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04 March 2016

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Fred

FB Ali,

I appreciate the insight Uri provides but this is a bit over the top:
"The Trump we see now is a very shrewd campaigner, a winner, a candidate who has an uncanny talent to channel the misgivings, resentments, anger and bitterness of the lower class of whites, who feel that their country is being taken away from them by corrupt politicians, blacks, hispanos and other riffraff."

There are two "hispanos" (to use his term, not mine) running for President. They are United States Senators Cruz and Rubio, of Texas and Florida respectively. Of course everyone on earth knows American hispanics only vote Democratic. The bit about David Duke and projection from "failure to repudiate" to thus being a KKK supporter is even worse, though he did apologize. Duke and the KKK have been a waining force in American politics for more than a generation. The people of Louisiana repudiated him 25 years ago when he ran for office. That's the repudiation that matters.

Lars

Time will tell, but it did not end well for Germany, Italy, Japan, or for that matter, the Soviet Union. What motivates the authoritarians are fear and anger. People with those conditions do not make good decisions.

History has also shown that if authoritarians are elected, the first thing they do is get rid of any opposition.

I am not convinced that your examples of China and Russia will have open ended economic progress. I have personally experienced strong government stewardship of the economy and while it works well for a time, it will eventually reach a ceiling.

no one

"Instead, we wound up with a bloated, complicated, and very expensive program that enormously profits the insurance and pharmaceutical industry at the taxpayer expense."

As the Col. is wont to say, never attribute to conspiracy that which is explainable by sheer incompetence.

United is pulling out of O'care. I work for one of the other really big insurance companies and I swear to you that we are losing significant money on O'Care and there is no end in sight to the hemorrhage of $s. We recently removed ourselves from the Florida market and will probably be making similar moves elsewhere.

I have personally worked on the O'Care financials and cost drivers and could write a book on the topic of why O'Care must have been designed by absolute morons on a hope and a prayer. I'll just touch on a few of the fatal flaws here to give you a feel.

First, there was the notion that young healthy people would be so happy to have insurance available that they would all sign up and, since they don't utilize much, the $ they paid in would cover the costs of the really sick high utilizers that would also sign up. But this did happen. We got all sick people and none of the healthy ones.

Second, and related to the first, is that the incentive to sign up was always stupid from a cost/benefit standpoint. If you're a low utilizer, why would you pay a premium to support high utilizers when the penalty at tax time is way lower than the cost of the premium? You wouldn't and they didn't. Apparently young and healthy people don't assess the risk of a serious (and expensive) illness and the need for insurance the same way that the people prancing around in DC do. Also, for young people, even if a premium is just a few hundred bucks a month, it's still can exceed what they are able to pay. Unlike DC, young people can't just print money.

Third, the whole pre-existing conditions coverage - what O and crew fantasized about was that people with pre-existing conditions would sign up, cost a lot, but then, as they got healed, they stay insured and cost would go down and premiums would eventually cover the initial high cost. Also, the healthy young people that never materialized, would cover the initial cost. Then there was - and still is, despite what lying GOP candidates say - a fund that acts like re-insurance to cover the insurance companies when O'Care costs get beyond a certain level.

But none of this worked out the way it was planned because, fourth, what has actually happened - and was predictable based on the incentives and rules - is that really sick people and those with pre-existing conditions sign up for coverage when they need it; sometimes, literally, in the emergency room. They get expensive care for a few months, then drop out of insurance. Frequently they don't even pay the premium during the few months when they were covered and utilizing healthcare. The law says that for three months after signing up medical care must be delivered even if the premium isn't paid. The insurance companies and healthcare provider have to eat the cost. I know for a fact that a lot of low income women signed up around about the time they were going to deliver a baby. They go into the hospital deliver, sometimes a premie (very expensive) and then waltz out without ever paying a dime of premium money. That's just one example.

Fifth, because of the problem with signing up, not paying premium and receiving care and insurance and providers eating cost, many providers are refusing to see O'Care members. If we (insurance) can't contract with providers, we can't carry a product.

Sixth, there is an incredible amount of outright fraud and abuse. I don't work in the investigations area so I'm not sure why this is occurring, but I am told that, again, it has something to do with the way O'Care is designed that lends itself to criminal activity.

I could go on, but hopefully you've got the picture. A concept built from pure fantasy that is ill suited for real world application. Kind of like the unicorn army in Syria.

LeaNder

different clue,

basically it feels to me that Naked Capitalism is doing a good job, thus, I wouldn't really blame it for some people that may have the wrong ideas from following it.

But your idea, that you may wind up in prison for not paying your health care sounds a bit odd. As do your comments about China.

******
during post graduate studies I did a bit of economics and law. Limited since it was a special program for people in the art, and thus in law e.g. a main focus was contract law.

I have to admit that I always felt drawn more to law then economics, thus the basic impression I came away with, was that the central formulas used in economics are always about reducing the costs of labor. Notice, I also learned e.g. how to leverage your gains, if you reduced your investment and used a high percentage of funds from a bank ideally with low interest rates.

Let me use a different product example. As far as I know Apple produces in China too. I would guess since production is more cheap over there. Now its probably based on the rule of reducing labor costs. What's your guess, are Apple products worse - or must somehow be at least the same after that based on the consumers being the products? What about investors expectations?

****
Ages ago I read an economist (Swedish, if I recall correctly) who drew my attention by using the wisdom of the arts in his field. One of his fields of attention was health care, public healthcare in some North European states.

It's pretty obvious that in this field more and more economics are taking over too. The problem in this field as in others is to control the costs. One of the things he focused on were the times people had to wait to get the necessary treatment.

I have an old school friend in Great Britain, that needed an operation on his eyes. Now he didn't pay the operation himself, due to the time he had to wait. Quite the opposite, he was horrified that the operation would not work out, and that, he had always troubles with them, but he feared he wouldn't be able to see again.l

Now he and his wife choose the best specialist in London and paid themselves. And you know what, the operation turned out bad. Now his hesitating to have his second eye done too.

Let me give you another example. A friend of mine suffered from Cataract. I researched for him the best available doctor over here. It went well. Around the same time a relationship of his who was insured with a private insurer and thus gets special treatment, or a prof to do the operation, using special clinic with origins in the States also had an operation. In her case matters did not turn out well.

We have a two central health insurance institutions over here. One is what we call public and one is what we called private. In one case you simply go to the doctor and give him your card and he gets refunded via the system. In other, the one in which you are insured privately, the money demanded is more transparent for you. There are also doctors that only treat private citizen, I suppose since they are refunded better. If you are insured privately, either based on your own decision or because you are a civil servant, like a teacher. You are sent the bills, which the insurance company then refunds you for. My sister, a teacher, likes the system.

Private insurance companies, not the one my sister has, I would assume, usually pull in young people. Obviously since they are cheaper. There's one crux, there is a time limit in which you can return to the public insurance company which has rather stable percentages, sometimes they are slightly raised be minor degrees. But if you are insured in a private insurance company and miss the point to return, you can get into serious troubles. The rates may be raised way beyond the amount you can afford.

Now thankfully I am rather healthy. Thus I may have spent much more over the years in my own private public insurance then was spent on me. On the other hand, there seems, not completely sure, but the doctor that operated my mother told me so, in her case--she was 86 least year--she may not have gotten the treatment she needed in a purely state health system. Now I guess, her kids would have convinced her to pay privately. But it seems, that in her case there would have been more serious checks if it was still worthwhile to let her have this treatment somewhere else.

The problem, no doubt may be more difficult then you imagine. To not go into related lobbies and their special interest and power in the field. They often are stock companies who while no doubt investing in research have to deal with their stock holders too.

I have no time to proofread this, I already babbled way too much.

Babak Makkinejad

My impression is that many people in the United States, Left, Right, or Center, are profoundly unsatisfied with what has happened in the United States over the last 40 years - since the election of Ronald Reagan.

The sentiment around the candidacy of Donald Trump reminds me of the sentiment I heard in 2008 from a European-American - almost crying - telling me: "He (Obama) will take our country back."

They are now looking for the Prince Charming on his proverbial White Horse. The world being what it is, they might have to settle for the horse.

Which, of course, leaves the larger question unanswered: "Were you, the Electorate, asleep at the wheel when you let things progress to this point?"

I recall editorials by Paul Sweezy, a Harvard-educated Marxist economist, and by the American conservative Patrick Buchannan, 40 years ago, both warning of the economic policies that were being pursued by successive US governments.

The Electorate ignored them.

LeaNder

Sorry, I shut up now again: But this is a serious blunder. The rest does not seem that important:

" in my own private public insurance "

I always was insured via what I called public insurance companies versus private in our system. I hope you got the idea though, that it is basically on a collective mechanism that allows elder citizen to not be forced to pay rates beyond their means later.

The system works basically like this: As employee you pay around 10% of your income. Slightly different from company to company. So far employers paid half of it. More recently this has been tweaked slightly to the advantage of employers. Would you consider paying 5% to 7% percent of your income over the years as exploitative, even more since you also are deducted taxes?

The argument that you have to remain competitive and otherwise shift jobs somewhere "better", no doubt may have helped in this context. And it surely contains more then a grain of truth.

different clue

no one,

I absolutely believe and accept that your company in particular and the private health insurance bussiness in general is losing money. I am just saying that Obama did not have a secret plan to engineer Obamacare to make you lose money. Obama had an openly stated goal to guarantee locked-in profits to the insurance industry for decades to come. This rolling pullout of the insurance companies from the Ocare exchanges is not what the Obama group had in mind. They thought it would work exactly as sold, and that Obama would collect hundreds of millions of dollars of job-well-done gratitude payments from the insurance industry after he leaves office.

With Obamacare working out badly for the industry, I think he will get a lot less gratitude payments from Big Insura than he was counting on. If money given to Obama is traceable, I expect very little of it to have Big Insura fingerprints on it.

different clue

LeaNder,

My idea is that when Obamacare has plunged deep enough into its Death Spiral that only heroic measures can save it, I strongly suspect that Congress will try to pass new laws requiring hard time in prison for people who willfully refuse to buy their legally force-mandated insurance. No such laws exist now. Any effort to pass such laws would stir new levels of rebellion and rejection in the public.

My views on China seem very straightforward to me. I know it is hard to find China Stanley thermoses and legacy Tennessee Stanley thermoses in Germany, but if you can find them, compare them and see what you think. And ask yourself what value China has created by selling poison pet food, melamine milk, lead paint toys for children, hydrogen-sulfide-offgassing sheetrock, tires where the tread strips right off while you are driving, etc. Explain to me what value China is creating by racing past America in terms of carbon skydumping and poisoning all the tuna in the Pacific Ocean with coal-based mercury. Show me the value.

Nick

If I may:

- Romney's speech was significant in that it telegraphed the party leaderships' refusal to support Trump or recognize him as the nominee.
- While Trump's supporters rightfully look askance at Romney, the potential wihholding of the party's support in the general election is nothing to sniff at: without the arty's expertise (yes, they still have some), GOTV operation, staff, and of course, $$$, Trump will have to dig deep into his own pockets, which he has been loathe to do up to this point. Or, he could fold, which although not likely is always a possibility. Hard to predict what he will do next.
- Agree that the anti-establishment feelings in both parties are running high. I think the next wave of politicians that flow into the new space crated by Trump and Sanders will be truly interesting. The GOP as we have known it is dead- and the Democratic party faces a similar fate if they fail to heed the warning that Sanders represents.
- If the GOP denies Trump the nomination, as it appears to me they will, and he decides to stay in as an independent, which I think he will, the conservative vote will be split, Hillary will take the WH and nominate Obama for the Supreme Court. Checkmate. (OK, I just threw that last bit in to be hyperbolic)

different clue

LeaNder,

The idea that we have to shift jobs somewhere "better" to remain "competitive" contains no inherent truth whatever. It contains the artificial cardboard replica of truth, a cardboard replica of truth which was artificially engineered into existence by the artificial passage of Forced Free Trade Agreements. And it can be equally artificially engineered right back out of existence by the abolition of Forced Free Trade and the restoration of Militant Belligerent Protectionism.

Fred

Babak,

"The Electorate ignored them."

I disagree. A portion of the electorate started voting Republican; meanwhile another portion believed the tales on NAFTA told by that previous charismatic Democratic president. Now they are years old and not any richer and thoroughly fed up.

no one

different clue - I agree. What I meant by designed to fail/negatively impact insurance companies was that it sure looks that way, but I accept that the design was the result of bungling and over absorption in fantasy; and not conspiracy.

Back on topic - not sure what Trump has in store for us by way of healthcare insurance. Should be interesting.

Stephanie

Trump is a genuine outsider in terms of power politics. Unlike many of the other GOP hopefuls, he has no zillionaire sugar daddy (unless you count his own daddy) and he is beholden to nobody and nothing in the political power grid, which is part of his appeal.

As far as waterboarding, etc., Trump, Rubio, and Cruz have all voiced support for torture and maintained its legality. Cruz and Rubio add a few more qualifiers, but that's about it. There really is not much space among the Republican candidates on the matter. Trump is blunter.

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