Breaking Down Obamacare, Or: Everything You Wanted to Know About the ACA but the Inept News Media was too Incompetent to Tell You

As per usual, partisan differences leave citizens caught in the middle.

Last week, the House passed a bill to repeal Obamacare. The Congressional Budget Office was unable to evaluate the bill so it is unclear how many people will be negatively impacted if the bill in its current form passes the Senate and is signed into law.

Source:
https://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act#

While Obamacare has problems. repealing it, absent any comparable replacement, would be a disaster. This is because Obamacare remedies some major flaws in the health care system. And although our health care crisis did not cause the economic collapse of 2008, it has been a major factor in recovering from what was the deepest recession since the Great Depression. Continue reading for the full breakdown...

I. Funding

Tax Increase On the Wealthy

In my opinion, the biggest flaw of Obamacare is that the subsidies that allow poor and middle class Americans to afford health insurance is partly funded by taxes paid by wealthy people (through taxes on Cadillac health care plans, which is currently delayed, and other taxes as well as cost savings). This means that the law will always be a target for repeal because wealthy people, like the rest of us, generally want their taxes to be as low as possible. [A brief history: the wealthy people of today succeeded in part due to the opportunities afforded our generations by the generations of wealthy
people before us. We all for the most part succeeded because of their generosity, vision and patriotism. We were able to build a country that had the best school system in the world. We had the best infrastructure in the world. Healthcare, manufacturing, agriculture; we were Number One at just about everything. But the wealthy people of today don't want to pay the kinds of taxes that can sustain what we once had and what we once were. Their taxes have been radically reduced over the past few decades, leaving the middle class with the burden of making up the gap while losing services due to lack of funding.]

The political influence of today's wealthy people in our politics is so substantial that Republican politicians have spent over $50 million of our tax dollars holding votes on bills to repeal the ACA. The repeal bills never had any hope of being signed into law, so you and I and everyone we know paid $50 million for Republican politicians to declare to their wealthy campaign donors that they were strongly against Obamacare. It was simply a way of ensuring that they would be showered with campaign cash in upcoming elections. When it comes to health care, Republicans have refused to lead, follow or even get out of the way.

II. Performance

State-by-State Variances
Obamacare's performance differed widely by state. States like Kentucky and California that embraced the law, expanded Medicare and set up state-wide insurance exchanges saw a large decrease in the rates of uninsured citizens and a reduction in the rate of rise of insurance premiums. Other states have experienced less success. Nationwide, Obamacare helped to slow the rate of increase to insurance premiums. People who got their health insurance from their employers, rather than through Obamacare, seemed to enjoy a slight reduction in actual health care costs.

Source: http://www.consumerreports.org/personal-bankruptcy/
how-the-aca-drove-down-personal-bankruptcy/

Personal Bankruptcies
One of Obamacare's largest positive impacts was effectuating an astonishing 50 percent decrease in personal bankruptcies. While Obamacare is not likely to be the only reason for the reduction in bankruptcies, experts believe that it is likely to have been the largest driver of that trend. When people got access to affordable health care, they were able to get needed medical treatment and pay their other essential bills. Unfortunately, I don't know how to evaluate the broader economic impact of preventing nearly 800,000 bankruptcies in the country but it would almost certainly mean a reduction in dependency on government services like food stamps and welfare. It would also mean avoiding a negative impact on productivity and our GDP. It certainly seems like fewer bankruptcies would mean a stronger economy overall.

III. Republican Attacks

Repeal Votes
While Republicans have attempted to say that Obamacare is collapsing under its own weight, the truth is that they have made every imaginable attempt to undermine the law. Had Republicans not wasted $50 million voting on bills that aimed to repeal it, that money could have been used to help solve deficiencies with the law or to fund more subsidies for those who cannot afford their insurance premiums.

Advising to Pay Penalties
When the law first passed, Republican politicians and pundits recommended that their constituents and followers pay the fine and get nothing rather than buy insurance through the ACA and actually have health insurance. This was not because they thought it would be the better choice for the individual. It instead was another tactic to undermine the law. They knew that the more people that signed up, the more likely it would succeed. There is something very disgusting about wealthy people who have great health care trying to achieve their political ends by telling people to forego health care coverage.

De-funded Risk Corridors

The fatal blow to Obamacare may have been delivered by Rep. Jack Kingston (R-Ga.), when he snuck an amendment into an unrelated bill that de-funded the risk corridors. There is some debate about this issue so I will break it down as I understand it: the risk corridors were set up to make sure that insurance companies didn't lose money by offering coverage to poor and sick people. In the past, those people simply would not be able to secure insurance coverage for themselves so the risk corridors were a way of bringing insurance companies into the program and to allow the poorest and sickest among us to finally get health care.

Democrats said that the risk corridors were going to be self-funded. Meaning that if Highmark made $5 million of net profit in the exchange selling policies to people in California and Humana lost $1 million selling policies to people in New Jersey, Highmark would share some of their profits with Humana so that Humana would not lose money by participating in the exchange. The amendment required that the risk corridors be self-funded, as the Democrats said they would be. This means that the government could not step in with money from other programs to pay the insurance companies if there was not enough money in the risk corridors to compensate all of the losses. In the first few years of the law's existence, it is extremely difficult for insurance companies to know how much to charge customers for premiums because there was no way of knowing how many sick people and how many healthier people would be signing up. Requiring that the risk corridors be self-funded meant that if the insurance companies were incorrect about their cost estimates, they would lose money in the exchange and they may not get compensated. [FYI: all of these insurance companies are incredibly profitable overall, but the challenge of figuring out how to make a profit by offering insurance to poor people is obviously difficult.]

Ramming it Down
Republicans said that Democrats had rammed the ACA down American's throats. This was a way of reinforcing a negative opinion of the law with citizens but it was never really true. Democrats held over 30 bipartisan hearings and allowed dozens of amendments to the law, in a process that took fourteen months. In the end, it passed with no Republican votes but the Republicans' fingerprints were all over it. Democrats started with the compromise position of using two conservative principles as the foundation of the law: the individual mandate and the private insurance exchange. Republicans railed against the individual mandate, even though it was their own invention. [Once, while reading Vultures Picnic by Greg Palast, I encountered a passage that said that the Koch brothers came up with cap-and-trade as a way of using free market constructs to get corporations to pay for the environmental damage that their businesses cause. I had to set the book down to contemplate why the Kochs would propose this solution, then fight it so vociferously years later. It suddenly occurred to me that it was a stall tactic. A successful one. Democrats worked to figure out ways to implement this system and how to make it work and when they are finally ready to pass legislation, the conservatives reverse their position, proclaiming that such a law would be un-American and would destroy the economy. Republicans have successfully stalled any further regulation of pollution for more than fifteen years. The same stall tactic seems to have been used to oppose the ACA.]

IV. Democratic Failures and Incompetence

Bad Optics

Who was health care reform intended to help?

Many of Obamacare's problems are undoubtedly the result of corruption and incompetence of Democrats and of Obama. The health insurance companies, pharmaceutical companies and hospital associations were invited to have input on the drafting of the bill which smacked of corruption and therefore tainted people's opinion of the law.

Poor Messaging
Democrats did a poor job of selling Obamacare to the nation. They allowed Republicans to get out in front of them and brand the legislation and set the framing for it. Republicans called it a government takeover of health care which isn't really true. They system never departed from the concept of citizens paying private insurance companies to manage health care provided by private health care providers. Government involvement only comes into play when a person cannot afford to pay their private health insurance premiums. The government gives subsidies in such cases. While some people embraced Obamacare, many opposed it, either because they didn't want government involvement in health care or because they felt that the law should have done more to provide health care to people and to cover more people.

The Invisible Three-Pronged Approach

In the book Confidence Men, Ron Suskind wrote that Obamacare was a way of tackling three major problems with a single action. We would put some of the eight million people that had lost their jobs in the economic collapse back to work in the health care delivery industry and create new demand therein by providing access to health care for many of the 50 million people who were without it. At the same time we could reform the health care system so that it was more efficient, more accountable to patients and would not leave people without access to needed services. It was a way of killing three birds with a single stone but Democrats are too incompetent to convey that message. Instead, they were always on the defense as they tried to shoot down ludicrous notions such as the law having "death panels". The soundness of the three-pronged strategy may have been convincing for many voters but they were unlikely to know anything about it if they didn't read Suskind's book. In the hundreds of articles about Obamacare that I've read over the years and in the many interviews with politicians I've seen, only in Confidence Men did I learn anything about this three-pronged approach.

Source:
https://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act#

Job Creation
So how well did the job creation aspect of Obamacare work? In an analysis, it was determined that more than one million of the new jobs created after passing of the law were in the health care industry. And Obamacare created compliance and advisory jobs in other industries as well. It would have been very difficult to reduce the unemployment rate by 5.6 points without some very large initiative such as health care reform. I certainly never heard any other plan from a politician that could have come close to being the jobs engine that Obamacare became. (The one other plan was Obama's Green Energy initiative but that was stalled in Congress. Trump's infrastructure plan may also result in a substantial employment increase but there has been little action on it and few details about the plan.)

Disastrous Rollout
The rollout of Obamacare was a disaster due to the web site for patients to sign up constantly crashing and being unable to handle the traffic. Many people tried for hours and could not complete their registrations. This was an unexpected and embarrassing failure because Obama got elected in large part to his campaign's embrace of technology and use of social media. Technology was skillfully wielded to get an advantage during the campaign but when it came to actually doing the people's business, the administration seemed incompetent.

Keeping Your Doctor and Insurance Plan

As we watched the debate over health care unfold, Obama did something unexpected and befuddling. With constituents across the country angry over the health care bill and misinformed by Republican lies about death panels and that undocumented residents would be able to access benefits from the program, Obama emerged to reassure everyone that if they liked their health care plan, they could keep it. And if they liked their doctor, they could keep their doctor. The statement was a bit like promising someone that you will never die. A grandfather clause in the law stipulates that people can keep their health care plan if they want to (even if it doesn't comply with the basic requirements of coverage in Obamacare). But there is nothing in the law that requires an insurance company to continue to offer a plan that a customer wants to keep. Nor is there anything in the law that prevents doctors from leaving an insurance network, retiring or dying.

My guess is that Obama wanted to convey the true fact that there is nothing in Obamacare that takes away anybody's insurance plan or prevents them from seeing the doctor they like. I also believe that Obama was intentionally misleading with his statements and that he understood that people would believe that they could not lose their doctor or insurance plan under any circumstances. I think that Obama sunk to this low and ill-advised position because he was exasperated by all of the lies that were being told by Republican politicians and conservative pundits about the law.

Obamacare gave small business employers the ability to get out of the practice of providing health care for their employees. Many small businesses relieved themselves of the burden but the change up in payers meant that many of these people would lose the coverage they had and would be forced into another plan. Their preferred doctor may not be in the network of the new insurance company so many lost access to their preferred doctor as well.

The Individual Mandate
The individual mandate is undoubtedly the most despised part of the Affordable Care Act. It requires that all citizens have health care coverage or pay a penalty. The penalties started at just $90 but increased over time. It is a slap in the face to every person who cannot afford health care coverage. Thousands of people ended up having to pay fines of a few hundred dollars simply because there were no affordable health care insurance options available for them. Especially in states where the Affordable Care Act was not supported by politicians, few insurance providers bought in to the program and therefore there were few options and little competition for health care plans.

V. My Personal Experiences

Doctors and Insurance Companies Denying Coverage
I supported Obamacare because when I was 22 years old, I was denied an MRI exam by my HMO doctors because they knew that they could get bonuses and other financial incentives to deny me care and save the insurance company money. This is an absurd situation that no American should be subjected to but there were millions of us that were. Many of them died from their inability to get the health care benefits covered by the insurance plans that they paid for.

If Republicans had come up with legislation that prevented this from happening to more people, I would have supported that legislation. But Republicans did not care about the millions of patients harmed by the practice. Insurance companies are the constituents of the Republican Party and they weren't complaining about the situation so Republicans had no interest in addressing the problem.

When Republicans had the opportunity to "repeal and replace" Obamacare--as they campaigned on doing in the 2016 election--they had nothing with which to replace Obamacare. After seven years of attacking and trying to destroy the law, they had not taken a single step to draft legislation to address any of the serious health care failures that Obamacare corrects.

~R. Charan Pagan
information systems technologist, musician, writer, filmmaker
Los Angeles, CA 90017
http://www.reclaimingourbirthright.blogspot.com/

A Possible Triple Trexit

Surprisingly, the press has not called the efforts to unseat Trump a possible "Triple Trexit"

The Takeaway

I'm going to start with the takeaway before I get into the weeds with all this recount and Electoral College business: my guess is that if Hillary Clinton or Donald Trump told people to get mad about our broken election system and to demand that politicians address the problems with it, millions of people would go out and protest for the cause. If Sean Hannity or Rachel Maddow said that people should protest and demand an election system that is fair, accurate and transparent, millions of their sycophant viewers would comply. But politicians and pundits do not want a fair, accurate and transparent election system. It seems that we are stuck with a broken election system and a political system that cannot serve the citizens of the country because we haven't learned that the issues that politicians try to avoid are the very issues that would make dramatic improvements to the strength of our democracy and our country. Instead, we are told to protest about the Affordable Care Act or gun control issues. People comply while our election system is incapable of producing candidates that are worth voting for. If we had candidates worth voting for, they wouldn't be passing laws that need to be defended. They would be passing laws and instituting policies on which nearly everyone would agree. If politicians passed a law to end the practice of gerrymandering, do you know a single person that would protest such a change? It is past time that we stop taking our direction from politicians and political pundits and instead identify an agenda that serves citizens and democracy, rather than politicians and political parties.

What happened to the Founders' vision of the country?

The Recount/Audit

There are two last ditch efforts underway to prevent Trump from taking office. The first is a recount effort, initiated by Green Party presidential candidate, Jill Stein, in the states of Wisconsin, Michigan and Pennsylvania. Jill Stein is leading this effort because 1) in order for someone to start a recount, they need to have "legal standing"--meaning that only someone who has suffered a tort due to the election process (one of the candidates) can demand a recount. And, 2) Hillary Clinton will not ask for a recount because the people who own her (Wall Street banks and CEOs of large corporations) do not care who the president is. Their interests will be served whether Trump is in the White House or Hillary is. Hillary is not going to rock the boat on behalf of her voters when her masters just want a peaceful transfer of power and limited disruption to business operations.

The states selected for recount were selected because the election results differed from the polls before the election and the exit polls. The votes in these states were never counted but were simply tabulated by optical ballot readers that are capable of error and can be programmed to deliver a specific result. It would be stupid to accept the election results when every metric available suggest that they may be in error and when the ballots were never actually counted by anybody.

The recount is not expected to change the results of the election for a number of reasons. In Wisconsin, a hand recount was requested but denied by the courts. So, the same ballots will be run through the same ballot scanners and if there is no significant variation in the vote totals, the results will likely be accepted as correct, even though the ballots have never been counted. There is no way of knowing--other than counting the ballots by hand--if the ballot scanners correctly tabulated the votes in the first place or in the "recount". In Pennsylvania, most of the precincts use electronic voting machines that do not produce a paper record at all. There will not really be any kind of a recount there because there is nothing to count. Basically, they'll ask the machine if it was correct on Election Day, press some buttons and the machine will likely spit out the same answer. There may be an audit of these voting machines as part of the recount effort and that could reveal malfunction or malfeasance.

The recount could change the election results under the following circumstances:

1. If an audit of the ballot scanners and/or voting machines is performed and it is revealed that tampering or hacking had taken place.
2. As I understand it, the ES&S M100 ballot scanners are in use in the states that are going to be recounted. When tested, these machines would give varying results when the same ballots were run through them. For this reason and others, the M100 was not certified to be used in the State of California (thank god). It is possible that the "recount" results could change due to machine error. Were that to occur, we would hopefully get a hand recount so that we would better know who the winner actually was.
3. If spoiled (rejected) ballots are reviewed and assigned to a candidate (when appropriate) it could overturn the Trump victory. This election, 3 million votes were rejected. Ballots can be rejected for legitimate reasons, such as if the voter had marked more than one choice for president, for instance. The machines can also be programmed to reject specific ballots with the intent to sway the election. Then there are semi-legitimate reasons for spoiled ballots. If there are stray marks on a ballot, it can be rejected but the same optical readers are sometimes used in other districts and configured to alert the voter when their ballot has been rejected. This allows the voter to cast a new ballot. In states that have Democratic Secretaries of State, the latter type of machine may be deployed in Republican districts while the former type is used in Democratic districts. In states with Republican Secretaries of State, the opposite is likely to be true. It's one of the ways that the political parties game the system and if some of these rejected ballots are valid and they are reviewed, the election results could change.
4. Provisional ballots are not always counted. The "recount" could include a review of hundreds of thousands of provisional ballots cast by legitimate voters who were removed from the voter rolls and/or hundreds of thousands more provisional ballots cast by people who did not have the ID required by new election laws in specific states, like Wisconsin. The spoiled and provisional ballots far outnumber the margin of Trump's victory in these states.

Electoral College Correction

The other effort underway to prevent Trump from occupying the White House is a campaign for the Electoral College to select another candidate. This is also not likely to occur but it is certainly a possibility and it could shake out two ways. The Electoral College is supposed to be a safety switch to prevent an unqualified and unfit person from becoming president. Donald Trump can easily be argued to be unfit and unqualified. In polls before the election, 62 percent of Americans responded that Trump was unfit to be president. And it would not require 270 electors to vote against Trump to select another president. If a handful electors decide to vote against him, or decide to award their state's electoral votes proportionally (rather than winner-take-all), then it could result in neither Trump nor Clinton having enough Electoral College votes to win the White House. In this instance, the House of Representatives would select the person to be the next president. John Kasich has been rumored to be the most likely compromise candidate.

The multitude of conflict of interest scandals and breaches of protocol by Trump in the past couple of weeks will make an Electoral College vote against him more probable. The questions raised by our dysfunctional election system and the restrictive voting rights laws could also be factors.

Of the possible outcomes (a recount giving Hillary Clinton victory, John Kasich being selected to be president by the Electoral College/House of Representatives or Trump remaining the president-elect), I would prefer to have Kasich as the next president. But that would set a new, scary and perhaps dangerous precedent: the Electoral College overturning the choice of the people. I believe that Trump is inexperienced and dangerous enough to take this dramatic action, but is he really? Is he dangerous enough to risk turning to the Electoral College to select a president for the country or turn the decision over to the House of Representatives, invalidating the election results? There is no way of knowing, other than letting Trump take the oath of office and seeing how things go--at which point it could be too late to ever rectify the situation. I'm not sure what the outcome will be but luckily, as an American, I am used to having no good options.


If you support the campaign for the Electoral College to overturn Trump's victory, or if you oppose that action, you can send a message to the electors to let them know how you feel. If you support the recount effort to determine who actually won in the states of Wisconsin, Michigan and Pennsylvania, go to Jill2016.com. We have until December 19th, when electors vote, to get this right.

Afterward

If you want to know all there is to know about elections in the United States, you need to follow two people: Greg Palast and Brad Friedman. The pair of journalists are the foremost experts in the country when it comes to voting laws and politicians' schemes to violate them. If you are listening to anyone else speak about election issues, then you are likely getting utter nonsense or, at best, you are getting unsubstantiated speculation for which there is little or no evidence. If you don't know what a caging list is, or a purge list, or what an overvote is, or what an undervote is, or if you don't know what Interstate Crosscheck is, or if you don't know what "fraction magic" is, then you are not aware of the multitude of ways that politicians try to steal elections and undermine YOUR vote. Both parties commit any election fixing they can get away with. Don't hold your breath waiting for a someone among them to encourage you to get involved with cleaning up our elections.

~R. Charan Pagan
information systems technologist, musician, writer, filmmaker
Los Angeles, CA 90017
http://www.reclaimingourbirthright.blogspot.com/

The truth About the "Takers"

Who is the real burden on society?

According to the right wing, the country is broke because there are too many "takers" in society. According to the right wing, these "takers" will vote for whichever candidate offers the most "free candy"--by which they mean welfare, food stamps, unemployment insurance, etc. When in these conversations, I first concede that entitlement spending is out of control and is unsustainable. I also usually find it necessary to point out that the low income people in our country are not the only people after "free candy". For every hundred low wage workers who gets $120 a month in food stamps, there's a big corporation that gets billions of dollars in tax breaks, subsidies and other "free candy" from the government every year. Even politicians, are helping themselves to free taxpayer money.

Mitt Romney was one of the worst candidates that the Republican Party could have picked as their presidential nominee in the 2012 election because his company, Bain Capital, often made money by being one of the biggest takers in the country. They would see a company that employed hundreds of people, giving them capital to spend in the community, which created an environment where other businesses could thrive, and where a healthy community could exist. Bain bought some of those companies and took out huge loans on the companies' credit so that they could pay themselves hundreds of millions of dollars in "management fees". Often times the companies could not pay back the enormous loans and the companies went out of business, the workers were laid off and the entire community took a big hit. Even though the Bain people made out quite well, I'm sure some of the workers lost homes and had to resort to unemployment insurance, food stamps and other forms of government assistance to get by. So, who were the takers in this scenario? It seems to me that he laid-off workers had something taken from them and Bain did the taking.

What's worse is that we, the taxpayers, had to pay for Bain's greed/poor management by providing assistance to the workers that were laid off. As for Bain, they got sweetheart tax rates on their profits because--due to successful lobbying efforts--the government has apparently been convinced that their business model is somehow good for the country. It is the new American business model: collect the profits while leaving the taxpayers responsible for losses and the costs of collateral damages.

Of course, Bain is just one private equity (aka "vulture capital") operation. There are others. And there are banks that illegally foreclosed on peoples' homes, banks that invested peoples' life savings and retirement funds in schemes the banks knew were worthless. All so they could make enormous profits and pass on the bill for the damages to the taxpayers. Now, they call anyone who needs assistance as a result of their schemes a "taker" while they enjoy the title of "job creator". And they are appalled when anyone suggests that they pay back some of their ill-gotten gains by way of higher taxes.

I assume that it would be extremely difficult, if not impossible, to figure out a way to fairly raise taxes on just the institutions that acted unethically. But I know that every thinking American would agree that carried interest profits should be taxed at the same rate as workers' wages. There is no stimulative effect to the economy from these special tax breaks and it rewards private equity firms for destroying jobs.

So, do you wonder why the pundits on TV who claim to have our best interests in mind don't scream about this issue and urge you daily to call your representatives to eliminate this subsidy for job loss? Could it be that they are paid millions of dollars to create controversy rather than find solutions to problems? Should we stop getting our information and talking points from them and assess for ourselves what issues deserve our immediate, focused attention? Only if we want to improve our country and economy, I suppose.

~R. Charan Pagan
information systems technologist, musician, writer, filmmaker
Los Angeles, CA 90017
http://www.reclaimingourbirthright.blogspot.com/

Identifying and Avoiding the Danger Ahead

Are we too distracted to know and understand the danger ahead?

Does anyone really think that our politicians suck because they;re too "liberal" or too "conservative"? Do you think that maybe it's because they're all beholden to interests other than yours or mine that their job performance is unsatisfactory?

I don't see many politicians I would call either liberal or conservative. If we had a liberal party it would be an anti-war party. And if we had a conservative party it would be fiscally responsible. Instead, we have Democrats and Republicans and just look at what they have accomplished over the past several years. It has not been pretty.

What is the best course of action?

If you are standing on a ship headed for an iceberg, does it matter whether you're on the port side or starboard side? Would you chain yourself to one side or would you rush the bridge, take control of the vessel and steer it clear of the danger? Understand that the primary danger ahead of us is not a mass of bad liberal ideas or bad conservative ideas. It is an iceberg of corruption, of plutocracy and of duopoly. If we cannot focus on avoiding that obstacle, or obliterating it, then we are sunk. Plain and simple.

We are not going to eliminate corruption by electing more Democrats or more Republicans. We are only going to eliminate it by addressing it ourselves, together. Politicians are not going to work to eliminate corruption. Most of them profit from it. Others enjoy the sense of power that comes from having the ability to take your tax dollars and hand them to their cronies.

Are we going to continue to tolerate the corruption or will we do something about it? Click here to read about how a 21st Century Continental Congress could be created to reform government and eliminate corruption. It would take a  lot of work but it would be successful. ...if we find the motivation to change the system to benefit us. Otherwise, we wait for the special interests, the plutocrats and the duopoly to wrangle over who gets our tax dollars and how much of it we get to keep. Why would you ever consider leaving such decisions in their hands?

~R. Charan Pagan
information systems technologist, musician, writer, filmmaker
Los Angeles, CA 90017
http://www.reclaimingourbirthright.blogspot.com/

How the 1% is Hurting the Country (part 2)

In my last blog post--How the 1% is Hurting the Country (part 1)--I linked to an article that explains how the country has been harmed by those whose wealth is used to influence politics in a way that is unfair to the majority of us. That article very brilliantly enumerates the ways that this oligarchy has been detrimental to the greater economy and even to the long term interests of those in the so-called 1%.

The aforementioned article offers some great insight into the macroeconomic issues facing the country. This week, I'd like to focus in on a microeconomic aspect that ties into the previous article and illustrates the stark danger of the plutocracy that our country has become.

So, imagine that there is a business in a community and the business is doing well, paying all of its employees and therefore the entire community is thriving because everyone is working and everyone has money to spend. Then let's say that someone sees this all going on and decides: I would rather have all that money for me! That person buys the company, runs up its debt to pay himself hundreds of millions of dollars then, when the business cannot repay the new debts, closes the business, fires the workers and files for bankruptcy, hanging the company's debts on the taxpayers (some of whom were just fired from the company). Seem fair?

Of course, that scenario is not hypothetical. It is how private equity firms, like Mitt Romney's Bain Capital, sometimes operate. I bring it up because I often see comments from people online, suggesting that people who voted for President Obama may now be regretting their vote, as if Romney/Ryan was a viable alternative. I also bring it up because people still blame the poor economic recovery on the housing bubble, bank bailouts, the "takers" getting too much welfare, Obamacare, the wars, etc. Although most of those things may also be to blame, the business practices of private equity firms is certainly one of the most destructive forces and it is an issue that desperately needs to be addressed. It is also an issue that is largely ignored by the mainstream media, while people are all-too-eager to talk about the other possible causes. We are not going to have a strong economy again as long as people are more inclined to chase large, short-term profits as opposed to long-term growth and stability.

Personally, I could not vote for a person like Mitt Romney. The types of business practices he was involved in at Bain should be illegal. We certainly don't need a president that champions such business practices and might perhaps help others make out the way he did: by essentially stealing wealth from the common worker.

This relates to Joseph Stiglitz' article because, through the magic of plutocracy, such unethical business practices have not only been made legal, but the profits from such travesties are taxed at a rock-bottom rate, far lower than you or I pay on our income we receive from working and producing things. You see, when you or I request things from government--like tax relief, clean air and water, transparency and accountability in government, etc.--government usually yawns. But when a very wealthy and powerful person approaches government and asks to legalize theft and then get a sweetheart tax break on those ill-gotten gains, the government tends to listen and bend over backwards (and bend us over forward) to accommodate them.

We citizens in the so-called 99% are the majority in this country. And it is supposed to be a democracy. Therefore, if the majority of us are intelligent, we could come together to demand changes to the system so that it is no longer rigged against us; we can make destructive business practices illegal and we can make profits from "carried interest" deals taxed at the full rate. If...

~R. Charan Pagan
information systems technologist, musician, writer, filmmaker
Los Angeles, CA 90017
http://www.reclaimingourbirthright.blogspot.com/

Save Your Breath

United States Congress

Our whole political system is corrupt. And to fix it we need to address issues like Congress' salary. $155,500 - $223,500 a year for a part-time job that used to be voluntary and they have an 10% approval rating. Would you have a job if your employer had an 10% approval rating of your performance?

What about Congress members' budgets? Rand Paul recently returned $600,000 of his budget that he didn't spend. Last year it was $500,000. He should be applauded for such a feat! And if he can do that, why can't the rest of them trim their budgets?

Why aren't these things even being discussed?

Why do we allow Congress members to trade stocks related to legislation that they are debating? As soon as a Congressperson takes their oath of office, all of their stock trades should be frozen. And if they attempt to tip off others with inside information they should be punished harshly. Boehner owns stock in oil companies, Pelosi owns stock in Citibank. They all get rich and who were they serving with their decisions?

Does everything really have to involve a penis to be a scandal now?

Politicians often leave Congress and go to work for the businesses that they voted to provide or deny federal assistance to. Sometimes they go the other way. Doesn't this all seem a little bit too cozy to you?

If we can't all get behind these issues then we really are stupid and perhaps we should just give up.

~R. Charan Pagan
information systems technologist, musician, writer, filmmaker
Los Angeles, CA 90017
http://www.reclaimingourbirthright.blogspot.com/

How We Solve the US Energy Riddle

What is our energy future?

Lately, conservatives have been arguing that we need to focus on extracting our fossil fuel energy in the US so that we can become energy independent. The problem with that is: even if we become 100% energy independent, if that energy independence is based on fossil fuels, other countries will continue to have influence on what we would pay for gasoline, coal and natural gas. This is because in a global marketplace, US companies will sell their product to US consumers for as long as it is economically feasible to do so. Once people in other countries increase their demand (and price) for fossil fuels, US companies will be glad to sell their products to them instead... until we can out-bid them and keep the supply here.

Also, I believe that at some point it may be cost-effective for countries like China to refine oil to export to the US. When countries without air quality standards or labor regulations can cheaply refine oil into gasoline and find a way to transport it inexpensively enough, I can imagine that we will be buying our refined fuel from those countries. This may sound preposterous but consider that we already send tons of flour to China for them to mix with melamine and mercury and send back to us in the form of cookies and crackers for us to consume.

Green energy, on the other hand, cannot be exported. Energy from windmills and solar will bring jobs that can't be outsourced. These are the industries of the future. This is where our long-term energy solutions will come from. We can't ignore it. We must embrace it. We should not be afraid of new technology. Of course, in light of our current economic crisis, it may be risky to gamble on somebody inventing ways to make green energy solutions viable in the near term. Green energy has a lot to prove still, despite the fact that it promises some amazing things. Fossil fuels however have a current, real, intrinsic value.

So here is what I propose: we aggressively harvest some of our fossil fuel energy over the next several years. If done correctly, fossil fuel energy could be a good source of jobs and we do need jobs desperately. It is true that fossil fuel projects won't create many jobs on their own. The XL pipeline project, for instance, is only expected to produce an estimated 20,000 job years (yeah, job years, not jobs--that's 20,000 jobs for one year; or 10,000 jobs for two years; or one thousand jobs for 20 years--it's not exactly going to turn our country around). We can create more jobs by over-regulating the fossil fuel energy industries. Most of the disasters that have occurred in the in the past few decades could have been avoided or greatly mitigated if crews and containment equipment were on the ready as oil companies promised they would be. If we actually make fossil fuel mining companies follow through on their legal and contractual obligations this time, there will be more workers to respond to a disaster, meaning more jobs filled, and fewer and far less severe catastrophes. The additional government regulatory jobs would improve oversight of  the operations of the industry. Yes, it is more bureaucracy but it also creates more jobs and reduces environmental impact. It is also likely to save lives (kind of important) and stimulate the economy. We stop funding terrorists and get cheaper fuel prices in the short term.

Anyone uncomfortable with trading more bureaucratic government jobs for more domestic energy production should consider the practice of oil pipeline "pigging" and its record of failure. Now imagine that a pipeline is proposed to run near your child's school or through your favorite hunting area. Government oversight is needed to ensure that safety regulations are closely followed and disasters affecting our citizens and environment are minimized.

Here's the other catch, profits from the new fossil fuel bounty would have to be taxed a bit to offset the environmental damage by funding research into green energy options for the long-term. Drastically reducing domestic fuel prices would only cause more consumption. If we accellerate our production of domestic fossil fuels, we need to devote much of the cost savings to move the whole country forward and not to just be a boon to energy companies. A little tax on the fossil fuel energy income and a little increase on the gasoline tax would be required. Then the whole country can benefit from capital that can be invested in green energy (our long-term solution).

The faster we can get green energy solutions paying off for us, the better. We need to compete with China for manufacturing those products since they are what will be in demand in the future. That may mean subsidies for green energy companies. Perhaps, more Solyndras. But as much as people like to make Solyndra out to be a big deal, the best information out there says that it was not a scandal. It was an unfortunate waste of money but in the bigger picture, most of the investments we've made in new technologies have paid off far more than enough to offset the few that failed. A little more of this will be in our long-term economic interests. In the short term, we suck the fossil fuel energy from this country like a demon sucking the last drops of blood form the skull of its victim and hope that we have the intelligence and dedication to ensure that it is done safely and responsibly.

It is a little complicated and not 100% to the satisfaction of the two ideologies that exist in this country. But I believe that it is a wise, responsible and sensible compromise to accomplish the goals of both sides; giving us all lower fuel prices, greater national security (which requires less military spending), improved environmental protection, more jobs and improved economic growth.

That's how we fix the energy problem. Now, can we go fix the CORRUPTION in Washington?

~R. Charan Pagan
information systems technologist, musician, writer, filmmaker
Los Angeles, CA 90017
http://www.reclaimingourbirthright.blogspot.com/

Bill O'Reilly Finally Gets it Right (sort of)

Get your free stuff here!

Following President Obama's reelection, Bill O'Reilly seemed baffled by the voters' rejection of the Republican establishment candidate. Flummoxed by Americans' preference for the guy who couldn't fix the economy over the guy who helped to destroy the economy, O'Reilly offered his assessment of the phenomena declaring that people voted for Obama because they want free stuff and Obama is the candidate most likely to give it to them.

This was the first time I can recall that O'Reilly actually got something right (sort of). As someone who voted for Obama in this election, I will enumerate some of the things I want from the government and believe that Obama is more likely to provide that Romney would have been:

1. When I pay for health insurance, I want to actually receive treatment, not just be a donor to the wealth of insurance companies and doctors (as was previously the case).
2. I want the people who are appointed to regulatory agencies to have the public interest in mind, rather than to merely be former executives from the industry. [Obama gets a failing grade in this category but I believe that Romney would be much worse.]
3. I want the people who head government agencies such as FEMA to be competent and proactive.
4. I want my political voice and influence to have no more and no less weight than every other American, rather than being drown out by billions of dollars worth of political advertisements sponsored by a few special interest groups.
5. I want our country to go to war as a last resort, and in the event of war, I would like the war to be conducted intelligently.
6. I want a country that gives everyone opportunities to succeed rather than being rigged to offer excessive advantages to those who already have.

Forgive me for being selfish but I voted for the guy who is most likely to give me the things I want. I wonder what the people who donated millions of dollars to the Romney campaign want. Somehow, I think their objectives are counter to mine. Bless democracy!

~R. Charan Pagan
information systems technologist, musician, writer, filmmaker
Los Angeles, CA 90017
http://www.reclaimingourbirthright.blogspot.com/

Mitt Romney's Investors

The Wealthy Few or the Welfare of the Nation?

Mitt Romney got himself into trouble a few weeks ago when a secretly recorded video of him was leaked to the press. In this video, Romney made his infamous "47%" comments as well as a bunch of other erroneous, insulting and insensitive comments about the citizens he intends to lead. Without a doubt, these comments were intended for a narrow group of his supporters and something that the Romney campaign wished would never have seen the light of day. But Romney has made other comments that I found to be far more revealing about him and those comments got little to no scrutiny by the press. The comments and their tone were perhaps less overt than the remarks revealed in the clandestine video and were therefore less worthy of attention from the sensationalist journalism pieces produced by our dysfunctional news media. So let's look at some of Romney's words and see if they reveal what his true positions are...

To me, the most damning statement Romney has made in his entire political career came in 2008 as he was running for the Republican nomination. All the Republicans were trying to make light of the economic downturn and looming financial collapse so as not to cast doubt on the efficacy of the Republicans' handling of the economy during the Bush years. George Bush famously stated: "I don't think we are headed to a recession...", while John McCain claimed that "The fundamentals of our economy are strong." Mitt Romney added that "People need to realize that this is a great time to buy." [Romney's quote went largely unnoticed so it is extremely difficult to find references to it. The web page linked to (above) is the only one I could find after about an hour of searching. Although it is not a "reliable source" it does prove that I didn't just imagine the quote, and the author of the article seems to have the same opinion I do.]

A great time to buy? Was Romney really suggesting that people who had lost their jobs and were finding it difficult to pay their mortgage go out and sink the rest of their money in the stock market? Or maybe he was suggesting that they use the remainder of their credit card balances to get into the stock market game? I presume not. He was really saying: "Rich people are in a great position to become richer still. So what's the problem?" To me, it was a pretty clear declaration of his domestic economic policy: to help rich people make more money. And if the poor and middle class can somehow find a way to be rich, then he'll help them too.

Granted, it is a lot of assumption to lay upon a single off-the-cuff statement made by Romney. But it did prick up my ears, so to speak. I've since been reading articles about the man, and although there are stories about Romney's generosity and humanitarian endeavors, they seem far fewer than the atrocities that he committed while at Bain Capital. Those stories support my initial assessment of the man.

Romney always made money for his investors, even when businesses they acquired failed, all of the workers were fired and their pensions they paid into were cancelled. Even in tragic cases such as those, Romney's investors turned handsome profits of hundreds of millions of dollars. So, in his role at Bain, the investors did very well but everyone else did horribly bad.

Now that Romney is running for president, one must ask him/herself an important question: who are Romney's investors? Those are the people that will do well in a Romney presidency. Will Romney consider himself to be the agent of the American people? Or will he consider people like Sheldon Adelson, who pledged to contribute $100 million to get him elected, and the Koch brothers to be among his primary investors? Once you determine whom his primary investors are, you have to wonder what their goals are. Will they recommend that Romney invest in schools, roads, bridges and programs that will benefit all citizens? Or with they suggest that Romney pay more attention to issues that really matter to them? Continued tax breaks, tilting the free market system to eliminate their competition, reducing regulations to allow business to increase profits by polluting the air and water?

If you did not give $100 million to the Romney campaign, then you are probably not going to be given the same attention as those that did. The issues you care about will likely languish while the very wealthy become wealthier still. Banks may go back to over-leveraging themselves at a ratio of 40 : 1, risking the greater economy. Then they'll take their profits offshore so they don't have to pay taxes to the US government that has given them much of their wealth since 2008. Yes, after the bailouts, your tax dollars went to make those banks wealthier through the Fed's "discount window". And we're still bailing out the banks through quantitative easing measures. And Romney himself has profited greatly from government bailouts.

As I see it, this election is really about which person will, as President, will best serve the entire country rather than cater to special interests. I hope that some of the information in this article will help to fill in the gaps of information that will help people to make a more-informed decision.

~R. Charan Pagan
information systems technologist, musician, writer, filmmaker
Los Angeles, CA 90017
http://www.reclaimingourbirthright.blogspot.com/

Ease Up On the Propaganda, Dude!

If you are paying attention, you probably heard that GE earned over $10 billion in profit yet paid no Federal taxes in 2010 and actually got a tax benefit from Uncle Sam. That turned out not to be wholly true but GE has heavily invested in lobbying the federal government and usually pays a tax rate of about 7% whereas many other businesses may pay as much as 40%. This is pretty outrageous but even more so when you consider that GE has moved thousands of US jobs overseas. It doesn't seem like a company that deserves (or needs) a giant tax break to me. So I get a little put off when I see GE's advertising campaign that seems to serve as a PR (public relations) initiative. One ad talks about how the medical devices that GE makes have helped people diagnose and/or treat their cancer. It's a feel-good commercial for sure. It tugs at your heartstrings and makes you feel good about how this company helped to save the lives of people. The commercial makes GE sound much more like a company that deserves a big tax break from the federal government. But what if there was a smaller company out there that is working on a better machine? A machine that is more accurate, more convenient and more cost-effective? This company is hypothetical as far as I know but such a company would not be able to afford to compete with GE for special favors from Uncle Sam. Therefore, their better machine would not be available for anyone.



Are you convinced that you're getting a fair share?

This is the danger of having a plutocracy- a country where very wealthy are able to buy what they want from government at the expense of the general public. This is the reason that everyone should demand fairness in the tax code and the electoral and legislative processes.

Another disturbing piece of propaganda comes from Chevron. Their TV ad mentions that they donate money to schools to teach kids science. Great! Such donations rarely come without strings attached. And I certainly have to wonder if the stings attached to this deal will be tied at the other end to textbooks that have no mention to the environmental damage related to fossil fuel energy. I know for sure that letting companies that deny the science of climate change shouldn't be teaching science to our kids.

You almost have to admire what seems to me to be a well thought-out strategy: industries pushes for tax breaks and offshore their profits so that the government goes broke. And when government can't afford to educate our kids or provide health care to our citizens, well here comes big business to lend a helping hand! Do you think these businesses will be too important to fail when we are dependent upon them for education funding and cancer detection and research?

So industry and the wealthy appear to be well-organized to ensure that their interests are served by government and that their propaganda is disseminated to convince us of the benevolence of the whole situation. What do you think will happen if we are not also organized? Do you think we may get steamrolled, bamboozled and taken advantage of? You really don't need to wonder. Our public schools are bankrupt and under-funded while corporations reap record profits and pay record low taxes on that wealth. Most of the wealth in the country has gone to the top .01% while the wages for the rest of us have stayed flat (when adjusted for inflation) since the 1970's. Has there really not been a single US worker that contributed to that explosion of new wealth? Shouldn't those who helped to create that wealth also get a small piece of it? Apparently not, under our current system.

How did this happen? How did our government and our political system stop serving us in favor of serving the wealthy few? After all, we have the power to vote to hire and fire these politicians. When corporations are considered "people" and money is considered "speech" politicians are going to turn to the "people" that have the most to "say". I won't try to claim that every politician is a greedy, corrupt person but every singe one of them depends on campaign contributions to get re-elected. Do you have a few million bucks you can contribute to a political campaign? If not, your representative will be talking to George Clooney, Foster Friese, Susan Serandon and the Koch brothers instead.

Some of the wealthy people that have the privilege of having great influence over the government may be less self-serving than others but the mere fact that you can't talk to a politician today unless you are a millionaire, and probably won't be able to have any serious influence unless you are a billionaire, should be disturbing and infuriating to all of us. Do you accept being marginalized in your own country so that a privileged few can steer our country in a direction that serves their interests and/or ideology?

I strongly believe that our only chance to recover control of our government is for us to stand together and demand changes. Together we are bigger and stronger and more influential than the industries, the celebrities, the corporations and the media. I know that political pundits have often said that those people who are politically to the left or right of you are "loonies", "pinheads" and "brainwashed fools". But don't we all want the same basic things from our government and our country? Justice, fairness and a comfortable lifestyle with a shot at earning great success and wealth? A government that is more efficient, more effective and more accountable to us? Can we work together to achieve those things or shall we continue to fight with one another over disagreements? How successful has that been so far? If we work together we can achieve the things we all want. When we fight with each other we have to accept what the politicians give us.

In the past several years upward mobility has slowed to a crawl. Few people in the lower class ever move up to the middle class. And few in the middle class ever move into the upper class. When we go into full reversal and only the very wealthy maintain or advance their financial positions and the rest of us slide backward, will you then be motivated to change things? Will you have finally had enough? Will it be too late to change things? Our time is now. Our birthright--a country of our own--is at stake. Are we Americans or are we merely shadows of our brave and ambitious forefathers?

~R. Charan Pagan
information systems technologist, musician, writer, filmmaker
Los Angeles, CA 90017
http://www.reclaimingourbirthright.blogspot.com/

Why Manipulating the Tax Code Won’t Fix the Economy and My Blueprint for Fixing the Federal Government

A 21st Century Continental Congress?

Republicans believe that there are a lot of wealthy people out there who are deciding whether or not to hire someone. They’re contemplating whether or not increasing their workforce will help them succeed in their businesses. And if we cut their taxes, it will increase the likelihood that these “job-creators” will be able to add new workers and create jobs.

If any of the above came out sounding sarcastic, it is unintended. There certainly must be some validity to this theory. It makes a great deal of sense. Anyone on the fence about creating a job will absolutely create more jobs if there is a bit of risk taken out of it. Lowering their taxes will give them more capital in their pockets to decide in favor of expanding their enterprise.

Democrats believe that if you shift that tax burden from the rich to the poor, the middle class and lower class will not have the purchasing power to create a demand for products that would drive that side of the economic engine. Claiming that wealthy individuals will not create jobs unless there is a demand for the products they are producing.

Again, if anything I’ve written sounds sarcastic, it is not intended. Certainly in the last few decades the tax burden has been shifted away from the wealthy and toward the middle class. And as for the poor, even if you don’t earn enough money to have to pay a federal income tax—you know, you’re elderly, a student, a handy-capped individual, etc.—you still pay a lot of state and local taxes, sales taxes and then there are the fees. Proportional to their income, the poor pay a great deal of tax leaving them with little money to purchase goods and services from others.

I think that both sides are correct but their arguments are eroding. What I see occurring daily is most wealthy people invest their money in foreign markets and store it in offshore tax havens. Then they fly to the Bahamas to enjoy mojitos on the beach. I don’t mean to make every wealthy person to be an evil, maniacal, greed-consumed person. But again, there has certainly been more of this going on in the past few decades. It is one of the results of globalization. And although not all wealthy people are consumed by greed, every person is aggressive with their money. Even the liberal anti-corporate crusader, Michael Moore, I’m sure has accountants who manage his money and will put it where it makes the most economic sense. Even if in places that are not necessarily good for America. And as consumers, we buy from China rather than products made in in the US because we want to save a dime so that we can make our money go further. We’re doing it too!!!

The goal seems to be to get the most bang for your buck, whether it hurts America or it helps America, which is a great economic drain on the country. We can favor the wealthy with the tax code and they will fund sweatshops in China, or we can favor the middle class, who will flock to buy Chinese products. Either way, America loses. Now we can ask the lower and middle class people to buy American and be willing to work harder to complete globally. But we have to cut the tax loopholes for the wealthy as well. For instance, the common rate of tax on so-called “carried interest” is about 15%. This is a cut of interest earned from investing someone else’s money. There is no stimulative benefit to giving a tax break on those earnings. Why should they be taxed at roughly half the rate of the wages of someone who shows up to work every day to drive a truck?

The point of all this is that we’re all to blame. So you can stop blaming our economic woes on the other side. We’re all pretty complicit. What we have to do is start thinking about how we correct it or adapt to the new economic reality. You see, nobody set out to destroy our nation. We all just drifted that way by our common human emotion: self-interest.

People, this is going to be a tough riddle to solve. While we are all fighting about who’s to blame, we are losing precious time to fix the nation’s problems. Moving forward is going to take concessions from both sides. And we may have to do a few more things that will hurt America in the short term.

Are there any adults left in the country to sit down and work out the country’s problems? How about a movement to appoint a short-term delegation that would direct Congress (no person having previously run for public office shall qualify). Candidates would have to be willing to compromise and get rid of any wasteful spending program or useless tax loophole. I can imagine a procedure much like the framing of our Declaration of Independence and The Constitution. Hopefully, without bloodshed. As groups of citizens, we’d establish a 21^st Century Continental Congress and work out the details for a reformed government in a civil manner. Then demand that our representatives do as we ask (with enough citizens backing the delegation). Positions on the delegation would be voluntary and strict rules would be in place to prevent any corruption. Our panel would work with the president to make the changes that make sense. And the body would have the ability to direct its constituents to vote out the president if his/her actions are deemed sufficiently counter to the demands of the delegation. Current politicians could either remain in their positions, with pay, or retire. Elections to fill vacant seats would commence when government reforms are complete. The delegation would dissolve at that time. It would be direct democratic action in the purest sense. And there is no reason that this can’t work openly and transparently with the cooperation of the government. If we all demand it, politicians will comply. They would have no choice. If politicians oppose our 21^st Century Continental Congress they would casting themselves in the roles of King George III and England.

But you know what, people? You may have to turn off American Idol and put some effort into it. And it may take years. No zapping it in the microwave for this thing.

So, do we have the strength, wisdom, courage and convictions of our forefathers who fought for this country’s independence? The rugged men who built this country? The steadfast citizens that led the Abolitionist Movement, the Women’s Suffrage Movement and the Civil Rights Movement? The soldiers that defeated the Nazis? The people that put us on the moon and have placed our technological footprint on the outer reaches of the galaxy? This is our moment and we are floundering. Our last, best hope of fixing this country is not in a voting booth. It is in the palms of our hands. Will we have the wisdom to seize it?

~R. Charan Pagan
information systems technologist, musician, writer, filmmaker
Los Angeles, CA 90017
http://www.reclaimingourbirthright.blogspot.com/