobbyists and the effect of campaign contributions on candidates is not some lofty ambition or ideal; it is an imperative that is the ONLY answer to having food on the table, gas in the tank and a roof over our heads.

A candidate for public office must (a) spend the time to learn about economics (b)  demonstrate their independence from special interests, (c) demonstrate their proficiency in understanding how economic trends impact the average voter and (d) educate the voter as to how economic policies are being used against them and what they can do about it. 

BEWARE OF PLATITUDES AND QUICK FIX PROPOSALS THAT WILL NOT WORK AND CANNOT DELIVER RELIEF TO THE HOME OR DINNER TABLE. 

Prospective voters who are considering support for candidates for public office or propositions and petitions having economic consequences are stuck between a rock and a hard place. The growing realization is that, in particularly in a global economy, some complex events are somehow having an effect on their daily lives. 

In the absence of any real information for each voter to make their own decision they are forced to rely on “mainstream” news, which is more fact based entertainment than informative, candidates who will say anything to get elected, and special interest advertising that mischaracterizes the choices.

Voters understand that food, fuel and medical costs are taking away more and more of their income with the same effect as if a new tax was enacted requiring them to fund the largest corporations in the world, whose losses are covered by taxpayers and whose windfall profits are closely guarded from consumers who don’t get the benefit of cost reductions, stockholders who don’t get the benefit of dividends, and merchants who don’t get the benefit of sales revenue from people who don’t have anymore money to spend. 

These “ private taxes” are reflective of the growing pattern of privatizing public finance. In short they are private taxes sanctioned by federal, state and local governments who themselves are victims of the pattern. In my opinion this represents “PRIVATE TAXATION” sanctioned by government.

Let’s look at some of the “proposals” for healthcare that are offered and watch how they work.

 

  1. American citizens spend more (35%-250%) on drugs, medical protocols,, tests and treatment than any other country in the world. The same drugs that cost $20 per pill in the U.S. can be purchased for $2.00 elsewhere. Protocols that would prevent disease or would cure them are virtually banned or are allowed to be “not covered” by insurance — resulting in the average person my age (61) taking thousands of pills per year that people in other countries are not taking because they don’t need them and because the pills themselves present risks of side effects that include everything up to and including death. 
  2. The financial excesses of the medical-pharmaceutical-insurance industry is supported by “laws” that protect the industry and which little or nothing to do with the health of any person. These excesses are present ONLY in the United States. 
  3. At the same time that we are spending more, we are suffering more medical disasters in more families every day. Longevity (life-span) in the United States is declining. Infant mortality is rising. Even average adult height has decreased in the Untied States and is now lower than many other countries.
  4. Protocols like chelation IV therapy, food supplements and vitamins, gene therapy, human stem cell therapy, and primitive cell therapy are being used all over the world, growing back diseased or missing organs, improving overall health, and improving vitality while at the same time vastly reducing the demands for medical treatment. Those other countries are spending less and delivering more. Several third world countries have now become centers for medical care of those Americans who have the money, time and physical ability to reach them. 
  5. National programs for health and fitness are not only improving physical health, but the all important index of happiness and contentment.
  6. Ideological arguments against these other systems are bogus arguments designed to distract American voters from the truth: the system is working here for those looking to earn a profit, whereas the system is working elsewhere in the world for those seeking to maintain a healthy population.
  7. The ideological argument against a single payer that negotiates prices, seeks preventative national programs and pursues the best possible treatments and cures is merely a hammer to threaten and frighten people with the prospect of “socialism” which most people translate as a loss of freedom, constant fear of government, loss of privacy, and a lack of disposable income at the end of the month.
  8. The truth is that all societies practice socialism as to those services that the government elects to provide. In the United States, taxes are used to pay for military, police, fire, education etc. In an ultimate irony, the heavy reliance on ideological argument over common sense has resulted in the the outcome most feared by those who are cajoled into voting against their interests: loss of freedom, constant fear of government, loss of privacy, and a lack of disposable income at the end of the month.
  9. The surrender of our healthcare to profit motivated private interests, like the surrender of prison management to private interests, like the surrender of regulation of sales of securities, creation of credit, expansion of monetary supply to private interests has led to a corporatocracy that threatens to consume the last dollar of every “average” American leaving them not only with no disposable income at the end of the month, but rather in debt up to their ears.
  10. Meanwhile the countries with “high” tax rates (which can simply be translated as honest transparency, as opposed to hiding the taxes in your utility bills, and covering up the private power of taxation given to corporate America) have satisfied, happy, free, contented populations who get along just fine and their citizens are not in debt and who are able to save up money and pay for things in cash.

American citizens have the exclusive right to vote in what should be a free society, but instead they are confronted with a corporate-government set of rules where the opportunities and choices are closing in on the the average guy or girl who is just trying to get through the month. 

Our incomes are being used to fund corporate losses, corporate abandonment of our own population for employment and training, military adventures that are funded by borrowing (which is future taxation), and huge windfall profits of oil companies, agricultural companies receiving “subsidies”, pharmaceutical companies, and insurance companies.

The answer to our problems is not a single issue proposed solution, but a sea change in our premise: either we are a nation of people and laws to protect, defend and promote the health, safety and welfare of our citizens or we are a vehicle for corporate interests that will do anything to maintain their positions of power and profit. Getting rid of the influence of lobbyists and the effect of campaign contributions on candidates is not some lofty ambition or ideal; it is an imperative that is the ONLY answer to having food on the table, gas in the tank and a roof over our heads. 

Mortgage Meltdown: Free Market Theology and Politics

Mortgage Meltdown: Socialized Losses and Expenses

The root of any solution to the current credit crisis and meltdown is politics, which is simply a consensus of opinion. When people consent to an idea like “free market” it seems to work because we make it work. The fact is that we don’t have a free market, we never had a free market, and if we did, the mortgage crisis  would be even worse. When we give up our ideology in favor of thoughtful response to the facts “on the ground” we will have a solution. Failing that, the economy is headed for far worse than ever imagined by the doom  sayers.

There is not enough MONEY in the world to stop this crisis. Mortgage Meltdown/Credit Crisis/Monetary Crisis/Housing Crisis can ONLY be solved politically through a consensus of ALL parties involved. REAL incentives must be present for borrowers, homeowners, bankers, mortgage brokers, appraisers, lenders, underwriters, investment bankers, retail securities brokerage houses, traders, money managers, CFO’s of government and companies and individual investors. “Bailing out” some of the variables just tips the economy more toward ultimate disaster. 

While we have free market forces at work within our economy, sometimes they work and sometimes they don’t. That is why you need a referee (government regulation). Free market ideology is wrong in its premise — that given the chance, everyone will rise to their highest potential, at least in terms of wealth. That has never been true because people are all different, they have all different perspectives and values, and all different life challenges that come from factors outside the closed circle of economic theory. 

In a truly free market, tyranny is the inevitable result. Those with the ambition, leadership qualities and political skills end up with controlling positions in the marketplace and in government such that wealth is unevenly distributed to themselves. Innovations, education, and cultural advances that endanger the dominance of such persons or companies are squelched. It’s legal because we make it legal. For the past 10-12 years American society has been reaching for the “ideal” of non-regulation or “free economy.” Now even the most ardent free market proponents are conceding that it has brought us to the brink of disaster.

In a truly “free market,” the market is actually a closely held dominated society with despotic leadership. Government mirrors the society in which the predatory and monopolistic entities get to pay for legislation and enforcement (and non enforcement) they want. 

In a truly free market, a few people dominate government and the marketplace so that losses and expenses are transferred to the citizens while profits and gains are transferred to the leaders in the marketplace and in government. This is what Bill Maher called “socialized losses.” I would add “socialized expenses.” 

Thus a truly free market is actually a socialized marketplace for the benefit of those at the top. In other words, “free market” is a combination of words stating an idea that does not exist but which politically is accepted because politicians and business leaders refer to it so much it has gained sufficient acceptance by listeners to be considered true. 

Thus it is the opinion of most people that “free markets” exist even though all empirical evidence is to the contrary. 

However as a political tool, the bullet phrase “free market” is appealing and is used to socialize the marketplace for the benefit of a select few right under the noses of the people whose opinion was swayed by disinformation emanating from the top.

 

  • We already have socialism as the predominant policy in our politics. We just call it other things like “benefits,” “bailout.” loan, relief package, earmarks, etc. 
  • We have socialized medicine — it just works to provide profits to the Big Pharma and service providers instead of medical service to the patients. 
  • We have socialized schools — it just works to provide added money to government budgets instead of education to our children and college for aspirants. 
  • We have socialized police — it just works to put more people behind bars than any other country in the world in a highly secretive privatization of prisons, the owners of which need to know the prisons will always be full. 
  • We have socialized fire departments — but they are sacrificed in budget cuts as soon things get a little hairy. 
  • We have socialized defense — but it used offensively to promote oil and profits pursuant to policies that should have been abandoned decades ago, instead of providing for the defense and welfare of citizens beset by disasters (Katrina) or defending and securing our borders.
  • We even have socialized money — it just works such that non-regulated money floods the marketplace, leveraged off of a money supply that is supposed to be controlled by the Federal Reserve, creating hollow profits and rising stock prices, while the rest of the citizenry deals with prices so high for fuel, food and other essentials that they can’t make it on two incomes.
  • We are a socialized economic society NOT a free market society. It just works for the benefit of the people at the top instead of the usual way of  spreading the benefit throughout the country to all the citizens. 

In a truly free market, Bear Stearns would have gone out of business, the proper result of overreaching behavior that tipped the risk allocations without telling anyone. 

OR, in an environment where free market forces were the goal, the Fed would not only have opened up its window to private investment houses, but also to private individuals and small businesses that were equally in danger of being wiped out. Instead we have the Fed conspiring to bail out one of a dozen variables in the equation that would produce a solution and then, responding to political pressure (something that the Fed was designed NOT to do), it increased the bailout for Bear Stearns 500% so rich people and the people that worked for this firm would not get completely wiped out. 

Careful examination of the Fed bailout of Bear Stearns, however, reveals the perfect plan for bailing out all the players behind all the variables in the equation for solving our monetary crisis, credit crisis, housing crisis, confidence crisis, political and economic crisis: Leaving the opportunity for their fortunes to rise when the crisis is over allows maximum protection for the player to recover, establishes an equilibtrium or plateau that is fairly strong is withstanding further downward pressure, and restores CONFIDENCE in the U. S. financial markets around the world.

By starting out as $2 per share and then moving up to $10 per share, the Fed and JP Morgan established a new precedent that can be applied to borrowers, investment bankers, lenders, investors in CDOs, homeowners who are in foreclosure and homeowners who are at risk. 

If followed out to its maximum advantage, foreclosures could stop, evictions would cease, payments would resume, CDOS (CMOs) would recover their value on balance sheets, capital insolvency would recede, and the opportunity for every one to recover as much as possible would be restored. 

As we have repeatedly said, there is not enough MONEY in the world to stop this crisis. Mortgage Meltdown/Credit Crisis/Monetary Crisis/Housing Crisis can ONLY be solved politically through a consensus of all parties involved. REAL incentives must be present for borrowers, homeowners, bankers, mortgage brokers, appraisers, lenders, underwriters, investment bankers, retail securities brokerage houses, traders, money managers, CFO’s of government and companies and individual investors.

Central to the solution is a political feat of enormous proportions: accepting the fact that housing prices were artificially inflated in 2001-2007. A reduction of the mortgage balances, payments and interest rates combined with an incentive to all players to recover their losses downstream when the market recovers would stop the slide, eliminate the crisis and stimulate the recovery. 

A Jail called Mandatory Health Insurance

A Jail called Mandatory Health Insurance

 

This is arithmetic not ideology. We make it ideology when we defy the numbers. We are already paying for full and complete coverage for all American citizens. In fact, we are paying 40% more than is required to give everyone complete health services. That we are paying for it and not getting what we are paying for (including a rebate or dividend on the many billions we are overspending) is testament to our ideology getting in the way of good judgment and concern for American citizens. It also gives you an idea on how and why the Pharmaceutical companies alone spend more than $5,000 on each and every one of the more than 500,000 doctors licensed in the United States, rewarding them with free samples, free trips, free seminars, free equipment, free supplies, and a host of other things that would make anyone other than a saint turn their heads.

 

In fact, it isn’t even ideology, it is myth. The myth is that American medicine is better than anywhere eels in the world. This is one of those myths that come from facts once holding morsals of truth. It is no longer truth. Our rate of medical advances is dwarfed by work done in dozens of other countries, our education is in a nose-dive, people are dropping out of the system, retiring early and otherwise getting out of the cancerous system we call our medical establishment.

 

We are already paying far more than we need to and far more than any other country in the world for the exact same medical facilities, medical care, medical treatment and medical prescriptions — AND we don’t have access without digging into the bottom of our pockets to treatments that are available, more effective and far less expensive than medical protocols in the U.S. because Big Pharma dictates those protocols through its absolute control of the FDA. And Big Pharma has a blank check from Big Insurance, because Big Insurance wants everyone to perceive the need to pay premiums for medial insurance. It’s like the credit card industry — they want to convert your assets into their fees without giving you anything of value in return.

 

Insurance is not the solution. It is the problem. Mandatory insurance locks us into the problem instead of heading for a solution. Wind down the need for medical insurance and the hold that Big Pharma has would likewise wind down. Putting people on the front line of what is available and how much it costs would put them “in the know” — instead of removing them from their sight the obvious tyrannies of the medical-insurance complex. This will create outrage. And outrage is what we need here — before we pass outrage and go straight to social unrest, riots, and other troubles that shake even the foundations of our form of government. We are corrupted and we the voters must make the changes that elected officials are unwilling to do. The only thing left that is made in America and for sale are our politicians.

 

Our insurance driven system causes us to spend about 40% more money than it would take to give full, total and robust health care to every man, woman and child in the United States. Instead, our citizens get partial coverage, no coverage and limitations on what therapies “qualify” for coverage — not on the basis of safety but on the basis of revenue production for Big Pharma, Big Insurance and Big medical. We need e little trust busting here like a hundred years ago. The corporate trusts, creating anti-competitive barriers to both older and newer treatments that are readily available, preventative care that would reduce the need for medical services and products, are literally ruining our lives.

 

Krugman, Clinton and the rest of those who subscribe to mandatory health insurance have it flat wrong on the numbers, the policy, and the purpose. Obama is a lot closer to the truth when he says we should NOT tie ourselves to the insurance model. Insurance is the problem, not the solution.

 

Under the Clinton plan we would be locked into the current cycle for the foreseeable future. Insurance companies would control how well we are cared for, what procedures are available (i.e., “covered), and perpetuate the medical fraud perpetrated on the public whereby spiraling higher medical costs for services, procedures and treatments are completely controlled in the lockbox created by the mighty triumvirate of Big Insurance, Big Pharma, and Big Medicine.

 

Under mandatory insurance the jail cell we are in would become a life sentence and the key thrown away. Transfer of wealth on the backs of those need help would continue on its merry way — a perfect Republican solution conceived in fear and deceit, servile to their own greedy agendas and creating cruel results but never brave solutions, to paraphrase Thomas Paine in “the Crisis.”

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