Archive for the ‘The Stupid Economy’ Category

Different Economies

March 2nd, 2013 No comments

I don’t know how they balance  checkbooks in Washington, but every time I increase spending and borrowing around our place the household economy goes straight to hell. Mind you, banks need our loan interest to thrive and grow, just as corporate manufacturers need us to buy their latest products, but a certain comfort and sense of independence comes with saving, not borrowing, for one’s needs. If these needs are simple and fail to bolster the national economy, then all we can do is hope the government will muddle through without our help a while longer.

— Peter V. Fossel, Organic Farming: Everything You Need to Know
(p. 18)

Fix the economy by fixing “healthcare”

August 4th, 2011 No comments

Yesterday’s post from Charles Hugh Smith has what may be the most sensible “fix the economy” plan yet.  It’s simple (not simplistic) yet challenging.  Like the simple plan for physical fitness (“Eat better.  Exercise more.”) the difficulty isn’t in figuring it out; the difficulty is in actually doing it.  While Smith has 3 major points, I’m going to focus on #2 in this post:

 You Want to Create Jobs?  Here’s How

The only engine for jobs is small business, so quit pandering to global corporations and start pandering to the people who might actually hire someone in America. The back-of-the-envelope number bandied about is that small business creates about 60% of the new jobs in the U.S. I suspect that’s a number from a decade or two ago; in the real world of the present, it’s more like 90%. …

The U.S. economy is hobbled by two systemic burdens: sickcare and the insolvent “too big to fail” banking system. Both act as enormous taxes on the productive citizenry.

You want to create jobs? Then stop diddling around with cargo-cult Keynesian “stimulus” which just props up the least efficient and most parasitic elements of the economy: the banking sector, Wall Street, cartels and fiefdoms. Keynesian stimulus is simply another facet of the Wall Street/bank/corporatocracy Status Quo: we’ve already squandered trillions in “stimulus” government spending, and very little has trickled down to the businesses which might actually hire someone in the U.S. It is a failed policy precisely because it is entirely Status Quo.

If we really want to create jobs, we need deep structural reforms. Rearranging the deck chairs on the Titanic–i.e. trimming the payroll tax 2%–is meaningless. Here’s the to-do list for those who are serious about creating jobs:

2. Reduce healthcare/sickcare costs by a third, from 17% of the nation’s gross domestic product (GDP) to 11%–then reduce it again to the level of Australian and Japan healthcare costs, around 8% of GDP. Sickcare is truly pernicious, as it acts as an 8% “useless tax” on the economy: if our developed-economy competitors can provide healthcare to all their citizens for literally half of what we spend per capita, then we are instantly uncompetitive just as a result of sickcare….

If you read the history of healthcare, it seems more an historical accident than some well-thought-out plan that employers were saddled with providing healthcare insurance for their employees. This was workable when healthcare was 1% or less of a workers compensation, but now that it’s 50%, and millions of people work part-time or are contract workers, it no longer works on a systemic level. There is nothing written in stone about this system, and in a “freelance nation” it no longer makes sense…

The common-sense solution to cut healthcare costs in half is a dual system: a VA-like system with universal access but strict cost controls and no profit, and cash: buy whatever care you want, from whomever you want. Don’t like the VA system? Fine, save your cash and buy whatever care you want, no restrictions. Don’t want to work for the VA system? Fine–get your license to practice medicine and set up shop, cash only.

This would not be a painless transition; after all, the cartel-Medicare/Medicaid complex has been on a hiring spree ever since the cartels realized there was literally no limit to how much they could bill the government. (Recall that 40% of our sickcare costs are paper-shuffling, embezzlement and fraud. That’s what’s incentivized, so that’s what blossoms.)

But the reality is that cutting sickcare in half would restore it from a “profit center” to actual healthcare in the hands of primary-care physicians.

The ultimate answer to improving healthcare is community-based healthcare. As long as isolated “consumers” have few incentives or local options for improving their own health with their peers and primary-care physicians and nurses, then improving health is fighting the headwinds of marketed illness via junk food and techno-entertainment inactivity.

If you don’t like these solutions, then come up with your own, but they have to cut U.S. healthcare spending per capita in half. Nothing less will create a competitive economy.

I essentially agree with this.  If ObamaCare had looked like this, with a modest but universal health care system for everyone, with “cash is king” freedom to seek alternative/additional treatment outside the system, all while removing the burden of health care costs from American employers, I would have supported it.

Instead, we got a monstrous inversion where the government, instead of supplying health care to citizens, supplies citizens to insurance companies.  This does nothing to address the cost or the power of the “sickcare” cartels.

This brought to my mind an article by John Michael Greer regarding the history of fraternal lodge organizations, which mentioned the “lodge trade” — how in the past, community-based lodge organizations would hire doctors to provide medical care for their members:

Lodges also provided health care to their members. The arrangement, once known as “lodge trade” among doctors, makes an interesting contrast with the corrupt monstrosity masquerading as health care reform currently lumbering its way through the US Congress. Each lodge simply went out and hired a doctor, usually on an annual contract. The doctor received a flat monthly salary from the lodge, and in return provided whatever general medical care the lodge members and their families needed. If it had a large enough membership, the lodge might also hire a couple of visiting nurses and a dentist on the same basis. Notice that this arrangement gave the patients a meaningful voice in health care quality, and imposed an effective limit on prices: a doctor who provided substandard care or charged more than the lodge wanted to pay would simply find himself out of a job when his annual contract came up for renewal…

Now it’s only fair to mention that as the lodges began their decline, they found the skids liberally greased by several outside factors. The American Medical Association, for example, spent much of the twentieth century in a sustained campaign to break the lodge trade system. Look through back issues of the Journal of the American Medical Association from the 1920s, 1930s, and 1940s and you’ll find any number of editorials denouncing lodge trade, and for good reason: the lodge trade system placed the concerns of health care consumers ahead of the financial interests of the medical profession. In the 1920s, the average doctor made only a little more than the average plumber; the end of lodge trade, and of a variety of other arrangements that subjected health care to the economic discipline of the market, was central to the shifts that produced today’s six- and seven-figure incomes for doctors.

It’s easy to see how a revived “lodge trade” could dovetail with the proposed “VA-like” government / cash dual system proposed by Smith.

Pros: Would achieve the social benefit of basic health care for all Americans while reducing costs and improving American competitiveness.  At the same time, it would preserve the freedom of Americans to choose their own healthcare (subject to what they can afford to pay, of course – but that’s already true).

Cons: I’d hate this with a burning, visceral, existential passion if I were a doctor, a malpractice lawyer, or owned lots of stock in pharmaceuticals, medical equipment, and insurance companies.

What am I missing on the pro/con lists?


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A Failure Of Leadership

July 19th, 2011 1 comment

The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the US government can not pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our government’s reckless fiscal policies. Increasing America’s debt weakens us domestically and internationally. Leadership means that “the buck stops here.” Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.
— Sen. Barack H. Obama, March 2006

As the French saying goes, plus ça change, plus c’est la même chose.


June 28th, 2011 No comments

Ilargi at The Automatic Earth writes about the Greek Debt situation:

Tanks in the street of Athens, and people throwing themselves out of windows. It’s come to this kind of threatening language, and in the next 48 hours or so it will only intensify, and financial markets will fluctuate because of it as if that’s their very and only purpose in life.

The words about the tanks and suicides come from one of Greece’s newly fangled fat twin political duo, Theodoros Pangalos, the deputy prime minister who appeared out of nowhere the past few days, as far as that is physically possible for someone his size.

Look, I’m not trying to make fun of fat people here, it’s just the irony that the fact that the “face” of Greece in the international financial media has overnight changed to these two huge guys that no-one outside of the country had ever heard about before. And that they’re the ones threatening the Greeks with hell and brimstone if they don’t agree to austerity measures that will make a substantial part of the population go hungry. “We all have to tighten our belts now”, that sort of thing. Well, those are quite some belts to tighten.

"it's as big as a whale, and it's about to set sail!"

Wow.  Looks like, for austerity measures, they could start with “think globally, act locally.”

While entertaining, why does this affect us (Americans, that is)?  Read on:

But yes, do ask yourself: what do you think would happen in New York, LA, Atlanta, Chicago, if those Greek austerity measures mentioned above would fall on the doorsteps of your community? Same question for those of you living in London, Berlin, Amsterdam, Montréal.

Maybe this is a good time to speak up. At least now you still can. Once there are tanks in the streets, that may prove to be not so easy anymore. Look, Greece is not the worst of the lot, or the biggest issue. As Jon Stewart pointed out last week, Greek debt amounts to some $44,000 per capita. In America, it’s $45,000.

We’re all in this together, believe it or not. US banks have exposure to Greece through credit default swaps to an extent that nobody can define. We do know, though, that it’s substantial. And that if the Greek austerity vote fails on Wednesday, those US banks will come looking for more bailouts. From a government that can’t even agree on a debt ceiling, because the debt is so monstruously high already there is no way out anymore.

I doublechecked — the quoted number is low.  As of today, the per-capita share of the U. S. debt is $46,027.83 (direct from the Treasury divided by the Census).

It’s also fun to compare Greek vs. U.S. unemployment numbers, but for right now, I will leave that as an exercise for my readers…


April 6th, 2009 No comments

The G20 leaders display the gravitas necessary to reassure a nervous public that all will be well.


February 18th, 2009 No comments

"I do not think that word means what you think it means"

February 11th, 2009 No comments

When I see headlines like these:

Up Next for Bankers: A Flogging

Bank CEOs flogged in Washington

Instead of pictures like this:

or this:

I really, really want to see pictures like this:

What Dale Said

November 22nd, 2008 No comments

Let me see if I have this straight…

(1) Dubious financial minds come up with even more dubious [read: bullshit] derivative “securities” upon which transactions are based, and our Congressional masters sling the financial industry $700bn, no questions asked. In fact, the entire premise upon which the bailout was approved even gets changed in midstream, but no worries.

(2) Auto industry which employs hundreds of thousands (over a million if you kick in the cascade effects) and remains the largest part of the American manufacturing base asks for $25bn to get it through until new cost-saving labor agreements and reduced legacy costs kick in, and the answer is “Clear it with Countrywide Chris and Subprime Barney first.” Oh, and you boot John Dingell for the Mayor of Whoville in the process.

Yeah, we’re watching here in Michigan. Which reminds me, a word of advice for Senator Dick Shelby: I can’t recommend sticking your schnozz north of Toledo for the foreseeable future–you’ve become a household name on sports radio, of all things. And not remotely in a good way.

Other than the fact that I don’t listen to sports radio — my thoughts exactly.

Impressions of Detroit

November 13th, 2008 No comments

John Michael Greer shares his impressions of Detroit:

I spent the flight staring out the window at half a continent’s worth of scenery while trying to fit my head around Bateson’s take on systems theory or the tangled syntax of some scrap of atrocious medieval Latin, and spent the ride from the airport to the hotel in suburban Auburn Hills taking in glimpses of Detroit: long-abandoned factory buildings in ruins, gritty slums with colorfully named churches and every third house boarded up, posh suburban neighborhoods with ostentatious yards, huge office buildings breaking the skyline, and then the huge mass of Chrysler’s headquarters complex looming up beside the freeway like a pharaoh’s tomb. I half-expected to see an inscription out of Shelley’s Ozymandias there:

My name is Iacocca, CEO of CEOs;
Look on my works, ye bankers, and despair!

I'm Shocked, Shocked to Find…

October 23rd, 2008 No comments

Captain Renault, I mean, Alan Greenspan “shocked” at credit system breakdown

WASHINGTON (Reuters) – Former U.S. Federal Reserve Chairman Alan Greenspan told Congress on Thursday he is “shocked” at the breakdown in U.S. credit markets and said he was “partially” wrong to resist regulation of some securities.

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