Tag: corporations

The Democratic Party and Healthcare – Preserving Obamacare Cannot Be The End Game

While our current attention is on the Republican Party’s transfer of wealth to the rich and corporations through the charade of a healthcare reform, the Democratic Party needs to face up to its future and the future of our healthcare system in particular.

The Global Context

The chart shown here tells you everything you need to know about the outrageous amounts of money we pay versus the astonishingly poor outcomes for our health. Basically we pay twice (200% more) than almost every other developed country in the world for healthcare that is distinctly second rate.1 To put it simply we have a healthcare system that is ripping us off and laughing all the way to the golf course. It is a market system that incentivizes tests, procedures, and prescriptions, not health. It is a market system in which the providers, doctors, hospitals, insurance and pharmaceutical companies set prices as they wish.  Our healthcare system consumes just shy of 20% of our economic output. Our developed country competitors use 8%-10% of their output.

click for large size.

Preserving Obamacare is not enough to bridge these gaps.

Obamacare addresses the lack of access to healthcare in a significant but hardly comprehensive manner. It only hints at changes to the incentives and pricing that drive the unhealthy outcomes. Obamacare is not the solution. Better than nothing, but given the enormous resources being spent and the fundamental failings of the outcomes it is not sufficient.

Health Not Profits

In order to create a world class healthcare system we need to focus it on health not profits. Every other developed country long ago recognized that a market based system would not work because health is not a commodity like corn, cars, or cell phones. It is complex, multi-dimensional, and emotional. It requires a system capable of a holistic approach to people and the society they live in. Each of the countries with universal healthcare approaches implementation very differently in the details, but all have some sort of national/regional health budget that is negotiated with the various constituents. This amounts to a lump sum per person with which the health system operates to deliver health outcomes. The proof that it works is in the chart above. 

Outrage and Political Will – Stop Taking Big Money from the Rich and Corporations

The Democratic Party must absorb the reality of our situation. We need to develop and express some outrage at the current healthcare providers. It will not be a simple task to bring a sector of the economy that consumes nearly a fifth of economic output to understand that we cannot allow this to continue. We need them to evolve to a system that consumes a tenth while vastly improving healthcare for the entire population. A basic truth here is that we as a society cannot and should not allow one sector to consume so many resources, so inequitably, for such poor outcomes. In the global context this is not sustainable and makes us less competitive and less flexible to meet the changes. 

None of this will happen as long as Democrats are taking money from the rich and corporations. If there is a single lesson from the Bernie Sanders campaign it is that with messages and programs that reflect the needs of the vast majority of Americans, you can raise enough money to fight off the Republican Party and its wealthy and corporate sponsors. Time to start now.

  1. The US ranks 56th in infant mortality out of 225 countries; 48th in maternal mortality out of 184; and 42nd in life expectancy at birth out of 224. – source Current CIA The World Factbook – https://www.cia.gov/library/publications/the-world-factbook/ accessed 5/13/2017 []

Trickle-Down Returns to Enrich the Rich

As the rest of us are recovering from the outrageous Senate healthcare bill released this week, Trump and the Republican Party are having closed door meetings to shape their “reforms” to the Federal tax system. Get ready for a resurgence of rhetoric about how enriching the rich will generate a surge in economic activity that will raise all boats. There will be lots of talk about “pro-growth tax reforms”. This is the return of 1980s trickle-down economics. The basic notion is that if you put more money in the pockets of the rich and corporations they will invest in creating new businesses and jobs. Thus the money trickles down to the bottom. Trump and his Republican Party allies have already claimed that this will increase the growth rate of the economy from its recent typical of 1.5% to 2% annual growth to over 3%. The difference of this one percent has enormous implications. At 2% growth the economy doubles in 36 years. At 3% growth it doubles in only 24 years.1

Trickle-Down – The Reality 

BUT, no economist, banker, or corporate chieftain not on the payroll of Trump and the Republicans believes this will happen. Leaving aside all sorts of analysis about demographics (aging population), technology, and global competition, history and current events provides a fairly comprehensive rebuke to these trickle down cover stories for the Republican give backs to the rich and corporations. Trickle-down economics was invented in the early 1980’s to explain the wisdom of Ronald Reagan’s tax “reforms”. Much space was taken up with displays of Prof. Arthur Laffer’s demand curves that were passed off as proof from the academy that enriching the rich and corporations would unleash a new wave of economic activity. Nothing like that happened in the 1980s. Nothing like that happened in the first decade of this century after Bush II’s big tax cuts.2 And most recently in Kansas, the Republican dominated State legislature had to override the governor’s veto of tax increases after a 5 year experiment there with trickle-down drove the state nearly to bankruptcy.3

Nevertheless, get ready for another round of bull shit Republican propaganda about “pro-growth tax policies”, unleashing the over-regulated, over-taxed job creators, and a great surge in economic growth. The forces of free-market capitalism just need to be freed from the shackles of government. You will here all of this and more. The media will continue to do its job of repeating all of this. You need to be clear that the vicious Republican Party is at work for their masters among the rich and corporations. There job is making sure that the 40 year stagnation in incomes for the 80% will not change course and the flood of wealth will continue to those at the top. 

 

  1. This is the rule of thumb exercise. To calculate how many years a given percent of growth or interest will take to double the initial amount you divide 72 by the growth rate – e.g. 72/2=36. []
  2. See “Trump’s Big Tax Cut Is Unadulterated Trickle-Down Fundamentalism” by Justin Miller 4/25/2017 at The American Prospect []
  3. Read “Epic fail of Kansas’ tax-cut plan offers a lesson for us all” by Eric Zorn in the Chicago Tribune 6/20/2017 []

Trump’s Innovations in Governing

The Plutocrats Have Occupied the White House and Executive Branch

It has been a fact of American life for decades that the rich and corporations control our political system. But this control has been exercised always one arms length removed from the actual levers of power. They have had to be satisfied with setting up their think tanks, hiring lobbyists, and buying politicians. Always they have had to put up with the unsavory influence that the public might have to disturb their plans and obstruct their enrichment. Even as described so eloquently and with such cleverness by Lawrence Lessig in his TED talk, “We the People and the republic we must reclaim“, the rich and corporations were always one step away from hands on control of the government.

Diversity and Identity Politics Is A Deadend

Progressives have to declare class war as a central strategy. Otherwise we will all be sitting at the dinner table basking in our glorious diversity with nothing to eat.

For many good reasons identity and diversity have dominated our politics for decades.  Progressives celebrate its expansion and Republicans and their brethren on the right pretty universally engage in either dog whistle or outright racist politics. 

Simultaneously the rich and corporations have been fighting a class war. They have succeeded beyond belief. As is well known, for 90% of the population real incomes have been flat for the past 40 yrs. Meanwhile, the rich and corporations have gotten fabulously rich. Richer than at any time in history. And, to make things worse they have done this while hiding behind free-market (neoliberal) ideology that has impoverished the government and the public sphere of our lives. Our infrastructure is crumbling, education is outrageously expensive, sending many students to decades of indebtedness. Our health system costs more than twice any of our developed country cohort and delivers third world results. 

Progressives, time to fight back. Diversity and identity without a fair share of the pie is not going to make you happy.

The Future of the Women’s March

There is much ongoing discussion about steps needed to turn the enormous one day action of the global Women’s March in to a sustained movement to achieve better outcomes for the vast majority of Americans.1 To focus on just one strategic element, the movement needs to move beyond identity politics to embrace class warfare. The rich and corporations have carried out a sustained and successful class war for more than 40 years. They control the government and the economy. Donald Trump is just a symptom of the underlying issues. We need to break this hammerlock and shift the rules of politics and the economy back towards us, the 90% who are living off the remainders, the scraps from their feast.

  1. The energy of this action is illustrated locally by the fact that over a 1,000 people marched in Hudson NY, a town of 7,000 in a county of 68,000. Video here of this event []

Park Avenue and How We Got There

“There” is our current situation in which our government has been bought by the rich and corporations, over 80% of the population has not had a pay raise in 40 years and the public sphere, schools, parks, our infrastructure, really anything not behind the gated walls of private wealth, is being starved in the name of free market ideology. The American promise that hard work, pluck and a bit of luck can bring success to anyone, regardless of their rank at birth, is an empty myth. If you are born poor you will die poor. Even if you are middle-class, there is a significant chance that you will sink and at any rate you will always struggle just to keep that middle-class status.

The rich and corporations have waged a 40 year class war. At this point they have won all of the battles and continue to take home the spoils.

Money in US Politics and Supporting Bernie Sanders

DollarSignNow that the quadrennial Presidential election circus has officially passed the first pole, we can take a look at the field. None of the Republicans would even be allowed into my outhouse let alone past the front door. They are all counter-factual, racist, homophobic, religious, free market fundamentalist zealots (excepting of course Trump who is most of that but also a made for TV grinning orange monkey). So, enough with them.

NSA Vacuuming, Meta Data, Mistaken Misleading Metaphors

NSA’s gathering of Meta Data Compared to Corporate Use of Information

In the current discussions of the government’s wholesale seizure of the meta data of our personal digital lives there is regular comparison to the acquisition and use of information about our digital lives by corporations. At the moment corporate use of individual information results in targeted advertising and increasingly location aware targeted advertising through our smart phones. The implicit, sometimes explicit, notion is that we mare so used to corporations gathering information that the NSA is just another corporation, nothing but just a bit more of the same old.

Comparisons Between Corporate Data Gathering and the Government Vacuum Cleaner Are Wrong Headed and Misleading

Thomas Friedman’s It’s a 401(k) World – facile, misleading

Thomas L. Friedman NYTimesMay Day 2013 brought a piece in the NY Times by Thomas Friedman, “It’s a 401(k) World” that points out the enormous changes in employment, technology, personal access to information and personal responsibility for larger swaths of life.  Work changed from a steady job as a regular feature of life to a series of part-time or short term engagements with corporations who view labor as a throw away element. 

Reading this op ed leaves one with the notion that these changes have arisen through some immutable forces of nature.

The Job Creators – Who Are They? The Rich, Really?

In recent years a standard bit of political rhetoric in the US has included references to “the job creators”. This most usually  flows along the lines of higher taxes on the wealthy will injure the job creators. Or, government regulation is crushing the job creators. The presumption of course is that the wealthy, the 1% in the current rhetoric, create jobs (and those not created by the wealthy are created by small business – this being another, long term part of our political discourse). Thus, government must do nothing that will upset the wealthy.

It must be noted that we have already had a large experiment with the obverse of this “don’t disturb the wealthy” policy. What if we made the wealthy even richer by lowering their tax rates? By simple logical deduction, this would incent them to invest more and create more jobs. Well, the Bush II years proved that this does not happen. Despite the largest tax reductions  on the wealthy in US history, job creation under Bush II was worse than in any presidency back to Hoover.

At some level believing the wealthy to be the job creators seems natural enough. They have lots of money to invest and in their desire for more they will be out investing in new projects that per force must create jobs. Without the aid of real analysis, I have always been a bit suspicious of this idea. Wealthy people have their money managed for them by large financial institutions and financial specialists. Very few of them are directly involved in any business other than the business of worrying about whether their financial advisors are ripping them off or doing stupid things. Why do real work when you can have your advisors leverage the vast scale of your wealth to get special deals on bundled high return financial instruments.

Nick Hanauer TED TalkAlong comes a wealthy guy, Nick Hanauer,1 with a five minute TED Talk debunking this job creator mythology that is more soundly thought out than my ramblings.

BTW – Hanauer’s analysis is straight forward Keynesian economics. We have a demand problem. US corporations have record sums of cash on the balance sheets. Yet they are not investing it. The answer is lack of demand, increased sales to generate the virtuous cycle of profits  followed by jobs. Though both the US and Europe are busy proving again that our economic problems are not going to be solved by austerity, debt reduction policies, other countries, like South Korea,  have proved anew the merits of Keynesian remedies. Unfortunately, we have no one in the elites who have the political will to do what has worked before very reliably. They used to call it “pump priming”. Now our pump is dry, unemployment and underemployment  is perniciously eating away at our society. 

  1. he was an early investor in Amazon []