Another reason to pass the healthcare bill...

Senate Minority Leader Mitch McConnell.  Image via Wikipedia

Is so that the Republicans in the Senate won't block funding for the troops anymore???  Yes, this is truly crazy, but the GOP attempted last Thursday to delay the healthcare bill through filibustering the defense appropriations bill; by holding up the defense bill, that could throw off the carefully crafted schedule Harry Reid put together to pass healthcare before the Christmas recess.  The Senate's parliamentary maneuvers and roadblocks have been on full display during the healthcare debate of late, however, Congressional historians agree that filibustering one non-controversial bill to block a controversial one is rather unprecedented.  Mitch McConnell, Senate Minority Leader, proving once again that principles can always take a backseat to political expediency.

UPDATE: Let's pass healthcare reform

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UPDATE BELOW: I had started a post earlier bemoaning the state of the healthcare reform bill, but over the last few hours I've been reading many persuasive arguments for both killing the Senate bill as it now stands (quick recap: no public option of any sort, mandates for 30 million currently uninsured people to buy coverage, premiums capped at 8% of income...more here courtesy of Sen. Paul Kirk, Ted Kennedy's replacement and former Chief of Staff) and for voting in favor of it.  I'm torn, and here are the two most persuasive arguments pro and con:

In favor of the bill (with great graphics): Igor Volsky.

Against the bill (with a strong and principled argument): Cenk Uygur.

Cenk argues that the public option was the focal point of so much progressive advocacy because it fundamentally alters the rules of the health insurance game, in the sense that health insurers only make a profit through taking your premium payments and finding ways to pay out less in benefits than you pay to them in premiums.  The incentive for insurers, therefore, is to deny care when possible, which is morally repugnant on its face.  The public option would provide an oppositional counterweight to the reigning insurance industry model in the form of health insurance that is not concerned with profit so much as providing the most effective care the most efficient way possible.

It's heartbreaking to have to give up the public option at this point, however the fact is, there will be time to tinker with the bill, and key Democrats are now saying that the public option will be "revisited" legislatively as early as 2010.  After looking at Volsky's graphics and reading about how much money average families and individuals are projected to save on their health insurance, I have to support the bill.  The subsidies to help people pay for the insurance they will now be required to purchase are generous as they currently stand, and if our ultimate goal is to insure more people, then despite the compromises involved, this bill needs to pass.

UPDATE: Here is the most complete and understandable breakdown of how heath care reform will affect the premiums various families of four will pay as of 2016 (once the program if fully phased-in).  Be sure to zoom in on the table embedded in the text - it's quite impressive.  My hope is being restored, little by little...

Money in Washington, or, How the Democrats Became Beholden to Business Interests

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Bill Moyers, who recently announced he will be retiring from weekly television to our collective detriment, shows that his style of intrepid journalism still makes for must-see-TV with his Friday episode of Bill Moyers Journal. Moyers interviews The American Prospect's Robert Kuttner and Rolling Stone's Matt Taibbi on the Obama Administration's various capitulations to the wills of monied interests from health care to financial reform. If you would like a succinct and informative look at how things have gone so wrong so quickly in Obama's still-young Administration, I highly recommend you take half an hour and watch the program. Hat tip to CitizenofEarth on DailyKos for drawing my (and others') attention to this episode.
In the Moyers discussion, Taibbi makes the argument that the Democrats, and especially Rahm Emanuel, Obama's Chief of Staff, have made a business decision to win the fundraising battle with Republicans by appeasing business interests:

And I think, you know, a lot of what the Democrats are doing, they don't make sense if you look at it from an objective point of view, but if you look at it as a business strategy- if you look at the Democratic Party as a business, and their job is basically to raise campaign funds and to stay in power, what they do makes a lot of sense. They have a consistent strategy which involves negotiating a fine line between sentiment on the left and the interests of the industries that they're out there to protect. And they've always, kind of, taken that fork in the road and gone right down the middle of the line. And they're doing that with this health care bill and that's- it's consistent.

In a sense, a connection can be seen between the health insurance industry's business model and the "business model" of modern politics: the only way to make profits is to deny the people who use your services the services that they have rightfully paid for, with that payment being, in this case, insurance premiums, votes, or public opinion. For instance, the insurance industry can use rescission and other nefarious tactics to deny health care to people when they need it most, and politicians (in this case, Obama and his minions) can use soaring rhetoric and populist talk to sell voters an idea of the politician they will get, and then when the rubber meets the road, they will aggresively capitulate to the monied interests who invested so heavily in their campaign over the will of the voters who voted them into office in the first place. The Democrats can only reap the "profits" of continued campaign financing from Big Business if they deny the will of the voters, since the reforms that voters overwhelmingly support will result in reduced profit margins for Big Business. The calculation it comes down to, as Robert Kuttner accurately places it in the Moyers interview, is that campaign donations from business will outweigh the wills of individual voters who will be turned off by a politician's being beholden to monied interests:

Look, there are two ways, if you're the President of the United States sizing up a situation like this that you can try and create reform. One is to say, well, the interest groups are so powerful that the only thing I can do is I can work with them and move the ball a few yards, get some incremental reform, hope it turns into something better. The other way you can do it is to try to rally the people against the special interests and play on the fact that the insurance industry, the drug industry, are not going to win any popularity contests with the American people. And you, as the president, be the champion of the people against the special interests. That's the course that Obama's chosen not to pursue.

It appears that Obama and his team have misread the situation in this country; they do not understand the deep-seated anger towards the companies and the individual CEOs and executives that have brought us to this point of a failing financial system that has brought the world to its knees, combined with a domestic health care system that is responsible for 22,000 deaths per year due to a lack of insurance and many thousands driven into bankruptcy due to catastrophic medical expenses. American voters can see that the decks are stacked against the little guys/gals, but sadly our political class still believes we can be deceived by positive talk and rhetorical spinup . I hope that Obama wakes up to the fact that he is widely being seen as allied with business interests against American interests, or else his presidency will become a failed one when that is the last thing that this country needs.

Time to make banking boring again

Yes! Vindication is nigh! Well, that's what Simon Johnson at the Baseline Scenario thinks, anyways. Johnson is convinced that Paul Volcker will be victorious in his quest to re-regulate the banking industry, and dare I say it, make banking boring again through reinstituting the Glass-Steagall reforms. What a concept, right? It's funny to me that when I read classic fiction, the bankers are portrayed as the staid, conservative types, who are well-off, but never considered the captains of industry as they are today (well, except perhaps in The Great Gatsby). And what is humorous to me is that that classic image of the banker is very much divorced from the one we have witnessed over the past decade, when banking became one of the most, if not the most, freewheeling industries in terms of risks taken and sums of money made.

The topic of banking and financial reform has become quite compelling to me of late (as is clear from the substance of my recent posts) as I believe that the problems we are witnessing strike at the heart of the American approaches towards money and morality. "More is always better" is the stereotypical American ethos, and yet there should be consequences for wrong actions (witness America's continuing fascination with the death penalty as a form of crime control, despite widespread statistical studies that show the death penalty does not deter crime). However, the financial titans pursued wealth with a single-minded focus, playing with other peoples' money, and when the house of imaginary wealth they built came crashing down, they suffered few, if any, consequences. There is a basic unfairness to this matter, and a sense that the outrages will not stop, given the current weaknesses in the financial reform plans the House passed last week and that are now before the Senate (and sure to be watered down there even further). Johnson notes the fairness issue in the context of Volcker's proposed reform measures:

This strategy is partly about timing – and in this regard Volcker has chosen his moment well. The economy is starting to recover, but this process is clearly going to take a while and unemployment will stay high for the foreseeable future. At the same time, our biggest banks are making good money – mostly from trading, not much from lending to small business – and they are lining up to pay very big bonuses.

Not only is this contrast – high unemployment vs. bankers’ bonuses – annoying and unfair, it is also not good economics. Bankers are, in effect, being rewarded for taking the risks that created the global crisis and led to massive job losses. And they are being implicitly encouraged to do the same thing again.

And there's the rub; bankers are being incentivized, to use the economics term, to take massive short-term risks again if we keep the basic banking structure the way it has been since the repeal of Glass-Steagall. The bonuses will not stop, and the government will continue to be expected to backup the banks when they fail, because they've done it once, and the banks now have an incentive to ensure that in the future they will once again be "too-big-to-fail" so that the government will be forced to backstop their losses when the next recession hits. The core business of banking, saving and lending money, is being short-changed in what ought to be our country's economic recovery in favor of the massive profits (and risks) of the financial innovations of the past decade. Until Obama and his Administation get a grip on the need for fundamental reform and a return to the basics, the Wall Steeters will continue to put all of our nation's money in harm's way.

Obama, Health Care Reform, and Corporate Chicanery: Capitulating the Battle and Losing the War

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So health care reform is virtually over, the chance for progressives to win out and to really cut costs and inject competition into the health insurance market has passed, and the corporations won out again. As noted below, I was despairing earlier today, but after reading Bob Cesca's latest piece at Huffington Post, I feel slightly better. His main point is that, despite being truly, utterly pissed off about how things have transpired in the health care debate, there is too much still at stake to actually "kill the bill." To wit:

Yet I can't help but to believe that killing reform will only heap an even larger failure on top of losing the public option, the Medicare buy-in and so forth. Only this time, it won't be a failure limited to an ideological or political routing. The failure of health care reform will invariably mean at least another decade (if not two decades) of a desperate health care system in crisis. Another decade or two of medical bankruptcies and deaths due to a lack of insurance -- exponential premium hikes and rescissions. You know the list.

If I stop being pissed off long enough to take a good look at what remains in both the Senate and House bills, there aren't necessarily fool-proof solutions to these problems, but there are regulations, subsidies and reforms that will ameliorate a significant chunk of the present crisis. For example, the Senate bill will reduce the cost of insurance for a family of four earning $54,000 from around $19,000 per year to around $9,000 per year.

[snip]

Do progressives really want to tell working-and-middle class families of that they're not allowed to get a $10,000 annual break on their insurance payments? If you're okay with that, I admire and respect your integrity, but I just can't be a part of it. Objective reality dictates that there's no other path at this point but to support the bill and to subsequently endeavor to fix it.

So incremental reforms it is, but at least 30+ million additional Americans will have insurance coverage, despite having to pony up the cash to buy that insurance themselves. Let's hope those subsidies come through, and that they're generous...

But the larger issue here is a sense that our President is selling us out. He could have drawn a line in the sand and fought harder for the public option, rather than pay lip service to it to appease the liberal base. He could have fought for pharmaceutical reimportation from Canada to help save the US taxpayer over $100 billion over the next 10 years, as he had when he was a Senator, however he brought his considerable political weight down on the side of killing that reform effort in order to preserve his backroom deal with the pharmaceutical companies to preserve their profits as long as they did not work to destroy reform. Beyond health care reform, the sense that Barack Obama is not living up to be the President we voted for is also apparent in the "financial reform" efforts I wrote about earlier today, and Cenk Uygur writes passionately about that sense, laying out a concise summary of all that is disappointing about our President thus far. In brief:

But I don't put the civil liberties and the wars in the same equation as the other issues I mentioned. Why? Because it's one thing if I disagree with your policies and principles, if they are genuinely held. Ok, that's a sad day for me but doesn't necessarily indicate that you're wrong or unprincipled (no matter how much I might disagree with you). What I mind is the give-aways to corporate lobbyists that have nothing to do with your principles and have everything to do with politics and money. What I mind is when you sell out the American people to protect corporate America. I hate it when the Republicans do it and pretend to be for the little guy. And I hate it when this administration does it and pretends to be for change.

There was always going to be buyer's remorse when a huge portion of the voting public places their hopes and dreams in one man who must work within the system that is presented to him, however I don't think anyone expected the remorse to be quite this sharp, on so many issues of such great importance to our country. I hold out hope for a change from Obama, but hope is fading fast these days.

UPDATED: Remember the Titans (of Industry are Not Friends of Yours)

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Allow me, if you will, to paint a layman's picture of the economic crisis and unbridled greed through the use of some headlines that have caught my eye in the last few days.

Headline 1: With Wall Street Shorting the Dollar, It is Time for Congress to Pursue Fundamental Change by David Paul, President of the Fiscal Strategies Group. This article provides some insight into how it is that Wall Street is managing to have one of its best years ever, despite the fact that the rest of the economy is in the grip of a major recession brought on largely by Wall Street's criminally risky behavior. Outrageously, after having been bailed out by US taxpayers, the banks are making their billions right now by shorting the US dollar and thereby effectively weakening the US' international position further than it would be otherwise. I won't excerpt from this article, as the entire piece is well worth a read, and has sadly been overlooked by the continuing popular outrage against the billion-dollar bonuses the banks intend to pay out this month, but suffice it to say that the banks are committing financial treason, if not outright treason, in pursuit of their profits at all costs.

UPDATE: Turns out that the Federal Reserve will allow the bet-against-the-dollar party to continue through the rest of the year by keeping the interest rate between 0% and 0.25%.  Sounds swell.

Headline 2: Obama Blasts Banks for Opposing Financial Reform: Here Obama comes out with some populist lines trying to get ahead of public sentiment against the excesses of the banks, and those banks ignore him, since he officially has no leverage over the banks' practices now that virtually all of them have paid back their TARP funds to the government. The banks are now free to continue to reduce business lending and to actively oppose any sort of reform that puts a damper on their radical activities. The lack of lending is slowing the economic recovery as businesses aren't able to hire workers as easily, and the banks know that they have the power to hamper any sort of recovery through cutting down on lending, effectively vetoing the President's initiatives from the private sector.

Headline 3: Bailout Banks Keep Tax Breaks As They Repay Loans: Yes, Citigroup and others are going to cash in on massive tax breaks, even as they repay the TARP funds that put caps on compensation practices early, to better engage in the type of compensation practices that preceded the economic collapse. The IRS appears, for all intents and purposes, to be in collusion with the banks on first glance, however by allowing for these tax breaks, the Treasury Department is actually increasing the value of the banks' shares, so that taxpayers get a better return on their TARP investments. Still, it's just an extremely sketchy way of going about increasing a company's worth, when the underlying fundamentals are still so weak. It is never a good thing for a company to rely on tax breaks to increase its value, rather than on sound business practices (say I who support tax breaks alternative-energy companies...)

All that being said, there appears to be hope on the horizon in terms of financial reform. Yes, the House passed a reform bill last week, but that effort was weakened by bank-friendly Democrats, and as noted in the above link, the Senate will now be the main battleground over financial reform going forward, with bank lobbyists gearing up for a major fight. But the Senators may have some tricks up their sleeves, and a voice from the past may play a larger role in the reform movement still to come.

Hopeful Headline 1: McCain and Cantwell Want a New Glass-Steagall Law by Michael Hirsh for Newsweek. Glass-Steagall is a post-Depression-era law that worked to separate the investment arms of banks from the commercial lending sides (what we know as the regular bank you set up checking and savings accounts with, and that provide loans for cars to homes). The idea behind Glass-Steagall is that the investment sides of banks can take the risks, but the lending sides should be more well-regulated, and they will be provided for by the newly-created Federal Deposit Insurance Corporation (FDIC) with the government as "lender of last resort" should a bank fail. With the 1999 repeal of Glass-Steagall, the banks were allowed to merge their lending and investment arms, and some, such as Sens. McCain and Cantwell, believe that the risky bets the banks took with depositors' money, such as derivatives, laid the groundwork for the mess we're in today. While I'm no economist (I've only taken one micro class thus far) and I'm certainly not a financial market expert, it would appear to me that if the banks could get back to their core business of banking that would be a welcome return for many. Which leads me to my next point...

Hopeful Headline 2: Paul Volcker: Think More Boldly and interview with the Wall Street Journal's Alan Murray. Paul Volcker, former Federal Reserve Chairman under Presidents Carter and Reagan, argues that the "financial innovations" Wall Street has foisted upon the world in the wake of Glass-Steagall's repeal add nothing in the way of actual productivity or economic growth in the economy as a whole. The titans of Wall Street created fake profits, and the financial innovations of credit-default swaps and collateralized debt obligations simply "move around the rents in the financial system" meaning the complex transactions that played out between banks and insurers (such as AIG) to spread the debts out amongst many different players. Volcker goes on:

How do I respond to a congressman who asks if the financial sector in the United States is so important that it generates 40% of all the profits in the country, 40%, after all of the bonuses and pay? Is it really a true reflection of the financial sector that it rose from 2½% of value added according to GNP numbers to 6½% in the last decade all of a sudden? Is that a reflection of all your financial innovation, or is it just a reflection of how much you pay? What about the effect of incentives on all our best young talent, particularly of a numerical kind, in the United States?

In Britain, I was just talking to a high-tech company about the immense attraction to go into finance when both Britain and the United States are suffering from a basic inability to produce things competitively, to keep up with the new economy. Is this a result of financial innovation that we should be really worried about?

These thoughts intrigued me; how much have the outsize profits to be had in finance over the last decade shaped the job market in the US? How many of our "best and brightest" have gone on to huge-paying Wall Street jobs that would have otherwise gone into less, ahem, financially-motivated work? Look at these graphs of US job growth over the past decade; what does it say about our country when the investment sector grows from 2.5% of GDP to 6.5% over 10 years, but job growth drops to near-zero percent over that same period of time? Is there a link, a correlation, a causation? My limited economic knowledge at this point in my education leads me to admit that I cannot find an explanation for those two inverse movements of financial-sector activities and job growth, but I would be greatly interested if someone could explain them to me.

Let me take a moment to plug a wonderful website I've just recently come across, The Baseline Scenario, which, I must acknowledge, led me to the Volcker interview in the first place.  Some very esteemed financial market watchers and economists evaluate the current economic situation and provide some solutions, in very detailed form. I'll do some more investigating into the jobs/financial sector expansion connection and report back when I can. The main idea I've come away with is that the American people are being misled and misrepresented by our public officials and big businesspeople all at the same time, on many levels. It pains me that Obama has not been more of a force for true reform, especially when the plundering of our nation's economy and public coffers has been so widespread and rampant by the titans of industry. There's still time yet to make some fundamental changes, and Volcker seems quite confident that his views will prevail, so let's hope the situation changes soon.

UPDATE II: Health Care Reform to be Killed?

Updates below...

Today is a tough day across for liberals.  Whether that is a positive development in you opinion or not, health care reform is something that, if done right, could help so many people in so many ways that any setback in the reform movement should be cause for concern among many. The health care bill in the Senate has been diluted by special interests (read: moneyed interests) and their lackeys in Congress to the point where it appears to be more beneficial to the American people to simply start over with a fresh bill. Howard Dean, one of the foremost experts on health care in American politics today, argues to kill the bill too:

"This is essentially the collapse of health care reform in the United States Senate," Dean said. "Honestly the best thing to do right now is kill the Senate bill, go back to the House, start the reconciliation process, where you only need 51 votes and it would be a much simpler bill."

Ah yes, the specter of reconciliation rears its controversial head again. The main bone of contention amongst liberals is that the cost-saving measures (the public option, for instance) have been either weakened to the point of irrelevancy or stripped out entirely, so that enforcing a universal mandate for Americans to purchase insurance without adequately affordable options beyond private insurance will anger many citizens (and voters). A development on that level could be disastrous for the country's health care system and,in an electoral sense, for the Democrats more generally. The Obama Administration is interested in getting a bill passed, no matter what the cost, to ensure an electoral "win" for the President on his signature domestic initiative, health care reform, but the repercussions of a bad bill getting passed could reverberate for many years. As I had written earlier, if the reform bill falls too heavily on young people's pocketbooks, then you can be sure that their allegiance to Obama's policies will be quite fleeting, and in fact could result in a backlash. Let's hope that cooler heads prevail, and the rush to pass something doesn't overwhelm the desire to enact a more-perfect bill.

UPDATE: Timothy Noah of Slate has a key writeup of what health care reform's failure could mean for the American public, and it's not pretty, as contrary to what many have come to believe (myself included) the reform bill would have effects beyond the uninsured:

A reasonable summary would be: health reform would make life easier for just about every person who needs to buy his or her own health insurance. It would also reassure those of us in the lucky 59 percent who didn't have this problem but could easily imagine acquiring it, especially amid the current economic turmoil. That's just about everybody. Health reform lends, says Hacker, the "security of knowing there's somewhere to get insurance outside of employment." Should it fail to pass, you would not have that security.

As I've mentioned before, it's difficult to put a price on the security that comes with knowing that even if you were to lose your job you would be able to have health insurance at a relatively affordable price (that's what the subsidies are for).  This bill may not be everything liberals want, but this is still farther than the American people have ever come before, and the effect passing it would have would be humongous.  We can tweak it later, once 31 million fewer people are uninsured.

UPDATE II: Okay, now I'm depressed.  Glenn Greenwald of Salon argues that Obama is simply using the intransigence of the Senate, and especially Sen. Joe Lieberman, as a foil to enact the handout to the health insurance industry he always intended.  The argument is that the Democrats will reap the benefits of the healthcare industry's deep pockets for campaign donations down the road if they help out the industry now by not reforming too much.  Sad, sad, sad.  Industry is poised to win again against the needs and desires of average Americans.  Are we entering a new Gilded Age, or have we already been in one for the last decade or more?  More on that theme presently...

Where the jobs at?

Federal Reserve Chairman Ben Bernanke is up for confirmation to a second 4-year term right now, giving Congress the chance to ask some tough questions of him and to assess his job performance over the past 3 years. While one might imagine that a reputed "expert on the Great Depression" would be eager to spur job creation in the United States to help out the little guys, how disappointed would you be to find out you're dead wrong in that assumption? Not only is Bernanke not interested in using the substantial monetary might of the Fed to stimulate job creation, but his concern over the US' long-run deficit is such that he now is signaling to Congress that the members ought to consider cutting Social Security and Medicare. Let's think about this for a minute. The elderly who may have been fortunate enough to have 401ks have presumably had those savings wiped out in this financial crisis, and now Bernanke wants to cut those entitlements they've earned through years of hard work during their lives? For those who never had investments on the stock market, and are solely reliant upon Social Security and Medicare, reducing their benefits would have devastating effects. This is fair how?

Bernanke worked to assure the committee he had nothing against old people. "I'm not in any way advocating unfair treatment of the elderly, who have worked all their lives and certainly deserve our support and help, but if there are ways to restructure or strengthen these programs that reduce costs, I think that's extraordinarily important for us to try to achieve," he said.

So for those of us who have been working and contributing to Social Security for our own future someday, we're just supposed to sit back and take another cutback, all in the name of long-term fiscal "responsibility?" If there's ever an appropriate time for kicking the can down the road on an issue, now is that time when it comes to Social Security, as it is the backstop for a lot of people who are suffering these days. Social Security and Medicare are two of what economists call "automatic stabilizers" that "dampen fluctuations in real GDP without any explicit policy action by the government." What all that means is that the stabilizers kick in during recessions to help people (i.e. welfare or unemployment benefits) and taper off during better times (more people are employed, so fewer people receive unemployment). These stabilizers help to keep recessions from getting too bad because they funnel money to people who need it and thereby increase spending (keeping GDP, and hence, the economy as a whole up more than it would be without them). So yeah, let's just cut, cut, cut away!

Thankfully, Sen. Bernie Sanders of Vermont is on the case:

Sanders said he sees it for what it is. "That's the solution? To cut back on the middle class and the elderly? That only adds fuel to the fire," he said. "Look, let's be clear. The middle class in America today is collapsing. Within the confines of the Beltway, we don't talk about that too much. But that is the reality. It's not just unemployment or underemployment. People are working longer hours for lower wages. People are unable to send their kids to college. People are losing their homes. People's jobs are going to China. That is the reality."

Hmm, there seems to be a common theme of the middle class being under assault these days. What kind of future can we Millenials expect to have if the social safety net on which our society has relied for the past 60 years is being cut out from under us, string by string?

America's Endangered Middle Class

I just wanted to share this very powerful piece by Elizabeth Warren, chair of the Congressional Oversight Panel that is overseeing the banking bailouts (TARP). In it, she argues (with graphs, no less, a rarity in the blogosphere) that the middle class is, and has been, getting an extremely unfair deal in American society. Meanwhile, the bankers whom we bailed out from having to face the consequences of their own greed, are earning record profits this year and are on track to hand out massive bonuses, all in the name of "employee retention." To protest against this condition, this blatant unfairness at the intersection of American finance and government policy, is to be labeled a populist. Screw that, I'd rather be a populist standing up for the values of fair play that this country was founded upon than a Wall Street sycophant masquerading in elected office any day.

Thank you, Elizabeth Warren, for daring to speak truth to the powers-that-be in the Washington-Wall Street nexus.

Health reform will save the insurance companies money...by not allowing them to deny coverage anymore?

Indeed, this is perhaps the most backhanded assist to the insurance industry I've seen yet from the Congressional Budget Office's scoring of the health care bill's costs:

"Compared with plans that would be available in the nongroup market under current law, nongroup policies under the proposal would have lower administrative costs, largely because of the new market rules," notes the CBO. "Administrative costs would be reduced by provisions that require some standardization of benefits -- for example, by limiting variation in the types of policies that could be offered and prohibiting 'riders' to insurance policies (which are amendments to a policy's terms, such as coverage exclusions for preexisting conditions); insurers incur administrative costs to implement those exclusions." (emphasis added)

So by not allowing the health insurers to deny coverage, either through rescission or through not insuring people with pre-existing conditions, the Senate health care reform bill will actually save the insurers money. This situation is similar to when the government increases tax rates, but in reverse; when tax rates are higher, more tax revenues will be received than before. But some of that additional revenue will inevitably be lost through individuals and firms hiring tax lawyers and specialists to find loopholes in the tax laws that they can exploit so as to pay less in taxes than they would otherwise. Thus, the effect of the tax increase on revenues is reduced.

In a similar vein, by disallowing rescission and non-coverage due to pre-existing conditions, the Senate bill will thereby remove the incentive of the insurers to save money through denying care. The denial of care costs the insurers money as they have employees devoted to analyzing health claims for discrepancies that can be used against the policyholders. Imagine if those employees could be employed in jobs where they actually helped make care more efficient, or user-friendly? This small item in the CBO report provides a window into the structurally anti-patient health care system we have in this country.

Kids, time to support your forebears

The original concept of this blog was to discuss the major political and social issues that face my generation, the generation which has been defined by researchers Morley Winograd and Mike Hais as the "Millenials," born between 1982 and 2003 (I don't quite fit in that category, being an '81 baby, but I'm definitely not a Gen-Xer!) While previous postings may have strayed from that theme somewhat, today is a different type of day.

Following yesterday's posting regarding health care reform, a timely article by Jim Angle at Fox News (no, not kidding) caught my eye. Probably the most underreported aspect of health care reform is that for a reform effort to be successful, it must rely in large part on the participation of the roughly 18 million young, healthy, uninsured people to buy into the health insurance market. As Angle reports

the health care reform bills in Congress require insurance companies to cover pre-existing conditions and prohibit them from charging sick people any more than others. That would force up insurance rates unless healthy young people buy insurance and in effect dilute the impact of older, less healthy people.

By having millions of previously uninsured, healthy, younger people start paying premiums while not using as much care as those who are sick or older, the insurance companies (and a public option, if it comes to fruition) would be able to mitigate the additional costs they will incur through expanding coverage.

For many years, health insurers have used certain methods to hold their costs down that were used at the expense of their customers, including denying coverage to people with "pre-existing conditions" ranging from mental illness and chronic conditions to the insurers denying coverage due to some rather more creative "conditions". Another tool of the insurance companies is called "rescission," a truly nefarious tactic of dropping a paying customer from their insurance plan when they need major or long-term treatment (think cancer, lupus, etc.) by claiming that the customer lied on their application form by not listing certain pre-existing conditions. What could those pre-existing conditions be? Some common ones are not listing occasional back pain or previous acne treatments in one's application for health insurance, although one would assume there would be some actual fraud caught once in a while...or is it? This from the Washington Post article above:

In the past 18 months, California's five largest insurers paid almost $19 million in fines for marooning policyholders who had fallen ill. That includes a $1 million fine against Health Net, which admitted offering bonuses to employees for finding reasons to cancel policies, according to company documents released in court. (emphasis added)

Rooting out pervasive fraud amongst the insurance customer base became such good business that a bonus structure was built on top of it for the most "effective" employees.

Now that the insurers will no longer be able to drop peoples' insurance coverage for pre-existing conditions and rescission will be largely curtailed under any sort of health care reform plan, the companies will need to find a new cost-saving mechanism, and it is the 18 million uninsured healthy young people they are targeting. It is the insurers who pushed hard for the universal mandate that every American must buy health insurance or be penalized; that provision ensures that the customer base will be swelled by the millions, and it also ensures that the low-cost segment of the population (younger folks) would be part of the system as well.

So why is it that young people are the ones being manipulated in this proposed new system? Naturally, it is the same as with any other political question; most younger people aren't paying attention, and furthermore, they aren't regular voters. When you have retirees threatening elected officials to "keep your government hands off my Medicare” those electeds sit up and take notice, since older folks vote in large numbers. On the other hand, federal legislators can then pull stunts like this with impunity:

"In most states, there actually isn't a limit on how much older people can be charged vs. younger people," said Anne Kim, director of Third Way Economics. "So in some states, older individuals pay six or seven times in premiums what younger people do."

But the Senate would take that down to 3-1. The House would make it 2-1.

That means older people will pay less but young people will pay more.

"If you limit the amount premiums can vary based on a person's age, that can result in premiums increasing by 50 or 60 percent for workers under the age of 30," said Robert Zirkelbach, a spokesman for America's Health Insurance Plans.

In fact, a study by the Urban Institute found that going to a 2-1 age rating would push up premium costs for the youngest adults by almost $1,100 to just under $3,000 dollars a year.

I have been without insurance a number of times in my life. I've see the premiums I could be paying under COBRA when I've left jobs that provided me with health care, and they were far beyond what I would consider affordable. It seems quite doubtful that many Americans in their 20s will be able to afford an extra $3,000 a year, but the politicians are betting that we aren't paying attention. And they are betting correctly.

Why isn't there an outcry from the younger generations that will have to pay taxes and/or premiums to support whatever reforms come out of Congress, successful or not, for the rest of their lives? Perhaps the intricacies of House/Senate committee deliberations aren't the most riveting dramas for young people to follow compared with the dramas unfolding on their Facebook pages, but this time it's personal. Perhaps there needs to be a youth lobbying organization, akin to the AARP for seniors; we have youth-oriented organizing groups like Rock the Vote, and Campus Progress (a group I must admit I'm not familiar with, but funded by the Center for American Progress, a liberal advocacy group) but seriously, we need LOBBYISTS! Until some serious campaign finance reform gets passed that creates public funding of elections, young people need to get into the Beltway and into the offices of members of Congress the same way the big players do, with issue advocacy and influence-peddling, combined with grassroots organizing. Lobbying is a four-letter word to me, but I see no other way to get our issues addressed fairly in a health care reform plan. The older generations and the insurance companies need us to keep health care affordable. Congress and the President need us to continue to vote for them. So why don't we use that leverage to get the changes we want and need in the reform bill? More to come on this later.

Reconciliation and Health Care Reform in the US Senate

The health care reform debate has taken up a lot of the country's attention over the last six months or so, and while it feels like every little step has been "momentous" (the votes of the individual committees such as Finance and the HELP committee in the Senate, the passing of the House health care reform bill a couple weekends ago) it is now, truly, game time.

The House of Representatives passed a bill that includes a bevy of essential health insurance reforms including requiring all who do not already have health insurance through either Medicare, Medicaid, employer-based health insurance, or individual private plans to purchase insurance. This is called an individual mandate, and it is a key element of reform, in that it is a central tenet of economics that in order to get people to do anything in large numbers, you must either offer negative incentives (the stick) or positive incentives (the carrot). So if all of those who are uninsured are going to be required to buy health insurance, how can we ensure that health insurance is affordable? Here is where the political/ideological sticking point that has held up reform for so long is located. One initial plan pushed by the progressive Democrats in Congress was for a single-payer plan, which is defined by Physicians for a National Health Program as "a system in which a single public or quasi-public agency organizes health financing, but delivery of care remains largely private." This maximizes the government's leverage in negotiating reimbursement rates with insurers so that efficiency is given priority and administrative costs are kept low (with executive compensation hopefully kept low too). Needless to say, the single-payer option was given a quick shove out the door by the Democratic leadership and those who receive large amounts of campaign contributions from the health care and health insurance industry.

So the compromise option for Democrats became what is called the "public option," perhaps you've heard of it? While there are many variations on what the public option would be, the main elements of the public option is to create a government-administered competitor to the health insurers, many of whom operate with virtual monopolies in many states. The public option would create a government-run insurance exchange where those who are currently uninsured (i.e. those who earn too much to qualify for Medicaid, those who are unable to purchase insurance currently due to "pre-existing conditions," or young people who are healthy) could purchase their newly-mandated insurance coverage. the most robust version (i.e. most cost-cutting version) would have what's called "Medicare plus 5," where reimbursement rates to health care providers would be set at Medicare rates plus 5% on top of that. The advantage of the public option compared to our current system is that it pools people together to have stronger leverage in negotiating rates with providers, as well as having lower administrative and executive compensation costs (compensation costs are significant, truly.) Without the Medicare plus-5 option, the public plan would be forced to negotiate its reimbursement rates separately from the much-larger Medicare pool, and therefore would not be able to save as much money, resulting in higher premiums for those under the program and more government subsidies to help people buy insurance, thus costing the taxpayers more money.

Sadly, yet predictably, the weaker public option passed the House, due to the entirely inconsistent arguments of "fiscally conservative" Democrats that the most robust public option would cost taxpayers too much money. To add insult to injury, a last-minute legislative offensive by anti-abortion Democrats inserted an abhorrent amendment adding major restrictions on abortion provisions to the health care bill, but that's a whole other topic. Suffice it to say that the amendment authored by Rep. Bart Stupak (D-MI) will hurt poor women the most, as if they don't have enough on their plates already.

So now it comes to the Senate, led by Harry Reid of Nevada, to debate health care reform. While the majority of Senate Democrats support the public option, there is a bloc of 4 who are holding things up by hemming an hawing about filibustering the health care bill if a public option is included. The filibuster (for those who haven't taken civics classes in a while) is a parliamentary tactic used by Senators to hold up votes on a bill, and indeed, all work in the Senate, indefinitely. The filibuster is a major obstacle to getting bills passed generally, and the way to end debate in the Senate is by 60 senators voting to invoke cloture of the debate. Despite the Democrats having 60 votes in the Senate (in truth it's 58 plus Joe Lieberman of Connecticut and Bernie Sanders of Vermont who normally caucus with the Democrats) the 4 holdouts mentioned before may not vote to pass healthcare unless the bill is heavily watered-down and/or the public option stripped out entirely. To prevent the from filibuster from killing the bill, Sen. Reid can use another parliamentary tactic to combat the filibuster called reconciliation, which is essentially to vote only on the parts of the bill that directly involve the federal budget. Reconciliation limits debate (i.e. filibustering is not allowed) and requires only 51 votes to pass, versus the 60 to end a filibuster. Using reconciliation would allow a much stronger bill to pass the Senate, as Sen. Reid can round up a group of strong Democrats to pass a robust public option without having to kowtow to the wishes of those senators who are bought and paid for by the insurance industry. The downside to reconciliation is that those parts of the bill that do not directly affect the budget could not be included in the health care bill and would need to be voted on separately, and that it would create an open war with the Republicans, who would accuse the Democrats and President Obama of violating their pledge of seeking greater bipartisanship.

That being said, we're at a major point of decision here; we've never been this close to comprehensive health care reform for all, and for the good of the country and our nation's future, if it takes reconciliation to pass the best bill possible, then I'm all for it. The Republicans have offered no serious reform bill of their own and have made it clear that they will stand united against anything that alters the status quo and/or is one of President Obama's legislative priorities. If the Democrats don't pass this bill, they're going to take massive losses in the 2010 elections, as former Gov. Howard Dean of Vermont predicted recently, and they will absolutely deserve those losses, as there is major support for health care reform in this country right now, with recent polls showing 72% of Americans supporting the public option. If we can't do it now, then when? Why must our health and well-being be subject to the profits of insurance companies? What is the price of inaction? With over 45 million uninsured in this country, it is huge.

Firedoglake, a premier progressive blog, has a petition set up urging Sen. Reid to pursue reconciliation to achieve the strongest bill possible for the good of us all. While my posting here elides over many of the nuances and difficulties inherent in trying to achieve major reform, and there's no guarantee that everything will get better once health care reform is passed, it's better to try and fail than wake up in the future and wonder what could have been. Please sign the petition, for the good of our country's fiscal future and future generations.

Another case for government funding science research

This morning I came across a brilliant Newsweek article about the National Ignition Facility (NIF) in Livermore, CA, part of the Lawrence Livermore National Laboratory. I had heard about the NIF through living and working in the Bay Area, but I didn't know that the point of it was to create renewable energy. This is a game-changing experiment they're carrying out, in that if they're successful, and the model of the NIF can be scaled-up to suit commercial ventures, the utility companies could adopt this around the country to provide clean energy.

I will have to explore the topic further another time, but the possibilities of powering the fleet of battery-electric vehicles that will, in all likelihood, be transporting us in the near future, are quite exciting. Here's the key element of this project, detailed with somewhat technical language:

What Moses is talking about is controlled nuclear fusion—fusing nuclei rather than splitting a nucleus, as happens in ordinary nuclear-fission power plants. In a fission reaction, the nucleus of a uranium atom is split into two smaller atoms, releasing energy in the form of heat. The heat is used to make steam, which drives a turbine and generates electricity. In fusion energy, the second half of this process (heat makes steam makes electricity) remains the same. But instead of splitting the nucleus of an atom, you're trying to force a deuterium nucleus to merge, or fuse, with a tritium nucleus. When that happens, you produce helium and throw off energy.

The one concern of mine that they don't cover in this article is the steam-making process; where is the water to make that steam supposed to come from? The East Bay, where Livermore is located, is not exactly inundated with wellsprings in every backyard. I would hope that there is a mechanism for recapturing the steam and condensing it back into a closed-loop system, but I suppose that will take further research on my part.

In any case, if this works, it will truly change the possibilities for the future of energy. Rather than looking to manipulate or capture the "macro" elements of nature (sunlight, wind, wave energy, etc.) here we are looking to the "micro" elements to provide power (deuterium and tritium, in this case). Fascinating; I have my fingers crossed that it all works out for Mr. Moses and his team.

Has it really been a year (or 9 1/2 months?)

Because yesterday was the anniversary of President Obama's stunning victory over Senator McCain there was a lot of talk on the internet political sites attempting to sum up the state of affairs a year later. How is Obama doing? Has he kept his promises? How disappointed or thrilled in his administration are we? Chris Weigant provides a long, thoughtful article reflecting on the 9 1/2 months of Obama's presidency (remember that there was a 2 1/2 month time after the election in which Obama was not the president and Bush was still haunting dark corners of the West Wing, opening public lands for oil drilling against the popular will, extending the one-finger salute to all who care about unmolested natural spaces). At base, Weigant's argument comes down to the fact that

it really all boils down to is one of trust. Do you still trust President Obama to do the right thing in most situations? I did back when I voted for him, and I have to admit that I still do. I have reservations, I'm a bit wary at times over specific actions Obama takes, and strategies he employs (or doesn't employ); but that core of trust in Obama -- as a politician, and with eyes wide open on my part -- still exists, I have to say.

Yes Obama has let me down at times, pushing to reauthorize the PATRIOT Act's surveillance techniques, making Bagram Air Force Base in Afghanistan the new Guantanamo Bay (indefinite detentions and all), and attempting to water down health care reform to gain a sheen of "bipartisanship" despite the fact that Republicans have never attempted to negotiate in good faith. But do I still trust the man? Yes, with a heightened awareness that I should not project my dreams of ideal policy proposals onto his legislative stances.

Moreover, I have to applaud him heartily for some of the work he has done, as Weigant notes:

The second thing that Obama is trying to change is the 24-hour-news-cycle, short-sighted nature of Washington thinking (or what passes for "thinking" in the punditocracy). The jury is still largely out on this one, I have to admit. The most impressive thing about Obama, which I have noticed over and over again in the past nine months or so, is that he absolutely refuses to be drawn in to trivial subjects -- which, it must be pointed out, cause vapors, fainting, shrieking, and even (at times) heads exploding among the cable news channels. Put succinctly: Obama takes the long view. Always. Even when all around him are taking a very, very short view -- for the sake of puffing some stupid playground battle among politicians into some improved cable chat show ratings. Obama, to a very large extent, just doesn't play that game. He simply refuses to, over and over again. The only time he's really slipped up on this front was the whole "beer summit" nonsense, for which he can be forgiven (seeing as how a friend of his was involved).

The media is still the lens through which many Americans view much of the world (even in the internet age) and combating the lies that can be propagated through the television and print media, not to mention the internet, through aggressive push-back campaigns from the highest levels of the Obama Administration may offend some as overreaching on the President's part. But when you have an entire network devoted to attacking your policies and character and then calling it "news" what is one to do? Sit back and take it? Please watch this instantly-classic Jon Stewart clip to see how the Fox operation works:

Ultimately, I'm glad that Obama's in the White House and not McCain-Palin, or anyone else, for that matter. I can't think of a better politician to have at the helm, even with Obama's failings on some very important issues. I can't imagine another human being keeping his/her cool so consistently despite the multitude of problems to be confronted (have you noticed his increasingly gray hair? Although perhaps it's just natural aging...) My hope still endures for the future of our country, so here's to hoping things take a turn for the collective better.

Agribusiness firms not on board with the First Lady's White House vegetable garden

Hmm, quite an interesting development here. Michelle Obama is certainly in a bind when it comes to the politics of the White House vegetable garden; she could have her garden treated with conventional agricultural chemicals and fertilizers and be spurned by the Alice Waterses of the world, or she can go the organic route, as she did, and get letters of protest from agribusiness groups, as in the link above. Can't the school kids just have their garden in peace?

Electric cars and the future

Just a quick note that today the automotive world was opened up to a new reality that has been much harkened-to but until now not realized: the electric, mass-produced automobile. And guess what? It's rather attractive! The Tesla Model S was officially unveiled today, with seating for 7 and a three-hundred mile range in the top-of-the-line model. What's more, it accelerates to 60 miles per hour in 5.6 seconds with a top speed of 120 mph. All-wheel drive is available too, making it a viable option for our snowbelt brethren.

The interior features a 17-inch touch screen with haptic interface, meaning it "clicks" when you touch it, like the recently released BlackBerry Storm smartphone. There is a quick-charge option that, with a 480 volt power outlet, allows you to fully recharge the battery in 45 minutes.

Granted, the base price is $57,400 ($49,900 with the federal $7,500 tax credit) for a version with a 160 mile range , so it's not going to be affordable to everyone. But if you consider it in the larger scheme of things, for roughly the same amount of money you could purchase a BMW 535i, which is probably the premier sports sedan in the world, or at least the benchmark against which all others are measured. That BMW, however, would be a stripped-out model, which technically don't exist in the world of German luxury cars, which virtually always include numerous options that would quickly drive the price up. In addition, the BMW would not be able to hold 7 passengers in comfort, and its highway mileage is rated at 26 mpg, hardly a headline-grabber when you're up against a car that is emissions-free.












So why is this car significant today, despite the fact that it won't be available until 2011? I would argue that we are now entering the world of the automobile 2.0, beyond the internal-combustion engine that has dominated our roads since the late 1900s. Yes, there was the GM EV1, but that was a two seater that was extremely light and rather spartan, and it was leased to consumers with the stipulation that GM could take them back, which GM did, famously crushing the vast majority of the cars in a special machine, fueling the formation of conspiracy theories (see "Who Killed the Electric Car"). The Model S will be on full sale, no ifs ands or buts, and no take-back clauses in the bill of sale.

Take a look at the luxurious interior in the photo above, the Alcantara (artificial suede) covered armrest with contrasting stitching, the lovely sculpted seats. This is a car that will appeal to the well-heeled, early-adopting tech person who does not want to sacrifice luxury for friendliness to the planet. It is these early, more expensive cars that will pave the way for future, more affordable cars as high-capacity batteries become more widely available and their prices come down. This is a first step, and I believe it is a big one.

Indeed, the one last issue to be resolved for the auto enthusiast is the lack of a fruity, rumbling exhaust note that is the hallmark of a highly-tuned internal combustion engine. Batteries don't make noise, and electric motors just whine, hardly the stuff that gets one's heart racing. Enter the German auto tuner Brabus, who added a V8 soundtrack to the Tesla Roadster. With the arrival of the Model S, I have no doubt Brabus will have more business in artificial engine soundtracking.

By the way, for more on the Model S and everything related to green automobiles, I highly recommend the excellent Autobloggreen.com.

More on food with Michael Pollan

Since he's always a good read and a reliably "big" thinker, I thought it wise to link to an interview with Michael Pollan in the same Mother Jones I cited yesterday. Pollan discusses Tom Vilsack (our U.S. Agriculture Secretary and former Governor of corn-ethanol-farm subsidy-heavy Iowa, or haven't you been paying attention?), the various agriculture lobbies, and Obama's corn ties. Interestingly, though, he talks a lot about how to divide the farmers, the farm lobby, in order to reshape their crop plantations towards more sustainable, less subsidy-dependent products than corn for ethanol. In perhaps the most telling passage, Pollan gets at the heart of the US' industrial agriculture/nutrition problem:

One of the more encouraging things that Vilsack said in his press conference when he was nominated was that he was going to put nutrition at the center of his nutrition program in the Department of Agriculture, which must have struck a lot of listeners as, "Well, duh," but in fact nutrition has not been at the center of these programs; disposing of agricultural surplus has been at the center of these programs. So if that really comes to pass I think that would be wonderful. (emphasis added)

"Disposing of agricultural surplus?" Perhaps this is why we have been reaping the "benefits" of corn ethanol in our fuel for the past number of years? Corn ethanol which, in its most common form of E85, reduces fuel mileage by about 25%? (Read further on in the linked Consumer Reports article and you get to the fact that the Bush Administration gave tax credits to the American auto manufacturers to build "flex-fuel vehicles," usually large-trucks/SUVs, so that the auto manufacturers could greenwash their vehicles through the use of an inefficient biofuel that contributes to the creation of high-fructose corn syrup that is making our children fat. I would argue that it is through the collusion of the federal government in cases such as this that permitted the US auto manufacturers not to move towards more efficient vehicles, thereby helping them get to their mostly insolvent current state. Hmm, nefarious much Bushies?) When you get right down to it, is it not the mark of a society with a surplus of surplus that we would even consider developing a source of food into a fuel to put in our automobiles? Not only that, but the fact that all of government could get behind this inefficient fuel as a way to satisfy a key caucus state in the presidential primaries? (See page 2 of the Pollan interview.) How can we justify ourselves to nations with millions of starving people?

The battle between Tom Vilsack and the environmental wing of the Obama Administration that will occur is going to be rather fascinating, and knowing what I have observed of Obama over the past 1.5 years of close observation, I am sure he will find a third way to walk between the two extremes. I'm really thrilled about Steven Chu, Secretary of Energy, however. This guy has credibility to spare, being a Nobel Laureate in physics and all, but he will also have to toe the line on conventional versus alternative energy in order to satisfy Congressional Republicans and moderate Democrats. The fact that last week Chu and Obama effectively declared Yucca Mountain, the boondoggle of a nuclear waste storage facility 100 miles outside of Las Vegas, dead shows me that Chu won't be playing by the usual Washington rules of continuing to fund Yucca simply because it's a waste of money to let it die. Hopefully he'll shake up the rest of our energy sector the same way, starting with the electrical transmission system in our country that needs upgrades and expansion to accommodate future alternative energies.

So this post was supposed to be about food, not energy, but honestly, the fact that food is being employed for energy production these days forces me to address both, so I apologize for getting "off-track" somewhat. It pains me to think of the children I saw in Rwanda with their bellies swollen from malnutrition, while knowing that millions of cars getting gas pumped into them in this country are ingesting food that could benefit those children. As with so many things in life, this will be a wait-and-see deal, but keep your eyes peeled for news of Obama's energy plan and where ethanol fits into the picture.