You are currently browsing the monthly archive for April 2009.
Please note that I have added links on the left sidebar (just under the blogroll) to allow you quick access to contact your elected representatives. Write to them early and often (sort of like they vote in Chicago). Elected officials read their mail and are influenced by your emails, letters, and phone calls.
If when you write, you are civil and write a letter that you would read and respond to, you will get better results than if you write with insults and invectives.
I would love to have a copy of anything your write. If you will copy your emails to email@example.com, I will read it and, if I agree, will also send the text to your representative (and maybe mine).
Hope you like this new feature on my blog.
Will Swine Flu become a pandemic?
Will it become the heart and soul of a new drive for universal healthcare in the U.S.?
Will it become an excuse to enter Mexico to take out drug cartels in the name of international health?
Will Swine Flu become an excuse for the U.S. to close its border with Mexico?
Will it show the weakness of a universal healthcare model, like Mexico’s, or will it do the same for a private system like in the U.S.?
If Rahm Emanuel* has anything to do with the answers to the above questions (and I think he does) I am sure that the Obama Administration is spending a great deal of time planning how to use this crisis (or charade) to their political advantage.
* – “You never want a serious crisis to go to waste.” – Rahm Emanuel
Don’t Trust Your Government!
That is the message we read in today’s Wall Street Journal. The article tells how Paulson and Bernancke forced Bank of America to buy out Merrill-Lynch without disclosing to stockholders the huge losses yet to come for Merrill.
If you believe that the article is factual you can’t help but be:
2. Ashamed of our Government;
3. Worried about other such events about which you know nothing.
4. Amazed that Mr. Obama has not fired Paulson and Bernancke.
I can’t imagine that things like this are happening in our country. In Angola, maybe. Here? Never. It is yet another sad day for all of us who believe in our country and want it to be good and above reproach.
Chatting with a friend today we were lamenting the demise of the U.S. Auto Industry.
It is hard to believe that GM will sell half the company to the U.S. Government to relieve about half its debt. Then it is offering most of the rest of the company to the United Auto Workers fund that will pay pensions (instead of GM) after this year.
Chrysler’s problems are well known. Now our government is telling it to join with FIAT or fail.
My friend, who is innovative by nature, came up with an idea for Ford. Advertise to any and all that Ford, the one who didn’t take Government money, is still alive and kicking, AND (here is the good part of his suggestion) you should support Ford if you support capitalism. Now that could backfire if it turns out that most of the employed people left in the country work for the government and want to see us a socialist state. Somehow, in spite of all that is happening in our economy, I think most people still think Capitalism is better than Socialism and would vote with their dollars and buy Fords.
Of course, they may have no other U.S.-made automobile choice within a couple of months.
Why hasn’t Warren Buffett or Bill Gates bought out GM or Chrysler, trimmed it down to size and made it work? Is only our Government stupid enough to think it can do things better in Detroit?
1. Releasing memos about interrogation techniques used during the Bush Administration was, IMO, a huge mistake that will come back to haunt Mr. Obama. It now appears that the Administration and/or Congress will go after attorneys who advised the DoD and CIA on the limits of interrogations. The U.N. and many foreign powers want to see more Americans disgraced in public. It also sounds like those who gave commands to extract information (by means they thought were within the law) may also find themselves interrogated and possibly prosecuted for “wrong doing.” There could be no better way to paralyze our intelligence gathering community and no worse time to do so.
2. Forcing Chrysler to join forces with FIAT sounds like something a Dictator would do, not the Democratically elected President of the United States. Is Mr. Obama an expert on the automobile business? Is his staff? Why does it seem like the Government should leave well enough alone and let Chrysler fail on its own or succeed on its own. This reminds me of a new owner of a football team with a losing record. Going down on the field and telling the coach what to do rarely has any effect other than to make things worse.
3. Meeting with Republican leaders last week, Mr. Obama mentioned at least 4 times that he did not like the fact that not a single Republican had voted for his Stimulus Bill. He made it clear that when it came time for Healthcare policy, they would not have a veto on what he wanted to do. In other words, “I’ll teach you.” Republicans complained that their input had been completely ignored on the Stimulus and their only hope to be heard was to stonewall the all Democrat bill. Mr. Obama promised to be bipartisan and seems to show more each day that he will be bipartisan as long as both parties agree with him.
Number one above is the most troubling because the intelligence community needs our support and we need their product. There have been no attacks on American soil since 9/11/01, in large part, many experts believe, due to the great work done by our intelligence community.
Number Two is troubling because Government has no right or duty to step in and take over business. That is called socialism. Last I checked we were a Federal Constitutional Republic and economically a capitalist nation. Maybe I need to check again.
The third is troubling because it says something bad about Mr. Obama’s personality. The fact that he feels he has to get even to show who is in charge sounds like Jr. High School. I thought Mr. Obama was above that. I still hope he is but actions like last week make me wonder.
Haven’t posted in a while and hate the feeling that people think I might have given up when it is just be a case of way-too-busy.
To solve the problem, I have written a few posts that are not time sensitive, and I will plan to have them post automatically each week on Wednesday. That way there will always be something new, at least once a week. As usual, I will post things of interest (to me) at any time, when I have time. The only real difference is that if you only want to check in once a week, you will get a new post and will be able to see any of the random posts generated since the previous Wednesday.
Hope this makes the blog more user friendly.
Last week, “Tea Parties” were held all over the country to protest government spending and taxing without representation. Kari Chisholm, the founder of Blue Oregon, a liberal blog in my home state, wrote a very derogatory post about the event in our state Capitol, Salem. For background, Kari runs a political consulting firm and hates (that appears to be what liberals do) all things conservative. That he wrote this piece and made fun of all the Conservatives is to be expected. To wit, he wrote “Memo to teabaggers: If you’re so concerned about government spending, how about cleaning up your mess – rather than expecting government employees to clean up for you? Didn’t your parents teach you to leave a place better than you found it?”
He accompanied his post with this photo.
A comment made to the post came from “Tim Trickey” saying:
With the greatest respect, you don’t know what you are talking about.
The steps of the State Capitol were left far cleaner than they were found. I know, because a number of us stayed around and not only picked up every piece of litter, but swept up the dust on the steps.
I understand all your political objections to the “Tea-Party” protest, but please don’t promulgate the false assumption that we left a mess behind.
The contrary is absolutely the case, and many of us worked hard to ensure we had a minimal impact on the Capitol and left it cleaner than we found it.”
Then another comment, this one from “Jonnie”came in with the attachedvideo .
Funny, he (Kari Chisholm) did not respond to either comment which he always does when he has something clever to say.
Last night, 60 Minutes, the CBS News Magazine had a piece on the 401k Plans and how many people have lost much of their life’s savings.
The piece was slanted to show 401 (k)s as being the problem. To give credit, 60 Minutes did interview a 401k industry supporter who clearly stated it was not the 401 (k)s but the economy and the decisions that had been made. It also did point out many fees that most investors are not aware of and in doing put them on notice.
The part that irked me was the interview of Brooks Hamilton, a pension planning consultant. He said, “401(k)s turned out to be so much cheaper than funding pensions, that many companies decided to freeze their pension plans and replace them with 401(k)s.” The clear implication was that Corporations dropped the “more expensive” defined benefit plans in favor of 401 (k) plans for money, period. Also clearly implied was that Companies care only about profits and don’t think about employees.
That is less than half the story and is extremely misleading. The other half is the series of events that caused Companies to move away from the old-style “defined benefit” pension plans. The fact that the plans were cheaper was one factor, of many, behind the move to 401 (k) plans.
Much more important was the liability issue. Some history: Until 1978 with the restatement of ERISA (The Employee Retirement Security Act), most companies offered Defined Benefit Plans. Defined Benefit Plans were created such that an individual employee was guaranteed a certain pension amount for life based on a number of factors like pay rates, years of service, etc. To guarantee this payment, Companies had to hire an Actuary each year to do a complete review of the plan and its assets and liabilities. If a company did conduct an annual actuary review and if they invested in anything other than highly risky investments, the Board and the Officers had no personal liability. In fact, most companies paid the PBGC (Pension Benefit Guarantee Corporation) to protect the pensions of their employees. The avoidance of personal liability changed over through the mid ’80s and ’90s. Increasing plaintiff activity and changes to the rules and laws by Congress, the SEC and FASB made it increasingly more dangerous for a company to have a defined benefit plan. The 401 (k) turned all investment decisions over to the employees and thereby eliminated most of the personal liability so feared by corporate officers and directors.
On top of the increased liability, corporate officers and directors were faced with a huge financial hit when interest rates dropped in the early 2000s. According to FASB Rule 87, the funding of liabilities for Defined Benefit Plans was tied to the average of the past 4 years of Treasury Bond Rates. As rates dropped from 7% or 8% to 2% or 3%, the companies had to double and triple the amounts held to cover pensions. Simply put, if it took $5 million to cover $350,000 in pension payouts for a year at 7%, the number the company had to put aside went to over $11 million at 3%. That hit the balance sheets and took profits from everyone. Investors who expected a dividend could kiss them good-bye. One solution was to convert to a 401 (k) plan.
The fact is that lots of people have lost a lot of money in the market. How a 401 (k) has performed is more dependent upon the decisions of the owner than on fees or decisions made by the Companie who offered the 401 (k)s. Those 401 (k) owners who chose the guaranteed low percentage return lost nothing. Those who chose Mutual Funds with large foreign investments lost 60% or more of their money. To blame the companies for the poor financial decisions of 401 (k) owners is poor judgment and editorializing on the part of 60 Minutes. Most of the “reporters” on that show are old enough to know better. Maybe they are just trying to justify their own losses which were due to their own poor investment decisions (they would call it ‘greed’ if it were done by a Corporate entity).
I was going to list Mr. Obama’s proposals one by one and then discuss what is right and what is wrong with each. I have decided that it would take me too long and no sane person would read it all. So, instead I will present a brief list of things I question about Mr. Obama’s plan, a list of the areas where I think Mr. Obama is on the right track, and my list of things I think we should consider to improve our healthcare delivery system.
Where Mr. Obama has it WRONG:
First and foremost, I disagree with the basic premise of the OBAMA PLAN that Healthcare is a basic right. Mr. Obama’s entire argument for Universal Healthcare is based on this assumption. Mr. Obama claims that since healthcare is a right, it should be provided for all people. In his view, the way to do this is to place the burden for providing healthcare on a government agency funded by taxpayer dollars. His assumption is wrong. Healthcare is not a basic human right. Is it a basic right to have three meals a day and shelter over your head? Is it a basic right to have clothing? Is it a basic right to have a job? How about a television? Ensuring that all citizens are healthy is a lofty and well meaning goal. Asking you, no, requiring you, to pay for treatment for your neighbor who drinks a quart of gin and smokes three packs a day is not the way to achieve that goal. Second, placing all healthcare in the hands of a government agency will only guarantee mediocre care or worse. Just look at what sick Canadians do. They come across the border to get good care here if they can afford it.
Where Mr. Obama has it RIGHT:
An ounce of PREVENTION is worth a pound of cure. Mr. Obama is right when he says that we need to spend more money and effort in preventing ill health. He is also right to emphasize using current technology to manage healthcare records. And, I think he is on the right track to suggest that health insurance should be portable, allowed to move with the person regardless of where he or she works. None of these recommendations requires universal healthcare or a government managed system to be implemented.
Here is the list of Healthcare issues and my take on each:
1. Cost –
I agree that healthcare costs have risen more than they should, effectively pricing many companies and individuals out of the market. Some of this is due to Medicare and Medicaid paying below market prices for services therefore pushing the costs to the private sector to pay. Some is caused by providing emergency room care for those who are not covered by insurance plans. Some is caused by an adversarial relationship between providers of worker’s compensation and regular health insurance. This drives up legal and administrative costs. Part is due to a legal system that has no limit on its rewards for successful lawsuits and the pressure that puts on Physicians and Hospital liability insurance costs. Some is due to Hospitals keeping up with the competition by buying all the latest technology. Much is due to a less healthy population. We are fatter, more sedentary. The list goes on but none of the reasons suggest Universal Healthcare as the solution.
We would go a long way toward controlling costs if we would do the following things: 1. Emphasize prevention. If insurance companies were allowed to sell health insurance based on the health of the individual (like they sell life insurance based on the expected life of the individual), there would be incentives to remain healthy. Businesses could buy better coverage or at lower prices if they could show that they have healthy populations. 2. If we had 24 hour care supplement insurance to replace Worker’s Compensation insurance, the same company would cover an employee whether his lung disease was the result of smoking or his work environment. In the current situation, the worker’s comp company fights with the regular health insurance company to see who pays and how much. Legal costs, alone, add dramatically to the cost of his treatment. 3. Pass a cap on awards, especially “pain and suffering” awards for medical malpractice lawsuits.
2. Healthcare Delivery – Do the economies of scale offered by a huge government health system offset the one-size-fits-all care and impersonal treatment that normally result from putting care in the hands of a large organization like the federal government? My belief is that working within a government health system would more resemble working with the IRS than working with a local clinic or hospital. Kaiser Permanente is a huge HMO. It has done a great number of things that are very positive and usually ranks near the top in cost containment, customer satisfaction, and prevention. Even though it is a good example of how a huge organization can give (generally) good care, I seriously doubt that a federal government delivery system could do what Kaiser has done. And, though Kaiser is near the top in customer satisfaction, that still doesn’t come close to the satisfaction levels of patients of small local clinics. Most consumers don’t like working with the IRS and will want nothing to do with a federal government controlled healthcare delivery system.
3. Prescription Costs – I believe that the U.S. and Switzerland are the only two countries that pay full price for prescription drugs, but, that is only part of the reason drugs are so expensive. The cost to bring a new drug to market are driven by FDA requirements that exceed those of almost every other country. We need to look to see if this system can be improved. We tend to believe there is a silver bullet out there for every problem. It is easier to prescribe a pill than to change behavior. Doctors are trained to ‘fix’ things with drugs. We need to look carefully at this paradigm. Many drugs are badly overprescribed. This greatly increases medical costs in general. It has been argued that much of what is prescribed for the aged and most prescriptions of ridilin are used to control patients behavior to make it easier to care for them.
4. Legal Costs – I think that our legal system drives costs for care higher than they would be if limits were placed on awards in most malpractice litigation. I also believe that the adversarial relationship between the Worker’s Comp and Health Insurance companies drives legal, and therefore medical insurance, cost upward significantly.
5. Prevention – The key (and one of the few) success of many of the nationalized healthcare programs in Europe is the emphasis on prevention. The only true way to lower medical costs is to require fewer medical interventions. Prevention is the path to this goal. There are lots of ways to approach this, worthy of at least another post, but I like the annual risk assessment and health screening used by Kaiser Permanente better than any other ideas I have seen.
6. Portability – I think that a good argument could be made for encouraging both insurance companies and employers to provide portability to the insurance plans they offer.
7. Insurance – I like Mr. Obama’s idea of an insurance plan for catastrophic care. All basic insurance could be reduced in cost dramatically if the cost of catastrophic care could be insured outside of the regular plan. How this would be done in a cost effective way, I am not sure, but would like to hear ideas.
8. Stem cell Research/Cloning/Abortion/Euthanasia/Assisted Suicide – Each of these items becomes a hot potato issue and can derail honest discussion of the basic healthcare delivery issue. I think that these fall mostly in the area of personal decisions. Handling these things at the State level and even the local level sounds like a better solution to me.
9. Bonus Issue – Is healthcare a right or a privilege? As I said above, I think the major flaw in Mr. Obama’s plan is that it is based on the false premise that Healthcare is a right. When I am in a cynical mood, I think the only justification for calling healthcare a right is to bring the power (that comes with controlling the healthcare of the people) to the Central Government.
I think it is important that we have a national discussion of healthcare delivery. Though far from perfect, I think it would be very instructive to look at the history and practices of Kaiser Permanente. Their success is based on three key practices which I think we would be well served to consider: Pay Doctors who are part of an HMO a Salary thus removing incentives to perform unnecessary procedures; carefully manage hospital stays and move patients to less expensive clinics or home for much of the recovery period; and most important, in my mind, is their emphasis on prevention – annual health assessments.
I would appreciate your thoughts on any and all of this.