Best Bushenomics article ever

Larry Beinhart's article on Bushenomics at Alternet is well worth a read. Some of his points regarding the looting of our country that's taken place under Bush:

• With privatization, one dollar out of every three for direct military operations in Iraq and Afghanistan goes to private contractors like Halliburton and Blackwater.
• Most the assets of the United States, our collective wealth, could not be sold off in such a direct manner. The administration instead borrowed against them. They cut taxes while continuing to spend lavishly, creating debt. The debt is owed by all of us, the people of the United States.
• As measured by the GDP, the economy grew by 35 percent between 2001 and 2007.
• Job creation: In the first six years of the Clinton administration, 13.7 million jobs were created. In the same period, under Bush, only 3.7 million jobs were created. Barely keeping up with population growth.
• Median income: That's as opposed to average income (If Bill Gates walks into a bar with 10 people, the average income of everyone in the room goes up by $17,5000,000. But the median income just moves up half a notch, from between the fifth and sixth person, to the sixth person's income). From 2001 to 2005, median income, for people under 65, went down $2,000.
• America's businesses: Under Clinton, the Dow Jones went up 324 percent. Bush arrived in 2001. Since then the Dow Jones is up just 10 percent.
• So where is that 35 percent growth in the economy?

• The M3 took off like a rocket after 2001. The Fed stopped publishing the M3 in 2006. (The M1 is basically cash, plus checking and "current" accounts. The M2 adds savings accounts, money market accounts and CDs up to $100,000. The M3 adds in the big CDs, Eurodollar accounts and other large exotics.)
• The administration grew the economy (or at least the amount of money in circulation), without inflation... If [Bushenomics] had created business growth -- actual business, not just financial business -- that would have created jobs. Then there would have been inflationary pressure. If salaries for ordinary people go up, even a little, the total is a big sum. But due to free trade, outsourcing, bad economic policy, policies aimed at keeping wages down, and relentless union busting, good jobs were lost, to be replaced with low-wage jobs, when they were replaced at all.
• Finally, the Fed kept interest rates down. The supply of money was increased. The price of money was kept artificially low.
• With no new boom to invest in, businesses made loans.
• The loans grew into a bubble...
• No job growth, no business growth, no stock market growth, falling median incomes, disappearing pensions and health plans, and the fall of the dollar.
• The real solutions are pretty obvious and pretty simple. First, we have to make a choice: Do we want a sound economy for all of us and a strong America? Or do we want to have a few people of unlimited wealth who use that wealth, among other things, to control the government so that it helps them milk more money from the rest of us?
• In the real world, there are no such things as free markets. In the real world, business people manipulate and conspire to control markets, and governments both control and collude with business, while tax policies and government spending have a major affect on the economy.
• Simply giving money to rich people doesn't work. Bob Novak, the conservative commentator who calls the investor class "the most creative class," is flat out wrong.
• Money has no mind of its own. It has to be directed toward areas that will generate and support business and good jobs at good wages. As it happens, our economic goals are on the same road as the social good.
• The No. 1 target has to be alternative energy.
• The No. 2 target is infrastructure.
• The No. 3 target is health care.
• The No. 4 four target is a balanced budget.
• How can all this be done? Raising taxes. On the wealthy. And on corporations. That's not class warfare. That's simple practicality.

Healthcare dragging down the economy

The Center for Economic and Policy Research has released "The Good, The Bad, and the Ugly: Job Quality in the United States over the Three Most Recent Business Cycles."

Killer title.

"This report finds that the US economy has created fewer good jobs in the 2000s than was the case over comparable periods in the 1980s and 1990s. The report analyzed annual data from the March Current Population Survey for the years 1979 through 2006 and shows that while the current business cycle has seen an increase in the share of jobs that pay at least $17 an hour, this gain has been more than offset by a decrease in the share of jobs that offer employer-provided health insurance (down 3.1 percent points) and pension coverage (down 4.9 percentage points)."

However, we're saved from being a nanny state. Good to look at the bright side, eh. Thanks be to all those Republicans and Dems who've made it possible.

Right resorts to lies

A couple of Cato Institute directors have resorted to half-truths and lies in an op-ed piece for the LA Times. The piece is titled "Universal health care's dirty little secrets" — those "secrets" evidently being foremost that preventive care doesn't make for healthier populations.

Ezra Klein does a good job of rebutting this, saying that the Cato guys distorted the study that supposedly proved this — and ignored the many studies that show positive correlations between preventive care and better health.

The other "dirty secrets" are similarly deceitful — beginning with the "fact" that the uninsured in the U.S. do get care in emergency room hospitals and via docs, who don't turn away patients just because they're uninsured. And there are physicians who take on an uninsured friend. But those instances hardly make for a "medical home" for a county's uninsured — especially for the uninsured with chronic conditions.

The Cato guys, of course, fell back on the right's frantic claim that there are waiting lists for elective surgery in countries with universal care. The right screams this so often that it's hardly a secret. They never mention the fact, of course, that there are also waits here in the U.S. — and that waits are hardly a secret in Canada. It's a public system that was underfunded and is now doing far better. Their problems are far more publicized than ours are, because it's public. People got mad about it, and they're fixing it. This is a "secret" only in the upside-down world of libertarians.

So will the Canadian system then be perfect — after they work out the waits? Give me a break. What system is perfect? The point is that the U.S. can do much, much better — and that Canada, Great Britain, Sweden and all the others already do much better. Unless you think that paying more and getting less is better. They have better outcomes for less money in a more transparent (and therefore amenable to improvement) system than ours.

Are we really such idiots that we can't do that too? Are we really so wedded to an inefficient, unjust, and uneven system just because it makes some people a lot of money? And employs — at the expense of lives — thousands of clerks, administrators, and marketing managers? Whatever happened to the joy of creative destruction that the right loves so much when it comes to outsourcing factory jobs? Whatever happened to the concept of retraining people whose skills become obsolete in a new, fast-moving economy that supposedly has to be as efficient as possible in order to compete globally?

Is that true in every sector except healthcare?

At least Amy Ridenour has come up with something new in her never-ending quest to ignore our own crisis and instead focus on the problems of others. Kind of like someone in the Philippines ignoring the hillsides of people living in squatter settlements made of cardboard an discarded mattress springs, saying that these folks are sheltered, after all — but look at the problems in Paris! Where so many people don't have air-conditioning!

Ridenour has dug up a nasty op-ed from the London Times about "mixed-sex wards," that makes it sound as though the British regularly share hospital rooms with sex fiends of the opposite sex. It is a scary story, but hardly, as Ridenour says, the one story you should read about single-payer, if you read nothing else this year. And in fact, a more balanced story from the BBC points out that most "mixed-sex wards" are actually emergency rooms. And I can tell you from recent experience that ours are mixed sex too — and that there is the occasional view of an octogenarian's butt. Big deal.

More recently, the scandal in the British papers about their hospital care is that the telephone charges have been increased. Evidently, it's now possible to spend 60 pence on a call before you're even connected. "It's outrageous!" thundered one letter writer. Indeed. I wonder if Ridenour is aware of that one.

Why U.S. healthcare costs so much

Both Paul Krugman and Steven Pearlstein wrote this week about a January report from the McKinsey Global Institute on accounting for the cost of U.S. healthcare.

Pearlstein, in the Washington Post, writes,

Even after adjusting for wealth, population mix and higher levels of some diseases, McKinsey calculated that we spend $477 billion a year more on health care than would be expected if the United States fit the spending pattern of 13 other advanced countries. That staggering waste of money works out to 3.6 percent of the nation's entire economic output, or $1,645 per person, every year.

In laying out with remarkable clarity how and where we overpay, the McKinsey report punctures myths, exposes common misconceptions and highlights realities long ignored in the health-care debate.

Let's start with one the American Medical Association hopes no one will notice, which is that American doctors make a lot more money than doctors elsewhere -- roughly twice as much. The average incomes of $274,000 for specialists and $173,000 for general practitioners are, respectively, 6.6 and 4.2 times those of the average patient. The rate in the other countries is 4 and 3.2.

Pearlstein outlines why the doctors' arguments fall flat against the evidence in regard to why they deserve so much.

He also reports on other sectors of waste, like the pharmaceuticals' outrageous profits in the United States. He ends up with insurance companies' overhead:

Proponents of a government-run "single-payer" system will certainly home in on the $84 billion a year that McKinsey found that Americans spend to administer the private sector portion of its health system -- a cost that national health plans largely avoid. But as long as Americans continue to reject a government-run health system, a private system will require something close to the $30 billion a year in after-tax profits earned by health insurance companies. What may not be necessary, McKinsey suggests, is the $32 billion that the industry spends each year on marketing and figuring out the premium for each individual or group customer in each state. Insurance-market reform could eliminate much of that expense.

Of course, any effort to reduce these excess costs faces determined opposition from well-financed lobbies, which is why many reformers prefer to focus on the goal of extending coverage to the 47 million Americans who don't have health insurance. But doing the one without the other, the McKinsey researchers warn, would be economic folly. Offering universal coverage without reining in costs would add another $77 billion each year in unnecessary and unproductive health spending.

The problem with this analysis is that Pearlstein is saying Americans reject something that a majority of us have said we would prefer.

Will the McKinsey Report sway Colorado's 208 commission, or any of the other state entities considering reform? Will it help progressives at healthcare institutes and foundations move forward? The good people at the Colorado Consumers Health Initiative have reportedly decided to submit a proposal that is based on expanding assistance without reform to the Colorado commission. This is evidently the default liberal position, and it's part of why people have lost faith in the Democratic Party.

You can read Krugman at Welcome to Pottersville, and also the great comments from readers.

Krugman not only cites the McKinsey Report, he ledes with this:

Is the health insurance business a racket? Yes, literally — or so say two New York hospitals, which have filed a racketeering lawsuit against UnitedHealth Group and several of its affiliates.

I don’t know how the case will turn out. But whatever happens in court, the lawsuit illustrates perfectly the dysfunctional nature of our health insurance system, a system in which resources that could have been used to pay for medical care are instead wasted in a zero-sum struggle over who ends up with the bill.

The two hospitals accuse UnitedHealth of operating a “rogue business plan” designed to avoid paying clients’ medical bills.

Can you believe it? That a company led by a CEO who went into forced retirement last year with $1.6 billion in illegal back-dated stock options, is afloat in a culture of corruption?

Could this be the true meaning of "trickle down"?

How can AARP continue to justify using UnitedHealth as their insurer?

For those of feeling jilted by Krugman's embrace of John Edwards' incremental reform plan, his finale to this piece may be more of the same.

McKinsey estimates the cost of providing full medical care to all of America’s uninsured at $77 billion a year. Either eliminating the excess administrative costs of private health insurers, or paying what the rest of the world pays for drugs and medical devices, would by itself more or less pay the cost of covering all the uninsured. And that doesn’t count the many other costs imposed by the fragmentation of our health care system.

How can we possibly get rid of "excess" administrative costs without getting rid of the insurance companies themselves?

Ties that Bind

By Christopher Juniper

In a capitalist society, it is a worthwhile exercise to identify all the forms of capital that we need for our prosperity. The authors of the LASER system for sustainable economic development planning by a community (LASER stands for Local Action for Sustainable Economic Renewal), of which I am one, identified ten forms of capital that a community must plan to build and preserve to support its long-term prosperity. One of them is “human capital.”

Some object to the phrase “human capital” since it implies that all we are good for is usefulness in wealth production. But the people in the public policy arena who have been using this term don’t have that nefarious purpose in mind. It is instead a recognition that each of us wants to be useful to each other, and sometimes we are useful in a way that we are paid for in the marketplace…but if our human capital (i.e. the ability to do work) declines, we are simply less useful to those we care about, both in personal matters and in the marketplace.

Human health is a core component of our human capital. Along with education, family stability and self-esteem it’s key to making us useful in the world.

To succeed in a capitalist system, we each must be good capitalists. To do that, we make investments that build capital – for today and the future. Thus, we must devise a human healthcare system that maximizes the health component of our human capital. Exactly who pays how much for building this essential part of human capital isn’t as important as that we are building it rather than allowing it to decline.

This week in the Colorado Springs Independent, there’s the sad tale of a young anorexic woman who is too weak to work. Without health insurance or savings, she’s become functionally homeless. A Colorado judge has tried to help her — without success. The woman is presently staying with his mother.

Whether you are suspicious of anorexia as a condition that deserves thousands of dollars to treat paid by the rest of us (i.e. why can’t she just start using some discipline and eat?!) as I am, or whether you believe that people are often victims of their own bad judgment in a way that still deserves our compassion for helping them recover (which a significant minority if not majority of us have done to ourselves)

– But the point is that her human capital – the ability to be productive – is zero, and will only recover if somebody invests in her future through a program that helps such folks. Aren’t we all better off if she returns to being a productive member of society?

We have to stay strategic rather than petty in our approach to building the capital we need. Strategic in this case means not only investing in people; it also means understanding the whole-system that is at work either building or destroying our capital….the ties that bind. And there is no doubt that natural capital (otherwise known as environmental health) is closely bound to human capital (or human health).

In short, it is foolish to focus on health care without also focusing on care for the natural capital that also underpins our prosperity. How silly to deplete natural capital – which includes the clean air, clean water, natural beauty, and the pollination services of bees and other pollinators that allow our food to grow (a vast majority of our food is pollinated by wild pollinators – without them we are in big trouble and they are in worldwide decline).

My message is simply this: don’t consider human capital/human health as separate from natural capital/ecological health. They are inextricably bound together. An investment in one enhances the rate of return on investments in the other. And where they come together most dramatically is in the health care system itself – i.e. whether the health care system we choose to fund – however we fund it – is building rather than depleting natural capital. A sustainable health care system includes minimizing drugs that leave our system and toxic wastes that end up polluting waterways; sustainable cleaning systems for health facilities; minimizing energy use in facilities; and maximizing use of the one clear rule for cost-effective human and natural health: prevention is many times cheaper than the cure.

Author Christopher Juniper is vice-president of Natural Capitalism Solutions Inc., a Colorado non-profit that helps nations, communities and organizations throughout the world enhance their prosperity through sustainability practices. He is also co-founding director of the Sustainability Leadership Institute and serves on the board of directors of CORE – Connected Organizations for a Responsible Economy, a partner non-profit of Colorado’s Advance Center for economic development. Full disclosure – he is also happily married to the usual author of Ave Cassandra, Kristen Hannum, who has become a single-payer activist. Both of us believe that a single-payer system is the most efficient way to build human capital in the healthcare arena, and we believe that building natural capital for the future is equally important.