Thursday, December 20, 2012

Where I agree with Sen Grassley...

Chuck "Death Panels" Grassley gets something right?  The Mayans may be correct after all.

Wednesday, December 19, 2012

Guns: The culture will change

I won't pretend to have any great insight into why something like Sandy Hook happens, but I know that our gun culture will change. While hundreds of young people get killed every week in our streets from senseless acts of violence, the event in Connecticut seems to have struck a nerve in our body politic.

The NRA has abrogated all moral standing by remaining silent, not just this week but every week that irresponsible gun ownership leads to murder. Why did Adam Lanza have access to guns? Where are the public service announcements about locking up guns?

In an unbelievable news item from today, an 11 year-old boy brought a gun to school in Utah yesterday telling teachers that it was for his own protection in the wake of Sandy Hook. The boy placed the gun to the head of a 6 year-old schoolmate. Ammunition was his backpack.

The kid got arrested, but some adult belongs to that gun. That adult gun owner needs to go to jail. Period. They are not fit to be mingling in our society and an example needs to be made. Whoever has a registered firearm needs to be responsible about it's proper use and the message needs to be loud and clear. Whether the parents approved of the kid taking the gun or not, some adult is ultimately responsible.

I cannot understand why responsible gun owners aren't screaming about this and every instance of senseless misuse of firearms, whether it's shooting sprees in schools and movie theatres, gas station robberies, or shooting up pictures of the president for fun. Instead all we hear is the fear of the government abridging their rights or the fear of someone coming into their house or business. Fear. How about the fear that the NRA's silence on responsible behavior is putting more kids at risk?

On Saturday morning, the NRA, Gun Owners of America, and every gun manufacturer should have been on TV and radio urging every gun owner to lock up their guns. In fact, with the recent increase in mass shootings and chronic gun violence, one would think that the gun makers would have an ongoing, visible media campaign to increase awareness.  What do we hear? Silence. Granted, the nation was numb from the events of Friday at Sandy Hook, but a Sandy Hook happens every single weekend in Chicago or Miami or Oakland-- every damn week-- so the numbness should have festered into a raging fireball of rage by now.

Instead of encouraging responsible behavior, the gun makers trump up idiotic reasons for us to buy more guns, blaming Obama or Nancy Pelosi. The gun culture will change because the national consciousness has been awakened. It's not the president or the politicians who dictate that consciousness, it's us.

The real threat to gun ownership is not Nancy Pelosi; the real threat is that gross negligence is going to lead to public outcry for stricter gun laws. While it may be fun to fantasize about your "man card" or other nonsense related to your tiny penis, eventually the adults in this country will step in to protect the children... by whatever means necessary, second amendment be damned.

I have no idea what kind of laws will be passed in the wake of Sandy hook, but I know something will be done and people will be angry on both sides: either the new laws will be too much or too little.  I also know that laws alone will not change our gun culture; there is no one law or one tenet of behavior that will suffice. A new consciousness about guns-- one that does not glorify violence, does not allow irresponsibility, does not tie guns to manliness-- is necessary, and it's coming.

We can have our guns, but we will (finally) have to grow up.

Monday, December 10, 2012

We're about to transfer more public wealth to health insurers.

Ahhhh, now I get it.

Digby has unearthed a key point in the circle jerk about raising tax rates and cutting entitlements. Avik Roy, Forbes blogger and one of Romney's health care advisers, floats the notion that all the talk of raising Medicare eligibility to 67 years is really about working towards the eventual privatization of Medicare.

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Roy says:
"I have to respond to this interesting hyperbole about Medicare death sentence. If you raise the retirement age for Medicare, we have the Affordable Care Act as the backstop. Everybody under 400% poverty level is still covered with the affordable care act in place. So what we are really talking about is means testing Medicare by raising the retirement age. People who are upper income, above 400% of the poverty level won't be subsidized if they're younger retirees. It's where entitlement reform should go, to expand it into the retiree population."

Here's the deal. Raising the eligibility age for Medicare doesn't save taxpayers any money since the vast majority of those individuals will qualify for the Affordable Care Act subsidy to purchase health care from the private insurers or get Medicaid. Even though they won't be on Medicare these folks will still have government supported health care, only a more expensive form. Roy knows this.

In other words, instead of paying for care directly through Medicare, the US taxpayers will be transferring revenue to the likes of Aetna and United Health Care to act as middlemen for the administration of health care. This adds another layer of unnecessary bureaucracy. Medicare already has very low administrative costs so why add insurers to the administrative mix?

This is the exact opposite of what we should be doing. The more cost-effective solution is to lower the eligibility age for Medicare to age 55 years, with these younger individuals who choose Medicare paying the risk-adjusted cost plus some margin. This does a couple things:

1. It immediately adds healthy, paying people to Medicare, increasing it's solvency.

2. It provides a comparison of younger Medicare patients with private insurance customers for head to head analysis to see once-and-for-all which payer method is more cost-effective. My bet is on Medicare with its economies of scale and huge market power to drive costs down.

3. It allows soon-to-be retired workers to have health insurance independent of their employer, thus allowing more part-time work, mobility, and also relieving employers from having older members in their insurance risk pool.

If my hypothesis is correct, such an experiment would show that Medicare operates better than private insurers and we could eventually allow even younger workers to participate. Of course, the last thing corporate health insurance executives want to occur is such a comparison, and their mouthpieces in Congress will gladly trade higher marginal income tax rates in order to privatize Medicare.  Somewhere Grover Norquist is groaning.

Much to our dismay it appears that some Grand Bargain will be made to annul the "fiscal cliff" and that bargain will include the beginnings of a privatized Medicare system and the resultant huge transfer of public wealth to private health insurance companies via the Affordable Care Act subsidies. 

Pro-tip: If such a Grand Bargain includes raising the Medicare age, shares of United Healthcare (UNH), Aetna (AET), Wellpoint (WLP) and Cigna (CI) should all do well. 

Friday, December 07, 2012

Howard Dean: "We've got to do something about the deficit in this country"

Finally, a voice of reason in the budget sequester/ tax hike debate. Howard Dean, former governor, former DNC Chair and former presidential candidate, appears to be the only adult in the discussion. We already have a bipartisan budget deal, it's been in place for 18 months, so let it play out.

Here is a defense contractor CEO whining about having to cut her budget. Gov Dean points out that there have been no substantive defense budget cuts in 30 years and the greatest risk to our national security is not some outside threat but rather the federal deficit that is approaching 100% of our GDP.

Hickton, the defense contractor CEO, states that the budget deal has no direction and is unfair to the defense industry. Bullshit. It's an across the board reduction in spending, and it's only $600 billion. The direction is clear: we will be spending less money. It's no secret that these projected cuts have been in place for over a year. What have these companies been doing to prepare? Hoping? Ugh.

CNBC leaves no doubt that they want some other deal than what has been passed.. In fact, I have yet to see or read anything in the mainstream media that likes the budget deal that was enacted in 2011 and is about to take place. Too much austerity, too many tax hikes, blah, blah, blah.  Now we have toi endure the "we will not be safe with defense cuts" hysteria?  Please.

The fact remains that this was a bipartisan deal with the goal of eliminating the need for any debt ceiling debate every 8 or 9 months.

Gov Dean states the obvious: we'll get a recession. So? Clean out all the detritus from the economy, the creative destruction that should have happened 4 years ago.  One advantage is that the US dollar would get stronger, helping savers and workers in necessary industries.  

At the end of this clip, Mandy fatuously parrots the mantra that "we need a deal". No we don't.  We already have a deal. Let Congress go on vacation now.

Saturday, December 01, 2012

Let's go over the cliff...

A couple weeks ago I said that the hardest job in DC was Boehner's, and I stand by it.

Obama is playing 11-dimensional chess and the GOP thinks it's checkers. They don't even know the game.

Disclosure: I don't give a damn how or even if the fiscal cliff (god how I hate that term) is resolved. My taxes are going up regardless, and I'll lose nothing from government cuts, so who cares? Cut defense by 1/3. Fine with me.

My financial adviser at Edward Jones sent me an email about the fiscal cliff (Ugh that term!)) and it shows that in the long run we may be better off if nothing is done. If the GOP wants a balanced budget and austerity, this is the way to do it. Let the Bush tax cuts expire, cut federal spending and.... voila!  

Recession now but it's short-lived and we get better GDP by 2014

The deficit hawks in the GOP should love going over the fiscal cliff

If the Republicans want to hold US workers' tax cuts hostage, there's nothing the president can do about it. At some point after January 1, Boehner and McConnell are going to realize how difficult it will be running for re-election after they've raised income taxes on everyone. The president offered to rescind the tax hikes for 98% of taxpayers, but McConnell in his infinite ignorance "laughed" at it. Psychopathic reaction.

And Boehner has yet to offer any plan. From the Guardian:

Boehner was then asked: Do you think the White House is trying to squeeze you? Boehner said he was always ready to work with the other party. But when asked what the GOP wanted to see cut from entitlements, Boehner was no more forthcoming than usual:
"You can look at our budget for the last two years, there are plenty of specific proposals."
A reporter then pointed out that even under the fabled Paul Ryan budget plan, cuts to Medicare wouldn't take affect for years, and didn't Boehner want something more quickly? Boehner did not answer.

And why on earth would President Obama, or the GOP leadership for that matter, sign onto a Ryan budget plan that was rejected by voters in the recent election? 

Check mate.