Tuesday, September 29, 2015

A-Tax on Average Americans

Yes, the Internal Revenue Code is way too complex, has way too many loopholes – most of which favor those at the top end of income and wealth – and is deeply unfair. But understanding the difference between a regressive tax scheme and one that is progressive becomes important. Regressive means that while a tax might look more “uniform” in its application, that uniformity is a much bigger sacrifice for those at the bottom of the earnings curve than it is for those at the top.
Regressive taxes include sales taxes, since those at the bottom of the earnings ladder have a lot less in the way of discretionary spends than those higher up the income ladder, so those who accumulate capital for investment purposes pay a smaller percentage of their income by reason of purchases where sales taxes (including the VATs, “value-added taxes,” which are assessed at one or more stages of the sales/distribution chain) are the revenue producers. Those at the bottom spend most of their income to survive, but pay taxes on virtually all of their non-food purchases.
Flat taxes or schemes with only a few fixed levels of tax rates, also tend to extract money from those at the bottom or middle of the earnings level where the result is true income impairment while those at the top generally benefit from a lower effective rate. So when you see proposals that envision sales, VAT, flat or two or three level income tax schemes, it is almost axiomatic that those at the top make out the best – no matter what the politicians try and tell you – and those in the middle and the bottom bear a disproportionate burden. Those at the very bottom generally don’t pay taxes anyway.
As for U.S. corporate income tax, you really have to differentiate between the tax rate (federal rates vary from 15% to 35%, and with state taxes thrown in, the average rates stand at about 39%) and the actual sums paid. While on paper, the United States has some of the highest corporate taxes in the world, for companies with incomes of $10 million or more, a little tax planning and some sophisticated movement of off-shore monies yields an average federal payment of between 12% and 13%. Some of the biggest U.S. companies in the world pay no or virtually no federal income tax. All efforts to repatriate foreign earnings of big U.S. corporations into the U.S. have met with a stone wall of Republicans in Congress. So while they scream about our high tax rate, only the smallest American “C” corporations ever pay anything close to the posted rates.
Rand Paul has suggested a “Fair and Flat” tax. Jeb Bush’s tax proposals – should we even consider these given his plunging standing in all the relevant polls? – are a boon to the wealthy. “Bush would drastically lower tax rates for both individuals and corporations, while eliminating loopholes and a number of popular deductions to make up some of the forgone revenue. The seven individual brackets we have today would be crunched down to just three, with rates of 28 percent, 25 percent, and 10 percent (currently, the top rate is 39.6 percent). Among other changes, he'd outright abolish the estate tax, which would be a boon to the Hilton family, and double the standard deduction most taxpayers take, which would help eliminate income tax liability altogether for millions of Americans. Meanwhile, he'd do away with the write-offs for state and local taxes, while capping them for things like mortgage interest and medical expenses.” Slate.com, September 9th. 
Donald Trump, who seems to have borrowed heavily from Bush’s plan, has told the world that his new personal federal income tax plan, reducing the current seven tax brackets to four, would benefit the middle class and eliminate federal taxes on those earning less than $25,000/year. He plans on eliminating some loopholes (with a rather unclear vision of how much, in hard dollars, this would generate) and dropping the federal corporate tax to 15%. It is unclear if his loophole closing would remotely bring all that U.S. corporate money sitting overseas back to the U.S. to be taxed, but he is hoping that a one-time 10% rate would motivate them to do just that, suggesting that he is not doing much in the way of permanent tax reform to keep companies from continuing to shelter earnings overseas. Want to make a little bet on how rich folks will fare under a Trump presidency?
“Steve Gill, a tax and accounting professor at San Diego State University, said that as a group, Americans who are making more than $200,000 a year would pay $400 billion to $500 billion less in taxes annually under Trump's plan than under the current system.” AOL.com, September 29th. Hmmmm! Not exactly a big surprise.
Lots has also been made of the so-called ‘carried interest’ rule, an absurd loophole that allows certain fund managers to treat their percentage upside in their clients’ investments to enjoy the same lower capital gains tax rates accorded to their clients… even if the fund managers haven’t invested a dime. But this anomaly has become a cause célèbre among Democrats, as it should be, but Republicans who are all for keeping taxes on the rich low – still pushing that clearly false notion that rich folks with low taxes create great jobs for everyone else (a rather completely disproven statement) – sense that they can make out like bandits by simply saying “yes” to the Dems in a legislative trade-off. 
Indeed tax-devil, Grover Norquist, who has seduced a whole lots of Republicans into signing a “no new taxes” pledge, seems to be cackling at the prospect. The September 29th New York Times (First Draft on Politics) summarizes: “Have Democrats duped themselves with their fixation on carried interest? … Grover Norquist, the antitax crusader who founded Americans for Tax Reform, thinks they have.
“Democrats have pointed to a provision that allows private equity and hedge fund managers to pay lower tax rates as an embodiment of all that is unfair in the tax code. Now both Mr. Bush and Mr. Trump have issued tax proposals that target the loophole, presumably throwing liberals a bone.
“While Mr. Norquist, who pressures candidates to sign pledges against tax increases, has been against increasing carried interest tax for philosophical reasons, he said that killing the loophole would not be that big of a deal.
“‘You guys can have carried interest; we’ll take a big cut in the corporate rate, and we’ll call it even,’ Mr. Norquist said, referring to Democrats. ‘Carried interest doesn’t matter.’
“Mr. Norquist estimated that taxing carried interest, the income that fund managers make when investing other people’s money, like ordinary income might generate $3 billion in tax revenue over a decade. He said that he would happily give that up in exchange for slashing the corporate tax rate and cutting the top personal income rate to 25 percent, as Mr. Trumphas proposed.
“Likening attacks on carried interest to a dog chasing a bus, Mr. Norquist said that, for Democrats, closing the loophole could be more trouble than it is worth.” At the end of the day, tax laws are complicated. Most Americans have no real ability to read these statutes or proposals and understand what it all means. So instead, they buy into the buzz-words, slogans and those aspects of the proposal that the politicians cite (usually the rate numbers without a clear explanation of the way they apply). Just understand that none of the proposals set forth by any GOP candidate will fund government sufficiently without a serious alteration in their structure to require those at the top really to pay their fair share. And none of these proposals do that.
I’m Peter Dekom, and until the real loopholes are closed, the foreign monies sitting overseas repatriated, and those at the top of the food chain pay their fair share, the U.S. remain a government by the elite, for the elite and of the elite.

Monday, September 28, 2015

Fast or Fast Food?

We are a fat country. “Twenty-two states now have obesity rates that top 30 percent, according to data from the Centers for Disease Control and Prevention’s Behavioral Risk Factor Surveillance Survey. And while much of the country is holding steady, obesity rates are growing in five states: Ohio, Minnesota, Kansas, New Mexico and Utah.” Yahoo.com/health, September 21st.  The secret ingredients that Americans love so well: cholesterol and sugar, all with an ocean’s helping of salt. Bacon, bacon, bacon… and we even lure our dogs with the allure of bacon!
Arkansas is the biggest winner/loser at 35.9%, up from 17% in 1995. Double?! “[A] whopping 20% of kids aged 10 to 17 are obese in Arkansas, as are 41.7% of adults aged 45-64.” Yahoo.com. Is their favorite local pastime sitting around chewing… and then swallowing… the fat? It’s an epidemic, one that is taxing our national healthcare system to the breaking point. Diabetes, heart problems, strokes and the dozens of additional serious ailments generated by being overweight.
Where does it all come from? Why do people weigh more today than they did in past eras? I see folks running, spinning, working out and just plain walkin’ n’ sweatin’ all over the place. Apparently, not enough. One common thread seems to be a leading “fatty” indicator: fast food. Not that all fast food is necessarily bad, but in the world of addictive marketing, luring repeat business with loads of butter, lard, bacon and other generous forms of cholesterol – enhanced with tons of sugar and seductive salt – is generally the norm. In a high speed world of school and work, it’s just too easy, and not too expensive, to lean on the un-lean: fast food.
Every day, more than a third of children in the United States eat fast food. A new report from the Centers of Disease Control and Prevention also showed that teens eat twice as much fast food as younger children; on average, 17 percent of teens' daily calories come from fast food.
“Fast food consumption among children grew between 1994 and 2006, rising from 10 percent to 13 percent. The new report, which used data from the CDC's 2011-2012 National Health and Nutrition Examination Survey, shows only a slight decrease—overall, kids ages 2 to 19 consume 12 percent of their calories from fast food. Surprisingly, these numbers weren't different across socioeconomic status, gender, or weight…
Over the last 30 years, childhood obesity in the United States has more than doubled. Between 1980 and 2012 the number of kids considered obese increased from 7 percent to 18 percent and the number of teens during that same period quadrupled.” MotherJones.com, September 17th.
The states with the heaviest folks are heavily represented in the traditional south, with the battle of the bulge between Mississippi and Arkansas bordering on legendary, and massive Texas is indeed filled with massive Texans, the country is moving in the wrong direction. In fact, 88% of the obesity in the country is settling in on the Red State side of the political spectrum, a strange reality since those in the greatest need of subsidized healthcare tend to vote to repeal that program with the greatest ardor and frequency.
We show drop-dead gorgeous models chowing down on the biggest, baddest, juiciest, bacon, cheeseyist burgers you can imagine, such that if these slimmed-down non-representatives of average Americans actually consumed them with any regularity (pun intended), they could never, never get the job to sell the product. Steamy has become a description of our sexual fantasies, but a rare form of fresh vegetable preparation for the vast majority of us.  Of course, too many of us are too big to engage in anything remotely resembling such fantasies.
It’s a big expensive problem that seems to be getting so much worse so much faster than we can afford. As healthcare costs escalate by a sad combination of healthcare corporate manipulation and a rising demand of fat Americans needing more medical services, our ability to pay for such extra needs is plummeting. sSo do we turn to “comfort food” – stuff with fat – to make us feel better, even though in the long term we will feel a whole lot worse?
I’m Peter Dekom, and I wonder what lessons we are teaching our children about diet and health?

Sunday, September 27, 2015

ISIS on the March

We have idiot candidates whose idea of foreign policy is the adult equivalent of “I’ll hold my breath until I turn blue if you don’t ____.” “I’d never talk to Vladimir Putin until he backs out of the Ukraine and stops aiding the Assad regime in Syria.” “We should not allow Chinese President Xi Jinping in this country until he revalues his currency upwards, stops building a military island and owns up to the big hack of our governmental personnel records.” “We should not be dealing with Cuba at all until they install a form of government we approve of.” “I would never negotiate with Iran until they accept our demands of a true democratic government, agree to no threats against Israel, accept a release of all their political prisoners, destroy anything we deem a basis for nuclear development and allow us – their sworn enemy – open and immediate access to their military bases where nukes could be stored or developed.”
The notion of only dealing diplomatically with your allies, not dealing with those you believe are your enemies unless they unilaterally accept every demand you have ever made, is a pretty interesting approach to world affairs. China and the U.S. may never develop a close relationship, but not dealing with the second largest economy on earth is an incredibly stupid policy. For the record, despite cries from ignorant politicians to the contrary, China didn’t devalue their currency as a slap in America’s face; after their stock market plunged and their growth/productivity numbers fell, they decided that to save their own manufacturing sector and address the economic plight of over a billion people who are not at the top of the economic ladder, for internal reasons, by implementing a currency devaluation.
And how is “nasty” China reacting as a global player? “China's president on [Sept. 26th] pledged billions in aid and said Beijing will forgive debts due this year in an effort to help the world's poorest nations, as world leaders begin to seek the trillions of dollars needed to help achieve sweeping new development goals.” AOL.com, September 27th. Yup, stupid candidates, we sure don’t want to talk to that man! 
By engaging Iran (no, I do not trust them either) and Cuba (so much less of a threat than was Vietnam after that war, where we have normal relations with the same regime that fought us), and by releasing sanctions, there is a strong probability that their economies will grow to the point where they would have too much to lose to trouble us, that their new economic classes would have a stabilizing power on religious or doctrinaire anger, and the benefits to us would seem to outweigh the short term turn of political direction. We cannot trust Putin either, and the sanctions there might push his nation in the right direction. But with the boiling cauldron we call the Middle East, Russia military presence suggests that the removal of Bashir Assad will be a negotiated reality while Russian arms help counter an ever-victorious ISIS, a reality that does threaten us all. We need communication.
Our current efforts to curb ISIS and their allies are a joke. Despite aerial attacks and some hardware and training support, ISIS is not yielding back conquered territory, and the military aggregation against them is not remotely producing the results we need. Iranian-led/trained forces have had some success, and coordinating the anti-ISIS efforts with Iran, Russia and Syria are among our very few options in the region.
Here three recent stories that will tell you exactly how well our policies of non-engagement with these American enemies are working, as we try, once again, to impose our “solutions” to the region.
ONE: “Nearly 30,000 foreign recruits have now poured into Syria, many to join the Islamic State, a doubling of volunteers in just the past 12 months and stark evidence that an international effort to tighten borders, share intelligence and enforce antiterrorism laws is not diminishing the ranks of new militant fighters.
“Among those who have entered or tried to enter the conflict in Iraq or Syria are more than 250 Americans, up from about 100 a year ago, according to intelligence and law enforcement officials.” New York Times, September 27th. Yup, folks love us so much that they don’t go to ISIS anymore… right!
TWO: We installed a corrupt government in Afghanistan, not able to counter the Sunni extremists, the Taliban, allies to ISIS. Our efforts to support an Afghan military, from training to arms, fall woefully short. Take for example our recent supply of 16 MD530 Scout helicopters (pictured above) to the already-impaired Afghan military: “Col. Qalandar Shah Qalandari, Afghanistan’s most decorated pilot, recently took command of what was meant to be the building blocks of his country’s new air force: a squadron of shiny American-made attack helicopters, intended to solve the chronic lack of close air support for Afghan troops…
“[Colonel noted;] ‘I will tell the truth. This is my country, and these are my men, and they deserve the truth.’… He tossed a map on the table, showing the effective range of the helicopter from its Kabul airfield: It cannot even reach areas where the Taliban normally operate. In summertime, its maximum altitude with a full load of fuel and ammunition is only 7,000 to 8,000 feet, he said — meaning it cannot cross most of the mountain ranges that encircle Kabul, which is itself at an elevation of about 6,000 feet.
“‘It’s unsafe to fly, the engine is too weak, the tail rotor is defective and it’s not armored. If we go down after the enemy we’re going to have enemy return fire, which we can’t survive. If we go up higher, we can’t visually target the enemy,’ Colonel Qalandari said. ‘Even the guns are no good.’… Each helicopter carries two .50-caliber machine guns, mounted on pods on either side of the craft’s small bubble cockpit. ‘They keep jamming,’ one of the colonel’s 10 newly American-trained pilots said.
“Colonel Qalandari is not the first Afghan official to complain about the woeful state of efforts to build an air force to replace the Americans in carrying out airstrikes, medical evacuations and transport missions in a country with poor and dangerous roads. United States officials have long seen the aspirations as unrealistic, while Afghans have complained that their allies have ignored their views about what they need to fight the Taliban.” NY Times. Smart or terminally stupid?
THREE: Remember that paltry force of 54 “moderate” Syrian rebels we trained to fight Assad and possibly ISIS… out of a targeted force of 5,000 (which we simply could not raise)? We equipped this tiny force and sent them into harm’s way. Seeking safe passage through al-Nusra (an al Qaeda/ISIS ally) territory, they immediately bought their safety by trading off a significant chunk of the weapons we supplied them: “A statement on Twitter by a man calling himself Abu Fahd al-Tunisi, a member of al-Qaeda’s local affiliate Jabhat al-Nusra, read: ‘A strong slap for America... the new group from Division 30… handed over a very large amount of ammunition and medium weaponry and a number of pick-ups.’” Telegraph.co.uk, September 22nd. Many other reports from the region seem to have confirmed these statements. “The items were apparently turned over in exchange for safe passage within the region and amounted to roughly 25% of the equipment assigned to that unit, US Central Command said.” TheGuardian.com, September 23rd.
So while stupid politicians running for office parrot idiotic statements of how to conduct foreign policy, the world increasingly ignores the United States and its desires and priorities. The dumber our statements, the more what we propose fails, the less impact we have. Remember that Russian guy our candidates don’t think we should talk to? “For the second time [in September], Russia moved to expand its political and military influence in the Syria conflict and left the United States scrambling, this time by reaching an understanding, announced on Sunday, with Iraq, Syria and Iran to share intelligence about the Islamic State.
“Like Russia’s earlier move to bolster the government of President Bashar al-Assad by deploying warplanes and tanks to a base near Latakia, Syria, the intelligence-sharing arrangement was sealed without notice to the United States. American officials knew that a group of Russian military officers were in Baghdad, but they were clearly surprised when the Iraqi military’s Joint Operations Command announced the intelligence sharing accord on [September 27th].
“It was another sign that President Vladimir V. Putin of Russia was moving ahead with a sharply different tack from that of the Obama administration in battling the Islamic State, also known as ISIS or ISIL, by assembling a rival coalition that includes Iran and the Syrian government.” New York Times, September 27th. The ill-informed babble, ignorance unbounded, of so many candidates for the highest elected office on earth should be shocking to voters. Instead, voters have slowly been seduced into believing that these sloganeering politicians have a viable plan.
Yup, we should only talk to powerful negative nations – in our perception – when they unilaterally kowtow to our litany of demands. Exactly how would you expect our government to react if China, Russia or Iran made similar-level demands on us? Yeah, exactly. That’s not how foreign affairs are conducted… or ever have been. You don’t need peace treaties with your allies….
I’m Peter Dekom, and the stupid foreign policy utterings of so many candidates would put the United States into serious additional jeopardy if they were ever implemented.

Saturday, September 26, 2015

Traveling – Too Many Steps

Above the Los Angeles skyline, I often look up as a private jet – celebrity or corporate usually – soars across the sky. Really expensive extravagance? Business necessity? How about those men and women in business suits, sitting in first and business class, pouring over reports and documents? And the pilots and flight attendants who serve them? Envious of a life filled with global travel, exciting venues, rushing from important meeting to breathtaking venues. Amazing meals, first class hotel room or deluxe suites, wines at the top of the food chain? Wow!
When I have been required to travel long distances for clients, people high-five me on my “vacation.” Vacation? Leave late at night, sleep on the noisy plane wearing a sleep mask, tolerating nasty airline food, and arrive in the wee hours of the morning… change clothes and head directly for a day of meetings. Sometimes windowless rooms. Sometimes conference rooms with stunning views… of the building next door. Food brought in. Maybe a nice dinner… but there is a business agenda and an early meeting the next morning. Jet lag is slamming you. Next morning, the non-stop meeting continues… rushing to make that later-in-the-day flight back home. Exhausted, you drive home and collapse… except for all those client calls and emails that gathered while you were gone. “How was your vacation,” you hear. The urge to punch wells up.
Bottom line: business travel is not actually good for the business travelers, no matter how “luxurious” we might think it to be. And the more you travel and the longer the distances, the less healthy you are likely to be. Professors from England’s University of Surrey (Scott A. Cohen) and Sweden’s Lund University (Stefan Gössling) address the topic in their Sage Journal publication (revised last March): The Darker Side of Hypermobility, which, in addition to original research, summarizes work conducted and reported in various studies over the past fifteen years.
You don’t have to look at those living this jet-set lifestyle with envy and jealousy anymore. Those frequent flyers are putting themselves and their health at serious risk. The above report is well-summarized in the September 10th issue of FastCompany.com. “‘[Business travel] has a wide range of physiological, psychological and emotional, and social consequences that are often overlooked, because being a ‘road warrior’ tends to get glamorized through marketing and social media,’ says Cohen. He argues that this glamorization of hypermobility—used to sell flights, frequent-flyer memberships, and hotel rooms—has silenced the negative health effects frequent business travelers expose themselves to.”
Here are some of the lovely factors and risks such travelers face (summarized in FastCompany.com):
Scientists now understand that specific genes can affect how quickly we age—and it appears the more someone travels, the faster they age. ‘Frequent flying can lead to chronic jet lag, which can cause memory impairment and has been linked in studies to disrupting gene expression that influences aging and the immune system, and increased risk of heart attack or stroke,’ says Cohen…
Radiation exposure is hundreds of times higher at high altitude than at ground," says Cohen… Matter of fact, it’s so high that ‘there have been calls to classify frequent business travelers as ‘radiation workers’… 
No matter if you’re in economy or first class, everyone on a long-haul transatlantic flight is breathing the same recirculated air. Not only does this expose frequent business travelers to germs more often, the jet lag and general tiredness from running to and from airports ‘can even switch off genes that are linked to the immune system,’ Cohen notes in his paper. This means frequent travelers are not as well equipped to fight off disease as people who travel less frequently…
Unsurprisingly, those who travel a lot generally don’t have the chance to eat meals prepared with fresh, healthy foods. Airline foods are packed with salt and sugar so they can retain their taste at higher altitudes during long journeys. But that salt and sugar will wreak havoc on your body over the long term. Cohen says the poor diet, combined with a general increase in alcohol and the lack of exercise opportunities while traveling, means frequent travelers have higher risk of obesity
‘The disruption of the circadian rhythm from jet lag affects mood, judgment, and concentration for up to six days,’ says Cohen. In his review of the literature, he found that the cumulative effect of the stress from preparing for a trip and the jet lag from those trips can lead to ‘travel disorientation.’
‘There is the stress of preparing for a trip, the fact that the time spent traveling is rarely offset through a reduced workload, and the anxieties of ‘inbox overload,' ’ says Cohen. ‘Stress is compounded through weather delays, technical failures, increased security checks, and rising anxieties over terrorism and safety.’
Frequent business travelers often also feel lonely and isolated—as well as guilty for leaving family members behind. Their spouses, in turn, often feel resentment and anger. When you combine the stress with the isolation and guilt, it can lead to serious mental health issues, notes Cohen. ‘One study found that employees of the World Bank who travel frequently for work have a threefold increase in psychological claims on medical insurance as opposed to nontravelers.’Still jealous of that lifestyle?
Obviously, if you take one such trip every few months, the impact can be minimal, but if you are traveling weeks out of each month, the impact can actually be worse. For some, it’s simply the nature of the job, so the choice of work marks the risk. Flight attendants and pilot face some of these risks, but at least when they arrive, they have time to themselves, but radiation is constant. Whatever the consequences, just ignoring the risk is clearly not particularly wise. Companies and the high-profile travelers themselves need to take steps to minimize the risks.
I’m Peter Dekom, and a little common sense can go a long way to moderate these risks.

Friday, September 25, 2015

Bitter Pills and Consumer Pain

When the Affordable Car Act passed in 2010, it did so with major concessions to insurance companies and pharmaceutical giants. By bandying the words “socialism” and “un-American” about, cash-laden-contribution-pledging Congressional lobbyists – even pre-Citizens United “buy your influence” case – agreed to support this controversial bill by carving out some of the most pro-consumer proposals and depositing them into the Congressional legislative garbage bin. They eliminated any direct governmental insurance involvement – even a simple expansion of Medicare – to insure (yes, pun intended!) that all that extra business would have to be funneled into their private sector coffers.
But the most despicable compromise was to the biggest pharmaceutical players. First – under some profoundly misguided, mendacious and self-serving notion that we could not trust the quality of drugs sold in such third world nations as Canada and the United Kingdom – they precluded Americans from being able to purchase their prescriptions at lower prices even at trusted venues outside the U.S. Further, unlike the programs in most of the developed world where such negotiations are routine, government agencies (state and local) were forbidden to try and use the power of the volume of their new healthcare program(s) to negotiate lower costs for prescription drugs.
To this day, the United States charges average prices for most patent-covered medications at levels staggeringly above the costs for those same prescriptions in any other developed country in the world. In the eyes of most of those governments and the people who are the beneficiaries of those healthcare systems, American consumers are the biggest losers. With the GOP still demanding repeal of the overall provisions of the Affordable Care Act – with no specific alternative program on the table – rest assured that their goal is to increase the revenues to the corporate interests, even if more consumers are denied coverage or if the price has to rise.
But without the ability to use its “power of a volume buyer” to negotiate lower prescription costs – something most governments around the world can do – and without a Medicare governmental insurance program alternative – the government appears to be powerless to contain the rising cost of healthcare. Hey, folks, that was designed by corporate interests into the bill! Further, as specialized drugs are developed to treat a narrow band of afflictions, or as more powerful and effective drugs enter the marketplace to replace older and less-effective prescriptions for more prevalent ailments, the size of the new pricing structure for these drugs, void of any governmental price-containment program, is nothing short of absurd. Are they worth it or should patients get use to the fact that insurance carriers will fight tooth and nail against paying the extra cost?
The September 10th CNN.com provides some  facts and supporting numbers: ‘The prices seem more and more to many people to be decoupled from a consideration of how much value they bring to patients,’ said Dr. Steven D. Pearson, president of the Institute for Clinical and Economic Review, a nonprofit research organization that evaluates the use and pricing of new drugs… Far and away the biggest driver of prices, according to respondents in the Kaiser survey, was pharmaceutical companies and their desire to make a profit…
It used to be that you did not have to break the bank to treat high cholesterol. Statin drugs have been available for decades, and a year's worth of pills only costs between about $50 (for generic versions) and $800 (for name-brand).
But this summer, the FDA approved two new cholesterol medications with price tags that could hurt your wallet: $14,600 a year for Praluent and $14,100 for Repatha. Even though these medications probably do provide benefits for patients who have very high cholesterol or who experience bad side effects from statins, it is not enough to justify the cost, Pearson said.
A recent report by Pearson and his colleagues at the Institute for Clinical and Economic Review concluded that the annual cost of Praluent and Repatha should be between $3,615 and $4,811, based on how much they are estimated to increase life expectancy and quality of life, Pearson said…
Earning their reputation for soaring costs, most new cancer drugs are $10,000 to $15,000 a month, and the treatment can last anywhere from a month to years, said Dr. Daniel A. Goldstein, a fellow in hematology and medical oncology at Emory University. Although Medicare and private insurers typically cover these medications, the co-pay can still be hefty, Goldstein said.
These price tags may not necessarily be out of line for ‘game-changer’ drugs, such as Gleevec, Goldstein said. "It's important to incentivize high-quality innovation," but insurers should be willing to cover more of the cost of these drugs so that patients can afford them, he said.
However, unlike Gleevec, most of the new cancer drugs provide much less benefit and do not merit their price tag, Goldstein said. A recent study he led found that a lung cancer drug called necitumumab, which is not yet approved by the FDA, should only cost between about $500 and $1,300 per cycle based on the fact that it only gives patients a few more weeks of quality life. ‘Basically a tenth of the going rate for drugs entering the market place,’ Goldstein said…
Four new drugs for hepatitis C virus, including Sovaldi and Harvoni, have got a lot of attention recently because of their ability to cure more people of the virus and cause fewer side effects than older drugs. Their price tag has also made headlines: A 12-week course of Sovaldi costs $84,000, or $1,000 a pill. Even with Medicaid coverage, patients are set back about $600 a pill.
‘Hepatitic C (drugs) were a real shocker because they were priced at the level of cancer drugs, but for a much larger patient population,’ Pearson said. An estimated 3.2 million people in the United States have hepatitis C…
New diabetes medicines are a big part of the reason for increased spending on prescription drugs overall in the United States in recent years, according to a report by IMS Health, a market research firm.
Although these medications are based on old-fashioned cheap insulin, the new formulations, in pens instead of syringes, drive up the cost. Pens typically cost about $30 to $40 each, a cost that some insurers do not cover, whereas a box of 100 syringes is about $10. One type of pen, called Lantus, has a long-acting form of insulin, and is the top-selling drug for diabetes…
Promising new therapies have come out for multiple sclerosis, and they carry price tags that match.
A recent analysis found that the cost of new oral MS drugs such as Aubagio has risen between 8% and 12% each year since they were approved by the FDA several years ago. And these new drugs may have paradoxically driven up the cost of older MS drugs, from about $8,000 to $11,000 in 1993 to $60,000 a year in 2015.
A study of so-called biologic drugs for another autoimmune disease, rheumatoid arthritis, found that they cost between about $10,000 and $20,000 a year, and that patients incur about a third of that cost out of pocket.
What can you do about all this? Write your Congressional representatives – in the Senate and the House – as well as your state legislators that healthcare bills need one huge change to benefit consumers: the government has to be empowered to use the power of volume to negotiate with the pharmas to contain the cost of prescription drugs. For those with more gumption, push for a simple expansion of Medicare for everyone as well.
I’m Peter Dekom, and if you really care about containing rapidly-rising healthcare costs, do something about it!

Thursday, September 24, 2015

The Legacy of Rewarding the “Job Creators”

As so many conservative legislators, state and federal, have clung to the mantra that trickle-down economics floats all boats. This supply-side economic theory didn’t work when it was proposed during the Reagan era, and it doesn’t work today. We’ve watched as post-recession billionaires increased their incomes and share of our nation’s wealth, as the middle class has contracted and those at the bottom rungs are slammed to the ground.
Aside from token gestures (like phasing in a fifty-cents an hour increase over three years) to raise the minimum wage, and some sleight of hand to change the nature of the tax code in a manner that still favors those at the top of the food chain well over those modest or low earners, little has been suggested from the conservative side to make the world a better place for average workers, and nothing much for those who still cannot figure out how to climb back into the earnings stream. Lots of distractions from this huge income inequality issue: immigration reform, religious rights to oppose gay marriage, etc., etc., but putting more money into the average pocket… nothing meaningfully measurable at all.
Insisting that financial and environmental regulations cost jobs – rather than focusing on the jobs environmental controls would create and the billions if not trillions of dollars financial controls might actually save – those supported by big business seem to choose to ignore the real cost of not reining in climate change damage. At the second GOP debate, sitting in a state with a horrific job-killing drought as land/home destroying fires raged to their immediate north, the uniform response was that there is little that we can do to fix the climate-change problem that matters, so we should basically ignore it. How many trillions of dollars of hard costs, lives impaired and shortened, have to occur before they react? It may be too late, but we can make things worse… much worse.
Hey, maybe it will just go away: “The National Oceanic and Atmospheric Administration announced [September 16th] that August, this past summer and the first eight months of 2015 all smashed global records for heat… That's the fifth straight record hot season in a row and the fourth consecutive record hot month. Meteorologists say 2015 is a near certainty to eclipse 2014 as the hottest year on record… Since 2000, Earth has broken monthly heat records 20 times and seasonal heat records 11 times. Scientists blame a combination of human-caused climate change and natural El Nino.” AOL.com, September 17th. Maybe not, but it’s pretty clear that no one on the GOP debate dais is willing to do anything about an issue that probably will cost Americans more in hard cash than any other reality. Food costs, medical costs, paying for huge natural disasters, insurance costs and sheer misery.
Remove the Affordable Care Act – not fix its obvious defects – remains high on the list of GOP targets. Nothing proposed to replace it; just kill it and go back to the bigger mess that preceded it. Take the almost nine million folks benefitting from the program and shove them back into the world of no coverage and even higher medical costs. Make life more difficult, particularly in the new “gig” economy where fringe benefits just don’t exist, for the average workers.
Lots of opinions. Now for the hard numbers that support how hard life is for Americans in the middle and below. Oh, from Census statistics from the Department of Labor if you’re worried about my bias. “The typical American family income was $53,657 in 2014, barely changed from $54,462 a year earlier, the U.S. Census Bureau reported [September 16th]… What's worse it's far below the peak set in 1999. That's a major reason why so many Americans are still gloomy about the economy six years into the recovery.
“This was the third year in a row that median household incomes stagnated, following two years of declines. Whites saw their incomes decline 1.7%, while blacks, Hispanics and Asians saw no significant difference…
“Median income remains lower than it was in 2007, Census said… The holding pattern in wages comes despite the fact that millions more Americans are working. Some 1.2 million more men and 1.6 million more women are working full-time, year-round, respectively… The earnings of women who work full time were essentially the same as they were in 2007, while men's earnings were 2.2% lower.
“Wage stagnation is a central focus of the 2016 presidential election. The Democratic candidates want to raise the minimum wage and widen the safety net, while Republicans want to spur job creation by lowering taxes and shedding regulations… Meanwhile, the nation's poverty rate also held steady at 14.8% last year. Some 46.7 million Americans were in poverty, compared to 46.3 million in 2013.” CNN.com, September 16th. In fact, in terms of discretionary income, given the rising costs of food and housing, Americans have experienced an unending contraction since 2002.
Strangely, the only really bright spot was in healthcare: “The Census Bureau also reported that the uninsured rate fell to 10.4% in 2014, the first year people could sign up for coverage on the Obamacare exchange or through Medicaid expansion in many states. That's down from 13.3% the year before. Nearly 9 million more people had health coverage in 2014 than a year earlier… But more recent government data found that the uninsured rate fell to 9.2% in the first quarter of this year, which marks the first time in decades the uninsured rate has dropped below 10%. Some 29 million people lacked coverage, down 7 million from a year earlier, the report found.” CNN.com.
Why do we even use the word “recovery” in our description of our post-recession economy? Because too many of the economic measurements – from stock prices and real estate values to income averages that include the massive pay increases of those at the top – simply are focused on numbers that do not accurately reflect those in the middle and lower economic brackets. Most of us are still very, very uneasy about the economy.
We just do not believe numbers that suggest the worst is over and we are now living in growing times of prosperity. And the reason we don’t believe those optimistic projections is anchored in the personal earnings numbers set forth above. For most of us, there has been no recovery and without some major changes to redistribute income, things are going to continue in the wrong direction. So you can vote along socially conservative lines, but if you are not at the top of the food chain, you simply are going to have to get used to a continuous and unceasing fall in the quality of your life, with even worse consequences for the next generation. It seems that those at the top of the earnings curve have figured out that too many Americans will vote to reduce their true income (and bolster the money paid to the top) if social conservatism rules otherwise.
I’m Peter Dekom, and rich folks – who can themselves side-step the constraints imposed by social conservatism by flying somewhere where those rules don’t apply – do not hesitate to agree to such policies as long as they can make more money.

Wednesday, September 23, 2015

Not Here!

For too many Americans and a greater number of Muslims, there really is a clash of civilizations – to the death even – a war between the Judeo-Christian world and Islam. Words from Al-Qaida leader Ayman al-Zawahri, like this statement in an audio recording released on September 12th, reinforce that message: “I call on all Muslims who can harm the countries of the crusader coalition not to hesitate. We must now focus on moving the war to the heart of the homes and cities of the crusader West and specifically America.” Trying to out ISIS… ISIS. The thought of a mosque or a Muslim family in a local neighborhood often sends shudders through a vast horde of Americans. Europe, however, is on the front line of this conflict.
With Germany facing the lowest birth rates in the West, well below replacement rates, the “threat” of immigration and the desire to undo the racist image of Hitler driving public opinion, that country is incredibly welcoming to a huge number of the Middle East/North Africa emigres. Scandinavians and the Dutch are also standing with welcome arms. It is one of the most basic tenets of entry into the European Union.
“When joining the European Union — as the former Communist countries have done since 2004 — nations are asked to pledge support to a raft of so-called European values, including open markets, transparent government, respect for an independent media, open borders, cultural diversity, protection of minorities and a rejection of xenophobia.” New York Times, September 12th. Now, with close to a million migrants flowing into Europe, escaping war, persecution and drought, those values are being put to the test.
Eastern Europe has never really had any serious, historically recent, experience with mass migration. Dealing with culturally different values is a huge struggle for what has been a very isolated region of Europe. “[T]he reality is that the former Communist states have proved sluggish in actually absorbing many of these values and practicing them. Oligarchs, cronyism and endemic corruption remain a part of daily life in many of the countries, freedom of the press is in decline while rising nationalism and populist political movements have stirred anti-immigrant tensions.
“‘People must remember that Poland has been transitioning from communism for only 25 years,’ Lech Walesa, who led that country’s independence movement, said in an interview. ‘Our salaries and houses are still smaller than those in the West. Many people here don’t believe that they have anything to share with migrants. Especially that they see that migrants are often well-dressed, sometimes better than many Poles.’
“Few migrants, in fact, are particularly interested in settling in Eastern Europe, preferring to head to Germany or Scandinavia, where social welfare benefits are higher, employment opportunities greater and immigrant communities better established.” NY Times. 
But resistance is a whole lot more focused on race – brown and black people – and religion; if these were white Christians, Eastern Europe would clearly be vastly more open. Instead, these migrants are facing barriers, cultural and even the barbed wire barrier that greeted them in Hungary (pictured above). “‘This refugee flow has outraged the right wing,’ said Kenneth Roth, executive director of Human Rights Watch. ‘If you scratch the surface, why are they so upset? It’s not about jobs or the ability to manage them or social welfare. What it is really about is that they are Muslim.’
“Unlike countries in Western Europe, which have long histories of accepting immigrants from diverse cultures, the former Communist states tend to be highly homogeneous. Poland, for instance, is 98 percent white and 94 percent Catholic… ‘And the countries that have very little diversity are some of the most virulently against refugees,’ said Andrew Stroehlein, European media director for Human Rights Watch…
“Poland’s new president, Andrzej Duda, has complained about ‘dictates’ from the European Union to accept migrants flowing onto the Continent from the Middle East and Africa… Slovakia’s prime minister, Robert Fico, says his country will accept only Christian refugees as it would be ‘false solidarity’ to force Muslims to settle in a country without a single mosque. Viktor Orban, Hungary’s hard-line prime minister, calls the influx a ‘rebellion by illegal migrants’ and pledges a new crackdown this week.” NY Times.
But even ‘welcoming’ Germany is having trouble dealing with the waves of potential immigrants: “Germany announced on [Sept. 13th] that it was invoking emergency powers to start protecting its borders, seemingly reaching a point of overload after greeting with open arms tens of thousands of migrants pouring into Europe, and urging other European nations to do the same.
“At a news conference Interior Minister Thomas de Maizière said that Germany would reinstate controls at its southern border with Austria, after thousands of migrants have entered the country in recent weeks… A total of 12,200 migrants came to Munich on [Sept. 12th], according to the German police, The Associated Press reported. On [Sept. 13th] morning alone, 700 people arrived at Munich’s main train station, the federal police spokesman Simon Hegewald told The A.P…
“The emergency measures would presumably allow Germany to turn away migrants from the Balkans and other areas whose citizens are not fleeing war or persecution… Mr. de Maizière signaled that Germany was reaching capacity earlier [Sept. 13th] when he said that all of the migrants moving into Europe from the Middle East and other troubled areas could not come to Germany. Because of its relative prosperity and welcoming stance, Germany is the most desired destination of the migrants, many of whom see their best prospects for a safe and secure new life under the government of Chancellor Angela Merkel… ‘We can’t allow refugees to freely choose where they want to stay — that’s not the case anywhere in the world,’ he said in an interview with the Tagesspiegel newspaper.” NY Times, September 13th. Several other European nations, who had not already closed their borders earlier, adopted parallel procedures.
How many “terrorists” ready to blow up Western targets are mixed in with legitimate refugees, fear many in Europe?Lebanon’s education minister warned that ISIS could be using the refugee crisis to send jihadists into Europe,speculating that as many as 2 percent of those coming into the continent are ‘radicals,’ according to The Telegraph.” The Daily 202, Washington Post, September 15h. How will traditional Western cultures absorb such profoundly different experiences and values? And really, is there in fact a war between Islam and the West? What do you think of this mess? Xenophobia, anyone?
Europe is asking the United States to absorb some of this migrant flow. And if you think this will be the last such flow, perhaps you haven’t been reading the news. Between ultra-violence fomented from governmental repressions or rebellious conquest and the massive layering of agriculture-destroying drought from climate change, we are only witnessing the beginning of massive new migration trends. It may be a choice between figuring out what to do with those hungry, desperate masses… or watch them die from starvation and/or genocide.
I’m Peter Dekom, and as the world changes, as desperation rises, you can expect people to run to safety and hope.