Sunday, April 24, 2011

Heads I win, Tails you Lose!

Many many years ago, I watched Dan Rather interview Ross Perot on the occasion of Perot's becoming a billionaire. Mind you, I have never been a fan of either of them. However, I did have to admire Perot's response. Basically Perot said:

Dan, many years ago, my personal net worth passed the point where my personal needs and desires were met. The point where the amount of money at my disposal covered every use I could conceive of for my own and family benefit. In short, last week, I might have had 198 times the amount of wealth a person could bring to bear in his own life. This week, I now have 201 times that amount of wealth. Are you asking if it is possible to somehow feel different? Now, since I put a lot of my wealth to work in my business ventures, creating jobs, if going from 198 to 201 means I will create more jobs, then yes, I am happier today than last week. But as far as any personal benefit, I passed that point long ago.

Rather obviously didn't catch what Perot was saying, as he asked two or three times again something like, "Yes, but how does it feel to be a billionaire?", and got basically the same answer. Finally, Perot graceful shut down that line of inquiry.

Now, whether or not Perot was honestly answering the question or simply trying to gild his image in immaterial. For all intents and purposes, what he said is probably true. One probably can reach a point where one has so much wealth that it is near impossible to really improve the luxury one can experience, other than bragging rights and greed instincts.

As the Tea Party threatens to block raising the nation debt ceiling, Perot's words came back to me. The Tea Idiots are offering a choice: No more taxes on the wealthiest and reduce programs to help the needy or they will damage the general economy, which will also hurt the needy. To use my late Uncle Sal's favorite coin tossing joke, "Heads I win, Tails you lose."

No matter what choice is selected in the Tea Party plan, it is the bulk of the population that will suffer. The 20% who hold the bulk of the nation's net worth and financial wealth may have to suffer a life style adjustment, while the remaining 80% may have to come face to face with considerable suffering. Joe Schmuckatelli, the wall street broker may have to forfeit one of his homes, while many middle and lower class folks may lose their only home. People currently making over $250,000 may have to forfeit an occasional gourmet restaurant meal, while thousands will have difficulty getting basic nutrition. Sally Joe may have to cut back on her health spa visits and botox treatments, while tens of thousands more will have to skip any doctor visits and prescription medications completely.

That's the wonderful part of our oligarchy. "Heads I win, Tails you lose". And the great unwashed actually believes there's a choice being offered!



  1. The real marvel to me, Al, is the way that this has apparently completely eluded that bottom 80%. In any sensible "democracy" this obscenity would have long ago produced a raving socialist government (best case) or a bloody revolution with Trumps and Kochs dangling from every streetlight. Instead, they're leading political candidates and power brokers.

    I am starting to genuinely despair for my country. I mean, we've virtually re-created the conditions of 1929; a bloated plutocracy and irresponsible financial elite that utterly shits the economic bed, impoverishing millions. Eighty years ago this resulted in the emergence of a semi-populist New Deal movement that forced the banksters and the wealthy to give up a portion of their lucre in return for social peace. What is happening today?

    The Teatards are threatening to hold their breath until the debt ceiling turns blue if the banksters and the wealthy aren't handed MORE of the nation's lucre.


  2. Chief-

    The 80% think that they are fat, dumb and happy, when they are really just dumb. Someone recently said (I'm old, so I can't remember where) that the general population suffers from a "I've got mine, everyone else is on their own to get theirs". I am coming to the conclusion that it's an ingrained cultural thing.

    It's kind of like the statement attributed to the German Pastor Niemoller:

    When the Nazis came for the communists,
    I remained silent;
    I was not a communist.

    When they locked up the social democrats,
    I remained silent;
    I was not a social democrat.

    When they came for the trade unionists,
    I did not speak out;
    I was not a trade unionist.

    When they came for the Jews,
    I remained silent;
    I wasn't a Jew.

    When they came for me,
    there was no one left to speak out

    While the 80% is being slowly raped, plundered and pillaged, it's being done slowly enough to allow all too many of us not to realize it.

  3. The Crash of 1929 and the suffering of the early thirties happened quickly and was widespread. Even those relatively unaffected could look around and think "I might be next." Getting folks to think of/vote in the interests of/fight for other people is always hard, it helps if there's an element of self-interest.

    We don't have that right now. Decades of "anyone can become a millionaire" thinking combined with poisonous political discourse, societal corruption and the gradual effects of the economic collapse (which is surely what is happening) have convinced too many that either a) it can't happen to them or b) there's nothing that can be done so why bother.

    Give us a few more years of slow decline, with the icy hand of poverty and fear reaching into more of the lives of us 80%-ers, and things will be different. Problem is, because of the things cited above, I fear we're not going to get another FDR but rather a Mussolini.

    And then we'll REALLY be SF.

  4. I think that's a result of the American "mindset" (from a commie Canuck north of the border). You have a terrific "I can do anything" mindset that's pushed you to the top and kept you there for decades. The downside is it also carries a very strong "everyone for him/herself" attachment. That makes it difficult for much of the populace to accept ideas/laws that benefit everyone at a small cost to them.


  5. Leon-

    Welcome to the fray! As your late, marvelous Canadian historian, Pierre Burton put it so clearly, and I have repeated here often in the past, the US was born by an act of violence and our founding document states that government exists to ensure the inalienable right to "Life, Liberty and the Pursuit of Happiness". The underlying theme is that the individual is superior to the collective well being. Burton contrasts that with Canada's peaceful birth by a rational act of Parliament (The British North America Act of 1867), which clearly states that government exists to provide "Peace, Order and Good Government". The underlying concept in your country is that the collective well being trumps the individual.

    If my rights are "inalienable" and unfettered, why should I care about someone else? Since government exists to ensure these rights, is it not understandable that those who are already enjoying them would resent being "burdened" with some responsibility to help the government provide these inalienable rights to those who are not enjoying them? Nowhere in our founding documents is there an explanation of how the "inalienable rights" are to be delivered, just that government exists to ensure them. It will take a major shock, such as the Great Depression, to convince the general population that they have a responsibility to individuals, and not because of any great shift in values, but because the numbers in dire need are so great that they suddenly have a self interested voice that can be heard.

  6. Well, and Al, let's not forget - FDR (and for my money I agree with you, EGrise) wasn't a softhearted or -headed old liberal wet. He was a vicious aristocrat from the noblesse oblige tradition...but one that saw pretty damn clearly.

    The majority of the oligarchs then - as the majority now, the majority in Louis XIV's court and the majority in St. Petersburg in 1917 - couldn't see further than the tip of their pampered noses. It took a brutal realist like FDR to understand that what the Depression had opened wasn't just your basic social class muttering (like the "panics" of the 19th Century had) but the possibility of a genuinely broad-based social revolution. And it took a vicious political bastard like FDR to ram the New Deal through and force the plutocrats to suck on it.

    IMO he did a hell of a lot to prevent the nation from becoming either a communist or a fascist dictatorship. But the oligarchs hate every scrap of the legislation that came out of the depression. My ex-wife's family was part of them, and, trust me, they really believe that they deserve every penny they "earn" from their trust funds.

    This country has always been more oligarchic that most of us want to admit. Hell, prior to the Nineteenth Amendment half the country couldn't vote, and if you keep walking it back to the early 19th Century between black laws, poll taxes, and property requirements I think that something like less than 10% of the people living in the then-U.S. were eligible to vote in the first Presidential election under the present Constitution.

    But we're going to a place we haven't been since the early 20th Century, and I have no idea whether the result will be as ugly as the so-called "Gilded Age" was for about...ummm...80% of the nation.

  7. Chief-

    I cannot claim to know exactly what motivated FDR, but you are correct in that he was a realist and knew that in the long run, the collective well being needed to be served to some degree to keep the masses from rioting. However, true blue bloods think about the future, not just their immediate selfish orgasmic pleasure. While I would guess that human nature is somewhat selfish, the US has elevated it to a new level by incorporating unbridled self interest into our very founding documents, albeit ever so subtly so. Well, the failure to franchise great portions of the population wasn't so subtle.

    Thus, only a clear and present threat to the oligarchs, like the Great Depression, can result in a brief respite from throwing many of the masses onto the dung heap.

  8. Al-

    Your comment as to the "great unwashed" reminded me of something I read some time ago. WJ Cash's 1929 article on "The Mind of the South":

    ". . . He is still at heart a mountain lout, lolling among his hounds or puttering about a moonshine-still while his women hoe the corn. He has no genuine conviction of wrong. His grievances exist only in the absolute. There is not one among them for which he is really willing to fight. And that is the prime reason why all Southern strikes fail.

    Moreover, the mind of the Southerner is an intensely individualistic mind. There again, it strikes back to the Old South, to the soil. The South is the historic champion of States’ Rights. It holds Locke’s "indefeasibility of private rights" as axiomatic. Its economic philosophy is that of Adam Smith, recognizing no limitations on the pursuit of self-interest by the individual, and counting unbridled private enterprise as not only the natural order but also the source of all public good. Laissez-faire is its watchword.

    The Southerner is without inkling of the fact that, admirably adapted as such a philosophy was to the simple, agricultural society of the Jeffersonian era, it is inadequate for dealing with the industrial problems of today. He has never heard of the doctrine of the social function of industry and would not understand it if he had. He cannot see that industrialism inevitably consolidates power into the hands of a steadily decreasing few, and enables them, if unchecked, to grab the lion’s share of the product of other men’s labor; he cannot see that the worker in a machine age is not an individual at all but an atom among atoms—that he is no longer, and cannot possibly be, a free agent. Under the Southern view, even a cotton-mill is an individual. If a peon cares to work for the wage it chooses to pay, very well; if he doesn’t, let him exercise a freeman’s privilege and quit. But for him to combine with his fellows and seek to tie up the operation of the mill until his wages are raised—that, as the South sees it, is exactly as if a lone farm-hand, displeased with his pay, took post with a shotgun to bar his employer from tilling his fields. . ."

  9. Seems that this goes double for an economy based on financial scams committed under the cover of infotainment/24/7 T&A distractions/diversions, rather than an economy based on actual industrial output as in 1929 . . . we're all "Southerners" now, ya'll . . . ;-)>

  10. A couple of observations:

    1. The problem of the public debt and deficits and the problem of wealth/income/financial disparity are two separate problems that don't, IMO, share a common solution.

    2. Not everyone here at the bar has disclosed their income and wealth, but those (including myself) who have are all in the aforementioned 80%. Are any of us in this "great unwashed" group up to doing anything more than complaining on the internet, much less rioting in the streets and stringing bankers up on light posts? We might want to examine our own reasons for not not doing more than the rest of the "great unwashed" before passing judgement on their intelligence and motivations.

  11. Andy-

    As to your point number 1, my post concerned the fact that in the two options offered by Teabaggers, the 80% has the most to lose, not the 20%. I don't care if they are addressing deficits or the like. It is very clear that they reject any general social responsibility in favor of individual interest.

    As to #2, my post was addressing our legitimate system, not the issue of riots. However, when I see senior citizen after senior citizen shouting, "I don't want the government taking over my Medicare", I think there is legitimate reason to judge "the great unwashed." Stupid is as stupid does. Similarly, when the Tea Party denizens threaten to bring down the economy (refuse to raise the debt ceiling) if social programs are not gutted, I also have concerns about the level of intelligence of major segments of our society who have no idea that they will ultimately suffer the result.

    As to whether it can be changed? To be frank, I have such low regard for the general population's intelligence that I think only a severe event, such as the Great Depression, will lead to any seriously sound approaches. Until then, ideology and demagoguery will continue to be the rule.

  12. Andy: Public debt and deficits ARE connected to wealth and income disparity by taxes and expenditures.

    The right loves to use the metaphor of the "family living within its means" while the reality is that a government is a family with the ability to give itself a raise in the form of increased taxes and decreased expenditures.

    The right loves to use the entitlement programs as whipping boys, while whistling past the military procurement graveyard.

    The right loves to fulminate about deficits and debt while ignoring that we're taxing ourselves at 1950s levels and significantly less than all the other industrial democracies outside Japan.

    And the reason I'm not out there gunning for the Trumps and the Kochs is because I don't want to spend the rest of my life in prison.

    It's fear, cowardice pure and simple, and given that I have more political information and motivation than the rest of the great unwashed it says something truly scathing about me. But at least I understand the depth of my own failure. There's a whole bunch of my fellow citizens whose comprehension is about on the level of the heifer heading down the chute towards the dark doorway that reeks of blood. While they are not as culpable in terms of the cowardice, they are far more culpable in terms of ignorance.

  13. FDChief: Given my own view that FDR (the wily old trout) saved American capitalism from a communist revolution (or worse), I always have to laugh when I see conservatives call FDR a communist (or worse).

  14. Sure, some of it is cowardice (as the Chief outlines above - I'm not going to be the first one to get shot trying to kick start a revolution that many may not even want). And some of it *is* stupidity (Exhibit A: the Tea Party).

    But from a greater perspective, it's the problem of the interregnum. Gramsci's quote: "The crisis consists precisely in the fact that the old is dying and the new cannot be born; in this interregnum a great variety of morbid symptoms appear."

    The old order is dying, if not already dead, and the general paralysis, the feelings of frustration and powerlessness, those are dead giveaways that we're in an interregnum. The looting of the nation, our inability to stop it, the increasingly blatant corruption, our feckless military actions, are all morbid symptoms.

    I don't blame people for not acting. I won't call them "sheeple" for not wanting to engage a system so thoroughly gamed against them and instead choosing to spend their time with family, friends, and their life's work.

    We will act *eventually*, but only once things have become so bad that the alternatives are worse.

  15. EGrise is a smart person.

    In the late 20's and early 30's the established power structure had the horrible example of the Russian revolution to look at.

    Today, we have the internet. It gives unprecedented ability for people to self organize. Right now we are at the peak of media centralization but it isn't enough.

    A new political order is coming where the elite will have much less say.
    However, it can't happen until the left abandons the Democratic Party.

  16. Al,

    I would argue the 80% are going to take a hit regardless. The rich in this country always had, and will always have, options not available to the rest of us. Entitlements, which primarily benefit the middle class, are unsustainable. Their collapse, absent reform, is a mathematical certainty. Although I agree the Tea Party does not offer any viable solutions to this problem, neither does anyone else currently. I think their threat with regard to the debt ceiling is mostly hollow and after an appropriate amount of posturing, it will get raised.

    Also, you're right that public ignorance is a serious problem, but it's not a problem limited to tea partiers or seniors who may think Medicare isn't financed by the government. There's polling going back two decades that shows, for example, that most people think foreign aid is a huge part of the federal budget (an average of 27% of the federal budget in a recent poll (it's actually less than 1%)) and that cutting foreign aid would provide significant savings. Similarly, large majorities strongly oppose any significant changes to entitlements especially in order to reduce deficits. People on the left continue to believe that increasing taxes on those making more than $250k will solve everything. IOW, everyone's got their own pretty pink unicorn they're trying to sell.

    Nothing can be done as long as significant majorities of people continue to believe in solutions that are mathematically impossible or that tinkering with the present system will "fix" our problems. The Tea Party is only one small part of that - it's not like the GoP and Democrats are offering rational solutions either.


    Sure, inequality and deficits are "related" but not causative. For example, if income was more evenly distributed in the US then federal income tax receipts would actually decline making the deficit problem worse. Point being, taxes/spending and inequality are different problems that ultimately require different solutions.

    The right loves to use the entitlement programs as whipping boys, while whistling past the military procurement graveyard.

    Well, entitlements (particularly health care) spending IS the long term problem. That's something on which practically everyone who's looked at this agrees, to include Paul Krugman and the CBO. Even if you zero out defense spending, it won't be enough. Unlike entitlements, defense spending hasn't grown all that much compared to the historical baseline what whatever criteria you want to use. Just to be clear, this isn't an argument against cutting defense spending - I've said many times I think we could do with substantially less - but it's not going to come close to solving our fiscal problems.

    BTW, I'm not including links in my comments anymore (ie. to what Krugman and the CBO say) simply because that causes the comment to go down the memory hole or get trapped in the spam filter.


    We're at the peak of media centralization? Media is more diverse than it's ever been.

  17. Al:

    The underlying concept in your country is that the collective well being trumps the individual.

    The Preamble states:

    We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

    By its very existence, the Constitution is a strong arguement against each individual for himself.

    However, like say, the Bible, its text is open to individual interpretation and which parts are stressed ( like the 2nd Amendment ) and which parts are ignored ( like the piece against unreasonable searches and seizures ).

    And, as I have written many times around this bunch, the Pop Americanus is one of the most propangadized and misled nations of the world.

    The Oligarchy has in these times that which it could not dream of having in the 20s and 30s, a very effective and widespread PR tool, the Press and Broadcast media.

    It is possible that I do have a bias, having grown up where I did, but I do believe a solid majority of Americans do know that we MUST give up some of our holdings to provide for the greater good. And that can be a selfish motive, too, with the realization that the individual can survive only in a functioning and, mostly, fair society.

    What would you do if you somehow found yourself the owner of a fortune, say a million? Would that be enough to turn a soul? A billion?

    Something I've never thought to ask you, but after I watched 60 Minutes' story on Mt. Athos, it popped up. Ever been there?


  18. I have to laugh, I spent Easter Sunday at my in-laws. They skyped their son and daughter-in-law at one point during the afternoon. In a short conversation, instead of catching up on nieces and nephews, etc. my sister-in-law launched into a rant about Obama being socialist and turning the country into a communist nation, etc., etc. yadda yadda. I tuned out after the word communist.

    What bugs me is that both she and my brother-in-law are "college educated" yet they can't see through the rhetoric. When did people stop thinking on their own? When did it become vogue to act stupid?

    The other thing that bothers me is how the uber-wealthy can't see that when they've raped and pillaged and there's nothing left but scorched earth, there'll be nobody to take from any more. Even the JP Morgans, the Carnegy's the Rockefellers knew this. The Kochs and the Murdochs are lopping the head off the golden goose.

  19. Andy: You rope in Krugman, but you haven't mentioned what the man said, to wit:

    "Entitlements" are not all one thing.

    Social Security is easy. It is not currently insolvent and can be made permanently solvent (well, permanently until and unless the entire U.S. economy takes a fundamental shift, more of which in a bit) by jiggering the FICA take and the benefit outlay. I won't rehash the whole thing, but he does, and his arguments look sound to me.

    The "unsustainable" part is in the health benefits programs, Medicare and Medicaid, and when you look at the numbers most of the hit is coming not in the programs themselves, which are cost-comparable to most private insurance schemes and better than many, but in the baseline rise in healthcare costs. This rise is hammering a lot of other aspects of the U.S. and can't be "fixed" by anything on offer presently. There are ways to control costs, but they would require the U.S. public to make choices that most other industrialized nations already have (read: centralized government-run care) as well as forced curtailment of a lot of spendy end-of-life care. I don't see that happening.

    But, sadly, the real elephant in the room is the increasing hollowing of the U.S. economy. A hell of a lot of living-wage jobs are going, and what is replacing them, if they are replaced, will be a lot more like McJobs that won't pay nearly the same. Lots more people living just above poverty, lots less confidence, lots less spending. Lots less taxes, lots more need for social services at the same time that those same services are increasingly frayed.

    And as pretty much everyone here points out...the elites are increasingly insulated. They have less and less reason, or interest, to try and do anything about that.

    Oh, well. Hopefully whatever "Cascadia Republic" that emerges from the wreck of the former United States will be a good place for my grandkids to live in...

  20. Chief,

    Sure, Social Security is easy when you look at it as a separate entity, but it's not so easy when considered as part of the entire federal budget. In the same way a credit card balance of a couple of thousand dollars isn't a big deal by itself, but if you add $200k on an underwater house, $50k in school loans, $25k for a car then that balance isn't so easy to deal with.

    Yeah, health care costs are the driver and the US government is the biggest insurer so cost increases are a pretty big deal for the national bottom line. Who has a solution to that problem? There are many solutions but they are all currently politically impossible until cold, hard reality can no longer be ignored. Actually, we really have one choice - ration care - the ideological disagreement is and will be over how to do that and who ends up being the sucker that gets screwed.

    As for the economy, I'm kind bipolar on that topic. Sometimes I think we're in a transition similar to the move from an agricultural to industrial economy - other times I think we're moving towards Augustan Rome.

  21. Andy:

    Disney, News Corporation, Time Warner and Viacom are the first, second, third and fourth largest media conglomerates in the world. Go look at what they do and where they reach. Next, look at what the media ownership picture looked like 20 years ago then come back and tell me that media concentration hasn't happened, big-time!

  22. Why do we call it heath "insurance"? Insurance involves pooling funds from many insured entities (known as exposures) to pay for the losses that some may incur. Insurance for every other aspect of the economy is a system where those in the insured pool share the cost of everyone in the insurance pool's claims experience. It is a rare case where that happens in the US “health insurance” industry. For decades, most health insurance plans' premiums have been paid primarily by people or entities outside the pool of insured persons. It's called "employer provided health insurance", and the majority of the costs are paid by the employer's customers, who are overwhelmingly not in the risk pool being "insured". The employer's customers have no say over the risks being insured against, nor the cost of the risk servicing. Thus, General Motors, for example, passed on the cost of 150,000 employees health insurance to some 4 to 5 million vehicle purchasers, no less parts purchasers, each year during it's "Glory Years". That is not risk "sharing", but risk "shifting".

    If the risk pool is paying only a minor share of the full cost of the pool's actual claims experience, why would the risk pool care if costs rise? If the entities actually paying the claims experience do not see how much they are paying to cover the claims experience of others, why should they care how much costs rise? At least until health care costs have gone through the roof, and it becomes increasingly difficult to shift those costs outside the risk pool. Consider all the ill will towards Detroit over how much of a car's price is based on health insurance for auto workers.

    We are not running up a huge medical bill in the US primarily due to all kinds of extra care and extraordinary life prolonging treatment. We are running up that bill because each and every transaction costs more than the identical transaction anywhere else in the world. Why does it cost more? In a large part, because for way too many years, burden shifting allowed the price to rise unchecked. Part of the higher price Americans pay is due to the $2.5 billion spent each year in direct to consumer advertising of prescription medicines, a practice prohibited in all other industrialized nations, or the $1.23 billion in annual hospital advertizing. We pay $12.60 per capita annually for pharmaceutical and hospital advertising, geared to both increase and influence demand for medical services.

    And, if we are alleged spending so much more on prolonging life, why is our life expectancy lower than many nations spending significantly less per capita on health care? Similarly, we have the highest infant mortality rate in the industrialized world. We think we have a great health care system, but do we?

    I think it was Paul Krugman who recently took issue with those who say the cure is to get government out of the health care arena and promote “consumer choice” as the ultimate market tool to contain health care costs. He railed at calling us “consumers” rather than “patients”. I find the whole idea of “consumer choice” ludicrous. “OK, doctor, I’d like the fuel efficient, compact, low cost coronary bypass. Cloth versus leather seats, please.”

    The government is not the cause of the massive per capita health care burden. The same government that is going broke paying for the Medicare prescription benefit, spends 40% less for VA prescription benefits. Why? Because GWB wanted Medicare “market driven”. The market place is the problem, and that market place has been a scheme of smoke and mirrors for years. Until the cost “crisis” of today became apparent to a major segment of the population, no one worried about medical costs, because no one was burdened enough to care. The imaginary "free lunch" is suddenly being billed, and we can't deal with it.

    Well, the 20% can.

  23. Andy:-

    Actually, we really have one choice - ration care - the ideological disagreement is and will be over how to do that and who ends up being the sucker that gets screwed.

    If we accept the current irrational model for health care pricing and delivery, yes. In fact, it is already rationed. My daughter has an auto-immune disease. When her husband lost his previous job, her "pre-existing condition" leaves her ineligible for insurance, thus rationing her care to what they can afford out of pocket. Not eligible for public assistance if he is employed. No limit on availability of required treatment, as slots are unused. They just don't have the cash to afford the proper frequency of treatment. That's the kind of rationing our current "market driven" system has had in place for decades.

    The root problem is that the government is being called upon to finance (not provide) medical care in a market that has seen no general cost control, because the name of the game is to shift the burden for medical payments to someone other than the risk pool receiving the care.

    Tweaking the current "insurance" system is going to solve nothing, as, unfortunately, far too much infrastructure has been established based on the exorbitant pricing that is in place. We cannot change things without a dramatic hit to vested interests, and none of those interests are the patients.

    We spend 25 to 100+% more per capita than other industrialized nations, all of which have some form of universal, comprehensive health care. 15% of our population is TOTALLY uninsured - meaning they are not covered by Medicare, Medicaid or any other program. Anyone who claims that our "system" can be simply adjusted to rein in health care costs is a fool. Anyone who thinks "government" is the problem is a bigger fool. We have been rationing health care for decades, using market prices to do so. My daughter can attest to that.

  24. Andy - P.S.

    As with most people, you blindly presume that it is the patient that must be "the sucker who gets screwed". Why is it that we consider the medical services industry's pockets inviolable? They are the ones driving per capita costs, not the "capitas". Think about that. If I can get a full annual physical, blood tests, to include PSA, from private physicians and lab here for 150 Euro (about $225), how do you explain the $400+ my insurance paid, along with the $75 I paid in the US five years ago? Perhaps my Greek physician's Oxford education is worth less than my US physician's state university education?

    The sucker has been and always will be the patient in the US, because he's part of the 80% and the job of the 80% is to be exploited and still think he's in the land of opportunity.

  25. This is a fucking laugh. Blaming Laissez-faire on our current problems is stupidity at its finest. We don't have Capitalism in this nation. We have Corporatism, aka Soft Fascism. Our goddamn monetary policy is part of the problem.


    "With the debate over the federal government's budget as the hot topic of the day, the proponents of big spending have gone into overdrive with their mantra that Herbert Hoover was a small-government liquidationist. As often as this myth is repeated, it's important to show that it is wrong: Herbert Hoover was a big-government man who did not trust the free market."

    Cutting the budget is the ONLY way we're going to get our goddamn country back before we go over the cliff. Yes, it means cutting the bloated Defense budget and stopping our fucking aggressive overseas wars. But hey, why fucking take the word of a 'Teatard' like me? China is set to dump its US securities that it holds and the complete monetization of our debt will begin. We're already facing inflation that is ramping up. Any fucking jackass that claims we have deflation hasn't bothered looking at the goddamn packaging for food in stores, nor the prices. The more expensive food and fuel become, the more expensive EVERYTHING becomes.

    From ZeroHedge:
    "All those who were hoping global stock markets would surge tomorrow based on a ridiculous rumor that China would revalue the CNY by 10% will have to wait. Instead, China has decided to serve the world another surprise. Following last week's announcement by PBoC Governor Zhou (Where's Waldo) Xiaochuan that the country's excessive stockpile of USD reserves has to be urgently diversified, today we get a sense of just how big the upcoming Chinese defection from the "buy US debt" Nash equilibrium will be. Not surprisingly, China appears to be getting ready to cut its USD reserves by roughly the amount of dollars that was recently printed by the Fed, or $2 trilion or so. And to think that this comes just as news that the Japanese pension fund will soon be dumping who knows what. So, once again, how about that "end of QE" again?"

    People like me at the bottom, who have been screaming about this, are about to get fucking plowed under and you fucking people WANT to continue? What fucking PLANET do you live on? Our goddamn problems, like the liquid wealth of the nation being concentrated in the hands of 1% of the population is BECAUSE of the government. STOP FUCKING BEING PART OF THE PROBLEM!

  26. BRL:

    I note that you propose only budget cutting. In the 90's, our conservative prime minister opted for raising taxes but could never quite get the budget under control. It wasn't until we got a liberal prime minister (after the the conservatives "flamed out" in a big way) that budget austerity (but no tax cuts) happened.

    Politics is a funny world where words and deeds don't align very well.

  27. BRL- Thanks for the canned Teabagger rant, which in no way addresses the subject being discussed.

    If you think I am surprised by any threat of China's to undermine our economy, I would mention that one noght over dinner, a Chinese friend, who at the time was a strategic economist for whatever Chase called itself in 1963 (were you born yet?), stated very clearly that we need not fret war with China. As he put it, with the very cheap labor pool at China's disposal, someday they will forget Dogma, face reality, and then take us over buy flooding our markets with cheap goods made my low wage replacements for US labor and conquer us economically.

    However, there is one flaw in your mantra and predictions of doom. Right now, China is very dependent on US trade, and will be until Europe gets back on its feet. Just before GWB left office, the Chinese trade minister told the EU that we (EU) are the trade partner upon whom they are making their long range plans. When asked how that could be, as the US was a bigger consumer, the Chinese trade minister said that it made no sense making plans based upon countries such as the US that have no serious monetary plans, no serious economic plans, no serious energy plans and no serious industrial plans. All that saves the US from Chinese plundering right now is that when we (The US) brought down the world economy, we dragged a lot of the EU with us.

  28. Al,

    A few points. Sorry for the bullet-list, but I'm a bit short on time:

    1. I think I've said many times before that I think we need to get employers out of the health insurance business. No disagreement with you there.

    2. There are other differences between "health insurance" and other insurance besides risk pools. For one, non-health insurance is typically designed to cover rare but catastrophic events. Not so with health insurance which is more aptly called health "coverage." Paying for every checkup or kid’s sniffle has little to do with risk pools.

    3. Ok, from your figures about $3.73 billion is spent on advertising in the health care sector. The health care sector spends about $2.5 Trillion annually in aggregate. Do the math, advertising isn't even a rounding error.

    4. I think we have a very good healthcare system - the problem is that's it's way too expensive and is therefore a poor value for what we spend. In short I don’t think we necessarily need better healthcare, we need cheaper healthcare that doesn’t compromise on current outcomes or negatively impact public health generally.

    5. Consumer choice isn't about deciding whether or not to get a discount coronary bypass - that is a strawman. Consumer choice (IMO) is the ability to choose types of coverage. For example, maybe someone only wants to pay for catastrophic care and is willing to pay for routine visits out of pocket; another person wants full coverage for everything with a low deductible/copay; someone else wants comprehensive coverage but with larger deductibles/copays, etc. Right now that choice doesn't exist because people are tied to their employers or are forced into a state-regulated cartels that are too expensive. Plus, the companies in those cartels aren't allowed to offer such choices even if they wanted to. Most of this is the result of a balkanized state-based regulatory system. That kind of choice is also incompatible with the fee-for-service system we are currently saddled with.

    6. Relatedly, there is no market in health care, nor is there a market in health insurance. The conditions required for a functioning market in both those areas do not exist. Bush was confusing "market" and "privatization" which is not remotely the same thing. Unfortunately, a lot of so-called “free market” types make that mistake all the time in all kinds of areas.

    7. You say, "Anyone who claims that our "system" can be simply adjusted to rein in health care costs is a fool." You're preaching to the choir there.

    8. You say, "Anyone who thinks "government" is the problem is a bigger fool." That all depends on what you mean by “government is the problem.” Government must be part of any solution, but as it currently stands our government (and state and local governments) ARE a problem. The fee-for-service system that's used by almost all health insurance whether public or private was created by Medicare. ( Here's a short history on that: ) Medicare reimbursement rates act as a price floor for the entire system - after all, providers claim they lose money on Medicare patients so they charge higher prices on private insurance. That's a problem that government created when it made the Medicare system and government has been unable to mitigate the negative effects of that original decision. Pointing that out should not, BTW, be interpreted as suggesting that government doesn't have a legitimate role in health care - obviously it does - but right now government policies are a huge problem and therefore government IS a problem that requires substantial reform.

  29. continued:

    9. You said: "As with most people, you blindly presume that it is the patient that must be "the sucker who gets screwed". I'm not sure where you got that idea and I'm pretty confident I've never written or suggested anything of the sort. My point was that there are no free ponies in solving the health care crisis - someone is going to take a hit. Rationing will happen one way or another which, IMO, is a good thing because no society can promise unlimited services. Ideally, rationing won’t significantly affect patient outcomes if the system puts in the proper incentives. There will be pain though, and I think the pain should be spread around, but I personally think a lot of it should fall on providers. It should put a lot of people out of work - people who do jobs that are not necessary in a rational system. Here I'm thinking of the medical billing/coding profession and other “compliance” jobs that only exist because of how screwed up our system is (While we’re at it we should simplify the tax code and put a bunch of corporate tax lawyers, accountants and Inuit out of business). And yes, patients will share the pain too either in terms increased taxes or increased fees/premiums depending on what system finally emerges. No free ponies.

    Another way I look at it is that the people who are going to get screwed the most are the three generations following the baby boomers. The boomers are now old enough that they will be grandfathered in on any solution and so the young-uns will have the privilege of not only paying for all the debt the boomers racked up over the last 3 decades (thanks to their penchant for low taxes along with a high level of government services), but also all the benefits they've been promised. In addition to the accumulated debt and the grandfathered boomer retirement benefits (because that SS/Medicare "trust fund" will be replenished with new taxes which the boomers won't be paying), the follow-on generations are also likely to pay more for lower benefits for themselves. Oh, and somewhere in there we'll have to save money for our own retirement costs, plus our kid's education (another area of the economy where costs to consumers are growing at 2-3X the rate of inflation – at historic inflation rates, tuition for my oldest kid will be twice what it is today in constant dollar terms – boy am I looking forward to that bill!). If you wonder why my wife and I, who will both earn military retirement benefits, are saving 25% of our annual income plus college tuition money for three kids (all of which, BTW, isn't the easiest thing in the world to do, even with our decent income and ridiculously low federal income taxes), it is because of that future probable reality. We don't have much confidence that those promises can be kept and we can’t assume that costs for all these things won’t continue to inflate. And to be honest, I don't think it would be fair to leave military benefits untouched while cutting or realigning everyone else’s benefits.

    10. Finally, your point about pay disparity between your Greek doctor and one back here in the US is a good one. I agree that we overpay people in our medical profession. Of course, it's easy for me to say that since I'm not in that profession. Doctors here in the US (and their lobbying organizations) frequently lament how insufficient Medicare reimbursement is and how expensive it is to get a medical degree. The biggest single cost in health care is labor - I don't see how it's possible to reduce the cost of health care without people in the medical profession taking a de facto salary hit. And they are naturally going to fight that. And all those medical billing people and administrators who won’t be needed in a rational system will be fighting hard to keep their jobs. Add in the fact that in our fee-for service system doctors can generate their own demand and part of the solution will have come from the ass of providers.

  30. Ok, looks like part 1 to my comment got hit by the spam filter....


    I think the media concentration you describe is irrelevant. I don't get much of my information/news from any of those. Their power is only going to further weaken over time - there is no "centralization" in the internet age. Just ask the people in Libya (who I follow on twitter), Egypt, Syria, etc.

  31. "Ok, looks like part 1 to my comment got hit by the spam filter...."

    Nothing in the spam folder, Andy.

  32. Thanks Publius, it's there now. The Pub might be haunted or something.

  33. Andy-

    The fee-for-service system that's used by almost all health insurance whether public or private was created by Medicare.

    That is not the case, nor is it what the article states. Having been a patient for 23 years before Medicare, my family business' medical insurance paid the fee for service charges of our attending doctors. But it is clear in that article, as admitted by one physician, that doctors charged Medicare more - because they could.

    "We found what the general fee for a service was and charged that or maybe added 10 percent, because of course I'm better than average," says Lucian Leape, who was a practicing surgeon at the time. "So it was an incentive for doctors to charge what they thought was reasonable for them, and then of course to increase it every year by, say, 5 or 10 percent."

    I would note that you are simply suggesting a different insurance scheme, not a system that affords universal comprehensive health care without the cost running double that of other comparable countries. You are just saying we should have the choice to "opt out". If I choose not to have routine care, I can lower my insurance premiums. How will that lower the rampant cost increases?

    My annual physical - by private physicians - costs half what you pay mainly because I do have choice. For 5 Euros for using the National Health Center and 32 Euros for the private lab doing the PSA (currently not available at our island public health center), I don't have wait for the bi-weekly arrival of the Public Health Service cardiologist and do it at the National Health Care Medical Center two blocks from the private cardiologist with whom I can make a convenient appointment. Since I had a bypass 15 years ago, the cardiologist does my whole annual, rather than seeing a GP (fee for service) and then an even more expensive cardiologist (bigger fee for service) as in the US. Oh, yes, the blood work at the private lab here is under the supervision of a physician, who sits with you to go over the results.

    We Yanks have been addressing health care by nibbling around the edges of a tragically flawed system, trying to come up with ways to adjust it. How can we claim to have a "good" system when our outcomes at the total population level (life expectancy and infant mortality, for example) are at the bottom in the industrialized world, even with our per capita outlays? Part of this is the cost barriers to access. We can blame it on poor lifestyle choices of the poor, but our outcome trendline in comparison to the rest of the industrial nations has been downward, which per capita spending has been upward. And, we had poor people all this time. One difference, I am convinced, is that the poor have been losing access to routine care, resulting in worsening general public health.

    Now, I must confess, I suffer from having lived where health care is good, universally accessible, regardless of personal wealth, and a hell of a smaller proportional cost burden on the people, in terms of government outlays or private expense. However, Americans do not want to consider a "foreign solution" or "socialist". We will stick by our dumb ass approach until it collapses.

  34. Andy-

    Allowing everyone to buy as much or as little health "insurance" creates a variety of risk pools, exactly what is a major contributor to the irrationality of America's medical care costs. That's "market" thinking, not the design for a comprehensive health care delivery system. At least not from a socially responsible standpoint.

    Is the current system irrational? Absolutely. Health care services are not structured based on any model of societal need, but on a "follow the money" model, with all kinds of different "money" being charged all kinds of different prices, based on what the market will bear. Read some web sites by medical advertising consultants when you get a chance, or read up on "boutique/concierge" medical practice. ONLY in America, and these designer practices shed 60% of their former patients when converting, with the patients being put on their own to find a new GP. But the doctors doing this proudly report living better lives with very little loss in personal income, if any at all.

    It ain't going to improve.

  35. "I don't see how it's possible to reduce the cost of health care without people in the medical profession taking a de facto salary hit."

    True. But one thing that might help would be reining in cost inflation in academe. The private-school liberal arts education (and a fairly decent one, at that) that cost my family about 40-60K when I received it thirty-five years ago now costs almost a quarter of a million.

    That's fucking ridiculous. Professors aren't that much smarter, and I can guarantee that my old geology department doesn't have a dozen scanning electron microscopes for the clay mineralogy class instead of the one old beater we had in 1978.

    If doctors didn't have such an enormous debt burden after residency they might be more inclined to accept salaries in the LOW six figures...

  36. Al,

    Yes, before Medicare doctors charged fees and provided services, but that was an informal system where fees were based on what individual doctors could charge. The system created by Medicare is not like that at all.

    Secondly, I was simply suggesting methods of having health-care "choice" that are not trying to find a discount heart transplant. Such choices, for me, would be "nice to have" in a system but they are not cost control and I never meant to imply that they would control costs. For me, cost control is paramount as long as it is consistent with good public health.

    Third, my suggestion wasn't one to allow people "to buy as much or as little health insurance" as they like, but simply to give people some choices since everyone's circumstances are not the same. After all, in Greece you pay a lot more in terms of out-of-pocket costs than people do in other countries. Giving people some choice on top of a standard level of service is completely consistent with good public health.

    Finally, boutique medical services are available everywhere, not just in America. Cuba is particularly popular for that - google up "medical tourism."

  37. "If my rights are "inalienable" and unfettered, why should I care about someone else? Since government exists to ensure these rights, is it not understandable that those who are already enjoying them would resent "being "burdened" with some responsibility to help the government provide these inalienable rights to those who are not enjoying them? Nowhere in our founding documents is there an explanation of how the "inalienable rights" are to be delivered, just that government exists to ensure them." WRONG, gov"t exists to ensure they"re not INFRINGED upon.

  38. "Nowhere in our founding documents is there an explanation of how the "inalienable rights" are to be delivered," Disturbing

  39. I learned that the stupid "teatards" don"t want to raise the "debt ceiling". If that"s stupid, why stop @ the "debt ceiling"? why not just increase it by a factor of 10, 100, 1000 etc & turn those stones into bread? Cause that"s how prosperity is created, right?

  40. Oxford edumacated docs for us all, no stupid mit western 1"s, & let the Germans pay for it.

  41. Anon-

    Whether we like it or not, we have two choices, independent of deficit spending, reduction or the like. We can raise the debt ceiling or default. Neither party has an exclusive on the factors causing this, and refusing to raise the debt ceiling will cause more problems than it will cure. In fact, refusing to raise it is a symbolic, ideological (or more precisely "idiotic) stance. The recessionary results of refusing to accept that the debt for which the ceiling needs to be raised is alreay in existence, would make balancing the budget impossible for many years simply due to the massive reduction in revenue following the defaults.