Friday, December 17, 2010

Grandma's "Worst Time"

My grandma, Nancy Campbell, had a hard life. She was born in 1891 in Kansas City Kansas. Her mother and father split up when she was little. She was raised as a step child in Orr household resulting from her mother's second marriage. She had a number of step brothers and sisters, most of whom she took care of as the "Nannie" of the house in more ways than one. She left school after the fifth grade and eventually continued her work as a housekeeper and nanny in the homes of families wealthier than her working class one.

When she was 18, she married a man 12 years older than she and quickly had two little girls. He left the family within three years and Grandma had to fend for herself with her two little girls. She continued her domestic work, often living in the homes of her clients. Sometimes the girls (one of whom was my other) would be with her but not always.

She remarried eventually and lived a typical life, if a life was typical during the depression and the war. Shortly after the war, her second husband died and she returned to work, again as a housekeeper and mother's helper in the homes of wealthy families in Kansas City Missouri. In her later years, she took care of her younger sister and their mother until their deaths. She died in 1986 at 95 years old. She was a blessing to all of us in so many ways.

This is all by way of background to recount a story my sister Anola told me when I visited Kansas City in early December. Her son, Gerry, had a school assignment to interview someone old; who better than grandma? He interviewed her in what must have been a highly professional fashion--he is now a highly accomplished professional journalist and editor. He asked the obvious question--at least the one I would have asked--and perhaps like me he would have an expectation of what the answer would be.

His question: What was the worst time you ever had? Her answer was quick, short and to the point. "I don't know. I never had a worst time." Oh, how I hope that gene has found its way into me and through me to my children and grandchildren!

Tuesday, December 14, 2010

Health Care Tax

I admit that I can be a bit dense about some things but I was shocked when I finally figured out about the health care tax. No, I don't mean the Medicare payments. And I don't mean the federal tax general revenue that goes to pay for other health care. That would be simple. However, alone among the developed countries, we in the United States have decided --well I don't remember deciding but I guess someone did--to make health care a market-based service and to rely on employer provided--assisted, at least-- health insurance to finance it. The result is that virtually every time I buy something made in the United States, a portion of the purchase price is used to pay for employee health benefits. No wonder foreign goods are usually less expensive.

Health care is not like, say an automobile. When I buy a car, I buy the car; the rest of you get yours. When health care is provided and paid for, we all pay for it either directly or indirectly through insurance, either ours or that provided to the people who make everything we buy. The point is that health care like education should not be a private economic good but a public service, one that we all pay for directly through the common resources of federal taxes.

This would have at least four advantages. First of all, it would be less expensive because we would take the profit margins of insurance companies out of the equation. Phased in over a three to five year period, this elimination of insurance would reduce health care costs, everything else being equal. Second, the price of goods and services produced in the United States would become less expensive and thus more competitive globally. Third, given the efficiency and effectiveness of Medicare, employers would pay less in taxes than they currently pay in insurance premiums. Likewise the individual would also pay less in federal taxes than they currently do in insurance premiums. Fourth, the rationing of health care--necessary in either approach, would be more humane and responsive. Government health officials responding to well established professional norms and to standards set by political authorities would treat clients more fairly than corporate officials responding to individuals and corporate financial incentives to increase revenue and reduce health care expenditures in order to maximize profits.

No wonder the rest of the world does not follow our approach. They probably cannot understand why we continue with this broken system that only seems to advantage corporate and financial interests rather than serve people. But then why should they care? They are the also advantaged by our blindness. The rest of the world is keeping its eye out for the next world leader since the United States cannot sustain the flawed economic and health policies that seem to be entrenched.

P.S. Oh, yes and if would eliminate the legislative provision that forbids Medicare from negotiating drug prices as the Veterans Administration does, we could immediately save even more.

Sunday, November 14, 2010

The end is near; pay no attention.

Normally we expect something like "repent and be saved" after we hear "the end is near." But the lectionary readings for this Sunday present a different thought to us, one that is more authentically Christian.

The passage from the Book of Malachi contain a stark and threatening picture of the end of time and final judgment:
See, the day is coming, burning like an oven, when all the arrogant and all evildoers will be stubble; the day that comes shall burn them up so that it will leave them neither root nor branch.
The reading from Luke recounts the words of Jesus about the end times: wars, insurrections, earthquakes, famines, plagues, etc.

We face these realities in our own life. As we contemplate our individual death, we understand more fully the meaning of annihilation; we face the complete destruction of who we are, or at least it seems like that. At the end of the passage from Luke, Jesus gives us a clue about what our faithful stance should be: "By your endurance you will gain your souls."

In other words, as disciples of Christ, we are to live our lives, not in light of what will happen at the end, either of our lives or the end of all existence. Rather we are to live out the reality of who we are as believers: sons and daughters of a loving God. Our lives are to express that reality rather than express our fear of what might happen at our death if we don't.

Friday, November 12, 2010

Amenable Mortality

Now here is a concept for you! "Amenable mortality" was an health analysis term developed in the 1970's to measure the effectiveness of health care systems in developed, industrialized countries especially. Amenable mortality measures the deaths that occur before age 75 that could have been prevented by timely and appropriate medical care, in other words, conditions that were amenable to health care but went untreated.

A study by the Commonwealth Fund showed the following results:

U.S. Ranks Last

Between 1997–98 and 2002–03, amenable mortality fell by an average of 16 percent in all countries except the U.S., where the decline was only 4 percent. In 1997–98, the U.S. ranked 15th out of the 19 countries on this measure—ahead of only Finland, Portugal, the United Kingdom, and Ireland—with a rate of 114.7 deaths per 100,000 people. By 2002–03, the U.S. fell to last place, with 109.7 per 100,000. In the leading countries, mortality rates per 100,000 people were 64.8 in France, 71.2 in Japan, and 71.3 in Australia.

The largest reductions in amenable mortality were seen in countries with the highest initial levels, including Portugal, Finland, Ireland, and the U.K, but also in some higher-performing countries, like Australia and Italy. In contrast, the U.S. started from a relatively high level of amenable mortality but experienced smaller reductions.

The U.S. ranks last even though we spent more money per capita that the other countries. In fact, we spend about twice as much as the average of the other countries. It is also important to realize that the other countries all have universal health care coverage, unlike the U.S.

The health care reform plan enacted this year does need to be amended but certainly not undone. It needs to be strengthened if we are to achieve any like comparable results as do the other industrialized countries.

I also note, with some dismay, that in just a little over five years, my mortality won't count, whether amenable or not.

Monday, November 8, 2010

The Important Role of Scapegoats

Scapegoats was a necessary part of any political process that seeks to disenfranchise some segment of society. Here is how it works. First you manipulate the political process, usually in more or less secret ways, to bring about disenfranchisement. Those who are so disenfranchised eventually realize that and get angry about it and want do do something about it. Scapegoating becomes central, not to defuse the anger but to point it in a direction away from those actually responsible.

Here is a current example. For the past thirty years, the middle class in the United States has suffered economic stagnation with almost no growth if any in real income. This is despite more people in the family working and everyone working more hours. The middle class turned to consumer credit and then to home equity, expanded beyond all reason by a speculative bauble. Eventually the bubble burst; the credit markets dried up; consumption and thus economic growth declined; and unemployment skyrocketed.

The anger and frustration of the middle class as a result of these developments seek a target. Who or what is responsible? Who or what can be blamed, punished or reformed? It would not be productive if this anger and frustration would actually end up focused on those who have actually gained income and wealth during these same thirty years. The top five percent of American households have done very well during this period; the top one percent, even better; the top .5 percent, best of all.

Rather than have the middle class come to that little conclusion, it serves someone's purposes a lot better if that anger and frustration can be pointed at other targets. What could be better targets than illegal immigrants and poor people. Under the rallying cry of illegal immigrants taking jobs from American--nothing could be further from the truth in reality--immigration reform has been stopped dead in its tracks.

But the significant outcome is not that but rather that all that justifiable anger and frustration is diverted away from those who actually have a lot more to do with the root causes of the current economic stress of the American middle class.

Monday, November 1, 2010

More Evidence on the Inequality Front

David stockman was Budget Director for Ronald Reagan. On 60 Minutes last night he took both Republicans and Democrats to task for saying that somehow taxes can be reduced on anybody without disturbing our current pattern of spending. He was particularly on point when he talked about a one-time 15% surtax on the wealthiest Americans. On the surface that sounds a little unfair until you hear the facts about the growth in wealth of the top five percent of American households.

"In 1985, the top five percent of the households, wealthiest five percent, had net worth of $8 trillion, which is a lot. Today, after serial bubble after serial bubble, the top five percent have net worth of $40 trillion," he explained. "The top five percent have gained more wealth than the whole human race had created prior to 1980."

In other words, the taxing and deregulation policies over the last 30 years have generated tremendous wealth for the wealthiest Americans while leaving the rest of the population to struggling with stagnating wages and massive debt. This tremendous wealth was not generated because the top five percent were smarter or harder working that the rest. It was generated because the top five percent convinced the rest of the population to reduce taxes on the rich, treat capital gains differently than earned income, deregulate, i.e., get government regulators out of the way of financial speculation and mismanagement.

Whatever happens in the 2010 elections, the U.S. economy has an inherent inequality that must be dealt with. A return to past policies will only worsen this fundamental problem and continue to build the wealth of the top five percent while the rest of us languish. Eventually that top five percent might come to the realization that they cannot continue to build wealth if the rest of us cannot buy goods and services and thus increase demand. Of course, they could simply ignore that and look to foreign markets for their easy money.

Sunday, October 31, 2010

Is there a Zacchaeus in my life?

The gospel reading for October 31 is the story in Luke about the interaction between Jesus and Zacchaeus, the head tax collector Jericho. For a variety of cultural and political reasons, those who collected taxes for the Romans were considered "sinners" by the Jews and thus Zacchaeus would have been an egregious sinner indeed. Zacchaeus was at least curious about Jesus, this itinerant teacher since he was trying to catch a glimpse of him. Since he was "short in stature," he ran ahead and climbed up into a sycamore tree above the crowds in order to see Jesus. His tactic worked; he saw Jesus and Jesus saw him. What happened next was unexpected and life changing.

When Jesus saw him up in the tree, he asked him to come down and then Jesus invited himself to dinner at Zacchaeus' house. This fraternization with a public sinner was scandalous to the crowd but was life changing for Zacchaeus. This acceptance of him as a person struck him to his core and he immediately responded by committing to give away half of his fortune to those less fortunate and to redress any injustice or fraud he had perpetrated on those with whom he dealt. His life changed, not because his "sins" were condemned as well they might have been, but because he was accepted as a human being.

If we Christians are to be the light of Christ to the world, are we not called to the same interaction? We are not called to condemn but to love others, especially those who are different from us. The challenge for most 21st century Americans is that we live, work, and play within tightly homogeneous groups. In order for us to model that acceptance displayed Jesus, most of us most of the time have to seek experiences outside our normal life spaces. It is there that we will find those, who like Zacchaeus are different perhaps even to the point of being condemned by society. It is these we are called to love with the same life-changing love and acceptance displayed by Jesus in this gospel story.

Sunday, October 17, 2010

Redistribution is the name of the game

We all knew that when Joe the Plumber labeled Obama as a "redistributionist" that he wasn't saying anything that wasn't true of all U.S. politicians. The issue is not whether to redistribute income or not but rather how income should be distributed. Robert Reich in his new book, After-Shock: The Next Economy and America's Future, opens with the single most important statistic for the current political debate: "In the late 1970's, the richest 1 percent of the country took in less than 9 percent of the nation's total income. After that, income concentrated in fewer and fewer hands. By 2007, the richest 1 percent took in 23.5 percent of total national income. It is no mere coincidence that the last time income was this concentrated was in 1928." (page 6)

This "redistribution" of income into the hands of the richest Americans was the work of both political parties but it began with Reaganomics and was accelerated by the Bush tax cuts after a period of some moderation under Clinton. The Tea Party profoundly misunderstands the dynamics of this redistribution in its calls for reduction of government spending and what it calls "confiscatory" taxes. There is an essential problem with rich people getting richer, even a lot richer. The problem is that they got richer by impoverishing the middle class. The middle 60 to 80 percent of Americans whose incomes in real terms have steadily declined since 1980.

This redistribution had two negative effects. First, it concentrated more and more money in the hands of people whose consumption was already at the maximum and thus rather than spend their increased wealth in consumption--the mother's milk of the American economy--they sought to get even richer. If they had actually invested that money in strong fundamental economic activity, we would have all benefited. What they did, however, is what they always do: they speculated. Too much money chasing too few investment opportunities simply drives up prices in a speculative frenzy: think dotcom bubble; think housing bubble. Eventually these bubbles burst and in the last case that almost brought down the entire economy.

The second impact fed into the first. Even though the American middle class had less and less real income, it continued to respond to the essential need to keep consumer demand high. This, for better or for worse, is the fundamental dynamic of the American economy. But if incomes did not keep pace with demand, what would predictably happen? The middle class would use consumer credit to make up for that income loss and when that reached exhaustion, it would use home equity which was ratcheted up by the speculation. Eventually that reached a predictable limit and the middle class was unable to continue to expand demand; the economy slowed and then descended into the Great Recession which was immeasurably worsened by the speculation and the associated abuse.

Government needed to step in and bolster demand lest the Great Recession become another Great Depression. If federal deficits had not become bloated with unneeded war expenditures and unwarranted tax cuts for the rich and if the excesses of the speculation had not required massive bailouts, the central government could have increased demand within acceptable deficit limits since recovery would mean increased federal revenues and the opportunity to pay down the debt. This happened during the Clinton administration but the resulting financial strength was expended on the above tax cuts and the military adventures of the following administration.

The problem now is that a recovery which does not address this maldistribution of income simply will not work. Private demand from the middle class will not develop to take the place of government demand--always meant to be a short response. The 17 percentage point gain in national income held by the rich must be reduced back to its 1980 levels. This redistribution will mean that the middle class will once gain be able to play its role in the American economy. While the richest one percent will have a smaller share of national income, the fundamental economic system will be sound and stable.

In other words, the previous tax cuts for the middle class should be made permanent but the tax cuts for the rich should be allowed to expire. To do otherwise could be disastrous beyond our wildest nightmares.