Who Is That Masked Man?

            A video has surfaced in which Romney candidly tell supporters that 47% of Americans don't pay income taxes and are immune to the magic bullet of tax cuts. Where did this 47% number come from? They come from an Urban Institute-Brookings study conducted in 2006, which was redone in 2011. The current number on non-income tax paying households is 46%.

            A person might assume that those not paying income taxes are “victims” living on the dole, suckling the national teat. The Brookings Tax Cetner, who conducted the study, points out that 60% of people not paying income taxes are working. They are paying many other taxes, including payroll taxes, property taxes, state and local taxes, and Social Security taxes. According to Brookings, the reason these Americans don’t pay income taxes is that their tax obligation is zeroed out by deductions. They point out that the tax code benefits Americans of all socio-economic strata. They note that the greatest beneficiaries of the tax code are the wealthy.

            I note that our current numbers of Americans not paying income taxes are a historic anomaly. These numbers rose sharply after the crash of 2008 and peaked in 2009. Current numbers show that 49% of American households receive some form of Government benefits. This is up from 30% in 1986. I see a strong correlation of Government benefits and an aging population and a profound permeating need within our society.

            23 million Americans are un- or under-employed. One out of seven households is on food stamps. Wages are falling. Americans are suffering more now than they have in decades.   

            Those are the numbers. Then there are the narratives which capitalize on them. One popular narrative is that in America, half of our population is dependent on Government. This segment of the population wants views Government assistance as an entitlement and wishes to increase such aid. Like most political narratives, this is not particularly reflect the facts, but this won’t deter true believers in that narrative.

            Another popular narrative is that the Democratic agenda is redistribution of wealth, i.e. socialism. Republicans recently trotted out a tape of Obama stating that he favored redistribution of resources. Like all political narratives, this one is not quite accurate. The  recording came from Senator Obama’s (first term) speech at Loyola University in 1998. I’m waiting for a replay of Reverend Wright any day now. If you actually listen to the Loyola recording, Obama advocates redistributing resources to create a social safety net, and then spends the rest of the speech promoting free market capitalism. Besides, Obama may actually have learned something about how the world works and think differently than he did in 1998.  

            The Presidential race is a contest of narratives, i.e. alternative worldviews. It is also a contest of perceptions. Romney’s problem is one of public perception. At the core, he appears to be hiding something. He doesn't appear authentic, connected with average people. For example, Romney released his 2011 tax returns along with compilations of previous returns. Why on earth his campaign would voluntarily submit compilations rather than actual tax returns is beyond me. The standard is to release 10 years of tax returns. He looks evasive.

            People don't really care what percentage/amount of taxes Romney actually paid. It might cheese off a few people that he paid half the percentage that they did, but that's not what all the “tax controversy” is about. Essentially, Romney plays into the narrative that he is out of touch with the lives and concerns of many Americans, whether this is framed as he's a guy who writes off half the country or has offshore bank accounts to hide his money. Like all political narratives, these are not particularly accurate. I’m not sure why Romney seems so distant and evasive. I do observe that he hides his true personality and ethics behind a Neocon persona.

            It is really too bad that Romney is forced to hide who he is. It's too bad the Republican Party is so screwed up that they put a bushel over this guy’s light. Romney's personal ethic is that of service and caring. There are many, many personal examples of this. Do you know of any? Why? Blame it on the thought police in his Party.

            Romney is not permitted to talk about his religion, his family, his integrity, his charity, and the many lives he has blessed A Gallup poll this week shows that Obama connects with the average person 66% to 23% for Romney. This number shows that half of Romney's own supporters don't believe he connects with them. For the Republicans, Romney was always more of a concept than a cause. Now the accusations and blame are flying within his own Party. A campaign in trouble is like a bad marriage.

            While my praise for Romney’s character might sound like a bromance novel, there may be some truth in the instinctive public caution against embracing Romney. People can tell if they are respected. While a solid case can be made for Romney's caring on a case-by-case basis, his personal value system may keep him from authentically viewing the average Joe and Jane with respect. These are people who want jobs. They don't want to start a business. They don't want to build a great corporation. They are not extraordinarily ambitious. They are not entrepreneurs. They just want a job. They want security and to work for somebody else. Joe and Jane still mentally live in the 20th century.

            In some ways, I agree that the America of the past is in the past. Americans have to get smarter, innovate, and become entrepreneurial to compete in the 21st century. Most Americans would not agree with this. They just want a job. They would say they want “opportunities”. So what are you going to do? You need to respect people where there at......or not.

            So if Mitt’s fundamental values of entrepreneurship and initiative are not where most Americans are, perhaps this is what most Americans are sensing. Mitt, if you want to be respected, you have to respect others first.

            I also am unclear what Romney is passionate about but I am quite interested. Listen to a passionate person. You can't fake passion. It is apparent that Romney is a non-ideologue running in an ideological age. Consider the disconnects this might produce.

            In my opinion, to move forward Romney needs to do some soul-searching. He has to define for himself what he stands for, what big change he will make, and make that message clear. Whatever that message is, it will be unpopular with many people. Big messages usually are. But it is an act of leadership and will earn my respect. He should craft his message as though he was talking to his grandchildren and fill in the blank “In 2012, I stood for....” By not clearly taking a stand, the narrative is that you

Avoiding the Healtrhcare Waterfall

            Some health insurance numbers came out this week. Health care premiums went up 4% so far this year. Health care premiums went up 9% last year. Wages for the average Joe and Jane went down 7% over the last two years. See a problem here?

            The Census numbers out this week show a 2 1/2% decline in average household income. The poverty rate did not follow previous patterns and remained flat. Analysis of the census data indicated greater economic inequality currently that at any time the Census has been reported (middle to top, middle to bottom, top to bottom, etc.). Such economic inequality continues to increase. Americans without health insurance coverage fell to 48 million. Analysts attribute this decline to increased enrollment in Medicaid and the initial effects of the Affordable Care Act.

            So them’s the numbers. This blog is on healthcare and the vital importance of reforming provision for this basic human need. The political debate is framed around the doctor and the patient. Additional government bureaucracy should not get between the doctor and the patient. We don't want the government calling the shots on how we’re cared for, when we’re care for, and where we’re cared for. Keep your government hands off my medical care, and off my Medicare.

            I agree that unqualified government bureaucrats should not get between a doctor and a patient. Apparently, that is the job of health insurance bureaucrats. The health care debate should be seen not in terms of who provides the care, but rather who pays the bills.

            Most Americans receive their health coverage from their job, albeit somewhat tarnished and diminished compared with the health plans of the good old days (insert your good old days here). When insurance companies actually cover and pay for continues to shrink while premiums continue to rise. Hey, but we need some kind of health coverage, and we don't want no stinkin’ socialist government health coverage. So, just keep it the way it is. But can we..... just keep it the way it is?

            Why are your wages shrinking? Like most of the world, and unlike most television “news” programming, the answer is complex. I point out that the Facebook status of your shrinking wages are “It’s complicated”. A few reasons for the non-two-per-center’s now-you-see-it-now-you-don't magic show are: (a) Many businesses have little social conscience or responsibility. If you take a hit, it's just business. (b) There are a lot more stupid regulations these days which makes running a business more expensive. (c) Commercial credit and thus cash flow is tougher to obtain. (d) Business get stuck paying for your healthcare.

            The numbers this week indicate that average annual per capita premiums are over $16,000. That's just premiums, just so you can have peace of mind in case you might get sick. Three quarters of these premiums are paid by your job. So if you think that you're paying more and more for your health coverage, imagine what your employer is thinking.

            Joe Blow didn't start the company you work for in order to provide health coverage for you and your kids. Oddly enough, Joe Blow started the company you work for in order to make money. If insurance companies continue to raise their rates, how long will Joe Blow be inclined to provide health coverage for you and your kids? That's called a waterfall.

            We might blithely drift downstream as the waters grow more turbulent, only to eventually encounter the waterfall we've been ignoring. For gentle readers unsure of the definition of a waterfall, it is a big cliff with water pouring over it in order to clean up the mess at the bottom. I recommend taking a different river.

            Why is healthcare a political football? Why is healthcare political at all? Because there's Big Money in healthcare. That's called a trough. This trough is too high off the ground to be of much benefit to the average person. The trough is created by the system (providers, insurance companies, politicians, etc.) and the system reaps the benefits. The system makes the rules of how the game is played. But all the average person wants is healthcare when they're sick.

            The average person can't afford the rates the system charges. So the average person pays protection money and get a little protection in the Big-Money shell game known as healthcare. Like in Defense, our technology is the best on the planet, and our costs are the highest on the planet. If we pay a bijillion times more for Defense or healthcare, it's a very hard case to make that we’re a bijillion times safer or healthier. The numbers show that we are not either of those things.

            Like the business you work for, the healthcare system was not created to provide health coverage for you and your family. The irony is.... Oddly enough, like the business you work for, the healthcare system was created to make money. Elements of the healthcare system, such as providers and drug companies, have dual agendas. They want to help people, but they also have to make money. In recent years, the making-money part of that equation is winning out. Other elements, like insurance companies, simply are in business to make money. Most people don't stop and consider that the mission and purpose of insurance companies, like all corporations, is to make profits for shareholders. This is a similar to lawyers working for auto insurance companies. When you’re in an accident, the lawyer’s job is not to protect your interests. That’s the job of your lawyer. What, you can’t afford a lawyer? Don’t you have lawyer insurance with your job? Another racket...but I regress. The insurance company lawyer's job is to protect the interest of the auto insurance company. The purpose of the auto insurance company is to make profits for shareholders. Just some musings to pass the time on our trip down the river.

            So one reason government is involved in healthcare is that it benefits from the Big-Money at the trough. It helps politicians keep their jobs. Another reason is that the healthcare industry (providers, insurance companies, drug companies, etc.) are highly regulated. The healthcare industry was not visited by the regulation fairy. Government helped create the system and the trough.

            Government has the influence to be a solution. But government is not thinking clearly. What a surprise. We’re offered two choices by government,(1) governments wastefully and inefficiently pays for your healthcare, and (2) you pay for your own damn healthcare. Are these the only two alternatives you guys could come up with, seriously? We’ll feed your family. You have the choice of a Bic Mac or a bucket of lard. One is on sale. Choose wisely.

            You might say the Republican approach is to provide vouchers and let market competition make healthcare more efficient. I stopped typing until the laughter subsided. Think about it. You charge $20 for your healthcare service. The average sucker, I mean citizen, receives $20 from the government to cover your fees. What will you do? You'll raise your fees to $40. The sucker, I mean citizen, pays the difference out of their pocket. You keep your profit margin. You can always raise rates next year. You make up the rules.

            This is a bit like education. Everybody needs healthcare, whether you get it from the witchy-woman or the Mayo Clinic. Government, in it’s infinite wisdom, has decreed that everyone must plant their butts into seats for so many years to get an education. It's tough seeing tweens doing hard time. So the public schools are babysitting factories. We’ll send our kids to shiny new market-competitive schools. But Joe Blow starts a market-competitive school to make money. If the Joe Blow Academy charges $5000, and Uncle Sam shells out $5000 to pay the fees, what will Joe Blow do? He will raise the rates to $10,000. Profit margins must be retained. So many people will be pounding on the door with their government vouchers Joe can charge any amount he wants. It's good to be Joe.

            Not so good to be in the public schools. Government has to shell out for vouchers, so money is cut for the public schools. But every kid has to go to school. The public school is not allowed to turn away kids. They have to take in all the little Mansons-in-training. Your little monster who so cute when they're sleeping has to go to school. It's the law. Joe Blow knows that your little monster who looks so cute when they're sleeping will blow his numbers and profit margin. Your kid is trouble right here in River City. Even if you shell out the $10,000, or $20,000, your kid will not be attending the Joe Blow Academy. They will have a five year waiting list            . Duh! Private business can cherry-pick students. Public schools can’t. You can’t solve education by throwing money at it, Republicans. What are you, Democrats? You can't fix education with vouchers. You can't fix healthcare with vouchers.

            So if the system makes the rules, how can healthcare get fixed? Left on its own, it will not fix itself. The guys making the rules will not give themselves less money, oddly enough. Faget about it!

 

            There are three parts to the fixing healthcare solution: market competition, incentives, and regulation. For most folks, regulation is a wash-your-mouth-out dirty word. What is regulation? At one level, it's how the game is played. It establishes the boundaries of the playing field. Republicans want market forces and competition to change healthcare. Market forces are creating the current rules. They cannot/will not change healthcare. The market is not the place to start. Regulation is the place to start. Our current river still leads to a waterfall. I recommend a different river.

            We currently have a sick care system based on fees-for=services. The system treats the average person when they're sick and charges them for drugs, tests and procedures. That's what the market does. That's the way the game is played. With the Republican, market-driven approach, that's the way the game is played. Medicare is a sick-care fees-for-services system. For government paid health care, that's the way the game is played. Under the Democrats, that's how the game will be played.

            So I'd like you to see two things: (1) healthcare is about who pays the bills, and (2) the power lies in who defines what healthcare is. If healthcare is defined as sick-care fees-for-services, it doesn't matter which captain is at the helm when we get to the waterfall. I recommend reframing the definition of healthcare in creating a new regulatory framework to send us down a different river. Who has the power to do that..... squabbling politicians, faceless bureaucrats, big-money think-tank policy wonks? I remind our gentle readers that the power is in their hands, the whole We the People thing. Government power, regulation, and policy is ultimately in our hands.

            The new definition of healthcare should be centered on the concepts of wellness and improving quality of life. Rewards and incentives within healthcare should be based on getting you well and keeping you well. It should also incorporate personal incentives and disincentives for keeping ourselves well. That is a different river.

            Healthcare is currently paid by the government and by insurance companies. Under the new definition of healthcare and new regulatory framework, government should for the most part get out of direct pay for healthcare business. Government can partner with industries to provide scalable incentives. There should also be a national pool to distribute cost and risk for catastrophic and end of life care. Actual payment for healthcare should come from private sector insurance companies. Insurance companies should be told that if they want to keep playing the healthcare game, they will make their money by completing for patient wellness, quality of life, and quality of care. Obviously, the insurance company most effective in organizing providers for these outcomes will be the most popular and received the most profit. So the People, not the system, would make the rules of how the game is played. Free-market forces could do what they do best.....innovate, compete, reduce costs and gain market share while increasing our national wellness and quality of life.

            While all this is an extreme oversimplification, the fact is, as I see it, we have to reframe the fundamental definition of health care to get fundamentally different results. A regulatory approach, although driven by popular sentiments, is essentially top-down. Healthcare can also be reformed from the bottom up. This also requires a reframing of the definition of healthcare and commitment to economically support that direction. By spending your healthcare dollars on the insurance companies and providers which best promote wellness and quality of life, you more stably establish these concepts is a viable market drivers. More and more companies will organize and compete around these principles and may eventually shift how the game is played.

            A bottom-up approach to health care reform involves your actually caring, considering what you would like to experience from providers, having conversations with providers and neighbors, investigating market alternatives, making your voice heard in organizing locally or at work to advocate a particular provider choice, and making an economic commitment to support the providers moving in the new direction. These actions are what is needed for healthcare reform. They're also what is needed for good government. We need to understand that we are personally responsible for the quality of the health care we receive, as we are personally responsible for the quality of the government we share. There’s a waterfall ahead. Choose wisely.

Defying Political Gravity

            Well, once again the Party parties are behind us. I vowed not to watch any of the hoopla-ing and I didn't. But, since I don't live under a rock, I glanced at excerpts and transcripts. One site appears to be making their case with profoundly flawed planning, and the other side seems to bring no planning at all. The “how” piece seems off the table. While the country doesn't want to hear huge multipoint plans that will never pass Congress, we do need to at least see a road. We’re going this way. Please come join us. At least tell us what you think stimulates growth. Show us a clear difference rather than leave it up to the “news” people to tell us what that difference is. If such strategic thinking and planning does exist, it has not yet been shared. I guess revealing such  “secrets”  would be a Party foul. So the road ahead for both sides becomes ‘Trust us, it's magic’. We’ll either spend or trickle-down our way to prosperity, contrary to facts and history. Perhaps Harry Potter could run as a third-party candidate.

            One side proposed investment in education and infrastructure to stimulate growth. Such spending is Keynesian. While structural reforms are commendable, they are a 30 year long proposition before we experience major benefits. Republican concern with such spending is that we’ll become Greece. Our economy will always be innovative, industrious, and competitive. We will never become Greece. However, we are unable to govern or make tough choices. The actual concern raised by that fact is that we become Japan, 250% debt/GNP and running on Government fumes for over a decade, a lost economic generation. Conversely, the opposing approach to growth is to cut taxes and increase defense spending. Both of these are also Keynesian, particularly if you’re a defense contractor.

            I most enjoyed hearing from the prospective First Ladies. Both demonstrated their intelligence, warmth, humor, and humanity. Why don't we nominate these two for President? That would be a serious contest.

            In spite of of their better halves, the wonky, technocratic contenders both failed to make a convincing or compelling case. Most independents were unswayed. Political prognosticators abound, and results may vary. The most complex and sophisticated statistical analyses predicting the election outcome put Obama ahead by four points. With the margin of error, it's a coin toss. Why don't we just have a coin toss?

 

            Like much of our economy, our political system is on uncharted ground. There is a strong anti-incumbent sentiment throughout the country, but Obama's approval ratings remain inexplicably static. The Republican base continues to diminish. Exclusion, purity, and fewer old angry white men will do that. Concern for jobs and the economy is quite high nationally, yet the Presidential contenders are tied. Generational and minority sentiments may shape our political landscape. In 2008, minorities were 12% of the vote. Today they are 28%.

            I'm not surprised that Romney is not doing better. In the eight years he's run for President, he has been unable to connect with voters. Connecting with voters usually adds seven points to the spread. However, the most inexplicable situation is how Obama could possibly be tying the race up. Every historical indicator goes against the President. Obama is defying political gravity.

            The Consumer Confidence Index was established in 1967. No President has been reelected with a consumer confidence rating below 95%. Obama is at 60%. No President has ever been reelected with unemployment over 8% since Roosevelt during the Great Depression. The Nonsupervisory Wage Index, the national measure of middle-class earnings, has plummeted over the last two years. Wall Street is in far better shape than it was four years ago, but Main Street has taken a tough hit and is still bleeding out. In spite of these facts and metrics, Obama is even or slightly ahead of his competition. Whether this is due to strong support of a loyal core or the un-appeal of Romney and the Republican message, Obama's popularity and this Presidential race is a historic anomaly. Our political system is on uncharted ground.

            So my take on the Conventions is that they were full of sound and fury, signifying little. There was a dearth of solutions and alternatives. For the most part, they failed to significantly address our crucial deep strategic structural reforms in areas such as education, healthcare, energy, immigration, regulation, corporate taxation and infrastructure. They failed to address the abdication of governance and responsibility currently permeating our broken system. In the short term, they failed to shed light on the fiscal cliff we will encounter in December, a trifecta of disaster involving tax cuts, the debt ceiling, and sequestration. For gentle readers forgetting the meaning of sequestration, it can be defined as forced across-the-board spending cuts automatically imposed on Congress by Congress because Congress is too gutless to make hard choices. Anyway, I think that's what the dictionary said.

 

            Congress’ main priority (both sides) is to win elections, block the opposition, and keep our jobs. If we had national leadership with the desire and competence to do so, we could produce a growth package with bipartisan support this week. But bipartisan is a dirty word these days. The opposition is the enemy. Ask anybody in Congress. After all, Washington is a land of us and them, isn’t it?

            The America that I’m familiar with is based on We. “We the People of the United States, in order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common Defense, promote the public Welfare, and secure the Blessings of Liberty to ourselves and our Prosperity, do ordain and establish this Constitution of the United States of America.” I find it good occasionally to revisit the actual source of what it means to be an American.

            With all this newfangled us-ing and them-ing going on, it's interesting to look back at Conventions past. No ghosts are standing by. The first national political Convention was held in 1831 by the Anti-Masonic Party, who felt that power and Big Money had hijacked the government. I wonder if these guys occupied anything? The Whig Party was a hot commodity at the time and won that election. The first Party platform was seen in the Democratic Party Convention of 1840, which begins “Resolved: that the federal government is one of limited powers....” Those were the days.