Thursday, January 5, 2012

How Lee Atwater Prepared the Continuing Lying Dogma of the Rich (However, Social Security Is Not and Will Not Go Bankrupt!), How OWS (Occupy Wall St.) HAS Made A Difference, Why Apple Represents a Great Deal of What Has Gone Wrong With the U.S. Economy Since 1980, & Driftglass Speaks!

Friends, I need to apologize for the last few days of nothingness here (sorry to all commenters who let me know they couldn't access my Comments section as well) as I may have been hacked. Yes, it's a common excuse for laziness, but believe me when I say that I've had quite a few essays ready to go and lacked the Blogger means to make it happen.

So, please excuse if you can, and although the following may seen a bit dated, they are still quite current in view of the 6:00 News (or 11:00, whichever you watch for your daily dose of mindless addlepation).

Egypt's Women March Against Army In Fury Over Abuse

Aaaaahhhh! Those were the days!

The master of the big lie, Lee Atwater of South Carolina, who trained Karl Rove and many of the other Rethugs in the Bush regime, has been dead (from a brain tumor at 39) since 1991. But his way of doing business lives on. And thrives. Everywhere. (As an aside, Bob Novak (exposer of Valerie Plame) is now . . . (dead) of a brain tumor also.) The biggest lies right now revolve around the "bankruptcy" of the Social Security system and how it's not trustworthy although, of course, it's invested in the safest-in-the-world United States government Treasury notes. Spend a few moments listening to the history of how we came to this low a gulch in political tactics.

by Dale Coberly

Social Security . . . Hearts and Minds

Tom Margenau wrote an essay about the payroll tax holiday in The National Memo Is Your Tax Holiday Gift A Lump of Coal? His essay seemed to me to illustrate one of the problems with the Social Security "debate" as it has been constructed.

Margenau  describes himself as "not very good with numbers," but someone who has been accused of being "a bleeding heart liberal." "But," he says, "this is one liberal who gives the Republicans credit... at least they are willing to talk about it." The trouble with all this is that Margenau does not understand the numbers, so he is giving the Republicans credit for being willing to talk about a problem that does not exist.

This is exactly what "liberals" have been doing: searching, searching for a way to ease their bleeding hearts by solving the huge, terrible problem that only looks huge when you don't understand the numbers.

Margenau cites the famous "in less than 20 years there will be only two workers supporting each retiree." And he proposes "relatively modest changes... bumping up the retirement age.."

You may read his full essay at the place cited. Easiest for me to simply reprint here the reply I sent to him.

"Tom, Your heart is in the right place, but you miss the critical point. Social Security is not welfare. It is critically important that it is not welfare. FDR understood this so he made it "worker paid" insurance, "so no damn pollitician can take it away from them." Social Security was never in trouble. 
All that 3 to 1 and 2 to 1 worker to retiree ratio is lying nonsense meant to impose on people whose math skills are not very good. What it amounts to is that if people are going to live longer... say 20 years after working 40 years, instead of 13 years after working 40 years, they will need to save about one third more each month for their own retirement.
This means raising the payroll tax from 6% to about 8%. And since the change in life expectancy is not going to happen all at once, it means we can raise the payroll tax one half of one tenth of one percent each year.

This is an increase of 40 cents per week for the average worker today. And while the increase gets bigger over time, so do wages. So the increase will never be felt as more of a burden than that 40 cents per week. AND the workers will get the money back, with interest, so they can look forward to a longer retirement with better benefits than today's retirees.
The Republicans were not being more responsible . . . they were telling a Big Lie. They could get away with it because the average person is innumerate, and the average liberal no longer understands the important difference between Social Security and welfare. It is probably too late, but it would help if the people who think SS is important at least understood the facts and the basic principle.
Margenau replied to me that "the worker to beneficiary ratio is not lying nonsense. It is critically important." And indeed it is. It is fundamental. But it doesn't mean what he thinks it means. All it means is that if we are going to live longer we are going to have to save more for our retirement. The "more" is not burdensome.

But working an extra year could be hell for many people. Meanwhile, Our President, and his Friends Across the Aisle have killed Social Security.
They did it by the breathtakingly bold and easy step of just taking away its funding by calling for a "payroll tax holiday."

The Democrats . . . Democrats!... are now running on the issue of making the payroll tax holiday permanent "to avoid a huge tax increase on the middle class." The lying is sickening. But the people will go for it. And the Republicans will cry, "Oh no, not the briar patch! Don't throw me in dat briar patch Br'er Obama."

And laugh up their sleeves while the "progressives" think they have scored a huge win for the poor. And the poor will never understand what happened until they go to retire and learn they've had another year added on to their sentence, or have to go to the welfare office to prove they need "benefits," and they better bring a note from their doctor saying they only have one more year to live.

The only way out of this would be a sudden demand by a hundred million working people to "Raise our taxes! Give us back our Social Security!"


A major reason the lower ratio of workers to retirees is not a problem is rising productivity.  One worker today produces as much output as many workers produced years ago.  Rising productivity means the workers will be able to produce enough output to cover themselves and retirees, even at the lower ratio, with some left over.

Life expectancy and worker/retiree ratios were taken into account in the early days of Social Security.  When Greenspan and Reagan "reformed" Social Security, they updated the numbers.  That fix would have been enough to fund Social Security forever, except they missed one detail.  They set the cap on SS assuming it would capture 90% of national income.  Because of rising inequality, the highest paid take a larger share of national income, so the cap captures much less than 90%.  If we raised the SS cap to once again cover 90% of national income, SS would be fully funded forever.

Even without a change, SS is fully funded for 25 years and almost fully funded thereafter.

The payroll tax holiday provides that SS be funded from general revenues.  It does not reduce SS funding, just changes the source.

The payroll tax holiday provides that SS be funded from general revenues.  It does not reduce SS funding, just changes the source.

At least that's what the first version did.  I haven't seen all details of the latest iteration.
Nancy Ortiz

The problem is that by "making up the difference" with gen revenue SS is no longer paid for by FICA tax alone. The key to its longevity has been its independent untouchable revenue stream. Dale is right that this "tax holiday" gives people the impression that SS is just like any other "transfer" program. Examples of transfer programs are TANF, Medicaid, Food Stamps, and SSI.

Those programs popularly called "welfare" programs are based on need, not work, and are available only to poor people. Thus, SS gets thrown into the mix and magically becomes in Simpson's immortal words an optional provision "for the lesser people." We could well be bargaining on just collecting the revenue to pay monthly benefits every time the clock runs out on a CR, debt limit, or annual budget.

The R's in the House have held the payroll tax holiday hostage over everything you can think of - lately a completely unrelated pipeline project of questionable safety as currently designed. Actually, the Trust Fund is of no importance now in paying for current monthly SS benefits. So, payments to the TF don't matter here. What matters is that there be no question about how SS is paid for, how much is paid, and who pays for it. There are literally dozens of other ways to provide a stimulus to working people - notably, an income tax reduction like the "Making Work Pay" cut of 2009-2010. Instead, we have this disaster. Welcome to austerity. This is how it works.
Nancy O

"Margenau replied to me that "the worker-to-beneficiary ratio is not lying nonsense. It is critically important." And indeed it is. It is fundamental. But it doesn't mean what he thinks it means."

Suppose that Social Security were completely private insurance. The worker-to-beneficiary ratio would work exactly the same way. The point is that the workers provide the goods and services that the Social Security beneficiaries buy. You have to have enough of them and they have to be productive enough. That is the point

I think that there is some confusion over the idea that it is the taxes of the workers that pays for current Social Security. But, as the thought experiment of a completely privatized Social Security shows, that is not the point. It is not the money, it is the actual goods and services that is the question.

Think OWS (Occupy Wall Street) hasn't made a difference? The Rethugs are getting a little bit worried now that the citizenry has been half-awakened by the Wall Street protesters.

They've even started pretending to be shocked, shocked at the gambling that has been going on in their casinos. (But it's okay as they've picked up their winnings already.)

. . . we can expect to see a lot of things like this in an election year marked by an absence of a real galvanizing message coming from either party. With OWS and populist anger generally filling that messaging void, there are going to be a lot of politicians who will look to capitalize by doing things like, for instance, beating up on the SEC in a few days of well-publicized but ineffectual hearings.

Spencer Bachus to position himself as a champion of Wall Steet reform is, of course, hilarious. Not only was he one of the leaders of the opposition to even the very mild Dodd-Frank reform, he went out of his way to stall changes to the rules governing derivative trades that would have prevented abuses like JP Morgan Chase's rape of Jefferson County, Alabama.

This was particularly egregious because Bachus, who was the House's third-biggest recipient of Wall Street money and a heavy beneficiary of donations from Chase, happened to be Jefferson County's congressman.

So this guy is no enemy of the banks. What yesterday's move does show, however, is that politicians are listening to the specific complaints of OWS. A year ago, we would never have even seen hearings like this coming from the likes of Bachus and Barney Frank, who also supported the move. But now, everybody is trying to find a way to ride the wave. It's too early to celebrate any of this, but it can't be a bad thing.

And does this matter in the PR world of today?

Oh yeah.

From the magical world of Driftglass:

With no humanizing attachment to anyone or anything outside of the vile white supremacist culture that saturates his world - with no solid plank of personal experience and fact to nail up against the constant onslaught of the silky lies on which his society is built - be becomes a monster.

The willing dupe for the depraved schemes of Roger Ailes and Rush Limbaugh, willing to fight for slavery or against the Kenyan Usurper for exactly the same reason.

Because a world constructed from the ground up out of one lie bolted to another is a zero-gravity world of mere data - where particles of information swirl undifferentiated and unpolarized by truth or falsity like snow flakes in a snow globe.  It is (a) terrifying place of chaos and eternal falling, and so to orient themselves as they float adrift inside it, adherents desperately crouch on the flimsy deckplates of demagoguery, and the purer the demagogue, the more kinetic energy their arguments pack, precisely because those argument have been stripped of any need to pay any attention to the truth.

This is why both Newt Gingrich's steady stream of napalm-slathered crackpottery and Michele Bachmann's fact-free; steamrolling; monotone comfort the base of the GOP, and why Mitt Romney's endless public rewriting of his source code scares the hell out of them.   Because what the Base believes has nothing to do with whether they are right or wrong as normal human being understand those terms: all that matters is that their bigotry and paranoia is regurgitated back to them in simple, declarative sentences by someone in a suit packing an enormous Bible.

This is the entire idea behind Fox News, Regnery Press and the rest of the Conservative media complex; an idea which has relentlessly distilled the Party of God down to its pure essence - a mob of ignorant, angry Authoritarians who want to follow a loud, bloody-minded Dear Leader into glorious (and cost-free) crusade against hippies and Negroes and...well...whoever.

And Mitt - a demagogue by awkward rote and script, not by nature - represents exactly the kind of weak-kneed, nuance-loving, fact-Nancy that could lose his nerve at some crucial moment and bring the whole House of Atwater down around their ears.

This was all baked into American Conservatism decades ago.

In the 1990s, for example, "being right" on the Right meant the catechistic acceptance of every scurrilous rumor about Bill Clinton as gospel. It meant to exist in a state of perpetual outrage over the imaginary sins and crimes of "Slick Willie" and perpetual contempt of the "Liberal media" for not sufficiently reporting their every paranoid delusion as established fact.

All of which came swaddled in a layers and layers of pious claptrap about respecting the rule of law, "even appearance of impropriety",  and the dignity of the office of the Presidency, and all of  was instantly inverted 180 degrees once George Bush was appointed president by a 5-4 vote.

Because that's how a party-line change happens in closed societies like Soviet Russia or the GOP.

The million words of pious claptrap all (went) straight down the memory how, and "being right" quickly came to mean "shutting up and obeying the Commander in Chief" no matter what the facts said.  Seven long years of endless obstruction, investigation and impeachment were obliterated in one, massive EMP (Electoral/Mnemonic Pulse) of Strategic Forgettery, and, as usual, the Beltway press - ever terrified of being called "liberal" - went right along with the program.

Crimes that would have gotten Clinton impeached were shrugged off and crimes that would have gotten Clinton lynched were laughed off by the Ministry of Truth and their brainwashed, idiot followers.

Eight years of it: all well-documented and on the public record, and now airbrushed into oblivion by the inconvenient election of Barack Obama.

Because that's how a party-line change happens in a totalizing cult like North Korea or the GOP.

And so after another flash of Conservative EMP-powered doublethink and flurry of tri-corner hats, birth certificates and fakes ACORN videos, the  Bush years ceased to exist.  Turns out, by golly, that nobody liked George Bush. Not one little bit.  Nobody voted for him or agreed with him (apparently not even when they were on the payroll.)

And so once again the party's leading hustlers and lunatics scramble up another, dangerously-teetering mountain of lies and pious claptrap to compete for the right to lead an army of bitter morons into another round of Conservative failure and catastrophe.
I wrote an essay detailing my reservations about Steve Jobs' idealization upon his death and why he wasn't the boy wonder he was touted as (except as a self-made marketing paragon). (As a matter of fact, read the essay below and learn why if Steve Jobs had actually been a do-gooder hippie (and not just out for his own ego gratification), you wouldn't have that neat, cool little iPhone in your grubby hands now.)

Marc McDonald over at Beggars Can Be Choosers did a better job than I and, even though I am months late in pointing it out, I'd like to say he embraces what is wrong with idealizing Apple (more capitalization than anyone briefly) as a paragon of business models far better than any writer I've read on the subject yet. Take it away, Marc:

Apple represents a great deal of what's wrong with the U.S. economic system today.

Since around 1980, the U.S. capitalism has increasingly become a "winner take all" system. This corresponded with a trend in which the very top elite in society began seeing an enormous increase in their compensation. These "winners" included everyone from CEOs to movie stars to hedge fund managers to sports superstars.

And nobody was more representative of this new breed of elite "winners" than Jobs.

The only problem is that, since 1980, wages started stagnating for the rest of us. Allowing for inflation, average workers' wages have barely budged in more than three decades.

The result is that America now has the income inequality levels of a Third World nation. In fact, the top 400 richest Americans now own a titanic amount of wealth that exceeds the combined wealth of the bottom 155 million Americans.

And that's only the beginning of the problems with U.S. capitalism today.

However, if you talk to the vast majority of economists today, they'll tell you that the American economy is still the world's crown jewel economy. We have nothing to learn from the likes of East Asia or Europe nations, the economic "experts" tell us. In fact, Europe and China ought to be taking notes from us, they claim.

As an "Exhibit A" of their claims, economists usually point to the great U.S. corporate success stories that have emerged in recent years: Google, eBay, Facebook and, first and foremost: Apple Inc.

While Americans fret over the ongoing destruction of the nation's once world-beating manufacturing base, our free-market economists and globalist politicians tell us not to worry. After all, they claim, high-tech, prosperous companies like Apple will ensure that the U.S. remains economically dominant.

But out here in the real world, there's a big problem with these grand claims. They simply don't hold up to scrutiny.

America, after all, has lost millions of good-paying manufacturing jobs just in the past 10 years. We've lost over 42,000 factories, just since 2001. By contrast, even America's most prosperous and high-profile companies, like Apple, haven't even come close to replacing the job losses in the manufacturing sector. Hence, America's stubbornly high jobless rates (and the even more troubling absence of new well-paid jobs).

For all the grand claims made upon its behalf, it is important to note that Apple is still a remarkably small company. That shouldn't be surprising, considering that Apple doesn't actually manufacture the products it sells. Apple only employs about 50,000 people worldwide. That's a mere drop in the bucket, compared to the great U.S. corporate success stories of the past, like General Motors. In fact, even today, a vastly-shrunken GM still employs over 200,000 workers in the U.S. alone.

A second problem with Apple is that many of its workers are not particularly well-paid. Sure, the likes of Jobs and other company top elites have pocketed enormous pay packages. But the average Apple employees make mediocre wages. In fact, most of Apple's employees simply consist of the unskilled sales people in the company's retail stores.

All of this represents serious problems for any economist who holds up the likes of Apple as an "Exhibit A" of how America's economy still supposedly leads the world.

Economists also hail the likes of Apple's wildly popular iPhone as proof that America is still in the world's technological forefront. At first glance, it appears that this claim is valid. After all, the iPhone is a high-tech marvel. And it is in heavy demand, worldwide.

The problem is: is the iPhone really even an "American" product?

Yes, it is sold by Apple, an American company. Yes, Apple came up with the concept. And yes, Apple does all the marketing.

But who really manufactures the iPhone? If you said, "China," you're only partly right.

The fact is the real heavy lifting and the technological wizardry that makes the iPhone possible comes from Japan (and to a lesser extent, Germany). This shouldn't really be surprising: virtually all of the world's most advanced manufacturing takes place in either Japan or Germany these days.

China does have a high-profile role in the building of the iPhone in that Foxconn, the Taiwanese-owned assembler of the iPhone, has captured a lot of media publicity over the harsh working conditions of its workers in mainland China. By contrast, Germany and Japan's vastly more important role in the iPhone's production is virtually invisible.

But it's important to note that China's only role is the assembly of the iPhone. (Assembly is by far the least sophisticated part of the modern manufacturing process).

The real high-tech manufacturing heavy lifting is done mostly by Japan. That shouldn't be surprising: Japan has long completely monopolized the making of the key, crucial components at the heart of all the world's smart phones.

So is the iPhone really an "American" product?

Consider this: as Robert Reich pointed out in an article in December:

About $61 of the $179 price goes to Japanese workers who make key iPhone components, $30 to German workers who supply other pieces, and $23 to South Korean workers who provide still others. Around $6 goes to the Chinese workers who assemble it. Most of the rest goes to workers elsewhere around the globe who make other bits.

And the share of the U.S. workers (whose role is mostly research and design on the iPhone): a mere $11.

It's clear that the iPhone is really much more of a Japanese product than it is an American product. The key, crucial enabling components that make smart phones like the iPhone possible are made only in Japan. By contrast, the iPhone's research and design work could be done in any number of countries which excel in R&D (everywhere from Israel to South Korea).

Note that barriers to entry for service economy activities tend to be vastly lower than those for high-tech manufacturing.

These days, high-tech smart phones are designed by a number of nations, from Finland to Taiwan to South Korea. South Korea's Samsung, for example, makes phones (like the Galaxy S2) that rival and even surpass the iPhone technologically. And it's important to note that all these nations' phone builders get their high-tech phone components from the same Japanese suppliers as Apple does.

What's troubling about all this is that it completely upends the "conventional wisdom" about the global economy that has been sold to the American people over the past few decades. The conventional wisdom dictates that America's loss of millions of manufacturing jobs was an "inevitable" part of economic globalization. And in any case, we're told, U.S. manufacturers supposedly can't compete these days, unless they move their jobs overseas, where they can pay lower wages.

But if America's free-market economists and globalist politicians ever took a look at the real world for a change, they'd see that the "conventional wisdom" is wrong.

For a start, nations like Japan and Germany are simply no longer low-wage countries. Both have wages that are as high, if not higher, than what U.S. workers earn. Both nations have strong organized labor and strict pro-labor laws that would be inconceivable to Americans. Mass layoffs are virtually impossible in both nations. And the extremely strong yen of recent years has made Japan a particularly expensive nation to do business in. But despite all these "obstacles," both nations continue to go from strength to strength in leading the world in high-tech manufacturing.

(Incidentally, the story that Japan has been "struggling" economically that has been widely peddled by the U.S. media in recent years is nothing more than a myth).

In short, there must be other reasons why the likes of Apple rely on Japanese and German suppliers for key iPhone components. Low wages and low manufacturing costs simply can't be the reason.

It's clear that a big part of the reason is that the U.S. simply can't compete with nations like Japan or Germany in high-tech manufacturing. The reasons for this are many: everything from America's abysmal public education system to our nation's crumbling infrastructure to our complete lack of a logical industrial policy.

By contrast, nations like Japan and Germany have honed carefully planned long-term industrial policies aimed at boosting both nations' industrial competitiveness.

It is extremely unlikely that the U.S. will ever regain its former high-tech edge. After all, no economic activity on earth has higher entry barriers than high-tech manufacturing. This is evidenced by the fact that all the world's high-tech manufacturing these days still takes place in the First World, rather than low-wage nations like China.

To give just one example: aerospace. While Boeing has lost market share in recent years, it hasn't lost it to low-wage Third World nations. Rather, it has lost market share to the high-wage First World producers of Airbus.

Incidentally, Boeing shares with Apple the same distinction of being a U.S. company that increasingly can't manufacture the products it sells. Note that the 787 Dreamliner, Boeing's latest generation Boeing jet, is largely made by overseas suppliers. And Japan is the nation that has the most crucial role in building the Dreamliner: the manufacture of the Dreamliner's extremely sophisticated, high-tech carbon fiber composite wings.

The fact that Japan placed massive early orders for the Dreamliner has little to do with "market forces" and everything to do with long-term Japanese industrial policy. With every new generation of Boeing airliner, Japan has negotiated to manufacture a bigger share of each plane. It's clear the Japanese eventually intend to dispense with Boeing entirely in the future and go it alone in developing its own commercial airliner industry.

It's clear that, far from being a showcase of U.S. high-tech might, Apple in fact reveals many of America's shortcomings in the modern global economy.

And for all the praise heaped upon Steve Jobs over the years, it's clear that his role in making the iPhone a reality was greatly exaggerated.

Jobs' role was akin to Aladdin rubbing the magic lamp. The super-sophisticated high-tech manufacturers of Japan and Germany then brought Jobs' ideas to reality.

Of course, the limelight-loving Jobs got all the glory - which is perfectly in sync with the "winner take all" ethos that characterizes today's U.S. economy. And no doubt, all that was just fine with the industrial planners of Japan and Germany, who are happy to take a low-profile role. The reason for the latter is that, if both nations' roles in the iPhone were heavily scrutinized by the U.S. media, it would shine an unwelcome spotlight on policies that have methodically decimated America's high-tech manufacturing in recent years.

Yes, Apple came up with the idea for the iPhone. But it's clear that other nations benefited vastly more from the manufacturing process of the iPhone than American workers ever did.

And this raises a troubling questions about the state of U.S. capitalism today. America continues to lose millions of good-paying manufacturing jobs. And it's clear that the likes of Apple are simply never going to be able to create jobs to replace those that have been lost. This is no small point when you consider than Apple now rivals Exxon Mobil as America's most valuable corporation.

Today's America continues to bleed the sort of good-paying manufacturing jobs that made possible the Great American Middle Class. The latter made America's economy the envy of the world for decades. The jobs that are replacing the lost jobs tend to be low-skilled and low-paying (think Walmart and McDonald's).

And even the occasional U.S. economic success story like Apple these days offers little to cheer ordinary American workers. After all, as noted above, Apple is not a particularly large company---and most of the jobs it creates in the U.S. are unskilled and not particularly well-paid. The only real U.S. beneficiaries from companies like Apple are the handful of people at the very top, as well as the stockholders (which, of course, are not only in the U.S., but worldwide).

In the 1950s, it was once claimed that "What's good for General Motors is good for the U.S." And actually that statement had a kernel of truth to it. General Motors, after all, in those days, offered hundreds of thousands of workers good-paying jobs that helped built the backbone of the Great American Middle Class.

But economic titans like Apple that outsource all their high-tech manufacturing will never play a similar role in today's economy. And as a result, the once-Great American Middle Class continues to shrink. Today's America has a Top One Percent that increasingly owns everything, while the bottom 99 percent become more impoverished, year by year.

Far from being the "crown jewel" of today's economy, it's clear that Apple represents a great deal of what has gone wrong with the U.S. economy since 1980.

It's inconceivable that a genius like Jobs never grasped the fact that the massive outsourcing of high-tech manufacturing jobs (as practiced by Apple) posed a serious, long-term threat to the U.S. economy. It's a shame that Jobs never used his high-profile position to call attention to this crisis, or to offer proposals to fix the problem. Instead, he was simply happy to outsource everything, make loads of money, and keep his mouth shut on the issue.

Jobs has been hailed as a genius and visionary who contributed a great deal to the U.S. economy. But I beg to differ. In reality, he was nothing more than a narcissistic, greedy, modern-day Robber Baron whose policies account for a great deal of what is wrong with the U.S. economy today as America continues its long-term decline.
Dean Baker takes us inside the secret deals made between what had been formerly termed "liberal" legislators and the creme de creme of the new "conservative" radicals. And it ain't a pretty concoction.

Years ago, members of the elite showed their courage by leading troops into battle. They risked their own lives for the greater good. (Never mind that the wars being fought often did not serve anything resembling the "greater good.")

Things are different today. In the land of the 1 percent, the way you show your courage is by demonstrating your willingness to beat up on the elderly. That gets you bucketloads of campaign contributions, high praise from The Washington Post in both its news and opinion pages, and could even get you named Person of the Year by Time Magazine.

Last week, Sen. Ron Wyden (D-Oregon) stood up to do the big kick. He decided to join ranks with Rep. Paul Ryan (R-Wisconsin) on a proposal to replace Medicare with a voucher-type system. The claim  was that with increased competition, we will be able to lower costs.

Using competition to lower costs; that seems like such a great idea! If only someone had thought of this sooner.

Of course, this has been thought of sooner and tried again and again. Remember Medicare Plus Choice in the 90s? How about Medicare Advantage, the more recent incarnation of the program which still exists? In both cases, analyses from the Congressional Budget Office (CBO) and others have consistently found that they raise costs. And we have been experimenting with competition between insurers in the private sector for decades, and it has not succeeded in holding down costs.

But in Washington, just because something has failed repeatedly is no reason not to do it again, especially if it protects the interests of the 1 percent.

The basic story on health care is not hard, even if we can devise plans that make it very complicated. We spend more than twice as much per person as the average for other wealthy countries. This gap is projected to grow even larger in the decades ahead. If these projections prove accurate, then health care costs will devastate the economy. The huge projected budget deficits are one part of this devastation because we pay for more than half of our health care through public sector programs like Medicare and Medicaid.

It is indisputable that we need to get off this health care cost growth path. There are two ways to do it. One is to give people less care; the other is to reduce the amount of money that we pay providers.

If we look to other countries, what makes costs in the United States so much higher is not that we get more care than people in Canada, Germany, the United Kingdom and elsewhere. The difference is that we pay much more for our care. We pay more to the pharmaceutical industry for our drugs, more to the medical supply industry for medical equipment, more to doctors - especially highly paid specialists - and we pay way more to our insurance industry.

A genuinely courageous senator from Oregon might stand up and suggest ways to get our payments more in line with the rest of the world. But some of the main beneficiaries of these overpayments are in the 1 percent. They are not interested in a solution to our health care cost problem that will reduce their income.

Therefore, if Senator Wyden had gotten up and proposed to reform our system in a way that is likely to bring down costs, he would have been either ridiculed by the media or ignored. Proposing a Canadian-style universal Medicare system is not the way to get on the front page of The Washington Post or to fill campaign coffers, a fact that Wyden understands very well.

If Senator Wyden was really interested in holding down costs instead of denying care, he didn't even have to make the big leap to a whole new system. He could have followed the suggestions that Columbia University economist Jagdeesh Bhagwati and I put forward for opening up the US health care system to international competition.

Wyden likes vouchers. Why not give people a Medicare voucher that would let them buy into the health care systems of Canada or England and split the tens of thousands of dollars of projected savings with the government? Why not make it easier for people to get expensive medical procedures at world-class facilities in the developing world that charge a fraction of the price - and let the patient share in the tens or hundreds of thousands of dollars in savings? 

Why not make it easier for qualified foreign physicians to practice in the United States, bringing down our payments to doctors and our health care costs?

That is what someone who really cared about lowering our health care costs would be proposing. But Senator Wyden doesn't have that sort of courage. Of course if he did, The Washington Post types would do their best to make sure that no one ever heard of the senator from Oregon.

Again, my apologies for the seeming laxity of publishing (due to being hacked possibly or Blogger going off the deep end (again)).


Bustednuckles said...

Raise the fucking limit on wages for having to pay in over 160,000 bucks.
How many times have I seen this?!
If you make ten million bucks, you still have to pay into SS.
Of course the Republicans will shit all over themselves but that is the cure for it, plain and simple.
By the way, FUCK THEM.

Suzan said...

Thanks, sweetie.

Couldn't have said it better myself.

And I believe it's $106K up.

This adjustment abolishing the upper limit will solve any future problem and guarantee the system for hundreds of years. (No matter what the mathematically challenged argue.)

Love you!