Category Archives: Current Affairs

Why Progressives are Bat—t Crazy

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Via Ed Cone comes this interesting piece with an even more interesting graphic about the Senate's health care reform proposal. The graphic compares the projected annual costs of health care (defined as premiums and cost sharing) to a family of four making $54,000 a year in 2016 under three different scenarios: If the Senate Bill is passed, the Status Quo (nothing changes from today's system), Status Quo + SCHIP (the cost of insurance under the status quo if you qualify for SCHIP subsidies).  Basically the annual out of pocket expense for the family under the Senate Bill would be $9,000 while under the status quo it would be over $19,500. The difference is due to a $10,000 subsidy the author identifies in the Senate bill.  He also says that progressives, who generally don't have a problem with "big government," should be all over this thing instead of railing against it.  Here's an excerpt from his breakdown of the "Status Quo" figures:

In 2009, the average premium for a family in the individual market was $6,328, according to the insurance lobbying group AHIP.
However, this figure paints an optimistic picture for two reasons.
Firstly, the average family size in the AHIP dataset is 3.03 people;
for a family of four, that number would scale upward to $7,925, by my
calculations. Secondly, the CBO's estimates are based on 2016 figures,
not 2009, so to make an apples-to-apples comparison, we have to account
for inflation. According to Kaiser, the average cost of health coverage
has increased by about 8.7 percent annually
over the past decade, and by 8.8 percent for family coverage. Let's
scale that down slightly, assuming 7.5 annual inflation in premiums
from 2009 through 2016 inclusive. That would bring the cost of the
family's premium up by a nominal 66 percent, to $13,149. And remember:
these are based on estimates of premiums provided by the insurance lobby. I have no particular reason to think that they're biased, but if they are, it's probably on the low side.

I'm glad to see someone finally putting some digestible figures out there.  While the figures might just be estimates the author at least puts the argument in the proper context.  As someone who has an average healthy family of five (two adults, three children) and who has been in the individual insurance market for years I can tell you that the $19,500 estimate is definitely in the ballpark since we've been dancing in the $12,000-$14,000 a year territory for quite a while.

Out of curiosity I decided to see how this health expense compares to a yearly mortgage expense.  I went to an online mortgage calculator and put in $150,000 for a 30 year loan at 7% interest.  The monthly mortgage payment would be $997.50 which my middle-school level math tells me is a little under $12,000 a year. So the projected "status quo" premium of $13,149 in 2016 is over a $1,000 than the annual mortgage expense on a $150,000 note.  That's truly insane. 

Oh, and the more the insurance is the higher the monthly expense the insured has to report on his loan application and that lowers the amount that he'll qualify for.  That means he and the other average folks like him buy less house, which means the developers have to build smaller/cheaper houses, which means the developer's suppliers sell him less stuff, which means they employ fewer people, and so on.  All so average people can pay out the nose for a piece of paper which tells them that they might not be bankrupted by a horrible illness as long as it wasn't some sort of preexisting condition or didn't happen during a full moon.  That's not just insane, that's bat—t crazy.

Mr. Pollin Was One of the Good Guys

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I grew up in the Washington, DC area during the '70s and '80s and I was a big fan of all the pro sports teams there.  As hard as it may be to remember now, the Washington Bullets were one of the premier NBA teams in the '70s and one of my fondest memories is of my Mom letting me stay up past my bedtime to watch the Bullets' decisive win over Seattle in game seven of the 1978 NBA Finals. I idolized all of the Bullets and to this day I can remember sitting in the Cap Center watching Elvin Hayes knock down one of his patented fade away jumpers, Wes Unseld hammering guys on the blocks and Bobby Dandridge adding a lot of flair with his all court game.  And of course I thought Abe Pollin, the team's owner, had to be the greatest guy in the world for putting this incredible team together.

Pollin also owned the Washington Capitals and over the years the Bullets sank into consistent cellar dwelling status and the Caps became a winning franchise.  In the mid-90s Mr. Pollin decided to move the teams from the Maryland suburbs to downtown DC.  Amazingly he built the then-named MCI Center with $220 million of his own money and he produced a jewel of a facility that became a central part of the revitalization of that part of downtown.  Let me repeat: he built it with his own money.

Mr. Pollin was loyal to a fault, keeping people in jobs long after most owners would have cut them loose, and he expected loyalty in return.  When he didn't get it he wasn't afraid to wield the ax (just ask Michael Jordan).  All in all he seemed to me to be an old-school owner who did things his own way, and although he didn't have any championships to point to after 1978 he earned the respect of everyone in Washington and throughout the sports world.  He wasn't perfect and was known to play hardball, but in the end he was a tremendous asset to his community.

Sadly Mr. Pollin died yesterday at the age of 85.

The ACLU is an Equal Opportunity Ticker Offer

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It always cracks me up to hear pigeon hole the ACLU as some sort of liberal activist group.  I guess they are if "liberal" means defending all peoples' civil liberties no matter which end of the political spectrum they fall on.  Sure, conservatives are ticked about the whole Forsyth County Commissioners' prayer issue, but I suspect they'd support the ACLU in their defense of a Florida student who wants to wear a t-shirt that says "Islam is of the devil." 

For the record I sometimes disagree strongly with the ACLU, but I do think they're very consistent.

One of Those Health Reform Arguments

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One of the arguments I hear about health reform proposals is that it will inevitably lead to socialized medicine and eventually the only people who will get "good" doctors will be those who can afford to pay cash for access to them.  Well I hate to tell you but we've had a "have vs. have not" health system in place here in the US of A for quite a while and I'm pretty sure it's only going to get worse with or without reform.  Check out this piece from a Greensboro blogger (h/t to Ed Cone for the lead):

I recently received a form letter saying that Dr. James Kindl, my physician for the past two decades, is joining MDVIP, "a national network of physicians who focus on personalized preventative healthcare." His letter goes on to say "In order to provide enhanced proactive care, I will be reducing the size of my practice to no more than 600 patients who may join on a first-come, first-served basis."

What his letter doesn't say, and what doesn't become apparent until one goes to his new website and actually tries to sign up for his new practice, is that this members-only service has an annual fee of $1,500, and that this fee only pays for membership; all the usual charges will still apply, billed to your insurance company.

Right now if you don't have health insurance your "safety net" is the emergency room and they must treat you if you show up.  Unfortunately if you have any assets at all the provider will take them in return for services rendered and you'll end up without much to enjoy with your (hopefully) good health.  Of course there are the free clinics but those offer inconsistent care at best.  That's what I mean when I say that we are a nation of haves and have nots with regards to health care. I'm flummoxed by the arguments against reform that say we need to resist "socialized medicine" so we can keep seeing our doctors without interminable waits for service and we can continue to have access to cutting edge medical equipment.

As for the anti-reformers' warning that my taxes will go up with any kind of public option, well I have a hard time believing that the tax burden can be any worse that what my health insurer does to me each year.  Right now my health care burden is about 15% of my gross income and it is only that low because my family has been extraordinarily healthy the last couple of years (knock on wood) and since our premiums tend to rise at a higher annual rate than inflation or my wages then I'm fairly certain that my health care burden will be approaching 20% of my income within a couple of years.

I'm not necessarily arguing for the reforms currently being proposed by Congress, but I'm pleading for the powers that be to do something because we're drowning out here in the real world.  And don't get me started about the impact on small business because we could be here all day.

More Dudes Needed

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According to this post at Applied Rationality, which in turn links to an Inside Higher Ed article, it seems that small liberal arts colleges are struggling with their own bizarro world cases of gender equity:

The U.S. Commission on Civil Rights has started an inquiry into the extent to which liberal arts colleges discriminate against female applicants in an attempt to minimize gender imbalances in the student body. On Friday, the commission agreed on a set of colleges — primarily in the Washington area — to investigate, but declined to release a full list.

The issue is an extremely sensitive one for liberal arts colleges, many of which in recent years have worried about their gender ratios reaching points (60 percent female is commonly cited) where they face difficulty in attracting both male and female applicants. Generally private undergraduate colleges have the legal right to consider gender in admissions. They were specifically exempted from the admissions provisions of Title IX of the Education Amendments of 1972.

People, it's not complicated.  Want more dudes?  Simply do the following:

  • Install 60" flat screens in every dorm room.
  • Outfit all rooms with an Xbox and a free subscription to Live.
  • Also provide unlimited supplies of nachos and any fried food.
  • Remove any "English Literature" requirements from the curriculum. Yes, yes I know it's a "Liberal Arts" college, but what's so liberal about reading boring crap written by a bunch of whimpy navel gazers or, well, women. Sounds anything but liberal to me.
  • Introduce a course on Family Guy, and call it something cool sounding like, "Influence of Modern American Cartoons on Familial Discourse."

Do those things and you'll be swimmin' in dudes.  You might be wondering why I didn't mention free beer, but honestly today's generation of young dudes seem to be a bunch of pansies who drink froo-froo concoctions with all kinds of silly names.  Sadly, the beer would be wasted.

Not Remotely Funny or Cool

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Someone sent an envelope containing baby powder to Rep. Foxx's office in Clemmons and caused quite a scare for one of her staffers.  As someone who lived through the whole anthrax thing in DC (my company was served by the postal facility that had to be decontaminated about 8 years ago, which meant we got some crispy mail for a while and any time we had a "clumpy" envelope everyone got a little nervous) I can tell you that if this was intended as some kind of joke then it's not remotely funny.  For that matter, I don't care how much you dislike a Congress-critter, this is a reprehensible way to try and make your point. 

The Obama Head Fake?

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So maybe health care reform is just a decoy:

But other issues that once consumed Congress are now sailing into law, often without much public notice. Senior White House political adviser David Axelrod said his opponents in Congress are absorbed with defeating Mr. Obama's health-care overhaul, what he calls "the shiny object that they've chased." As a result, he contends, other measures have been left to pass into law.

Earlier in the article:

Last week, Mr. Obama signed defense-policy legislation that included an unrelated measure widening federal hate-crimes laws to cover sexual orientation and gender identification — 12 years after it was first introduced. The same legislation also tightened the rules of admissible evidence for military commissions, an issue that consumed Congress in debate in 2007 but received almost no attention this go-round.

Other new measures signed into law since the administration took office, all of which kicked up controversy in past congresses, make it easier for women to sue for equal pay, set aside land in the West from development, give the government the power to regulate tobacco and raise tobacco taxes to expand health insurance for children. Congress and the White House, in the new defense-policy bill, also killed weapons programs that have survived earlier attempts at termination, among them, the F-22 fighter jet, the VH-71 presidential helicopter and the Army's Future Combat System.

Bizarro Banking

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If we've learned nothing else the last year or so it's that we can't count on the folks running our financial system to be, you know, wise.  Check out this paragraph from an article in the Washington Post about the trouble Bank of America is having meeting the Obama administration's November deadline for modifying 125,000 home loans:

The company's effort has been hamstrung by a staff shortage and by adapting its computer systems and even fax machines to the scale of the program, which began in March. The company was also slow out of the box because it initially took a more conservative approach than some other banks, requiring that borrowers document their income and complete other paperwork before granting preliminary approval for a modification. In August, Bank of America softened the requirement and began authorizing some modifications without getting all the documents first. (Emphasis mine)

So a bank is struggling, in part, because it is doing what we'd normally expect a bank to do when it's loaning money to a consumer?  Obviously they're doing this because they don't want to risk any more of their capital than they have to, right?  Maybe not so much:

Under the Making Home Affordable program, lenders are paid with taxpayer funds to reduce borrowers' mortgage payments by lowering their interest rates, for example, or by extending the terms of their loans…

Bank of America and other lenders have a lot riding on the foreclosure prevention program. The company stands to collect about $6 billion — some of which will be passed on to investors — of the $75 billion the administration has set aside for the Making Home Affordable program. 

Hey, it's easy to criticize the banks since they really and truly have earned condemnation on many fronts.  It's also easy to laud a program that's set up to help people manage their mortgage expenses.  It's damn near impossible to understand how this is going to end well.

Dell Hell, NC Version

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**Update** If you'd like to see a really good discussion about the Dell situation then head over to Cone's blog and check out the comments.  No shouting and lots of thought behind the comments.  Really good stuff. 

A couple of years back Jeff Jarvis, author of What Would Google Do?, blogged about a very negative experience he had with Dell and he dubbed it Dell Hell.  After yesterday's news that Dell is closing down their desktop plant here in Winston-Salem I'd say we're having our own version of Dell Hell.

Yesterday I wrote that Dell's move couldn't possibly have been a surprise to anyone who's been awake the last 18 months.  Ed Cone quoted me on his blog and since at least one of his commenters suggested that it is a surprise to a lot of people I felt compelled to explain myself in the comments:

The reason I wrote that it shouldn't be a surprise was really an observation that given the overall economic environment of the last 18 months, the fact that the plant was built to produce desktops, that the market has been moving strongly towards laptops and Dell didn't seem to be interested in re-tooling the plant to produce laptops and that Dell has been reducing it's workforce at the plant, then it shouldn't really be seen as very surprising that this has happened. Abrupt? Sure, but these things tend to be.

As for Winston-Salem getting back its incentive money I heard an interview on WXII this morning in which the Dell rep said that the incentives were based on job creation and the Dell had met those conditions, so maybe Dell is planning on fighting the return of those incentive dollars.

In addition to my points in that comment I'd also like to put forward the following thoughts:

  • I remain convinced that subsidies stink. I also remain convinced that if subsidies are a part of the economic development competition between states then state and local officials are pretty much forced to use them. 
  • Hopefully Mayor Joines is right when he says "The city, the county and the community will get reimbursed every dollar we put into the project." What worries me is that Dell might go to court to fight the reimbursements. Even if Dell is wrong they probably have less to lose in taking the issue to court and working for a settlement than they do in ponying up the reimbursements without a fight.
  • Even if we get our money back we still have over 900 people being added to the unemployment rolls by January. That's a heck of a hit for an already overburdened unemployment system, not to mention a potentially chatastrophic impact on the employees.
  • Some leaders have pointed out that the silver lining here is that we have a relatively new manufacturing facility that can now be marketed to another company. I guess that's a good long term view, but short term I wouldn't hold my breath. From the Fed's September 9 Beige Book report for the fifth district, which includes North Carolina:

    "Vacancy rates climbed higher across office, industrial, and retail space in most District markets, while the amount of available office sublease space remained fairly steady since our last report. On the sales side, very little activity was reported in recent weeks."

    Maybe we can re-purpose it as a fabulous new indoor soccer park.

  • I've read some comments on other blogs and news stories that essentially say, "Hindsight is 20/20" or "It's easy to criticize the deal now, but no one could have known this was going to happen at the time the deal was struck." Those folks are right, and at this point I don't think it's appropriate to criticize the folks who put the deal together. I truly believe they were doing what they thought was best for the community and given that incentives are a tool that most state and local governments are using to attract business it's hard to criticize them for trying to compete. (We could argue that the price tag was too high, but that horse is out of the barn).  What we should be focusing on is how we protect ourselves in the future. Winston-Salem is in the unfortunate position of having two deals (the downtown baseball stadium and Dell) go squirrelly on them in very short order and I think it's clear that we have to go into these deals with eyes wide open and assume that the worst can happen.
  • Any which way you slice it, this situation stinks.