Archive for the ‘Uncategorized’ Category

Your health care dollar at work, 3

September 11, 2009

I have a patient who has taken a certain medication for about 10 years. It has hoped her maintain her life. Without it she becomes profoundly depressed. Recently her health insurance company was changed. The new one will not cover the medication. Your doctor might prescribe a medication you need. You might have to find out which insurance company covers it.

What to do with the insurance companies.

July 11, 2009

Buy them.
Let’s put the profits that health insurance companies make into the public coffers. The overhead of private insurance companies exceeds 20 percent. For Medicare it is less than five percent. Which system works better? When you turn 65, you qualify for Medicare, no matter how sick you are. If you are younger than 65, you had better keep your job.

Bush’s Irony

January 3, 2009

It is we who did the devil’s deal; not he.

Why not bail out the car companies?

December 4, 2008

Let me see if I understand this “bailing out the car companies” problem.

First, full disclosure. I have never owned an American made car. I have driven them in the hopes that I would buy American. But why buy a car with drum brakes, leaf springs, skinny steering wheel, torque steer, column mounted three speed transmission, short lived seats, sagging rocker panels and lousy gas mileage. My current ride is a 2003 VW Passat wagon with 96,000 miles on it. It’s been trouble free, gets over 30 mph on the freeway and over 25 mph in the city. It has some cosmetic damage, but basically still looks new.

The “Big 3,” along with the businesses associated with them, employ one out of ten American workers. They provide their workers with health insurance and retirement plans. They are the second largest contributor to the consumer economy, after housing. For years they have built the cars and trucks Americans wanted to buy. Sure, there was the environmental fringe complaining about the CAFE standards, but it was effectively marginalized by our government.

Now the same people who protected them have turned against them. The people who wrote the laws favoring SUV’s and pickup trucks are now castigating their builders for lack of foresight. Now, with the recession putting the brakes on car sales, the “Big 3” are the bad guys who deserve to fail. How soon do we find scapegoats.

If they go broke, we add 10% to the unemployment rate. All those families lose their health insurance. Who knows what happens to their retirements? A 25 or 38 or 47 billion dollar loan would keep that part of the economy available for when money starts flowing again.

The “financial system,” however, deserves 7 trillion dollars, no strings attached. These are the folks whose contribution to American productivity was to guarantee each other’s incomes. Instead of using their money to provide health insurance to several million people, they put it behind screens and “poof,” it’s gone. If they lose their jobs, they will move to their chateaux on the French Riviera.

Hank Paulson can give $20 billion to Goldman Sachs or whoever during a weekend and nobody makes a peep. The Democratic congress has to spend hours raking auto executives over the coals before telling them to come back with a plan to – do what the environmental fringe has been talking about for years.

This makes no sense.

What if we bailed out … us?

November 30, 2008

According to Bloomberg, November 24, the United States (that would be you and me) is prepared to provide $7.76 trillion to bail out the financial system.

Apparently it needs that money because of something like this: Bank A agreed to pay bank B a lot of money if the loans bank C made went into default. Insurance company D guaranteed the money bank A agreed to pay bank B, for which guarantee bank B agreed to pay company D a premium. Bank C then raised the interest rate on its loans high enough to guarantee that they would go into default. Bank A had told a fib and didn’t have the money to pay bank B, so bank B turned to company D, which had also told a fib because it had used the premiums to send its execs to Barbados so it couldn’t make good on its promise.

You would think that all would be ok if we just bailed out bank C. But no. Bank C and its debtors aren’t the problem. The problem (according to the people with public voices)is banks A and B and company C.

Let me see if I understand this. I buy a house and borrow $250,000 from bank C at 3% interest. After a couple years the interest rate goes to 10% and now I can’t afford the payment. I lose my house. That isn’t a problem. Mr. Lynch bets Mr. Sachs that I will default. Mr. Sachs takes the bet after he gets Mr. Aig to guarantee the bet. When I default Messrs. Lynch, Sachs and Aig look at one another and burst out laughing. None of them really has any money. That is a problem. But they have friends in high places, so they go to some smoke filled room with Messrs. Paulson and Bernanke. Ok, I miswrote. There’s no smoking.

“At the end of the day” (they like that phrase), I am homeless, bank C is a landlord, and Messrs. Lynch, Sachs and Aig pocket $2.58+ triilion each.

BTW. In year 2007 there were 93,197,000 households in the US with incomes less than $100,000 a year. We could have taken that $ 7.76 trillion and bailed them out to the tune of about $83,000 per household. Or, let’s be fair and include the guys in the financial system. There were 116,783,000 households, total. Each one could get between $66,000 and $67,000.

As it is, each household gets to add between $66,000 and $67,000 to its debt.