Briefs

Kavanaugh
Anybody who ever was a drunken high school boy can have no doubt that He Did It, whether he remembers it or not.  If he does remember, he'll lie about it — but far more disqualifying are the lies he already told during his 2006 confirmation hearings for the DC Circuit Court of Appeals, regarding his service in the Bush administration.  He was an adult by then, and presumably sober.

Trade War
China's threat to respond to the latest Tr*mpian tariff escalations by disrupting US supply chains must be taken very seriously, given that key components of important manufactured products just are not available outside of China.  Even unregenerate supply-siders like Larry Kudlow are able to see that; Our President, though, only will listen to his paleo-mercantilist trade advisor, Peter Navarro.  Can mainstream corporatist Republicans stop them?  Maybe.  Maybe not.

Big Lie
Jaws agape, anybody who has been paying any attention at all over the past forty years stared in amazement as Our President declared that Democrats want to destroy Medicare, Medicaid, and Social Security.  Will his base believe him?  As Hitler wrote in Mein Kampf, "in the primitive simplicity of their minds they more readily fall victims to the big lie than the small lie, since they themselves often tell small lies in little matters but would be ashamed to resort to large-scale falsehoods." 

Socialism Redux?

Eugene Debs won 6% of the vote when he was the Socialist Party candidate for president in 1916, and he still won 1% when he ran again, from Federal prison, in 1920.  For American socialists, it was downhill from there.  Although FDR appropriated some major chunks of the Debs platform in his response to the Great Depression, and although Americans ignored the "socialist" label when LBJ introduced Medicare, it took Bernie Sanders to make socialism almost respectable again.  Almost.  When it comes to selling a policy, what you call it still counts for a lot.

"Medicare for all" has a nice ring to it.  People like Medicare, so calling government sponsored health care "Medicare for all" makes it a lot more appealing than calling it "single payer" (too dry) or "national health care" (too European) or, heaven forbid, "socialized medicine."  "Medicare for all" it is, then!  Beyond that, it will be far easier to extend an existing system than to create a new one from scratch, so "Medicare for all" may have to be more than a politically palatable label.

The main obstacle to universal Medicare, though, is that most people don't need it.  Most Americans have medical insurance through their employers, their benefits often are considerably better than those offered by Medicare, and they assume Medicare will be there for them when they retire.  How, then, can today's socialists garner popular support for national health insurance?

The simplest answer is to sell Medicare coverage to employers, in direct competition with private insurers.  Not required to turn a profit, Medicare can undercut private competitors; and as it grows, economies of scale would make it even more competitive.  The risk pool of Medicare's users would become younger and healthier, and the new cash flow would alleviate the problems of finance that Congress fails to address.  Mass enrollment also would create pressure to improve Medicare benefits, which currently are less than generous.

Contrary to popular opinion, socialists do not have to be oblivious to the power of markets; they do not have to be visionary idealists divorced from economic realities.  They do have to be committed to democracy, though — because in any economic system, only the power of the many can constrain the corrupt avarice of the few.

Medicare for All?

It's obvious that Bernie's "Medicare for All" bill is not about to become law, but that doesn't make it an exercise in futility.  It is a means for ambitious Democrats to define themselves as progressive, not slaves to the party establishment.

The single greatest obstacle to national health insurance is not Republican or industry opposition – it is employer provided health coverage.  As long as most Americans have that, they will not be especially concerned for those who do not; so public pressure for national health insurance never will be sufficient to bring about change.

There must be a means to transition from employer provided insurance to public insurance – and the most direct route begins with allowing employers to purchase Medicare for their workers.  This "free-market" approach would put a government-run program in direct competition with private insurance.  Profit-free, Medicare should have a competitive advantage; and by introducing younger, healthier participants into its insurance pool, Medicare should become more economically viable.  The new money in the system also would make the prospect of future cuts in benefits or increased premiums less likely.

The impact on the private insurance industry would be gradual, as employers switched over.  Since Medicare is far from a "Cadillac" plan, many employers also would shop private markets for supplementary, further softening the impact on the industry.  Over time, there would be plenty of public pressure to improve the coverage that Medicare offers, and to offer Medicare as an option in the ACA insurance markets.

Once a majority of Americans already are covered by Medicare, it would be far easier to find support for universal coverage, paid for by a combination of individual and business taxes.  Here in the USofA, "creeping" socialism is the only kind that ever wins the race.

Corruption

In India, Prime Minister Narendra Modi invalidated most of India's cash in an effort to fight corruption.  Many believe his attempt at a cure may be more devastating than the admittedly severe disease, but it certainly is a valiant attempt.

In the United States, many believe that our President-elect will not be tempted to use his office to further enrich himself because "he's already rich."  Well, he was born rich, and had more money, decades ago, than you and I could spend in a lifetime — but somehow that didn't slow his pursuit of lots more.  Becoming President is not likely to change his behavior.

A little thing like the Emoluments Clause won't stand in his way.  A Republican Congress is not about to impeach and convict a Republican president for a little bit of self-dealing — nor, for that matter, a lot of self-dealing.  We can expect revisions to the tax code to make the party's benevolent billionaires even richer, at the expense of the rest of us.  We can expect windfalls for military contractors, the banking industry, any company that takes advantage of "public-private partnership" opportunities and, of course, property developers.

Deficit hawks will insist such expenditures be "paid for" with spending cuts in other areas.  The most "obvious" places for cuts already are being eyed hungrily by GOP ideologues: environmental protection, health care (including Medicare and Medicaid), Social Security, the tattered remains of the rest of the social safety net, and regulatory enforcement.

Anybody who expects our President-elect to start behaving like a "normal" president when he takes office is even more delusional than he is.

Beware the "Grand Bargain"

The general public seems to believe that what Bernanke called "the fiscal cliff" (and Krugman called "the austerity bomb") has been averted.  It hasn't, of course.  Sequestration and lifting the debt ceiling were kicked down the road a couple of months, but nothing, really, is settled.

During his first term, Obama seriously sought a "Grand Bargain" on tax increases and spending cuts with John Boehner — but Republicans, possibly convinced by too rich a diet of Fox News, declined, thinking they could take the Presidency and possibly the Senate as well in the 2012 elections.  Well, they were wrong.

The problem now, though, is that Obama still wants a "Grand Bargain," and probably still is willing to make entirely too many concessions on what currently are called "entitlements," but which used to be called "the social safety net."  (Yes, the progressives let the conservatives select the lexicon again.  When Republicans talk about "reforming entitlement programs," what they mean, really, is "shredding the net.")

Well, there are some changes that could be steps in the right direction.  The salary cap for FICA contributions could be lifted — or, better yet, entirely eliminated — to build the Social Security trust fund.  Since that trust fund may be invested only in government bonds, perhaps the Fed could create a new instrument — available only to the trust fund — that actually pays a little interest.  Since the Fed creates money out of thin air, it wouldn't cost taxpayers a cent, so beefing up the trust fund would not have any negative impact on the general economy.

What Medicare needs more than anything is what insurers call a more favorable experience rating — that is, it needs more members paying in who need less health care.  Hence, it makes no sense at all to raise the age of eligibility to 67, since the youngest members use the fewest services.  What should be done is to open up Medicare coverage to much younger participants.  The best way I can see to do that is to allow Medicare to compete against the private companies on the Affordable Care Act exchanges.  Uh huh, that good old public option — but there's no doubt it would cut costs.  The real solution, of course, is single payer for all.  Don't miss Eduardo Porter's column in yesterday's Times!

Needless to say, eliminating corn subsidies and the corn-based ethanol requirement for gasoline would free up a lot of money for food stamps, and raising the minimum wage to a living wage would help increase all kinds of tax revenues while reducing income inequality.  Yes, prices might have to rise, but poorer people tend to spend whatever extra income they receive, boosting sales.  That means more profits for (real and alleged) small businesses, and more employment.

I could go on, but why bother?  None of the above will happen.  After all, as Will Rogers said, "We have the best Congress money can buy."

Regarding what's "on the table"

The June job figures show employment continuing to crash, even as corporate profits increase. Is anybody surprised? The profits are coming mainly from overseas, although "productivity increases" here at home (automation plus increasing worker exploitation) aren't hurting at all.

In his column in yesterday's Times, Paul Krugman pointed out that the president is running very low on economic advisers, and wondered if the political advisers — who, like Obama himself, seem to know very little about economics — might be exerting too much influence. Given the quality of the economic advisers he used to have, I suspect there's not a hell of a lot of difference, but I'm hoping somebody can communicate some sense to him.

First of all, somebody has to pound it into his thick skull that we are not dealing with supply-side problems. It doesn't matter how many tax cuts and tax advantages government tosses at business — they'll just take the money and sit on it, or use it to buy back their own stock or take over other businesses (with concomitant staff "consolidations") or distribute it as dividends to shareholders. None of it will be used to create jobs in the United States as long as Americans can't afford to buy their products.

(The political advisers, of course, will point out that some percentage of "independent" voters have swallowed the supply-side line, and will encourage Obama to "get out ahead" of the Republicans. Obama once said he'd rather be a good one-term president than an ineffective two-term president, but I suspect he was either lying or self-deceiving at the time. I don't have a lot of confidence in Obama — or any of our current political elite — putting the country ahead of their own ambitions.)

If we disregard political ambitions and corporate contributions (har de har har), it makes absolutely no sense to give the corporations "tax amnesty" for bringing overseas profits back to the United States. We tried it back when Bush was president, and all it did was create a great deal of moral hazard, inevitably leading to the current proposal to do it again.

It also makes no sense to cut entitlements, which would serve chiefly to further reduce demand, and make our employment problems even worse. If Obama really has Social Security and Medicare "on the table" in the current talks with the Republican leadership, let's hope he's feeding them a line of bullshit no less stinky than the line they're feeding him about the possibility of increasing tax levies on the plutocrats.

Shit, nobody in either party wants to tax the plutocrats! They are the plutocrats! (Where's the IWW when you need it? We need it now.)

Medicare, again

The special election won by Democrat Kathy Hochul in New York's heavily Republican 26th Congressional District had national Democrats jumping for joy. Apparently, Paul Ryan's plan to turn Medicare into a voucher program was not at all popular up there in Erie County, and Democrats expect similar feelings extend nationwide. Probably, they're right.

Republicans claim Democrats "misrepresented" the Ryan proposal. Frankly, though, their chief problem seems to be that people understood all too well: just eliminate Medicare, the government insurance program, and replace it with a voucher to buy private insurance. Government savings only can come from voucher amounts always being significantly less than policy premiums. Those who can't afford to pay the difference wind up with no insurance, so they would not even be using their vouchers — leaving even more money to distribute in the form of tax cuts for the rich.

Republicans are right, however, in pointing out that Democrats have not offered a real alternative for reducing Medicare costs. The Obama plan, such as it is, depends mostly on reducing payments to providers — which logically would result in fewer providers accepting Medicare. We are still waiting the administration to suggest a replacement for the cost inflating fee-for-service model, which encourages providers to provide many unneeded tests and unproductive treatment protocols.

The chief reason Medicare is so costly, though, is that the people using it are older and sicker than the general population. To bring costs per patient down, the most sensible thing would be to bring younger, healthier individuals into the pool. In the past, I've recommended selling Medicare policies to major employers who wish to provide coverage to their workers. Since Medicare does not have to advertise nor pay out profits to stockholders, it ought to be able to offer real competition to private insurance companies. To stay competitive, the privates would either have to cut rates or offer better coverage and service.

Yes, this would look a lot like a first step towards a single-payer system, but if the private sector really is so much more efficient than government, it just might be able to steal away Medicare's customers — including the ill and the elderly. Now wouldn't that be a triumph for the free market?

Reinhold Niebuhr?

Yes. Reinhold Niebuhr. Evil exists, and sometimes we have to respond in ways we might not like. Okay — but what does that have to do with escalation in Afghanistan, especially when there are other alternatives? True, Obama is not Bush — but who the hell is, except Bush (or somebody else with Cheney's arm up his ass)? Nobel Peace Prize. Bah!

When a country is as corrupt as Afghanistan, the best way to bring peace is to buy it — not with troops and blood, but with money. Nobody can convince me we can't buy every last warlord and Karzai relative for a hell of a lot less — not even including lives — than we're currently spending on goddamned "nation building." Someday, perhaps, Afghan girls will be able to go to school, choose abortion, and belittle their husbands' dick size — but it won't be a result of anything American troops do in Afghanistan over the next ten years or so.

In the meanwhile, I couldn't care less that the Senate looks ready to kill the so-called "public option." The CBO has reported, as anybody with half an economic brain could have predicted, that the House version of the public option probably would cost more than private plans. The only way a public option can make a difference is if it is available to large employers, or others who can guarantee large numbers of plan participants.

The idea of people in the 55 to 64 age bracket being able to buy into Medicare is a lot more interesting. If the employers of people in the 55 to 64 age bracket are allowed to buy them Medicare instead of whatever they're buying for the rest of their employees, there could be some real savings. That, of course, won't happen.

What 850,000 assholes don't know

Yesterday I got a robocall asking me to "just press one" in order to join 850,000 other Medicare recipients in a campaign to save Medicare Advantage. It went on for about two-and-a-half minutes, progressing from "surely you want to press one" to "IF YOU DON'T PRESS ONE YOU WILL DIE!!!"

Actually, I'm not on Medicare yet, and I won't need Medicare Advantage when I go on it because I'll have secondary insurance via my former employer. Of course, there was another reason I wasn't about to press one.

Unlike the 850,000 already signed on with the insurance industry's front group, I'm not an idiot.

I had a look at the Medicare Advantage plans available in my area. Most of them, naturally, are HMOs. If I correctly recall the Clinton era, the advantage of an HMO is greater efficiency, which makes it possible for the HMO to offer enhanced coverage for the same amount of money as the usual fee-for-service coverage. Other Medicare Advantage plans either use preferred provider networks (doctors willing to accept reduced fees for more business), or allow the insured to use "Any Willing Doctor" [emphasis added] – to wit, any doctor willing to accept reduced fees.

What those 850,000 assholes don't understand is that the government subsidy to the insurance industry for offering Medicare Advantage plans – roughly 14% – does not pay for additional services. It goes straight to insurance company profit margins. If the final health care reform bill includes a public option, the privates quickly will learn to do without their 14% markup.

.....

My congressman punked out early, and did a health care teleconference instead of a town meeting. It was done well, but I still was disappointed – I wanted to get out there and mix it up with the local Republican crazies, waving my "Smart People for Single Payer" sign, and wearing my "Obama's not a Socialist, but I AM" button. Well, life is full of disappointments. Sigh.

Obama confirms sellout

Billy Tauzin of Louisiana was a founder of the Blue Dog Democrats, but decided in 1995 that the Blue Dogs were way too liberal, and became a Republican. Later, he helped to "negotiate" the Bush administration's creation of Medicare part D -- the drug plan -- which specifically forbids Medicare administrators to negotiate prices with pharmaceutical companies or even consider re-importing lower-cost drugs from Canada.

Almost immediately after that towering legislative achievement, Tauzin left the House to become the leader of PhRMA, the drug lobby. Earlier this week, Tauzin was hopping mad. It seems that Democrats in the House had the audacity to think that the drug cartel ought to kick in cost savings somewhat greater than the eighty billion dollars over ten years which the Obama administration agreed to for the purpose of getting Harry and Louise on its side. Taubin insisted that the administration affirm the eighty-billion-dollar agreement.

Obama, who does not have his predecessor's flair for lying, confirmed the deal.

One of the real advantages of leaving the details of health care reform to Congress is that Congress does not have to go along with half-assed deals agreed to by the administration. One only can hope that Congress will do the right thing, and pass a bill that endorses negotiation of drug prices by Medicare, Medicaid, and the much maligned public option that had damned well better be part of the final bill.

I can't see Obama vetoing a health care bill, no matter how inadequate it turns out to be. Let's just hope whatever comes out of Congress is better than what we have now, and that both the Executive and Legislative branches show some guts. If a strong House bill and a weak Senate bill go to conference committee, the administration can strongly influence what comes out.

That's when we can find out if Obama actually has some liberal inclinations, or if he's just another unprincipled pol like Bill Clinton.

If it ever gets that far.

Mark Twain called it "the best Congress money can buy." We'll see.

Action on health care

I'm running up the old red flag today to mark the first installment of a series I call Sensible Things Congress Won't Do.

Back when I taught economics, I liked to present my students with this conundrum: when there are necessary services that the private sector won't provide because they're not profitable, government steps in to provide them. If they should happen to become profitable, government hands them over to the private sector. That's called privatization.

So it follows that anything government does must lose money -- with the costs coming out of our taxes. Well, think about this: wouldn't it make sense for government to get involved in a few things that make money, to offset its losses? That way our taxes wouldn't have to be so high.

My students always thought that sounded like a pretty good idea. "Then," I would ask, "why don't we do it?"

As usual, I would have to answer my own question: "Because that would be socialism!"

Now, what about health care? A clear majority of Americans support the idea of a government run, single-payer health insurance system -- erroneously called socialized medicine by its opponents. It's not socialized medicine, of course, it's just socialized insurance -- and we already have that. It's called Medicare.

Ideologues on the right would love to eliminate Medicare, but there's a good reason Lyndon Johnson was allowed to sign it into law. The elderly and the disabled have a nasty habit of needing medical treatment a lot more often than other Americans. Private insurers are not in business to pay out benefits; they're in business to collect premiums. They don't want to insure the elderly and the disabled -- except for those able to pay vast sums for the privilege.

So, in keeping with our national custom of privatizing profits and socializing losses, the government stepped in -- and something amazing happened. Medicare developed into an extremely efficient and effective enterprise. Its biggest problem is a client pool of people who need far more medical care than the general population.

To me, the answer is simple. Despite the red flag flying at the top of this post, I sincerely believe in competition. I just think it has to be real competition, not some oligopolistic division of the spoils. In keeping with that belief, I believe Medicare should have a chance to compete in the marketplace with private insurers.

The first step is to allow large private employers to buy into Medicare to provide their workers with health insurance. Not burdened with advertising costs, mammoth executive salaries, or stockholders demanding dividend checks, Medicare should be able to offer employers significant savings over private insurers while still collecting more in premiums than it pays out in benefits. On average, the pool of participants would become younger and healthier, so average per-person benefits paid would be reduced.

Gradually, smaller employers also could be included, as well as various kinds of affinity groups -- including groups for uninsured individuals and families that could be organized by state governments or by non-profit social welfare agencies. Each time the pool of Medicare clients expanded to include more of the young and healthy, profit margins would improve -- and the payroll taxes that currently support Medicare could be reduced. Also, each time Medicare expanded, its bargaining power with the health care industry would be strengthened, further reducing costs.

Private insurers, of course, would be encouraged to compete by offering better benefits or (far less likely) lower premiums. Private supplementary plans, similar to those purchased by many current Medicare recipients, undoubtedly would be quite popular. Insurers who were unable to compete successfully would go out of business. After all, that's capitalism.

None of this is in conflict with the Obama or Clinton proposals for health care reform. If employers and individuals are to be required to purchase health insurance, there's no reason that insurance shouldn't be Medicare. If we're going to subsidize uninsured individuals and families, there's no reason those subsidies shouldn't go right back into government coffers instead of into corporate accounts.

The key to all this is that it presents us with more choice -- Americans would be able to choose either a government program or one of many private insurance plans. If the critics of big government are right, and government never does anything as well as the private sector, then the private sector will triumph. The super-salaried CEOs will prove their worth, and Medicare will shrink back to where it began -- or wither away entirely. On the other hand, Medicare just might prove itself a more robust competitor than the private insurers, and evolve into the single-payer system most of have wanted all along.