RedState Inspired me. The Best & Worst of 2011 in no particular order.

Worst (Get the ugly out of the way)

I agree with RedState that the Kardashian's represent the absolute worst in what America represents today. However, since I do not know any of my Democratic friends who think differently, their fans must be Republican's.  They certainly do not have many minority fans.

The lies that the Republican candidates are using to try and get the Presidential nomination.  No one is being honest with the voters that a balanced approach is needed to deficit reduction and it must include health care reform either in the form of an improved Affordable Health Care Act or something similar.

The Republican Congress's inability to respect the President and at least let him appoint people to run the government.  Gridlock in the Office of Government Printing??

Where did MF Global's customer cash go?  Unforgivable, but we need the authorities to identify who specifically screwed up and whether it is criminal or not.

Israel's continued expansion of the West Bank Settlements.  How can there be peace if you keep taking the land away from the other side's population?

OK The best

Israel continuing to kick Hamas's pretend Army in the ass with targeted drones blasting the rocketeers to meet their virgins in the sky.

No more Osama Bin Ladan and no more a large number of other terrorists thanks to the drone's and our Navy Seals.

I no longer work for *****; nor do I own two homes anymore.

Everyone I know who found out they had cancer this year, had it discovered early and has a good prognosis for survivorship.

The U.S. economy is recovering; if only a solution could be found for housing so it is more like the cancer story of my friends.  Alas, it is not and the only thing I know is that a government solution is not likely to be a solution.  The market needs to work.  Renting, knocking them down, completing foreclosures, letting paying customer's refinance at lower rates regardless of the loan/value.  Continuing to prosecute the banks is not helping the economy.  Those who committed the ugly loan originations are already out of business.  Taking $ from those who bought them to fix them does not help the economy.  This might belong in the other column.

One of my neighbors in this building is drilling or sanding and it is giving me a headache.  Happy New Year.

Republishing a NYT Blog on Health Care Reform

The Wyden-Ryan Plan: Déjà Vu All Over Again

By UWE E. REINHARDT

Uwe E. Reinhardt is an economics professor at Princeton. He has some financial interests in the health care field.

After wrestling for decades and in futility with the triple problems facing health care in the United States – unsustainable spending growth, lack of timely access to health care for millions of uninsured Americans and highly varied quality of care – any new proposal to address these problems is likely to be a recycled old idea.

TODAY’S ECONOMIST

Perspectives from expert contributors.

The widely discussed new proposal from Senator Ron Wyden, Democrat of Oregon, and Representative Paul D. Ryan, Republican of Wisconsin, to restructure the federal Medicare program for the elderly is no exception.

The idea – generally known as “managed competition” — goes as far back as 1971, when Dr. Paul Ellwood and his colleagues at the Health Services Research Center of the American Rehabilitation Foundation injected it into President Nixon’s attempt at health reform.

Since then, the idea has appeared and reappeared in health reform in many variants and with different names, too numerous to permit a full listing here. Its most sophisticated renderings can be found in the extensive writings on the concept by the Stanford economist Alain Enthoven.

To describe the unifying theme running through these past variants, it is helpful to enumerate the major economic functions any health system must perform:

1. Producing health-care goods and services.
2. Financing health care, which involves extracting money from households (which ultimately pay for all of health care) and funneling it to the producers of health care, usually through the books of private or public health insurers.
3. Risk pooling by private or public insurers to protect individuals from the financial inroads of high medical bills through insurance policies.
4. In most modern societies, assuring that every member of society has timely access to a defined set of health-care benefits.
5. Purchasing medical treatments from the producers of health care, which includes determining the prices to be paid, claims processing for insured patients and controlling overall spending and the quality of that care with various forms of controls lumped together under the generic label “managed care.”
6. Regulating the behavior of the various participants in the system to preserve the integrity of health care markets and the safety of health-care products and services.

Most of the debate over health policy in this country has been over two questions.

First, to what extent should healthier or wealthier members of society be asked to subsidize the health care received by their poorer or sicker fellow Americans? Second, influenced by the answer to the first question, who should perform the functions listed above: government, private nonprofit entities or for-profit entities?

The Wyden-Ryan plan and similar precursors answer these questions as follows:

1. Let government perform the second, third, fourth and sixth functions listed above (financing, risk pooling, assuring access to care, and regulating) but delegate the first and fourth functions (producing health care and “managing” its purchase) to the private for-profit or nonprofit sectors.
2. Let there be a limit to the extent to which healthier or wealthier Americans are forced to subsidize the health care received by sicker or poorer Americans – that is, to the practice of social solidarity.

Together, these two responses may be called “truncated social health insurance.” The chart below illustrates it. Here an individual or a family is offered a choice between two health plans. In practice, such a menu could include many more competing plans.

Managed competition schemes, the Wyden-Ryan plan included, are typically operated through health-insurance exchanges of the sort provided in theAffordable Care Act. Rival health plans, which may or may not include a government-run plan, compete on this exchange under strict regulation of their behavior.

Each insurer must quote on the exchange the total premium it will charge for an assumed standard mix of actuarial risks and for a standard, defined package of health care benefits, as well as the portion of the total premium to be paid by the prospective insured.

Typically in these schemes, insurers cannot base their premiums on the health status and gender of the individual applicant and perhaps not even on age.

If government provides the defined contribution, as under the Wyden-Ryan plan, the health plan chosen by the insured will be sent by the government a premium contribution. In most designs, the contribution is adjusted for the actuarial risk the applicant represents, as best that can be done prospectively. It may also be means-tested, that is, tailored to the insured’s income.

There may also be ex-post risk adjustment, if, after the enrollment season, some some plans end up with risk that is more costly than average and other plans end up with lower-cost risk pools.

The major point of contention in the political debate over managed competition is not over these design parameters. Rather, it is over the nature of the “defined contribution,” which defines the extent to which the concept achieves social solidarity in health care. The crucial distinction here is between “vouchers” and “premium support” (as explained in Section B of this Brookings Institution document).

In a “voucher” system, the level and future time path of the defined contribution is set independently of the time path of the cost of health care per capita. If health care cost per capita in general rises faster over time than does the indexed voucher, the system naturally shifts more and more of health care costs onto the insured. That may be its chief objective.

The plan proposed earlier this year by Representative Ryan and passed by the House of Representatives on April 15 as part of its budget plan is a voucher scheme in this sense. In that plan, Medicare’s contribution to the private insurance purchased by Medicare beneficiaries was to be indexed to the Consumer Price Index, which historically has risen less rapidly than has health spending per capita.

The Wyden-Ryan plan is also a voucher scheme, because what it calls the “defined contribution” by Medicare is limited to the growth of gross domestic product plus 1 percent, adjusted for general price inflation. Historically, general health spending and Medicare spending per capita have risen at higher growth rates.

Alternatively, the defined contribution could be styled as a “premium support” payment whose time path is indexed to the growth in average health spending per capita (in the case of Medicare, per Medicare beneficiary) in a region.

The defined contribution in the Federal Employee Health Benefit plan enjoyed by members of Congress and federal employees is of this nature, as was the “premium support” in a plan proposed in 1995 specifically for Medicare by the Brookings Institution economist Henry Aaron and Robert Reischauer, then director of the Congressional Budget Office and now president of the Urban Institute.

Genuine premium-support models are designed to protect Medicare beneficiaries better against rapidly rising health care costs in general than would most voucher plans indexed to magnitudes that grow less rapidly than does health spending.

By the design of the defined contribution, the Wyden-Ryan voucher plan would be able to constrain the growth of taxpayer financing for Medicare, simply by shifting the risk of rapid health-care cost increases from taxpayers into the household budgets of the elderly.

As I noted in several earlier posts, the hypothesis that managed competition among private health plans can better control the overall health spending per Medicare beneficiary than would traditional Medicare lacks empirical support. It certainly has not worked that way in employment-based health insurance.

That hypothesis remains purely a belief.

Mitt Romney is starting to scare me

I have been trying to keep an open mind about Mitt.  Not that I think I would vote for him for he is sure to appoint Supreme Court Justices that would promote both the Republican Social Agenda and protect Corporate Rights to be seen as a human being when it comes to unattributed campaign contributions.

However, I generally thought he governed Mass. in a reasonable way and he certainly ran the SLC Winter Games in a responsible way, so I have been trying to keep an open mind that he would not be terrible for the country.  This also would allow me to continue to have decent conversations with RSL about this as she has been genuinely considering him favorably.

Now, I am not so sure.  Mitt has said that he would bomb Iran to prevent them from getting a nuclear weapon.  Now he has said we should have kept the troops in Iraq and that means he won't be bringing them home from Afghanistan.  Never mind that the Bush Administration signed the Treaty that forced us to withdraw now anyway.

How will he pay for this?  Bombing Iran is almost sure to create military consequences that I do not believe we can even begin to imagine.  But I can imagine the economic consequences.  Oil will go to $150 a barrel before collapsing as the global economy sinks into a recession.  US Tax Revenues will go down.  Meanwhile, Romney would be promoting tax cuts to stimulate employment when the real problem is a lack of demand.  How exactly does he plan to pay for him military adventures?  How does he plan to balance the budget which we must start to proceed to do in the next administration?

So what would a Romney Presidency look like?  Military adventures continuing in Afghanistan to accomplish what?  We have already beaten Al Qaeda and the Taliban reproduce like rabbits, so there will be no shortage of people who want to shoot our troops.  Bombing Iran will create the potential for Iran to invade Afghanistan and take on US troops directly.  Then what do we do to keep our troops alive and in a "winnable" war? We will never conquer Iran and leave it in the condition that we did Iraq.  Car bombs driven by fanatics will cause tremendous harm to our troops or our troops will be shooting everyone in sight.  Meanwhile, the US Economy will be in a sink hole, our portfolios will be in a sink hole and I don't know how I will ever pay for retirement.   And I am better off than a lot of people.

So while I have previously thought that a Romney win would be good for my savings, I now doubt that.   Unless he is just a blow heart on all this Military Adventure stuff and saying it to win the nomination.  This is one thing I will hope for a flip flop on.  And I will also hope for his flip flopping his flip flop on Mass. health care which the Affordable Health Care Act is almost identical to.

I republish a Washington Post blog, not the best written but you will get the point.

Rubber soul

By Tom Toles

Oh Romney is worried now about the American soul. This from Mr. Bain Capital, soul central! Could it have a more Dickensian name?? The “soul” Romney is talking about is the licence to pursue capitalism in its most cold-blooded form, and define THAT as the “soul” of the United States of America. Way to go, Mitt! You can make your case for this business model if you like, and no doubt you will have more chance to do so, but could you leave the word “soul” out of it, please? WWJD?

And anyway, come on, do the boomer candidates have to keep demonstrating that they are still stuck in the 60’s? This choice between an “entitlement society” and “opportunity society” is so false and outdated as to be laughable, if anybody still recognized ridiculousness when uttered. You could maybe make the case that the Democratic Party, Lyndon Johnson Era, was all about consequence-free program manufacture, but after Bill Clinton and Barack Obama, if you actually took the time to look at their records, which neither the media nor the public actually do, you’d see that centrism and pragmatism have seized the terrain, and you can listen to the howls of the tiny remnant left if you don’t believe me.

But oh oh oh, there’s an eager raised hand waving in the back of the class. WHAT ABOUT OBAMACARE??? Well, what about it? It’s an insurance plan built out of mostly Republican-engineered parts with some added cost-containment wonkery. Health insurance is done either through the government or the private sector, or a hybrid. Obamacare is a hybrid. The ROMNEY HYBRID! Does logic even EXIST anymore? Maybe you want to make the case that people should not HAVE health insurance if they are poor and undeserving. So go ahead, make that case, and see if you can work the word “soul” into your argument.

Oh, How I Wish Bank of America Had Done Some Due Diligence

before they bought Countrywide.

Backdrop:  Back in 2007 when the markets were frothy, I decided that when it was time to invest my bonus I would buy some nice safe bank shares for the dividends.  Sure there might be some volatility, but how bad could it be.  Thinking there were more risks on the International front for reasons that I cannot remember, I bought a little of JPM and C but mostly I bought BAC because they were not that big in mortgages.

Then along comes 2008 and the next thing I know, BAC has bought Countrywide, which was a relief professionally because my bank analyst did not have the foresight to get us out of Countrywide (or anybody else for that matter, may she RIP unfortunately).

Now 3 years later, most of BAC's problems can be traced back to that purchase of Countrywide.  You all know about the RMBS lawsuits, but the reason I write this today is the news that Countrywide was pushing "qualified for prime status minorities" unnecessarily into subprime loans.  Now while I realize these people should have done some homework to protect themselves, it was sleezy behavior on the part of Countrywide.  Not to mention all the other sleezy things Countrywide and the others were doing originating liar loans and any number of varieties on that which have turned out poorly.

Sadly, I as a shareholder with a full time job did not have the time to do my due diligence on what any of the banks were doing, but I would have assumed that BAC would know what Countrywide was doing in general and figured out in due diligence what they were doing specifically and walked away from this mess to protect their shareholders.  Oh wait, I have a dim memory they tried to but the Bush Administration made them go forward.  Thank you Hank Paulsen!

It is now clear that BAC did no due diligence and we shareholders have suffered mightily.  That is how capitalism works so I am only kavetching (sometimes it is hard to know how to spell a Yiddish word) and expressing remorse that the management team "I hired" did not do their job better.

Of course, they walked off with huge paydays upon their exit because the Boards take care of their own and that is why I am at least sympathetic with the Occupy Wall Street crowd.  Even if I am perhaps a target of theirs.

Wise Words From jennifer Hudson

"In a recent interview, I was asked how I reconciled being a Christian with performing at events for my gay fans. I find it upsetting that some folks equate being a Christian with being intolerant of gay people. That may, unfortunately, be true for some, but it is not true for me. I have talked often of my love and support of the gay community. I have said again and again that it was the gay community that supported me long before and long after American Idol, and kept me working and motivated. It is the gay community that celebrated my voice and my size and my personality long before Dreamgirls. Yes, I was raised Baptist. Yes, I was taught that the Bible has certain views on homosexuality. The Bible also teaches us not to judge. It teaches us to love one another as God loves us all. I love my sister, my two best friends and my director dearly. They happen to be gay. So what? While some search for controversy, I hope that my friends and fans who know me, know where I stand."

I Don't Believe It

I just took an ABC on-line test to see which candidate positions were most in line with my own.

The fact that it showed President Obama as my 1st choice was not a surprise and not the reason for the title.  It was my 2nd and 3rd choices.  #2 was Michele Bachmann and #3 was Ron Paul.  The latter is not so surprising as I am a state rights guy and a libertarian on some points but #2 is a shocker.  I have no idea which position of hers and mine line up.

This is Going to Cruel

But I cannot resist.

It has to come my attention somewhat belatedly that Sarah Palin's second child, Track, is also facing a shotgun wedding, as did his older sister.  Apparently, Sarah who preaches abstinence over birth control and sex education didn't do such a good job teaching her own kids her values.

At least she is not in this looney Republican campaign.

Don't Hold Your Breadth But Could Compromise in the Middle Be Happening

A Republican Congressman in a leadership position, Paul Ryan, and a Democratic Senator, Ron Wyden have actually put forth a theoretical template to extend the Affordable Health Care Act principals to Medicare and, for some not old enough to be in Medicare, extended some Medicare concepts to the Affordable Health Care Act.

Not I am far to cynical about any Republican's intentions to not be concerned that Ryan's participation in this is a "Sheep in Wolves clothing".  But this proposal would separate health insurance from employment for some, thereby invigorating the market for individual health insurance.  It would also preserve a public option in the Medicare bracket while introducing competition to control costs.  If a public option works for the older set, why wouldn't it work for the younger set.  It could even use the Medicare infrastructure.

Now as I wrote a few weeks back, true cost control is a complicated process.  It includes getting everyone paying for health insurance, even the healthy, and getting people out of the emergency room and into non-emergency care through them having health insurance.  It includes getting away from paying for service and paying for events.  Simplifying billing through centralized process is another element.  And yes, tort reform is needed as is allowing Medicare to negotiate for lower prices on pharmaceuticals.  Both of those require Acts of Congress and competition will do nothing for it.

But something about this Ryan/Wyden proposal smells like it is a good path forward to both getting health insurance to everyone and controlling the costs.  We can only hope this is true for our fiscal dilemma.

Thomas Friedman Once Again Catches Up With Me

Here is the key excerpt from what he wrote today


"As for Newt, well, let’s see: If the 2.5 million West Bank Palestinians are not a real people entitled to their own state, that must mean Israel is entitled to permanently occupy the West Bank and that must mean — as far as Newt is concerned — that Israel’s choices are: 1) to permanently deprive the West Bank Palestinians of Israeli citizenship and put Israel on the road to apartheid; 2) to evict the West Bank Palestinians through ethnic cleansing and put Israel on the road to the International Criminal Court in the Hague; or 3) to treat the Palestinians in the West Bank as citizens, just like Israeli Arabs, and lay the foundation for Israel to become a binational state. And this is called being “pro-Israel”?"


I have never written about #3 because I don't see Israel going that way.  Following Path #1 or #2 is where I fear conservatives in both the Israel and the U.S. will go when the only reasonable path to a permanent peace is a 2 state solution.  Now I don't expect a 2 state solution to bring peace immediately.  But what I do expect is after the Palestinians have their state and Israel has to invade it on a temporary basis to get rid of terrorist activity, eventually the people will hold their Palestinian  leaders responsible for the lack of peace and the Palestine Government will start to act like one.  Then peace will be possible.  But until then, the Palestinian leadership cannot control the terrorists because there is too much acceptance of the terrorists within the Palestinian population.


Go to the NY Times.com to find Freidman's full column where he discusses how secular American Jews like myself are losing our connection to Israel.  Growing up I knew I had distant relatives somewhere in Russia, Hungary or parts in between and I knew that they had not likely survived German occupation in WWII.  So to me, Israel's foundation was always just and appropriate.  But Jews have survived all over the world through time by remaining true to their religion while adapting to the environment around them.  Israel's conservatives and their U.S. supporters have forgotten this.  Israel can only survive as an honorable Jewish State if they remember this.

How does a Drone Crash and not Destroy Itself?

While some are trying to make this the President's fault, I don't see how it is anyone's fault except the CIA pilot. You want to know something about Iran, what better way to find out then send a drone over it.

What I do not understand is the following.  These things fly at an altitude of at least 10,000 feet and maybe 30,000 feet.  So wouldn't it be standing operating procedure for a malfunctioning drone to crash from it's flying altitude and destroy itself.  Somehow, the great minds in the CIA ranks managed to fly this thing down to an altitude where it did not destroy itself.  You would think the CIA above any other agency would plan for contingencies and act in a prudent manner.

Not destroying the drone was a huge mistake.

Physicals and Regulations

Well there's a headline that is lucky if it attracts any of my non-regular readers.  B!O!R!I!N!G!

But here goes.  Today I had my annual physical.  All is well, which is good because my better half is undergoing chemo.  But, my Dr. let me know this cheery statistic.  80% of 80 year old males have prostate cancer!  Since I plan on living at least another 22 years, that means I have an 80% chance of getting prostate cancer.  Well I hope they figure out some better ways of dealing with it.  Right now, everyone I know who has had it, had the organ cut out and rebuilt their muscle controls.  That is not how I want to spend my days, so maybe I will go with the radioactive seeds and develop a glow you know where.

So where does regulation come in. It doesn't directly.

The NYT had two excellent columns today detailing how the Republican's are screwing up the progress the country could be making on key issues with their intransigence.  Neither column was written by RedState's favorite foil Paul Krugman which shows that even middle of the road columnists like Joe Nocera and David Brooks see the issue in the manner I do.

Mr. Nocera wrote about what the unconfirmed temporary appointed (and now resigned) Head of Medicare Dr. Berwick was able to accomplish in his 18 months trying to get people healthier with shorter stays in hospitals and reduce the cost of health care.  Of course, he was only able to just get started because Medicare is like a gigantic aircraft carrier on a medium sized lake.  Why did he have to quit?  Because the Republicans blocked a vote on his nomination.  Mr. Nocera explained why Dr Berwick is the most qualified person to accomplish this important task, but because he once praised a single payer plan.  Well Medicare is a single payer plan for U.S. Citizens 65 and over and it does need its costs fixed.  Beyond me why the Republicans wouldn't vote for someone committed to reducing its costs.

Mr. Brooks wrote how President Obama has included business people in his regulatory process.  62% of the people the administration meets with regarding regulation are business people.  Only 16% are activists.  Furthermore, President Obama has not increased regulatory costs as much as President's Reagan, Bush I and Bush II.  And I bet if you took out Dodd-Frank, the Gulf Oil Spill, and the Affordable Health Care Act, regulatory increase has been close to zero.  Now I don't know about you, but I think the Banks' that gave us our current economic mess should be regulated better.  Certainly, Halliburton, TransOcean and BP (and the others) need sufficient oversight to make sure another Macondo oil well spill does not happen again.  And as someone with a family member with a preexisting condition, I am glad that we will be able to buy health insurance when COBRA runs out.

yet, the Republicans are campaigning to undo all this supposed regulation.  I hope the Democrats defend themselves aggressively.  Mr. Brooks ran through a thought process that disputes these regulations are causing the employment problem and points out that two of the areas with the greatest increase in regulation (health care and energy) are actually the source of job creation.

As I pointed out recently, the Republicans continue to run on this point because they have no other solution to the employment problem and they think they can convince the voters that regulations create and maintain unemployment.  Republicans really want to pursue the same policies that Bush II used and put us in this mess.  I hope a sufficient number of voters see this my way in 11 months.

A Must Read

http://www.bloomberg.com/news/2011-12-01/raise-taxes-on-the-rich-to-reward-job-creators-commentary-by-nick-hanauer.html

Ding Dong, I just got something

The Republicans keep blaming Obama for creating regulations that are preventing job creation when the real thing preventing job creation is a lack of demand for the supply additional workers would produce.

Yet, the Republicans keep hammering on this regulation thing.  As far a I can tell, all the regulations they want to end are doing things to protect people from unscrupulous business people who have money to give to Republican candidates.  I mean who knew that imported apple juice would have arsenic in it.  Juicy Juice has it for God's sake and that is a brand that I used to work for, although I no longer think Libby's/Nestle still owns it.  And who wants their 3 year old to be ingesting arsenic.  Maybe that is why we have a problem getting kids out of HS and into college.

So what did I just get.  The Republicans have nothing else to talk about because everything else they want to do just enriches those who have wealth and they have no plan to create employment.  So blame regulations and keep at it.

By the way, housing/credit bubble bursts take 5 to 10 years to work through.  This one started in 2007 so  it will end sometime in the next two administrations.  The issue is how we get from here to there and which party you think will do more damage.

Since the Republicans want to return to doing more of what Bush II did and that caused this mess, that is not an environment that I want to encourage.  And the Democrats want to improve Health Care, keep a lack of regulation from harming us and bring about a balanced budget in a responsible way.  That is something I want to support.

RedState thinks I am not really a conservative, but then Richard Nixon, Nelson Rockefeller, Ronald Reagan or George Bush I would not be nominated by the current Republican party and my policy beliefs are not that different from theirs.  So am I no longer conservative or has the current version of Republican conservatism moved so far to the right that it is no longer mainstream.  48 weeks to go.