New eBook Pricing is a Rip-off

When Amazon began pricing books at $9.99 I thought the amount was a tad high, but not altogether unreasonable. Now, with the Apple iPad, the price is set to spike to $15. This, of course, is contrary to the theory of capitalism and competition where the more suppliers their are the less we we should expect to pay. Instead, Amazon is being forced to raise the price of books, not lower them. Thank Apple, Macmillan, and other greedy publishers for the higher prices.

Why should an e-book cost almost as much as a print book, and in many cases, more? At $9.99 everyone made plenty of money, so at $15; the extra $5 is pure profit since the costs behind that price have not changed at all. The publisher has dramatically reduced costs. Of course there is no printing, warehousing, trucking, mailing, restocking, or repurchase of unsold inventory. There is no limit on how long a book can remain “in print”, unlike the old system where most books ceased to be available after as little as six months. The risk to a publisher has basically been reduced to a small fraction of what it was before. Before, to gain print cost savings, a publisher needed to ensure a certain level of sales. Now the risk is solely in recouping the cost of marketing and editing. There is even less cost in terms of marketing. Marketing often meant in-store events, displays, jobbers; yet there is no in-store anything since there is no physical store. Such an event now might be a podcast or a web based video, but that is a one time cost. There are just a few booksellers on-line, and each is tied to their expensive device (up to $500 in the case of the iPad); so instead of having the cost of a brick and mortar store, they need a relatively simple web site in lieu of hundreds of stores that have monthly rent, employees, property taxes, etc.

The publishers costs are a small, small, small fraction of what they were before; yet they think they are entitled to the same price so they get to pocket not just the same profit as before, but far, far, far more profit. The retailer also makes vastly higher profits since instead of hundreds of stores, they now have one, no shipping costs, and the up-front donation of hundreds of dollars whereby a consumer voluntarily locks themselves into your store.

I have a Sony eBook Reader and a Kindle. I like Apple products, but the iPad is of little interest, in large part because of the book prices. Sony’s book prices were higher, the number of titles smaller, and their device chock full of annoyances. The Kindle offered cheaper books, immediate downloads, sample chapters, and note taking and bookmarks and more. I love the readers, the Kindle more so than the Sony; and I was satisfied, but now I am feeling ripped off by more of the same rampant greed that killed our economy, unemployed million, and will likely provide an opening for someone in India or China to suck up another segment of our economy.

So, when people start steeling electronic books on a wholesale basis as they have the music that was vastly overpriced; the publishers will whine about how beleaguered they are by the world of crooks. The publishers are the real crooks, but they are usually the ones to cry foul first. They will simply be getting what they asked for. Right or wrong, when people feel aggrieved, they take things into their own hands and  react using their own form of justice. Stealing digital music is a mild form of civil disobedience and payback. The same thing can be expected as payback to publishers that should be passing on some of the savings to the consumer and savoring the huge spike in the sheer volume of customers. If this occurs, like the artists that are no longer being paid for their work, the same will happen to authors. Oddly, in the book publishing business; the author is almost incidental to the whole industry and all but a few authors cannot make a decent living on their writing, yet the publishers flourish and the higher prices for e-books won’t necessarily translate into more money for authors.

Is the Senate Health Care Bill Better than Nothing?

Hmmm, that’s a tough one. If I understand the bill, and it is quite likely nobody actually understands the thousands of pages that it entails, it’s vastly better for the insurance companies then the consumer and the taxpayer.  It was probably written by the insurance industry and the drug lobby just like the Bush Era drug bill that made it illegal for US consumers to import drugs from anywhere, and illegal for the government to negotiate fair drug prices, was written almost entirely by the PHARMA lobby.

If I understand this thing, it will be illegal for the insurance industry to deny coverage for pre-existing conditions, but that won’t kick in until after 2014 when nearly all of the baby boom generation will be covered by Medicare. Hmmm, how did that happen? There are supposedly provisions to protect people from being priced out of the insurance market, but the loopholes will certainly make it possible for deductibles to be so high that most insurance companies won’t have to pay a dime in claims for the most seriously ill. We still can’t get competitive prices for drugs. This from people that are arguing that a public option for health care would be anti-competitive. I guess there are two sets of rules we need to understand, one set says it is not only okay to screw the consumer and the taxpayer, but that it should be written into law and set in stone. The other set of rules says its okay to cry foul if anything smacks of anti-big business no matter how egregious their sins, past, present, or future.

We will definitely be paying higher taxes as well as more for health care, and we will be required by law to purchase whatever the crooks in Hartford (the insurance capital) foist off as health coverage. Aetna already has stated that it plans to screw 660,000 small businesses by jacking up rates to extreme levels and I have little doubt that all the insurance carriers plan to stick it to the little guys before any restrictions and the compound double digit increases we have been subjected to for decades go into place.  As I said before, what they don’t bleed out of us in premiums, they’ll make up for with $50,000 or $1000,000 deductibles or hidden fees that will make your illness the least of your worries. If you don’t believe our fine, fine, fine congress would do this to us; take a look at the way it has handled the banking crisis and the sieve they call banking reform. As but one example of how well that went, the credit card protection measures have spawned a credit card with a 79.6% interest rate and an industry that cranked up the rates, restrictions, penalties and lowered the limits on nearly the entire marketplace further tightening credit at a time when our economy desperately needs more credit, not less. In any other setting, what these businesses are doing to this country would be considered treason.

The insurance industry will get 50,000,000 (50 million) new customers, required by law to buy whatever they offer, will crank up rates for anyone who’s ever had a cold or a headache claiming it is a pre-existing condition, and then start claiming these poor beleaguered insurance giants can hardly make ends meet unless the government allows them to deny nearly all the coverage we are now supposed to get and are forced to pay for. We’ll be told that this can’t happen, but its been happening and you can be sure that within those thousands of pages of legalese there are thousands of loopholes big enough to drive a super tanker through. Remember, the bill was written in whole or in part by the insurance industry, not the congress that for the most part was bought and paid for by the businesses that stand to gain the most from this smorgasbord of fattening treats prepared just for them.

Back in Econ 101 we learned about the economy of scale. In a nutshell the more customers a business has the cheaper they can manufacture and sell their product, but with a captive audience there is no incentive to offer a fair price and certainly not a competitive one. There are only a handful of insurance companies that get to divvy up the loot coming in from 50 million new customers, and many companies are a virtual monopoly in their region, so why offer a lower price?

As I said before. I don’t understand all that the health care bill entails but from what I have read so far, there is nothing in it for me but higher costs and higher taxes. It will give benefits to people who had no coverage before and pay little or not taxes, that’s where the higher taxes on the rest of us come in. I believe it will cut Medicare benefits just about the time I’m eligible after allowing me to pay for them for my entire working career. The bill won’t hold down costs but it will guarantee that I am forced to pay for something I may not even want.

Part of the problem on this bill came from partisan politics where the Republicans are allowing the Democrats to take the heat for this cluster f— piece of legislation, then we’ll see congress shift to a Republican majority and the Democrats will do the same thing to them on other critical legislation that will further impoverish the majority while enriching the few. During the next election cycle we’ll be told how horrible the Dems are and how the Republicans tried to protect us, but that’s a crock – they tried to make the Democrats fail and succeeded.  If any of these guys gave a crap about the people, they would have worked together to craft a bill that truly reduced costs across the board, made coverage affordable and accessible, and allowed all the businesses involved with health care a fair but not exorbitant profit. The profits these guys are set to rake in will rival what Wall Street just demonstrated as yet another slap in the face to the American taxpayer.

I don’t really know if this is better than nothing, but the preliminary evidence makes it sound like a loser. All the good stuff has been removed, the loopholes buried deep inside the mumbo-jumbo, and our fragile economy is set to take yet another body blow.

Reimporting Drugs from Canada, huh?

Congress just blew off an amendment to the healthcare reform bill that would have allowed reimporting drugs from Canada. What I can’t fathom is why we should need to reimport drugs from anywhere since it should be cheaper to eliminate the middle man (Canada) in the first place. Isn’t that just the craziest thing you ever heard?

Our government does all sorts of things is isn’t really supposed to be doing, but one of the few things covered by our constitution is to regulate trade. In other words, congress has it within its purview to regulate the pharmaceutical industry and it wouldn’t be at all unreasonable for congress to insist that no drug developed in the US could be sold within the US at a price higher than anywhere else on the planet. It’s called a most favored nations clause. The federal government has provided a great deal of the research behind some of the most profitable drugs ever made and not only did we the taxpayers pay for the development, now we’re paying through the nose to ensure that the pharmaceutical industry rakes in immense profits and the CEOs pull down enormous salaries and pay packages.

The reason this will never happen is that congress isn’t working for the people, it’s working for the pharmaceutical industry and the oil industry and wall street. Most Americans believe that the US is in decline. If this is true, its because we’ve gotten off track and our nation’s leaders have sold out to the highest bidder. Obstructionists like Joe Lieberman and John McCain know full well that the American people are in desperate trouble and rather than offer real solutions, they simply throw stones at people trying to create solutions. If our current healthcare plan is no good, fine, but they should have alternatives; not just obstruction. Anyone calling for the current insurance industry or pharmaceutical companies to reform their draconian practices isn’t on the side of the people; these industries have been bleeding us dry and have no intention of ever treating the American people with anything but contempt. We’re the suckers to be picked clean at every turn and congress is helping them do it until we’re all bankrupt.

It is possible to come up with fair pricing on drugs, a reasonable and comprehensive healthcare system, and even solutions to energy and the environment; I’m just not sure we can do it with the current congress. Perhaps we should fire them all and start over.  Democracy and capitalism can work, it just seems that the people in charge of this have gotten too greedy and are willing to throw the rest of us under the bus to line their own pockets.

When Will Unemployment Get Better?

The duh answer is. when companies start hiring, but that doesn’t really provide a meaningful answer. Meaningful gains in employment might be a decade away. The economy is still broken, Wall Street is still a ponzi scheme, small businesses are still failing by the thousands every month, big businesses are in worse shape, and housing isn’t really getting better and millions of foreclosures are yet to come. All of this spells more unemployment, not less.

What helped back in the 1930s were things like the WPA and the CCC. The Civilian Conservation Corps (CCC) put millions of men to work for as little as a $1 a day, and the men were glad to have the work. The Glen Becks and Rush Linbaughs of the world would decry this as too much government, and perhaps it is, but of course, they have jobs and they haven’t lost their homes. They’re hypocrites anyway. Linbaugh used to decry drug addicts until he got caught being one, then that particular line of derision disappeared from his blather. Perhaps we should strip the guy of all his money and fire him from his job and allow him to see what it’s like to worry about where his next meal comes from or if he’ll be homeless any day. I suspect that his commentary would change on that score too.

What if the government stopped handing over trillions to Wall Street and started creating useful jobs to repair our crumbling parks, fix our roadways, clean up inner cities, and help build a renewable economy.  Those jobs should pay bare minimum and only be available to those most desperate to work, just like in the great depression. The workers of the CCC had it good compared to what they had before. Most of the people that worked for the CCC were on the verge of starvation, had clothes that were full of holes and had never owned a new pair of shoes and never visited a dentist or a doctor. Once they showed up at the CCC camps, these men were given physicals, visited dentists, given new clothes and shoes. They received 3 meals a day and a tent and a cot and in return were expected to work hard, and for the most part they did or they were sent packing. The CCC had an unforeseen, yet incredibly important benefit as well. When World War II broke out, the millions of men of the CCC were the closest thing the U.S. had to a large well disciplined army, all in top physical shape and with a great deal of pride and gratitude to a country that helped them in their hour of need.  How do you think the average unemployed homeless guy and his family today feels when he reads about billions in Wall Street bonuses and nothing in the works for them.

Hoover dam was built during this time and the working conditions were horrible, the pay terrible, the work itself extremely dangerous and demanding; yet once again, the men were anxious to do it since the alternative was far worse. I’m not saying that the draconian conditions imposed on the men that built Hoover Dam were fair or right, but the legacy of that project and the jobs it provided are a testament to what can be accomplished in a period where most people felt that all hope was lost.

None of what the government did back then was make-work, the jobs provided incredible value for the country and today, 70+ years later, we still see the legacy and benefit of most of this work. What we are doing today is handing over trillions of dollars to people that are not suffering, banks that continue to foreclose on homes, people that the dishonest and corrupt while we watch the very core of America wither. We’ve propped up the worlds largest and most crooked casino., the stock market. The theory of the current economic policy is that if we save big industry and the banks and the stock market, eventually the individuals that suffered the most from the lunacy of big business and Wall Street will be able to gather the crumbs left over. This fails to point out that millions already have lost their life savings, millions are unemployed, millions are starting to eat away at their retirement a decade before they planned and tens of millions are entirely reliant on the government or charity for their very survival. These aren’t the people that have always relied on government, they were at one time hard working tax paying honest people. If the government had created jobs with the trillions handed out to Wall Street, perhaps Wall Street would have collapsed, yet for each trillion we could have employed tens of millions of people doing useful and productive work that would benefit the country for decades to come. Instead we have a stock market that appears to be in recovery, Wall Street handing out billions in bonuses and profits; yet the average American is worse off than they were even last year let alone a decade ago and each year into the future many will only see things get worse and worse.

We’ve been sold on the idea that if the stock market is doing well so is the country, but that’s absurd. Once upon a time that might have been true, back when stocks represented something tangible behind each share, but now each share is tied to things and concepts none of us could ever understand. Most of what is traded on Wall Street isn’t backed by anything but more securities which are backed by more securities and so forth. Companies buy these securities and thus when we buy a share of stock in a “blue chip” stock, we’re also buying a good chunk of the crap Wall Street simply invented. The current economic policy does nothing to address the fact that one out of five workers is unemployed or under employed, and that is the conservative estimate; yet the guys that created the problems are the only ones to have been rescued.

I wish I could take back the money given to Wall Street and use it to hire workers to fix the real and substantial problems facing this country. We bailed out the banks to get them lending again and they took the money and used it to gamble instead of build the economy and to lend to businesses and individuals. We propped up the brokerages and select big businesses, yet most have either failed or have used large chunks of the cash given to keep them afloat to further influence congress to allow them freedom to screw us again and again. In the coming months we will begin to see entire states go bankrupt leading to more unemployment, starting a new and even more devastating death cycle. Will Wall Street come to their rescue. I wouldn’t count on it.

Had we hired people into a modern CCC a year ago there would have been far fewer foreclosures, far fewer people reliant on handouts from the government, far fewer people that will run through their savings and need government assistance well into the future. People have been putting off health care and that will come around and bite us in the ass somewhere downstream. By allowing so many Americans to drown, we’ve created a cascading effect that will haunt us for decades. A good chunk of the pressure on overstressed states has come about because of unemployed people, so why the hell haven’t we done something to get them back to work.  The stimulus spending has created a handful of jobs here and a handful there, but a good chunk of that spending has gone to providing huge salaries at the top and profit to private companies. Profit is supposed to be the incentive that causes businesses to take risks, but businesses aren’t taking risks, they are demanding a sure thing from the government, taking their profits first, increasing executive pay and then perhaps hiring a few $6 an hours guys so they can claim they’re are increasing employment while they are making every effort to outsource more and more work to India and China. Even the Cash for Clunkers program did more to bolster foreign car companies than provide and protect U.S. jobs.

Perhaps the problems are too big to solve. Perhaps we should just lie down and allow the modern day Robber Barons to pick our pockets and then burry us and our country; or, we could put workers back to work doing precisely what is needed. We need to build new energy infrastructure. I hate the idea of the government doing this, but it was the government that hired the Six Companies to build Hoover Dam – a partnership between government and business where the government was in the drivers seat and profits only happened if the contractors performed as agreed. Had we rescued Wall Street and stipulated they weren’t allowed to make a dime in profit or hand out bonuses until the economy was back on track and reached certain performance goals, you’d be damn sure to have seen a hell of a lot more consumer and business lending and business practices designed to keep people in their homes and on the job. But no, we only guaranteed that the guys at the top would get richer with no stipulations what so ever.

Why do we need derivatives?

In large part, financial derivatives caused the meltdown of the world financial system. Do you know what a derivative is? If you found a derivative on your doorstep, would you recognize it? Do you think your local banker knows what a derivative is well enough to describe it to you? Could your financial advisor educate you to where you could truly understand them? Do you think Alan Greenspan understood derivatives when he had a chance to do something about them? Do you think anyone in the world really and truly understands derivatives? The answer to all these questions is a resounding NO! So, do we need them to survive? Does our economy need them? The answer to that may not be so clear cut.

A derivative is an investment for the sake of investment with pretty much nothing behind it, basically a gamble. A derivative is an investment in another investment. Many derivatives are based on another derivative which very likely is based on yet another derivative, on and on. It’s not at all unlike those Russian dolls, one doll inside another inside another, sometimes dozens, even hundreds deep. Derivatives are about as useful as Russian dolls too.

Why we may need derivatives at all and why you don’t hear many national leaders calling for their elimination is that our entire economy has become a Ponzi scheme based on the banking sector that is little more than the worlds largest casino now largely reliant on these bogus securities. If we tried to undo the Ponzi scheme overnight, calamity would ensue, and of course already had. The calamity we saw in 2008 is just the tip of the iceberg.

The total value of all derivatives as of 2007 was around $516 trillion. The  gross domestic product of the US economy is about $15 trillion. The size of the derivatives market shot up from $100 trillion to $516 trillion in just five years leaving little doubt that there was anything at all underpinning the sector. It’s not as if the value of all assets upon which such investments are based shot up by 500% in five years, it’s just the most massive con ever perpetrated on mankind.

I mentioned Alan Greenspan and the fact that even he, arguably the number one economist in the world, didn’t understand derivatives much better than you or I. Over ten years ago, the danger of these investments was brought to his attention, and he had to do battle with Brooksley Born who tried to regulate them in order to allow derivatives to spiral out of control. Had Mr. Greenspan had a clue as to how dangerous and fraudulent these investment vehicles were, perhaps he’d have at least given the American public fair warning as to what he was going to allow the banks to do to us all. He knowingly allowed what happened in 2008 to happen. He’d seen the effects of derivatives gone bad when one of the wealthiest counties in the United States, Orange County, California; declared bankruptcy, mostly from derivatives . This was the late 1990 when derivatives were about $25 trillion. As far back as 1993 derivatives cost Proctor and Gamble big as well, and took down Long Term Capital Management (LTCM), a trillion dollar hedge fund, over ten years ago.  Even today, derivatives are completely unregulated and are still the scariest thing in our economy.

So, do derivates have a positive side? Only if you happen to be the guy peddling the damn things and perhaps if you get in and out before the bubble bursts. Its a scam, period. I won’t venture to say that you’d be better off at your local casino, but you can understand what your odds are there and there is far more regulation over any casino compared to Wall Street.  One report states that even Alan Greenspan stated that he had no interest in preventing fraud on Wall Street, that he’d leave self-regulation to the industry and the market. In other words, he’d allow investors to get burned so they’d know enough not to invest a second time. The main problem with this theory is that now that he and Larry Summers and the other heavy hitters that for the most part are still calling the shots have allowed our entire economy to be mostly based on the false value and false usefulness of the investment banks. Once upon a time these banks were the means of funding industry, now its a shell game, hiding the decent investments based on something concrete amongst a sea of faux investment, derivatives. You and I and sophisticated investors and bankers and government officials and just about anyone in the world had no idea how solid any investment is. You may think investing in a blue chip stock might be a sound investment, yet as we’ve already found, solid companies get sucked into some of the $516 trillion dollars worth of crap, potentially killing a healthy company and your investment. It happened to governments all over the world, it happened to blue chip companies, and it harmed tens of millions of investors of all sizes. There is no transparency in this business, the banks and brokerages dealing in these things know they are screwing their investors and are quite proud that we are all such suckers and that government is so incredibly corrupt and compliant.

So what are we to do? Who knows? The banking sector won’t allow Washington to protect us, our economy needs investment and most people need to do something with their savings other than watch inflation erode its value. I guess what we need to do is simply wait for the inevitable to happen, the Ponzi scheme to go bust and a new system of investing to emerge. It will be painful, but so far nobody has a better plan.

There is another significant problem exposed by derivatives. We have all assumed that the guy running the asylum know what they are doing, yet they don’t. They understand more than you and I, to be sure, but they are either corrupt or simply do not have the ability to control the monster they created. Dr. Frankenstein knew enough to assemble body parts, but he had no idea as to how to deal with the creature he had created. So too is the problem faced by all of Wall Street and the Federal government, and worse yet, they are concentrating their efforts on how to take thier profits before this whole nasty mess collapses, and it will collapse. It must.

Look at the guys running the show. At one time Bernie Maddoff was the chairman of the NASDAC stock exchange. Doesn’t that say it all? Robert Rubin, a key Clinton era player, key to the complete deregulation of Wall Street and a top play at Citibank at the time the government was required to hand over $100 billion to keep them afloat. What does that say about the brains making the rules.  We should all be scared, very scared. Maddoff wasn’t an anomaly, its just that he was caught. He wasn’t primarily involved with derivatives, but he was indicative of the lack of oversight and the fact that the people we revere and place in high positions are like the king with no clothes, we simply choose to ignore what our own senses are telling us.  By 2007, the derivatives market shot up to $595 trillion, then to $684 trillion in June of 2008 and back down to $592 trillion at the end of 2008. Be scared, very scared. This crisis isn’t over.

Is the War in Afghanistan Winnable?

This is just an opinion of a person that has never been in the military and has no inside information, so it is anything but an expert opinion. It seems pretty clear that if we really, really, really wanted to win the war in Afghanistan, we might be able to pull it off, but what does really, really, really mean? It means trillions of dollars, it means killing hundreds of thousands of people, tens of thousands of American lives, killing anyone that got in our way. It means getting the rest of the world to hate the US more than it already does, and it means a sustained commitment for decades, or as John McCain once said, a hundred years if thats what it takes. Anything less than that and it doesn’t seem like a winnable battle. I’m not advocating this, but I believe thats what it would take despite the political rhetoric that if we could only get them to love us enough by winning their hearts and minds, we’ll win by default.

The reason we can’t win and why the Russian couldn’t win and nobody can win is that its nearly impossible to figure out who you are fighting. For the U.S., there are two wars being waged, the one the enemy is fighting and the one the US are fighting. They aren’t even the same battle. We are trying to use expensive technology, harm no civilians, garner a positive world opinion, and essentially play nice. The enemy is actually trying to terrorize the population, doesn’t give a damn about killing anyone and everyone and often does, and literally wants the world to fear and hate them. The U.S. wears uniforms that practically have a bullseye on them, the Taliban and the rest of the zealots on the other team look just like civilians, and that is because, when they aren’t shooting at us, they believe they are civilians and go back to their farms. Many of them are paid to plant roadside bombs and do so willingly, paid with money from the heroin trade, and the U.S. is even afraid to destroy the poppy crops because it would harm the already miserable Afghan economy. It’s insane!

If we wanted to win the war, we’d spray their fields with defoliant, we’d bomb the piss out of any village where there was even a single enemy fighter, we’d pull out all the stops and turn the country which is already pretty much rubble into smaller chunks of rubble. We’d make it so that even though the beleaguered villagers that are under threat from the Taliban would be more afraid of the U.S. Don’t get me wrong, I’m not advocating this, but the reality of Afghanistan has always been that the most oppressive regime has always come out on top because most of the country is simply unable to stand up to tyrants and has always been unable to fight back.  When we watch the nightly news many of us ask why, if the Taliban is so awful, don’t the people being oppressed by them kill everyone that looks like they might be Taliban. The answer is simple, they are unable to. It seems clear that Afghanis are willing to kill at the drop of a hat, but if a villager has a stick and their tormentor has an AK47 and is wiling to behead everyone in the village in retribution for even a single one of their own being killed, its sort of a no-brainer.

I have taught US history and even though the American Revolution wasn’t an easy fight, the main difference was that the American people at the time fell into two camps, ones that wanted to remain under British rule and the ones that didn’t. There were individual states that had their own concerns, but it was fairly clear they all saw themselves as having more in common than not. Afghanistan could not be more different. The country has never has any form of strong central government and it is more similar to the street gangs in the U.S. than the colonies back in 1776. The U.S. hasn’t been able to stamp out the Crips and the Bloods and Chicano gangs and hundreds of other in our own cities, but we somehow think we can do something similar in a vast country clear on the opposite side of the globe when 98% of the country doesn’t necessarily want democracy or anything more than to be left alone by all parties involved.

Is failure in Afghanistan any sort of inditement of the American fighting forces? No, not at all. A war such as this is un-winnable without the sorts of draconian measures we are unable and unwilling to undertake. During World War II, the U.S. pulled out all the stops. We bombed civilian population centers, we dropped nuclear weapons and firebombs; we are not going to do that here. Losing World War II was not an option, losing in Afghanistan is unpalatable, but it is acceptable if the alternative is bankrupting the U.S. economy or getting drawn into a larger war. With Pakistan an even more scary problem and the bulk of the Pakistani population strongly anti-American, it seems clear that if we stay in Afghanistan we could end up at war with all or part of Pakistan. It is an impossible situation that likely will not get better as long as we are seen as an invading force, especially a largely impotent invading force.

We don’t have the money or the commitment, and even though we will probably regret pulling out of Afghanistan, we will also regret staying even more. In my opinion, with the information I have found from the news, we simply cannot win even if we do stay 100 years, so we should cut our losses and try to fix the bigger problems such as global warming, energy, water supplies, health care and on and on. If we pulled out of Afghanistan and took the trillions it will take to fight that war, we could easily afford universal health care or a good start on 100% renewable energy. That doesn’t address the issue that perhaps we can’t afford to be spending trillions on anything, but that’s a different discussion.

Here’s an alternate possibility. What if we took the trillion dollars we are going to squander there and instead divided it up among the 24 million people in the country, They’d each get about $43,478.  The current average annual income is about $360. If we made that money contingent on the people killing off the Taliban and al Qaeda and keeping them out, do you think they might do it since that represents 120 time what they earn today. We could insist that they burn all the poppy fields too.

Is the Recession and the Financial Crisis Almost Over?

If you watch the nightly news or read the news on the web, it sounds like things are getting better. The stock market is up 40% over its low, the banks appear to be stable, job losses are tapering off, real estate sales are up 6% from the month before, and on and on – all good news, right?

Job loses are slowing as measured against new jobless claims, but there are still millions of people that are unemployed and unaccounted for, either dropping out of the system or never signing up in the first place. There are people that have taken an early retirement, burning through their savings a decade earlier than they were expecting, counting on dying before their money runs out. Not only will they not be earning more toward their retirement nest-egg, they are taking it out before it had a chance to increase in value due to compound interest. Add to that, much of their savings may have been invested in the stock market which of course tanked, and the value of their house is now half what they were hoping for. For these people, the recession is permanent; their remaining lifetime is one of diminished expectations if not poverty.

Unemployment doesn’t include kids just out of college or high school since they are not eligible for unemployment since they were never employed. These kids are living off their parents, making their parents less prepared for retirement and the kids themselves are put in a holding pattern before they can start their careers and start earning. Add to that, those kids and all the generations behind their parents will be saddled with trillions in national debt.

The stock market has soared in the past 8 months, but would that have happened without the trillions in stimulus and trillions of infusions into the Ponzi scheme we call Wall Street? In other words, the gains in the stock market are an illusion and not any sort of sign of a more stable economy. For that matter, using the stock market as a judge of a sound economy is buying into the whole ludicrous game that has become our system for investing. I put investing in italics since what we have today is no more investing than taking your paycheck to the local casino or race track. Some people consider gambling investing, most don’t, but slick marketing of Wall Street has many people convinced that the recent melt-down was just an aberration and not a sign of more to come. If you believe that, think again. Consider Goldman Sachs, the average paycheck for every employee for the entire company, janitor on up, was $700,000 this year. That money came from you, the investor and wasn’t invested in anything but individual yachts and mansions. I worked in the gaming business where we considered such investors, suckers. Wall Street has so little to do with investing that you needn’t go any further than the front page of any prospecting where they will tell you you stand a very real chance of losing your entire investment. The only people in such transactions that don’t lose are the guys running the con, just like casinos, the house always wins; perhaps not on every bet, but far more often than not. The primary difference between a casino and Wall Street is that casinos are fairly honest about your chances of winning. So, is a recovery in the stock market a good thing or simply a sign that people are incredibly gullible.

The real estate market recovered for a few months in a row, but housing prices are still way, way, way down. Don’t forget, that if your investment or house drops in value by 50%, it has to increase in value by 100% to get back to where it was. As incredibly gullible as people are, they will likely take a long while to forget that they lost their home to foreclosure, were unemployed for years and years or will likely never be able to retire. Perhaps the recession will taper off as these people start to forget.

This recession is different than all those many recessions and stock market crashes that happened between the great depression and this, and there have been plenty, and there will be more. Recessions are a perfectly natural occurrence. Investors get nervous and pull back, others see those around them panicking and it becomes a chain reaction. It has happened ever since there has been money and any form of investing, but as I said, this wasn’t investing, it was 100% gambling and the banks gamble cost us all to lose and they somehow managed to get us to cover their losses and they are still riding high. We see it all around us and we are helpless to do anything about it. As long as between 15 and 20% of our people are unemployed and under employed and tens of millions unable to ever retire; this recession will persist.

We are counting on the government to tell us when the recession is over, yet this is the same government that has repeatedly manipulated the accounting to make a national deficit look less shocking, the same government that shipped our jobs overseas by conning us into believing that globalization and outsourcing nearly all our manufacturing was a good thing. This is the same government that encouraged banks to do what they did to collapse the world economy. This is the same government that has ignored our energy and environment and global warming and population problems so now these problems could very well kill off millions if not billions of people in the coming decades, perhaps make the planet close to uninhabitable. We had the opportunity to take one last desperate stab at dealing with global warming and energy, using the stimulus to jump start a new energy industry, but no, we allowed the existing energy infrastructure to derail this one last possibility. That’s not to say we won’t eventually deal with energy and global warming, but it will cost many times more and will only come once the energy companies have taken the current game to its inevitable conclusion while ignoring the futures of 7 billion people.

The recession is only beginning. We will shortly have a hundred million people counting on the government to support them because the rich and greedy  managed to run off with their retirement, or at the very least, made it worth significantly less. The government may not call the persistent misery heaped upon people for decade upon decade a recession, but those people might tend to disagree. If your parents are set to retire soon and can’t work and can’t count on the government, you may find them living in your spare bedroom. That will diminish your life and theirs. If you end up paying significantly higher taxes for the rest of your life to pay for the trillions of additional debt caused by Wall Street’s ineptitude and greed, you’ll have every right to call it a recession. If energy bills shoot through the roof as the oil companies and the coal companies play their end game and suck up even more of the national wealth, you can call that a recession too. As your health care bills suck up 25% or 30% of your income because congress bent over for the insurance industry, you can all that a recession too. Keep in mind, 60% of all bankruptcies are caused by medical bills because the system is entirely out of whack, and 78% of those medical bankruptcies were from people with insurance.

If you look around things seem fairly okay. Most people still have jobs, people take vacations, businesses still operate, and stores still have customers; so perhaps all that I have said is wrong and things aren’t so bad. That would have to operate from the assumption that we have solved the energy problems, we have solved global warming, that medical insurance won’t continue to eat up more and more of your paycheck, that government will start working for the people instead of big business, that the wars will magically end tomorrow, that terrorists will collectively turn nice overnight, that the stock market will stop being a con and return to the business of investing in the economy. Perhaps this is a depression since it sure seems pretty depressing to me.

A Truly New Idea for Paying for Catastrophic Illness

My plan is called the 100% rule.

Today when most people without insurance and many who do end up in the hospital with a catastrophic illness or from an accident, their hospital bill is more than their net worth (total of all assets, car, house, cash, stocks, pensions, etc).  If your net worth is just $100,000, it’s not hard for one illness in the family to take everything. Even if your net worth is $1 million, a nice lingering case of cancer can suck it all up in just a few years. So here’s the deal, we make the hospital bill relative to one’s net worth.

Right now if your child needs a heart lung transplant and your net worth is $350,000, you get to decide, your money or his or her life, because it will take every nickel to save your child, possibly more. So let’s do that to everyone. If Bill Gates brings his kid into the emergency room, the bill will be $64 billion. If Fred the auto mechanic shows up they’ll take everything and fix his kid, even if everything is just $15,000. Seems fair, right? We’ll make it so everyone is treated the same, rich and poor alike will be equally financially devastated by our current medical system, that way, the next time we have a debate on the medical system we’ll all be on the same page.

Health Care System Needs a Radical Change

Everybody hates something about all the healthcare proposals out there, so here’s another one to hate.  How about if we have the government provide a system whereby it provides a basic level of healthcare below which the patients pays nothing, fills out no paperwork, needs no adjudication, it is just there and available to all – NO INSURANCE COMPANIES WHATSOEVER.  This level of care would provide all office visits, basic prescriptions, maintenance meds, most basic surgeries, emergency room visits, and most ongoing treatment regimens.

The level of healthcare would be sufficient for 90 to 95% of most medical issues. If you want coverage for the rest, you buy it just like you do now. This does several things quite readily.

(a) Immediately costs drop like a stone since nearly all of the billing and paperwork associated with adjudication and approval and so forth disappears for 90% of all medical services. They do it this way in many parts of the world.

(b) The government is now free to negotiate drug prices, saving, by some estimates, $135 billion a year.

(c) Everyone is covered and encouraged to get treatment early on when it is usually relatively easy and inexpensive to treat.

(d) Eliminates all the wrangling over pencil pushers determining what treatment you get.  Anything outside of the scope of this plan must be covered by private insurance which is entirely up to you to purchase or not.

(e) Gets the doctor out of the business of fighting insurance companies and lets them do medicine

The level of care covered under this plan would need to be determined, and it would certainly raise taxes but lower overall costs to patients and taxpayers alike.  I pay $1,200 a month for myself and my wife and I just went to the doctor to get an allergy shot. I waited over an hour, paid a $50 copay and was told the shot itself is no longer covered, just the visit. The doctor billed the insurance company $150 for the visit. I doubt that in my entire life of 58 years the total to the insurance company cost for everything I’ve ever used hasn’t totaled over $10,000, yet I have shelled out in excess of $450,000 in premiums and they won’t even pay for a lousy shot. I broke an ankle and had a hernia repaired and take one prescription for allergies; all of which I would guess would be covered under the plan I propose and much more. I carry insurance in case I get in a car wreck or some other calamity.  I don’t wish to have my life prolonged for even a second if I’m brain dead or have both legs chewed off by a shark; yet there are those that would. They can buy insurance for the extraordinary care, but we all shouldn’t be forced to pay for it. My taxes may go up by thousands of dollars, yet my insurance premiums would likely drop by even more.

This sort of plan allows those that wish to live life on a ventilator to pay premiums to ensure they can do just that.

I asked a neighbor that is a surgeon why he thought medical costs kept skyrocketing and have been for all of my adult life, far in excess of inflation, typically 3x inflation. He said it was because of the cost of the equipment and new treatments and exotic options, and also because of end of life care costs – accounting for 30% of all medical costs for the last 6 months of life. He admitted that the bulk of the costs benefit a very small percentage of the population, There was the case of Terry Schaivo that lay in a vegetative state for 15 years at a cost of about $100,000 per year. There aren’t many people like this, there are even fewer that given a choice would choose to live that way, and it should be up to the individual or their family to plan for such things by buying appropriate insurance. Currently I am paying for such care yet I simply don’t want it.

We need to develop a system that provides the most help to the most people at a sustainable cost, not a system that focuses so much attention on so few and makes the rest of us pay for it. We all paid that $1.5 million to keep Ms. Schaivo alive through higher premiums, let alone the costs of all the legal wrangling. I’m not saying that those people that choose to live with feeding tubes and round the clock attendance not be able to get that sort of care, they just need to pay for it – either through premiums or out of pocket. Sure this will exclude the poor, but they are already excluded. With this plan, the poor now get to see a doctor and hopefully avoid the need for the really expensive treatments they won’t ever get under either plan.

Bottom line. A plan such as this should cut costs all around through less paperwork and a healthier overall population. Many people would choose not to have insurance, accepting the provided level of care, others could pay for various optional levels of care all the way up to the promise of a bedridden life on feeding tubes if that’s their wish. Not being allowed to negotiate fair drug prices is a scandal, we should squeeze those bastards for everything they are worth – they’ve been doing it to us for the better part of a half century. The insurance companies will fight such a plan, but they fight everything but the status quo, and that’s because the status quo has made them fabulously wealthy and impoverished most of us and will eventually bankrupt us. It’s time for a change!

I’m So Sick of Rampant Greed

I have been ranting and raving about the greed that collapsed the world economy, but that’s old news (sort of).  Everything in American society is just mired in greed.  Ryan Seacrest just signed a deal for $45 million to say about 200 words once a week on American Idol for the 4 months the show runs between seasons.  He seems like a nice guy, but where’s the talent in what he does?  Can’t just about anyone do that?

I recently tried to find a domain name for a new business venture dealing with schools.  Nearly every reasonably close name has been gobbled up, not by people that need them, but by greedy as?hol?s that simple hope someone else will be desperate enough to pay them for tying up tens of thousands of names that encompass anything to do with the words in the english language.  There is no value added here, just greed, greed, and more greed. How do these jerks sleep at night?  They should have the word scum-bag burned onto their foreheads so people could avoid them like the vermin they are.

Remember last summer when the price of oil shot up toward $200 a barrel. Did you assume there was an oil shortage? There was no shortage, every barrel of oil traded 27 times by greedy f#^@e^s helping to set the stage for a collapse of the world economy. You can expect to see more and more of this sort of thing as natural resources of every stripe start to grow scarce.  Some say this is just smart business, I say it is greed and damn near immoral.

CEOs and executives think they deserve tens of millions a year for what they do. Maybe the next time one of those people rushes their kid to the hospital for life saving medical attention, perhaps the doctor should demand a hundred million or he’ll let the kid die.  Fair is fair, right? Supply and demand, right.  The CEO has an immediate and urgent demand, the doctor is the only game at the right time and place, pay up of kiss your child goodbye.  Thankfully doctors don’t play by the same rules, but the time may come…

I used to be a pretty big fan of capitalism, but if what happened and is happening on Wall Street, if what happens in every store in America, if Enron, Tyco, Worldcom, and Goldman-Sucks 2.72 billion in profits, and if the shoddy products of nearly every company from Microsoft to the automakers to toy manufactures and on is what capitalism is all about, perhaps we need to modify our form of what should be a pretty decent system.