Showing posts with label Politics. Show all posts
Showing posts with label Politics. Show all posts

Thursday, December 7, 2017

Why people have such a low opinion of politicians

A recent Gallup poll (Nov. 2-8, 2017) put Congress’s approval rating at 13%, disapproval at 81%, and 6% with no opinion. The short answer why so many disapprove is that we believe the vast majority are unprincipled.

Principled politicians carry the same core beliefs whether they are in power or out of power.

House Republicans yesterday again demonstrated their that belief in state’s rights applies only when they’re not the ones telling the states how to act. If enacted, the law they passed and sent to the Senate would allow anyone with a legal concealed-carry right in their own state to take that right with them when they travel to states with more restrictive policies. For example. Arizonians, who do not need any permit for their concealed-carry, would be able to conceal their guns while traveling in Maryland, which has a very strict concealed-carry policy.

One might cynically think this vote is a payback to the National Rifle Association, which has been pushing this, for their contributions. That may be, but it also shows the Republican Congress believes it knows better than Maryland what their citizens really need. Funny, how when the Federal Government under Democratic control proclaimed transgender people should be able to use the bathroom of their choice—well, that was gross overreach and an issue that should be left to the states.

President Trump’s shrinking of two Utah national monuments illustrates a lack of principles by both parties. Many Republicans have maintained that states should have free rein to manage national lands “because they know best.” One can and should discuss whether lands acquired by treaty belong to the whole nation or should be deeded to the state in which they belong. Regardless of one’s personal position, Trump has consistently said national lands should be run by and for the states. By that measure, his trimming of the monuments is principled.

However, candidate Trump and Republicans in general decried President Obama’s executive orders and proclamations as unlawful, unconstitutional overreaches of presidential power. Yet once he became President Trump, and with Congressional Republicans cheering along, he has used these same strategies to pursue Republican objectives.

Democrats do not show principles, either. Many Democrats are now decrying President Trump’s “overreach.” Such decisions should be left to Congress they now say, ignoring their eight years of approving President Obama’s use of executive power to achieve his agenda.

Elections should, of course, have ramifications. Those who support the policies put in place during the Obama administration will not look favorably on Republican changes. They should have done a better job of electing their candidates. To decry the mechanism of power now that they don’t control the levers is not defensible.

However, Republicans have learned nothing from the mistakes Democrats made in unilaterally passing legislation with sweeping national consequences. Democrats pushed through Obamacare without soliciting expert opinion on all the consequences. The public did not like it then, in large part because Democrats never brought them into the process; Democrats overstated some and never clearly explained other benefits (remember “nobody will lose their insurance”?), and they never admitted to the costs.

The Republican tax bill process has done them one better on all these counts. Only 32% of people approve the plan, while 48% oppose it, and 20% don’t know enough to do either.

Republicans universally decried Democrats for pushing through “Obamacare” without bipartisan input—and have sunk even lower with their tax bill by rushing through a 500-page bill with repercussions that affect every individual in the US.

The process is deeply flawed. It has been said that people would be sickened to see how either sausage or legislation is made. Making last-minute changes and pulling all-nighters didn’t work well when we were in high school and college, so why does Congress think their constituents would applaud this approach to running the country? Politics, as Bismarck said, is the art of the possible and requires compromise.

Last January, Senators Grassley and Lee introduced an amendment to the constitution to require the Federal government to have a balanced budget. Without the new tax legislation, we are running budget deficits of a half-trillion dollars a year. Both senators voted for a tax cut that will increase Federal debt by over a trillion dollars. In the House, multiple balanced budget amendment bills have been introduced and co-sponsored by Republicans who voted for the tax cut.

Kudos to Senator Corker who did take a principled stand against increasing the deficit and voted against the bill.

No principles. No respect. No solving the enormous financial problems facing our country.

To quote Trump: “So sad.”

Monday, October 9, 2017

Has We the People become I the Individual?

I belong to a group of bloggers called Writers Who Kill. It’s not meant literally, of course, but as mystery/suspense/thriller writers our writing includes murder. My books have included mass poisonings, many shootings, attempted suicides, and in my current WIP Empty Promises (Seamus McCree #5), a rock becomes a murder weapon.

In the wake of this month’s Las Vegas mass-shooting, I again debated with myself whether writing novels with violence abetted the epidemic of killing in the United States. The easy counter-arguments to those worries include that, given my sales, I’m not even a blip on the collective social conscience. If I removed even that blip, people would read someone else. However, even if something does not matter because it is only a drop in the ocean does not mean the drop is acceptable.

Other countries love murder-mysteries as much as we do in the U.S. They even read many of the same bestsellers as we do, and yet their rates of violence are significantly lower. Something other than reading choices must drive our levels of violence.

The answer might be our heightened sense of individualism and low sense of community responsibility. Unless confronted by incontrovertible evidence, we choose individual freedom over individual or collective safety. We choose individual freedom over individual or collective financial costs.

Evidence, Jim; we need evidence. Our choice to interpret the Second Amendment to the U.S. Constitution as an individual right to buy nearly every kind of gun and ammunition available has led to 1.5 million gun deaths in the last fifty years. In comparison, in the combined U.S. wars starting with the Revolutionary War and including the current conflicts, only 1.2 million Americans have died.[i]

Price of freedom, we say. That price comes to 30,000 people dying each year for fifty years. A huge number, but it means little to us because the chances of it being us are incredibly small (~.01%/year).

Let’s switch to driving habits. Raise your hand if you routinely drive faster than posted speed limits? Me too. Studies have demonstrated that increased speeds lead to more deaths and injuries. Lower speeds use less fuel, save money and the environment, and yet we mostly root for increased limits and don’t obey those that are posted.[ii]

And while I’m on the topic of driving, states have vacillated, but many have removed helmet requirements for motorcyclists. It’s a no-brainer that the chance of death or serious injury are greater without a helmet. I understand the thrill of letting the air blow through your hair (or over a bald pate in my case). I don’t use a helmet when riding my ATV unless I’m traveling where the police are likely to see me.

According to the Center for Disease Control, if every state required motorcyclists to wear helmets it would save $1 billion a year, 740 lives a year (they estimate those states with laws saved 1,772 lives in 2015).[iii] Who pays that $1 billion? Mostly the rest of us through our own vehicle insurance rates, medical premiums (to cover uninsured hospital costs), Medicaid costs, etc. My state of Michigan allows those over age 20 to forego helmets if they have passed a course (or driven for at least two years) and carry at least $20,000 in medical insurance[iv]—as if $20,000 is going to cover the costs of a head injury. Have the legislators paid any attention to the costs of hospital stays?

How about that fundamental right to build your house wherever you want? The seashore? A flood plain? A nice canyon in tinder-dry California? In the middle of the Michigan woods on a nice inland lake? Sitting on top of an earthquake fault zone? Guaranteed: each of those will have a major problem sometime. That’s what insurance is for, right?

Yes, but . . . individuals are often unwilling to pay the true cost to insure their individual decision and instead rely on government funding—i.e. the rest of society—to bail them out. (Full disclosure, I have purchased flood insurance on my Savannah condo.) The National Flood Insurance Program is $25 billion in debt (and that’s before the 2017 hurricane costs). In 2012 Congress raised rates to close the gap between what policyholders paid and the true cost of insurance. In 2014 they fell to pressure from the skyrocketing rates and backed off, instead adding a surcharge to “pay” for the deficit. Current proposals won’t fix the problem either.[v]

It is not impossible to change the way we treat risk and cost. Roughly fifty years ago, Ralph Nader published Unsafe at Any Speed. In 1965 we suffered roughly five deaths for every million miles we drove. Today it is about one death per million miles. That’s an eighty-percent decrease. https://www.nytimes.com/2015/11/27/automobiles/50-years-ago-unsafe-at-any-speed-shook-the-auto-world.html

Rachel Carson’s Silent Spring kicked off an environmental movement that brought us back from environmental catastrophe from indiscriminate pesticide use (another example of individual freedom to spray trumping community needs—until legislation changed the balance).

We’re facing a similar crisis regarding the overuse of antibiotics and the creation of superbugs.

The list grows, but I have two conclusions resulting from my ruminations. Relying on each individual to make decisions based on individual needs only works when community costs are factored in, which we have not done with guns, freedom from wearing helmets, flood insurance or antibiotic use. Second, I put my name on my books; if someone thinks my writing is responsible for abetting the unacceptably high level of gun violence, at least you know exactly who I am.

This post first appeared on Writers Who Kill 10/8/17




[i] http://www.msn.com/en-us/news/us/more-killed-by-guns-since-1968-than-in-all-us-wars/ar-AAsUIda?ocid=spartandhp
[ii] https://www.wired.com/2016/05/raising-speed-limits-irresponsible-states-keep-anyway/
[iii] https://www.cdc.gov/motorvehiclesafety/mc/index.html
[iv] http://www.iihs.org/iihs/topics/laws/helmetuse/helmethistory
[v] http://www.heritage.org/government-regulation/report/the-national-flood-insurance-program-drowning-debt-and-due-phase-out

Wednesday, August 16, 2017

Fire and Ice




Here’s a YouTube version of Robert Frost’s short poem, “Fire and Ice,” which was first published in Harper’s Magazine in 1920 and later incorporated in the Pulitzer-winning book New Hampshire. It’s a short poem, and I give you permission to do a quick listen before reading the rest of this blog.

With all the bloviating going on between the heads of state of North Korea and the United States, I was reminded of Frost’s poem, written not long after the end of World War I, but well before the nuclear attacks by the U.S. on Japan at the end of World War II.

I grew up in the age of “duck and cover.” [Oh heck, I just Goggled the phrase and came up with this nine-minute 1951 Civil Defense film featuring Bert the Turtle.] I remember in school curling into a ball under my desk, covering my head and neck with my arms. Other times we filed into the hallways and, making sure not to be opposite a door where flying glass would be a problem, we impatiently sat covering our heads with our hands. The assumption was we should do everything possible to survive an enemy attack.

My house and school were about six miles away from Kodak Park in Rochester, New York. Kodak Park would have been a very likely target in a nuclear war with the USSR because of its film production and processing capabilities. At the time, all the spy-plane cameras and film were produced by Kodak or Polaroid (also a Rochester company back then).

What no one told us back then was that a typical mid-sized hydrogen bomb when exploded in the atmosphere would have a blast zone of nearly seven miles and a thermal radiation hot zone of fifteen miles. That would have been the effect if either of the four megaton H-bombs the US accidentally dropped on North Carolina on January 24, 1961 when a B-52 broke apart had exploded. Although three of the four “fail-safe” devices on one of the bombs did fail, the fourth held and the devices didn’t trigger an explosion. [i]

The world for me would have ended in fire. Crushed or not, I would have been toast.

For those not so near a likely target, the world might have ended in ice. For many years, “experts” predicted a nuclear winter would follow an all-out nuclear war. The hypothesis was that the firestorms caused by the nuclear bombs would combine to throw so much soot into the atmosphere it would block sufficient sunlight to cause a significant temperature drop and induce a permanent winter—at least until the soot precipitated out of the atmosphere.

Hey good news: we have a cure for global warming—a global nuclear war! While generally discredited now because models show cities won’t burn as originally anticipated and therefore not produce enough atmospheric debris,[ii] it struck a chord of plausibility as the world has experienced global cooling because of atmospheric soot. In 1816 the northern hemisphere suffered a “volcanic winter” generally attributed to the ash plume from the 1815 eruption of Mount Tambora in the East Dutch Indies. In the Berkshires and upstate New York where my ancestors lived there, was wide-spread crop failure as snow fell as late as June and frost occurred throughout the summer.[iii]

As a child, I was never scared of nuclear war. It had no meaning for me. The drills were just one of the things you did, like saying the pledge of allegiance every morning. You didn’t think about the meaning of either one. That changed for me in October 1962 during the Cuban missile crisis. It’s the first international news event that I really recall (I turned twelve while it was going on), and I remember it because of the palpable fear I sensed from adults around me. I remember watching the news with my family as President Kennedy announced on live television the embargo of Cuba. I had to ask my parents where “Cuber” was (and learned about New England accents!) I remember the huge typeface of the newspaper that included the critical word: BLOCKADE.

Negotiations worked that time, but there was a subsequent boom in backyard bunker building.

Now it seems some of the 1% are preparing for all kinds of potential disaster with luxury bunkers.[iv] I have neighbors who are contemplating how they could become subsistence farmers and hunt the woods for their meat. My neighbors have armed themselves in preparation of that dystopian future; they would surely have to defend their supplies and food from those who won’t be prepared.

I am making no such preparations, and I frankly have no fears of a nuclear holocaust. When I think of what it would take to survive a nuclear war or collapse of our food supplies, whatever the cause, I realize I don’t want to be a survivor. Maybe it’s because I’m on the downward slope of life. Maybe it’s because I am so distraught about our continual worldwide inhumane treatment of our fellow humans that I secretly think the world might be better off if our species became extinct.

I admit to being a chicken when it comes to death. I’d prefer it to happen with no pain and in my sleep. If it comes to a great disaster, I’d rather go in the fire of one big flash and know nothing of it than by the slow freeze of ice.

I have been thinking about the collapse of our food supplies, but in a fictional sense. It’s the proximate trigger for a future I am sketching out for a possible trilogy. I’ll let you know how that works out.

This post first published on Writers Who Kill

Wednesday, July 19, 2017

Living on Borrowed Time

Last week a five-minute blast of very high straight winds hit our property in Michigan’s Upper Peninsula. In the hundred feet between our house and cabin and the lake, we lost all or parts of eight large trees: three hemlocks, two spruces, one cedar, and two maples. I haven’t explored the south end of my near-shore property, so there could be more. I have traveled most of the paths that wander through the remainder of my eighty acres looking for damage and found nothing major.

Why the disparity in damage levels, and does this have any larger significance beyond me having serious chainsaw work ahead of me?
  
View of lake 2013. Note density of trees and short understory

When I bought the land in 1997, the trees at the lake’s edge were generally towering white pines and sprawling white cedars. The next tier of forest consisted of black spruce (60%), white pines and white spruce (10%), and deciduous trees (mostly red maple, white birch, quaking aspen – 30%). Beyond that 100-foot line, the deciduous trees became dominant with evergreens accounting for at most a quarter of the trees.

The black spruce were already starting to die from blight. A diseased tree would first exhibit the problem in the fall when many of the needles at the treetop turned yellow. By the next fall, the tree would be dead, and within three years the top would blow off, leaving a twenty-five-foot stub, which generally fell in the following decade. After twenty years of this infestation, perhaps five percent of black spruce near the lake remain.


The understory 2017

The spruce deaths have opened the understory for new growth, and a mass of balsam, pine, and hemlock have reached up to fifteen feet tall. During this period, a few of the white pines, which were already past their prime and on their decline, have also died, losing their needles and dropping branches as the years pass. A third source of destruction occurred when beaver “harvested” up to a third of the large deciduous trees in that first hundred feet, including almost all of those at or very close to the water.

One advantage of all this woods-thinning is that we have a much better view of the lake from our house than when we first built it. The bad news is that when we consider the density of trees taller than twenty-five feet in that first one-hundred feet, there is no forest. Those trees have become a collection of individuals.

More open view of lake 2017 (of course it was foggy the day I took this)

Those of you without significant forest experience may not realize that trees in a forest grow differently compared to the same tree in a suburban yard. Because of the lack of competition in the yard, trees grow out, expanding their canopy using long limbs that require thick trunks. The quest for canopy space in a forest requires rapid vertical growth. Light reaching the floor of a forest signals affected trees to grow tall as quickly as they can so they can grab that small spot in the canopy. Lower limbs are quickly abandoned. Strengthening the trunk takes a back seat to reaching height quickly. This results in tall, thin trees whose trunks are often brittle.

Twenty years ago, high winds that whipped across the lake were met by a dense collection of trees. Pines formed the core of the defensive front. Tall and supple and strong, and backed up by the large numbers of spruce behind them, they forced much of the wind to deflect up and over the forest. Now the big trees are isolated, with large gaps between. High winds are no longer deflected up; they retain their strength, sweeping past the pines, and pounding individual trees with their full force.

The unbroken wind uses the densely packed needles to apply extra leverage to individual trees, causing those cedar and spruce trees with shallow or weakened root systems to tip over. Trees with stronger root systems, like maples, birches, and hemlocks, remain standing, but the unchecked winds apply immense force to their leafed out or needled upper portions. If the trunk has a weaker spot, the winds can rip the tops of those trees off their bases. This is what happened to the hemlocks and maples.

Collectively, the forest—before it was weakened by disease, old age, and beaver—could withstand almost any straight winds with only minor damage to the tall trees. Individually, trees are hard-pressed to sustain the periodic battering we receive in the U.P.

The birch and maple trees initially benefited when the black spruce died and dropped to the forest floor. There was more light for them. Their roots had less competition. When the beaver wreaked its devastation, it didn’t chew down the evergreens, leaving the towering hemlocks to stand alone. When a huge pine died, all the other trees grew faster using the extra light.

The tall trees that remain now claim a disproportionate share of the natural resources. Their leaves or needles gather most of the light. Their extensive root systems, hidden under the ground, absorb most of the water and nutrients.

The tall trees are now this forest’s billionaires. The black spruce were the forest’s middle class: hollowed by a disease that benefited those at the top of the food chain that claimed much of the canopy and feasted on the nutrients released to the soil. The understory trees are the forest’s working poor, struggling to get by on the scraps left by the big trees, but flourishing where they do receive enough light.

Those billionaire trees are living on borrowed time. When the winds come, the eviscerated middle class can no longer support them, and one by one they will be toppled.

~ Jim

This blog first published 17 July 2017 on Writers Who Kill.

Monday, March 27, 2017

Remembering Pearl Harbor

War is caused either by an imperialistic stance by an aggressor, a failure of nations to successfully negotiate their differences, or a combination of the two, which is how the United States ended up in World War Two.

When Japan invaded Manchuria (imperialism), the United States reacted by refusing to sell Japan oil. This was no small matter for Japan, who bought 80% of its oil from U.S. companies. When the terms the U.S. required to begin shipping oil to Japan were too high for the Japanese government to accept and still maintain face—a commodity more important to politicians than to the millions of regular people who suffer when nations resort to war—Japan attacked the U.S. at Pearl Harbor on a date that FDR decried would live in infamy.

In two hours, Japan sank most of our battleships, numerous other vessels, and killed 2,400 people. As battles go, the material losses were major (although temporary, as most of the battleships were raised to fight again). In comparison to other battles, the human loss was small. On a single day at the battle of Antietam (Sharpsburg, MD) nearly 23,000 soldiers died. The atomic bomb dropped at Hiroshima killed over 40,000 people that day and 50,000 -100,000 more in the next four months.

I know all those statistics, but what resonated most with me as I toured Pearl Harbor, part of the World War II Valor in the Pacific National Monument (including the USS Arizona memorial), is the virulent hate so many immediately felt toward those of Japanese heritage living in the United States. In Executive Order 9066, FDR set in motion what would become the mass internment of Americans with Japanese ancestry. In the mainland U.S., over 100,000 were interned. In Hawaii, with a population of over 150,000 individuals with Japanese ancestry, fewer than 2,000 were interned!

Did you know the disparity of treatment of between locations? I did not. This was racism, pure and simple.

Fear allows presidents to take actions that would otherwise be unconstitutional. FDR subjected citizens of Japanese ancestry to the loss of property, freedom, all citizen rights, simply because of fear that they might conspire against their country.

President Lincoln suspended habeas corpus soon after the start of the hostilities now referred to as the Civil War, the War Between the States, or the War of Northern Aggression. The Judiciary determined that the right to suspend habeas corpus resided in Congress, not the President. Lincoln ignored the court order.

Lincoln was wrong to ignore the courts. FDR was wrong to tar all those with Japanese heritage with a single brush. Yet, in surveys, Lincoln and Roosevelt are considered two of our greatest presidents. For example, in the Siena College Research Institute, Presidential Expert Poll of 2010, Lincoln was rated #3, FDR was #1[1].

During the McCarthy era, political persuasion (and sometimes only presumed political persuasion) was cause for citizens to lose their jobs, to be blacklisted by industries regardless of whether they had ever committed any act against the interests of the United States.

This is our past. We should not run away from it. We must remember it to avoid repeating it.

We feared Native Americans and tried to exterminate them, or at least confine them to reservations. We feared Southern sympathizers and allowed presidential power to trump the checks and balances of our three branches of government. We feared the Japanese and illegally interred 100,000 fellow Americans.

Our current president uses fear of race, religion, and national origin to pit U.S. citizen against U.S. citizen. In our society, I am lucky to be privileged: an Anglo-Saxon male with sufficient financial means that I don’t need to rely upon charity to live. From the perspective of those in power, I should be concerned about losing all that I value because of the growing influence of those who are “not our kind.”

They are correct that I am concerned about losing what I most value. However, we have very different concepts about what has greatest value.

If I do not stand with Muslims and Jews and Blacks and Mexicans, if I do not stand with the poor regardless of race or religion; if I don’t object when others’ rights are diminished in response to fear promulgated for political gain; if I allow anyone to trample the inherent worth and dignity of another, I have lost my own soul.

~ Jim

This blog first appeared on the Writers Who Kill Blog 3/26/17




[1] https://en.wikipedia.org/wiki/Historical_rankings_of_presidents_of_the_United_States#Siena_College_Research_Institute.2C_Presidential_Expert_Poll_of_2010

Thursday, March 2, 2017

A Primer on Replacing Obamacare

“For every complex problem, there is a solution that is clear, simple, and wrong.” – HL Menken

“Nobody knew that health care could be so complicated.” – President Donald J. Trump

For the last six years, congressional Republicans have had a clear, simple, and wrong solution to fixing the Affordable Care Act (ACA or “Obamacare”). They voted umpteen times to repeal it and offered no measure to replace it.

The law, as many laws are, is a complex compromise between aspiration (mostly by Democrats) and legislative reality. It was not perfect at birth and, like a six-year-old car that has had no maintenance, is in worse shape today. Had Republicans spent the last six years fixing the problems in Obamacare, it would be in much better shape. But that is all past. We must look to the future.

With Trump’s election as president, Republicans suddenly became the dog that caught the Obamacare car. What do they do with the thing? In my Open Letter to President-elect Trump and the Members of the 115th Congress (on repealing Obamacare) I closed with these words:

If you do not have sufficient experience with the actuarial and underwriting principles that underpin the individual insurance marketplace, I urge you to work with the American Academy of Actuaries to understand how those principles relate to any proposed legislation before casting your vote.

Perhaps had President Trump reflected on my open letter he would not have been so surprised about the complexity of health care.

Fortunately, Congressional leaders recognized that the wrong approach of repealing without replacing a law that runs to 906 pages (and tens of thousands of pages of regulations) would lead to multiple disasters. With healthcare, even the minutia has minutia.

However, there are several broad truths about heath care that are important to keep in mind as we evaluate the Republican’s proposed replacement.

The total cost of medical insurance =
the total cost of medical benefits provided, plus
administrative costs, plus
profit

To reduce the cost of medical insurance requires reducing some or all of its three components.

Reducing corporate profits is not part of the Republican (or Democratic) agenda.

Everyone would like to reduce administrative costs, which everyone agrees are too high. There are very few incentives in place to reduce administrative costs. Obamacare forced certain insurers to rebate to their policyholders a portion of paid premiums if overhead, including profits, exceeded 20% (15% in the large-employer market) of premiums collected. I received a rebate related to my premiums for 2015 from my large-deductible medical care policy.

Moving to a one-payer system would probably reduce administrative costs. It has for other countries; but the U.S. has its unique issues, so I am not making promises. Shifting policies to give consumers a larger choice of insurance options will not materially affect administrative costs—and may increase marketing costs.

Which leaves us with reducing medical costs as the only practical method to reduce overall premiums.

Reducing the cost of medical benefits provided can be achieved by
(a) reducing costs charged to patients or their intermediaries (insurance companies or the government),
(b) shifting the costs from covered insurance to some other source of payment, or
(c) eliminating utilization of the benefit.

Reducing Costs Charged: Competition without collusion usually reduces costs. Republican proposals to allow insurance carriers to operate over state borders could offer additional competition and marginally reduce administrative costs. (Insurance companies often must keep separate corporate entities and books for each state in which they operate.) Changing laws to provide greater competition on drug prices would address that aspect of cost. Three steps Congress could take to reduce drug costs incurred are to allow Medicare to negotiate costs with drug companies, to outlaw the ability of a drug patentholder from paying another company to withhold a generic from the market, and to allow the public to import drugs from other countries when they are the same drug sold at a lower price.

Regulating provider prices (as Congress has tried with Medicare reimbursement rates) often leads to shortages of providers when doctors make the economic decision to stop accepting Medicare patients and concentrate instead on private insurance payments.

Shifting Costs from Covered Insurance: One of the most popular approaches to reducing medical insurance premiums is to shift costs from the policy elsewhere. The two major approaches are to increase the policy deductible and to cap expense reimbursements.

Before I became Medicare eligible, I purchased high-deductible insurance. I was healthy and gambled that my out-of-pocket medical costs would be less than the insurance costs of a low-deductible plan. However, if something major happened, I didn’t want to pay for that out-of-pocket. My insurance costs were significantly reduced – BUT at the cost of taking on considerable risk. (My gamble paid off for the fourteen years I had individual coverage.)

My behavior was affected, however. I thought twice before going to a doctor or agreeing to a test or procedure. This is a double-edged sword. Because I had monetary skin in the game, I was a more careful consumer. However, studies have shown that when people defer routine healthcare, the long-term costs of chronic diseases increases because the individual enters the health care system at a more advanced stage.

The two ways of limiting reimbursement is to impose a lifetime maximum or reimburse fixed amounts for a particular benefit (for example $200/day in the hospital). As costs increase and reimbursement does not, more of the total costs are shifted from the plan to the covered individual. (The same will happen to states if they receive block grants. Unless Congress continues to increase the block grants to match cost increases, the states must either pick up the tab or cut benefits to those covered.)

Eliminating Benefit Coverage: There are multiple ways to decrease benefits and reduce costs. Health care policies could exclude certain procedures now covered. They could decide to eliminate coverage for organ transplants, or abortions and birth control, or sex-change procedures, or wellness exams, or any drug that costs over $1,000 a year, or whatever was deemed legal. The United States could effectively ration health care by limiting the number of procedures performed each year. This is the approach Canada has taken to reduce costs: fewer procedures equals lower costs.

Reducing the number of covered individuals: Finally, the easiest way to reduce costs is to reduce the number of individuals covered. Increase Medicare’s eligibility age to seventy from sixty-five and you’ve eliminated five years of costs. Eliminate medical coverage for Medicaid-eligible individuals, and cut those costs.

Obamacare increased overall covered costs by including additional benefits in plans, decreasing the acceptable size of deductibles in order to avoid a tax-penalty (I had to pay a penalty the first year because my high-deductible plan did not qualify), and significantly expanding the number of individuals covered under medical insurance by allowing children to remain much longer under their parents’ policy and expanding Medicaid edibility for those states who accepted it.

Republicans currently claim their proposal will decrease medical costs. The question that we need to answer is how will they do it? What are the tradeoffs they are proposing? Whose ox is gored?

The truth about pre-existing conditions

I pay house insurance every year and I hope to lose money every year because I don’t want my house to burn down just so I can win. Even though I have “lost” money on my housing insurance every year, it’s reasonably fair. Actuaries and underwriters price my insurance based on my house’s size, structure, safety measures, type of wiring, how far it’s away from a fire hydrant and fire station, and so on. They can reflect all the pre-existing conditions of my house in determining the premium.

In the past, we have done the same thing with individual medical insurance. If you are a young, healthy male, don’t smoke, do drugs, or engage in risky avocations (motocross racing, for example), your medical insurance can be inexpensive. Your biggest risk is from accidental injury; you rarely get sick. And you don’t get pregnant, which is why individual insurance for women used to cost more than for men.

Until as a society we decided that wasn’t fair, and eliminated sex as a basis for determining premiums. Men now subsidize women in this regard.

Many group medical insurance plans charge the same premium regardless of age. Older folks have more medical issues than younger ones. The young subsidize their elders. This is also the case for Medicare. Young(er) beneficiaries generally cost less than their older compatriots, yet premium costs are the same.

Even where plans reflect age in their premiums, they may not reflect health status. All Medicare beneficiaries pay the same premiums (ignoring extra premiums paid based on income status). Healthy beneficiaries subsidize sicker ones.

When we turn to the individual insurance market, healthy people think premiums should be based on their age and health. Why should they pay to cover someone who is older, or overweight, or has diabetes? It’s a fair question and one that needs an answer.

Under Obamacare, the answer was essentially that the young and healthy had to join plans and pay more than their fair share as part of a societal good. The same extra costs that are buried in group plans now became embedded in individual plans. Younger individuals either joined and paid these extra costs through their premiums or chose not to join and paid the costs through a tax. Because Obamacare provided a financial mechanism for supporting the extra costs of those with pre-existing conditions, they could require insurance companies to provide coverage for those sicker people. It was up to insurance companies to enroll enough of the younger, healthy individuals to break even on the deal.

What happens under such a system? The sick sign up in a New York minute: it’s a great deal for them. It’s up to insurance companies to enroll enough healthy folks to pay the tab for the sick ones. Insurance companies set rates based on an assumption of how many sick and healthy people they could attract. Where they were unable to enroll as many younger healthy individuals as they planned, they lost money. To make up for those losses, they raised premium rates. In those areas of the country where states supported the new marketplaces, lots of younger people joined the plans. Competition remains and premiums increases are moderate. Where states did not support the new marketplace, enrollment was well below expectations, resulting in subsequent huge rate increases and carriers dropping out of the market.

The death spiral of individual plans

Those of us involved in employer group medical insurance saw this death spiral when employers first introduced optional higher-deductible plans in an attempt to lower their insurance costs. Back in the 1970s and early 1980’s, most plans had no or very small ($100 individual/$300 family) deductibles. Increasing the deductible to $250 or $500 produced significant savings relative to the costs at the time. Employees chose the plan that made the most economic sense to them. Healthy individuals and families rushed to the higher-deductible plans. Older and sicker individuals stayed with the old no-deductible plans.

At the same time, companies first introduced Flexible Spending Accounts, seeding them with money for those employees choosing the higher-deductible plans and allowing employees to set aside tax-free money to pay for the costs they would now need to pay out-of-pocket.

Note what employers did: they lowered plan costs and provided “tax credits” to help pay for the plans. The very same elements Republicans currently promote (although we do not yet know the details). How did that work?

The next year, the costs of the no-deductible plan increased significantly. It included sicker folks after all, and in the second year, those on the margin dropped their expensive coverage and selected the higher-deductible plan. Those folks in the high-cost plan were on average even sicker. In a short time, the high cost plan had astronomical premiums and the companies dropped those plans altogether.

Deductibles for everyone have continued to increase, as have premiums, but at least under the group plan concept, those with pre-existing conditions can still receive coverage, and that coverage is subsidized by their fellow employees.

Take the same scenario to the individual market and no such protection will exist for those with pre-existing conditions. With multiple insurance plans to choose from, the healthy will make economic decisions that will cause people with pre-existing conditions to experience that same cost death spiral. Sure, they won’t be denied insurance, but they won’t be able to afford it.

Squeeze the Balloon

Visualize medical costs as a balloon. Each new drug, each new treatment, each new test, each new procedure, each administrative change either blows more air into the balloon or lets a little out. Total U.S. medical expenses only decrease if we find ways to let air out of the balloon. Squeezing the balloon simply shifts who pays for it and makes the one doing the squeezing “good” by pushing costs away from their sector of the balloon.

Propositions such as changing Medicare from a single-payer system to a system in which all covered members receive a credit grant to allow them to shop for their own insurance does not affect the size of the balloon. It will affect who pays the costs, and, depending on its implementation, may create its own death spiral similar to the corporate experience of the 1970s and 1980s. Block grants shift responsibility and burdens from the Federal government and introduce additional inequities between states.

Conclusion

Above all, ignore the pretty words (and titles) politicians use to describe their laws.

When evaluating health care proposals, consider the specifics: how costs are being reduced, who will subsidize whom and by how much, and what incentives will counteract the inherent inequities in paying for medical plan costs.


~ Jim

Tuesday, December 13, 2016

An Open Letter to President-Elect Trump and the Members of the 115th Congress (on repealing Obamacare)

An Open Letter to President-Elect Trump and the Members of the 115th Congress

RE: Repealing “Obamacare”

Beginning January 20, 2017 with the inauguration of President Trump, a vote to repeal Obamacare moves from political posturing to potential reality as the assured veto of prior bills by President Obama is no longer available. I urge members of the 115th Congress and President-Elect Trump to consider the real and varied consequences of any changes to the current programs.

Public reports indicate Congressional leaders are considering a sweeping repeal of Obamacare with implementation delayed until a replacement plan is developed. The uncertainty caused by such an approach will result in unintended negative consequences for the individual healthcare market.

Certain aspects of the current law function only because private insurers expect robust risk pools. The Health Practice Council of the American Academy of Actuaries recently sent a letter to House Speaker Ryan and Minority Leader Pelosi, expressing their concerns regarding a deterioration in individual health insurance markets if certain provisions of the Affordable Care Act are repealed without immediate replacement. You may find a copy of the letter at http://actuary.org/files/publications/HPC_letter_ACA_CSR_120716.pdf

I urge you to thoroughly understand the risks outlined in the letter before voting on any repeal measures. Unintended consequences can include significant premium increases by insurance carriers to offset increased uncertainty and reflect adverse selection in which younger and healthier individuals drop coverage. The adverse selection will quickly lead to spiraling premiums and contraction of markets as only high-risk individuals remain in plans and more insurance companies drop coverage. The number of uninsured would rise from current levels, leading to less preventative care and higher use of emergency services with their attendant costs.

I also caution you not to retain certain popular provisions of Obamacare without understanding the incentives necessary to make them work. For example, retaining pre-existing conditions protection without exorbitant costs requires either a very large enrollment base over which to the spread costs of that benefit or direct subsidies. Keeping the provision without providing appropriate incentives to provide one or both mechanisms will rapidly lead to a collapse in the individual healthcare market.

If you do not have sufficient experience with the actuarial and underwriting principles that underpin the individual insurance marketplace, I urge you to work with the American Academy of Actuaries to understand how those principles relate to any proposed legislation before casting your vote.

Sincerely,

James M. Jackson
Retired Actuary

Wednesday, December 9, 2015

Donald Trump’s War on Muslims

Taken from DonaldJTrump.com
First they came for the Socialists, and I did not speak out—
Because I was not a Socialist.

Then they came for the Trade Unionists, and I did not speak out—
Because I was not a Trade Unionist.

Then they came for the Jews, and I did not speak out—
Because I was not a Jew.

Then they came for me—and there was no one left to speak for me.

~ Pastor Martin Niemöller

Donald Trump is not the United States of America’s version of Adolf Hitler. However, Hitler and his propaganda minister, Joseph Goebbels, would certainly understand and appreciate Trump’s tactics of gaining political support by picking on a minority religious group and telling big lies enough times they begin to sound like truth to many. Trump’s invective against the Muslims reached a new moral low when he called for “a total and complete shutdown of Muslims entering the United States until our country's representatives can figure out what the hell is going on.”

This pronouncement comes fast on the heels of Trump’s statement that the U.S. should “strongly consider” shutting down certain mosques in the United States (likely unconstitutional).

Trump indicated he is open to the idea of a Muslim registry because “we’re going to have to do things we never did before.” Is it much of a step from a Muslim registry to forcing Muslims to prominently display a star and crescent moon on their persons to make the rest of us aware we might not be safe in their presence?

I know; you’re thinking we would never do something like that, right? The German people never anticipated Hitler’s final solution, did they?

Your rights of free speech? Not so much if that free speech happens to infringe on The Donald’s sensibilities. When a Black Lives Matter advocate tried to interrupt one of his rallies and was reportedly pushed to the ground and kicked, his response was, “Maybe he should have been roughed up, because it was absolutely disgusting what he was doing.”

We in the United States have a history or forgetting our ideals, not to mention our laws, in times of perceived national security crisis. Abraham Lincoln suspended the right of habeas corpus and ignored a Supreme Court’s ruling that his act was illegal; Roosevelt illegally interred Japanese citizens; Bush authorized torture, and Obama continued Bush’s practice of allowing illegal information gathering on U.S citizens.

Trump admits that he is willing to break international law by reinstituting President Bush’s authorization of waterboarding. He’s willing to ignore the constitution if it does not suit his purposes. He is Machiavellian with his ends-justify-the-means positions. When he has no arguments to refute his detractors he relies on ad hominem attacks against the person rather than disputing their ideas.

Trump exhibits the characteristics of a playground bully. Like any bully, the earlier we stand up to him and call out his lies, the better it will be for everyone, including Trump.


~ Jim

Tuesday, October 14, 2014

Blocking Political Spam

With the midterm elections three weeks away, political “advertising” is heating up. Thankfully I’ve found a way to stymie the system. Note I do not claim to have beaten them; it’s just one battle in a long war.

I have met no one other than a politician who thinks that when you sign your phone up for the “No Call” list that politicians shouldn’t be barred from robocalls and the like. However, since politicians pass the laws, they exempted themselves.

I found an app for my cell phone that now allows me to avoid their robocalls and pitches for contributions. “Mr. Numbers” works on Android phones. I’m sure there are equivalent apps for Windows and Apple operating systems. I’m not even claiming Mr. Numbers is the best Android app. But here is what it allows me to do:

I set the app to block all restricted callers. These are folks who do not display a callback number. My theory is that if they don’t want me calling back, I don’t want them calling in. I originally did this to avoid telemarketers who get around the no-call list because they have some superficial link to a provider I have or had in the distant past. What I discovered is that as a bonus I no longer get political advertising or calls for contributions.

It’s a blessing I am passing on to you, unless you enjoy stringing folks along, in which case I don’t want to ruin your fun.

My only concern is that the politicians will outlaw software that restricts their “first amendment right to harass me” – er –their “free speech.” It’s a war and like any war the instruments of battle will escalate. Right now, I have the advantage and I am enjoying it.

~ Jim

Thursday, September 12, 2013

Who Deserves a Quality Life?

The fifteen dollar minimum wage: over the last month pundits on every side of the economic icosahedron have put forth their arguments, couched in terms of effects on job creation, inflationary pressures, global competition and the like. It’s either great, terrible, probably okay or not.

I’m a number geek so the numbers side of things is interesting to me, BUT all the economic back-and-forths miss the real question: Who deserves a quality life? Keep that in mind as we look at the general pros and cons of a minimum wage.

Most economists agree that establishing a minimum wage decreases the number of jobs that economy produces. Well, no kidding. If we had no minimum wage and paid less than any other country in the world, we could have all the jobs we wanted—assuming people would take them.

So let’s get real. We have a minimum wage now and we’re not going to abolish it. The only real argument is about the level of the minimum wage. Minor changes to the minimum wage have not had the deleterious effect to jobs that opponents have suggested. That means a bit of an increase can be had with little economic dislocation. As evidenced by the current lack of jobs, decreasing the minimum wage by letting inflation wear away its real economic value hasn’t produced a plethora of new jobs either.

A little change is not what is needed. Measured against inflation, the minimum wage is considerably less than it was when I graduated from high school in 1968. 

Chart taken from CNN.com


To get back to the same real value as the 1968 minimum wage would require us to increase today’s $7.25 by almost 50%.

But that’s not enough. Why should I, and why should you, be willing to pay someone so little they cannot live decently?

Assuming you have a job that pays decent wages, imagine with me what it must be like to try to live on $15,000 a year. With rounding, that’s the result of working forty hours a week, fifty-two weeks a year at the minimum wage. Also imagine you have one child to support. You have no benefits, other that perhaps a 401(k) plan you can’t possibly afford to contribute to in order to earn the company match and the opportunity to purchase a family medical plan, for maybe a third of your income—not likely.

In the U.S. this level of income for a family of two is just below the published poverty line. It is well below the impoverished line. Some unions are calling for a $15 minimum living wage. At that level, a full-time job will earn $31,200. That’s not exactly rolling in money, but it is closer to the amount needed to take care of basic necessities including healthcare.

Others have gone to great lengths to try to figure what a living wage means. I’ll rely on the results posted on http://livingwage.mit.edu/ . Half the year I live in Chatham County, Georgia (Savannah area). According to this calculator, the living wage for an adult and child, the adult working a 40-hour week, is $18.30. That is 22% above the level demanded by the $15 minimum wage proponents. Imagine how far away from a living wage $15 would be for this hypothetical family of two in New York City or San Francisco.

Okay, I know some of you are mentally griping about my single parent family. Let’s look at a family of two parents, both of whom work at minimum wage, and two children. As reported by the folks at MIT the poverty level wage is $10.60, and the living wage is $18.82—higher than for a single parent with one child.

Okay, I convinced you and everyone else and, we’ve increased our minimum wage to a living wage. What are the consequences of that action?

Overnight millions of families will be more economically secure. The money we pay these workers will be recycled back into the economy because although these workers are now being paid up to twice as much as they used to earn, they will not be saving much of this money. It will be used to purchase living necessities. The psychological health of affected families will certainly improve. Government programs to support the working poor will be less needed.

Bad news will arrive as well. All economists agree that with such a dramatic increase in wage rates, we will surely lose jobs—and many proclaim that is the reason for not making such a change.

Heck, we lost a lot of jobs when we abolished slavery too. We abolished slavery because it was the right thing to do. Counting jobs lost is a mathematical argument. Economists disagree on how many fewer. There will be increased costs for things that currently utilize “cheap” labor. Food crops will cost more to harvest. Fast food will be more expensive. The list is long.

By not paying people fair, living wages we hide the true cost of the items and services their labor produces. The extra costs show up elsewhere: in the Earned Income Credit, in emergency room costs when people without insurance get routine care, in higher medical expenses because people cannot afford relatively inexpensive preventative care, and as a society we collectively pay for expensive restorative care.

We cannot use the fear of higher unemployment to argue against treating people fairly. A significant portion of our long-term unemployment problem (as opposed to that caused by the most recent recession) is caused by the very poverty a living wage would diminish.

Despite the fact that paying living wages will not solve all our economic problems, it is morally the right thing to do.


~ Jim

Thursday, January 3, 2013

Republicans Blink


The deal hammered out in the U.S. Senate and reluctantly approved by the House this week was massively flawed; however it did call the Republicans’ bluff on no tax increases. Technically they might be able to hang their hats on the proposition that since they did not vote until January 1, they were actually voting for a decrease in taxes because the so-called Bush tax cuts had expired. The only people who might buy that are the politicians themselves.

Lots of people will focus on the many flaws of this legislation, but let’s look at the real positives.

(1) A bill passed Congress with bipartisan support. Huzzah! Everyone was grumbling (which is often the case with legislation that has bipartisan support) but a supermajority in the Senate and majority in the house voted yes. This proves they can do it!

(2) Republicans and Democrats voted for a tax increase. As I have written before, our annual deficits cannot be solved with spending cuts alone. Although House Republicans voted almost 2-1 against the bill, this vote shows recognition by a majority of legislators that we must also have increased revenue.

(3) Congress made most of the changes permanent. It’s important to recognize that permanent does not mean they may not be changed in the future. It means they stay in place forever until they are changed by law.

This differs from Congress’s typical approach of short-term fixes that they need to address year after year after year. This practice of temporary changes became standard because of the way Congress “scores” the cost of legislation. It minimized the costs and maximized benefits to make legislation look good. This process allowed politicians to make claims supported by incomplete economic analysis and also caused myriad opportunities for junk measures (aka pork) to ride along with a bill that must be passed. Making these changes “permanent” takes away “must pass” bills that are tar babies for pork.

(4) It returns the marginal tax rates on those with $400,000 (single) $450,000 (joint) back to 39.6% and also limits deductions and the personal exemption for those earning over $250,000 (single) $300,000 (joint). Capital gains rates will also be greater for higher income earners. These changes show a recognition that those well off must bear more responsibility for our tax revenues than they did.

(5) The AMT (alternative minimum tax) is finally indexed to inflation so it will apply to targeted groups and not add unintended taxes on middle class taxpayers.

(6) Eliminates the payroll tax holiday. While effective as a stimulus in getting more spending money to those working, it was ineffective in its appreciation by those receiving it. Further, it eroded the security of Social Security, which is particularly important at a time when so-called entitlements are all under attack.

(7) Congress blocked an increase in their pay. They actually thought they deserved one for their performance? I’ve said before Congress should get no pay until they pass a complete budget for the fiscal year.

Of course I wish this legislation had done more, but what it did accomplish was mostly pointed in the right direction. The next battle will be waged by the next Congress as it tackles the artificial debt limits imposed in the same short-sighted manner as the “fiscal cliff” by previous Congresses.

Happy New Year.

~ Jim

Tuesday, November 13, 2012

Fixing the Fiscal Cliff


Unfortunately the moniker “Fiscal Cliff” itself projects visions of the U.S. as Wile E. Coyote discovering on January 1, 2013 that the ground is no longer beneath his fast-spinning feet. Cut the camera shot to his crumpled mess lying on a much lower level than where he started.

Not solving the economic mess encompassed by the fiscal cliff (automatic tax hikes and across-the-board cuts) won’t be that quick, and it won’t be that disastrous. But it won’t be good. Unlike Wile E. who is A-OK after the commercial break, the US economy will not recover for a long time if all those tax policies and spending cuts stay in place for any length of time.

Other commentators have suggested a middle ground between Obama’s higher taxes on the rich and Boehner’s no increase in tax rates. I’ll leave it to them to figure out the how; I am going to postulate a world in which we avoid the insanity of the current stalemate. Then what?

My suggestion focusses on avoiding the next fiscal debacle brought to us by the children we elect to run the country. When I was young and had an allowance, I had to earn it. I had certain chores, and if I didn’t complete them I didn’t get my allowance.

The U.S. Federal fiscal year begins on October 1. If we do not have an agreed budget in place before that date, Congress has not done its job. If they have not done their job, they should not be paid. Congress has not approved a budget for this fiscal year, 10/1/2012 – 9/30/2013; that’s why we have the fiscal cliff problem. The first thing the lame duck Congress should do is pass what I am calling “The Pay for Performance Act of 2012.” Then they should pass a budget, because until they do, they will not be paid.

To be clear, by “budget” I do not mean a budget resolution. I do mean passing all of the appropriation bills required to implement the budget resolution. It’s the deed that counts, not the name.

If the budget calls for a deficit, then the debt limit must be raised. It is lunacy to agree on a budget but vote against increasing the debt ceiling to implement that budget. However, I have no confidence that the boys and girls of Congress will get their act together simply because they aren’t being paid, so when they do finally pass a budget that calls for a deficit, the debt ceiling should automatically be raised to also cover an equal amount for the next year. That will avoid the artificial constraint of facing another debt ceiling crisis should they not agree on a budget by October 1.

There are many other things I would like to fix with how Congress does business, but if they give me this one, I promise not to make other demands for one election cycle. If they don’t… well, that’s what future blogs are for.

~ Jim

Friday, August 10, 2012

Romney Scandal on Personal Taxes


I have no idea whether Harry Reid’s “source” is correct that Mitt Romney avoided paying any income taxes for ten years. Furthermore, that fact is not per se important. Judge Learned Hand’s opinion in Gregory v. Helvering states in part:

"Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands."

The scandal of Romney’s position to only release the last two years of his personal income taxes is not the possibility that he paid no taxes for a decade. If Romney and his tax accountants and lawyers figured out how to legally use the tax code to avoid or defer paying income taxes, more power to them and more reason to eliminate all the deductions under the tax code. (See the Jim JacksonSimplified Tax Plan.)

The scandal is that Romney asks voters to trust him to be president, but he does not trust voters enough to provide them information they need to make an informed decision. When his father ran for president, the senior Romney released twelve years of tax returns.

The son is hiding his past and he is a very smart man; there must be a reason.

The reason can’t be that voters will be distressed about how much money he made. We already know he made a ton, and most people do not begrudge him for it. Americans like success stories. Romney is running for president in large part based on his demonstrated abilities to run large, complex organizations (Bain Capital and the Salt Lake City Olympics).

The reason must be how he arranged his finances relative to US tax laws. As Judge Hand said over seventy-five years ago, there is no sin in paying the minimum taxes required by law. However, if Romney used discredited tax shelters or off-shore tax shelters that he underreported and later took advantage of tax amnesty programs, voters should be so informed.

How did Romney build his IRA to over $100 million? If he presciently purchased stocks that increased over 100-fold in a few short years, he should be trumpeting his financial acumen. If, as some have suggested, he made IRA contributions of purposefully undervalued stock to circumvent the annual deduction limits, voters should know. Again, I have no clue how he grew such an outsized IRA, but I do believe voters have a right to understand the mechanics of this amazing financial result.

When a company decides to put itself on the block it dresses its financial statements in as attractive clothing as it can muster. Analysts know to look past the stated numbers and carefully read the footnotes to understand how the financial statements were prepared. They also know it’s necessary to analyze previous years’ financials to fully understand the current statements.

Romney has noted that he isn’t a business, but to understand his full character, voters deserve full disclosure of prior tax returns. The last two years of taxes are window dressing. To get a true sense of the man’s financial values, we need to know how Romney operated before he knew everyone would be looking over his shoulder.

~ Jim