Why Health Savings Accounts are a rip-off

One way the government has tried to offset the rising cost of health insurance was to create the Health Savings Account.  It turned out to be a rip-off that didn't do anything but benefit insurance companies and banks.

In exchange for selecting a high deductible health insurance plan, you can create a savings account that you can use to pay your out-of-pocket costs, the savings plan allows you to make your contributions tax deductible, so, theoretically, all your out of pocket costs are tax deductible.

The problems are:

• The annual contribution limit for tax purposes is less than the out of pocket maximum in the insurance plans.  So, if you go over your out of pocket limit due to large claims, you cannot recover all the money you spend.  You can theoretically recover it in future years, but you need to have enough leftover unspent money in future years to do it then.  (The current annual funding limit is around $7,000 for a family).
• The premiums for the HSA plans are not comparatively lower than traditional PPO plans to the extent that you take on additional risk; you take on more financial risk, but you are not fully compensated for it with lower premiums. In short, the insurance companies quickly absorbed the difference by ratcheting premiums back up, so the plans were essentially a Trojan Horse for implementing higher deductibles without offsetting rate reductions for the policyholders.
• There is no individual out of pocket limit as there is in a PPO plan, only a family limit.  If you have family coverage, this is a very bad deal.  Be careful: because the spreadsheets that insurance companies use to compare HSA and PPO plans imply that there is an individual limit.
• You need enough leftover money to actually put money into the HSA savings account; the point of the whole scheme.
• You need to pay for your high deductible before any insurance kicks in, that means you "front" more of the first-dollar claims cash, compared to a PPO plan.  You better have enough extra cash ready for a big claims year.

The tax deductibility is a pretty clean benefit, although there are other ways to get it, including the tax deduction on your 1040 schedule A (subject to a limit) or an employer’s Cafeteria plan (subject to use-it-or-lose-it provisions).

In the end, choosing between a PPO and a HSA is a gamble, the outcome depending on how much claims you have in the year, and which family member has them.  There are scenarios where an HSA is better (and the tax deducibility is more assured), but there are many scenarios where an HSA is worse.  It is mainly better if you don’t have any claims that year.  The HSA is best when you don’t use it, and then only to the extent that its premiums are lower than a PPO.

But the real problem – and this is where the rip-off comes in, is that the HSA accounts themselves are a bad deal; and a boondoggle for the banks that hold the accounts.  They have all sorts of fees – account set up fees, low balance fees, and the usual checking account type of fees.  Also the rate of interest you earn is ridiculously low, like passbook savings account low.  The fees can add up to a couple hundred dollars per year, and you must keep a minimum balance sitting in the account our you will get sucked dry with a monthly fee..

In addition, the balance in your account may or may not be FDIC insured, so be careful what bank you use and how much you accumulate.

http://liberalvaluesblog.com/2006/11/26/health-savings-accounts-and-adverse-selection/

http://www.prospect.org/csnc/blogs/ezraklein_archive?month=11&year=2006&base_name=the_problem_with_health_spendi

http://www.truth-out.org/020609HA

http://www.cahi.org/cahi_contents/newsroom/article.asp?id=632

The Reagan Revolution in Charts - everything got worse

When Republicans try and articulate a coherent explanation of what they actually do - besides destroy social institutions, tell lies, and ruin a lot of lives - there are inevitably attempts to invoke the myth of Reagan, the trend increasingly notably since his death and now 100th birthday.  This reflex is fitting, since myths and poorly-recalled false memories are what suits modern conservatives best.  As reality's harsh light shines on the nihilism and pathology of the right, Republicans tend to bury themselves in denial and fabrication.


Here's some reality: since 1981, just about every economic measure available has gotten worse.  The election of Reagan brought us the "conservative era;" and as the following measures show, it has been a damn catastrophe for the nation and its middle class (the top 10% excluded, who have done exceedingly well since then, which is not mere coincidence).

The only measure that has improved, at least nominally, is the stock market.  The stock market is of course almost entirely owned by the wealthy, so this uptrend mainly benefits them.  And of course even this increase was primarily financed on the backs of the middle class, through the cannibalization of our productivity  and the piracy of our affluence, and later through taxpayer-backed cheap money for the backs, followed of course by taxpayer-financed bailouts of the banks.  Upwards wealth transfers, all of it.


Here's a simple fact: Reagan massively increased the spending of our government - an inconvenient core truth about the alleged "small government" hero's governance.  But he also sat astride the apex of American power and wealth - the nation's downtrend slide can almost entirely be traced back to its genesis during Reagan's tenure (except a few areas of decline that began under Nixon).

The myths and lies and treasons of Reagan are almost too numerous to list.  But it is worth reiterating that he launched an explicitly illegal war in Nicaragua in violation of an explicit law of Congress, which he did by supporting drug-running death-squad terrorists who were overthrowing a democratically elected government and torturing and killing a lot of civilians in the process, He illegally sold missiles and other weapons to Iranian terrorists in order to pay for the illegal war in a massive secret money laundering scheme, and he lied about all of it to Congress and to the people.  The entire scheme was swept under the rug when his former Vice President pardoned the gang of conspirators with preemptive, prejudicial amnesty - a get-out-of-jail card card that was granted before the trials even began.  Reagan's covert support of Saddam Hussein is another area of disgrace.
 
Reagan also "blinked" in the face of terrorist demands, when he bribed Iranian terrorists with weapons (and a cake) to gain the release of their hostages, this is a betrayal that his predecessor Jimmy Carter refused to make.  

Oh, Reagan also raised taxes several times - on the middle class.  But his biggest betrayal of the nation was that he initiated the destruction of the middle class.  The numbers speak for themselves....



Some things that got worse since 1981...


The National Debt 
(Debt goes parabolic in 1982, second spike in 2003)

Balance of Trade 

(Trade balance declines beginning in 1981, crosses axis from surplus to deficit in 1986; then the decline spikes downward in 2000)

 

Manufacturing Employment 
(Employment peaks just before 1980; falls off a cliff in 2001)
(To be fair, the manufacturing share of GDP started to decline long before 1981) 
 

Labor's Share of Productivity Gains
(The productivity-wage divergence trend spikes in 1983)
 

 

GDP Growth
(Rate of growth peaks in 1982)

Personal Savings
(Savings rate peaks in 1982 and then falls off a cliff)
 
 

Household Debt 
(First parabolic move up is in 1982; second in 2000)

Widespread Prosperity

(Income growth diverges in 1979; goes parabolic in 1984)

Income Share of the Top 10% Diverges about 1981 (aka the "great divergence" after 40 years of middle class prosperity)

 

"Financialization" of the Economy
(Converting the economy from one that made things to one where the financial sector made money as middlemen, without adding much value, while everyone else went into debt. This change starts between 1981 and 1984, with debt going parabolic in 2002)

Deficit Spending
 

For What It's Worth... (Presidential Popularity)

Thanks to Dave Johnson & Terrance Heath for the idea and many of the charts:
http://www.ourfuture.org/blog-entry/2010062415/reagan-revolution-home-roost-charts
http://www.truth-out.org/revisiting-reagan-nightmare67507

Also:
http://rondam.blogspot.com/2006/10/why-i-bash-republicans.html
http://www.brillig.com/debt_clock/faq.html
http://www.cbpp.org/cms/index.cfm?fa=view&id=3309
http://blog.prospect.org/blog/ezraklein/inequality/
http://www.opednews.com/articles/Tea-Parties--Crackbrained-by-Steven-Leser-090410-987.html
http://www.thefoldblog.com/2011/01/after-running-up-national-debt.html
http://www.headybrew.net/other/federal_budget_deficit_chart.html
http://www.bizindia.net/news/News.asp?newsID=149&catID=58
http://www.obamaftw.com/
http://www.centerforpolitics.org/crystalball/articles/frc2010072901/
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2010/04/09/businessinsider-15-charts-about-wealth-and-inequality-in-america-2010-4.DTL
http://www.mybudget360.com/financialization-era-banking-welfare-captured-our-economy-wealth-financial-debt-leverage/
http://www.investorsinsight.com/blogs/profitscore_iq/archive/2009/09/22/why-are-americans-earning-less-than-they-did-in-1982.aspx
http://www.shadowstats.com/article/hyperinflation-2010
http://gamingmywife.wordpress.com/2011/03/05/decline-of-the-middle-class/
http://www.frumforum.com/gops-2012-budget-dead-on-arrival/
http://www.stumbleupon.com/su/1Iesg6/www.headybrew.net/other/federal_budget_deficit_chart.html/
http://voices.washingtonpost.com/ezra-klein/2011/01/a_graph_im_trying_to_understan.html
http://economix.blogs.nytimes.com/2013/09/10/the-rich-get-richer-through-the-recovery/?_php=true&_type=blogs&_r=0
http://www.financialsense.com/contributors/adam-taggart/america-cant-afford-future

[updated March 2014 to replace broken links]

http://www.dailykos.com/story/2010/2/27/841375/-Unemployment-Hits-10.8,-Presidential-Approval-Drops-to-35

Understanding the media spin cycle

Here's a list from some blog laying out the various techniques used by official spokes-maggots to avoid telling the truth.  I probably don't agree with the guy's politics, but it is a nice synopsis of spin techniques.  Next time you watch a press conference, see if you can identify the tricks as they come up.

1. Dummy up. If it's not reported, if it's not news, it didn't happen.
2. Wax indignant. This is also known as the "how dare you?" gambit.
3. Characterize the charges as "rumors" or, better yet, "wild rumors." If, in spite of the news blackout, the public is still able to learn about the suspicious facts, it can only be through "rumors."
4. Knock down straw men. Deal only with the weakest aspect of the weakest charges. Even better, create your own straw men. Make up wild rumors and give them lead play when you appear to debunk all the charges, real and fanciful alike.
5. Call the skeptics names like "conspiracy theorist," "nut," "ranter," "kook," "crackpot," and of course, "rumor monger." You must then carefully avoid fair and open debate with any of the people you have thus maligned.
6. Impugn motives. Attempt to marginalize the critics by suggesting strongly that they are not really interested in the truth but are simply pursuing a partisan political agenda or are out to make money.
7. Invoke authority. Here the controlled press and the sham opposition can be very useful.
8. Dismiss the charges as "old news."
9. Come half-clean. This is also known as "confession and avoidance" or "taking the limited hang-out route." This way, you create the impression of candor and honesty while you admit only to relatively harmless, less-than-criminal "mistakes." This stratagem often requires the embrace of a fall-back position quite different from the one originally taken.
10. Characterize the crimes as impossibly complex and the truth as ultimately unknowable.
11. Reason backward, using the deductive method with a vengeance. With thoroughly rigorous deduction, troublesome evidence is irrelevant. For example: We have a completely free press. If they know of evidence that the Bureau of Alcohol, Tobacco, and Firearms (BATF) had prior knowledge of the Oklahoma City bombing they would have reported it. They haven't reported it, so there was no prior knowledge by the BATF. Another variation on this theme involves the likelihood of a conspiracy leaker and a press that would report it.
12. Require the skeptics to solve the crime completely.
13. Change the subject. This technique includes creating and/or reporting a distraction. 

He missed one: answer the wrong question and quickly move on.  I find that many replies sound like they are answering the question, but if you pay attention to the actual words critically, you see they do no such thing.

He missed another trick: filibuster.  I remember an old quote from some NPR journalist about the technique whereby the speaker rambles on for minutes going off on tangents.  It is essentially composed of changing the subject, and a bit of answering the wrong question, but then the subject speaks for so long that the interviewer and listener stop paying attention, and are reluctant to answer a follow-up question because it is so painful.

[From] Thirteen Techniques for Truth Suppression

We committed at least $13 trillion to bailout reckeless banks

.. and we can't find a few billion for the poor and unemployed.

 http://voltagecreative.com/articles/scary-bailout-money-info-graphic/



OTHER COVERAGE
Bailout Costs vs Big Historical Events
Adding up the Government's Bailout Tab
Total Bailout Cost Now $12.8 Trillion

A Tally of Federal Rescues:

We gonna spend $3 trillion on that war

http://www.ritholtz.com/blog/wp-content/uploads/2011/01/threetrilliondollarwar.jpg 

Word of the day: "Deficit Hawkoprite"

"The bottom line: As a party, the Republicans who will be railing against fiscal irresponsibility and threatening to block a raise in the debt limit are the irresponsible ones themselves who created the need to raise that debt limit [in the first place]."

Deficit Hawkoprite Watch 

http://baselinescenario.com/2011/01/17/deficit-hawkoprite-watch/

 

"Some critics continue to assert that President George W. Bush’s policies bear little responsibility for the deficits the nation faces over the coming decade — that, instead, the new policies of President Barack Obama and the 111^th Congress are to blame. Most recently, a Heritage Foundation paper downplayed the role of Bush-era policies (for more on that paper, see p. 4). Nevertheless, the fact remains: Together with the economic downturn, the Bush tax cuts and the wars in Afghanistan and Iraq explain virtually the entire deficit over the next ten years"

Critics Still Wrong on What's Driving Deficits in Coming Years: Economic Downturn, Financial Rescues, and Bush-Era Policies Drive the Numbers

http://www.cbpp.org/cms/index.cfm?fa=view&id=3036

Call me iPop, or: What is "modern rock"?

While recently visiting my town's new brewpub, I commented that I did not much like the music being played.  (It may have been coming off the owner’s iPod I think.)   It's not so much that I disliked it, more that I simply had no idea about it.  I did not recognize a single song and certainly could not name the artists to be sure.  But more interestingly, I could not even place it as a genre.

It was some kind of modern pop-rock.  Not too intrusive, certainly no “edge” to speak of.  It employed the usual variety of instruments I suppose, and the singer was just sort of, well, there.  So I guess it is not an alt- or indie-somethingorother since no one was shouting or playing their instruments with any particular emphasis.  Somehow it blended the upbeat backbeat snap of Jack Johnson with the nasal melancholy somberness of a Moby dirge.  (Moby, I am wiki-informed, belongs to the genre: ambient electronica)

Absent the lyrics it could not be differentiated from Christian Rock.  There were perhaps the vaguest hints of a lineage with metal and honky hip-hop, but fleeting and very very subtle.  It was in fact kind of medium-to-up-tempo electronic elevator music; perfectly at home in a quiet bar, but also in a mall, or backing a car commercial.

TV commercials in particular these days seem to be in fact avenues to showcase new release for new bands, which is an interesting phenomena in itself: commercials no longer just raid existing music favorites, they have become a place to release new music, or for bands to make a name for themselves. I find that interesting: new bands probably now aspire to be featured on a TV commercial.

It could be that there is an entirely new genre that exists only in iTunes-land, composed by Generation-Ritalin, targeted for television commercials, and sold at 99 cents a pop.  So I decided to name this genre: iPop.

If forced to guess the names of the bands, I would have gone with Radiohead, or Cold Play, or Green Day.  Which is pathetic of course, since those guesses are probably outdated by a decade.  So anyway, it struck me that I was not only unable to name the genre, but I cannot name a single new artist from the last decade.

None of this is a surprise to people who know me of course, the last new album I bought from an emerging style, when it was released, was probably London Calling by the Clash.  Granted, I was there at the emergence of the second wave Jam Band Yonder Mountain, but pretty much fell off the backside of that wave in short order.  My record collection is composed of about 80% pre-2000, 70% pre-1990, and 40% pre-1970 issues.  The genre's rotating in my CD player are largely blues and bluegrass.  Most of my "new" music I do buy is actually new recordings of old music. (The astute may note: I just used the word record collection.  And while I literally still own hundreds of LPs, I also still refer to CDs as "records" and have no idea what to call music available only on iTunes - ok; I do know, it's playlists)

Confession: I do not own an iPod, and rarely listen to music on my computer.  My stereo (yes, stereo) is oriented around a 100-watt receiver and a pair of JBL speakers from the 1970's that still squat like pieces of furniture in my living room.  (Anyone surprised by that?)

Anyway, in my research, I came across this interesting inventory of musical styles since the 1990s.

What Are The Ingredients In This Nasty Soup We Call “Modern Rock”?

http://idolator.com/5220851/what-are-the-ingredients-in-this-nasty-soup-we-call-modern-rock

Naomi Klein saw this coming

Klein claims that crisis’s are manufactured or at least exploited on purpose - what she calls disaster capitalism (but is more accurately crisis capitalism) – we can now see that the end goal is the laundering of electronic money into hard assets.

In the financial bubble version of crisis capitalism, everyone’s wealth is first hyper-inflated via transient electronic/virtual currency and the velocity of speculative financial transactions bids prices up, and then eventually the bottom falls out.  However, some people are still left with considerable piles of money after the fall, and those left with the biggest piles of wealth after the crash are in an excellent position to exploit everyone else by scooping up assets in distressed sales and defaults.  During the crisis; cash is king.

In this phase we see huge purchases happening at prices far below the levels of just a few years ago, but since no one has access to cash or loans, the prices (while comparatively low) are effectively unreachable for most people since no one will lend them money to match up to buyers with cash.  As a result, all sorts of hard & productive assets change hands: prime real estate is purchased for a song, productive companies are swallowed by others, publicly owned assets and revenue streams are privatized (roads, state parks, and public parking systems), access to markets and resources is acquired through long-term sweetheart-deal leases with state and local governments, etc.

As a bonus to the elite in this phase, various public gains are un-done in the name of austerity and shared sacrifice.  Union contracts are nullified via obligation-laundering bankruptcies, long-term pension obligations are renegotiated under bipartisan crisis committees, worker pay is slashed to levels it takes decades to recover from, and the like.  This time around, we see also the perverse argument that in order to recover from the crisis, taxes must be further cut for the elite. This is all textbook disaster capitalism.

But in order to make this orgy of wealth transfer possible, you must first get the current owners of prime assets into a leveraged position, so that when the crash happens, they are desperate to sell.  This is accomplished by the speculative bubble phase.  But to make the speculative phase happen, you must first entice people to play along; which you do with cheap money and a loose regulatory environment, along with a variety of other mechanisms from official cheerleading to a milieu of arcane regulatory and fiscal incentives...  which is where the US government comes in.

The government itself sets up the scheme.  What’s more, the US government is financing the end game: the US government and central bank is literally bankrolling this elite spending spree by providing low interest loans, toxic debt laundering, and other subsidies directly to the elite (via the banks), while simultaneously doing very little to prop up the financial strength of everyone else.

In absolute dollar terms, the elite look worse off compared to before the bubble burst, but in terms of real wealth relative to everyone else, they are much better off.  In the end when the dust settles, a few people have taken over ownership of a whole lot more real wealth.  The post-crash atmosphere creates an extent of wealth transfer that makes it apparent that although the bubble was lucrative, the real point of the game is the crash.  In the end, everyone’s balance sheets have shrunk, but a very few people now hold a bigger pile of deeds and titles in their safe, which reflects a concentrating of the real wealth.

Of course crisis capitalism has been practiced by the US and global elites around the globe for decades; what is new is that it is being practiced by the west, on the west itself.

You can see evidence of it here:

In Corrupt Global Food System, Farmland Is the New Gold - IPS ipsnews.net

http://www.ipsnews.net/news.asp?idnews=54119

But the evidence is everywhere, just watch the headlines about banks consuming smaller banks, which commercial and prime real estate changes hands, what assets are being sold off by cash-strapped governments at a discount, and anything bought by Goldman Sachs.

Krugman's oversimplification

Intro.  In a recent NY Times column, Paul Krugman takes a stab at explaining the chasm between the political left & right.  His take: we suffer from fundamentally differing premise in terms of the moral basis for government policy.  Krugman thinks that conservatives oppose any sort of welfare state government intervention, as a moral basis.  I disagree, I believe conservatives only claim they oppose expansive or activist government, while they gladly embrace it in many forms.... in short, conservatives' actions & advocacy, in contrast to their stated values, are often at odds.

A Tale of Two Moralities

http://www.nytimes.com/2011/01/14/opinion/14krugman.html

My Comment.  While Krugman’s oversimplification about moral-based values is a fair generalization as far as it goes, it does not go very far.  It omits the fact that in politics, the moral and the pragmatic are not so easily separated.

The left may well believe in the moral values of a welfare state and progressive taxation, but it believes also with equal commitment that the practical implication of such a system is wider, deeper, and more lasting prosperity for all.  The moral dimension of supporting the poor is only a portion of the overall belief set.  It is the corresponding belief that “red in claw” capitalist systems tend to devour themselves and lead to widespread suffering that forms the foundation for the moral framework.

Meanwhile on the right, one must wonder why so much of their alleged moral belief system in terms of economics must be sustained through the extensive use of myth, deception, magical thinking, and denial.  Not to mention that so many purported followers of right-wing economic “morality” tend to be living contradictions of their own views in the extreme.  Be it the hilarious specter of health care plan protesters who are recipients of Medicare, or any other of the “welfare state’s” largess to which they willingly consume, nay, demand.

The Best and Brightest of Wall Street

"Asked about why he had given out $4 billion in bonuses to his Merrill Lynch staff in a quarter in which the company had lost a staggering $15 billion dollars, ex-CEO John Thain typically responded: "If you don't pay your best people, you will destroy your franchise. Those best people can get jobs other places, they will leave." Apparently it never occurs to those who utter such perverse statements about rewarding the "best people," or "the best men," that we'd all have been better off, and saved some serious money, if they had hired the worst men."

[from] Locked into the Bailout State

Recovery for Whom?

"The first question to ask about the Recovery Program is, “recovery for whom?” The answer is, for the people who design the Recovery Program and their constituency, the bank lobby. The second question is, what is it they want to recover? The answer is, another Bubble economy, having seen the Greenspan Bubble make them so rich with his particular kind of “wealth creation”: wealth in the form of indebtedness of the “real” economy at large to the banking system, and unprecedented capital gains to be made by riding the wave of asset-price inflation."

[from] What Wall Street Wants - Michael Hudson

It started with a single recall of some commercial peanut butter....

And has not stopped expanding ever since.

"Peanut Corp. of America, the company that produced the contaminated peanut butter now being widely recalled, lied to Food and Drug Administration investigators about shipping food known to be contaminated with salmonella bacteria, the agency said Friday." - Chicago Tribune

This recall has now engulfed nearly every sort of product you could imagine containing peanuts (ice cream, cookies, brownies, candy) as well as some products you might not have thought of (pad thai flavoring mix, energy bars, pet food) not to mention peanut butter sold under a couple scores of brand names. It has engulfed hundreds of brand names and approaching two thousand products. The list of new recalls rolls through my email inbox daily like the litany of war dead on the evening news. Each day, several new products and brands are added to the list. Each week a new type of product is added to the universe of recalled products.

And now the scale of this has morphed from an unfortunate but widespread recall to a full blown scandal involving manufacturer’s shoddy practices and cover up, regulatory negligence and inaction, and possibly overt criminal acts by the manufacturer in terms of knowingly shipping tainted goods – to schools no less.

People have died as a result of this. Hundreds have been sickened.

Here’s a few things thought to be clear to anyone who was not previously paying attention:

• When you walk down a grocery aisle and see all these brand names and product choices, consider the possibility that inside the boxes all the ingredients are in fact the exact same crap all from the exact same factory.
• Our food supply system has been centralized to the extent that a huge portion of all the peanut butter food products in this nation run through a single company and even a single facility. A huge portion of the peanuts made in this country that go into other processed food products are transported to a single factory, tossed in a massive hopper, and then sent back out to the cookie and ice cream and dog food factories. It would be comical were it not tragic. A single point of failure. An opportunity for a single criminal company to sicken an entire nation. Terrorists could not design a more vulnerable and fragile system.
• Much of the so-called “organic” and “natural” food we buy are also sent through the same system and share the same assembly lines as the chemical-ridden non-organic products. Just because it says “organic” on the label does not mean what you might think it means. It certainly does not mean that the products were lovingly hand-processed by monks living in a monastery with good hygiene practices. Given that we can trust so little about our food system, one ought to wonder also if perhaps we should be wary of the very claims of the “organicness” of the raw materials themselves.
• The FDA is useless. Worse than useless; the FDA provides us false comfort that someone is watching out for us when in fact they are doing nothing of the sort. The FDA has been “captured” by the companies it is supposed to regulate. It now serves only as a smokescreen.
• Even if the FDA wanted to do well (as I am sure some of its civil servants would like to), decades of defunding, congressional and legislative attack, rhetorical attack from the right wing, partisan meddling by appointed bureaucratic hacks, abuse of science and use of secrecy by the White House, and abdication by a Democratic party largely captured by the same corporate contributors have left the FDA unable to be effective even if it decided to try.
• It might surprise you to learn that our food regulatory system is largely voluntary for the manufacturers and mostly self-enforced with very few actual inspectors in the field. The FDA have very few tools at their disposal in terms of an ability to make unannounced inspections, to compel a mandatory recall, to impose effective fines or close down an operation. As a regulatory agency, the FDA is blindfolded and has their hands tied.
• Faced with the choice between cutting cost and providing safe products, some companies will choose to cut costs.
• Faced with the choice between shipping a tainted product or the expense of volunteering to recall it, some companies will choose to ship it anyway.
• Faced with evidence that their products are making people sick, some companies will choose to cover it up rather than take corrective action.

If you are horrified by what we are now learning about peanut butter food safety, I suggest you stop eating meat immediately. You should probably be careful with prescription drugs as well, since these institutional problems are pervasive and infect every industry.

The true outrage here is this situation was avoidable. The destruction of the FDA was done very much on purpose. It is the direct result of greed hiding behind a false ideology of self-regulating free markets. A thirty year “conservative” campaign to destroy our system of regulation has succeeded in its goal. We have no regulation any more, just a façade. What’s worse, the campaign to destroy our regulatory system succeeded in destroying our expectations. We have been fooled as a nation to accept that there is no need to protect us. In fact, large portions of the nation loudly screech day in and day out the real risk is not criminal corporations, the real risk to us is regulators. The Democrats, curse their cowardly corrupt souls, have played along with this crime every step of the way.

Added to the anti-regulatory suicide pill we were convinced to ingest, we embraced an economic system that sought absolute centralization and monopoly, which has led us to destroy our own food supply system, along with our family farms, small businesses, and local communities.

The only silver lining to this is that we are now witnessing the simultaneous collapse of the entire “conservative” ideology all at once. The deregulatory fever and greed is good mantra of Wall Street along with its celebration of excess compensation has brought the entire world to the precipice of full blown economic collapse, requiring unprecedented interventions and bailouts by the supposedly evil and useless government and its taxpayers. The fascist militaristic ideology of the right has left us with a world in turmoil, enemies everywhere, our moral authority drained, and a government that is bankrupt with a strained military. The false misnamed system of economic globalization has left our communities waking up to the value of local economic systems and small businesses, and now this latest scandal in deadly food will, I hope, reveal to the nation that the deregulatory fever and laissez faire attitude about our food system is threatening our health.

We would be much further along on registering and processing these realizations, of course if the media itself was not also captured and corrupted by the same corporatist interests that brought us these damned plagues of collapse.

Alas, this is the nature of addictions and infections; it seems there is no easy way to break their hold on us without some fever and convulsions. The suffering, as always, is borne mostly by people who did not participate in the profits. But we can hope at least that in the end we emerge a little better and a little smarter than we were before. We can hope at least that the next generation will remember these crimes and these outrages, and will not so easily sell their dignity and personal security to deceptive corporations and their purchased politicians.

Angus MacSurly's Economic Forecast Calculator

[click on the above image for a full size version]

GOP Filibusters and the Height of Hypocrisy

"Though seemingly forgotten by most TV talking heads, it was only three years ago, when the Republicans had control of both the White House and Congress - and "filibuster" was a dirty word"

more...

Beware of what you eat, because... "You are on your own."

FBI enters Peanut Butter Investigation as US Schools May Have Received Tainted Peanut Products.

"Beware of what you eat. You are on your own", Senator Tom Harkin announces to Americans in Senate Agriculture Hearing.

Pin the Cash on the Donkey

Listed below are some of the top organizations contributing to the 2008 Presidential campaign, based on aggregated individual contributions. Here's the challenge: guess which of the following of the two donor lists is the Democrat.

Top Donors to Candidate #1

• Merrill Lynch
• Citigroup Inc
• Morgan Stanley
• Goldman Sachs
• JPMorgan Chase & Co
• AT&T Inc
• Credit Suisse Group
• UBS AG
• PricewaterhouseCoopers
• Wachovia Corp
• Bank of America
• FedEx Corp
• Lehman Brothers
• Bear Stearns

Top Donors to Candidate #2

• Goldman Sachs
• Microsoft Corp
• Google Inc
• JPMorgan Chase & Co
• Citigroup Inc
• Time Warner
• National Amusements Inc
• UBS AG
• IBM Corp
• Morgan Stanley

Here's the answer.

How oh How Will We Pay for the Stimulus Bill?

$900 billion dollars, oh my. Where will we ever find the money? Gee, I dunno.

Oh look; here's $3 trillion. There's another $2.3 trillion lying around somewhere. There's a trillion per year spent in here.

Apparently there are pallets and pallets of the stuff floating around Iraq. Maybe we should call it a secret no-bid contract with Halliburton, we seem to be able to afford those.

Or maybe under here? Ok, here’s some money we could reallocate.

Maybe we could do a better job collecting the taxes we are already owed. If nothing else, maybe these guys can pick up the slack.

There IS one thing that Wall Sreet Executives are very good at...

Paying themselves big bonuses. Very big bonuses. With our money.

And they're not afraid to hide it.

The $9 Trillion Bailout. $9 Trillion.

So, you think $900 billion is a lot of money? Keep your eye on the ball.

While Congress dithers about what to waste $900 billion on -- "waste" being defined as anything that places money directly in the hands of actual everyday people -- the Fed, FDIC, Treasury et al have signed you and me up as guarantor on almost $9 trillion in bad debts.

$9 T * R * I * L * L * I * O * N

That's more than it cost us for the Marshall Plan, the Louisiana Purchase, the moonshot, a few wars, NASA's lifetime budget, and the New deal, combined.

Shocking Revelations in the Madoff Scandal

The guy who saw through Madoff's scam testified before Congress last week.

"Harry Markopolos, a derivatives expert who spent nine years urging the SEC to investigate Mr Madoff, will say that, through their "investigative ineptitude and financial illiteracy" SEC securities lawyers effectively colluded to allow schemes like Mr Madoff's to continue."

Among the "shockers" that he reveals:

!!! Madoff didn’t act alone. !!! Money from the mob was involved; drug cartels too. !!! Other people knew about it and participated anyway.

!!! The SEC is shockingly inept and is a regulatory agency in capture by those it is supposed to regulate. capture. deep capture. very deep capture.

So, have Wall Street and the SEC formed an Iron Triangle with Congress, a conspiracy whose sole purpose is rent-seeking rather than productive wealth-creating economic activity? We report; you decide.

The Boldest Daylight Robbery in the History of the World?

Well, the colonial plunderings of Africa and North America by Europeans were probably larger, but the US Treasury is being robbed right now and in broad daylight; right under our noses.

"The Congressional Oversight Panel (COP) reports today that Hank Paulson's Troubled Asset Recovery Plan (TARP) stole $78 billion of our money. This sounds like a huge under count to me -- I would put the figure at much closer to $350 billion. The questions now are what to do about TARP and whether similar waste can be prevented for the next $350 billion."

You might not have noticed though, since they threw a TARP over it.

Lies, Damned Lies, and Government Statistical Data

This observation is from the blog of a investment pundit/daytrader (Jesse’s Café Americain).

It is about the suspicious pattern of after-the-fact revisions to the unemployment numbers. [Here’s a larger version of the Chart ].

Conspiracy theory, you say? Perhaps. But there is an undeniable pattern of after-the-fact revisions to important statistics like unemployment and CPI, and the revised figures tend to not only change the figure, but also change the “story” that the original release was supposed to be telling.

That’s ok. We all know that due to the significant estimating being done, the official UE figures are worthless anyway and besides, only count about a half or even a third of the truly unemployed.

My only point here is to be cautious of trying to try too hard to find useful indicators in a single release of monthly/quarterly data. Caveat emptor.

Pay no attention to the bank behind the curtain

Forget the stimulus; here's where the real action is.

Watchdogs: Government Overpaid for Wall Street Assets

GOP's Captain Renault once again opposes pork

On the Republicans born-again fear and loathing of earmarks, pork, and the prerogative of the Congressional majority.

Criticisms of the stimulus

Correction: mini-criticisms

Earmarks and so called pork never really bothered me that much per se. After all, it's right there in the legislation, and our leaders vote for it, right? The artful language of some earmarks is a bit of an annoyance, but no one is really fooled. At least, not the congress staffers who actually read the bill. They all know exactly what is going on. It's all there in the Congressional record for everyone to see for eternity, you can even view the bill on their web page.

In addition, what else do we expect our congressmen to do, except direct the spending at their constituents? One district's jobs program looks like pork to everyone else. The Congressmen come back to their district and cut the ribbon at the new $50 million Ronald Reagan museum in some cornfield outside Dekalb, and the media takes his picture, and the people from Dekalb reelect him for doing such a great job for his district.

The problem comes in that all 535 of the motherfuckers are trying to do the same thing for THEIR districts, and they discovered that they can simply borrow from the future to pay for it

I'll go out on a limb here. I don't need a tax break. My TOTAL effective income tax rate averages less than 20% over the last 20 years (excluding social security, which is not a tax but a mandatory annuity investment plan and the medicare plan, which is a mandatory individual health insurance policy). I am upper middle class. 20% may seem like a lot, but not if you consider we live in one of the best places on the planet to live. Show me a country that is as nice to live in, with lower effective tax rates. My tax rate is reasonable. The national debt, on the other hand, is scary.

I am even less bothered about "pork" in a STIMULUS bill. Pork is the POINT of a stimulus bill. This is where the government directly injects money into the hands of people to go spend. Much better to research biofuels and even to build museums in cornfields than give the money to banks so they can speculate on T Bills, or buy up other banks so they can eliminate the jobs. I'd be happy if the government dropped rolls of $100 bills from airplanes. The key here is to make it DIRECT spending. The test of success is not: "can you prove that this will create jobs?" The test is: "will this money get spent on buying stuff or paying wages, soon?"

So you give the money to some guy who wants to build lawnmowers that run on french fries. Great. Unless he is a complete scammer, he's going to buy french fries and pay a couple high school kids to test drive the mowers, even if the things never work. On the other hand, if he uses the money to pay down his credit card debt, or invest in Madoff's ponzi scheme, or start a hedge fund to play the currency carry trade, THEN, it's wasted.

The government really did invent the internet and did the basic research to cure many diseases, and did invent the atomic bomb. Every one of those projects looked like pork. Just imagine the bill language: "funding to pay German scientists to work in a basement under a football stadium in experiments at making atoms smash into each other."

The other thing that doesn't really bug me is that this is some sort of Democrat "wish list." Well, duh. The Dems won. They get to do their stuff. That's why we have elections. What would be really weird is to have one party win and then set out to pursue the other party's wish list. I am sure if the GOP was in the majority they'd be giving the Dems a big share of their wish list. Right. Remember, the GOP used 9/11 to pursue THEIR wish list. Now THAT's exploiting a crisis to further your agenda.

The problem with pork, aside from the deficit spending (excluding a stimulus in a recession, which is by definition deficit), is that people don't pay attention to the fine print on a routine basis. And there is no follow up programs to find out if it was a scam. And so too much of the money ends up in numbered accounts in the Cayman Islands. In terms of stimulus, money spent on wages and spent on things is generally not money wasted.

We do need to be concerned with "who" benefits. But the problem is not a question of who clearly benefits from the bill in comparison to who does not so clearly benefit. The problem is why is it that the frequency of giving large amounts of money to politicians tends to correlate with being on the receiving end of large portions of the money? This is a campaign contribution problem, not an earmark problem. You want earmarks to make sense? Then reform the campaign system.

One thing that DOES bug me is that we are all worked up about a $1 trillion stimulus bill. Meanwhile, in mostly secrecy and out of the spotlight, the Treasury and Fed has committed over $10 trillion in bailouts and loans and guarantees, and all of it is directed at a very short list of very connected companies in the banking and auto industries. Talk about pork for the piggies, that's an entire year's of GDP directed at about five huge banks and the big three auto firms, who got a wee taste of the action too.

Ah well. The good news is that with the GOP in the minority, they have rediscovered that they oppose pork and secrecy and hypocrisy. So, if we would all cooperate and forget everything they said and did for the last eight years, we can let them pretend to be outraged now.

My vote: pass the bill and move the fuck on.

The thing we should all be focusing on is not this bill. The thing we should pay attention to is the proposal to create a "toxic" bank to absorb the banks' bad debt. THAT, my friends, is a $1 to $3 trillion con job, directed at getting you and me to help the CEO of Citibank find a place to dump all his problems.