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Health deform could be ticking timebomb


The Democrats’ timid, defensive approach to healthcare, which started with a rejection of the popular (67% of Americns favor it, including 59% of doctors) "single-payer" or :Medicare for all" plan, could result in a political train wreck for the Dems, while leaving Americans’ health problems largely unaddressed.

The spineless condition of the Democrats grew worse as the debate has proceeded, with the Democrats themselves refusing to push a "public option" that the insurer-owned consulting firm the Lewin Group predicted would gain 129 million customers.

1) The Dems have inexplicably delayed reform, even though 45,000 people a year die due to lack of insurance (according to a recent Harvard Medical School study described on my website)–they get no care or vastly inferior care–a new study reported in the Nov. 15  Milwaukee Journal Sentinel on page reported that those without insurance are nearly twice as likely to die after treatment.

a) So why are the Democrats waiting until 2013 or 2014 to apply some of the most important provisions of their (increasingly watered-down) health plan?

b) While the Democrats may be afraid of widespread public disappointment and disillusionment and want to delay that as long as possible, people will start realizing the severe limitations of what they are proposing:

##Mandatory purchase of the defective and unreliable product of private health insurance.

##Allowing insurers to charge older patients at least 2 times as much as younger patients.

## A public option which
a) will not be open to all Americans like the proposed Medicare Plan E, but an infinitesimal 6 million; hence it will be unable exert any positive pressures on the premiums and practices of private insurers.
b) that the public option will have to compete with well-established private, for-profit insurers (United HealthCare alone has 70 million customers)
c) is increasingly being forecast as a dumping ground for older, sicker patients, and thus will have HIGHER, not lower premiums than the for-profit firms so skilled in "cherry-picking healthy patients; ; and
d) will permit reactionary states like Mississippi–precisely those states with the most appalling health conditions for their citizens –to opt out of the plan.

[Of course one possibility is that "opting-out" it will finally get large number of whites in the Deep South--up until now still bound by their racial prejudices (the pro-Obama vote in Lousiana, Mississippi, and Alabama ranged between 10% to 14% of white voters!) to recognize that their lives and those of their families are litterally at stake,]

##The institutionalization of different tiers of care for people, based on their ability to pay. No longer America’s shameful secret, the Democratic plans openly create "basic, "enhanced," "preimium," and "premium-plus" levels of benefits. This a fundamental repudiation of the notion that healthcare is a basic human right to which all Americans are equally entitled.

##Very little discussion has been devoted by the media to the all important question of premium levels.

First, for-profit insurers will continue to have the power to arbitrarily jack up their rates for most Americans whenever they feel like it, whethr it be in retribution for regulations they wish to undermine or a drop in their returns from the stock and bond markets (which account for more than 40% of their revenues.)

Second, under the Senate Finance Committee plan drafted in larger measure by former insurance lobbyist Liz Fowler working hand-in-glove with Chairman Max Baucus, premiums for under a "silver"-level plan would be unaffordable to most families.

For example, the Washington Post reported 9/21/09, a family of four earning $54,000 would pay premiums of $5,300. But before the family would derive any benefits from those premiums, they would have to pay a $5,000 deductible. In other words, the family would be exposed to $10,300 in annual health costs.

Third, even the more generous House bill-decribed in depth by Carol Miller at CommonDreams.Org on Nov. 16, would set a deductible limit of $1500 (which is high, but lower than the SenateFinance Bil) but would also allow a variety of cost-sharing schemes, with a limit of $10,000 per family annually.

While we don’t yet know the details of the final Senate Bill be unveiled by Majority Leader Harry Reid, there is very good reason to worry as the Senate moves toward debate at 8 p.m. Saturday night.

It may take a while, but when the public finally has a chance to sift through all the details of the final health bill (the Senate bill still has to be reconciled with the House bill now weighed down by the fanatically anti-abortion Stupak amendment), they will see that the insurers get tens of millions of new customers thanks to some $465 billion in public subsidies so that fellow Americans can buy insurance, and untold additional billions in revenues.

2. IMPLICATIONS FOR 2010
Once the public sorts this all out, their mood is likely to be less than forgiving toward the Dems.

But unlike 1994, when Bill Clinton failed to deliver on healthcare reform but instead rammed through the job-destroying North American Free Trade Agreement, the Republicans are rudderless and in disarray.

The GOP, both in its Congressional form and tea-bagger guise, has failed to rise the politics of rejectionism while offering no concrete reforms, dabbling in extremist and racist appeals, and offering nothing on Americans’ economic insecurity except to once more unleash the private sector.

But Americans saw the fully unleashed private sector shift its resources from real production to perilous financial maneuvers, resulting in the Wall Street meltdown and a set of never-ending bailouts sprinkled with reports of outrageous bonuses.

However, leading Democratic coices  like chief economics advisor Lawrence Summerare blind to the ongoing economic and social misery occurring across America, and are resisting the notion that a new economic stiumulus is needed.

This head-in-the-sand approach conveniently ignore some very unpleasant realities:

he credit system remains essentially frozen solid for consumers and small business. "In more normal times, one dollar in base money hasbeen fanned by the banks into $8.50 in loans. Today, one dollar in
base money produces only one dollar in loans," reports Ellen Brown in Yes! Magazine.". Although the Fed has been frantically pushing cash into the banks, it can’t make them lend to consumers."
       "Job seekers now outnumber openings six to one, the worst ratio since the government began tracking open positions in 2000," the New York Times reports. Two-thirds of the jobless.
       Employers use the economic crisis as cover for undertaking
off-shoring US jobs and shutting down US plants. “These jobs aren’t coming back,” John E. Silvia, chief economist at Wachovia in Charlotte, N.C., told the NY Times (3/7/08). “A lot of production either isn’t going to happen at all, or it’s going to happen somewhere other than the United States. There are going to be fewer stores, fewer factories, and fewer financial services operations. Firms are making strategic decisions that they don’t want to be in their businesses.”

From Manufacturing to Finance

While America’s productive base suffers from under-investment or is lost to off-shoring to Mexico, China, and other low-wage countries, U.S. corporations have engaged in speculation, using supposedly more profitable paper assets such as mortgage-backed derivatives. “The only thing that has kept the economy going since Reagan is one sort of artificial bubble or another, because Corporate America has been destroying real production,” declares UE Western Regional President Carl Rosen.

One stunning symptom of America’s declining productive capacity: the contrast between the nature of the imports and exports clogging the mammoth West Coast port of Long Beach. On the import side, warehouses and parking lots around the port are filled with imported cars and electronic products from mainly China and Korea—an enormous backlog due to the current crisis in the world economy. On the export side, the profound shift in the U.S. economy from production to finance is reflected in the leading U.S. export from Long Beach: recycled paper and cardboard.

At the same time that capital has flowed away from U.S. factories to low-wage sites abroad, it has also been increasingly channeled into the financial sector. This has occurred within major manufacturing corporations like General Motors and General Electric, which had been extracting a growing share of profits from their financing arms as investments have increasingly shifted away from production to finance.

Reflecting this shift, the U.S. financial sector produced $313 billion in profits in 2003, compared with just $119 billion for American manufacturing, as economist William K. Tabb has pointed out. Where the financial sector accounted for less than 2% of total domestic corporate profits in the mid-1950’s, in 2007 it provided close to 40% of all domestic corporate profits.

Tabb aptly describes the seemingly “magical” process behind the expansion of the financial sector:

Money could be made solely out of money, without the intervention of actual production. The new secret was presumed to be leverage and risk management, which allowed the purchase of assets that promised higher returns even if they carried a higher risk.

This was both an economic and a political development, as the financial sector gained leverage over the rest of the economy, in effect gaining the power to dictate priorities to debtors, vulnerable corporations, and governments. As its power grew, it could demand greater deregulation, allowing it to grow still further and endangering the stability of the larger financial system.

“The decimatio

ation of employment in legacy American brands such as General Motors is a trend that’s likely to continue,” said Robert E. Hall, an economist at Stanford University’s Hoover Institution.
       The number of foreclosures is taking place at ten times the daily rate during the Great Depression, according to Nomi Prins, author of It Takes A Pillage.
       Wage cutting is now more prevalent than at any time since the Depression, reports Louis Uchitelle of the NY Times. This is resulting in a deepening of the recession, since the reduction in consumer
buying power cascades into more layoffs and wage cuts.
       Workers’ compensation covers only about 43% of jobless workers in contrast to the 1975 recession  when it reached at least two-thirds of the jobless.
       Even before the recession began, 41% of US families were having trouble paying their medical bills, according to a 2007 study by the Kaiser Family Fund.
       While unemployment nationally is officially at 10.2% (with  the number of under-employed swelling the figure to 17.5%), we witnessed the last recession ending a year and a half before net job creation began to occur, as economist Nouriel Roubini has pointed out.

Progressive political strategist Steve Cobble offered a memorable set of insights at a January, 1995 Rainbow Coalition conference–held to examine the rubble created by New Gingrich’s takeover of Congress in the 1994 mid-term elections and to bring together a progressive response. The Democrats’ basic message on the economy came in two parts, Cobble stated.

First, the Democrats were telling working people, "You’re doing better than you think you are." This line contradicted the experience of falling wages, busted unions, and jobs being relocated overseas.

Second, the Democrats argued, "We’re setting up all these re-training programs for the new computer-based economy in case you lose your factoy job." But wWorkers were and are keenly aware that training programs don’t matter if there are no decent-paing jobs with benefits on the other end, and also highly skeptical about where they would fit in the new low-wage economic sectors where they were to be relocated.. The Dmocrats’ message on this point, according to Cobble, was translated into, "It’s too late for you, Jack."

The result of these counter-productive messages was a sharp drop-off in voter tournout from Democratic constituencies. The purported Republican tidal wave was more of a matter of very low dikes in the form od depressed turnout.

At this point, unless Obama and Co. seriously re-engage with their once-enthused voters around reviving the economy, the most likely outcome for the Democrats in 2010 is a depressed, demorailized, and disillusioned base unlikely to show up at the polls.

The Republicans, for their part, lack any credible message about reversing the economic downturn still confronted by most Americans, regardless of stock prices and leading economic indicators. The GOP only promises a larger, more extreme dosage of the medicine offered for eight years by George Bush.

 

However, t the Democrats’ thematic weakness and inability to deliver for Americans still leaves a major vacuum that could be filled by a pseudo-populist Republican message like the kind offered by Lou Dobbs, blaming both arrogant CEOs for outsourcing US jobs and soft-headed liberals for permitting an influx of job-stealing immigrants. But given the current Republican direction, don;t expect to hear any crticism of off-shoring jobs from the Republicans.

And even more shamefully, don’t expect denunciations of relocating US jobst from many Democrats, either.

 

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