Monday, September 30, 2013

Defining the New America

Quotes from around the American press that seem to tell us what we look like in the new, leaner, meaner shutdown America.
“Recent college students are defaulting on federal loans at the highest rate in nearly two decades, reflecting "crisis" levels of student debt and a lackluster economy that leaves graduates with bleak employment prospects… One in 10 recent borrowers defaulted on their federal student loans within the first two years, the highest default rate since 1995, according to annual figures made public Monday by the Department of Education.” Huffington Post, September 30th.

“In the most somber part of the [just-released United Nations Intergovernmental Panel on Climate Change's ‘Summary for Policymakers’], the IPCC provides a truly geological perspective on the changes that we are causing. It notes that much of what we are doing to the planet is ‘irreversible on a multi-century to millennial time scale’ and that temperatures will remain ‘at elevated levels for many centuries,’ even if we completely stop emitting carbon dioxide. Indeed, the report states, much of the carbon dioxide that we've emitted ‘will remain in the atmosphere longer than 1,000 years.’” Mother Jones, September 27th.

“Meanwhile, on Game Day, the Dallas Cowboys stadium consumes more electricity – with air conditioning, massive scoreboard, etc – than the nation of Liberia with 3.7 million people.” DCS Client Contact Bulletin, September 30th.

“With just hours to go until a government shutdown, Congressmen couldn't seem to agree on much except the fact that drinks were in order… Reporters tweeted Monday night that they could smell booze on the lawmakers working to strike a last-minute spending deal on Capitol Hill.” Huffington Post, September 30th.

The U.S. government was poised to shut down for the first time in 17 years early Tuesday, after a Congress bitterly divided over President Obama’s signature health-care initiative failed to reach agreement to fund federal agencies. The impasse means 800,000 federal workers will be furloughed Tuesday. National parks, monuments and museums, as well as most federal offices, will close. Tens of thousands of air-traffic controllers, prison guards and Border Patrol agents will be required to serve without pay. And many congressional hearings — including one scheduled for Tuesday on last month’s Washington Navy Yard shootings — will be postponed.” Washington Post, September 30th.

“The debt ceiling is another matter. Nobody really knows what will happen if we breach the debt ceiling because it’s never happened before. And everyone worries that it will be awful because nobody’s created any legal provision for not making it awful. A breach is sometimes characterized as a default on the national debt. But it’s actually weirder than that. Normally the way things work is that the Treasury Department cuts the checks Congress has told it to cut, collects the taxes Congress has told it to collect, and borrows to cover the difference. But the statutory debt ceiling also instructs Treasury not to borrow more than a certain amount of money. When we hit the debt ceiling on Oct. 17, Treasury will lack the legal authority to borrow any more money to close the gap between spending and tax revenue.”, September 30th.

Average American paychecks have faced reduced buying power every year since 2000: “American households were about 10 percent better off in 2000 compared to where we are today.  Of course you need to think about the individual circumstances that have changed since that time.  We now have 47+ million Americans on food stamps.  Our national debt is now at an incredibly high $16+ trillion.  The unemployment rate although improving, is twice as high as it was in 2000 (4 percent versus 8 percent today).  The challenge of course is that for the typical Americans worker they are having to live in a free market system with all the pressures that come with it while the connected few, can take banking handouts and use accounting magic to essentially socialize losses and privatize massive gains.  Clearly by the looking at household incomes your average family is not benefitting here.”

That we have control of our lives, have choices to make and alternatives to pursue… but don’t… suggests that perhaps we, as Americans and citizens of the world, have precisely the elected representative we deserve.

I'm Peter Dekom and if you care… really… do something about it; even screaming and yelling is better than sitting on your duff feeling confused!

Sunday, September 29, 2013

Ethanol Games

As climate change generates floods in Colorado, it is sucking the water out of vast sections of the mid- and south-west. The segment of Ogallala Aquifer that sits in Kansas and north Texas is bone dry, unlikely even into the distant future to become recharged through rainwater, which itself is in very short supply. And the grain crop you really don’t want to plant (as it was in this same area) in water-impaired areas, especially if all you’re going to do with that grain is use it as a the source of fossil fuel, is water-absorbing corn… not to mention that if you really want that resultant ethanol, try vastly more efficient sugarcane.
But in the middle of the first decade of this millennium, our government began passing a series of laws – some of which have ended – to require ethanol as a clean-fuel additive and as a subsidy to corn-growing agricultural states (adding a prohibitive tariff to Brazil sugarcane-based ethanol), particularly valuable to those states that supported the election of the Bush administration. “The federal government created the market in special credits tied to ethanol eight years ago when it required refiners to mix ethanol into gasoline or buy credits from companies that do so. The idea was to push refiners to use the cleaner, renewable fuel, or force them to buy the credits.
“A few worried that Wall Street would set out to exploit this young market, fears the government dismissed. But many people believe that is what happened this year when the price of the ethanol credits skyrocketed 20-fold in just six months, according to an analysis of regulatory documents and interviews with more than 40 people involved in the market, including industry executives, brokers, traders and analysts.” New York Times, September 14th. Banks began stockpiling the credits, not to improve impact of burning fossil fuels… but to take advantage of a loophole and embrace a new market.
And since Wall Street has long since focused on making money by trading and moving money and assets around – as opposed to using their financial acuity to create and finance new businesses and long-term values (so very “old world” today) – and since these credits are tradable instruments…. The spike in the value of these energy derivatives has distorted the marketplace. While banks are by no means the largest player in ethanol credits, Wall Street’s activity in this market reflects a larger effort by financial institutions to exert their influence over loosely regulated markets for basic commodities, from aluminum to oil. The opacity of the ethanol credit market makes it difficult to determine the extent to which large financial actors have profited.
“The banks say they have far less influence in the market than others are suggesting, and are doing nothing wrong. But the activities, while legal, could have consequences for consumers. In the end, energy analysts say, the outcome will be felt at the gas pump — as the higher cost of the ethanol credits gets tacked onto the price of a gallon of gasoline. (The credits, which cost 7 cents each in January, peaked at $1.43 in July, and now are trading for 60 cents.)…
“The Valero Energy Corporation, a refiner that owns thousands of gas stations, says the squeeze in ethanol credits might cost it $800 million. PBF Energy, also a refiner, puts its bill at about $200 million. A review by The [NY] Times of a federal registry of nearly 1,500 businesses and individuals in the renewable fuel market found big Wall Street banks as well as a handful of people with troubled legal histories among the participants. Several high-profile cases of fraud have emerged…
“Price movements on other commodities futures are limited by the exchanges on which they trade as a check on speculation. But the biofuel credits are not traded on an exchange: their prices are unbridled. And, unlike in the broader financial industry, no formal qualification or license is required before a broker can start trading.” NY Times. Congress also miscalculated fuel consumption patterns and over-compensated. Consumers began buying more fuel-efficient cars and traveling less as prices at the pump skyrocket. Demand for fuel moderated. Hence, ethanol credits just piled up.
So the legislation did not have the intended environmental impact, extracting way too much valuable water from places where droughts have become chronic. They made the rich richer and will continue to pressure rising costs at the pump, further decreasing the effective buying power of average Americans, which has fallen every year since 2002. Generally, this legally-distorted system is redistributing income from those who really need it to those who don’t. Winner: speculators and the companies that serve them. Loser: the American consumer. Stupid laws favoring the rich. A dash of fraud. No regulation. A perfect storm.
I’m Peter Dekom, and once again the playing field is tilted in favor of big business and against the rest of us.

Saturday, September 28, 2013

Hidden Benefits, New Perspectives

As the nation careers around deadly political curves, the battle royal between Republicans and Democrats that could result in a federal government shut-down, the Affordable Care Act has motivated some bigger corporate players to rethink healthcare alternatives from the ground up. While Congress has in its power to fix the elements of Obamacare that don’t work, it is clear that the only realistic change that the House will accept is delay or cancellation. So unable to fix obvious flaws, corporate America is figuring out how to stem the seemingly unbridled escalation of medical costs with new strategies that address their employees’ and retirees’ needs for universal access.
I’ve already noted how Time Warner Cable and IBM have proposed to address the ever-rising cost of their retirees’ healthcare benefits: moving them off corporate plans and, with Medicare in the mix, paying for them to enroll in the new healthcare exchanges that are being created under the Affordable Care Act. While there is an expected legal challenge to this approach, the fact is that companies are trying to figure out how to address otherwise out-of-control medical cost increases with the new tools that are now available to them… one way or another.
Others, like drugstore chain Walgreens, are considering giving qualified employees the money to purchase coverage on these new healthcare insurance exchanges, which are effective as of October 1st. “Aon Hewitt, a benefits consultant that will oversee health plans on Walgreen’s behalf, said 18 large employers had [also] signed up [to this strategy] so far, including Sears and Darden Restaurants…
“Some companies — Trader Joe’s for example — decided to send at least some employees to the new public exchanges. Trader Joe’s has left coverage for three-quarters of its work force untouched but is giving part-time workers a contribution of $500 to buy policies in the newly created state marketplaces. Because of the employees’ low incomes, the company says it believes many will be eligible for federal subsidies to help them afford coverage.” New York Times, September 26th. The federal version tri-level exchange plans are far from perfect, with limited insurers and medical care vendors in the plans, but for companies with low-paid employees and tight margins, they represent a strategy that offers a needed benefit. State plans, which don’t exist in 36 states, usually will offer better coverage.
The mere existence of Obamacare has created new bargaining leverage for larger companies with the size and clout to negotiate directly with the healthcare industry. That companies could always slide to the lower cost exchange model makes healthcare providers more responsive. Corporate giant General Electric, for example, spends $2 billion a year for its 500,000 covered employees. Where they have particularly large facilities, they can negotiate directly with regional doctors and hospitals to effect cost savings and spending limits while keeping quality in the mix.
G.E. has also embraced a new strategy that involves centralizing the complex world of managing multiple medical issues involving referrals, controlling all relevant medical records in one place using what they call a “medical home.” As its aviation business makes G.E. one of the Cincinnati, Ohio’s largest employers, it has simply changed the way medical care is provided and administered: “Over the last few years, G.E. has pushed for the creation of so-called medical homes, in which an individual medical practice closely coordinates a patient’s care by having access to all of the patient’s medical records… In Cincinnati, about 118 doctors’ practices have converted to medical homes, and all five of the major health systems are making their primary care practices move in that direction. G.E. has also pushed for greater transparency of results…
In Cincinnati, there are beginning to be grudging signs of success. Early results are promising: patients enrolled in medical homes had 3.5 percent fewer visits to the emergency room and 14 percent fewer hospital admissions over the four years from 2008 through 2012. G.E. plans to ask an outside firm to do a more detailed analysis.” NY Times.
If for some unlikely reason, the House GOP manages to slow or halt the implementation of these provisions of the Affordable Care Act, some of these plans may be stopped dead in their tracks. The fact is we have one of the worst healthcare systems in the developed world: it both excludes too many people and is by far the most expensive per capita cost on earth.
The Senate has passed a simple, non-contingent bill to raise the national debt limit (which expires on Oct. 1st), but so far the House, seemingly backing off a permanent defunding efforts, seems determined to at least extract a delay of one year in implementing the Affordable Care Act as its quid-pro quo for even just a short-term increase in debt ceiling (until Dec. 15th). Cutting off or delaying Obamacare now would generate huge new costs since the momentum and system structure are now geared for the new act. Undoing or postponing the act that implements the biggest aspects of the law starting on October 1st would require retooling it all.
Look at the failing system we have without that statute. Costs of simple procedures vary by significant multiples depending on hospital and region. Prices for covered and uncovered are staggeringly unfair. Where an individual without insurance may be stuck with a $30,000 bill for a hospital stay and minor surgery, a person with coverage under a managed care insurance policy will get the identical procedure but wind up costing the insurance carrier more like $5,000. The clout that the insurance company has to contain costs does not benefit the individual who needs the care but lacks any bargaining power.
The healthcare exchanges are an attempt to offer that clout to people who otherwise could not get group health insurance, because they worked by themselves or part-time, their employer offered no benefits, or they were unemployed. Many could not get healthcare because of pre-existing conditions or lifetime benefit caps. The Affordable Care Act changed all that, but for the entire system to work, there simply have to be more participants.
That’s the heart of the struggle. You cannot have these lowered costs without more people in America’s covered healthcare mix, and the GOP believes that healthcare has to be an option – for employers and individuals – and not a mandate (like the mandate of Social Security). Obamacare’s mandate for employers and individuals has been upheld by the Supreme Court, in an opinion from one of its most conservative members, but the GOP is pledged to kill this structure. American workers who have solid (but expensive) insurance plans – even those with identical pay to foreign workers – often lose the competitive edge because too many overseas have healthcare provided under governmental universal healthcare systems as part of the tax base.
In short, the time has come for the United States to contain the unacceptable costs of its failed healthcare system. And while the Affordable Care Act is far from perfect, and could stand more than a few statutory tweaks, it is the best plan out there. If all the GOP can do is bluster negativity without solutions, exactly why are they holding elected office? What are their real alternatives? Really? What do they propose to lower medical costs and create greater access? Oh, do nothing and go back to what already has failed. Sorry, folks, that’s just not good enough.
I’m Peter Dekom, and perhaps the biggest failure of Obamacare has been the inability of the government to explain to the American public the benefits that it creates for most of us.

Friday, September 27, 2013

Pretend Legislation

State legislatures have a bad habit of making up non-existent problems to limit constitutionally-protected activity they don’t like and to take away the ability of those who might vote against these incumbents from accessing the ballot box in the first place. We’ve already addressed the non-problem of voter and voter-registration fraud in the United States – the given and fully unjustified excuse for the spate of new voter ID requirements that eliminate mostly older, urban and minority voters (people without driver’s license). The instances of actual and reported fraudulent voting incidents were too few to create the slightest statistical impact on any recent election.
For those who oppose “free choice” in the abortion controversy, they have selected another path to shut down clinics or limit the time within which a woman may opt to abort her fetus. Texas recently passed a series of tough new laws and regulations to apply to abortion-providers in that state. The excuse, the sponsoring and supporting legislators (and the governor) gave, was a deep concern that these clinics were not able to provide a sufficiently safe environment for their clients.
But the statistical reality in Texas – the truth if you will – was altogether different. Not that inspections showed 100% perfection, but there were no instances of any serious or meaningful violations that remotely threatened the health and safety of the women who sought their services. “State auditors identified 19 regulatory violations that they said presented a risk to patient safety at six licensed abortion clinics that are not ambulatory surgical centers in Texas. None of the violations was severe enough to warrant financial penalties, according to the Department of State Health Services, which deemed the facilities’ corrective action plans sufficient to protect patients.
“And between 2008 and 2013, the Texas Medical Board, which regulates the state’s physicians, took action against just three who performed abortions — all for administrative infractions that did not involve criminal practices or late-term abortions.
“‘The point of this legislation was to make abortion inaccessible,’ said Amy Hagstrom Miller, chief executive officer of Whole Woman’s Health, which operates five abortion facilities in Texas. ‘It wasn’t about safety, because there is no safety problem around abortion in Texas.’” New York Times, September 15th.
Statistics, truth and facts are easily trumped by opinion, particularly religiously motivated passion that simply will not accept contradictory facts… the same kinds of contradictory facts that too many Texas textbook reviewers cannot accept when it comes to man-induced climate change and teaching evolution as scientific fact. With some of this nation’s greatest and most progressive universities, from the University of Texas itself and prestigious schools like Rice University, with some of the best teaching hospitals in the country, Texas seems mired in a legislative mire of arrogant ignorance and a profound need to meddle in the personal and private lives of its citizens.
“Although most of the state’s recent inspection findings point to administrative errors as opposed to medical ones, abortion opponents have not been deterred. Beginning Oct. 29, Texas will ban all abortions after 20 weeks of gestation and require abortion facilities to have a physician with admitting privileges at a hospital within 30 miles. In a year, additional rules will require abortion facilities to meet the structural guidelines for ambulatory surgical centers, which include wider hallways and preoperative and postoperative waiting rooms.
“Emily Horne, a lobbyist for the anti-abortion group Texas Right to Life, said the conditions auditors found in the last year could have easily led to women getting sick or injured, and a ‘lower standard of care’ could result if inspectors ‘find these problems and do nothing about them… The clinics need to be safer,’ she said. ‘You can’t advocate for more abortion that is unsafe’” NY Times. That Americans have differing opinions about conservative vs. liberal issues is the American way… but knowingly lying through your teeth to get your way shouldn’t be… and these days too often is.
I'm Peter Dekom, and the lying seemingly necessary to pass these legislations only make the legislation seem that much more unsustainable and ill-conceived.

Thursday, September 26, 2013

The Known Unknown

There are enough people in the world, linked as never before by Web and mobile applications and particularly by social media, who believe with every fiber of their bodies that their way is the only way, and that any and all opposition is deeply sinful and offensive to their interpretation of God. With nascent disaffection raised by skillful leaders and trainers to obsessive hatred, amplified by their marginalization of the humanity of anyone who does not share their belief, there are tens, maybe hundreds, of thousands of willing “soldiers of God,” and hundreds of millions of sympathizers with whom a Robin Hood feeling about these soldiers truly resonates.
We’ve seen it in Christianity, from the Spanish Inquisition to the Salem Witch trials, but in today’s world, it is fundamentalist Islam that draws our focus. To those fomenting this notion of sequential, unexpected and devastating individual or small group killing and maiming efforts, every time someone discriminates against a Muslim (or someone who looks like one), whenever there is a law in any country that forbids or limits headcovering or religious symbols, whenever any primarily Christian nation fires upon or sends troops into Muslim lands, the skillful purveyors of hatred uses these events and feelings to draw even more recruits into the fold.
That Islam conveniently places the righteous into a giant waiting room upon their death, to await Judgment Day sometime at the end of the world… unless they die in defense of Islam (martyrdom), in which case they rise into perpetual bliss, life forever in Heaven… adds a level of tangible reward to dying for the cause. Training camps rise and fall in the Tribal Districts of Pakistan, Afghanistan, Somalia and Yemen. They know how to build, carry and deploy bombs, handle sniper rifles, RPG rounds and assault weapons with deadly accuracy and to hurl grenades to maximize mayhem.
Al Shabab attacked an upscale mall in Nairobi recently. Shocking but news that is already fading from the public consciousness as life goes on. That terrorist organization has used social media, including a Twitter account that appears and disappears as events unfold, with complex spurts of exceptionally articulated, well-educated bursts of extraordinary prose as their mark. Probably not from native-born Somalis, experts suggest. Al Shabab has been very effective in recruiting the disaffected, often second generations from Muslim (particularly Somali) immigrants. The Somali community in Minneapolis-St. Paul seems to have placed some its children into this diabolical mix. Authorities are still trying to trace the voices to be sure.
Manchester and London, England have produced their share of these second generation immigrants and placed them into the religious battlefield. Rejected by the larger community around them, economically hopeless and seeking meaning for their lives, they are angry and easily drawn into the rhetoric of religious zeal laced with hatred and a sense of mission available in their communities or easily assessable online.
The targets are easily identifiable, misinformation drives their misplaced passion, and change with current events. A Danish cartoonist who denigrated their messiah, and anything Israeli, American or even just Western. For Boko Haram in Nigeria, it’s anything Christian. For Taliban, it’s anything that opposes their severe view of what human behavior must be like – but it particularly includes Christianity, things Western and anything from the apostate Shiite branch of Islam. For al Shabab, despite Ethiopia’s more strident attacks, Kenya’s involvement in southern Somalia combined with their relatively open society made them an easier target. That the Nairobi Westgate mall had Israeli owners made that venue a more delicious target.
The sinking economy, laced with polarization that keeps the mega-wealthy on top, the hostile and escalating reactions of the West to the symbols of Islam, the failure of the Arab Spring, the “American” wars in the Middle East, the collateral damage of drone attacks, the random acts of cruelty from Abu Ghraib to burning Qur’ans to murderous U.S. soldiers breaking into homes for random killing… all represent the litany of arguments that recruiters use to gather more suicide bombers, more soldiers of God, willing to go anywhere in the world their services are needed.
Even as Taliban take out civilian targets in Pakistan, shoot little girls in the head for proselytizing the “right” of girls and women to be educated and plant bombs at Shiite funerals and Christian churches during mass, to a vast majority of Pakistanis, there is secret admiration for these economically incorruptible forces… amidst the insidious and pervasive political corruption that defines modern Pakistan. They are viewed as pure of motive and spirit, even if the results are death and destruction, and too many Pakistanis naively believe that once the Americans leave Afghanistan, the problems will just subside. Higher-level politicos see a longer-term issue and are trying to work a shorter-term solution with the Taliban, whom they believe grew to their present size and power in Pakistan due to American intervention in the region. They may be Taliban, but they are “our” Taliban to most residents of this mostly Sunni nation.
What we have is pervasive and unstoppable zealots, growing in number, seeping beyond their native borders, often born, deeply disaffected, in Western countries. Death is just a transition to a better place. Al Qaeda’s influence has fallen in Iraq (but powerless Sunnis blast away at Shiite targets almost daily) but is rising in Yemen and Somalia. Local terrorist groups avail themselves of al Qaeda’s communications and perhaps their sponsored training facilities, but they increasingly act on their own, coordinating with al Qaeda when it suits them, but deploying on their own when there is a need. Al Qaeda will take credit of all of the above.
Nairobi, the Twin Towers, the Boston Marathon, U.S. embassies, Israel, trains in Spain… the list goes on and on. New targets will be added as the disaffected, with nothing in their eyes to lose, find ways to vent their ignorant anger across innocent lives in too many places around the world. We know there will be attacks, but we often don’t know when or where. It defines disaffection in the twentieth-first century. The known unknown.
Prepare! “In a new ‘worldwide caution’ issued [Sept. 25th], the [U.S. Department of State] said it continued to be concerned about threats to U.S. citizens and interests in Europe, Asia, Africa and the Middle East. It said attackers could use a variety of tactics, including suicide operations, assassinations, kidnappings, hijackings and bombings… It said potential targets could be high-profile sporting events, residential areas, business offices, hotels, clubs, restaurants, places of worship, schools, public areas, shopping malls and other tourist destinations where Americans gather in large numbers.” Huffington Post, September 25th. The terror continues.

I’m Peter Dekom, and we seem to have the uncanny ability to provide running fodder to these recruiters of those seeking to focus their need to inflict hatred, death and devastation.

Wednesday, September 25, 2013

Healing the Patient

We have a black and white showdown staring us in the eyes. Folks who simply want to kill a flawed statute – the Affordable Care Act – rather than try to fix it are willing to shut down the federal government (as much as they can) and slam the Republicans’ standing to generate the national constituency to elect a president. There are no politicians who believe that Obamacare doesn’t need fixing. No one! But while every seminal statutory change – from Social Security to civil rights legislation – has had one or more opportunities for fine-tuning in subsequent “fix-it” legislation, the Affordable Care Act does not have that opportunity. Repeal is the only direction that the GOP-dominate House will permit. We never hear that “fix-it” alternative from the factions in the battle.
The objections to the statute are many: The mandate for coverage has been its most vulnerable provision. Too many younger workers – feeling the invincibility of youth – cannot bring themselves to write the checks to secure the mandatory coverage and hate the notion of paying any fines associated with that decision. Without the mass of coverage for the young, the system cannot amortize the costs of healthcare and cannot work the overall savings that the plan is determined to implement. With younger workers also bearing the blunt of the new lower wages that Americans are earning these days, they have a point. Solution: raise the deductible and allow policies just for disaster coverage one or incorporate a lower rate into automobile insurance, which will better access of this demographic segment. There may have to be some additional interim government subsidies here (beyond those at the poverty level), based on income from those who are employed, until this economy really starts positively impacting working Americans… and not just investors.
While cheaper-than-almost-everyone-else Wal*Mart is relenting and is restoring workers to full-time status, the GOP correctly points out how many employers are avoiding writing the healthcare checks by making sure the bulk of their workforce now qualifies as uncovered part-time workers (under 30 hours a week). They are cutting workers from regular full-time jobs and moving them to part-time or outsourcing work to smaller contractors without those benefits. Folks are losing earning power. So just fix the problem! Other than excluding interns who are part of a qualified regular academic program, make employers pay for healthcare for all employees (including contributions for contractors), but base that payment ratably (based on a 40 hour week) on any hours worked. That money can be applied to the employee’s/contact employee’s choice of healthcare exchange or regular insurers.
There are going to be sacrifices to those who have to access healthcare those these new exchanges, scheduled to take effect on October 1st, since the policies will have limitations. “When insurance marketplaces open on Oct. 1, most of those shopping for coverage will be low- and moderate-income people for whom price is paramount. To hold down costs, insurers say, they have created smaller networks of doctors and hospitals than are typically found in commercial insurance. And those health care providers will, in many cases, be paid less than what they have been receiving from commercial insurers.
“Some consumer advocates and health care providers are increasingly concerned. Decades of experience with Medicaid, the program for low-income people, show that having an insurance card does not guarantee access to specialists or other providers.” New York Times, September 22nd.  In lower income communities, the number of facilities that are or will be part of the program may be harder to get to and offer fewer services. While the cost of these exchanges will drive monthly costs down to between averages of between $100 to $400 per month, depending on federal subsidies, the fact is that some healthcare costs will fall out of the system. Again, some form of disaster coverage, on top of general coverage, may be required.
If your state didn’t create a state exchange (and 36 states left that to the feds), and you are looking at the federal exchange costs, they are pretty reasonable. “For a benchmark plan — the second-lowest-cost ‘silver plan,’ covering 70 percent of projected medical costs for a typical consumer — the average premium nationally will be $328 a month for individuals, the administration said in a new report….  For a family of four with an annual income of $50,000, the administration said, monthly premiums for the second-cheapest plan will vary widely, averaging $600 in Arizona, $800 in Georgia, $961 in Indiana, $1,069 in Mississippi, $859 in New Hampshire, $943 in New Jersey and $656 in Utah.” New York Times, September 25th.
If you are lower-income qualified, those costs can drop significantly: “Under the 2010 health law, most people buying insurance in the exchanges will be eligible for federal subsidies in the form of tax credits. Taking account of these subsidies, the administration said, a family of four with income of $50,000 will generally be able to buy a silver-level plan for $282 a month, while a 27-year-old with income of $25,000 will be able to get such coverage for $145 a month.” NY Times. But the number of insurers are limited, generally one or two providers in each state. It isn’t perfect, the coverage isn’t as complete as purely private plans, but it’s a decent start.
There are and will be more problems to solve along the road, but in this world of lower wages, lots of outsource contractors providing zero benefits and a need for younger workers to grow their own business just to have jobs, we have real issues on how to pay for healthcare while driving down the costs. The GOP already vetoed our ability to access cheaper prescription drugs from Canada or Europe – making the big pharmas, who paid lobbyists well to insure that option died, smile – or direct government healthcare option, making sure that the for-profits would be the beneficiaries of the new law.
Compromise got us the new law. Compromise can fix the flaws. But compromise requires dialog and a willingness to help make things work. Until the gerrymandered House is reconfigured by the next (distant) Census, expect the government to stop and drag on for years. Healthcare is just one “I’ll hold my breath until we all turn blue” issue. There will be more.
I’m Peter Dekom, and perhaps if we don’t have the government we want, we are getting the government we deserve!

Tuesday, September 24, 2013

How Many Taxpayers Does it Take to…..

Obviously, it depends how much they pay in taxes. We have too many loopholes at the top – different tax rates, off-shore avoidance rules that only favor the biggest, slick estate tax “outs” that allow mega-estates to pass from one generation to the next avoiding the clear estate tax rates almost entirely – and declining earning power in most of the rest. We have, according to The Economist, $2.7 trillion of unfunded state and municipal pensions and retiree healthcare obligations, and our “fight big wars while cutting taxes” federal deficit has only grown under the strain of the great recession. Detroit is our mirror and our darkest fear.
And if you think Detroit is just an anomaly, try the beginnings of a parallel vision in the mega-wealthy Silicon Valley: “San Jose [the third largest city in California] now spends one-fifth of its $1.1 billion general fund on pensions and retiree health care, and the amount keeps rising. To free up the money, services have been cut, libraries and community centers closed, the number of city workers trimmed, salaries reduced, and new facilities left unused for lack of staff. From potholes to home burglaries, the city’s problems are growing… ‘We’re Silicon Valley, we’re not Detroit,’ said Xavier Campos, a Democratic city councilman representing San Jose’s poor East Side. ‘It shouldn’t be happening here. We’re not the Rust Belt.’” New York Times, September 23rd. It’s happening everywhere. We need more taxes? How about those loopholes and the number of folks paying taxes?
Well, if you can close lots of those loopholes, the ship will list a little less as it limps along. Do we have the stomach to do this? Not in this Congress and not in most state legislatures. Congress saves money by shutting off programs – except a few that favor their contributors – and perhaps by shutting down the entire government. Cutting infrastructure, education and research actually cuts our future earning power rather significantly, which of course reduces the ability to generate the tax base we need. Austerity didn’t work so well in Europe as we can plainly see.
How about adding new taxpayers, folks who today are loathe to work in jobs where they need to report their undocumented presence just to fill to legitimate employment forms? People whose kids wind up in our public schools and who are often treated gratis at local emergency rooms. If there were a path to legitimacy, requiring registration and paying of taxes, exactly how many new taxpayers would that involve?
The experts at Pew Research examined the recent trends of illegal immigration to reassess the hard numbers. Back in 1995, the number was estimated to be around 3.5 million undocumented workers, mostly concentrated in California and New York. By 2007, that number had risen to 12.2 million scattered across the country, but the recession dried up even the menial jobs that so many of these undocumented workers are willing to accept. The bottom of the recession trough was 2009, when estimates place the total at 11.3 million. A slight uptick in our job situation, and we are holding at roughly 11.7 million.
Contrary to popular belief, they are not all from Mexico: “The Pew study released [September 22nd] found that the number of Mexican immigrants living illegally in the United States has dropped steadily to just over 6 million, down from a high of 6.9 million in 2007 and the lowest number since 2004. By contrast, the number of unauthorized immigrants from other nations has reached an all-time high of 5.7 million, the study found.” Washington Post, September 23rd.
There are issues and subtexts in allowing such people to process their way to citizenship. While GOP powers emphasize border security and crime rates, even though Hispanics are mostly Roman Catholics where abortion is forbidden, the underlying reality is that these minorities tend to support more liberal candidates and not Republicans. But with overall demographic trends indicating that a “majority of minorities” will control anyway, there are more than a few Republicans worried that their actions will simply push these potential voters even further away from the GOP.
The Democratic-controlled Senate has approved a far-reaching plan to add new layers of security along the U.S.-Mexican border, provide more legal channels for immigration and allow those here illegally to gain citizenship over 13 years if they pay fines, learn English, remain employed [and pay taxes!] and do not commit crimes… But the Republican-led House has shelved that plan and is focused instead on a series of piecemeal bills that do not include measures to legalize undocumented immigrants.” The Post.
Back in 1986, the Reagan administration promulgated legislation that cleared the path for approximately 2.5 million undocumented workers to become residents and ultimately, possibly citizens. In today’s world, the Institute on Taxation and Economic Policy (ITEP) estimated that these workers would, if given a path to citizenship, add additional money to the currently assumed $10.6 billion in taxes and other governmental assessment that they are estimated to have paid in 2010:
“The taxpaying power of undocumented immigrants would grow were they able to acquire legal status. According to ITEP: ‘Legalization would increase immigrant wages both because of their increased bargaining power with employers and because of their increased investment in their own language and skill development, thus increasing the taxes paid by those same immigrants. But, the most significant revenue gain comes from simply having these immigrants fully participate in the federal, state and local tax system, requiring them to pay state personal income taxes.’ ITEP estimates that, provided the opportunity to earn legal status, formerly undocumented immigrants would pay a total of $12.7 billion in state and local taxes each year, including: $8.5 billion in sales and excise taxes. $2.8 billion in income taxes. $1.3 billion in property taxes.” As quoted at, July 12, 2013.
Mainstreaming also reduces the cost of governmental benefits consumed without offsetting revenue. Over generations, menial workers transition to high forms of labor, eventually into higher management, education and the professions. Los Angeles, Chicago, Miami, New York, etc., etc. are clear venues where these trends are clear. We are a nation of immigrants… but for some reason, too many Americans actually fear the process that gave them life in this great nation.
I’m Peter Dekom, and it’s time to show fear the door.