The Public Option Is Off The Table?

This brings to mind three quotes:

Democracy is the theory that the common people know what they want and deserve to get it good and hard. --Mencken

They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety. --Benjamin Franklin

Democracy is a device that ensures we shall be governed no better than we deserve. --George Bernard Shaw

Well, you asked for the status quo, now you're going to get the status quo --the 37th best healthcare system in the world.

Yay.

People are crazy.

Protect the Men in Blue (and Women Too)

Legalize it!

There is, today, a must-read op-ed in today's Washington Post. Find it here.

Both officers are members of the growing "Law Enforcement Against Prohibition".

We need more of this in the mainstream dialogue of this nation.

End of Life Counseling

So, the townhall shouters have made headway. They have actually succeeded in having the house remove the "End of Life Counseling" section from the healthcare bill. Here's a question for each and every one of those who I will refer to in the aggregate as "the opposition". How many of you have "End of Life Counseling" clauses in your private healthcare plans?

Let me repeat that.

How many of you have "End of Life Counseling" clauses in your private healthcare plans?

The answer is, close to 100%. Seriously, death panels?

The supposed evil that you rally against is precisely what you are risking life and limb to protect.

Huh?

Yes, that is right. You are fighting against what you are fighting to protect.

Your precious private healthcare plan offers you the same "End of Life Counseling" that President Obama is trying to extend to those with fewer privileges than you have.

Don't worry, your ill-informed rantings wield great power. The house has modified the bill for you. Keep up the good work, and for God's sake don't learn anything about what you are fighting for (or against).

Arrgghhh.

A Heartbreaking Story

Click here to read a recent tale of a successful, well insured man who had an accident.

And still people line up to demand that the great United States of America preserve its 37th best health care system in the world.

The Number One Cause of Bankruptcy

It has been pointed out to me, in rebuttal, that my previous assertion that Medical bills are the number one cause of bankruptcy in the USA is not true. This is debatable, but the debate does not change the point.

The furor is over a study that many are trying to put into disrepute. The major problem that the detractors have is that the study was a peer reviewed, joint effort between the Harvard Medical School and the Harvard Law School.

I would like to handle this in two phases.

First I will take the detractors criticism at face value, then I will present some stats from the Harvard findings.

17%. That is the number that the detractors say is the true percentage of bankruptcies caused by medical bills. 17%.

Remember, the people who are presenting this number are politically and/or financially motivated (prove me wrong) to come up with the smallest number possible and the best they could come up with was 17%. Well, let's suppose they are right. I am not sure they are making their point. If almost 20 per cent of all bankruptcies are caused by medical bills then there is a national crisis that requires immediate attention. End of argument.

Let me repeat. If the detractors are correct, there is still a national crisis that needs immediate attention.

Now here are some facts from the Harvard Study:

Medical Bankruptcy – Fact Sheet

David U. Himmelstein, M.D., Deborah Thorne, Ph.D., Elizabeth Warren, J.D., Steffie Woolhandler, M.D., M.P.H.

• In May 2009, more than 5,000 families filed for bankruptcy every business day. For all of 2009, the total is expected to reach about 1.4 million. The average personal bankruptcy involves 2.71 debtors and dependents. In total, an estimated 3.8 million Americans will be involved in personal bankruptcy filings this year.

• Illness and medical bills were linked to at least 62.1% of all personal bankruptcies in 2007. Based on the current bankruptcy filing rate, medical bankruptcies will total 866,000 and involve 2.346 million Americans this year – about one person every 15 seconds.

• Using identical definitions in both years, the proportion of bankruptcies attributable to medical problems rose by 49.6% between 2001 and 2007.

• Most medically bankrupt families were middle class before they suffered financial setbacks. 60.3% of them had attended college and 66.4% had owned a home; 20% of families included a military veteran or active-duty soldier.

• Most medical debtors had some health insurance, but many suffered gaps in coverage:

• 77.9% of the individuals whose illness led to bankruptcy had health insurance at the onset of the bankrupting illness; 60.3% had private insurance.
• 69% of debtor families had coverage at the time of their bankruptcy filing
• 60% of families had continuous coverage
• Only 0.3% of the uninsured went without coverage voluntarily, i.e. because they though they didn’t need it – most others couldn’t afford it.

And still people line up to demand that the great United States of America preserve its 37th best health care system in the world.

"We're number 37! We're number37! We're number 37!"

Let me see if I understand this correctly.

1. The USA has the 37th best level of health care in the world
2. The USA has the most expensive health care in the world
3. The number one cause of personal bankruptcy in the USA is medical bills.

So, The US has pays the most for nearly the worst and should a citizen get truly sick they will likely lose everything they, and perhaps their ancestors, have worked for.

That is the status quo.

Currently, if someone needs medical attention any action must first be approved by an employee of a for profit insurance company. This is scary: a company that profits from denying you treatment is in charge of deciding if you qualify for treatment.

The average bureaucratic cost of government health insurance (Western nations) is 4%. The bureaucratic cost of the current American system is 30%.

This is the kicker. An astounding number of very vocal Americans are demanding the status quo.

I always thought that Americans were, and were proud of, being number one. Not number 37.

Repeat after me, "We're number 37! We're number37! We're number 37!"

Why this is an issue is beyond me.

Okay, I hear the opposition saying they don't want some disinterested government employee standing between them and their doctor. Well, let us take this at its face value. I ask you, which would you rather have deciding whether or not you get an operation: a disinterested government employee or an employee of an insurance company which profits from your not having the operation.

Is it really that simple? Yes, it is. Let me repeat the three points I laid out at the top:

1. The USA has the 37th best level of health care in the world
2. The USA has the most expensive health care in the world
3. The number one cause of personal bankruptcy in the USA is medical bills.

Now, make your case for the status quo.

Some Perspective

This is truly an amazing time.
Sometimes the mirror must be held by a comedian.
From Youtube

I Like to Think I Am A Weener

For those who are not familiar with "Sheldon" Check this out!!!

The Economic Drug Debate

I have never understood the modern right-wing anti-drug policy.

For the purposes of this polemic I will not separate hard and soft drugs. Even though I am generally anti-cocaine, I believe the argument holds for all drugs.

First lets make one thing clear: almost all of the negative effects of the drug trade have nothing to do with the drugs themselves. Though cocaine does rapidly age your heart it does not cause people to break into your car to steal your leather jacket. As well as creating high levels of un-motivation, heroin causes significant constipation; it does not cause people to rob corner stores that should be selling lotto scratchers.

Yes, it is possible, and arguably common, to overdose on harder drugs, but this is, undeniably, a result of lack of control/regulation in the manufacturing process.

In fact, prior to prohibition, overdosing was almost unheard of as these drugs were never refined to the point of causing overdoses. The over-refining of opium to heroin was unnecessary when it was legal to import a couple of hundred pounds of the stuff. The refining of heroin was a result of the simple fact that G-men are more likely to catch you if you import a hundred pounds of low grade opium than if you import a couple of pounds of high grade heroin. The pharmaceutical importation is the same.

Which brings us to the basic economic situation.

The pharmaceutical cost of a fifty dollar hit is about sixty cents. The fence will give the junkie approximately 10% of the original value on stolen goods. Therefore the junkie needs to steal $500 dollars worth of goods in order to get their $50 dollar hit that has a pharmaceutical value of about 60 cents.

This is worth repeating. The cost to you and me for that junkie's 60 cent hit is 500 bucks.

A hypothetical: what would happen if the government produced the drug and sold it to the junkie for a single dollar?

Well, the first thing that would happen is that governments at all levels would recover 25-30 per cent of their law enforcement budgets (or keep the budgets the same and dedicate those officers to the pursuit of rape, murder, fraud, &c.).

There are millions of lists of the positive fiscal results of ending prohibition and my intention is not to provide another here.

My intention is to underline the insanity of forcing us to suffer a $1000 dollar loss (ultimately it is us who pays: chiefly through increased insurance rates) for a buck's worth of drug.

It is not the drug that causes the junkie to steal the $1000 dollars worth of goods to pay for the one dollar's worth of narcotic, it is prohibition that causes it. It is prohibition that leave the control and taxation of narcotics in the hands of organized crime. Make no mistake, it is controlled and taxed. It is controlled with an iron fist and taxed up the proverbial ying yang --by organized crime.

It does not make sense that the pro-business right wing takes a pro-prohibition stance. Even if you consider the modern Christian Right: where in the bible does it say that you should not smoke pot?

The numbers do add up. It does not make sense.

Grow your own

There is a growing meme on the 'net regarding an interesting baby step towards ending the indefensible prohibition of marijuana.

A "Grow your own" policy.

Simply stated, it would be 100% legal to grow and smoke your own pot. It would remain illegal to sell, import, export or give to minors. But the near harmless activity of growing and smoking a natural herb would be open.

I can see it now: a pot of pot in every home. I like it. For those who are not familiar with it, cannabis is a beautiful plant. It is basically pest resistant, meaning that no pesticides are required.

Though, I recommend keeping it from your family cat --'specially if the little meower knows where you keep your emergency stash of Cheetos. That's right, you will come home to find the door to that cupboard over the fridge open, assorted debris strewn about the kitchen and a smiling kitty lying on its back proudly showing off its bright orange beard. Cheetos will never, again, be safe.

I would add that you should be able to share your harvest with whomever you wish as long as it is not part of a transaction that could be considered trafficking. eg. no trading pot for guns, sex, meth, &c.

This would be an interesting first step that could bypass decriminalization --to which I am philosophically opposed.

LOL --Kudlow Kills Me

He is on CNBC right now saying that we are about to see a new bottom. (Big head shake).

The simple fact is, a bottom will not be reached until investors actually think (believe) that good, safe companies are both good and safe. Until that confidence returns their will be no bottom.

It has nothing to do with the confidence of the president, or the confidence of the fed. Rescuing the right companies is a start. It might help accelerate the stabilizing of those companies; but, until the consumer sees securities of large banks as being as safe as treasuries a bottom is no where in sight.

That is not to say we could not hit a bottom, but anyone who believes they can see a bottom is smoking a prohibited substance.

The Non-SOTU

I was not going to comment on Obama's Tuesday night speech as everything that could be said would be said. That said, "Holy crow can that guy deliver a speech!"

Really, his theatrical ability to fill the roll of the leader is unlike anything I have ever seen (or is it "scene").

In comparison Little Bush looks, well, bush. And, the Republican rebuttal was a joke. If you haven't caught The Daily Show's comparison to Mr. Rogers' Neighborhood, I recommend it.

That's all. I am not going to add to the plethora of dissections that are out there. Yes, he needs a better fact checker, but who cares. What theatre. If you haven't seen it, pop over to Youtube and check it out.

The Market Moves on Small Investor Confidence

I don't know why this well known fact is not discussed more. You will never hear it on Kudlow; you will never read it in the Financial times (though this is a recommended read); and you will never hear it from a politician.

But, the simple fact is: major moves --and by that I mean up or down trends that last years-- by the market are driven by little old ladies in Cadillacs, by portfolios owned by hair dressers, and postal delivery workers.

Institutional investors are there, they have always been there and always will be. That the institutional investor is sitting in cash (the average seems to be about forty per cent) is of little consequence.

The biggest problem is that safe investments are no longer safe. The list is long and you know the names, GM, Citi, AIG, &c.

When holding Citi Stock is unsafe the un-savvy investor flees. And when the small investors flee en masse they take key billions with them. These are the extra billions that puts the market over the top (or under water).

This is the important thing: If the institutional investors were full invested it would make little difference. Sure, the Dow Jones Industrial Average would probably return to 1999 levels; but, without the return of the little old lady from Pasadena that is all that would be accomplished.

Is it "Chicken before the egg?"

Will the, despite Cramer's best efforts, uneducated investor return? That is the big question. In the 1930s that investor never returned. Till the day they died, my grandparents never bought stock --treasuries were all the risk they could stomach-- they were not alone.

I think they will return. But, and this is a big but, they will not return until they are confident that safe companies are, indeed, safe.

When will this be? Nobody knows. Anyone who says they know is either a liar or suffers (if that is the right word) from self dellusion. It could be as little as two or three years (if Obama gets lucky with his programs) or it could be a generation.

It will happen, it will come back. But it might be a good time to get a government job.

I wonder if the post office is hiring.

Late to the Party

A year ago I had never heard of Gillian Welch. I guess I am not alone, but that is a shame, this woman is a great, great singer songwriter check her out at www.gillianwelch.com. You won't be disappointed.

The Poop

The first grandiose statement of my return:

The government doesn't really want the banks to lend all that money.

How can I say this? Well think about it. The first thing that happens during a credit crisis is that people take money out of circulation, they stop spending. In order to float the economy and keep money moving (even accelerating) the mint has to print a dollar for every dollar that is removed from circulation.

This is why printing buckets might not necessarily be inflationary.

Then as people start spending again the mint must print less at the same pace to keep from having a flood of dollars in circulation (definite inflation).

Well, should the banks, tomorrow, start lending the hundreds of billions that they got as part of the TARP funds the fed will immediately lose control, the economy will be flooded with dollars and a loaf of bread will cost $17.50.

What are the banks supposed to do with the funds? Nothing.

That's right, nothing. They are supposed to sit on them. It is capitalization: nothing more, nothing less.

Now the banks don't like sitting on funds, so it was only natural that, under the previous administration, they would dole it out --massive parties, billion dollar bonuses, private jets. (Big head shake) The simple fact is that the banks lent out a multiple of their capitalization that was unsustainable and as they are not able to reduce the loans (how many houses can a bank own?) they have to correct the equation by increasing the other side of the balance sheet --their capitalization.

I think Citi gets this. BoA? I am not so sure.

One thing I can tell you is that they will not be nationalized before healthcare --can you imagine?

I'm Back

Well, it has been almost a year since my last flurry of posts and, once again, I find myself sitting here ready to rant. "Where did I go?" you might ask. Well, despite the Obama's election being terribly exciting and despite the history making nature of it, there were so many voices that I felt I would be doing a disservice by adding mine to the mix. And I was busy with my day job.

Speaking of which, I came across an anonymous blog the other day detailing the mismanagement of a start-up company. I highly recommend it: Never Turn A Short Con Long

I have learned more about economics since I started this 'net-rag and have lots of questions to pose (and a few answers too).

Well, as the song goes, "I'm back in the saddle again..."

Woo hoo.