Wow, these people are absolutely ridiculous. According to many of the leading lights in the GOP, our government would be behaving like a corrupt Latin American dictatorship if we prosecuted Bush administration officials for torture. Ignore the fact that many, if not most, leading Bush administration officials violated American and international law by authorizing torture. If we go down that dangerous path towards prosecuting people who break the law, America will become no better than a Banana Republic. Like I said, wow.
Let's be honest, these remarks reach new levels of Orwellian insanity, even for Karl Rove. Furthermore, it's especially offensive for folks like John McCain, who have long supported sunglasses-wearing dictators and subverted democracy in Latin America, to make statements about the US becoming a "Banana Republic". What's the matter John, strongman rule works for Haiti or Venezuela but not for the USA?
These people make me sick.
viernes, 24 de abril de 2009
domingo, 19 de abril de 2009
Two great pieces on Somalia
Most of the mainstream discourse on Somalia and the Somali pirates is disastrously misinformed. If you're interested in learning more about this tortured African nation, please check out these two great pieces that came out this week:
"Analysis: Somalia Piracy Began in Response to Illegal Fishing and Toxic Dumping by Western Ships off Somali Coast" from last Tuesday's Democracy Now
and
"Obama and Somalia," written by Bill Fletcher Jr., which appeared in Black Commentator and on Znet.
lunes, 13 de abril de 2009
Ah, more wisdom from Tom Friedman
According to his most recent New York Times Op-Ed, columnist Tom Friedman is currently down here in Costa Rica on a little "eco-vacation". Welcome to the rich coast, Tom! To be honest though, I'm a little disappointed to learn that you're here via your newspaper column. You couldn't have a least sent an email or posted on my facebook wall to let me know you're down here? Well, I suppose you're a pretty busy man, so I'll give you pass on not getting in touch with me just this once. I better get an invite to your memorial day party this year though. That pad of yours in Bethesda is pretty sweet.
All kidding aside, the subject of Friedman's column is Costa Rican environmental policy, and the nation's much-vaunted commitment to sustainability. What most impresses Mr. Friedman about Costa Rica, in his own words, is the widespread belief among the nation's policymakers that "economic growth and environmentalism work together". Among Costa Rica's pro-growth and pro-environment policies touted by Friedman are its Carbon tax, which goes to a "national fund to pay indigenous communities for protecting their forests," its tax on water, "whereby major users [such as agribusiness]...have to pay villagers upstream to keep their rivers pristine," it's 5-year old ban on oil drilling, the government's aggressive promotion of renewable electricity, and its consolidation of energy, the environment, and mining under a single government ministry.
Some of Friedman's elaborate praise for Costa Rica is valid. The country's ban on oil drilling was indeed a very wise, far-sighted decision, as the country possesses little oil to begin with and drilling would merely pollute the country's beautiful Caribbean beaches. I find it hard to argue with compensating local communities for protecting their forests. It's a terrific idea, and ought to be expanded. Further, the decision of the state-owned power company, the Costa Rican Electricity Institute (ICE in Spanish), to continually expand renewable electricity production was great from an economic perspective. As Friedman mentions in his article, renewable electricity is the cheapest form of electricity, and Costa Ricans enjoy just about the lowest electric rates in all of Latin America (this also has a lot to do with the fact that electricity is publicly and not privately controlled, but we'll talk about that some other time).
Unfortunately, as you probably expected, Friedman is generally misguided in his assessment of Costa Rica's environmental record. This should not be a surprise to anyone, as Thomas Friedman is generally misguided about most things. What Friedman regards as the country's greatest strength--the view among its elite that growth and conservation go hand in hand--is I believe Costa Rica's greatest weakness. The fact of the matter is, often times the interests of industry and the pursuit of economic growth do not coincide with the goal of environmental preservation. When the interests of industry and the environment inevitably come into conflict, the Costa Rican government, like any other government, is faced with a choice: are we in favor of profits or the climate? Or just as often, are we in favor of profits or the people? Here in Costa Rica, the answer is almost always profits. Unfortunately, it's very much unlike the Costa Rican government to challenge the interests of powerful economic groups. As such, the reality behind the Costa Rican government's soaring environmentalist rhetoric is often rather ugly. For instance, Costa Rica has the highest deforestation rate in all of Latin America. Costa Rican farmers also use more gallons of pesticides per acre than farmers in any other nation in the hemisphere (see page 14 of linked article).
If my buddy Tom took some time to catch up on current events in Costa Rica, rather than relying exclusively on the testimony of a single government official, he would have likely come across an article or two about one of the myriad resource conflicts between industry and local communities which have taken place here over the past year. He wouldn't even have to learn Spanish to read about these struggles, as most of these cases have been extensively covered in the Tico Times, an English-language weekly oriented towards the sizeable North American expat community in Costa Rica. Had he done so, I hope he would have come to at least slightly different conclusions. Industries which have provoked conflicts with nearby communities include mining, tourism, and agribusiness/industrial fruit production and the federal government has taken the side of big business in every one of them. In my humble opinion, the most flagrant case of all of these is the government's treatment of the pineapple industry.
Anyone interested in learning more about Costa Rican pineapples can check out my blog post from last November about this issue. In a nutshell, the pineapple industry has grown rapidly in Costa Rica over the past ten years. From 2000 to 2007, land under pineapple cultivation grew over 200%, from 30,000 to 95,000 acres. From 2001 to 2008, the value of pineapple exports grew 294%, from $142 million to $560 million a year. As a result of this massive growth, Costa Rica is now the number 1 producer of fresh pineapples in the world and supplies more than 8 out of every 10 pineapples consumed in the United States. The primary beneficiaries of this explosive growth have been transnational fruit conglomerates Del Monte and Dole, which control most pineapple production, much of the processing of the fruit, and nearly all export operations. Unfortunately, however, the environmental impact of the industry has been utterly disastrous. Forests have been clear cut to make way for more pineapple plantations, soils have been depleted of their nutrients, and most importantly, rivers and aquifers which Costa Ricans rely on for drinking water have been contaminated with carcinogenic pesticides, including Bromacil and Terbufos.
How is it possible that the industry has done so much damage? The answer is that its growth has been almost entirely unregulated. Costa Rica has among the most progressive environmental legislation in the world. For instance, it is illegal for farmers to plant within 200 square meters of community water sources and companies must file environmental impact reports before comencing operations. However, when Costa Rican law comes into conflict with the desires of Dole and Del Monte, it has simply not been enforced. I have seen with my own eyes plantations located less than 10 meters from acquifers which supply water to thousands of Costa Ricans. Most plantations have not carried out environmental impact studies of any kind. In the rare occasion that studies are carried out, they're often done months after planting has begun and they are at times fradulent. The impact study for one plantation on the Caribbean coast, for instance, spoke of bird species that don't even exist in Costa Rica but was nonetheless approved by the government. Friedman's claim that Costa Rica's water tax ensures that rivers upstream from agribusiness operations remain "pristine" is simply laughable. Instead, they're often chock full of chemicals as well as extensive sedimentation caused by runoff from pineapple, banana, and other plantations.
Thankfully, the people of Costa Rica have not taken abuse from the pineapple industry sitting down. Rather, communities around the country have mobilized to oppose further expansion of the industry and demand that its growth be subject to public control. Last year, several community groups formed an umbrella organization called the National Front of Sectors Affected by Pineapple Expansion. You can check out their terrific website here. Sergio Porras, head of the pineapple program at the Costa Rican Ministry of Agriculture has dismissed these activists as senseless "radicals" bent on destroying an industry which employs thousands of people. Despite being looked down upon by the national government, they have gotten the attention of many throughout the country and have successfully forced two municipalities in the Caribbean province of Limon to impose moratoria on new plantations.
Anyways, what I'm trying to say is that the reality of environmental policy in Costa Rica is a lot less pretty than Tom Friedman makes it out to be. Development and the environment do come into conflict and the result is often ugly. Fortunately, though, there are many dedicated activists throughout the country looking to change that. Here's to hoping that the National Front of Sectors Affected by Pineapple Expansion and other community groups enjoy more and more victories in the future.
All kidding aside, the subject of Friedman's column is Costa Rican environmental policy, and the nation's much-vaunted commitment to sustainability. What most impresses Mr. Friedman about Costa Rica, in his own words, is the widespread belief among the nation's policymakers that "economic growth and environmentalism work together". Among Costa Rica's pro-growth and pro-environment policies touted by Friedman are its Carbon tax, which goes to a "national fund to pay indigenous communities for protecting their forests," its tax on water, "whereby major users [such as agribusiness]...have to pay villagers upstream to keep their rivers pristine," it's 5-year old ban on oil drilling, the government's aggressive promotion of renewable electricity, and its consolidation of energy, the environment, and mining under a single government ministry.
Some of Friedman's elaborate praise for Costa Rica is valid. The country's ban on oil drilling was indeed a very wise, far-sighted decision, as the country possesses little oil to begin with and drilling would merely pollute the country's beautiful Caribbean beaches. I find it hard to argue with compensating local communities for protecting their forests. It's a terrific idea, and ought to be expanded. Further, the decision of the state-owned power company, the Costa Rican Electricity Institute (ICE in Spanish), to continually expand renewable electricity production was great from an economic perspective. As Friedman mentions in his article, renewable electricity is the cheapest form of electricity, and Costa Ricans enjoy just about the lowest electric rates in all of Latin America (this also has a lot to do with the fact that electricity is publicly and not privately controlled, but we'll talk about that some other time).
Unfortunately, as you probably expected, Friedman is generally misguided in his assessment of Costa Rica's environmental record. This should not be a surprise to anyone, as Thomas Friedman is generally misguided about most things. What Friedman regards as the country's greatest strength--the view among its elite that growth and conservation go hand in hand--is I believe Costa Rica's greatest weakness. The fact of the matter is, often times the interests of industry and the pursuit of economic growth do not coincide with the goal of environmental preservation. When the interests of industry and the environment inevitably come into conflict, the Costa Rican government, like any other government, is faced with a choice: are we in favor of profits or the climate? Or just as often, are we in favor of profits or the people? Here in Costa Rica, the answer is almost always profits. Unfortunately, it's very much unlike the Costa Rican government to challenge the interests of powerful economic groups. As such, the reality behind the Costa Rican government's soaring environmentalist rhetoric is often rather ugly. For instance, Costa Rica has the highest deforestation rate in all of Latin America. Costa Rican farmers also use more gallons of pesticides per acre than farmers in any other nation in the hemisphere (see page 14 of linked article).
If my buddy Tom took some time to catch up on current events in Costa Rica, rather than relying exclusively on the testimony of a single government official, he would have likely come across an article or two about one of the myriad resource conflicts between industry and local communities which have taken place here over the past year. He wouldn't even have to learn Spanish to read about these struggles, as most of these cases have been extensively covered in the Tico Times, an English-language weekly oriented towards the sizeable North American expat community in Costa Rica. Had he done so, I hope he would have come to at least slightly different conclusions. Industries which have provoked conflicts with nearby communities include mining, tourism, and agribusiness/industrial fruit production and the federal government has taken the side of big business in every one of them. In my humble opinion, the most flagrant case of all of these is the government's treatment of the pineapple industry.
Anyone interested in learning more about Costa Rican pineapples can check out my blog post from last November about this issue. In a nutshell, the pineapple industry has grown rapidly in Costa Rica over the past ten years. From 2000 to 2007, land under pineapple cultivation grew over 200%, from 30,000 to 95,000 acres. From 2001 to 2008, the value of pineapple exports grew 294%, from $142 million to $560 million a year. As a result of this massive growth, Costa Rica is now the number 1 producer of fresh pineapples in the world and supplies more than 8 out of every 10 pineapples consumed in the United States. The primary beneficiaries of this explosive growth have been transnational fruit conglomerates Del Monte and Dole, which control most pineapple production, much of the processing of the fruit, and nearly all export operations. Unfortunately, however, the environmental impact of the industry has been utterly disastrous. Forests have been clear cut to make way for more pineapple plantations, soils have been depleted of their nutrients, and most importantly, rivers and aquifers which Costa Ricans rely on for drinking water have been contaminated with carcinogenic pesticides, including Bromacil and Terbufos.
How is it possible that the industry has done so much damage? The answer is that its growth has been almost entirely unregulated. Costa Rica has among the most progressive environmental legislation in the world. For instance, it is illegal for farmers to plant within 200 square meters of community water sources and companies must file environmental impact reports before comencing operations. However, when Costa Rican law comes into conflict with the desires of Dole and Del Monte, it has simply not been enforced. I have seen with my own eyes plantations located less than 10 meters from acquifers which supply water to thousands of Costa Ricans. Most plantations have not carried out environmental impact studies of any kind. In the rare occasion that studies are carried out, they're often done months after planting has begun and they are at times fradulent. The impact study for one plantation on the Caribbean coast, for instance, spoke of bird species that don't even exist in Costa Rica but was nonetheless approved by the government. Friedman's claim that Costa Rica's water tax ensures that rivers upstream from agribusiness operations remain "pristine" is simply laughable. Instead, they're often chock full of chemicals as well as extensive sedimentation caused by runoff from pineapple, banana, and other plantations.
Thankfully, the people of Costa Rica have not taken abuse from the pineapple industry sitting down. Rather, communities around the country have mobilized to oppose further expansion of the industry and demand that its growth be subject to public control. Last year, several community groups formed an umbrella organization called the National Front of Sectors Affected by Pineapple Expansion. You can check out their terrific website here. Sergio Porras, head of the pineapple program at the Costa Rican Ministry of Agriculture has dismissed these activists as senseless "radicals" bent on destroying an industry which employs thousands of people. Despite being looked down upon by the national government, they have gotten the attention of many throughout the country and have successfully forced two municipalities in the Caribbean province of Limon to impose moratoria on new plantations.
Anyways, what I'm trying to say is that the reality of environmental policy in Costa Rica is a lot less pretty than Tom Friedman makes it out to be. Development and the environment do come into conflict and the result is often ugly. Fortunately, though, there are many dedicated activists throughout the country looking to change that. Here's to hoping that the National Front of Sectors Affected by Pineapple Expansion and other community groups enjoy more and more victories in the future.
domingo, 22 de marzo de 2009
Cause for revolt
Change we can believe in? Though they'll try to convince us otherwise, the new Geithner/Obama bailout plan is just a more complicated version of the original Paulson/Bush TARP proposal released last September.
While the administration intends to formally announce the plan tomorrow, the details of the Geithner/Obama bailout plan were leaked to the New York Times last Friday. The plan is rather complicated and I won't pretend to understand all the details. Nonetheless, Yves Smith at Naked Capitalism has provided a more or less understandable analysis of the plan. From what I can tell from the Times article and the Smith analysis, the Geithner plan includes three main parts. Firstly, the FDIC will provide loans to private investors like hedge funds and private equity firms to encourage them to purchase "toxic" assets. The loans will be equal to 85% of the value of said assets and backed "only by the value of mortgage assets being bought," according to the Times. I believe these loans are basically, in the words of Paul Krugman, "heads I win, tails you lose" propositions. In other words, if the prices of these assets go up, private investors will reap profits. If they fall, the taxpayer will pick up the tab. In part two of the plan, the treasury department, drawing on the remaining $350 billion in taxpayer dollars allocated for TARP, in conjunction with private investors, will cover the remaining 15% of the value of these assets. According to the New York Times piece, treasury will likely contribute 80% of the remaining 15% share and private investors will contribute about 20%. All told, private investors will contribute about 3% of the cash under this plan and the taxpayer will be on the hook for the remaining 97%. In the third and final piece of the plan, the Treasury "plans to expand lending through the Term Asset-Backed Secure Lending Facility, a joint venture with the Federal Reserve". This program is intended to make it easier for consumers to get loans. The administration assures us that the taxpayer will be protected from overpaying for toxic assets because the banks will "bid in auctions against each other for the assets". As a result of this process, they contend that the government will pay far below the original market value for these assets.
Without a doubt, this plan is just plain awful. In proposing this plan, Obama and his economic team have revealed themselves to be one of two things: utterly incompetent or a bunch of duplicitous liars trying to pull a fast one on the American people. Unfortunately, most of the evidence points towards the latter, but let's start with the incompetence of the plan.
To begin with, the Obama economic team has fundamentally misdiagnosed the problems facing the financial system. According to Paul Krugman's most recent blog post, the administration remains captive to the idea that over the past year or so, we've been experiencing a run on basically sound banks. This bank run has drove down the price of assets and got the banks in trouble, but in the view of Obama's economic team, there's nothing fundamentally wrong with the bank's balance sheets. In the minds of Geithner, Summers, Bernake etc, "there are no bad assets. Only misunderstood ones". As such, intervening in the markets to stabilize and correct the price of the banks' "misunderstood assets" will solve the problem. Unfortunately, as ought to be evident to pretty much anyone, the banks are not fine and their troubled assets, which are largely mortgage-related securities, are not misunderstood, they're just plain bad. As Dean Baker frequently points out, we are and have been experiencing the collapse of an $8 trillion housing bubble. Due to the collapse of housing prices, the related rise in foreclosures, and the epidemic of negative equity facing millions of Americans, the market regards mortgage-backed securitites as basically worthless and of course, they're right. Further, housing prices in many areas of the country still need to fall an additional 20% or so to reach historic trend levels, so the actual value of these assets will inevitably continue to fall. As such, the FDIC and Treasury will end up overpaying for assets, the real value of which will continue to slide downwards, costing the taxpayer billions of dollars. Yet, even after we've propped up the banks with more subsidies, many of them will still be insolvent. They've just made too many bad bets.
As for the duplicitousness of this plan, the examples are myriad. Firstly, as Yves Smith points out, the billing of this plan as a public private partnership is maddeningly Orwellian. In her own words, "Since when is someone who puts 3% of total funds and gets 20% of the equity a "partner"?". There is very little private and very little partnership in this plan but there's an awful lot of public money and public risk.
The unnecessary complexity of this plan is also disturbing. By developing a Rube-Goldberg machine-like bailout plan with lots of moving parts, the administration seems to trying to hide an essential fact: that it's really just a repackaged version of the original Henry Paulson bailout plan proposed last September. The goals are the same: get the bad/toxic/troubled/misunderstood assets off the banks' balance sheets, as are the means: use public dollars to pay above market prices for these assets. The central component of the plan, the "heads you win, tails you lose" loans to hedge funds worth 85% of the value of these assets, is the functional equivalent of just buying the assets outright from the banks. Geithner et all are just adding another step to the process, by routing the money through private equity funds and hedge funds rather than just buying the assets outright. Although they totally missed the housing bubble and have demonstrated monumental incompetence elsewhere, we can be pretty sure that Geithner, Summers, and everyone else involved are well aware of this fact. These folks only tend to be incompetent when competence threatens the profits of America's bloated financial sector.
Finally, the administration's argument that competitive bidding will keep the taxpayer from overpaying for bad assets is probably the most despicable and bald-faced lie of all. According to Yves Smith, the reality of these auctions is the exact opposite. Banks simply won't agree to sell these assets unless they get what they think they are worth, which is by definition an above-market price (if this were not the case, they would've already been able to get ride of them). Thus,
the point of a competitive process (assuming enough parties show up to produce that result at any particular auction) is to elicit a high enough price that it might reach the bank's reserve, which would be the value on the bank's books now.A plan which the administration claims will protect the taxpayer but in fact does the exact opposite! This sounds a lot like the Clear Skies Act and other Bush administration antics to me. Rational observers have long known that Obama is no radical and not even especially progressive, but I honestly never expected such open deceit would emanate from his office as president.
And notice the utter dishonesty: a competitive bidding process will protect taxpayers. Huh? A competitive bidding process will elicit a higher price which is BAD for taxpayers!
On top of revealing that the Obama economic team (which includes President Obama of course) is a midly incompetent and highly duplicitous bunch with a disturbingly low opinion of the American people, the new bailout plan also rewards all the wrong people and creates some pretty perverse incentives. Unlike nationalization, which is the only sensible solution to the financial crisis, this plan leaves the criminal management of the banks in place. Apparently, the Obama administration would like to continue rewarding the same folks who got us into this mess with even more cash. The "heads I win, tails you lose" loans to hedge funds also encourage them to make risky bets without bearing any of the consequences. And do we really want to funnel any more money into private equity firms and hedge funds, which, as Juan Gonzalez often points out on Democracy Now, are even less transparent and more dangerous than investment banks? I certainly don't think so.
More than anything, this plan reveals that the Obama administration cares more about the banks and their executives than the American people. We should all do everything we can to voice our opposition to it. In electing President Obama, the American people thought they were voting for change, not 4 more years of Bush-era, failed policies. Yet, when it comes to financial policy, team Obama has done absolutely nothing to distinguish itself from team Bush. In fact, in some ways the Obama administration has been worse. At least when Paulson released his plan for bailing out failed banks with taxpayer dollars back in September, he was basically upfront about it. Instead, the Obama team has developed an excessively complex plan to mask their true intentions. I know it's a little dramatic to say so, but this is a sad day for American democracy.
lunes, 16 de marzo de 2009
Cause for celebration
Yes!
"This is the defeat of Ronald Reagan, nothing less."
-Roberto Lavato, Salvadoran-American and Contributing Associate Editor with New America Media
sábado, 7 de marzo de 2009
One thing I forgot to mention
In my recent post about health care reform, I forgot to include one very important point. Not only is single payer the most efficient and equitable means of financing health care, it's also quite popular. Numerous polls have demonstrated that the majority of Americans support government-financed, universal health insurance. In general, polls conducted over the past two years show that approximately two thirds of Americans would prefer single payer over the current system. Surprisingly, this level of support holds true even if switching to single payer would require a tax increase. (In a May 2007 poll conducted by CNN, 64% of the survey population responded "yes" to the question: "Do you think the government should provide a national health insurance program for all Americans, even if this would require higher taxes?".) The majority of health care providers also support single payer. The largest union of Registered Nurses, the California Nurses Assocation-National Nurses Organizing Committee, strongly supports national health insurance. 59% of physicians, up from just 49% in 2002, support it as well.
Given that large majorities of both consumers and providers of health care support single payer national health insurance, a majority, or at least a large portion, of our representatives in Congress ought to support single payer as well. That is, of course, if you believe congressional representatives ought to represent the views of their constituents. Likewise, single payer health insurance should have been vigorously debated as a serious option for the United States at the recent Obama administration-sponsored health care summit, if in fact "all options are on the table," as the President claims. Furthermore, single payer ought to be widely discussed in the media and advocates of single payer should be given extensive time and space on television and newspaper op-ed pages to make the case for national health care. Unfortunately, this is not the case in any of these instances.
The bill to create a single payer health insurance system, HR 676, currently has 93 co-sponsors in the House. In other words, about 1/5 of the "people's house" supports a bill that about 2/3 of Americans support. There is no single payer legislation currently in the Senate at all, though Russ Feingold (at least at one point) and Bernie Sanders are supporters. Apparently it's difficult to stand with the people, rather than with the corporations, when you have to finance increasingly expensive state-wide elections every six years. At first, not a single advocate of single payer was invited to Obama's health care summit, but in response to intense grassroots presure, Obama relented and allowed John Conyers (D-MI), the congressional sponsor of HR 676, and Dr. Oliver Fein, the director of Physicians for a National Health Plan (PNHP), to attend. Nonetheless, according to The Nation's John Nichols, neither Conyers nor Fein were allowed to give speeches at the event, while representatives from the U.S. Chamber of Commerce, Blue Cross Blue Shield Association, and the Business Roundtable were. None of these organizations support single payer and none of the speakers at the event did either. Apparently the "we" in "Change We Can Believe In" excludes the American people.
Media coverage of single payer has been similarly representative. In a report released yesterday, the media watchdog group Fairness and Accuracy in Reporting (FAIR) argues that there has been a "media blackout on single payer". According to FAIR, there have been hundreds of stories in major national newspapers and on television over the past week on health care and health care reform, "yet all but 18 of these stories made no mention of "single-payer"(or synonyms commonly used by its proponents, such as "Medicare for all," or the proposed single-payer bill, H.R. 676)". In the rare event that single payer or its synonyms were even mentioned, it was often done so disapprovingly. Only 5 stories of the 18 stories which mention single payer included the views of single payer advocates, all of which appeared in print. Of the 10 op-ed pieces that appeared last week which mentioned single payer, 5 were a column written by Charles Krauthammer, originally published in the Washington Post and reprinted 4 times, which lampoons the concept of national health insurance. On the other hand, "socialized medicine," the misleading term preferred by opponents of single payer, appeared 7 times on television. (If medicine were truly socialized, both the financing and delivery of health care would be in the hands of the government, as in the case in the National Health Service (NHS) in Britain. In contrast, single payer, as envisioned in HR 676, would mean government financing but private delivery of health care, as is the case in Canada or in Medicare for elderly Americans. Basically no organization in the U.S., to my knowledge, advocates making doctors employees of the government). In fact, according to the FAIR study, "socialized medicine" is CNN chief medical correspondent Elizabeth Cohen's term of choice when describing basically any additional government involvement in health care, whether the example is Bill Clinton's attempted health care reform from 1994, the Canadian national health care system, or the British NHS. Thank you Dr Cohen (Ms. Cohen?) and the rest of the media for doing such a great job keeping us informed.
The disparity between widespread public approval of single payer and even more widespread disdain for single payer among our nation's political and opinion elite is a glaring case of what David Sirota aptly calls the rootsgap; sadly, on most important issues, public opinion and elite opinion are diametrically opposed. This gap will make overhauling our disastrous health care system particularly difficult. Nonetheless, grassroots activism has already achieved some victories. For instance, if it were not for pressure from PNHP, pro-single payer labor unions, and other activists, voices for single payer would not have been been included in President Obama's health care summit. We have to keep at it, and I'm confident that those same folks will continue doing everything they can to advance the cause of a just and efficient health care system. Hopefully the FAIR study will shame some of the media into changing their ways as well. In particular, I'd like Bill Moyers, Tavis Smiley, Rachel Maddow, and/or Keith Olberman to step up on this issue. Come one guys, let's see a panel discussion on health care on your shows which include single payer advocates! Let's see one of you bring the facts into this debate, like the CBO study on cost savings from shifting to single payer or any of the myriad public opinion polls. Jon Stewart of Steven Colbert could do a lot to ensure that all voices are heard in this debate as well. Please, invite David Himmelstein, Rose Ann Demoro, or John Conyers on your programs! Or why not my man Dennis Kucinich or America's favorte documentarist, Michael Moore! There's no shortage of smart, dedicated people on the right side of this issue. They just need to be given a chance to speak out. So please, just give single payer a chance!
Given that large majorities of both consumers and providers of health care support single payer national health insurance, a majority, or at least a large portion, of our representatives in Congress ought to support single payer as well. That is, of course, if you believe congressional representatives ought to represent the views of their constituents. Likewise, single payer health insurance should have been vigorously debated as a serious option for the United States at the recent Obama administration-sponsored health care summit, if in fact "all options are on the table," as the President claims. Furthermore, single payer ought to be widely discussed in the media and advocates of single payer should be given extensive time and space on television and newspaper op-ed pages to make the case for national health care. Unfortunately, this is not the case in any of these instances.
The bill to create a single payer health insurance system, HR 676, currently has 93 co-sponsors in the House. In other words, about 1/5 of the "people's house" supports a bill that about 2/3 of Americans support. There is no single payer legislation currently in the Senate at all, though Russ Feingold (at least at one point) and Bernie Sanders are supporters. Apparently it's difficult to stand with the people, rather than with the corporations, when you have to finance increasingly expensive state-wide elections every six years. At first, not a single advocate of single payer was invited to Obama's health care summit, but in response to intense grassroots presure, Obama relented and allowed John Conyers (D-MI), the congressional sponsor of HR 676, and Dr. Oliver Fein, the director of Physicians for a National Health Plan (PNHP), to attend. Nonetheless, according to The Nation's John Nichols, neither Conyers nor Fein were allowed to give speeches at the event, while representatives from the U.S. Chamber of Commerce, Blue Cross Blue Shield Association, and the Business Roundtable were. None of these organizations support single payer and none of the speakers at the event did either. Apparently the "we" in "Change We Can Believe In" excludes the American people.
Media coverage of single payer has been similarly representative. In a report released yesterday, the media watchdog group Fairness and Accuracy in Reporting (FAIR) argues that there has been a "media blackout on single payer". According to FAIR, there have been hundreds of stories in major national newspapers and on television over the past week on health care and health care reform, "yet all but 18 of these stories made no mention of "single-payer"(or synonyms commonly used by its proponents, such as "Medicare for all," or the proposed single-payer bill, H.R. 676)". In the rare event that single payer or its synonyms were even mentioned, it was often done so disapprovingly. Only 5 stories of the 18 stories which mention single payer included the views of single payer advocates, all of which appeared in print. Of the 10 op-ed pieces that appeared last week which mentioned single payer, 5 were a column written by Charles Krauthammer, originally published in the Washington Post and reprinted 4 times, which lampoons the concept of national health insurance. On the other hand, "socialized medicine," the misleading term preferred by opponents of single payer, appeared 7 times on television. (If medicine were truly socialized, both the financing and delivery of health care would be in the hands of the government, as in the case in the National Health Service (NHS) in Britain. In contrast, single payer, as envisioned in HR 676, would mean government financing but private delivery of health care, as is the case in Canada or in Medicare for elderly Americans. Basically no organization in the U.S., to my knowledge, advocates making doctors employees of the government). In fact, according to the FAIR study, "socialized medicine" is CNN chief medical correspondent Elizabeth Cohen's term of choice when describing basically any additional government involvement in health care, whether the example is Bill Clinton's attempted health care reform from 1994, the Canadian national health care system, or the British NHS. Thank you Dr Cohen (Ms. Cohen?) and the rest of the media for doing such a great job keeping us informed.
The disparity between widespread public approval of single payer and even more widespread disdain for single payer among our nation's political and opinion elite is a glaring case of what David Sirota aptly calls the rootsgap; sadly, on most important issues, public opinion and elite opinion are diametrically opposed. This gap will make overhauling our disastrous health care system particularly difficult. Nonetheless, grassroots activism has already achieved some victories. For instance, if it were not for pressure from PNHP, pro-single payer labor unions, and other activists, voices for single payer would not have been been included in President Obama's health care summit. We have to keep at it, and I'm confident that those same folks will continue doing everything they can to advance the cause of a just and efficient health care system. Hopefully the FAIR study will shame some of the media into changing their ways as well. In particular, I'd like Bill Moyers, Tavis Smiley, Rachel Maddow, and/or Keith Olberman to step up on this issue. Come one guys, let's see a panel discussion on health care on your shows which include single payer advocates! Let's see one of you bring the facts into this debate, like the CBO study on cost savings from shifting to single payer or any of the myriad public opinion polls. Jon Stewart of Steven Colbert could do a lot to ensure that all voices are heard in this debate as well. Please, invite David Himmelstein, Rose Ann Demoro, or John Conyers on your programs! Or why not my man Dennis Kucinich or America's favorte documentarist, Michael Moore! There's no shortage of smart, dedicated people on the right side of this issue. They just need to be given a chance to speak out. So please, just give single payer a chance!
lunes, 2 de marzo de 2009
A Truly pragmatic approach to health care reform
Health care reform is, once again, in the air in Washington. President Obama says its his administration's top fiscal priority. It's about time. Evidence of the myriad flaws of the U.S. health care system is overwhelming. Among the industrialized nations of the world, the American health care system is the most expensive, both in absolute terms and relative to the size of our economy, least equitable--1/6 of Americans have no insurance, while in every other industrialized nation, health care is a right--and just about the worst performing. Despite spending more on health care than any other nation, The United States ranks 38th in the world in life expectancy, and 33rd in infant mortality. Many developing nations, such as Costa Rica and Chile, have higher life expectancies. Cuba, whose per capita income is less than a fourth of the U.S., has a far lower infant mortality rate. The rising cost of health care in the United States is also becoming unbearable for American families. Medical bills are the cause of nearly half of personal bankruptcies in the United States. The U.S. health care system is also a disastrous competitive disadvantage for American industry, a problem best exemplified by the Big 3 auto companies. As Amy Goodman loves to point out, the automakers spend more on health care than on steel. According to Dean Baker, if the U.S. health care system was as expensive as the Canadian system, GM would have earned $22 billion more in profits over the past ten years. If they had those extra earnings, they might have been able to ride out the current crisis without government assistance, or at least with far less aid.
It may come as some of a shock, as I rarely say anything positive about him, but I think President Obama's thinking on health care is, at a minimum, on the right track. First and foremost, I'm happy that President Obama has acknowledged that the American health care system is in crisis. In his own words:
Both of these ideas aren't bad, if implemented correctly. Our goal, however, ought to be moving towards a single payer health insurance system, like that of Canada. Unfortunately, Obama is not proposing a single payer system. Single payer is the most equitable means of financing health care as it guarantees the same standard of care to everyone, regardless of their ability to pay. In single payer systems, people also aren't dependent on their employers for health insurance, like we are in the U.S., allowing for continuity of coverage in the event of joblessness. It is also far and away the most efficient means of financing health care. As mentioned above, countries which use single payer systems and guarantee coverage to everyone, like Canada, France, and the United Kingdom, actually spend less per person than we do in the United States, despite the gaping holes in our system.
How is that possible? Mainly because private companies are far less efficient insurers than government agencies. That's right, as difficult as it may be for Americans to believe, privatization is not synonymous with efficiency. Private companies are less efficient because they make money not by providing the best quality insurance at the lowest price, but by denying coverage to the sick and selectively covering only the healthiest and wealthiest among us. This process, as any American whose ever wrangled with their insurance company knows, requires a lot of paperwork, wastes time, and drives up administrative costs. In a single payer plan, everyone is covered, regardless of income or health, so there's far less wasteful paper work. Private companies also earn profits and pay executives exorbitant salaries, two sources of waste which are nonexistent in government bureaucracies. These costs all add up. According to Physicians for a National Health Program, private insurers spend 13 cents of every dollar they take in in on administration and profits. For managed care organizations, this figure is even higher, averaging 30%. In contrast, administrative costs and overhead represent just 2% of the costs of running Medicare and 1% of the cost of the Canadian national health insurance system. Having to deal with multiple insurance plans, each with different, complex, and often confusing billing procedures, also drives up administrative costs for doctor's offices and hospitals in the U.S.. In Canada, doctor's offices spend 34% of their gross income on overhead and hospitals spend about 12%. In the United States, the numbers are 44% and 25.5%, respectively. All told, the potential savings of switching to a single payer plan in terms of reduced bureaucracy are enormous. According to the U.S. Congress's General Accounting Office (GAO), switching to single payer would instantly cut U.S. health care costs by 10% a year, saving us $100 billion annually.
Any plan that leaves private insurers in place will force consumers and providers to bear the cost of unnecessary administrative waste. As such, private insurance will never be as effective at containing costs, while preserving quality and equity, as public insurance. As concerned citizens, we ought to be organizing and pushing for single payer. That being said, Obama's plan is not at all terrible. In particular, creating a public plan that everyone can buy into, even as a voluntary option, is a great idea. Due to the inherent efficiencies of public insurance noted above, the public option ought to deliver decent coverage at a lower price than private insurance. Thus, through the magic of the marketplace, individuals and businesses should switch from private to public insurance, saving them money on a micro level and decreasing costs on a macro level. Obama has also proposed the idea of requiring private insurers (and the new public plan) to use community rating, which would make it illegal for them to deny coverage to people based on pre-existing health conditions and require them to charge everyone the average, rather than marginal price of coverage. In other words, if it costs, on average, $6000 per person per year to cover everyone at your workplace, then the insurer must charge everyone $6000 a year and cannot charge less for young, healthy workers or more for older, sicker workers. Community rating is an absolutely essential piece of Obama's plan for it to work properly. It ought to make private insurance function more equitably. By criminalizing selective coverage, it should also cut down on administrative costs as insurers will spend less money trying to figure out how not to cover people. Community rating will also insure that the public and private plans compete on a level playing field. If a public plan which uses community rating is actually established and private insurers are not required to play by the same rules, private companies will continue to cover just the healthiest, youngest, and wealthiest and likely drop their coverage of sicker people, while the least healthy and oldest, who cost more to insure, will migrate to the public insurance, weighing down the public budget. This phenomena, known as adverse selection(see example: insurance), is a big problem in Chile, which has both public and private insurance but does not require that they use the same standards for coverage (if you're a total geek like me and would actually like to read the Chile study, send me an email and I'll send you a copy).
Basically, if Obama's plan were put into law exactly as he envisions it, it would be decent, but not ideal. Regardless, the pragmatic path for citizen activists to take is still advocating for single payer. Not only should we advocate for it because it's the best system, it's also the smartest negotiations tactic if we're willing to be honest about how Washington actually works and indeed how all public policy is made any where. As Paul Street eloquently pointed out back in November of last year,
Whatever health care reform comes out of Washington, I believe, will inevitably be a compromise between the people's interests and corporate interests. If we build a large, aggressive, grassroots campaign for single payer, as many progressive organizations like Physicians for a National Health Program, the California Nurses Association, and Healthcare-Now!, are already working towards, we approach the negotiations over health care reform in Washington with a strong hand and raise the cost of not acting or acting solely in the corporate interest. In contrast, if we preemptively make concessions to corporate interests, like those made by Health Care for America Now!, which has aligned themselves totally with the Obama plan and opposes single payer, we set ourselves up for failure. The health insurance industry will do everything they can to prevent the most vital and progressive elements of the Obama plan from passing, namely community rating and the public insurance plan. If we start off by calling just for those reforms, a far weaker plan can be presented as a compromise between the left (the people) and the right (the corporations). See the recent stimulus debate for more evidence of this dynamic.
So please, write or call your congresspeople and tell them you want single payer health insurance today! There's already a bill in congress that would put single payer in place, sponsored by Representative John Conyers of Michigan, HR 676. Then check out Healthcare-Now!'s website and find out when the next demonstration is in favor of single in your area and go to it! I know it's easy to say this, heck, I'm in Costa Rica, but I really think supporting single payer is among the most patriotic things you can do. HR 676, for America's future!
It may come as some of a shock, as I rarely say anything positive about him, but I think President Obama's thinking on health care is, at a minimum, on the right track. First and foremost, I'm happy that President Obama has acknowledged that the American health care system is in crisis. In his own words:
the cost of our healthcare has weighed down our economy and our conscience long enough. So let there be no doubt: healthcare reform cannot wait, it must not wait, and it will not wait another year.He is also matching his words with action. In his budget proposal, Obama has allocated $634 billion for health care reform. Obama plans to use those $634B for two main purposes. Firstly, he wants to set up a system of subsidies to help Americans without health insurance to afford it. Secondly, he wants to set up a public health insurance plan, like Medicare, that any American can buy into. He proposes to pay for this by raising taxes on the super-wealthy and eliminating subsidies for the pharmaceutical and insurance industries in Medicare, which were included in the 2003 Medicare Modernization act. Or, as Paul Krugman more accurately calls it, The Medicare Middleman Multiplication Act of 2003. Eliminating the gratuitous and utterly inefficient corporate welfare in Medicare is a good step in itself. I'm glad that he also plans to put the savings generated to good use.
Both of these ideas aren't bad, if implemented correctly. Our goal, however, ought to be moving towards a single payer health insurance system, like that of Canada. Unfortunately, Obama is not proposing a single payer system. Single payer is the most equitable means of financing health care as it guarantees the same standard of care to everyone, regardless of their ability to pay. In single payer systems, people also aren't dependent on their employers for health insurance, like we are in the U.S., allowing for continuity of coverage in the event of joblessness. It is also far and away the most efficient means of financing health care. As mentioned above, countries which use single payer systems and guarantee coverage to everyone, like Canada, France, and the United Kingdom, actually spend less per person than we do in the United States, despite the gaping holes in our system.
How is that possible? Mainly because private companies are far less efficient insurers than government agencies. That's right, as difficult as it may be for Americans to believe, privatization is not synonymous with efficiency. Private companies are less efficient because they make money not by providing the best quality insurance at the lowest price, but by denying coverage to the sick and selectively covering only the healthiest and wealthiest among us. This process, as any American whose ever wrangled with their insurance company knows, requires a lot of paperwork, wastes time, and drives up administrative costs. In a single payer plan, everyone is covered, regardless of income or health, so there's far less wasteful paper work. Private companies also earn profits and pay executives exorbitant salaries, two sources of waste which are nonexistent in government bureaucracies. These costs all add up. According to Physicians for a National Health Program, private insurers spend 13 cents of every dollar they take in in on administration and profits. For managed care organizations, this figure is even higher, averaging 30%. In contrast, administrative costs and overhead represent just 2% of the costs of running Medicare and 1% of the cost of the Canadian national health insurance system. Having to deal with multiple insurance plans, each with different, complex, and often confusing billing procedures, also drives up administrative costs for doctor's offices and hospitals in the U.S.. In Canada, doctor's offices spend 34% of their gross income on overhead and hospitals spend about 12%. In the United States, the numbers are 44% and 25.5%, respectively. All told, the potential savings of switching to a single payer plan in terms of reduced bureaucracy are enormous. According to the U.S. Congress's General Accounting Office (GAO), switching to single payer would instantly cut U.S. health care costs by 10% a year, saving us $100 billion annually.
Any plan that leaves private insurers in place will force consumers and providers to bear the cost of unnecessary administrative waste. As such, private insurance will never be as effective at containing costs, while preserving quality and equity, as public insurance. As concerned citizens, we ought to be organizing and pushing for single payer. That being said, Obama's plan is not at all terrible. In particular, creating a public plan that everyone can buy into, even as a voluntary option, is a great idea. Due to the inherent efficiencies of public insurance noted above, the public option ought to deliver decent coverage at a lower price than private insurance. Thus, through the magic of the marketplace, individuals and businesses should switch from private to public insurance, saving them money on a micro level and decreasing costs on a macro level. Obama has also proposed the idea of requiring private insurers (and the new public plan) to use community rating, which would make it illegal for them to deny coverage to people based on pre-existing health conditions and require them to charge everyone the average, rather than marginal price of coverage. In other words, if it costs, on average, $6000 per person per year to cover everyone at your workplace, then the insurer must charge everyone $6000 a year and cannot charge less for young, healthy workers or more for older, sicker workers. Community rating is an absolutely essential piece of Obama's plan for it to work properly. It ought to make private insurance function more equitably. By criminalizing selective coverage, it should also cut down on administrative costs as insurers will spend less money trying to figure out how not to cover people. Community rating will also insure that the public and private plans compete on a level playing field. If a public plan which uses community rating is actually established and private insurers are not required to play by the same rules, private companies will continue to cover just the healthiest, youngest, and wealthiest and likely drop their coverage of sicker people, while the least healthy and oldest, who cost more to insure, will migrate to the public insurance, weighing down the public budget. This phenomena, known as adverse selection(see example: insurance), is a big problem in Chile, which has both public and private insurance but does not require that they use the same standards for coverage (if you're a total geek like me and would actually like to read the Chile study, send me an email and I'll send you a copy).
Basically, if Obama's plan were put into law exactly as he envisions it, it would be decent, but not ideal. Regardless, the pragmatic path for citizen activists to take is still advocating for single payer. Not only should we advocate for it because it's the best system, it's also the smartest negotiations tactic if we're willing to be honest about how Washington actually works and indeed how all public policy is made any where. As Paul Street eloquently pointed out back in November of last year,
Big and meaningful reforms - and we need serious reforms (e.g. single-payer national health insurance, massive public works programs, and the restoration of union organizing rights in this country), however insufficient they may be in and of themselves - are only attained when elites are convinced that the cost of changing is less than the cost of not changing. The New Deal is a perfect example of this. As I've stated before, FDR did not create social security, set up public works/job creation programs, or reform American labor legislation solely out of the goodness of his own heart. Rather, he took these steps because there were lots of radicals, such as trade unionists, unemployed activists, and anti-eviction protesters, running arround in the 1930s with very dangerous ideas that shook the status quo to its core. I can't find the exact quote, but I'm almost positive that FDR regarded his efforts as "saving capitalism from itself". If he had not acted, America may have very well been taken over by those crazy radicals. (If only, I'd say, but we can get back to that later). Instead, he preserved the state capitalist economic system, albeit in a much more humane fashion.
Whatever health care reform comes out of Washington, I believe, will inevitably be a compromise between the people's interests and corporate interests. If we build a large, aggressive, grassroots campaign for single payer, as many progressive organizations like Physicians for a National Health Program, the California Nurses Association, and Healthcare-Now!, are already working towards, we approach the negotiations over health care reform in Washington with a strong hand and raise the cost of not acting or acting solely in the corporate interest. In contrast, if we preemptively make concessions to corporate interests, like those made by Health Care for America Now!, which has aligned themselves totally with the Obama plan and opposes single payer, we set ourselves up for failure. The health insurance industry will do everything they can to prevent the most vital and progressive elements of the Obama plan from passing, namely community rating and the public insurance plan. If we start off by calling just for those reforms, a far weaker plan can be presented as a compromise between the left (the people) and the right (the corporations). See the recent stimulus debate for more evidence of this dynamic.
So please, write or call your congresspeople and tell them you want single payer health insurance today! There's already a bill in congress that would put single payer in place, sponsored by Representative John Conyers of Michigan, HR 676. Then check out Healthcare-Now!'s website and find out when the next demonstration is in favor of single in your area and go to it! I know it's easy to say this, heck, I'm in Costa Rica, but I really think supporting single payer is among the most patriotic things you can do. HR 676, for America's future!
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