Uncommon Sense

March 22, 2012

WTF, Part 2

Filed under: Economics,Politics — Steve Ruis @ 9:54 pm
Tags: , , , ,

I often have to admit to being perplexed, often over a whole range of issues. For example, during a speech by Presidential Candidate Rick Santorum after the Illinois primary election, just a few days ago, he stated that his campaign was about freedom. He asked the question “Are we going to have a government which orders us around and rules out lives?” The crowd responded with a chorus of “No’s”! Now, on the face of it I can agree with the sentiment, but Mr. Santorum and many of his Republican brethren are doing just the opposite. Mr. Santorum is against gay marriage, he is against contraceptives, and he is against abortion. And he thinks it is okay for the state to impinge upon your freedoms in these cases. All across the country Republican state legislators are proposing and passing anti-abortion bills, most prominently they are emphasizing requiring “trans-vaginal ultrasound scans ” before abortions can be performed. Government body cavity searches on women, lots of women. They want this to be the law.

This is the same Republican Party that vilified The Affordable Health Care Act because it intruded government into the near sacred doctor-patient relationship. Now Republican legislators are telling doctors and patients that certain procedures, for which there are no medical reasons, will be performed or the patients and doctors will feel the force of the law come down on them. And the victim must pay for the “service.” This is freedom? WTF?

And while a nonsensical anti-“freedom” condemnation of The Affordable Health Care Act is sucking all of the air out of the room, there is no discussion of what is wrong with the bill. For example, hospitals are required, by law, to provide care for the indigent and the only figure I could find that was somewhat nationwide is a little old: “According to Healthcare Financial Management Association’s Receivable Analysis Service, hospitals provided $11.5 billion in uncompensated services last year (that was 1988)—more than 9 percent of their revenue.” Now, there are far more uninsured now that then so this might be up to 12%, 15%, or more, I don’t know, let’s just say it is 10%. (It is really hard to determine because hospitals shift costs by charging insured patients more than uninsured, called cost shifting. And, yes, there are wide ranges in the numbers of indigents getting served at various hospitals, but this doesn’t affect my point.)

When The Affordable Health Care Act kicks in and the number of uninsured goes down dramatically, should that 10% surcharge on insured patients still be necessary? Should not all “full pop” hospital charges go down 10% (or whatever) and health insurance costs also go down 10% when ObamaCare kicks in 2014? I haven’t heard anything about this.

Or is this just another windfall for big business in this country?


March 16, 2012

Why Not Try . . . Democracy?

Last night I watched “Richard Wolff: Can We Afford Capitalism?” a Link TV original production. Dr. Wolff, an economist argued in his presentation that capitalism is quite probably fatally flawed and that it is time to explore alternatives.

One of the strongest points in his presentation concerned his opinion that it is a mistake to try to regulate powerful business enterprises! Dr. Wolff’s argument is that all regulations become are a target for the affected industries to chip away at and neutralize. He used the example of the Glass-Steagall Act (the Banking Act of 1931) which came about as a way to regulate banking abuses that led to the Great Depression. Shortly thereafter and through its history, the banking industry chipped away at the Act, getting it amended in their favor. Finally in 1999 President Bill Clinton signed the bill repealing the Act in front of a smiling bipartisan group of legislators. Eight years later, a mini Great Depression happened destroying trillions of dollars of wealth from which the big businesses were bailed out, right on schedule. Glass-Steagall would have prevented this most recent catastrophe. His point is that regulations provide a focus and a target for industries which, to achieve their ends, require businesses to “purchase” politicians and justices. So, industries are operating in a fundamentally flawed system that points exactly to where we are now, in a “democracy” of the businesses, by the businesses, and for the businesses.

I highly recommend watching the whole program but I do want to comment on one of Dr. Wolff’s suggestions as to avenues to explore as we move beyond capitalism. (Everything he suggested is being done or tried somewhere on Earth currently so his are not the recommendations of an ivory tower academic.) His principal recommendation is reflected in the title to this piece: let’s try democracy to run business enterprises. He started with the fact that current corporations are run by very small groups of individuals at the top and that corporations are constituted with no social responsibilities at all. What if corporations were more democratic? What if everyone involved had a say in what the corporation did, in what it produced, and how it produced it? One outcome he thought plausible is that it would be very highly unlikely that such a corporate structure would pay its CEO 350 times what the average worker got paid (the current average for large corporations). This, by itself, would decrease the wealth gap in the entire country as corporate executives constitute much of the 1% earning such a disproportionate share of this country’s income. Another effect is that it would make it highly unlikely that the member’s of such a board of governors would pack their plant up and send it to China!

I can hear now the howl’s of conservatives defending the sacred right of capital to call the shots. “It’s the shareholder’s money invested, they should get to say what is done with it!” Yes, that is the “normal argument.” But it takes capital and labor to make a business, so why is capital totally in charge? If you look at any successful corporation, you will find that the owners, be they individuals or shareholders, had very small roles to play in the overall success of the enterprise. Managers make the vast majority of the decisions, workers implemented them. The owners may have had the idea of the company itself, but the rest of the ideas came from designers, engineers, acountants and economists, and the like. And many shareholders may have bought their stock after the company found success and had almost no role in that success. Dr. Wolff’s comment is that we have rejected most “all and none” authoritative social structures: master and slave, lord and serf, etc. and maybe it is time to do the same for employer and employee.

Dr. Wolff’s main point is that if we try to “reform” our current system, what we create is more politicians, regulators, and regulations for businesses to target and transform to their benefit, which makes the businesses richer and more able to do more of the same. Such is the genesis of our current state of affairs in which, for example, not one politician has suggested that we re-institute the Glass-Steagall Act. It is time to see what our commitment to democracy really is.

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