Interviewing For Dummies. . .

Whenever the economy turns south, business websites start posting interview tips. Wear a suit, don’t pick your nose, don’t pick the other guy’s nose. Sometimes they even post questions that might be asked, just to “prepare” you. But what good are questions without answers? And these other websites never give you the answers. Commentarama doesn’t play that game! So without further ado, we give unto you, the Commentarama Interview Guide.

Tips and Tipp-offs

Often, the decision to hire an applicant will come down to some subtle mistake the applicant makes, like missing the spittoon or insulting the interviewer’s mother. Sometimes, it’s a grooming failure or inappropriate body language. Sometimes, there’s just something about you that screams “untrustworthy,” “lazy,” or “stopid.” Fortunately, these kinds of mistakes are easy to avoid. Try to remember the following common sense guidelines:

• Wear clothing. The age of interviewing au naturel passed in 1976 with the advent of disco. Interviewers now expect you to come fully clothed.

• Check your resume for typos AND fix any typos you find. Sure, this sounds like nitpicking, but employers dig that kind of stuff. . . nitpicking, not natpicking.

• Don’t hurt anybody. . . don’t even threaten to hurt anybody. Save that until they try to fire you.

• Avoid common swear words whenever possible during the interview. Try using uncommon swear words instead. Swearing in a foreign language also can be seen as a sign of sophistication.

• Do not finish every statement with the words “as foretold by prophecy.” Once or twice is fine, but more than that seems a little emphatic.

• Do not bring a chunk of blue cheese with you, and if you do, share. We generally recommend pre-sliced provolone or a Vienna sausage.

• Don’t mention the six months you worked as a pimp. You paid good money to have that expunged, don’t waste the investment.

• Use the word "playa-hater" liberally.

Beyond that, pretty much anything goes.

The Interrogation

At some point, most interviews end up in a question and answer phase. This is where interviews get tricky. Contrary to what other “experts” may tell you, it is not a good idea to refuse to answer these questions. Indeed, you should never (1) greet a question with stony silence, (2) ask to “pass” on the question, (3) respond “what do you think [expletive]” to the [expletive]’s stupid question, or (4) plead the fifth. With that in mind, here are some common questions you might encounter, and some answers with a proven track record of success.

Q. What do you know about our company?
A. Apparently more than you, if you are asking me. They have a website if you want to bone up on it before we continue?

Q. What can you do for us that someone else can't?
A. I am willing to go that extra mile, and I’m not saddled with qualms about morality.

Q. What do you believe is the most difficult part of being a supervisor of people?
A. Dealing with the jerks that companies hire.

Q. How would your colleagues describe you?
A. Why? What have you heard?

Q. How would your boss describe you?
A. Obsessed with quality, paranoid about mistakes, maniacal about customer satisfaction, and down right crazy when it comes to company loyalty.

Q. Why do you want to work for us?
A. My cult leader told me to work here. He said further instructions would follow.

Q. What are your strong points?
A. I’ve won national awards for both the decibel level and the duration of my flatulence.

Q. What are your weak points?
A. My tendency to take revenge against people who don’t hire me.

Q. What was wrong with your current or last position?
A. The legal fees were killing me.

Q. What position do you expect to have in 2 to 5 years?
A. I plan to be your boss.

Q. Tell me about your hobbies?
A. I sell office supplies at flea markets.

Q. If you could be any type of tree, what kind of tree would you be?
A. The kind that gets hired.

If you practice these questions and memorize these answers before an interview, nothing can go wrong!

Turn The Tables On Your Opponent

Finally, there will come a point in the interview when the hunter becomes the huntee, and you get to grill the bastard. Many people are afraid to take advantage of this opportunity to land a few devastating blows. This is a mistake. Try the following questions, which will make you sound like an ideal candidate:

• You’ve never interviewed anyone before, have you?

• Why do the secretaries call you “stinky”?

• You’re not going to verify anything on my resume are you?

• Why is this position open?

• Did you know that aliens built my house?

• I heard the word "bathroom cam" when I passed the mailroom, what are the limits on that policy?

There you have it, advice that is all but guaranteed to get you noticed! Trust me, you’ll thank us later. . .

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What's On Hillary Clinton's Mind?

So what are we to make of Hillary’s outburst?

“My husband is not Secretary of State, I am. If you want my opinion, I will tell you my opinion. I am not going to be channeling my husband.”

On the surface, it’s obvious. Hillary Clinton is an ambitious woman with a huge ego. But for most of her career, she has been obscured by her husband’s shadow. With Bill being praised for his solving the North Korea journalist situation, a situation that normally would fall within the purview of her current position, her outburst could merely represent her frustration at being shown up, once again, by her buffoonish husband.

But there is something much deeper here, both for Hillary and for the Democratic party. This outburst likely represent the realization that Hillary has made a huge mistake by agreeing to join Obama’s administration, because she has been minimized, marginalized, and irrelevant-ized. Indeed, by all appearances, she is the least independent, least powerful, and least relevant Secretary of State the country has known in our lifetimes. And, in politics, appearance is everything. Thus, her mistake likely has killed off any chance she has of being elected President.

This situation actually has its roots in 1992. When Bill was elected President, Hillary thought she had been given carte blanche to exercise Bill’s power as a co-president. But her attempts to exercise that power disintegrated under a wave of public criticism that she had not been elected, only Bill had been elected.

Thus, once Bill was safely out of the way, she set out to claim an electoral mandate of her own so that she herself could one day exercise power. And she chose to get that mandate by becoming a United States Senator from New York. But her ultimate goal was always to become the President, not merely a junior senator. Thus, she subsumed her ideological desires to gain a reputation in the Senate as a moderate, in the belief that this would make her palatable to the majority of the American people by defusing the image of her as a socialist, an image that was formed in the health care taskforce debacle.

What she did not count on, however, was that her party would go insane and would seek to nominate not the most experienced or most reasonable or most electable candidate, but would reach out to the candidate promising the most extreme left-wing policies. Thus, while she sold herself as an electable moderate, Obama ran far to her left and knocked off her lethargic campaign. He then went on to defeat John McCain who, to this day, has never been able to articulate a reason for anyone to vote for him.

After this shocking upset, Hillary made her next mistake: she listened to the press, which circulated the idea that she had lost because she had no foreign policy experience. Thus, when Obama offered her the position as Secretary of State, she saw an opportunity to check that box on her resume. Sadly, for her, she did not see the danger.

For Obama, it turns out, is perhaps the most Machiavellian politician the United States has ever produced. He saw the appointment of Hillary as an opportunity to eliminate a possible competitor by stripping his party of a leader that could oppose his agenda. Thus, he appointed her, and promptly tucked her away into the bowels of the State Department, far away from her former political organization and without the power to raise funds or speak her mind. Moreover, to prevent her from gaining the experience she sought and then leaving to lead an opposition, he immediately set about stripping her position of all useful authority. No sooner had her rear end hit the chair, than Obama began appointing special envoys to handled all of the complex and high-profile foreign policy matters normally handled by the Secretary of State. Even Biden was sent to key meetings instead of Hillary. . . slow Joe Biden.

Finally, to solve the North Korea issue, a relatively minor issue in the diplomatic scheme of things, Obama sent Bill Clinton, the very man whose shadow Hillary had been trying to escape, to very publicly achieve what she could not. Obama and Clinton further praised this as a purely private effort, even though it was not, wrongly suggesting that the State Department was irrelevant to resolving this matter.

Thus, not only has Obama stripped Hillary of her political organization, of her base, of her fund raising ability, and of her political voice, but he deprived her of the foreign policy experience she craved and he shoved her right back into Bill Clinton’s shadow. Effectively, Obama has smothered her political aspirations.

But Hillary is not alone. One by one, Obama has co-opted each of the people who might challenge him and made them disappear into the machinery. Governors, Congressmen, and even a few Republicans have all vanished into the bureaucracy. The effect on the Democratic party is actually quite corrosive. While this means initially that they are more unified than is their custom, it also means that they no longer have any leaders waiting in the wings to replace Obama when his term expires. Indeed, if Obama chose to leave politics today, ask yourself who among the Democrats has the stature to run a national campaign to replace him.

It is an odd strategy to destroy your friends to keep them from becoming your enemies, but that seems to be the planning coming from the White House.

Moreover, the Obama people seem quite content to risk the political careers of many young moderate Democrats by forcing votes on issues like cap and trade and the absurd health care reform, which will not satisfy their base but will enrage everyone to the right of Nancy Pelosi. One must wonder, whether Obama would not rather see these moderates -- natural opponents to his agenda -- fail and be replaced by Republicans than to face dissent from his own party? Perhaps, so long as he can keep a workable majority of liberals, he thinks it’s wise to cull these moderate friends?

Whatever is going on, now is not a good time to be an Friend Of Obama.


** As an aside, it turns out that the questioner did not ask about Bill's opinion; the question was mistranslated. He asked about Obama's opinion. I guess the universe does love a good joke now and then. . . Bill, by the way, spent his birthday in Vegas, without Hillary.

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United States of America™, Property of Goldman Sachs

In 1873, Mark Twain co-authored a book called The Gilded Age: A Tale of Today, and thereby gave a name to era between Reconstruction and the Progressive Era. Were Twain alive today, he would likely name our present era “The Second Gilded Age.” And nothing illustrates this more than the many-tentacled creature known as Goldman Sachs.

The Gilded Age

Events today read like a repeat of the Gilded Age.

The Gilded Age is generally considered to have begun under the Grant administration. It was an era noted for massive corruption, dramatic social and economic upheaval, and a shocking incestuousness between big business and government. These two became so intertwined that the public came to see government action as nothing more than favoritism, bribery, kickbacks, inefficiency, waste, and corruption. Smart people.

The Gilded Age was the age of robber barons, like Andrew Carnegie, John Rockefeller, Cornelius Vanderbilt, and John Pierpont Morgan -- names that continue to mark our most powerful corporations today. It was the time of Tammany Hall and Boss Tweed, of corrupt local politics and election fraud, of Republican Mugwumps calling for an end to the spoils system in the civil service, of Bourbon Democrats calling for free market reforms, and of national parties ignoring all the cries for reform. And in 1889, this Age gave us the Billion Dollar Congress, an outrage that seems quaint compared to this year’s trillion dollar deficit.

The Gilded Age also gave us waves of immigrants to keep factory costs down, Chinese labor to build the nation’s railroads, and the birth of labor unions. The media too was changing, with the introduction of yellow press journalism, and the abandonment of factual news for sensationalism and sentimental stories. And the economy endured two depressions, the Panic of 1873, caused by the manipulation of the gold market by Jay Gould and James Fisk (“Black Friday”), and the Panic of 1893, a deep depression that ushered in the Progressive Era.

Sound familiar? Try substituting Goldman Sachs, ACORN, Tea Party, Mexicans, infrastructure, Madoff, Stafford, and reading this again.

By the 1890s, the Gilded Age was ending. Spurred on by reformers, the government imposed new regulations in response to corporate excesses, dangerous workplace and consumer conditions, exploitive labor practices, and anti-competitive behaviors. Many of those regulations remain with us today.

Goldman Sachs: The Corruption of the Revolving Door

It seems we are doomed to repeat the Gilded Age. And as history loves irony, the company at the center of this Second Gilded Age is a company formed at the tail end of the first Gilded Age: Goldman Sachs.

Goldman Sachs was founded as Marcus Goldman & Co. in 1869. It was renamed Goldman Sachs in 1882. The company made a name for itself in its pioneering use of commercial paper and it joined the New York Stock Exchange in 1896. Over the next 100+ years, it would grow to become one of the most influential companies in the world.

Now before I continue, let me be clear, I do not believe in conspiracies. There is no small group of illuminati that meet regularly to decide our fates and control the world. That said, I am not fool enough to believe that our government acts in the best interests of its citizens. It should be painfully clear to all of us that the government responds to those who have the most access to it. Thus, where we find access, and we find favored treatment for those with access, we must wonder whether the system is working or not. That is the point to this article.

Nor, is this article an attack on Goldman Sachs per se. Goldman is simply one of dozens of groups with too much influence. I have picked Goldman from the crowd only because they’ve made it very easy lately to see how they use their influence to help themselves at our expense.

How Much Influence Does Goldman Have?

How powerful is Goldman? Said one recent commenter: “It’s Goldman’s world, folks. We just live in it (at Goldman's discretion, of course).” Consider these facts. In October of last year, the New York Times reported that thirteen Goldman employees worked in senior positions with the George W. Bush administration. This included Treasury Secretary Hank Paulson, White House Chief of Staff Joshua Bolten, and the man who would oversee the TARP, Neel Kashkari. The Times called this “Government Sachs.”

The Clinton administration too was staffed with Goldman employees, including Treasure Secretary Robert Rubin. Obama, who received $918,000 from Goldman employees for his campaign, also has hired his share of Goldman alumni. Indeed, in a rather controversial move, Timothy Geithner hired former Goldman employee Mark Patterson to be the Treasury Department Chief of Staff, in direct violation of Obama’s “no lobbyists” policy.

But Goldman employees aren't just in the administration. Goldman employee Robert Zoellick is president of the World Bank. Mario Drahi is the governor of the Bank of Italy. Romano Prodi is the former Prime Minister of Italy. Mark Carney is the governor of the Bank of Canada. Michael Cohrs is the Head of Global Banking at Deutsche Bank. Malcolm Turnbull is the leader of Australia’s Liberal Party. Jim Cramer spends his days talking up Goldman Sachs on his show on CNBC, along with former Goldman alum Erin Burnett. Edward Lampert bought K-Mart in 2003. Ashwin Navin is President of BitTorrent. John Corzine, the former head of Goldman Sachs became a United States Senator and then governor of New Jersey. And there are many more.

Some are in key positions that regulate Goldman itself. Goldman alumnus Stephen Friedman and current Goldman board member, became an economic advisor to President Bush and Chairman of the Foreign Intelligence Advisory Board, before leaving the administration to become Chairman of the New York Federal Reserve Bank’s Board of Directors. . . the agency that regulates Goldman Sachs and which has a significant role in setting interest rates, which affect Goldman directly. Even worse, Friedman received a waiver, allowing him to remain on Goldman’s board during his time on the New York Fed. However, when it was learned in May 2009 that he purchased 52,000 shares of Goldman Sachs in January, he resigned from the Fed “to avoid the appearance of a conflict of interest.” Wouldn’t want that.

William Dudley, a former Goldman economist, was appointed as president of the New York Fed to replace Tim Geithner, who was mentored by former Goldman CEO and Treasury Secretary Robert Rubin. Rubin has been an economic advisor to President Obama.

Goldman executive Gary Gensler became the head of the Commodity Futures Trading Commission, replacing Brooksely Born, who was criticized for failing to regulate the derivatives market. Gensler himself stated that Born, “should have done more to reign in exotic financial instruments that have battered global markets.” What went unmentioned, however, was that Born’s efforts to regulate derivatives were blocked by Goldman alum Robert Rubin, who recommended to Congress in 1999 that the Congress strip the CFTC of its regulatory authority over derivatives. More on Goldman’s role in the derivative issue in a moment.

Goldman's Influence Equals Power

So what has Goldman gotten from all this influence? Remember cap and trade? Goldman Sachs, which gave $4,452,585 to the Democratic Party, has been pushing cap and trade because Goldman dominates the new carbon-credit market. Matt Tabbi of Rolling Stone notes that this

“is a virtual repeat of the commodities-market casino that’s been kind to Goldman, except it has one delicious new wrinkle: If the plan goes forward as expected, the rise in prices will be government-mandated. Goldman won’t even have to rig the game. It will be rigged in advance.”

In an interview in July 2009, former Assistant Secretary of Treasury Paul Craig Roberts was asked “Does the US Secretary of the Treasury work for the people or does he work for the banking system on Wall Street?” He replied: “He works for Goldman Sachs.”

Do you remember the bailout? The bailout was designed by former Goldman leader Hank Paulson. Here’s what you might not know:

• Paulson let Goldman competitor Lehman Brothers go bankrupt. The very next day, Paulson established the bailout program.

• Paulson put Goldman employee Neel Kashkari in charge of administering the bailout (TARP) funds.

• Paulson gave $300 billion in taxpayer money to Citigroup, which was run by ex-Goldman head Robert Rubin.

• Paulson gave $138 billion to help Bank of America buy, and thus bailout, Merrill Lynch, then run by former Goldman employee John Thain. According to recent testimony by Bank of American president Ken Lucas, Paulson threatened Lucas to go through with the deal and to pay off bonuses to Thain and others. Thain, by the way, was rumored to be John McCain’s choice for Treasury Secretary had he won the election.

• Goldman/Treasury employee Robert Steel was put in charge of Wachovia, which he turned around and sold to Wells Fargo after a few months, triggering $225 million in golden parachutes that went to a handful of Wachovia executives, including Steel.

Now consider the AIG shell game. As we noted above, Goldman alumnus Robert Rubin stood in the way of the CFTC regulating derivatives. A derivative is basically insurance against a bond defaulting. When the derivatives market took off, AIG became heavily involved. Goldman was the first group to realize that AIG had underestimated the risks in issuing these derivatives and it bought lustily from AIG.

When the market turned and it became clear that AIG had over extended itself and likely could not pay off these derivatives (in fact, the company appeared ready to fail), Paulson stepped in. He not only agreed to bail out AIG to the tune of $85 billion, but he put former Goldman employee Ed Liddy in charge of AIG. Liddy paid $13 billion of these moneys over to Goldman, paying off 100% of AIG’s debt to Goldman. No other institution received 100 cents on the dollar from AIG.

But this is nothing new for Goldman. According to Matt Tabbi, Goldman has been heavily involved in inflating every bubble and then profiting from the bailouts that follow the busting of those bubbles.

Nor is Goldman’s influence limited to the national level. Do you remember Goldman head John Corzine? He’s now the governor of New Jersey. Guess what company floats bonds for New Jersey? More interestingly, in November 2008, it was revealed that at the same time that Goldman was selling bonds for New Jersey, it was telling its wealthiest customers that they should short those bonds. This advice would make those bonds appear riskier than they actually were and would increase the interest rates the state needed to pay on future bonds (and Goldman profits).

At the same time, the Los Angeles Times accused Goldman of doing the same thing in California.

Conclusion

This is not an issue of Republicans or Democrats. Both sides are equally guilty. Nor is this an issue of Goldman Sachs being evil or running the world. Goldman is simply taking advantage of a system that lets people move between government and industry with amazing easy, that lets people profit from conflicts of interest, and that converts our government from a referee into a cash machine. It is time for serious ethics reform to prevent the types of arrangements that make the above possible.


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Magic 8 Ball Says. . . Stay In Bed

Do you believe in fate? Fate believes in you. But never fear, you don’t just have to accept your fate anymore. No no no! The internet now offers you a chance to escape your fate. How you ask? The daily horoscope.

Horoscopes are an incredible resource. Not only do they offer you keen insights about events yet to unfold, but they even tell you how to handle them. So join me as I demonstrate to you, the wonders of the horoscope.

Let’s begin by pulling up my horoscope. I like the website www.defi-fate.com. This is a great site with lots of resources, just be sure you spell it right: its got two f’s, not an f and a c. . . that’s a very different website.

Once the site comes up, you need to figure out when you were born. For those of you with birth certificates, this should be quite simple. The rest of you might need to guess. The Chinese say I was born in the year of the dog. The Greeks say I’m a cancer. Who knows what the Nigerians think of me, but my mom likes me, and that’s all that counts.

Any ways, let’s see, cancerous dog. . . cancerous dog. Ok, here it is:

The undead feature prominently in your life this morning. Bring garlic to work and shield your braaaaains. Your afternoon is a time to relax, comas are possible. Build a bunker for the weekend.

Well, that’s a wee bit troubling. Oh wait, that’s my horrorscope. Fortunately, those things are notoriously unreliable.

Let’s click the other link. . .

The value of money is no match for the value of love, respect and joy in your life.

Yeah, sure, you try using love to buy a burger. . . the cops will not be amused, I can assure you.

Remember your family today.

Do I look amnesiacal to you? Come on internet, this isn’t what I want! I want predictions. I want to abdicate responsibility for my life. Should I turn left or right at the fork down by the old haunted school house? Will my grocer challenge me to Russian roulette? Is today a good day to mention that little STD problem? (Don’t look at me that way, STD stands for “shaved the dog.” It’s a long story.) How about a little help here internet?

Indecision could plague you a little teensy bit today.

I don’t know about that. Let me try this other link.

You could feel a little antisocial. You’ll need to muster up some strength to make things right in a personal relationship.

Sounds like it’s time to settle a few scores. Tell me more!

Whether you’re at work or at play, you won’t be able to sit still for a single second.

Need Preparation H, check. But what’s this got to do with the relationship thing?

Just be sure to save some energy for after dark.

Heh heh, I get it now. That kind of “strength.” Forget the Preparation H, bring some Aqua Velva.

Some leisure time spent alone, perhaps doing crafts, could benefit you on this rather changeable day.

Alone? You’re talking about a relationship with myself? And “doing crafts”? Is that some kind of euphemism I’ve never heard before? Actually, that’s kind of clever, now that I think about it. “That’s when they caught old man Wilson doing crafts behind the bleachers.” I like it! You crafty devils.

You’ll pick up a trick or two from watching others.

You mean the two blonds in Apartment 7B? I’ll check that out. . . if you insist.

Be cautious in being too frank to your loved ones, this may damage the relationships.

Yeah, probably not a good idea to mention this to anyone.

Travel is favored today.

Travel? Now you lost me. What kind of travel?

You might like taking an elderly neighbor on a ride to a park for some fresh air.

Doubt it. . . wait a minute, what does this have to do with getting crafty?

It is not patriotic to spend money on old people.

** scratches head **

Your elderly neighbors mock you when you are not around.

Whoa, hold the phone! Am I misreading this whole thing? What exactly do you mean “take an elderly neighbor for a ride”?

Hope and change.

What?! Who put this horoscope together?

Take projects one step at a time. Silence is golden when exercising your craft. The Soybama Green plan does not include people.

You know what, I’m thinking this might not be the best day to look at my horoscope, even with the nice logo. . .



Maybe I’ll just stick with the lotto numbers. . . I think I'll get better odds.

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How Good Is European/Canadian Health Care Really?

I’m convinced. We need a government-run, single-payer health care system. Why? Because our health care system is miserable -- it’s the worst in the developed world. And everybody else's is so good. Yep. The end.

What’s that? You want me to produce evidence? Fine, but it’s a waste of time. . . just like reading a bill before you vote for it.

Let’s start with life expectancy. Did you know that the United States ranks 50th out of 224 nations in life expectancy? That’s pretty bad. Of course, we live to an average age of 78.11 years, whereas the world average is only 67. So I guess that’s not so bad. And I guess I should mention that the European Union only ranks 41st, at 78.67 years. Interesting. . .

Hey, did you know that the most observable determinant of life expectancy is obesity. And if you factor out the increase in obesity in the United States between 1991 and 2004, the American life expectancy would increase by six months to 78.71, a little better than the EU. Wow, I never saw that coming!

Ok, so the life expectancy thing didn’t work, but we ALL know that the United States leads the world in infant mortality. What? That’s not true either.

The US infant mortality rate is 6.26 deaths per 1000 births, placing us 44th on the list of 224. The EU rate is 5.72 deaths per 1000, placing them 42nd. Only two spots higher. But there's more you say? Not all countries count infant mortality in the same way? In Canada, Germany and Austria, premature babies weighing less than 500 grams are not considered living children and are not counted toward mortality statistics. In Switzerland and other parts of Europe, a baby is not considered a baby unless it is at least 30 centimeters in length at the time of death. In some countries, babies that survive less than 24 hours are considered “stillborn” and are excluded as well. Hong Kong and Japan classify these as “miscarriages” and don’t count them either. Norway has one of the lowest infant mortality rates in the world until you add these exclusions back in. When you do that, the have the same rate at the US.

Who could have guessed that the two big reasons cited for switching to a single payer system are false? I wonder what else we don’t know. . .

• Breast cancer mortality is 88% higher in the UK, 52% higher in Germany, and 9% higher in Canada than in the US.

• Prostate cancer mortality is 604% higher in the UK, 457% higher in Norway, and 184% higher in Canada than in the US.

• Colorectal mortality is 40% higher in the UK and 10% higher in Canada than in the US.

• Americans have better access to treatment for chronic diseases like heart disease. For example, 56% of Americans who could benefit from statin drugs receive them. This compares to 36% of the Dutch, 29% of the Swiss, 26% of the Germans, 23% of the Britons, and 17% of the Italians.

• Canadian and British patients face waits that are twice as long as those in America.

• The US has 34 CT machines and 27 MRI machines for every million Americans, whereas Canada has only 12 CT machines and 6 MRI machines per million, and Britain has only 8 CT machines and 6 MRI machines.

Nor are foreigners all that happy with their systems. Just like Americans, more than 70% of Germans, Canadians, Australians, New Zealanders, and Britons report that their health care systems need either “fundamental change” or “complete rebuilding.” That is surprising if one is to believe that the single payer system is such a good idea?

Further, the idea that American drugs are expensive compared to the rest of the world is a myth. Recent studies have shown that while the US, on average, has higher prices for newly originated drugs, it has the lowest generic prices compared to other countries. The US also has the lowest over-the-counter costs. Moreover, while the US consumer would have spent, on average, 3% more for the same basket of drugs in Canada and 27% more than your average German, the American would have spent 30% less than the average French patient, 9% less than the average Italian, 8% less than the average Japanese, and 24% less than the average Briton.

Finally, consider that the world is piggybacking on American innovation.

• The top five US hospitals conduct more clinical trials than all the hospitals in every other developed country combined.

• Since the 1970s, the Nobel Prize in medicine or physiology has gone to US residents more than the residents of all other countries combined.

• The United States spends three times as much as the rest of the world on R&D in biotechnology.

So maybe, in the end, our system isn’t the disaster we’ve been told? Or maybe, emulating the European/Canadian single payer model just isn’t a good idea.

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Don’t Learn Chinese Just Yet

You’ve heard the headlines. China will become the world’s biggest economy any minute. America will slowly slip away. We don’t manufacture anything. We’ve become second rate. Put a chopstick in us, we’re done. But is this true? No, it’s not. . .

Not a week goes by without some hand-wringing journalist telling us that any minute the Chinese economy will surpass the American economy. Last month, we learned that China’s auto market will be larger than the American market this year. This month, Fortune magazine released its annual list of the world’s top 500 global companies, and, surprise, “the number of US companies . . . fell to its lowest level ever.” Even the top slot went to a non-American company for the first time in over a decade. At the same time, “more Chinese firms appeared [on the list] than ever before”!!

That sounds bad, right? It’s misleading.

China’s economy is big, sure. But ours is bigger. . . much bigger. The World Bank estimates China’s GDP at $7.8 trillion (2008). By comparison, the United States economy is $14.3 trillion dollars. Thus, China’s economy is only half the size of the American economy. (The European Union, if you want to count them, had a combined GDP of $16.5 trillion).

Alarmists originally estimated that China would overtake the United States in 2011. But now they’ve moved their estimate back to 2035. But of course, that assumes that China will continue to experience its current astronomical growth rate, which didn’t happen with any of the other countries that were going to unseat America. And there are reasons why strong growth can’t go on forever. China’s growth, like Japan’s and Korea’s before it, has been fueled by cheap labor (based on the bringing of peasants from the countryside into the manufacturing sector). But as economies grow, their labor gets more expensive and the economy becomes less competitive. Korea ended Japan’s run because it was cheaper. China ended Korea’s run. India is knocking on China’s door. Others wait as well.

So what about the Chinese market topping ours in car sales? Is this true? Sort of, but it’s not that clear. So far in 2009, Chinese consumers are buying cars at an annualized rate of around 10 million units. By comparison, Americans are buying only 9 million. But prior to the current recession, Americans bought around 16 million per year. If the American market returns to that level, the Chinese market will be only 60% of the size of the American market.

What about that Fortune list? Well, for starters, it wasn’t a Chinese company at the top -- it was Royal Dutch Shell. The Chinese only had one company in the top 10 (the state owned China Petroleum & Chemical Corp, which supplies 80% of China’s fuel) and only managed to get 37 companies on the list in total. That puts China below Japan (68), France (40) and Germany (39). The United States had 140.

And what about that claim that the United States doesn’t manufacture anything anymore? About 13% of the American economy, or around $1.8 trillion dollars, is directly related to manufacturing -- that’s about the size of Britain’s economy or France’s. Moreover, this number increases to 19% (or $2.7 trillion) when you consider indirectly related effort. That’s about the size of Germany’s economy, and would make our manufacturing sector alone the 6th largest economy in the world.

Further, we are the third largest exporter in the world, behind only Germany and China (in that order). That’s right, Germany exports more than China.

So what does this mean? It means that reports of our demise as the world’s premier economic power are greatly exaggerated. So don’t bother learning Chinese just yet.

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Harry Potter: Conservative Hero

Whenever a new Harry Potter movie rolls into theaters, conservative political pundits whip out the long knives and go after the books. Strawman after strawman is torn asunder in a veritable strawbath of ill-informed and poorly-reasoned diatribes of the type that can only come from the poisoned pens of people who have never read the books. So let’s cut through some of the garbage, and reintroduce you to this unfairly maligned series.

At its core, the Harry Potter series is a truly conservative, i.e. classical liberal, work. Seriously. It imparts excellent values, values that should make conservatives giddy. But before we detail those values, let us dispatch the complaints of the unread punditocracy.

And Although I Know It’s Strictly Taboo. . .

The complaints of these “conservative” pundits generally come in three flavors of stupid: gays, witchcraft and rewarding misbehavior.

The gay complaint holds that Harry Potter promotes homosexuality because Dumbledore is gay. Oh my! But when did being gay become inconsistent with being conservative? It’s not. And if the complaint is that no book that includes a gay character can be conservative, then one wonders what is left for these pundits to read. . . assuming they can read. Hence, a few of the more clever pundits, will assure you that they aren’t opposed to gays, it’s just that Dumbledore promotes the gay lifestyle. Really? Does he take a lover? Does he attend a parade? Hand out pamphlets? Shower the crowd in condoms? Take Harry to a Turkish bathhouse? No, this issue is never mentioned in the books. In fact, Dumbledore’s sexuality was never brought up until after the books were all published.

The complaint that Harry Potter promotes witchcraft is almost too stupid to mention, except we saw this once before. . . during the the great Dungeons & Dragons crisis of 1983, when millions of young children sold their souls to the devil and disappeared in a fiery poof. Tragic. In any event, it is worth pointing out that (1) this silly complaint would apply equally to the entire fantasy genre, so put down that copy of The Lord of the Rings you Satanist, and (2) unlike The Golden Compass, which truly is anti-Christian, Harry Potter makes no attacks on any religious figures, principles, or beliefs.

The third complaint usually involves some moment where Harry “does not pay” for his “bad behavior.” But these complaints are typically made by people who have not read the books. For example, in a silly recent diatribe, one shrill conservative pundit proclaimed that Rowling “ignores ethics and encourages dishonorable behavior” when Harry “cheats” by using “a textbook that has all the answers in the margins,” and he’s not even punished for it! For shame! Thus whines said critic: “Rowling’s readers will conclude it’s OK to go on eBay and buy a teacher’s edition of a textbook.” Or critique a book they haven’t read! The horror, the horror. What this whiner misses is that the “answers” written in the text book are not “answers” to test questions, they are the work of a rather genius young wizard who invented dozens of new spells, most of which have nothing to do with the class itself. A more accurate conclusion would be “Rowling’s readers will conclude it’s OK to go on eBay and buy an independent study guide!” But that doesn’t have the same ring to it.

Moreover, in terms of not getting busted, some of these spells prove to be quite dangerous, and when Harry injures a fellow student using one of these spells, he gets showered with disdain and ostracized by his fellow students. Indeed, most of the series is about Harry making mistakes, for which he pays and from which he learns.

But enough of sweeping away straw. Let’s talk about what makes the Harry Potter books conservative books.

What Makes Harry Potter Conservative

I will save for another day what it takes to consider a particular film or book to be a conservative work. Suffice it for now to say, that we should not consider a work conservative unless it promotes themes that are philosophically conservative, and it does so consistently. In that regard, the Harry Potter series delivers time and time again.

Consider, for example, that the bad guys throughout the series read like a who’s who of things conservatives despise:

• Government. A common theme throughout the books is that the government not only cannot help you, but will actually abuse its power to harm you. The Ministry of Magic is hopelessly bureaucratic, and ultra-intrusive. It regulates every aspect of Wizards’ lives, right down to how caldrons are measured -- regulations which are usually mentioned derisively. And when Dumbledore begins to warn the world that Voldemort has returned, the MOM demonstrates the evil to which it can sink. It tries to discredit Dumbledore, just as it tries to discredit Harry. When this proves ineffective, it tries to drive Harry from the magic world through a Soviet-style show trial. It then drums up fake charges against Dumbledore (something about a Turkish bathhouse), and chases him from Hogwarts, where he is replaced with a woman who sets about imposing an educational agenda that seeks to lower all children to the lowest common denominator. The government seizes key industries, denies the truth, and locks up its opponents. Sounds like somebody read Ayn Rand.

• Elitists. The Malfoy family and their allies are the epitome of hereditary peers, if you’re English, or establishment elitists, if you’re American. They are out of touch, they despise ordinary people, and they are corrupt, inbred and non-productive -- think John Kerry.

• The Cult of Personality. The Death Eaters, Voldemort’s followers, worship him and fear him in a strange cult of personality. They do as they are told without question. “Yes we can, my master.” Nothing is more classically liberal than thinking for yourself. Nothing is more modern liberal than believing what you are told by your betters.

• Evil. Voldemort represents something rarely seen in liberal thinking, an evil man. He is evil to the core. He is not misunderstood, nor was he driven to evil. And while he claims various motivations, the series never once hints that we should sympathize with him or that his past excuses his present. If you put the second book to your ear, you can actually hear an ACLU lawyer weeping.

Consider also the multiple conservative themes that run throughout the series. For example:

• Rejection of Moral Relativism. Unlike much of modern liberal thinking, Rowling does not accept the shades of gray theory. The good guys are good and the bad guys are bad. It’s black and white. Readers are told repeatedly that you cannot do evil and remain good, even where evil seems to offer an easy solution. We are also never asked to consider root causes. And whenever good characters suggest that an evil character might only be evil because they feel pressured (like Dumbledore suggests about Malfoy or Tom Riddle), those characters always prove that people who do rotten things tend to be rotten people.

• The Value of Hard Work/Self-Reliance. Unlike heroes in most modern stories, Harry is actually nothing special. He doesn’t have super powers. He’s not smarter or wiser or stronger or faster than the other kids. What Harry does have going for him, is a group of people who care about him and who drive him to work harder. When he does, he succeeds. When he doesn’t, he fails. It’s that simple. In the Harry Potter world anyone can succeed if they work hard; hard work gets rewarded. Education gets rewarded. Having something handed to you, or waiting for someone to hand it to you, gets punished. What could be more conservative than that?

• Belief in Traditional Families. The series repeatedly stresses the importance of the traditional family. Harry’s mother and father died to protect him, and in so doing, put a charm on him, that protects him so long as he has family, even when that family is nasty to him, i.e. the family bond survives good times and bad. The happiest people in the series are the Weasley family, who impart invaluable lessons about love, responsibility and all the other things your parents taught you, even though the Weasleys are poor. By comparison, the messed up kids, from Neville Longbottom to Luna Lovegood, come from single parent homes. Even Malfoy, who does have both parents, is raised in an unbalanced family where the father dominates the mother. The implication is clear throughout the book: a strong family is the best foundation. Love your parents, love your kids, and think more about them than yourself. Indeed, the greatest moments in the book involve self-sacrifice to save family members.

• Pro Capitalism. Harry Potter is also unabashedly pro-capitalism. Time and time again, it is the private sector, not the government, that is shown to be superior. This is true from the pro-commerce Diagon Alley, to the way The Quibbler (a tabloid) rises to meet consumer demand for the truth when the main paper falls under the influence of the government, to the Weasley brothers being a walking advertisement for the joys of starting your own business. Whereas the government world is seen ad drab and oppressive, the private sector world is always vibrant and active.

I don’t know about you, but those seem like pretty conservative values to me.

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RTRP: CommentaramaCare Summarized and Priced

Last week we finalized the CommentaramaCare proposal. At the time, we posted both the final piece, reforming the way we pay for health care, and the conclusion. Several people have told us since then, that the conclusion got lost in being published on the same day. So today, we repost the conclusion to CommentaramaCare, which summarizes the proposal and puts a price tag on it.

The United States health care system is broken. It costs too much and achieves too little, its costs are out of control, not enough people have access to insurance, and it suffers from poor quality control. CommentaramaCare fixes each of these problems: it cuts costs dramatically, it expands coverage to 22 million people -- while still saving the taxpayer $245.7 billion, and it improves the quality of care.

Problem One: Cost Control

The primary problem with the American system is that it costs too much. The American system now eats up $2.26 trillion a year, and it is growing by the second. This problem is the result of (1) a payment system that has little incentive to control costs, (2) a regulatory scheme that generates excessive administrative costs, (3) the prescription of a vast number of medically unnecessary procedures/tests, and (4) an intrusive tort system. CommentaramaCare proposes the following solutions:

1. Fixing The Payment System

Under the current insurance system, buyers of health care (patients) do not negotiate the price of services directly with the sellers (doctors). This interferes with the parties’ incentives to keep costs under control. To solve this, CommentaramaCare proposes making health insurance more like car insurance or home owners insurance, where individuals make routine payments out of their own pockets and then use the insurance only as a form of quasi-catastrophic protection. This quasi-catastrophic coverage would kick in after a person had spent $5,000 on health care during the year, and would cover all remaining health care costs that person experiences during the year.

This change would give patients the incentive to keep costs down for most procedures, as they seek to avoid spending the first $5,000. At the same time, this system protects people from being bankrupted by serious illness. This system also should slightly reduce the insurance cost borne by the average American -- even before considering any specific cost savings that result under the plan.

To assist buyers in pricing their health care, CommentaramaCare requires providers to make available to any patient or potential patient, in advance, a price list for all procedures that they offer, so that potential patients can compare providers and seek competition. It also requires providers to use joint billing for individual procedures.

CommentaramaCare further proposes freeing providers to arrange their business and billing practices in more innovative ways, such as the fixed-price arrangement discussed previously.

Potential savings: Unknown

2. Eliminating Excessive Administrative Costs

According to Harvard Medical School, 31% of health care spending goes to pay administrative/overhead costs (this is nearly double the 16% percent spent in Canada). A reduction to even Canadian levels would save Americans $339 billion annually.

The primary reason administrative costs are so high in our system is that health care is regulated at the state level. Thus, every administrative function is repeated fifty or more times, often with different rules. Complicating this, the federal government provides health care through a half dozen agencies, each with their own bureaucracies, requirements, and rules -- many of which are enforced through state budgets.

To fix this, CommentaramaCare proposes:

• Removing states entirely from this process by replacing state regulation with one, consistent federal regulatory scheme to be organized under a Federal Medical Board (“FMB”). This will eliminate fifty state agencies.

• Allowing the FMB to issue licenses that are valid nationwide, so that providers can move freely and need only satisfy one regulator.

• Eliminating the half dozen agencies in Washington that control different (and overlapping) parts of the health care system and replacing them with one single agency and set of regulations, controlled by the Health Care Administration (“HCA”).

The potential cost savings from these changes could be as high as $339 billion.

Further, rather than trying to develop separate insurance plans for recipients of government-sponsored insurance (i.e. those currently on Medicare/Medicaid, etc.), the government would instead buy those persons the commercial catastrophic insurance, as discussed, and would subsidize some portion of the $5,000 deductible. Even assuming that the full $5,000 is provided for each recipient, this could save the government $3,700 for each of the 81 million current recipients, for a total potential cost savings to the taxpayer of $299.7 billion.

Potential savings: $339 billion
Potential savings to the taxpayer: $299.7 billion

3. Reducing Medically Unnecessary Procedures

It is estimated that $500-$700 billion is spent annually on treatments, tests, or hospitalizations that do nothing to improve health. Studies have shown the best ways to reduce these costs are to (1) change the billing method, (2) improve knowledge of the standards of care, and (3) establish effective tort control. Thus, CommentaramaCare proposes:

• Changing billing methods as outline above, which should reinvigorate the incentive for patients to control costs;

• Allowing the introduction of more fixed-price services (or other plans);

• Improving knowledge of the standards of care by having the FMB establish standards of care and disseminate them, and allowing doctors to use those as “legal safe harbors”;

• Reducing the filing of meritless lawsuits by (1) requiring all medical malpractice actions to be brought in federal court; (2) requiring plaintiffs to obtain certificates of merit before filing, and (3) shifting fees to the prevailing party; and

• Reducing outrageous jury awards by (1) eliminating punitive damage awards and (2) capping awards for non-economic harm at one million dollars.

Potential Savings: $500-700 billion

4. Tort Reform

It is estimated that an additional $11.3 billion can be saved in malpractice insurance premiums through the introduction of effective tort reform.

Potential Savings: $11.3 billion

** Certain problems are not addressed specifically at this time, including (1) medical innovation costs, (2) drug costs, and (3) long-term care costs. It is unclear to what extent the realignment of cost reduction incentives will influence those items. Thus, further reform may be needed after these effects can be evaluated.

Problem Two: Improving Access To Health Care Coverage

The second group of problems with our health care system are related to access to health insurance. Not only is there the issue of the “46 million” uninsured, but there are issues related to illegal aliens, uninsurable persons, and the problem that loss of employment currently also means loss of health care. CommentaramaCare proposes the following solutions:

1. The “46 Million Uninsured”

Of the 46 million uninsured, only 7.3 million persons fall into the category of those who cannot obtain insurance due to lack of income. Assuming the projected cost of $7,400 per person, providing these people with fully paid insurance and income subsidies (in other words -- no cost to them) would cost $54 billion dollars per year.

Projected Cost to Taxpayer: $54 billion
Additional People Covered: 7.3 million

2. Illegal Aliens

Another 9.7 million of the 46 million uninsured are non-citizens, whose health care expenses should be paid for by their country of origin. Only the federal government has the power to stem the flow of illegal immigration and to deal with foreign governments. Thus, CommentaramaCare proposes (1) that the federal government fully reimburse providers for the costs of providing such care, and (2) that the federal government seek to charge the home countries for the costs incurred.

Projected Savings: Unknown (should zero out)
Additional People Covered: 9.7 million

3. The Uninsurable

Another 5 million of those without insurance are considered uninsurable because of pre-existing conditions. CommentaramaCare solves this problem by requiring bidders on the HCA insurance contracts to accept all persons who apply, at the same fixed price, without regard to pre-existing conditions, and by prohibiting such insurers from terminating individuals who experience high medical costs.

Projected Cost to Taxpayer: $0
Additional People Covered: 5 million

4. The Link Between Loss Of Employment And Loss Of Health Care

Currently, 59.3% of Americans receive their health insurance coverage through an employer. The unemployment rate is 9.5% and growing. Moreover, the composition of the 9.5% changes every day. Thus, vast numbers of Americans are at risk of losing their insurance because they face the prospects of becoming unemployed. To solve this problem, CommentaramaCare proposes to break the link between employment and health care by:

• Making health care premiums tax deductible to the individual, but not the employer;

• Allowing the creation of HSAs wherein individuals can save unused deductible costs, which should eventually build up to cover future deductibles;

• Ensuring that the HCA plans are available to any person at any time, without regard to employment; and

• Continuing government subsidies for low-income and unemployed persons to obtain health insurance coverage.

This method should ensure that anyone can get access to such insurance, regardless of employment status.


Problem Three: Improving Quality Control

Finally, the current system exposes patients to an amazingly high risk of under-treatment and over-treatment, and results in an incredible number of preventable medical injuries. The existing mechanisms for monitoring quality control are simply inadequate.

According to a study by Dartmouth’s Institute for Health, patients had just a 50% chance of receiving the right treatment for common ailments. Other studies have shown that between $500-$700 billion in medically unnecessary tests or procedures were ordered in 2007, that nearly 200,000 avoidable hospital deaths occur each year, and that another 1.5 million preventable drug-related injuries occur each year. The costs of treating injuries resulting from preventable medical error could be as high as $520 billion per year.

At the core of each of these findings was the conclusion that the lack of clear national standards, and the fact that many doctors lack adequate information about the standards of care, were the direct cause of the majority of these failures.

CommentaramaCare proposes the following solution:

• Federalizing the oversight/regulation of the entire health care profession (doctors, nurses, psychologists, therapists, hospitals, etc.) under the FMB;

• Making the FMB responsible for licensing medical providers as well as investigating complaints against medical providers and disciplining those where necessary;

• Making the FMB responsible for issuing national standards of care, which the FMB would disseminate to doctors in the field -- the FMB also would issue best practices guidelines and would regulate continuing legal education requirements; and

• Reversing the legal changes that allowed hospitals to avoid liability for the actions of doctors who practice at the hospital, to encourage hospitals to conduct thorough oversight.

Projected Savings: Up to $520 billion


Conclusion

As outline above and as explained in greater detail in the prior posts on this topic, CommentaramaCare has the potential to dramatically improve each of the three main problem areas in the current health care system. Moreover, it does so without stripping patients, doctors or insurers of their freedoms -- in fact, each group is freed from considerable amounts of regulation.

Under CommentaramaCare, an additional 22 million people would be able to obtain health care. Yet, taxpayers should be able to save $245.7 billion, even as coverage is expanded.

The country as a whole should benefit as well. It is difficult to determine exactly what the potential savings would be, as many of the $1.3 trillion potential savings identified above likely involve duplicate costs. Still, it is clear that dramatic savings could be achieved. Also, a reduction on the order of one trillion dollars is not as outlandish as it sounds. That would reduce the amount Americans send on health care to between 9% and 10% of GNP, which would put us in line with the amounts spent by other Western countries.

If Washington wants a plan that works, here it is.

Thoughts?


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Federal Power Grab: Executive Pay

Virtually unnoticed, on Friday, the House of Representatives passed a bill giving the federal government the power to regulate executive compensation at public companies. This bill, sponsored by Comrade Barney Frank, passed 237 to 185, largely along party lines.

Not only is this an amazing seizure of power by the federal government, but the bill’s proponents have been misleading the public about what the bill does. They have sought to give the impression that the bill only requires non-binding votes by shareholders and that it applies only to TARP recipients. Neither contention is true.

What The Bill Does

The bill in question is called the Corporate and Financial Institution Compensation Fairness Act of 2009 (H.R. 3269). According to the introduction to the bill, the bill amends the Securities Exchange Act of 1934:

to provide shareholders with an advisory vote on executive compensation and to prevent perverse incentives in the compensation practices of financial institutions.

Note the second clause, after the word “and,” this is the part of the bill the supporters want you to ignore.

Whenever the bill has been discussed, its supports address only the first part of the bill, and in those discussions they make the claim that the bill “only” requires (1) that shareholders be advised of executive pay arrangements and so-called golden-parachutes, and (2) that shareholders be allowed to vote, in a non-binding vote, on whether or not to approve those compensation agreements. And that is exactly what Section 2 does. So what’s the problem?

The problem is Section 4, which they always fail to mention. Section 4 contains the following legalese:

The appropriate Federal regulators . . . shall prescribe regulations that prohibit any compensation structure or incentive-based payment arrangement . . . that the regulators determine encourages inappropriate risks by financial institutions or officers or employees of covered financial institutions that

(1) could threaten the safety and soundness of covered financial institutions; or

(2) could have serious adverse effects on economic conditions or financial stability.

Let’s put that into English. The Federal government can prohibit any pay practice that the government thinks could harm the company, the economy or the financial markets.

And to whom does this bill apply? It applies to any bank that participates with the FDIC, any credit union, any broker-dealer registered under the SEC, any investment advisor, and “any other financial institution that the appropriate Federal regulators. . . determine should be treated as a covered financial institution.” In other words, the “appropriate federal regulators” will figure out who is covered -- and if the TARP and TALF are any indication, a great many non-financial companies will be surprised to learn they are now financial companies.

So who are the appropriate federal regulators: (1) The Federal Reserve, (2) the Office of the Comptroller of the Currency, (3) the FDIC, (4) Office of Thrift Supervision, (5) the National Credit Union Administration Board, and (6) the Securities and Exchange Commission. Together, these agencies regulate virtually every large company in the country.

And for the record, nothing in this bill limits its application to TARP recipients, as Rep. Jeb Hensarling (R-TX) made clear during a CNBC interview.

What The Public Was Told

So what has the public been told? The Chicago Tribune mindlessly echoed the bills supporters, when it stated:

Say-on-pay votes would be non-binding, would take place months after compensation is handed out and wouldn't force companies to alter the payouts.

They failed to mention Section 4.

The New York Times, on the other hand, grasped the second part of the bill, but only after the bill was passed:

The bill, introduced by Representative Barney Frank, Democrat of Massachusetts, enables regulators to ban payments that give workers what the legislation calls “perverse incentives” to take risks that could hurt the nation’s financial system.

The bill gives the Securities and Exchange Commission, among other federal regulators, nine months to propose rules for regulating compensation packages at institutions whose assets total more than $1 billion.

Before the bill was passed, the Times was a good deal less clear on this point, though they did mention it. That article began:

The bill does not set pay limits. Instead, it gives shareholders the right to vote on pay and requires that independent directors from outside of management serve on compensation committees. The shareholder votes would not be binding on company management.

And then way down the page, they added:

The measure also gives regulators the authority to prohibit inappropriate or risky compensation practices for banks and other regulated financial institutions.

Close. But then they added:

Democrats led by Mr. Frank also agreed to . . . reduce[] the authority of regulators by giving them power to restrict only incentive-based pay arrangements instead of any kind of compensation.

This is a stretch. Section 4 states that the regulators may “prohibit any compensation structure OR incentive-based payment arrangement.” An “or” generally means multiple choices, and rarely means “only.” Thus, claiming that only incentive-based pay arrangements could be restricted was not exactly accurate. Also the use of the word "inappropriate" implies that such practices were already improper, not that they would be made improper by the new regulation. Indeed, reading this article, it's not clear that much of anything would be done by the regulation.

In any event, the real lying was left to Democratic Congressmen like Rep. Gregory Meek, D-NY. Meeks told CNBC prior to the vote that all the bill did was to require disclosure of pay schemes to shareholders and require “non-binding” votes by shareholders. . . it does not cap pay or prohibit the use of incentive-based pay in any way, he assured viewers. And he managed to maintain this lie for some time during the interview, until the anchors confronted him with the wording of the legislation itself.

At that point, he dissembled and rephrased his answer to state that the point of the bill was not to cap executive pay or to take away incentive-based pay, and that “most of the votes is [sic] non-binding.” But then, the point of communism was to make a better world, not to kill a hundred million people, as the practice turned out.

So Does Obama Support This Bill?

You would think there would be no mystery about whether or not Obama supports this bill. But on August 1, the New York Times reported that while Obama has advocated nonbinding votes for shareholders, “the White House has not suggested that federal regulators curb incentive-based pay for risk-taking.”

Of course, this contradicts the New York Times’ July 29th report, which stated that the legislation “closely resembled an Obama administration proposal seeking to impose new restraints on executive pay.”

But it played along nicely with the “we haven’t decided” game played by White House spokesman Robert Gibbs, who stated that no decision has been made yet whether the President will support this bill or not. . . apparently he is “not familiar” with the whole bill.

Sadly for Gibbs, Tim Geithner did not get the obfuscation memo, and he rushed out to issue a statement that said of the legislation:

This is a positive step forward to increase accountability and transparency in executive compensation, and to help ensure that pay encourages long-term performance, not excessive risk-taking.

That sounds like support. It also sounds a bit like central planning. . . comrades.

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Tell Me About Yur Mozzer. . .

Dear reader, there has been an outrage in the psychiatric community. I read about it in an obscure regional journal called the New York Times, and since likely none of you have heard of this journal, I thought I should fill you in. Apparently, a Dr. James Heilman from Moose Jaw, Canada has destroyed the Rorschach test. Of course, in his defense, what else are you going to do in Moose Jaw during the summer. . . without hockey.

The Rorschach test was created by Swiss psychologist Hermann Rorschach after he wrote his 1921 book “Pyschodiagnostik” -- a real page turner. Rorschach died a year after writing the book, when he misinterpreted some signs that warned of approaching danger.

For those of you who don’t know, the Rorschach test involves showing a series of ink blots to crazy people and using what they claim to see in the ink blots to determine their inner motivations. If you see your mom, you have mommy issues. If you see your dad, you have daddy issues. If you see your sister, you live in West Virginia. To put this in technical terms, a “real” doctor would tell you: “the underlying assumption is that an individual will class external stimuli based on person-specific perceptual sets, including needs, base motive, and conflicts, and it’s covered by insurance.”

Many skeptics consider the Rorschach test to be pseudoscience and they suggest that it is akin to cold reading.

[Which reminds me, we want to send a shout out to a certain reader who has an "a", an "s", or an "e" somewhere in their name, who works in a thankless but important profession, and works harder than everyone else in their office, but who doesn't get the recognition they deserve. . . you're our favorite reader. . . but let's keep that between us -- we wouldn't want the others to get jealous. ;-)]

So let’s get back to Dr. Heilman. Several months ago, Dr. Heilman, an emergency room physician, infuriated the psychological community when he posted all 10 original Rorschach plates, along with some common responses to each image, onto the Wikipedia (a division of Wikimedia, a wholly-owned subsidiary of The Intelligence Suppression Group, Inc.).

According to Gottfried Nussjob, of the Psychological Analysis Normalization Integration Center (PANIC), a trade group, posting these images on the Wikipedia is the equivalent to posting an answer sheet to next year’s SAT, something recently suggested by Joe Biden to raise student performance. Nussjob, thinks this is bad.

Dr. James Heilman
-- Worse than Hilter?

Nussjob initially stated, “The more test materials are promulgated widely, the more possibility there is to game it.” But he then backtracked, when he realized this implied that psychologists could not see through obviously fake answers. He thus stated, “forget I said that.” His attorney later wrote, “The process of making sense of one’s experience is gratifying. To take Rorschach’s test is to make sense of ambiguity in the context of someone who is interested in how you do that. It is dangerous to use these materials without proper guidance. . . like using a Ouija Board alone on Halloween.”

Dr. Heilman responded that posting these plates was no worse than posting the Snellen eye chart: “Yeah, eh. You can go to the car people and you could recount the chart from memory, sure, and you could get into an accident. . . what was your point again?”

Well the point is that we at Commentarama are all about helping our readers cheat on tests. So with that in mind, we’ve taken the liberty of reproducing the offending images below and providing you with a few, good safe answers which will help you fool any court-ordered psychologist.

Let us begin. Take a look at each image and then memorize our explanation below. . .


Bad Answer: Bat, Butterfly, Moth

Good Answer: This test throws you a real curve ball right out of the gate. They want you to answer Bat, Butterfly or Moth -- all caught with nets. See the problem? In reality, this image is an electromagnetic depiction of the human soul, after being crushed by a bus. Tell the reviewer, “I see dead souls.”


Bad Answer: Two Humans

Good Answer: Humans? Like, two hairdressers playing patticakes? Not likely. This image in fact represents three distinct personalities, buried deep within one mind, desperately struggling not to surrender to their urge to kill again. Just repeat that to the reviewer.


Bad Answer: Two Humans

Good Answer: Do you see two waiters with both male and female genitalia? Really? Seriously? Wow. . . how’s that whole crossdressing thing working out for ya? Listen, whatever you do, don’t mention genitalia and don't mention the waiters. Do you remember those silver, perpetual motion birds, with the top hats -- the ones you tip over and they would bob up and down, pecking the ground over and over? That’s what this is. . . just two silver peckers.


Bad Answer: Animal Skin, Massive Animal

Good Answer: This image shows the despondence of being unable to reconcile the relationship you had with your mother with the need to develop a fully mature super ego. . . or it’s a troll riding a motorbike, either answer is acceptable.


Bad Answer: Bat, Butterfly, Moth

Good Answer: This one probably is a bat or a butterfly, but if you tell them that, they will write: “patient lacks imagination, possibly bed wetter.” The better answer, according to the Psych Manual, is to tell them you see your mother. . . in a wig. . . holding a beer.


Bad Answer: Animal Hide, Rug

Good Answer: Don’t fall for this one either, there are no animals hiding here. This is a flattened violin. Your best answer, “It’s the day the music died.”


Bad Answer: Human Heads, Faces (or was that ‘feces’? I’m too lazy to check.)

Good Answer: Some will tell you that this is two dancing American Indians who have bumped buttockses. And you can probably see that, can’t you, you sick pervert! What it really is. . . actually, it does kind of look like that. Ok, run with it.


Bad Answer: Pink Animal

Good Answer: Just tell ‘em its pink. . . only pink. . . and that makes you kind of angry.


Bad Answer: Orange Human

Good Answer: Orange Human? Like orange beef? Don’t tell them that. . . that road leads to thorazine city. This is two dragons, riding on hippos, crushing a herd of pigs.


Bad Answer: Blue Crab, Red Lobster, Spider

Good Answer: Blue crabs? Red Lobsters? Yellow stars? Forget the lucky charms. This is two gay British cops in Paris, near the Eiffel Tower, and they have crabs.


There you go. Follow our plan and they are sure to declare you unbelievably sane. Just remember don’t let them make you change your answers. . . it’s what they want you to do.


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RTRP: CommentaramaCare Part III, The Coverage Plan

Today we finish the CommentaramaCare proposal. In this article, I will outline how the coverage system should be reformed to reduce health care costs, to save the government a fortune, and to improve coverage. In a second article, to be posted later today, I will summarize the entire CommentaramaCare proposal and outline its costs and cost savings.

The Coverage Plan

CommentaramaCare proposes making health insurance more like car insurance or home owners insurance, where individuals make routine payments out of their own pockets and then use the insurance only as a form of quasi-catastrophic protection. This quasi-catastrophic coverage would kick in after a person has spent $5,000 on health care during the year, and would cover all remaining health care costs that person experiences during that year.

Such a plan should:

• Reduce the cost of medical care by encouraging buyers of health care (patients) and sellers of health care (doctors) to deal directly with each other rather than through a middle man for most issues;

• Reduce the cost of insurance to the average person;

• Break the link between employment and insurance;

• Cover everyone regardless of pre-existing conditions;

• Dramatically cut what the government pays to provide health care to those on public programs (i.e. Medicare, etc.); and

• Allow the government to increase coverage to eliminate the uninsured problem.

Before we dig into the specifics, let us be clear. This proposal does NOT:

• Ban any form of private insurance -- you can continue to buy any type of insurance you want;

• Impose fines to force people to change their insurance plans; or

• Advocate that the government issue insurance -- not one penny is paid to the government by anyone under this plan.

Here are the details:

The Problem With The Current Scheme -- Runaway Costs

There are two broad complaints with the current system: (1) medical costs are out of control and (2) not everyone has coverage. Let's start with costs.

We have previously outlined several significant cost reduction measures, but we have not yet addressed the primary cause of out-of-control costs. There is significant evidence that the current insurance system is the main reason that health care costs are skyrocketing. Indeed, as the following graph from John Stossel shows, there is a dramatic and clear relationship between the increase in medical costs over the past fifty years and the increasing percentage of medical costs that are paid for by insurance:


Notice that as the percentage of health care costs paid directly by patients has declined, the cost of health care has increased. As Stossel states:

This interesting chart from the Goldwater Institute illustrates one of the main reasons health care costs have been skyrocketing: Americans have been paying less and less out of their own pocket. It's basic economics that the less you have to pay for something, the more of it you'll use. And yet the “reformers” keep pushing for MORE health insurance.

And this makes intuitive sense.

In a normal market, sellers want to charge as much as possible. But that instinct is held in check by the need to attract buyers, who want to pay as little as possible. When millions of willing buyers and sellers haggle over price, the resulting consensus tends to set the price most efficiently.

But under our current system, buyers (patients) don’t deal directly with sellers (doctors). Instead, buyers pay a small flat fee, and leave it up to a third party (the insurer) to handle the negotiations and the payments. Thus, the laws of supply and demand don’t work properly. Indeed, what you have is called a “moral hazard,” because the patient wants as much care as possible and doesn’t care what it costs, because they don’t pay for it.

Moreover, patients have no incentive to keep the costs of treatment down: why find a cheaper lab to run your lab work, or why run the MRI without contrast, or why engage in preventative care when it doesn't cost you anything not to bother? And that is the problem. No other field accepts such a pricing model.

The Solution -- Make Health Insurance Like Car/Home Owners Insurance

So do we ban insurance? Absolutely not. Not only does CommentaramaCare firmly believe in letting people satisfy their own consumer choices, but insurance is necessary to prevent serious medical conditions from bankrupting people.

Instead, we need to remake health insurance along the lines of car insurance or home owners insurance, so that people again begin to care what their treatment costs.

Thus, CommentaramaCare proposes encouraging Americans to abandon their current insurance in favor of obtaining a quasi-catastrophic policy that kicks in once a person has spent $5,000 on health care during the year, and which would cover all expenses thereafter through the end of the year.

Such a plan would give people an incentive to keep their costs down to reduce the amount of the $5,000 that they pay. But at the same time, it would also ensure that no one would be bankrupted by a sudden, serious illness.

What Would This Cost The Average American?

Right now, the average American spends $7,500 per year on health care. As just mentioned, we are proposing a deductible level of $5,000. Ergo, if the cost of the insurance works out to less than $2,500 a year, there will be no net cost increase to the average person.

My sampling of catastrophic plans has found that most plans currently run between around $100 per month to $200 per month, i.e. $1,200 a year to $2,400. Therefore, even if we take the high end estimate, the average American would save $100 a year under this plan.

And keep in mind, this assumes that you have more than $5,000 in medical bills during the year. Anything less than that will result in direct savings to the individual. Thus, a person who has no medical bills at all during the year, would save $5,100 over the current average. Likewise, a person who was on a flat rate plan (like the one discussed in the last article) and who had only routine medical issues, would have yearly medical expenses of only $3,600 ($200/month insurance + $100/month flat rate plan). This is less than half of the current average cost.

Further, it is more than likely that the cost of such insurance will fall significantly when the rest of the reforms kick in. As you will see in the summation, the savings under this plan could be vast. Presumably, some portion of that would be reflected in a reduction in the cost of insurance.

How To Encourage People To Switch Over

Now, it is easy to say, “encourage people to rethink”, but how do you actually get people to switch over to the new system? To encourage (NOT FORCE) people to make this switch, CommentaramaCare proposes:

• Making the premiums on the catastrophic policy tax deductible to the individual (I would suggest treating them like an HSA);

• Making medical debts non-dischargeable in bankruptcy; and

• Making the first year deductible limit $10,000 rather than $5,000 to discourage people from waiting until they are sick to sign up for the insurance. (This would be implemented in the future, after the plan is established and people had the chance to switch over.)

Moreover, to encourage (NOT FORCE) people to give up their current plans, which are distorting the pricing mechanism in the current system, we also recommend eliminating the tax deductions for any coverage that exceeds the catastrophic coverage. This would not prevent individuals from obtaining coverage that is superior to the catastrophic coverage, it simply won’t be tax deductible.

How Such Policies Would Be Created

Now comes the tricky part. To make this plan work, such insurance must exist. In fact, three things must be guaranteed:

• That such catastrophic plans, which cover all expenses after the $5,000 deductible, will exist and will be generally available to anyone who wants such a plan;

• That persons with pre-existing conditions can obtain such coverage, and at reasonable rates; and

• That providers cannot terminate individuals who experience high medical costs.

This could be achieved by imposing such mandates on the insurance industry. However, CommentaramaCare opposes mandates because people should be free to buy whatever insurance they want, on whatever terms they wish. Imposing coverage requirements violates that principle. It also could be achieved with a government-run option, but CommentaramaCare opposes that for obvious reasons.

So we favor a third alternative. Under this method, the federal government, through the Health Care Administration (“HCA”), will procure such insurance and make it available for the public. Here’s how this would work:

The HCA will divide the United States into geographic districts. For each district, HCA will open a series of $0 contracts for competitive bidding. A $0 contact is one under which the government promises no money. Any insurer in the country could bid on any of these contracts, without regard to state licensing requirements (subject only to obtaining HCA certification).

These contracts will require any insurer who submits a bid to agree to cover a certain number of people (specified by the insurer) at a fixed price (specified by the insurer). The contracts will specify the precise coverage terms, which would include the requirements detailed above, plus whatever other coverage requirements are deemed necessary by the HCA administrator to effect the coverage plan.

By bidding, insurers agree to accept any person who signs up for the plan (up to the number of persons specified in the insurer's bid) at the fixed price, without regard to age or medical condition or any other factor (although family plans should be allowed).

HCA would then accept all conforming bids, and would publicly list these providers and their fixed prices. After that, any member of the public can contact these providers directly and sign up at the fixed price bid by the insurer until that plan is full.

Here are the benefits of this plan:

• This method ensures that anyone can get access to such insurance, regardless of employment status or pre-existing condition;

• This method reduces insurance costs through the use of competitive bidding and large scale pooling;

• No money is given to the government under this plan; and

• Private insurance will continue to exist. Indeed, not only does this plan rely on private insurers, but it leaves private insurers free to offer superior or inferior (and presumably cheaper) coverage as they see fit. If you want more coverage than the minimum, you can buy it. If you want less coverage than the minimum (e.g. a $10,000 deductible or a plan with co-pays or limited coverage), you can buy that too. You can even continue under your current plan and ignore the new system entirely. And since there is no government-subsidized insurance to compete with, the government will not crowd out private insurers.

(** The government currently does something similar for its own employees.)

Saving The Government A Fortune AND Expanding Coverage

This biggest surprise in this program comes in the remake of government insurance, i.e. Medicare/Medicaid/Tricare, etc. CommentaramaCare proposes eliminating these programs entirely and replacing them with one program to be run by the HCA. This can save the Government a fortune, if done right. . .

Rather than trying to develop a separate insurance plan for these recipients, as is currently done with Medicare/Medicaid, etc., the HCA should use the money that would have been spent on such insurance to instead (1) buy these recipients commercial catastrophic insurance, as just discussed, and (2) provide some level of subsidy for the $5,000 deductible (depending on income-level, age, military status, etc.).

Consider this. . . if the cost of the new catastrophic insurance remains around $2,400 annually, and (for the sake of argument) the government chooses to pay the full $5,000 deductible for each of these recipients, and they all use the full $5,000 deductible, it would cost the government $7,400 per recipient to pay all of their medical expenses during that year. The government currently spends $11,093 per Medicare/Medicaid recipient. Thus, by switching to this plan, the government could save $3,700 per recipient. With 81 million recipients, that means a total saving of $299.7 billion dollars -- and this is an annual figure, not a fake 10 year projection.

Moreover, still assuming the projected cost of $7,400 per person, this means that the government could ADD another 40.5 million people to this program without spending a penny more than is currently spent. Since only 7.3 million Americans truly can’t afford insurance, this allows the government to extend coverage to those persons and still generate cost savings of $245.7 billion per year!

(** This assumes full 100% subsidies and full use of the program -- thus, the savings figure likely will be higher. It also does not include any cost savings from eliminating vast amounts of bureaucracy at the state and federal level.)

Finally, to make the deductible subsidy work, HCA would pay the insurers directly on behalf of those receiving subsidized policies, and HCA would issue a health insurance credit card directly to the covered individuals. Those cards would allow the holders to acquire only health care products and services (using product codes). And depending on the level of income subsidy desired, each card could contain any amount up to $5,000.

Illegal Aliens

Lastly, on the issue of illegal aliens, it is clear that these costs should not be borne by the states or by individual providers, as only the federal government has the power to stem the flow of illegal immigration and to deal with foreign governments. Thus, CommentaramaCare proposes (1) that the federal government fully reimburse providers for the costs of providing such care, and (2) that the federal government seek to charge the home countries of these aliens for the costs they have incurred.

CONCLUSION

Without forcing anyone to participate, without raising taxes, and without endangering anyone’s current plan or private insurance, this plan should reduce the cost of medical care within the country, reduce the cost of insurance to individuals, reduce the cost of providing care to persons on government assistance, and ensure that everyone in the country who wants coverage can get it at reasonable rates.

For further analysis, particularly related to costs, see the next post. . .

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