Steve Russell: Political Snake Oil


Y’all have made it clear for all to see what a lucky man I am.

Cancer stalks us all. Being attacked by that beast is nothing to complain of after all the good things that have come to me.

I find myself with a support system anyone would envy.

Because my Facebook friendships come from several of my lives, some of you don’t know my wife Tracy Russell who demonstrates every day what it means when I say that I “married well.”

What a turn in my life that I can say that after losing Donna Mobley! I don’t know which hits me harder now—how convinced I was that my life had tumbled into nothingness or the fact that Tracy knew it when she took me on as the world’s most unlikely emotional reconstruction project.

That is, she knew I was broken and she married me anyway.

Nobody I’d rather have beside me in this.

Moving outward from my rock solid spouse, I will observe that if you have four kids there will be drama. There is none right now. All hands are on deck backing me up and backing Tracy up.

I live in a retirement community among people with whom I have little in common….except that we all face health challenges.

According to my medical team, I’m doing well. I feel much better but spend much of my time feeling weak as a kitten.

When I told my editors about my diagnosis, they were totally supportive. Reshuffle my work load. Take time off and know the gig would be there for me. Whatever I wanted. What a blessing that is!

I’m trying to keep up with my column, How Did I Miss That?. It does not require an attention span, which I lack right now.

Because I am without the ability to bear down on a topic, I am going to cheat a little for a comment on our current political pass by recycling remarks I made to a Trump voter back when it looked like Trump would snatch defeat from the jaws of victory and lose to an establishment candidate in a change year.

I don’t feel better about Mr. Trump’s announcement that he’s appointed “the highest IQ cabinet in history.” Our history-challenged POTUS should look up what JFK said about that.

I think we were not teleported into this moment. History does matter, so I’m going to re-tell some very recent history from my point of view in this letter to an early Trump supporter:

You claim to be worried about the national debt.

You do not, however, conduct yourself as if the national debt were important.

I expect you voted for Mr. Bush over Mr. Gore and, in that campaign, the primary issue was whether to use the prosperity of the Clinton years to pay down debt or to fund a tax cut.

To the credit of the voters, Mr. Gore won the popular vote, but the Electoral College and the SCOTUS, not necessarily in that order, installed Mr. Bush.

Mr. Bush could, of course, have paid down debt while he had a surplus and explained to voters like you why that’s important.

You pay down debt in a time of surplus. You do not cut the budget into a slow economy, which is exactly what your side of the political street has advocated.

Leaving aside the magic of the aggregate demand curve, which you steadfastly refuse to learn about, there’s another reason. In a recessionary economy interest rates are very low, making it a great time to borrow money.

Businesses typically do not take advantage because a downturn means fewer customers and no need to expand capacity. Very big businesses with lots of cash on the balance sheet use the recession to upgrade on the cheap, but even they seldom expand.

Government, on the other hand, is responsible for a lot of capital improvements that require upkeep: highways, bridges, dams, and airports. Government also should be, but is not at this time, responsible for the electrical grid, which is generations behind Europe and much of Asia.

Government expenditures have something called “velocity.” That is, all expenditures do not stimulate the economy equally.

The same could be said of tax cuts, except the only tax cut with any simulative effect to speak of is the payroll tax.

In a recession, you are not trying to get money into the hands of the folks you call “job creators” because they are not failing to invest for lack of funds. They fail to invest for lack of customers.

All tax cuts are not equal because—Reaganomics to the contrary—the goal is not investment. The goal is spending.

American politicians generally—not just Trump—are selling manufacturing snake oil. Those jobs are gone and few of them will ever come back. Pretending otherwise is irresponsible.

One thing about China’s socialist tradition is they still have five year plans and you can see what they intend to accomplish. They, too, are bleeding manufacturing jobs. Their plan, since they do not have to deal with messy democracy, is to face facts and let them go. Their goal is transition to a service economy.

We already have a service economy. As usual, ahead of their curve.

“Service economy” is not all about flipping burgers. It’s about intellectual property—who creates it and who owns it.

I have taught lots of Chinese graduate students. I’m betting more than you have. Based on my observations, Chinese come to graduate school much better prepared than Americans.

However, they do not do greatly better once they arrive. I teach in social sciences, where we deal in questions that either have no answers or have answers that raise new questions.

American students from first tier universities are used to those kinds of questions. They are, in a word, creative. Chinese students have a much larger store of known facts but their ability to project into the unknown is stunted. They catch on quickly and I don’t mean to denigrate knowing a lot of stuff.

My point is that we can compete and we can prevail. But I digress.

For you and I, balancing a budget means our spending does not exceed our income.

On the macro level, balancing a budget means the debt grows less than the economy does. Any particular year does not matter. When you have a reserve currency, and particular decade does not matter. This does not mean that deficits should be ignored. It’s a statement of priorities. Deficit spending is necessary to reconstruct that aggregate demand curve you choose to ignore.

The amount of demand that is missing is a knowable number. It is not a matter of opinion. It’s a matter of arithmetic.

The recovery has been sluggish because Obama did not get the stimulus needed and much of what he did get came in the form of tax cuts.

Social Security is not as critical as it would be thanks to all those undocumented workers Mr. Trump wants to deport. There’s quite a controversy over how many years undocumented workers add to both Social Security and Medicare but there is no question that having all those people paying in who will never take out does give US taxpayers a margin they would not have otherwise.

The conservative think tank turned political shop, the Heritage Foundation, produced a “study” that claimed otherwise. But I’ve got to think you can see what they did wrong without my prodding.

I agree with Bernie Sanders that SS benefits need to be increased and the retirement age cut rather than raised.

Why? You don’t deal with a structural unemployment problem by forcing people to stay in the work force longer.

How? Remove the cap on the payroll tax. I did not know there was a cap until the first year I hit it and thought I had gotten a pay raise. At those income levels, the impact on the demand curve is marginal. The pain would be nonexistent.

Having people retire earlier with smaller benefits is a concession to the new employment reality. I live in a “retirement community” and everybody works.

Another problem with the new employment reality that must be solved is the impact of the “gig economy.” I learned about it first when I was working my way though school. I knew I would have lots of jobs during the school year but I didn’t know exactly where they would come from and what I would be doing. That’s OK when you are a student. It’s harder for adults.

But the big deal is that the time of the fixed retirement benefit is long gone. People will still need to retire,

The fixed income benefit was a creature of the labor movement, and the labor movement has not figured out a way to organize workplaces that are no longer physical places. Ditto the regime of wages and hours we are used to ever since the New Deal gave us the Fair Labor Standards Act.

Giving the FLSA a 21st Century overhaul is hard with a party controlling Congress that purports to believe that the market exerts all necessary control over wages and hours.

This would be the same party that opposed the federal right to organize in the NLRA.

The same party that called the GI Bill “the dole.”

The New Deal and the Reagan Revolution are blueprints for very different societies.

The Soviet Union paradigm is not an option on the table, except perhaps in the mind of Mr. Putin and his pal Mr. Trump.

They say you run in poetry and govern in prose but I want to suggest you don’t do either in cartoons. It takes real people with real ideas supported by real numbers.

Democratic forms of government are run by who shows up. Those forms do not lend themselves to reification. Government can be stupid if the people who show up are stupid and authoritarian if the people who show up are authoritarian.

I have always tried to show up when necessary, when I thought I could do what was required better than anybody else willing to serve. I am sure as hell not authoritarian and I’m sure you can form your own opinion whether I’m stupid. But I am the government. And so are you, if you choose to be.

Naked Capitalism on Healthcare Looting


Debate Over Health Care Yet Again Omits Elephants In the Room: Excessive Costs Due to Terrible Incentives and Pricing, Administrative Costs, Pharma Looting

I should write a long post but I feel like screaming and a short post can accomplish that.

A new Wall Street Journal story, Health Care’s Bipartisan Problem: The Sick Are Expensive and Someone Has to Pay, is narrowly very good and broadly terrible. Despite the fact that the US health care system is doing a worse and worse job of delivering results yet is chewing up ever more of national resources, the press and punditocracy almost without exception refuse to question the basic premise of how the system operates. Remember that the cost of the US health care system is roughly twice that in GDP terms of that of other advanced economies, yet delivers worse results. A reminder from 2014:

Despite having the most expensive health care system, the United States ranks last overall among 11 industrialized countries on measures of health system quality, efficiency, access to care, equity, and healthy lives, according to a new Commonwealth Fund report. The other countries included in the study were Australia, Canada, France, Germany, the Netherlands, New Zealand Norway, Sweden Switzerland, and the United Kingdom. While there is room for improvement in every country, the U.S. stands out for having the highest costs and lowest performance—the U.S. spent $8,508 per person on health care in 2011, compared with $3,406 in the United Kingdom, which ranked first overall.

That is roughly the same sort of performance Soviet manufacturing showed in the decade before the implosion of the USSR. From Yegor Gaidar’s book Collapse of an Empire:

In manufacturing per unit, the U.S.S.R. in 1980 used 1.8 times more steel than the United States, 2.3 times more cement, 7.6 times more [mineral] fertilizer, and 1.5 times more timber.

The causes include:

A pay-for-piecework system that rewards doctors for over-treatment. These incentives are reinforced by encouraging patients to expect too much of doctors and demand surgeries and medications rather than accept that they may have to live with limitations or a slow recovery. I hate to rely on anecdote, but how many doctors are like the now 75-year-old orthopedist I finally found after seeing God knows how many who either had no clue and/or were super eager to operate. For instance, when I called his office to come in because I was pretty sure I had broken my little toe, he refused to see me and told me to tape it to my next toe. And this month, I managed to bang the hell out of myself in a bad fall (proving at least that I have no bone density problems) when I already had an injury and set myself back and then some. I hobbled in to see him. He poked and prodded and made me move a bit, declared me to have not done any permanent damage, and told me I needed a couple of weeks to heal more and to rest. And for this he charged $100 (the functional equivalent of bupkis in Manhattan) when I hadn’t seen him in over 10 years. When I was in Oz, most doctors were of his school of practice: their reflex if a problem didn’t look scary was to tell the patient to wait ten days and call the office, and if things hadn’t gotten materially better, then they would investigate further.

Similarly, I’ve been appalled when I visit doctors and mention what I consider to be a minor complaint that they almost universally regard it as a request for meds and are creepily eager to provide them.

And ads like this only encourage this sort of thing. I only watch TV an itty bit when on the treadmill, yet I’ve seen this commercial on CNN in prime time repeatedly. Mind you, this is for a diabetes medication, yet it sure looks like they are selling a great club drug:

The TV version has all the dance sequences and none of the charts or scenes in the bathroom, so the “gee this is a super happy drug” message is even stronger.

Drug company rent extraction. The US funds a huge amount of basic R&D and demands way too little. Big Pharma has succeeded in creating an intellectual property regime that makes it more attractive to milk existing patents and cheat on drug marketing than discover new drugs. Over 85% of the so-called new drug applications for the last 15 years have been for extensions of patents on existing drugs based on minor reformulations. The industry also spends more on marketing than R&D, and you can be sure that the beancounters allocate as much overhead as possible to R&D. Yet they’ve managed to con much of the public and complicit legislators that they need fat profits to “innovate” when they instead go to CEO and executive bonuses

Even worse, drug company marketing abuses kill people on a large scale basis. Vioxx and Oxycontin are poster children.

Needless insurance company costs and burdening of doctors with unnecessary admin work. One of the big reasons for the shortage of primary care physicians is the every-rising hassle of dealing with insurance companies. My impression is most doctors spend a day a week fighting to get paid, on top of having to pay staff to deal with paperwork. That is driving more and more MDs into concierge practices and services focused on the rich, like cosmetic services and anti-aging, that are outside the medical/insurance regime.

Iatrngenic conditions are a big problem. This is not unique to American medicine, but I would love to see comparative statistics. For instance, between superbugs, MRSA, and pneumonia, anyone who is sick should avoid a hospital stay unless there is no other choice.

As we know all too well, Obama made his health care “reform” all about institutionalizing the medical industrial complex looting. The bill was written by health care industry lobbyists. Drug company and insurer stocks both rose when it was passed. Even though insurers are whinging on how they are having a hard time making enough money on Obamacare exchange plans (and this serves as their excuse for dropping them and/or raising premiums), the press seldom mentions that they made out handsomely on Medicaid expansion. And let us not forget that Obamacare also barred drug reimportation from Canada.

So having chosen to misuse a once-in-a-generation opportunity to have a go at the fundamental problems of a clearly broken health care system, Obama, as he did with the banks, sided with powerful incumbents at the expense of ordinary Americans. Some people may perceive that they have been helped, but I wonder how many have road tested their coverage via suffering a serious mishap. As readers know too well (and many have told us), if you are hit by a bus and get taken to an emergency room not in your network, the costs are all on your dime. Even if you schedule an operation in network, it is impossible to prevent the hospital from gaming the system and scheduling practitioners who are not in network as part of the team so as to run up a bigger tab (lawyers have told us you can contest the bill successfully if you’ve demanded that they schedule only in-network professionals and they agree, but why should people who are having to deal with the stress of recovery from a major procedure be put through fights like that?). As we’ve also discussed, many insurers are effectively excluding pre-existing conditions via narrow networks that do not include specialists that can treat them.

Yet the frustrating Wall Street Journal article does a fine job of discussing the problem of treating people with costly ailments in our current broken system without once acknowledging the structural issues that make American medicine so egregiously overpriced. While it does marshall some useful data, for instance, that 1% of patients account for 21% of health care costs, far worse than the usual 80/20 rule, it conflates that with the pre-existing conditions problem, when end-of-life care is a big ticket item included in those figures.

Nobel Prize winner Angus Deaton stated clearly what is wrong. The American health care system “seems optimally designed for rent seeking and very poorly designed to improve people’s health.” And nothing is going to get better until we tackle that problem head on.


Charles D. Hayes: The Politics of Emotion


There are two fundamental ways, we do politics, either we compare ideas and strive to negotiate compromise, or we simply relate. The former method relies on reason, the latter emotion.

To reason one’s way politically, requires a civic education and a willingness to live up to one’s responsibility as a citizen in a democratic republic. To relate via emotion, is a tribalistic inclination based, in part, on the primal instinct of us vs them. It’s akin to the same impetus that enables us to become instant fans of team sports.

Now, these two dramatically different methods are not completely cut and dried. Most of us exercise these methods as matters of degree. But, unless you do your homework to the point that you know what you are talking about, then, relating is the only option because you will lack the knowledge necessary to participate in political discussion effectively.

Citizens who wear their politics as a matter of their tribal identity are infamous for offering political arguments that are intelligibly incoherent, reminiscent of the tea party and Trump supporters frequently interviewed on television carrying placards.

When citizens’ primary political orientation is one of relating, facts don’t matter, policy doesn’t matter, better arguments don’t matter, instead fear and hatred often substitute for substance and that’s where we find ourselves today.

We have a President-elect, whose support is steeped in emotional revulsion of the “other” and yet, those of us who care about policy and the better argument are still trying to address their emotion with reason and it’s not working, it’s like fighting fire with oxygen.

The angst felt by those who rely on relating over reason is real. They have good reasons to be upset. We have a dysfunctional political system and both major parties share blame. Now, those of us who rely on reason are also upset because we believe that our way of life depends upon reason, in the same tradition that our founders crafted the laws and rules we try to live by.

So, what is happening is that those of us who advocate reason get emotional when the relaters just relate and they get more emotional when we try to use logic, at which time, they just call us “liberals” and they think by doing that they have won the argument.

For citizens, whose politics is simply a matter of their identity, as in us vs them, they don’t think the rules apply to them, everything they do is automatically self-justifying their identity, is their license of legitimacy, in all important matters.

For example, for the GOP, Democratic Party appointees must meet astringent vetting standards, for the GOP, however, expediency trumps the need for vetting.

My point, in this piece, is that to deal effectively with the emotional angst of people who are never going to become civically responsible, we are going to have to come up with ways to appeal to their emotions by addressing their concerns in an emotional tribal context.

We must discuss the things they care about, family, work, military service, firearms, and religion in terms they can relate to emotionally, or else we are just going to become more and more polarized.

One method that I have used effectively, for example, is to discuss healthcare on their terms, using examples of the armed services risking their lives on foreign soil, while their family members back home face life and death medical issues because they can’t afford health insurance. This makes a difference because they can relate.

Now, admittedly there is no point in trying to reason with dyed in the wool ideologues and when I identify them as such I’ve just started blocking them, but some of us have friends and family members that we don’t want to write off and it takes an extraordinary effort to communicate effectively.

In these instances, the trick is not getting so angry that we blow and I will admit that despite my best efforts, there are times in which I just lose it. It’s very hard at times not to tell these folks where to get off the train, but if we don’t at least try relate on their terms, nothing is to be gained. If you have ideas about how to do this, please post them.

Charles D. Hayes: Trump, a Clear and Present Danger

The Trump effect

By any reasoned study of the daily antics of President-elect Donald Trump, one must be willfully blind, not to realize that he represents a clear and present danger to the future welfare of the United States and quite possibly the world.

A bull in a china-shop may be an understated analogy. Trump lives in a preferred reality, whose sole context is the preservation of his ego. Better to deny Russian hacking than hint that it might have helped him win the election.

Trump turns every issue he is involved in into a contest of ego preening and when challenged, or criticized, there are no limits to his efforts to save face.

Trump reacts to any sort of criticism with rhetoric that has a “baby, baby, suck you thumb, don’t forget your bubble gum” childish ring to it.

It’s also crystal clear that those of us who have hoped that Trump would wake up and grow up that we have been expecting something that’s not going to happen.

It’s widely reported that Trump is in so far over his head that those close to him have discovered that he seems mostly influenced by the last person he talked to, which has his staff jockeying for position.

Those who speak for Trump spin his preferred reality into a coarse wool for the eyes of his true believers. Although, I hit mute when Kellyanne Conway appears on my television I have closed caption and I have yet to witness her answer a question, as asked.

So, it’s going to be nothing but lies from here to the end. Moreover, Mike Pence may be the most disingenuous individual we’ve ever had to hold the office of vice president.

Pence is so pliably scripted that he deserves a part as an android in the second season of Westworld. If Trump denied gravity, Pence would explain how liberals were the pressure keeping him grounded.

We are truly in uncharted waters. Michelle Obama said it best, “This is not normal.” Trump hasn’t even assumed the presidency yet and I suspect many of us are beginning to experience what will be declared psychologically as something akin to post traumatic news disorder.

Trump turns mole hills into mountains simply for the attention he gets which means everything he involves himself in has the potential to end badly.

By no stretch of imagination can I see a Trump presidency lasting four years. He is too reckless, too self-absorbed, too confrontational, and too undisciplined.

At some point, I suspect, if the GOP can sustain anything we might deem in the vicinity of objectivity, an intervention, maybe even impeachment, will be in order, to save us from the same kind of incompetence that led to serial bankruptcies and a string of business failures. Remember, we didn’t get to see the tax returns.

And to think, that we almost elected the most qualified candidate in history, but for problems with gender, email, and having been the subject of the longest running accusation campaign in political history, with help, even from Vladimir Putin.

Make no mistake, if Hillary had won under these exact conditions, this election would be in court for a do over.

Just think though, by the time this farcical circus is over those of us who are paying attention will all have graduate degrees from Trump University, as if we couldn’t all test out now.

Steve Russell: The Decline and Fall of Sears





When I was a kid, the “wishbook” from Sears, Roebuck, was perhaps the most potent symbol of capitalism, a smorgasbord of reasonably priced consumer goods from all over the world.

Sears sold two wheel transportation under the Allstate brand, Vespa scooters from Italy and Puch motorcycles and mo-peds from Austria.

Sears had apparently bought army surplus Enfield rifles from England and if memory serves you could get one “as is” for under $20 and a sexed up version less a lot of wood and metal for a bit more. Order your military rifle and it shall be delivered to your door, until Lee Oswald ordered an Italian military rifle by mail and did major mischief with it.

Sears has fallen on hard times when it could have put its business plan on line and become Amazon. Instead, it moved to brick and mortar and has gone the way of most brick and mortar stores.

Sears stock was victimized by one of the bear raids made possible when Bush 43 neutered the SEC. The naked short rule went unenforced and the uptick rule was flat repealed to the detriment of ordinary Americans who had no idea why that mattered.

At one point during the Great Recession, a bear raid had knocked the stock down so far I was having a nostalgia attack and wanted to buy some–only to discover that more shares were sold short than existed in the float. I had not yet seen Bush 43’s tracks in that crazy state of affairs but the sheer absurdity of it scared me off big time.

Good thing, too, for me personally, because I would have let emotion into a trade and gotten hosed. Letting emotion into stock trading is an error like the one addressed by the maxim, “Never fall in love with a car” when shopping for transportation.

Anyway, yesterday the Wall Street Journal sent a bulletin to my iPhone saying that Sears–impecunious again–was about to sell the Craftsman brand to raise cash.

Oh, no! Craftsman to me always stood for excellent hand tools, well designed and well made and backed by a legendary warranty. Bring your broken Craftsman hand tool into Sears and they hand you a new one, without asking where or when you bought it, whether you abused it, etc.

Craftsman tools were mostly if not exclusively made in USA, and it never dawned on me that the company was somewhat protected in the US market by the oddball sizes our tools required in a world of metric.

Don’t get me started on British Standard–the bottom line was a garage that wanted to work on everything needed three sets of tools. Does anybody but me remember that we were on track to go metric when President Reagan reversed the decision of the Carter administration to join the rest of the world? Another Reagan idiocy, right up there with tearing down the solar panels Carter had installed on the White House roof.

Either Carter’s solar energy turn or Carter’s metric turn would have saved more US jobs than all the tweets Donald Trump offers to the same end.

Anyway, I was all “Oh no, not Craftsman,” thinking that the iconic brand could be acquired by some outfit making cheap tools in Taiwan or wherever and they would trade on the reputation of the brand until they managed to destroy it. Another victim of unregulated globalization.

This morning I read that the buyer is Stanley Black & Decker. I’m too old to use hand tools much anymore, so why do I feel like I’ve dodged a bullet?

Charles D. Hayes: People Before Profit in Healthcare


If we play our cards right, the GOP’s killing of the Affordable Care Act, may be the very impetus, we need to get a single-payer system enacted. As I have pointed out elsewhere, after the war ended in 1945, Harry Truman tried to get legislative approval for universal healthcare and because of the goodwill from the war effort, most people were for it.

But law makers from the South blocked the measure, because their constituents were afraid they would have to share doctors and medical facilities with racial minorities. Obamacare, however, is fashioned after a conservative plan, hatched by the Heritage Foundation, that put an emphasis on personal responsibility by making insurance mandatory.

President Obama thought he was meeting the GOP halfway by using their model, instead they turned against their own idea and flip-flopped from an issue of personal responsibility to an attack on personal freedom, rather than give President Obama a victory.

If the GOP were to replace the ACA with something better, that would be great, but we know, it’s not going to happen. That’s not the way they roll, they are big talkers about freedom of choice, but they are betrothed to big-money.

The GOP will cut deals that favor Big Pharma and the insurance companies, over the interests of their constituents, this is what they do, they can’t help themselves, it’s who they are, it’s what they believe is just, it’s a trace of the ethos of their deep-seated ideology of the survival of the fittest and their visceral, but seldom publicly acknowledged assumption, that people who can’t afford private health insurance, don’t really deserve it.

Once the full painful effects from the GOP’s botched special-interest rigging are felt by the public, there is going to be a backlash from people in dire straits without available medical treatment and we need to catch the winds of their justified anger in our sails and force a hurricane of dissent.

We are the only developed country in the world that can’t seem to generate enough goodwill to see to the that all our citizens have affordable healthcare without emotional angst and constant whining. Our dilemma is embarrassing, but worse, it’s an egregious insult to the memory of real patriots.

That we have lost members of the armed services on the battlefield who have had relatives die from a lack of medical care, because they couldn’t afford health insurance, is a national disgrace. This doesn’t happen in a good country, let alone one that incessantly claims to be great.

That we can spend trillions of dollars for potential military threats without blinking, but cry budget deficit, when it comes to our citizens facing actual harm, life and death threats, is a moral blasphemy that flies in the face of any ideal of what it means to be an American.

There is no room for profit in health insurance, because it comes at the expense of medical treatment, period. We need to keep making the case that not only is single-payer the only ethical system of handling our health insurance, it’s the only method that is proven to be economical and this is easy to prove.

Fortunately, the number of people in favor of single-payer is growing and when the GOP bungles the ACA, which they are honor bound to do, we need to make a BIG DEAL about SINGLE-PAYER as a slam dunk election issue in 2018, and 2020.

Naked Capitalism on TrumpCare


TrumpCare: ObamaCare, Medicaid, Medicare, and the Veterans Administration

By Lambert Strether of Corrente.

Assuming that Trump takes office on January 20, we can expect health care policy to shift from the left side of the Overton Window to the right, even as the only solutions that remain “on the table” are neoliberal and markets-first non-solutions. Let’s begin by setting the baseline for a rational and humane health care policy — i.e., not neoliberalism — as a universal benefit.[1] From Richard D. Lamm and Vince Markovchic in the Denver Post:

U.S. is on fast track to health care train wreck

In 2015 we spent $3.2 trillion on health care, which was $10,000 per person in the U.S., ($25,000 for a typical American family). This is 17.5 percent of the U.S. Gross Domestic Product (GDP). To put this in perspective, this is more than twice what most other developed nations spend on health care while insuring all of their residents. This year we are on track to exceed that amount with it being 18 percent of GDP.

Even with the implementation of the Affordable Care Act, we still have 28 million people with no health insurance, and many more are under-insured due to rising co-pays and deductibles….

Of the $3.2 trillion health spending, 70 percent goes directly to fund the cost of our healthcare. The remaining 30 percent is spent on administration and profit, which is more than twice that of any other nation. In 2014, studies published by the Institute of Medicine, Rand Corporation, and the Center for Medicare/Medicaid Services estimated that out of total health care spending, as much as $900 billion, or about one third of our total spending, can be attributed to waste, fraud and abuse.

This current system is unsustainable, but who will tell the American public? We suggest that the solutions to the real problems of health care are hardly being talked or written about.

The ideal health insurance system is one that: provides free choice of hospitals and doctors; provides insurance coverage to all at all times (i.e., not tied to an employer); is affordable and will remove all risk of medical bankruptcy. This system should have an administrative cost of less than 5 percent and have everyone in the risk pool, thus making premiums affordable. We have such a system now: Medicare covers all persons over 65, those on total disability, and all renal dialysis patients.

Medicare, with all the fraud and other issues, still operates with about 3 percent to 4 percent overhead. That is much less than the profit and overhead added by U.S. health insurers, which is instead 15 percent to 20 percent. In addition, Obamacare, Veterans Affairs and Medicaid each add another entire layer of expensive bureaucracies. All these, along with the government being unable to bid for drugs purchased under Medicare, add up to unnecessary cost and waste in our system.

Similarly, there would be tremendous cost savings if under Medicare as a single payer, it is authorized to negotiate for hospital care on a more cost-efficient and more comparable basis across the nation.

So, the health insurance companies are parasites who should be removed. Now, I don’t know why Lamm and Markovchic don’t just lower the age for Medicare eligibility from 65 to zero, like Teddy Kennedy proposed. And I also don’t know why Democrats (including Sanders) aren’t prefacing every statement they make on heatlh care with “Of course, Americans deserve Medicare for All. Until then….” Instead, they’re digging in to defend a flawed system that hasn’t covered 28 million people, instead of going on the offense for the universal benefit. (That’s the difference between “resistance” and “revolution,” I guess. The one is reactionary; the other is, er, progressive.)

Anyhow, it is what it is and we are where we are. Absent a universal benefit[1], we get health care silos: ObamaCare, Medicare, Medicaid, and the Veterans Administration, among others. In this post, I’m going to take a very quick look at the current news in each silo. All the silos are in decay and disrepair — except from the standpoint of those who profit from them, of course — and all suffer from neoliberal infestations, but the forms of decay and the degrees of infestation differ. So the post will be a bit of a patchwork, but then the health care system itself if a patchwork. As always, I welcome comments from readers with informed experience interacting with these systems, for good or ill.

ObamaCare: Repeal and Replace, But How, When, and with What?

On ObamaCare repeal, Chuck Schumer suggests: “It’s a political nightmare for them. They’ll be like the dog that caught the bus.” Heaven forfend Schumer should defend a universal benefit, but on this he could be right. Throwing 30 million people off the rolls[2] is a heavy lift, even for Republicans. That’s because there’s really no popular consensus for doing it:

But the euphoria of finally acting on a long-sought goal will quickly give way to the reality that Republicans — and President-elect Donald Trump — have no agreement thus far on how to replace coverage for about 20 [or 30] million people who gained insurance under the health-care law.

Obamacare continues to be viewed unfavorably by Americans, but the politics of undoing the law are complicated. A Kaiser Family Foundation poll after the election showed 26 percent want to repeal it, while 17 percent want to scale it back. Nineteen percent want to move forward with implementation and 30 percent want to expand it.

It’s also not clear what would happen to Republican border states like Tennessee and Kentucky, that benefited signifacantly from Medicaid expansion under ObamaCare.

So the Republicans want Democrats to hold hands with them as they jump off the cliff. Let me know how that works out:

Some Republican aides say they may pursue a replacement through a series of small bills as opposed to one big measure. Leading Republicans such as Senate Majority Whip John Cornyn of Texas have said they want Democratic buy-in on a replacement plan. Breaking a filibuster would require the support of at least eight Democrats.

(Of course, reconciliation requires a bare majority, and the filibuster can be altered or abolished when the Senate adopts its rules at the start of a session.)

So the Republicans are toying with various ideas, some of which involve kicking the can down the road (“three year delay”), or even off the road entirely:

Now comes the American Enterprise Institute’s conservative health wonk James Capretta with an idea that cuts to the chase: Why not just “grandfather” all the people currently receiving benefits via the ACA and make whatever the new “replacement” system turns out to be prospective for new people seeking assistance?

It is also worth noting that Republicans have not had much luck in the past convincing people to accept radical policy changes by grandfathering those most immediately affected. George W. Bush’s proposed partial privatization of Social Security was supposedly only going to affect people aged 55 or younger. The same was true of Paul Ryan’s original Medicare voucher proposal.

(ObamaCare enrollment hit a record high this year, so I wonder if people were acting on rational expectations of a grandfathering solution. I know I thought of it.) So the 115th Congress should be interesting. However, if the 21st Century has taught us anything, it’s that it’s always possible to make a bad situation worse. Remember the ObamaCare rollout debacle? Does anybody believe the Republicans will do any better at a rollback?

Medicare: Balance Billing

Naked Capitalism covered ObamaCare’s balance billing problems back in 2013:

One of the proofs that Obamacare is really about helping insurers and Big Pharma rather than ordinary Americans is its failure to do much about the seamy practice known as balance billing.

Say you have a scheduled procedure, like getting a stent. Like most Americans who have health insurance, you are in an HMO or a PPO. Your doctor, who is in your network, schedules you for the operation at a hospital in your network. You assume the only thing you need to worry about is a fairly minor co-pay and recovery.

But weeks later, you find that the anesthesiologist wasn’t in your network, and you are hit with a $12,000 bill for his services. And this sort of scamming (hospitals knowingly putting people on a surgical team that they can bill at huge premiums to negotiated rates) is routine. And of course, if the ambulance takes you to an emergency room that is not in your network, the outcome can be catastrophic.

And now, the Trump administration is considering expanding this pleasant practice to Medicare:

“[B]alance billing” [is] why the American Medical Association is strongly supporting Donald Trump’s pick of [the aptronymic] Rep. Tom Price (R-Ga.) to lead the Department of Health and Human Services, which oversees Medicare. … In 2011, Price (an orthopedic surgeon himself) introduced a Medicare “reform” bill in Congress that, among other things, would have brought balance billing to the program. This

Balance billing is basically illegal for Medicare patients…

Permanently obliterating the financial security of helpless families with no or bad insurance as a loved one dies slowly and painfully of a chronic illness is a nice little profit center for providers. But it pales in comparison to the gravy train they might get if they can bring balance billing to Medicare. Seniors use far more care than the younger exchange population, and there are a lot more of them — 55.5 million, versus 12.7 million people on the exchanges. Perhaps most importantly, they’re quite a bit richer on average. Many seniors have been scrimping their whole lives to save for retirement, in keeping with decades of agitprop from conservatives and Wall Street, and the more sociopathic among the health-care population are licking their chops at the prospect of being able to devour those nest eggs.

(I like Ryan Cooper. The man can write.) So, like I said, it’s always possible to make things worse…

Medicaid: Privatization in Iowa

Let’s start out by noting that Medicaid has a serious neoliberal infestation problem:

More than two-thirds of states contract out some or all of their Medicaid program to private companies. The benefits of the practice and its impact on quality and cost of care have been unclear, however.

The Des Moines Register:

HHS believes 57% of Medicaid beneficiaries were enrolled in Medicaid managed-care organizations as of July 1, 2011, compared with 10% in 1991. The consulting firm Avalere Health projects that 75% of Medicaid beneficiaries will be covered by managed-care organizations starting in 2015. A recent U.S. Government Accountability Office report, using fiscal 2011 data, found Medicaid managed-care plans received about 27%, or $74.7 billion, of federal Medicaid expenditures.

The rush into Medicaid managed care came despite limited evidence that the plans save money for states and the federal government.

Iowa’s Republican governor Terry Branstad controversially privatized Iowa Medicaid services, on the (ostensible) premise that the state would save money (see Lamm and Markovchic, supra). Oops:

Iowa Medicaid payment shortages are ‘catastrophic,’ private managers tell state

In a Nov. 18 letter to Iowa Medicaid Director Mikki Stier, a UnitedHealthcare executive also warned of financial problems. Kimberly Foltz, chief executive officer of the company’s Iowa branch, wrote to Stier that she appreciated the state’s efforts to address some of the issues, “but overall the program remains drastically underfunded.”

Foltz wrote that experts from the Milliman firm, who were hired by the state, underestimated by 40 percent how much it would cost to cover the tens of thousands of poor Iowans who were allowed to sign up for Medicaid under the federal Affordable Care Act.


The mistake “suggests there were material flaws in the rating projection,” [Foltz] wrote.

Oops. (Had UnitedHealthcare no data to check Milliman’s figures?)

Foltz wrote that one way to help make up for the shortfall would be to allow the managed care companies to negotiate down how much they pay pharmacies to fill prescriptions. She suggested her company could cut those rates by nearly 90 percent. Hill said the contracts are written in a way that would make it difficult for the managed care companies to opt out unilaterally. But she said the companies could argue that the state and its actuarial firm, Milliman, did not properly estimate the costs of covering care for Iowa’s poor and disabled residents. “Conceivably, that could be a material breach of the contract,” which could allow the companies to bail out of the project, she said.

A nice Christmas gift for Terry Branstad. (The 90% figure seems to me remarkable.)

Of course, the real solution to cost problems is to abolish the insurance companies altogether, and use the power of single payer to beat back Big Pharma. But then you knew that.

Veterans Administration: Creeping Privatization

Finally, let’s take a look at the Veterans Administration. (I’m by no means an expert in the VA, and so readers will correct me, but my general impression is that the VA rations by queuing but can’t admit it, which has caused them political problems. But once you’re in, the care is good, which presumably explains why veterans themselves don’t want to “privatize” it. However, I think privatization as a frame is slightly deceptive, as we shall see (even if Sanders adopts that frame).

So, here’s Trump doing the Trump thing, which is — and do not underestimate him! — translating policy into vivid phrases voters can grasp immediately:

TRUMP: “We think we have to have kind of a public-private option, because some vets love the VA. Definitely an option on the table to have a system where potentially vets can choose either/or or all private.”

Brilliant of Trump to hijack the virulently memetic phrase “public option” — the bait and switch vaporware “progressives” used to suppress single payer advocacy in 2009 — with the conservative-sounding “public-privateoption.” And here Trump explains how such an option would work from the user’s perspective. Poltico:

Trump has insisted that what he wants is not to hand the veterans’ support mission entirely to the private sector. “No, it doesn’t have to be privatization,” he said in May. “What it has to be is when somebody is on line and they say it’s a seven-day wait, that person’s going to walk across the street to a private doctor, be taken care of, we’re gonna pay the bill.”

He has also proposed that all veterans be able to use their veterans’ IDs to get care at any hospital or doctor’s office that accepts Medicare.

Vets could use their ID cards! It’s brilliantly simple![3] It’s also a bridge too far for veterans:

But veterans’ groups see that as a major step toward privatization because it would allow veterans to opt out of the VA health care system. That is different from the recommendations of a recent federal Commission on Care, which pushed for the VA to oversee a network of qualified private health care providers to supplement VA-run hospitals and clinics.

But there’s less to this distinction than there seems to be at first sight. Trump proposes “walk[ing] across the street to a private doctor”; and the Federal Commission proposes “walk[ing] across the street to a certified private doctor.” Since the VA actually delivers health care, both solutions “allow veterans to opt out of the VA health care system,” and so both destroy the universality of the benefit. The Commission on Care (PDF) explains certification:

VHA credential community providers. To qualify for participation in community networks, providers must be fully credential ed with appropriate education, training, and experience, provide veteran access that meets VHA standards, demonstrate high-quality clinical and utilization outcomes, demonstrate military cultural competency, and have capability for interoperable data exchange.

Oh. Credentials. Not that I don’t want medical personnel to have them, but isn’t this rather a dog-whistle for liberals? And:

[A]ddressing veterans’ needs requires a new model of care: rather than remaining primarily a direct care provider, the VA should become an integrated payer and provider.

So, from being the American equivalent of the UK’s National Health Service, a “direct care provider” (even if the vile Tories are gutting it), the Commission proposes that the VA become more like Canadian Medicare for All, a single payer system. I told you it was a patchwork!

Now, let’s step back for a minute. The Commission was set up in 2014 under Veterans Access, Choice, and Accountability Act (VACAA), which was designed to solve a queueing crisis through “choice,” i.e., by allowing veterans who are unable to get an appointment in a reasonable time to seek care outside the VA. Now, a suspicious mind would put this under the heading of a neoliberal pattern for destroying a universal public benefit: 1) Underfund the service; 2) Wait for the inevitable problems; 3) Publicize them; 4) Push through a privatizing solution; 5) Rinse and repeat until the public service is destroyed. The VACAA was quite small. The Commission’s proposals are not so small. And in a decade or so, if the neoliberals get their way, the VA will be where Iowa is today, even if it does pass through a single payer phase on the way.

That’s why I think the privatization frame is a little deceptive. Yes, the ultimate goal, as with all neoliberal programs, is privatization. But it can take place a little at a time. For example, from Stars and Stripes:

Concerned Veterans for America, or CVA, is a veterans advocacy group in the Koch brothers’ political network and has been one of the most vocal critics of VA since the 2014 wait-time scandal.

The CVA is poised to become more influential under the new administration, as President-elect Donald Trump has tapped the group to help overhaul the veterans health-care system. The most controversial proposal by the group is an expansion of veterans’ health-care options in the private marketplace – which critics, including traditional veterans advocacy groups and Democratic lawmakers, say could lead to the dismantling of the current VA..

But CVA has not proposed a wholesale transfer of VA’s services over to the private sector – which is what “privatization” usually describes.

No, there is no “wholesale transfer.” Now. That’s for later, as with the Tories and the NHS.


So, what we have is a number of different battles on different fronts: ObamaCare, Medicaid, Medicare, and the Veterans Administration. It would be nice, and politically useful, if all these battles could be seen as a single theatre of war: Are we to have a humane and rational health care system — a universal benefit — or are we to have TrumpCare: An expensive and lethal mess?


[1] In of the earlier stories on Trump administration health care policy, the Times suggested that the Republicans seek a universal benefit. See FAIR, “Media Legitimizing GOP’s ‘Universal’ Health Plan That Doesn’t Exist.” I’ll believe it when I see it. The Democrats didn’t do it, so why would the Republicans?

[2] The 30 million figure comes from the Democrat nomenklatura at Think Progress, who helpfully calculate the number of deaths that will result. Ironically, they never calculate the lives saved with Medicare for All.

[3] Heaven forfend that any adult could use, say, their Social Security card for the same purpose.

The Price of Greed

Follow the Money: Nominee for Secretary of Health and Human Services Traded Health Care Stocks and Owned Tobacco Stocks While in Congress

By Roy Poses, MD, Clinical Associate Professor of Medicine at Brown University, and the President of FIRM – the Foundation for Integrity and Responsibility in Medicine.  Originally published at Health Care Renewal

At least the US president-elect seems to be making the problems of conflict of interests and health care corruptionless anechoic.

Dr Price’s Stock Portfolio

The latest relevant big story was first picked up by Sheila Kaplan writing in Stat. It seems that Dr Tom Price, once a practicing orthopedic surgeon, then a Congressman, and now Mr Trump’s pick for Secretary of DHHS, owned and owns lots of health care related stocks:

his stock portfolio includes investments in pharmaceutical, medical device, and health insurance companies, the heart of the industries he would be overseeing as secretary.

In particular,

Among Price’s holdings are some in Innate Immunotherapeutics, Ltd., a biomedical company in which another lawmaker is a major shareholder. According to his financial disclosure statements, on Aug. 31 he bought between $50,001 and $100,000 worth of stock the firm.

Representative Chris Collins, a New York Republican, is a director of the company, which develops drugs to treat multiple sclerosis. He lists assets in the firm worth between $5,000,001 and $25 million. Price also purchased a smaller amount of stock in Innate Immunotherapeutics in 2015.

Collins is also a member of Trump’s transition team.

In March, Price invested between $1,001 and $15,000 in AmgenEli Lilly and Co.; PfizerBiogenBristol-Myers SquibbZimmer Biomet, a medical device company; Aetna; and Athenahealth. Also that month, Price sold the same amounts in GileadAbbott Laboratories, and Thermo Fisher Scientific.

So for readers of Health Care Renewal, this is very familiar. We have discussed ad infinitum the conflicts of interest that may affect physicians, particularly due to financial relationships with big health care corporations. The issue is that physicians swear oathes to put the health of their individual patients first, and to support the public health in general. Yet the interests of, for example, drug, biotechnology, device companies may be at odds with this primary mission. Such companies in this age of promoting “stock holder value” may primarily be about increasing revenue by selling as much of their products as they can, and let the Devil take the hindmost. Yet physicians ought to use drugs and devices judiciously, and only when their benefits for individual patients outweigh their harms. The concern is that physicians who have financial interests in such and other health care related companies may consciously or unconsciously allow their professional decisions to be influenced by their personal financial advantage.

Dr Price appears to be a member of the US House of Representatives full time, and no longer a practicing physician. But he has not relinquished his Georgia medical license (look here). So he should still be bound by his oath as a physician.

Dr Price’s Active Stock Trading

But wait, there’s more. Last week, the Wall Street Journal noted that Dr Price was not simply a long-term owner of stocks, he was an active trader.

President-elect Donald Trump’s pick to run the Health and Human Services Department traded more than $300,000 in shares of health-related companies over the past four years while sponsoring and advocating legislation that potentially could affect those companies’ stocks.

Rep. Tom Price, a Georgia Republican, bought and sold stock in about 40 health-care, pharmaceutical and biomedical companies since 2012, including a dozen in the current congressional session, according to a Wall Street Journal review of hundreds of pages of stock trades he filed with Congress.

In the same two-year period, he has sponsored nine and co-sponsored 35 health-related bills in the House.

His stock trades included Amgen Inc., Bristol Myers Squibb Co., Eli Lilly & Co., Pfizer Inc. and Aetna Inc.

This raises more issues. First, that Dr Price was actively trading these stocks suggests that his financial holdings might have been more salient to him than, say, a long-term investor who just buys stocks and puts them away in a retirement portfolio. This increases the likelihood that his stock holdings, and their recent performance, may well have influenced his decision making.

Moreover, this emphasizes that we should be concerned not so much about the effect of financial relationships on Dr Price’s clinical decisions – in fact, it appears that he is a full time Congressman, and hence is not practicing – but on his decision making as a national legislator with considerable influence on health policy and the public health. As a congressman, Dr Price also took an oath to “support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion, and that I will well and faithfully discharge the duties of the office on which I am about to enter.” So the concern is that the immediate profitablity of his actively traded stock portfolio might influence how Dr Price legislates.

As the WSJ article noted,

Mr. Price, an orthopedic surgeon who chairs the House Budget Committee, has played an influential role in shaping health legislation. He sits on the Ways and Means Committee’s health panel, which oversees Medicare. He also is a member of the Republicans’ Congressional Health Care Caucus that has called for repeal of the Obama administration’s landmark health overhaul.

Beyond just the issue of conflict of interest is that of Dr Price’s apparent comfort with the ethical and sometimes criminal track records of the companies from whose stocks he appears to have profited. We on Health Care Renewal have been documenting the ethical misadventures, and sometimes crimes committed by large health care organizations which claim they operate for the good of patients and the public, but seem more to operate for the benefit of their insiders, particularly top management. Many of the companies held by Dr Price have lengthy lists of such bad behavior. See the links above to some individual companues for many more, sometimes sordid details.

If Dr Price, who is not only a physician but a legislator with significant influence on health policy, is unaware of these companies’ track records shame on him. If he owned these stocks with full knowledge of the companies’ track records, more shame on him.

Dr Price’s Tobacco Stocks

But wait, there’s more.

The WSJ article also noted:

Mr. Price also has traded in shares of … tobacco stocks, including Altria Group Inc., whose products are regulated under the Food and Drug Administration, a part of HHS.

An article in Wired implied that Dr Price’s tobacco holdings may have affected his legislative decision making. Price voted against

a law that now requires the FDA to regulate tobacco as a drug.

That now goes beyond just a relatively simple set of conflict of interest issues. At least drug, biotechnology, and device companies make products meant to benefit patients and the public’s health, if used properly and judiciously. For that matter, insurance companies, like Aetna, are supposed to help patients afford needed medical care.

But tobacco companies are different. Although they are legal in the US, there is overwhelming evidence that their products are harmful to health, and this harm is not outweighed by any health benefits, nor any benefits to society other than the money tobacco companies can make from them. Most doctors now would recommend their patients stop smoking and, if they are not smoking, never start to smoke. It is extremely hard to reconcile Dr Price’s professional status and his ownership of tobacco stocks.

A physician legislator with a powerful role in health policy owning tobacco stocks may appear to be abusing his entrusted power for private gain. That is the ethical definition of corruption used by Transparency International(although it is not a legal definition.) No wonder that in a commentary in New York Magazine on Dr Price’s stock holdings suggested that they mean in Dr Price’s eyes

The appearance of corruption is totally fine.


Mr Trump’s ongoing behavior does have some silver linings. It is making the public more aware of the dangers of conflicts of interest and corruption, not just in health policy or health care. And it is also making the public aware how we have to follow the money, all the money that flows around our new plutocrat-in-chief to be, and his rich and well connected cronies.

If we cannot restrain the increasing pile of conflicted and possibly corrupt political appointments, we will be in for much worse than the health care dysfunction Health Care Renewal has been lamenting for more than 10 years.

Judge Steve Russell: Netanyahu Is Not Israel



It never fails. A U.S. administration spends the last months or weeks trying to cut the Gordian Knot of Palestine.

Bush 43 ridiculed Bill Clinton for even trying….and then he did the same.

I hesitate to tell other nations how to run their business, but Israel cannot take so much from our treasury and our political capital and then say we have no right—I would say duty–to insert our point of view.

Israel is a hard problem but Jerusalem is easy. We install a nuclear bomb smack on top of the Dome of the Rock. Distribute three triggers to the three highest mucky-mucks—Christian, Jewish, Muslum. Pressing a trigger sets off a signal, so the world knows if anybody presses one, but the bomb will only detonate when two of the three are pressed. Remove the bomb when all three parties sign an agreement to share Jerusalem.


As we speak, Israel is sabotaging the Two State Solution by building more settlements on the West Bank, changing the facts on the ground.

Israel wants Palestine to be a non-militarized state like Costa Rica or Japan immediately post-bellum.

The Palestinians claim that would reduce them to a client state.

That would be so if the only source of power in the neighborhood were military force, but the whole objective is to change that.

A Palestinian state would start out as a client state of Israel because trade would be its lifeblood and there is no Arab state that can hold up both ends of a trade route that starts in Palestine. The reasons why are internal governance and waste of assets on military power.

The remedy for Palestinians is not an army. It’s an economy.

Why two states?

There are more Muslims than Jews on the real estate if you draw state borders around Israel plus all the disputed lands. Within those lines, there can be no equal protection of the law, no formal equality.

Democracy and apartheid cannot coexist.

The Two State solution is the only way to have both a Jewish state and a democratic state.

Netanyahu is not pitching Jewish under the bus, but rather democracy.

I do hope somebody can convince Mr. Trump that Netanyahu is not Israel.

I wonder if there’s a point at which the two states idea is dead and cannot be revived?

 *  *  *  *

And this:

There’s a rumble among my generally smart and well informed FB friends that the Two State Solution is dead.

If that is so, whither US policy?

My fascination with democracy means I enter the discussion with one hand tied behind my back. I am unwilling to adopt an apartheid state.

I do firmly believe that a state encompassing all the disputed territory cannot be both Jewish and democratic. After the civilized world sat on its hands during the Shoah, we all ill equipped to veto a Jewish state if casting that veto were doable in terms of domestic US politics. Since it’s not doable, sane people either look for a way to have a Jewish state or a way to break the AIPAC death grip on Congress.

I’m OK with breaking the AIPAC grip because I think it’s counterproductive. It destroys any hope for a US role as honest broker.

There’s no future in supporting an apartheid state.

Here’s what I’m thinking. There is already a substantial Arab/Muslim minority living in Israel.

We should regard the Arab Israelis as hostages to Israeli democracy. At the same time, we should regard the West Bank settlers as offering themselves as hostages to Palestinian democracy.

It is an objective fact that no Arab state has successfully navigated the challenges of democratic government for any length of time. If that means they can’t, then this entire effort is folly. Eventually some Arab state will develop nuclear weapons and the entire region will be laid waste.

The Grim Reaper is the only winner if the Middle East becomes nothing but a tale of three theocracies: Iran as the tip of the Shi’a spear, Saudi Arabia as the tip of the Sunni spear, and Israel as the militarized Jewish state living out the battle cry, “Never again!”

If we must pick a rogue out of that gallery to befriend, Israel is the obvious choice.

The Saudis are the source of “radical Islamic terrorism.” The unholy alliance of the House of Saud with Wahhabi Islam is based on domestic politics, not religion. The Saudi royals have used their wealth to create a social bubble in which they do not have to comply with the austere lifestyle required by the flavor of Islam that same money promotes worldwide.

The Iranian mullahs are the least transparent, and as best I can tell the most sincerely religious. Their aggressive moves are more conventional. They rely on young men from the endless pool of ambitious and unemployed who have no other prospects.

One tide of history running against global jihad is world response to global warming, if we bring it off. The drive to erase Israel from the map is funded by oil money. Should there come a time when oil goes the way of coal, Iran may still have an economy but Saudi Arabia will not.

The Shi’a minority might appear to be economically better off for the long run that the Sunni majority in world Islam, but that’s only so as to Sunni Arabs. And the Saudis still control access to the Hajj, the pilgrimage to Mecca required of every observant Muslim who is able.

Israel is the only one of the three with a 21st century, knowledge-based service economy.

The nations with oil riches could use those riches to leap frog directly to a service economy without ever having had an industrial or consumer economy. So far, they have conducted themselves in the way dictatorships normally do: promise butter and deliver guns.

Another reason to back the Israeli horse is that they have the only economy that can generate internal democratic legitimacy without an outside threat. But if that legitimacy entails second class status for Israeli Arabs, how does that square with our professed values?

Charles D. Hayes: The Trickle-Down Shakedown



One of the most change resistant views in America is the claim that we can’t afford living wages for all full-time employment. Few beliefs are so deeply ingrained in our culture.

People wedded to this idea believe it with a religious fervor equal to their faith in gravity and when challenged they will pull out text books authored by people who qualify as high priests of scarcity.

The religiosity of this acceptance is why geneticist David Suzuki has characterized conventional economics as a form of brain disease. To my thinking, it is simply a case in which the means have become more important than the ends.

We created an exchange system to thrive that metastasized beyond its purpose because of the power of a few to exploit the many. Bottom line examples all over the world show clearly that you can rig an economy for any purpose, it can be to sustain a middle class or mostly benefit the rich and once the rich have legally bribed most of the politicians the latter example is hard to control.

I internalized the trickledown ideology growing up and I used to believe it as they say with every fiber of my being. But after many years of study, in my view, the assumption that living wages for all fulltime employment are not possible in a country where our citizens often claim to be the greatest country on earth is pure unadulterated bullshit.

Three hundred years of global economic history shows decidedly that over time the growth of capital outpaces labor, unless there are safeguards to prevent it.

Competition in the production of goods and services leads to lower prices, competition among businesses for employees leads to higher wages. And this must be considered constantly in a robotic and digital app economy. There are lots of jobs being created that are tasks that need to be done, but they lack the political power needed to demand fair compensation.

Some of our most successful companies pay wages so low that taxpayers must subsidize their employees, and yet, when they announce their executive salaries, bonuses and stock options in the millions and millions of dollars we don’t hear complaints about them having to raise prices for their goods and services. Why is that?

But when employees at the low end ask for livable wages, well connected and well compensated economists will leap out of the woodwork screaming about how the country just can’t afford it.

The reality is that in America, public corporations are openly looted by executives and quid pro quo boards of directors. Even upon going bankrupt executives often bailout with multimillion dollar golden parachutes.

What makes living wages impossible is an echelon of wealthy individuals and corporations with the political power to gain a legislated freeride and escape paying their fair share of taxes.

Unfortunately, all they need to do is send their free market lobbyist missionaries out with messages that some poor fools somewhere are going to benefit at public expense and the distraction is complete, along with the notion that trickledown Kool-Aid is the only drink in town.