Political Economy category archive

. . . slopping at the public trough.

Cookie Jill points out that five of the 20 biggest cases of private companies bilking the federal government involve those bastions of fee enterprise, health insurance companies.

They don’t want their gravy train to end.

Transcript here.

As Atrios pointed out recently, people don’t pay attention to the revisions. Maybe because it’s usually worse than they thought:

The first 12 months of the U.S. recession saw the economy shrink more than twice as much as previously estimated, reflecting even bigger declines in consumer spending and housing, revised figures showed.

The world’s largest economy contracted 1.9 percent from the fourth quarter of 2007 to the last three months of 2008, compared with the 0.8 percent drop previously on the books, the Commerce Department said yesterday in Washington. Gross domestic product has shrunk 3.9 percent in the past year, the report said, indicating the worst slump since the Great Depression.

Follow the link for more revised numbers.

And, remember, this was the logical outcome of Republican economic theory. People who weren’t blinded by the DOW saw it coming.

Bonddad considers reports that Gross Domestic Product last quarter was down at an “annualized” rate of one percent, rather than the 4.5% that was forecast. His conclusions (follow the link for the full analysis):

1.) Government spending really saved the day last quarter — it was the one positive area of growth.

2.) The rate of decline in several important areas occurred at a slower rate. Gross private domestic investment decreased at a far slower rate as did exports and imports.

3.) The rate of decline is more along the lines that occurred in the 4th quarter of 2008 rather than the 1st quarter of 2009.

Michael Lewis dispels some myths about Goldman Sachs. A nugget:

Rumor No. 1: Goldman Sachs controls the government.

Every ninth-grader knows the U.S. government has three branches. Goldman owns just one of these outright; the second we simply rent; and the third we have no interest in.

What small interest we maintain in the government is, we feel, in the public interest. The financial crisis has its roots in a single easily identifiable source: others’ envy of Goldman Sachs.

The bozos at Merrill Lynch, the dimwits at Citigroup, the nimrods at Lehman Brothers, the louts at Bear Stearns, and even that momentarily useful lunatic at AIG took risks that no non-Goldman person should take, in a pathetic attempt to replicate our returns.

Now we are working with Tim Geithner and Congress to ensure that we alone are allowed to take the sort of risks that might destroy the financial system.

Read the whole thing.

Report from the field. Ashley Sayeau writes in the Guardian:

Wooed by healthcare lobbyists, Republicans love to berate countries like England and Canada for their bureaucratic healthcare systems – where, they claim, politicians not doctors make decisions! But the truth is that nowhere is healthcare more impersonal and de-medicalised than in America. And until the profit motive is removed (or at least challenged), it’s a lie to suggest that anything but money is determining the quality of care Americans receive.

It wasn’t until I arrived in England that I understood this completely. Thirteen weeks before my recent operation, I had given birth at the same London hospital. I was able to hold my daughter for maybe 20 minutes before the midwives and doctors discovered that I had a very serious and rare fourth-degree tear in my perineum. After the finding, I was immediately wheeled into surgery, where for the next three hours, I was stitched up by, I’m told, one of the best surgeons in the field.

(snip)

Indeed there was nothing bureaucratic about any of it. Far from impersonal, I had repeated conversations with the surgeon himself about the injuries and the operations. The clinic’s nurse, a wonderful woman named Ann, held my hand through some seriously uncomfortable pre-operative exams. This Monday, her babysitter called in sick. I know because I talk to her all the time. Not once in any of these encounters did anyone bring up money. Not once was a politician present.

Betting it gets revised upwards:

The number of U.S. workers filing new claims for unemployment benefits rose slightly more than expected last week, but the number of workers staying on jobless roles fell to the lowest in three months, government data showed on Thursday.

Initial claims for state unemployment insurance benefits rose 25,000 to a seasonally adjusted 584,000 in the week ended July 25, the Labor Department said, a touch above market expectations for a reading of 570,000.

However, the four-week moving average for new claims, considered to be a better gauge of underlying trends as it irons out week-to-week volatility, fell by 8,250 to 559,000. This was the lowest level since late January.

What happens when persons are not willing to pay the cost of living in a civilized society taxes.

The ingredients of the failure: too many special interests feeding off the public trough, at least in part through pushing spending proposals via the initiative process. A public willing to mandate a generous array of programmes into existence but unwilling to cough up tax revenues to fund it. A political culture that follows public opinion rather than seeking to lead. An initiative process that almost guarantees political incoherence. A tax-and-budget process that guarantees annual political stalemate. And a term-limits system, passed in the heyday of anti-government rhetoric in the 1990s, that discourages expertise and too often discourages high-calibre personnel from seeking public office.

No more la la la in LalaLand.

(Or maybe it’s “Egypts.” Noz wonders here.)

It’s a way of life. George Monbiot in the Guardian:

American conservatism could be described as a movement of denialogues, people whose ideology is based on disavowing physical realities. This applies to their views on evolution, climate change, foreign affairs and fiscal policy. The Vietnam war would have been won, were it not for the pinko chickens at home. Saddam Hussein was in league with al-Qaida. Everyone has an equal chance of becoming CEO. Universal healthcare is a communist plot. Segregation wasn’t that bad.

He goes on the discuss some of the consequences of blundering into the future with blinders on. It’s worth the five minutes it takes to read.

Bushonomics: The Hangover continues:

New claims for US unemployment benefits jumped last week, in line with market expectations, as employers cut payrolls to cope with the severe recession, government data showed Thursday.

The Labor Department said first-time claims for unemployment insurance benefits rose to a seasonally adjusted 554,000 in the week ended July 18, after a revised 524,000 in the preceding week.

Howard Jarvis finishes off California:

The agreement calls for cutting spending by $15 billion, including $6 billion from schools, $3 billion from colleges and $1.2 billion from prisons. Schools will be repaid $11 billion once the state’s economy turns around. It also raises $4 billion by in part accelerating personal and corporate income tax withholdings and increasing income tax withholding schedules by 10 percent.

It also calls for the state to divert more than $2 billion of tax receipts meant for local governments, redevelopment agencies and transportation districts. That money would be repaid with interest. Local governments could sell bonds backed by the promise of repayments. The agreement also shifts $1.5 billion between accounts to save money and moves the last payday for state workers in the current fiscal year into the next.

Running out of people to lay off (emphasis added):

In news on the closely watched jobs market, the U.S. Labor Department said initial claims for state unemployment insurance fell 47,000 to a seasonally adjusted 522,000 in the week ended July 11.

The figure was much lower than expected, but was not seen as a sign of a sudden, sharp improvement in the labor market.

Claims were “massively distorted by the shift in timing of summer shutdowns,” economists John Ryding and Conrad DeQuadros at RDQ Economics in New York said in a note to clients.

A Labor Department official said there had been far fewer seasonal layoffs than anticipated in early July in the automotive sector and elsewhere in manufacturing.

Many of the jobs typically shed for summer plant retooling were cut earlier, and in some cases permanently, as the industry slashed output in the spring to reflect extremely weak demand.

A caller to the Diane Rehm show:

Given a choice between a disinterested bureaucrat and an insurance company employee with a fiduciary interest in denying me coverage, I’ll take the bureaucrat.

Follow the link for his analysis. Here’s his conclusion:

The bottom line is there are a ton of indicators saying the worst is over. Now — this does not mean we have clear skies ahead because nothing could be farther from the truth. There are huge challenges. But, all signs are the worst is over.

Avedon at Eschaton:

. . . .when someone claims they oppose healthcare reform because it is too expensive, there really is only one sensible response: “If you are worried about costs, why don’t you support single-payer, which will save hundreds of billions of dollars?”

Imagine living in a society where reliable police and fire protection were available only to those who worked for the largest employers. In this fictional country, people with enough money might be able to buy personal protection – but perhaps not if they’d suffered a burglary five years ago, or once called 911 for a kitchen fire.

(snip)

Substitute health insurance for police and fire protection, and you have one of the best – and least-heralded – arguments for universal health care, according to a small but growing number of economists.

Read the whole thing.

Also, read this and this.

And from The Nation:

It’s time to part ways with obstructionist Republicans and pass a strong healthcare bill with a majority vote, which is possible if efforts cease to get a handful of Republicans to cross over. Redefining bipartisanship at a time when the GOP has become a male, pale and stale party committed to deficit demagoguery and fearmongering is the common sense and, I’d even argue, pragmatic course. Instead of wasting time on recalcitrant GOP holdouts, do what Drew Westen, author of the terrific book “The Political Brain,” advises to pass meaningful healthcare change: “Focus on principles, tell compelling stories, move people emotionally and send clear messages.”

“Male, pale, and stale.” I love it.

Military folks are changing their shopping habits:

Military families either went to the commissaries for the first time or shifted more of their grocery shopping to the government exchanges while “not spending as much at the Farm Fresh or not going over to Costco any more,” Maloney said.

This morning, Second Son called to make an eye doctor’s appointment. He can’t get one until late August.

Seems all the persons who have been laid off are making appointments before their health coverage runs out.

Reuters:

Fresh signs of weakness in U.S. job markets on Thursday underlined the strains faced by a recession-struck U.S. economy that contracted slightly less in the first quarter than previously thought.

The Labor Department said the number of U.S. workers filing new claims for unemployment benefits last week jumped unexpectedly by 15,000 to a higher-than-forecast, seasonally-adjusted total of 627,000.

Continued claims, which gauge how many Americans were still on jobless rolls after an initial week of claims, rose 29,000 to 6.738 million in the week ended June 13, the latest period for which the data was available.

I was in the local quicky lube this morning–I’d pushed the current oil change as far as I could–and only one of the two bays was in use until I arrived.

A fellow came in looking for a job (I guess you would call it a “lube job”). The manager took his application, but warned him that things were really bad, that he was having to cut his employees’ shifts and hours. “Just this morning,” he said, “I had to send two persons home because I didn’t need them today.”