Thursday, September 26, 2013

Dunkin’ Shammy

Apple users around the world upgraded to IOS7 this past week.  9 million people just bought new phones.  Many of them succumbed to the scam that went around the Internet:  that the new operating system would make their iPhone/iPad/iDevice waterproof  It’s silly, really, to think that people are gullible enough to think that a software update would impact hardware.  I must admit a certain amount of amusement that I had in reading some of the outraged comments from people who upon learning of this feaux-feature prompted took their phone out and dunked it in water to verify.  It shouldn’t however, be surprising that people fell for it – millions of people vote for politicians who promise the same sort of reality-bending premise as the Apple scam.
Senator Ted Cruz has been vilified by both the Republican and Democratic establishment for his demagoguery of the Affordable Care Act (aka “ObamaCare”).  He has spent months cruising around the country, leading Town Halls, airing television commercials, extolling the horrors of the law.  To be clear:  I dislike this legislation and I think it doesn’t do what it purports to do and I think the country would be better off if it found a death panel.  That said, I know that it is the law of the land and has been validated by the Supreme Court and it will begin to be implement October 1, 2013.  Despite my own distaste for the policy, much of what Senator Cruz has propagated just isn’t accurate.  Even more than misleading on the facts, the real problem is that he made a promise that couldn’t be delivered.  The entire campaign was a false premise. 
People were exhorted to contact their Congressperson, their Senator – and tell them to “defund ObamaCare.”  Millions did.  CNN’s recent poll shows that only 39% of the American public supports the bill.  Polls, as always, are not the holy grail.  When Fox News polled Republicans whether they supported “Obamacare” only 14% did.  In the exact same survey they then asked the same people if they supported the “Affordable Care Act” and 22% did.
Congress last week approved a Continuing Resolution that would fund the Government, but defund the President’s signature legislation.  With the Senate in Democratic hands and President Obama still in the Oval, there’s no way that legislation is ever going to become law.  This reality means that the people who vigilantly made calls, wrote letters and believed that if they took action then they’d get rid of ObamaCare were actually sold a waterproof phone.

Implementation of the program will happen in fits and starts, and in short order the policies will become part of the Entitlement Culture of the United States.  Along with Social Security, Medicare, the Prescription Drug Program – 35% of the American GDP is spent on an Entitlement program, some 62% of all government spending.   As ObamaCare/Affordable Care Act becomes part of this system, the same people who don’t want the Government to touch their Medicare/Social Security, etc. will be saying that about their health insurance.  Too bad we don’t have a Shammy to sell them to absorb the water from their dunked phone.

Thursday, September 19, 2013

Crazy is as Crazy does

Another gunman has gone on a shooting rampage.  Everybody from politicians and opinion makers to John and Jane Public express outrage.  Partisans get behind their well-worn(out) talking points.  “See what happens when guns are so freely available.”  “Who needs this type of gun to hunt?”  “Background checks.”  “Violent videogames (tv shows, books, comic books, etc.) are the cause!”  “We need to deal with mental health.”  There’s actual merit in each point, but it’s crazy what America does with the least sane amongst us.

According to the National Institute of Mental Health, mental disorders are so common that approximately one quarter of adults are diagnosable for one or more disorders. The main burden of illness is concentrated among a much smaller proportion (about 6%) who suffer from a seriously debilitating mental illness.
I’m not a doctor, haven’t studied the nuances of psychiatry or psychology outside of my own personal issues and don't play one on TV.  Despite this limitation and with all of the political incorrectness I can muster:  anybody who takes a gun and goes to a public place and mows down innocent people is nuts.

It takes resources to tackle this issue.  According to NIMH in 2006 (the last year data is available) $57.5 billion was spent  which is 6.2% of all healthcare spending. 23% went to pharmaceutical costs, 22% to physicians and other professionals, and the remainder was split amongst various types of institutions, hospitals, administrative costs, etc.
On October 1, 2013 – days from this posting – the Affordable Care Act affectionately known as ObamaCare – will take effect.  (Well the parts that they haven’t postponed or exempted will kick in.)  This trillion dollar program isn’t the one-stop-shopping healthcare Armageddon that right-wing conservatives have been warning against and that many left-wing liberals wanted.  Instead it is an insurance company bonanza, with the Government mandating that individuals either buy a policy or penalties kick in – both at the individual and employer level.  The idea is that with more people insured, then there’s more money in the healthcare system to service everybody.  It’s about providing access to healthcare…not actual healthcare.  (Congress received an exemption from the Obama Administration so it won't have to apply the law to itself.)

The legislation compounds the biggest problem in healthcare:  insurance itself.  Anybody who’s had to navigate the system for themselves or a loved one knows that the costs and problems lie within the insurance system and its various rules and policies.  Those regulations have been imposed by various government agencies at the behest of insurance lobbyists. And the circle is therefore complete.

In theory it’s great to get more people access – but with deductibles, co-payments and other restrictions, how many people will get actual healthcare?

As a free market capitalist, I have to admire the insurance companies and how they’ve totally co-opted the healthcare industry.  When Richard Nixon began Federal regulation of the healthcare industry 40 years ago it was unimaginable that anybody other than doctors would be making medical decisions.  Today the first African American President’s signature legislative achievement is the one that further cements the insurance companies at the center of the healthcare system and doesn’t help out sick people.  As somebody who’s seen friends and family suffer (and die) because of these rules and regulations, I’m at complete odds with myself.
Health can’t be a commodity that is bought and sold.  The balance between capitalism and socialism in healthcare that existed for generations it out of whack.  It is time for the pendulum to swing.  American citizens (like every other first world country) must be able to walk into a medical facility and obtain treatment – whether it’s for a broken limb or a broken spirit – and not have the economic impact bankrupt them and their family.  Crazy thinking, right?!?

Thursday, September 12, 2013

From 1 to 99

Five years ago this week the world changed.  A series of events occurred in the first 2 weeks of September 2008, sparking what’s known as “The Great Recession.”  In the mid to late zero’s (00’s) I was part of the 1%, falling within the upper echelon of wage earners in the U.S., owning multiple properties and investments while giving away 20% to various charities.  I worked hard providing 7-figure returns for the companies I was managing.  I was laid off in January 2009 and did not obtain regular and consistent employment until December 2011 – three full years later.   In that time I lost savings, 401(k), all my properties, investments and ultimately filed for personal bankruptcy.  I went from the 1% to the 99%.

I’m not the only one.  The typical family in America lost $50,000 to $150,000 based on a study released this week by the Fed.   

What brought this on this devastation was a most eventful month, with several key decisions by the Government:

·         On September 7, 2008 the U.S. government tookover Fannie Mae and Feddie Mac – effectively nationalizing the mortgage market. 

·         One week later the U.S. government engineered Bank of America’s buying of Merrill Lynch.

·         The Government didn’t help Lehman Brothers and it collapsed the next day, filing the largest bankruptcy in US history.

·         The next day AIG was downgraded followed by the U.S. government lending $85 billion to the company, saving it from bankruptcy.

·         A week later Washington Mutual is seized by the Government (FDIC) which facilitated the sale of its assets to JPMorganChase.

·         On September 29 the Emergency Economic Stabilization Act goes down to defeat while -Citigroup tried to acquire Wachovia (that ultimately went to Wells Fargo, thanks to the Government’s change in tax law).

·         On September 30 the US Treasury Department changed the tax law (without approval or consultation from Congress) to allow a bank acquiring another to write off all of the acquired losses for tax purposes.

·         On October 3 President Bush(43)  signs a slimmed down one-page resolution, HR1424 that took the place of the failed measure the week before that authorized a $700 billion bailout.  There were rules, policies or protocols included.  It becomes known as TARP – Troubled Asset Relief Program in the hopes that the funds would be used to help out distressed assets.  Instead the bulk of the funds are used to recapitalize the now larger US Banking institutions.

The review of these major events is stunning at the level to which the U.S. government thwarted capitalism.  When companies fail – whether it’s through mismanagement, fraud, stupidity or even circumstances beyond its control, they must fail.  They must collapse for it’s only out of the rubble that something new can be built.

Today the U.S. cobbles along with a weak economy, shored up by trillions of dollars “printed” by the Fed.  The American economy was once driven by consumerism, profits and losses of companies and now it is nearly totally dependent on the policies of a Central Bank, lending rates, and monetary availability.  China and Russia similarly have economies driven by Central Bankers.

Had the companies that were failing been allowed to crumble the pain would have been momentarily greater, but it would be over.  Consider the Hostess Company last year – it dissolved, was broken up and less than a year later Twinkies are back on the shelf from another owner.   People lost their jobs, but new ones were created.

My own personal experience was years of difficulty because I tried to maintain a life that I didn’t realize I would no longer afford.  Had I known regular employment was so far off many choices would have been different.  Ultimately when it was clear I was going to lose everything, I did.  Today I am going strong, just with a different lifestyle, a different focus in a different city.  No regrets.

The U.S. must do the same – it must allow capitalism to work and allow pain to happen.   Fundamental changes to the regulatory environment haven’t happened, and in fact may be worse.  The institutions that were “too big to fail” are even larger today.  More risks exist today.  Government must stop holding onto those halcyon days of the early 00's.  The lessons of 5 years ago must be learned by Government to make sure that the U.S. doesn’t go from being a 1st world nation to one of the other 99.

Thursday, September 5, 2013

Inferno pants

Children taunt each other with “liar liar pants on fire” – whose etymology dates to William Blake’s 1810 poem “Liar.”  Watching cable news or reading various posts on the Internet – we see that the grown up version isn't all that different.  PolitiFact adopted the phrase in its determination of politicians who they determine are less than truthful.  Blog writers tend to go hyperbolic and use inflammatory rhetoric to make their points – something I have diligently tried not to do over the past three years and 165 posts.  Today could be different.  Today I can understand why names are called, and there is now the risk that the pants aren’t just on fire – they’re an inferno.
President Obama did not have my vote in 2008 or 2012.  My policy differences with his platform are significant.  He articulated a vision for the country, a set of ideals and a variety of plans to fulfill his goals.  A majority of registered voters (but a minority of constituents) chose his plan over the other options.  Twice.  Arriving at the Oval Office it’s inevitable that one’s perspective changes.  Going from criticizer-in-chief to commander-in-chief dictates a different strategy. 

Anti-war, passionately and effectively poked  holes in all of the errors, mistakes and fallacies of a nation engaged in multiple wars
Won the Nobel Peace Prize and has transferred troops out of Iraq to Afghanistan.  [The U.S. in 2013 has no troops in Iraq, but instead funds tens of thousands of private contractors (former US Military) there.]
Expanded U.S. presence in Africa’s war, deploying thousands of “advisors.”
Had US lead the bombing of Libya and is advocating the same in Syria. 
Maintains a private kill list where he alone determines who lives and dies, including Americans. 
Health Care for everybody
“Obamacare” is insurance reform that benefits for-profit entities while not increasing access to care or addressing medical costs. 
Spoke of fiscal responsibility and reducing the deficit while growing the economy with "green" jobs.
The economy’s slow recovery still has some 22 million Americans under or unemployed.
Trillion dollar deficits look to continue and have mortgaged the future for generations.  Presidential predecessors racked up some $13 trillion.  Obama has added another $4 trillion. 
The constitutional law professor he swore he’d follow the rule of law.
He guaranteed transparency. 
Under his leadership the U.S. government has the ability to spy on its own citizens without any due process. 
For the first time in American history journalists have been indicted as ‘co-conspirators’ and ‘traitors’ for doing their job.  Administration officials who leak information favorable to the Government are not sought out but those who reveal something embarrassing are charged as criminals.

Each of Candidate Obama’s promises were punctuated with the refrain “Yes We Can.”  The country, even those of us who didn’t vote for him, were left with a sense of optimism and confidence that while he was unlikely to achieve all that he hoped – we could count on him to work within the framework he provided.  As President it’s all about what can’t be done.

These differences are vast.  It’s not that just one policy has changed due to circumstances.  George W. Bush (43) campaigned against “nation building” and after 9/11 focused his entire administration and foreign policy on doing just that.  While I passionately disagree with that choice– at least Bush explained the disconnect, and owned it. 
It’s not just the conservatives or tea-party members who are upset with the President.  Matt Damon, the liberal actor-director put his feelings very genteelly, and quite accurately:  “Obama broke up with me.” 
Barak Obama had the potential of being a transformational figure in world politics.  He rose to that for LGBT rights – becoming the most pro-gay President in history.  We need more of this.  Can he restore within himself and the country the hope and inspiration that has gone from a strong flame to just a flicker?  He has to, for the world needs Candidate Obama.  He can do better and he must.  Can he?  Yes he can.  We may not agree on the how – but he must succeed.  We’re here to douse the embers, not fan the flames.  It's in nobody's interest to have a President whose pants are a flaming inferno.