Stop Me Before I Vote Again

A nice lapidary exchange today between Doug Henwood and another participant -- let's call him Aquifer -- on lbo-talk:

Henwood : Forcing people to buy shitty insurance from private vendors is outrageous. Subsidizing that is also outrageous. Nice if you're an insco, though.

Aquifer: Then why do they oppose it now?

Henwood: They do? I thought they'd been pretty quiet. They wrote the draft of the Senate bill, which is pretty much what they're voting on now. Wall Street seems happy with events: over the last year, Aetna stock is up 40%; United Health, almost 60%; Wellpoint, almost 80%; and Cigna, 100%. All but Aetna are outperforming the S&P, which is up just 50%.

Posted by Michael J. Smith on Friday March 19 09:35 PM | Permalink | Comments (1)

Here's Paul "bellwether" Krugman, liberal conscience terrier, summing up Obomneycare (hopefully for the last time):

".. withdrawing coverage... is [now] widespread... for a simple reason: it pays.... Employment-based health insurance... is unraveling.

Americans overwhelmingly favor guaranteeing coverage to those with pre-existing conditions...To make insurance affordable, you have to keep currently healthy people in the risk pool, which means requiring that everyone or almost everyone buy coverage... You can’t do that without financial aid to lower-income Americans so that they can pay the premiums...

You end up with a tripartite policy: elimination of medical discrimination, mandated coverage, and premium subsidies."

Here's the cost arch versus the status quo arch, according to Krug -- per CBO 'findings':

"the proposed legislation would reduce the deficit by $138 billion in its first decade... [$14 billion on average per year -- peanuts, anyone?] ...and half of 1 percent of G.D.P., amounting to around $1.2 trillion, in its second decade."

To put this in perspective one needs a few more embedded number assumptions. The health sector is currently gaining GDP share. The numbers look something like this: the difference between general inflation and health sector inflation per annum revolves around 5% -- 8% health-sector vs. 3% over all. So the rest of the economy is inflating at a little over 2%.

Watch Mr Fright Graph climb!

The health sector share is now 15% of GDP. But if the health sector is inflating at 7-8% a year -- doubling every 10 years or so -- then as the sector grows as a share of GDP it would "pull" the overall inflation rate up towards itself. For example, if the health sector share gets to be 1/3, then the inflation rate of rest of the economy would only "out weigh" it by two to one, instead of today's six to one. At that point, with an 8% health sector inflation rate, to keep the overall rate down to 3%, the rest of the econmy would have to inflate at less then 1%. Yikes, that's the verge of the infamous deflationary trap!

Where does that put this bill's cost control measures?

If we stick to the bill's projected outcome -- twenty years or so to close the rate gap -- is that really bending the cost curve fast enough? Of course not.

Obviously, despite the patent cost crisis, price controls are far from "job one" here. In fact, despite all the circle-dancing and arm-waving, it looks to me like cost control ain't a serious part of this bill at all. It's behind numero uno: insurance profits; numero dos: health sector profits and fees; and numero last but not least in the hearts of googoos everywhere, the humane crusade to cover the uncovered.

Posted by Owen Paine on Friday March 19 05:32 PM | Permalink | Comments (3)

Smartass pleb defiance, or just the usual positioning for a buttfuck? You decide...

Yer man Carolan O'Marx (the da) observes somewhere that the Irish often get the chance to prove just how far a people can go to debase themselves. Of course, the good doctor was thinking of the then recently passed great and glorious famine.

Much since has troubled and tasked those verdant superstition-cursed but matchlessly-eloquent islanders. The latest hammering seems to include an extra-special dose of nasty: a banker bedlam turned servile sovereign bailout, and one so wild it may well be without parallel on the planet.

After the Irish lot bubble burst, at a level well beyond the American regional standard -- on the order of 50% from the top of the market to the bottom! -- the economy contracted monstrously. Unemployment soared. Pay packets were slashed. Misery saddled up its dark horse and galloped throughout the land. I'll let global visionary and indignant half-twit Simon Johnson take up the telling here, in an essay with the disquieting title, "Could the US become another Ireland?":

"Ireland's three main banks built up 2.5 times the GDP in loans and investments by 2008;... The banks got the upside and then came the global crash... Today roughly 1/3 of the loans on the balance sheets of banks are non-performing or “under surveillance”; that’s an astonishing 80 percent of GDP, in terms of potentially bad debts.

The government responded... They guaranteed all the liabilities of banks and then began injecting government funds. The government is now starting a new phase – it is planning to buy the most worthless assets from banks and pay them government bonds in return. Ministers have also promised to recapitalize banks than need more capital. The ultimate result of this exercise is obvious: one way or another, the government will have converted the liabilities of private banks into debts of the sovereign (i.e., Irish taxpayers)."

"Ireland, until 2009, seemed like a fiscally prudent nation. Successive governments had paid down the national debt to such an extent that total debt to GDP was only 25% at end 2008 – among industrialized countries, this was one of the lowest.

But the Irish state was also carrying a large off-balance sheet liability, in the form of three huge banks that were seriously out of control.

When the crash came, the scale and nature of the bank bailouts meant that all this changed....The government has cut takehome pay of public sector workers by roughly 20% since 2008 through lower wages, higher taxes, and increased pension payments...Even with their now famous public wage cuts, the government budget deficit will be an eye-popping 12.5% of GDP in 2010...they still plan further major expenditure cutting and revenue increasing measures each year until 2013, in order to bring the deficit back to 3% of GDP by that date. The latest round of bank bailouts (swapping bad debts for government bonds) dramatically exacerbates the fiscal problem. The government will in essence be issuing 1/3 of GDP in government debts for distressed bank assets which may have no intrinsic value. The government debt/GDP ratio of Ireland will be over 100% by end 2011 once we include this debt."

"Ireland had more prudent choices. They could have avoided taking on private bank debts..."

But comes now one Johnny Corrigan with this bold Celtic cuff line:

"You have to talk the talk and walk the walk,... send a clear message to the market about how you are going to correct the problem and then deliver."

Oh lord above, please, I beg you, help the long-suffering people of Ireland, that Red Sox among the nations. Stretch forth thy mighty hand and stir them up to rebellion. Turn 'em into Vikings. Strengthen them to spit back these crooked obligations their gubmint has forced 'em to swallow. Visit thy wrath and indignation upon their gubmint for underwriting all these failed plunderings of their very own pirate pack of Shylock fraudsters, whilst at one and the same time slashing everything in sight. Yea verily, they do out-Hoover Hoover!

Ahh now, calm down Owen me lad, calm down. After all don't it just go to show ya an antique Emerald truth: when a "sovereign" lobby owns an Irish gubmint, it really owns 'em, all the way down to their heels. The buy is never partial or renegotiable. An Irish gombeen gummint can be trusted to walk the walk, as the man sez -- right off the plank.

Posted by Owen Paine on Thursday March 18 05:08 PM | Permalink | Comments (4)

Okay, confession time. I've always had a sneaking fondness for Dennis Kucinich, ever since his madcap days as the boy mayor of Cleveland, when he made the "business community" so hot under the collar that they started to exhibit random quantum effects, winking in and out of existence and leaving half-dead cats strewn in the streets.

Oh, I always knew better. I mean, the guy's a Democrat. Doesn't even try to hide it. But I couldn't help myself. It was my dirty secret.

So it's a relief to see the "maverick" neatly lasso'd by Rahm Emanuel & Co., and meekly proclaiming his support for the Great Insurance Company Pig Trough, aka "health reform":

Mr. Kucinich said he would keep working for a government-financed single-payer health care system. But after coming under intense pressure, which included a visit to his district on Monday by Mr. Obama, Mr. Kucinich said he did not want his objections to stand in the way of the legislation.

“If my vote is to be counted, let it count now for passage of the bill, hopefully in the direction of comprehensive health care reform,” Mr. Kucinich said.... “We have to be very careful that the potential of President Obama’s presidency not be destroyed by this debate.”

I was so cheered by this gratifying news, so glad to have this discreditable little monkey off my back, that I felt up to a quick tour through the pwoggo blovosphere. Here's a representative take from Kos -- literally the first post on this subject that my eyes lit upon in the orange bog:

Kucinich and ... Michael Moore have, by their own words, taken one for the president.... both plainly say it should be passed because of their desire to see President Obama's presidency succeed....

Try to let that sink in. They want the right-wing attempts to delegitimize [Obie] to fail. They do not think this bill is real reform (the word "detest" comes into play), but will support it anyways. I respect both men and absolutely take them at their own words.

Kucinich conceded that he decided to swallow the bill because failure would be a threat to Obama’s overall agenda. Moore said, "Pass it because, if President Obama takes a fall on this one, I don't know if he'll be able to get back up. And then NOTHING will get done. We can't have that."

A gloomy picture. But there are some grace notes of low comedy that you can always rely on; like the preposterous macho rhetoric these Dembo weenies love so much, which becomes ever more more purple in direct proportion to the hapless abjection and cringing slavishness of their politics. "Take one for the president," forsooth!

Posted by Michael J. Smith on Thursday March 18 08:15 AM | Permalink | Comments (22)

Suitably the reverend father writes of uni-ville; I write of dutyville, in particular the 5th international view of teachers' unions, as rendered in words by one Shango Cooke:

...public controversy seeks to dislodge teachers' unions: the right-wing trashes teachers’ unions outright, while the “liberal” media takes a more subtle, sophisticated approach, blaming the state of public education on “bad teachers” ....The bi-partisan goal is to undermine and dismember public education....

... as public education is gutted, rich investors parasitically benefit from it by opening for-profit “charter schools,” curriculum corporations, [etc.]

If teachers’ unions cannot keep schools open, or teachers from being fired... If any teacher can be fired when they are labeled “bad,” then one of the fundamental concepts of unionism, seniority, is crushed.... The struggle of the teachers is thus the struggle of all union workers. But unions benefit more than just union workers.

Taxing the rich and corporations must be the rallying call for the entire public sector workforce, which remains the bedrock of American labor.

Can post-industrial American unionism be all about schools, libraries, hospitals, and nursing homes? I sure hope not.

Once you add in those sectors that are quasi-public, PS unions have joined the blue-ribbon contruction kulaks in dominating the movement. And they're Dembo barnacles to a man. They typify political-machine shakedown unionism -- the very nexus, so effectively targeted by rage radio, of do-little and care-less parasitism. We got ours, and know what? You can go to hell if you don't like it.

To the unorganized, un-connected mass of badly jobbled citizenry, these rackets can look as much like gangsterism in uniform as the Brownshirts. The bastards are giving unionism a bad rap.

Okay, okay, it gets complicated. One thinks of the last pair of serious transit actions in NYC and Phili. Tactics need sharpening here, and the corporate media certainly can twist a plea for fairness into a screw job and a holdup. But as a Woodstocker I first think of the goddam police "unions", and that other working-class hero scam, the firemen.

As to their plainclothes cousins, one notes the teacher outfits... say the NYC UFT under Shanker.

Of course none of this in itself is fatal to union expansion, but letting these apes run the federations and the councils can cripple organizing in tougher sectors where the unions face bottom-line alley cats, not tax-based puddy tats.

The union movement needs to self-reconstruct, right?

If its long slide is to reverse itself, a new organizing paradigm is needed -- as big as the protracted antagonistic transition from trade to industrial unionism that culminated in the birth of the CIO -- to organize the vast privately owned and operated low wage corporate service and commercial sectors: the restaurants, the hotels, the retail stores, the cleaning services, the delivery and warehouse networks and so on.

Yes, the health sector has been a partial success, largely because inside-baseball unionism works, and even sustains itself in a hostile sea of anti-unionism, wherever gubmint money flows into payrolls. The locus classicus is construction, where all the Davis-Bacon Act rig jobs allowed the rise of the hardhat kulakery and created reactionary Meany-streak unionism back in the 'Nam days.

Even if Meany and his ilk are now long since members in that final union beyond, down here the culture of unionism is still entirely based on inside deals, i.e. ways to carve up added surplus extracted from a passive, nearly prostrate fee- and tax-paying public.

That's not the model of a "progressive" union, which would be a market-restricted shift in value-added shares between corporates and their job force. Rather, the PS unions' model is a surplus upcharge instead of a takeback. Instead of shifting the shares of value-added between labor and the corporations, public unionism is all about locating possible new sources of capturable surplus -- what the econ-cons call drilling for rent -- or better, collaborating in the erection of ever-new tollgates to scim-scam more of the innocent public's money

Education, of course, is the gold-standard horrible example, but health care is right u there too -- may even be the ultimo mishmash of irrational arbitrary taxing disguised as pricing.

But I come to save unionism, not to bury it.

I hope to live to see the union movement, that loveable old much-battered pug, rising majestically from his stool like old Laertes, his strength miraculously restored by the gods of class war, ready for the next big round.

Posted by Owen Paine on Wednesday March 17 11:41 AM | Permalink | Comments (16)

It's getting to be less fun trying to discredit the Democratic Party these days; the party is doing such a terrific job of self-discreditation that any additional contribution from this 'umble blog seems, well, supererogatory. So I find myself returning more and more to another unpublishable book(*), this one an attack on the credentialling sector, CS for short.

I personally have a fondness for dead languages, and so I subscribe to an email list for people interested in ancient Greek and Latin. Not surprisingly, a good many fellow-subscribers are either inmates or screws in the CS.

Now every mailing list has its recurring obsessions -- monsoons that blow in every couple of months or so and drench everything in sight with torrents of platitude. For bicyclists, it's helmets. For harpsichordists, it's temperament (the musical kind, not the characterological). For classicists, it's The Usefulness Of The Classics.

This Ixion's wheel of tedium got its latest spin from a ponderous Colonel-Blimpish column in the Telegraph, written by the entertaining Tory buffoon Boris Johnson, shown below after an appearance at the Westminster Kennel Club dog show. (He was entered as a Pomeranian, a region from which some of his oddly-assorted ancestors are said to originate.)

Excerpt: "The reason we should boost the study of Latin and Greek is that they are the key to a phenomenal and unsurpassed treasury of literature and history and philosophy, and we cannot possibly understand our modern world unless we understand the ancient world that made us all."

All the various arguments for the utility of classical studies -- understanding the modern world, stretching the mental muscles, etc. -- strike me as both implausible, and unappealing even if they were plausible.

On the other hand, perhaps I'm just a self-indulgent sybarite, but pleasure seems to me like a good reason to do something. To paraphrase Dr Johnson -- a more penetrating Tory Johnson than Boris -- there are only two reasons to study anything: emolument and delight. Classics are not exactly the high road to emolument, but for people wired a certain way, they can be a considerable source of delight.

Delight, however, is the last thing the credentialling sector boffins would think of offering. Perhaps they know their own limitations; but no, I don't think so. What they're articulating here is something that goes deeper.

Somebody once observed of the Puritans that they disliked bear-baiting not because it gave pain to the bear, but because it gave pleasure to the spectators. In this respect the Puritans sounded a motif that the rising petit-bourgeoisie was to make very much its leit-. Even my louche and dissolute generation, who would remember the Sixties with great pleasure if they could remember, have returned to bourgeois form on this point. Pleasure -- idle pleasure -- wasted time -- is deeply suspect; everything has to have some utility -- every investment of time or effort has to show a return. Even vacations get filed under some such rubric as "recharging the batteries", so that the striver can come back with redoubled zeal to his weary corporate climb, and more than make good the time he lost on the ski slopes. And this constituency of instrumental-reasoners is, naturally, the demo that the Unis are marketing to.

But of course, the argument from utility is transparently bogus when it comes to Classics, and that's why academic Classics are doomed.

A good thing, too. My Greek is pathetic and my Latin hardly better, but I really think the old boys in the chitons and togas would be in better hands if they were tended by amateurs -- even amateurs like me. Hell, if present employment trends continue, I'll be in an excellent position soon to improve my Greek.

There's an old humorous verse, which I'm probably misremembering --

The legacies of history
Are left to strange police --
Professors in New England guard
The glory that was Greece.

When the regents finally ax these poor devils and I meet them on the bread line, I'll give 'em a cheerful Ave (or Χαίρε) and propose a reading group, whose only rule will be a firm commitment to unproductive pleasure.

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(*) Working title: The Hell With Merit.

(**) Though seldom so vulgarly phrased. "Boost," forsooth! And what does this great classicist think "phenomenal" means?

Posted by Michael J. Smith on Tuesday March 16 07:24 AM | Permalink | Comments (19)

I'm almost embarrassed for John Cassidy, but the loathsome spectacle he's joined puts him well past any such concern.

The big banks remain able to open their doors only because Geithner and Bernanke keep them on life support. They are not healthy. They are not solvent. They are utterly dependent on the heroic book fiddling of the Fed's and Treasury's yuppie Stakhanovites. What's more, they're still playing the same games that got them into code orange panic. Only the most severely delusional pretend otherwise. Even the banksters aren't kidding themselves, and that really says something. Cassidy's adulation—oh the sordidness of it all!— Tim Geithner... It might be possible to find someone more loathsome, but I honestly have no idea where to begin looking.

Posted by Al Schumann on Tuesday March 16 01:09 AM | Permalink | Comments (4)

Simon Johnson -- shown above, looking a bit like Bob Newhart -- has had his manic anti-Laputa moments lately. But it seems, come the ultimo pinch -- once a guy's spent some quality time trawling the watery byways of the planet for the IMF in full B and D mode... well, you know... ya just can't take the bonecrusher out of 'em.

Here's Simon pressing our brave little grasshoppering Hellenes to morph into fiscal anorexia mode and deal with their "sovereign debt bubble" by... paying it off!

"By the end of 2011 Greece’s debt will reach around 150% of GDP... About 80 percent of this debt is foreign owned, and a large part of this is thought held by residents of France and Germany."

" Every 1 percentage point rise in interest rates means Greece needs to send an additional 1.2 percent of GDP abroad to those bondholders."

"What if Greek interest rates rise to, say, 10% – a modest premium for a country which has the highest external public debt/GDP ratio in the world, which continues (under the so-called “austerity” program) to refinance even the interest on that debt without actually paying a centime out of its own pocket, and which is struggling to establish any sustained backing from the rest of Europe?"

"..Greece would need to send a total of 12% of GDP abroad per year, once they rollover the existing stock of debt to these new rates (nearly half of Greek debt will roll over within 3 years).

This is simply impossible and unheard of for any long period of history. German reparation payments were 2.4 percent of GNP during 1925-32, and in the years immediately after 1982, the net transfer of resources from Latin America was 3.5 percent of GDP (a fifth of its export earnings). Neither of these were good experiences."

"On top of all this Greece’s debt, even under the IMF’s mild assumptions, is on a non-convergent path even with the perceived “austerity” measures."

These "numbers" can get a signifigantly opposite play. Enter St Paul of Nassau: "In the past, some countries have managed levels of debt that high or higher, without default...So how is that possible?

Suppose that Greece had as much credibility as Germany, and could borrow at a real interest rate of 2 percent. Then stabilizing the real value of its debt, even with a debt ratio of 150 percent, would require a primary surplus of only 3 percent of GDP. That’s certainly possible for some countries, although maybe not for Greece... this suggests that optimism or pessimism about future default can, to at least some degree, be a self-fulfilling prophecy." As if to scotch Johnson's own bitter prophecy, the Euro barons are making nice about Athens -- err, not Byronic nice; more like "them's pets of the realm" nice.

In any case these numbers are far from horrorific in absolute terms. Imagine, say, South Carolina in fiscal trouble. Could the rest of the states bail her out through the grand offices of Uncle Sap?

"Soitenly!" as "Curly" Krugman pointed out some time ago: "Overall, the group of stressed economies account for about 20 percent of the eurozone’s GDP", Krug observes -- less of a hard slog than, say, if Uncle were to bail out Dixie (though we have to put Spain aside as TBTF).

Hell, it gets to be a damn fine boat ride. If the Euro central bank can borrow at sub German rates, then...

But alas, mates, a greater fraud is in progress here, perpetrated upon a lesser fraud, and in the end 'twill all prove just another silk-hat squeeze play, a starve-the-little-critters gambit, a nifty iron-law flimflam, a way to crumple the welfare state just a tad more, foul its safety nets and crimp its feckless hu-cap squanderings. "They're in a pickle, boys, so let's squelch 'em and squelch 'em gooood!..."

To paraphrase Andy Mellon: "Starve starve starve! Starve Greece! Starve Portugal! Starve Latvia and Estonia too, and oh yes, of course, begorrah, starve that dirty little figment on the Emerald Isle."

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(*) The rates on Greek sovereign debt -- as a mere fly speck out of the global total -- could be easily kept down by simple purchases on the open market by the European central bank. This fantasy of ballooning rates leading to a cascade of attacks on other weak sister sovereigns is as unnecessary as the fear of, of... the fear of wet hair when you're about to leave a hat shop in a rainstorm.

As to this straight-from-scratch bullshit --

"[10%] is a modest premium for a country which has the highest external public debt/GDP ratio in the world"

And as for Greece the debt king -- why, the chaps have a smaller GDP to debt ratio than Japan, among others.

Check out Japan's borrowing rates.

Posted by Owen Paine on Saturday March 13 09:21 PM | Permalink | Comments (6)

My man Alex Cockburn was in fine form the other day, a propos the Oscar for Hurt Locker:

The film’s director, Kathryn Bigelow, said at the end of her acceptance speech, “I'd like to dedicate this to the women and men in the military who risk their lives on a daily basis in Iraq and Afghanistan and around the world and may they come home safe.”

...I haven’t seen The Hurt Locker and don’t plan to.... “We had these Blackwater guys that were working with us in the Middle East and they taught us like tactical maneuvers and stuff – how to just basically position yourself and move with a gun,” Hurt Locker actor Anthony Mackie told the New York Times’ Melena Ryzik. “We were shooting in Palestinian refugee camps. We were shooting in some pretty hard places. It wasn't like we were without enemies. There were people there looking at us, 'cuz we were three guys in American military suits runnin' around with guns. It was nothing easy about it. It was always a compromising situation.”

I love Alex for breezily dismissing a movie he hasn't seen. You can tell a book by its cover, I've always said, and all you really need to know about a movie is how people respond to it. I am not being ironical here. Reception is not just the main thing, it's the only thing.

I personally made this discovery years ago, in connection with the movie The Deer Hunter, which I still haven't seen. I found that all I had to do was get people to tell me what they liked about the movie, and I had plenty of grist for my mill. Sentimentality is chief lady-in-waiting to militarism -- sloppily weeping and waving her sodden handkerchief as Moloch marches off to the fields of slaughter.

Sentimentality also gets to have it both ways. IMDB has an unsourced quote supposedly from director Kathryn Bigelow:

I'm thinking of the war and I think it's a deplorable situation. [Movies are] a great medium in which to speak about that. This is a war [i.e. Afghanistan] that cannot be won, why are we sending troops over there? Well, the only medium I have, the only opportunity I have, is to use film. There will always be issues I care about.

Posted by Michael J. Smith on Saturday March 13 12:42 PM | Permalink | Comments (15)