Relevant and even prescient commentary on news, politics and the economy.

Social Security and the NYT

(Dan here….)  Via the New York Times comes an article on the Social Security shortfall.  No explanations given for what the shortfall context is, and not till the end was a fix suggested.  In comments calling SS a ponzi scheme (with no explanation) was common, or with the fix mostly was about lifting the cap.  Only one commenter referred readers to a Bruce Bartlett article from 2013 on the matter,

From an e-mail by Dale Coberly

Forgive me,  I have studied this problem and may actually know what I am talking about.
All we have to do is pay an extra dollar per week per person per year.  After next year It will be more like a dollar and ten cents.  And if we wait another year it will be about a dollar and twenty cents for the first few years,  then a great deal less than a dollar per week on average. This would keep Social Security solvent essentially forever.  The Deputy Chief Actuary at Social Security agrees that this is true.
This would mean people are paying more, but not a lot more, for their Social Security.  That is they would be setting aside enough money through Social Security to save enough to live on when they will no longer be able to work.  Don’t fool yourself:  working longer is not going to be possible for at least half the population.  And since they will have paid for it themselves, there is no reason they should not be able to retire if they want to even if they “could” work longer.
The Social Security Trustees Report says that about a one and a half percent (about fifteen dollars per week) one time “immediate and permanent” increase  would keep SS solvent for the next seventy five years.This would not be a real burden, or even noticeable once people got over their overreaction to the increase.  Even the about twenty dollars per week that would come in 2035 or so if we wait to the last minute will not be a real burden.  Wages will have risen by about two hundred dollars per week by then.  Again, no no one would think twice about it if it weren’t for the Big Liars making it sound like some kind of tragedy:  “You are going to have to put aside an extra twenty dollars per week, out of your two hundred dollar raise, in order to have enough to live on for the extra two to four years you will expect to live.” [Dollar amounts are in present terms.  SS pay as you go financing automatically takes care of inflation and real interest.]
The thing is they keep talking about it as if “we” — that is “the government”– can’t afford it.    But we — that is each of us — certainly can afford it.
But “they” want to talk about it as if “the government” was going to have to come up with trillions of dollars.  And they call it “socialism.”  Meanwhile the “progressives”  want to make it socialism by “making the rich pay” for it.
Social Security was carefully designed to NOT be welfare. It’s just the worker saving enough of his own money to pay for his own food and shelter when he will be too old to work, and insuring himself against the possibility that otherwise he might not be able to save enough. The government does not pay for any of this. The “rich” do not pay for more than they will get back with reasonable interest, including its insurance value.
Since you have been lied to intensively for at least the last thirty years,  you will not easily understand this or believe it. But it can be proven with attention to real math and real facts. There is no hope the people will understand it if no one tells them. The question is are you willing to do the work?

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Women Strike in Switzerland for Equal Pay

Interesting there is not a peep on this in the US and literally hundreds of thousands of women gathered in the streets of the Swiss cities. 40,000 in front of parliament in Bern and the same was repeated in the cities of Lausanne, Geneva, and other places. It is said the turnout is greater in numbers than the protest in 1991. Much of the same inequalities are recognized in Switzerland as they are in the US. Women lose is salary if they take time off. This is not only in gross income, it is in hourly, weekly, or month income when compared to equivalent paid time period.

However in Switzerland, there is a movement afoot to again equalize the differences experienced between genders which has been written into the Swiss constitution. In Switzerland, equal rights for women and men were enshrined in the Federal Constitution by voters on June 14, 1991. 40 years after the popular vote to make it a part of the constitution, the goal of equality has yet to be achieved.

Five key indicators illustrate the day-to-day gender inequality in Switzerland:

– Lack of wage (median gross) equality with women making 12% less than men. The difference was even greater with women earning 14.6% less than their male colleagues which could not be explained by education, years of service, or role in the company.
– The majority of men work full time while only 41% of women do. Much of this is explained by the difference in out of home and at home workloads which men are impacted less in their careers.
– The division of housework in couple’s households remains the same. Women choose part-time work to care for children followed by other family responsibilities. Men working part time are pursuing an apprenticeship, a course of study, or are simply not interested in full-time work. This difference is reflected in the unequal distribution of domestic work of which women do the bulk.
– Due to working less paid hours, women get less from the Old-age and Survivors Insurance as well as the Occupational Pension fund. provision.
– Women in City, Canton, and Federal government are underrepresented.

In a country where even a labor strike action is rare, women have been concerned about neglecting their jobs and workplaces. To adjust for the time off, women demonstrators have decided they will finish their work day at 15.24 on Friday afternoon a time chosen to reflect the differences in pay for the same or a similar job done by men. The 15:24 reflects the almost 20% wage disparity with men. Many women and men in support of the movement are wearing fuchsia purple clothing on Friday the symbolic color chosen to reflect the event.

The strike has been covered in foreign media such as the Financial Times and on the BBC. There was also support from the United Nations.

Huge turnout for women’s strike in Switzerland, SwissInfo

Minding the gap between the sexes in Switzerland, Kai Reusser (graphics) and Sonia Fenazzi (text), Swiss Info.

Hundertausende Frauen fordern rasche Fortschritte bei Gleichstellung, Regula Bühlmann, SGB/USS

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The North Korea Food Shortage Deepens

The North Korea Food Shortage Deepens

Yeah, I know, the Iran situation is more in the headlines, but nobody knows anything and everybody is shooting off their mouths.  I shall comment on that one when things settle down a bit.

Instead I shall provide info less widely reported coming out of nkecon  on the still-unreported-in-MSM story about the increasingly bad food situation in North Korea (DPRK). There are multiple reports.  Drought has hit the principal rice growing area in DPRK.  Also, there is now a serious situation regarding potatoes, the old backup for wheat and rice failures. and generally a widely relied upon staple for DPRK diets.

The latest hot story regarding potatoes is that a couple of people have been arrested and sent to labor camps for stealing potato seeds.  Reportedly this often goes on at this time (actually May when there is a two week period when usually most planting occurs).  Most of the time these people are not themselves using the potato seeds to plant them themselves but selling them to others.  But this year the situation was much more serious last month, and these arrests are a sign of it.

As I argued earlier, this situation is probably aggravating political conflicts within DPRK.  We have seen a weird letter from Kim Jong Un to Trump even dumping on Biden. Trump has now further disgraced himself by not only praising this letter, including specifically for its Biden remarks, but even going so far as to say after Kim’s dead brother was reported to have been a CIA informant that, no, not during his presidency will we let the CIA spy on North Korea.  We shall only use DOD intel agencies to keep track of DPRK nuclear weapons programs.

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Covering the Sahara Desert with Solar Panels to Fight Climate Disaster?

Juan Cole at Informed Comment has a post up by Will de Freitas Should we cover the Sahara Desert with Solar Panels to Fight Climate Disaster?

A map of North Africa is shown, with a surprisingly small box somewhere in Libya or Algeria shaded in. An area of the Sahara this size, the caption will say, could power the entire world through solar energy.

Over the years various different schemes have been proposed for making this idea a reality. Though a company called Desertec caused a splash with some bold ideas a decade ago, it collapsed in 2014 and none of the other proposals to export serious amounts of electricity from the Sahara to Europe and beyond are anywhere close to being realized.

An engineer at Nottingham Trent University has researched various options for Saharan solar, Amin Al-Habaibeh and discusses the sheer size of the Sahara desert and amount of sunshine it receives:

– It’s larger than Brazil, and slightly smaller than the US.

– If every ray of sunshine hitting s the Sahara was converted into energy, the desert would produce enough electricity over any given period to power Europe 7,000 times over.

So even a small chunk of the desert could indeed power much of the world, in theory. But how would this be achieved?

According to Amin Al-Habaibeh, there are two main technologies which can be applied to this project and each has their pros and cons:

– Concentrated solar power using lenses or mirrors to focus the sun’s energy in one spot, which becomes incredibly hot. This heat then generates electricity through a steam turbine.

– A tower in the middle of the mirror or lens is the “receiver” which then feeds heat to a generator.

– Some systems store the heat in the form of molten salt. This means they can release energy overnight, when the sun isn’t shining, providing a 24 hour per day supply of electricity.

– Concentrated solar power is very efficient in hot, dry environments, but the steam generators use large amounts of water.

– There are also the regular photovoltaic solar panels which are much more flexible and easier to set up, but less efficient in the very hottest weather.

Amin Al-Habaibeh: “Just a small portion of the Sahara could produce as much energy as the entire continent of Africa does at present. As solar technology improves, things will only get cheaper and more efficient. The Sahara may be inhospitable for most plants and animals, but it could bring sustainable energy to life across North Africa – and beyond.”

The issue may be in how to transmit the energy to other areas? Is it still transmission via immense cables?

The longer we delay, wait, deny, and ignore the issues we produced for climate; the more drastic the action to be taken. There is more to the discussion on producing power from the sun in the desert and worth exploring. In Juan Cole’s post: Should we cover the Sahara Desert with Solar Panels to Fight Climate Disaster? there are other sites identified in which to do similar installations.

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Michigan, Do Not Be Fooled – You Just Lost More Than You Got in Return

No Fault Auto Insurance

On May 30th, the Democratic Governor of Michigan Gretchen Whitmer, signed what was called a bipartisan effort by the Republican controlled legislature and a few of the Democratic members to solve the problems of expensive automotive insurance in Michigan. Due to redlining, other nefarious schemes, and a lack of transparency to how fees were calculated, No Fault Insurance in Detroit was substantially higher than in other areas. It is true the state’s no fault insurance has been a cost burden on many people; but, every attempt made to understand the whys of the costs were stopped by Republicans. The lack of transparency in how the fees for the Personal Injury Protection portion of No Fault insurance were calculated, how fees to doctors and hospitals are set, and how much is in the PIP fund resulted in a constant battle.

With the revision, Republicans have left Michigan constituents with an over priced commercial healthcare insurance plan which does not mirror the care provided by No Fault’s Personal Injury Plan (PIP). Republicans have promised there will be a decrease in premiums. Yes, there probably will be such but it will not be equivalent to want has been lost in benefits and the payout may be reduced by increases in other areas.

Over the last couple of weeks Republican Senate Leader Mike Shirkey and the Republican House Leader Lee Chatfield have led the Republican controlled Senate and House along with a few Dems to pass a bill gutting the present No Fault Insurance in Michigan and stranding constituents. The new bill relies on Commercial Healthcare, Medicare, and Medicaid plans to replace life time Personal Injury Protection and guts the protections of No Fault. It does lessen the cost of Automobile Insurance but it also calls out for a 200 to 240% payment to hospitals and clinics for care. The CBO already studied Commercial Healthcare Insurance cost as compared to Medicare and found Commercial Healthcare pays 89% more than Medicare. The Republicans new plan is a large giveaway to the Healthcare Industry.

This is an abbreviated article of what was written by RN Julia Pulver of Medium Magazine who took the time to review the recent legislation passed by the Michigan Legislature before Memorial Day. RN Julia Pulver is a certified nurse case manager who worked in the field of catastrophic injury for 5 years.

In a planned nontransparent manner reminiscent of what the lame duck legislature did before the reins of the Governorship were handed over to Governor Whitmer, the Republican majority-controlled legislature passed legislation pre-Memorial day, sent it off to Governor Whitmer and asked her to sign it. This to similar to an attempt by a lame duck legislature when the governorship was changing hands earlier this year. No one has had time to review the bill and its potential issues. The Republicans are hoping Whitmer would just sign it, she did, and having felt boxed into a no-win situation.

Such a ploy by Republicans was to also avoid feedback and prevent input from those who already use this valuable portion of No-Fault Insurance covering the results of serious automotive injury. It is being done in such a manner to prevent experts such as RN Julia Pulver from having any input. It is being rushed off to Governor Whitmer’s desk to be signed (and I would urge Governor Whitmer to veto it) before Michigan constituents are aware of what they will lose.

Under the guise of equating Healthcare Insurance Medical benefits to No Fault Personal Injury Protection benefits, the Republican led bipartisan effort are applauding their efforts to take away protections resulting from automotive accidents. Furthermore (redundant alert here), there is no comparison between commercial Healthcare Insurance Medical Benefits and Personal Injury Protection Benefits as the former is only a part of the later.

Also keep in mind, the legislation will allow for medical payments 2 to 2.4 times of what Medicare allows for the same treatment. A Congressional Budget Office analysis had determined the average payout by commercial healthcare insurance is 89% higher than what Medicare pays out. This legislation allows more than twice such at 200 and 240% resulting in a big giveaway to Michigan hospitals, clinics, and doctors.

As researched by RN Julia Pulver, the following is what Michigan constituents will lose now that Governor Whitmer has signed this legislation:

• Coverage for wage loss for three years following an accident, usually 80% of your base wages, paid in real time, while you’re out of work.

• Coverage of guardianship costs for people with brain injuries.

• It pays for a home health aide who can help you with your activities in your own home.

• It pays for replacement services to offset the cost of household needs ( mow your lawn, etc.).

• It pays for modifications to your home and car if you are wheel chair bound or unable to use stairs.

• It pays for an occupational therapist to come to your home, assess what modifications need to be made, and determine the number of care giver hours you require to ensure you are safe in your home and everyone’s care needs are appropriate.

• It pays for an independent nurse case manager to be your patient advocate.

• It pays for long term rehab and community-based care allowing disabled patients to achieve and maintain as much mobility and independence as possible.

• It pays for intensive therapies for children to help physically recover and maintain their cognitive and physical abilities into adulthood.

• It pays for therapists to help injured people re-learn their jobs or find new jobs or skills to continue and lead meaningful lives following injuries.

• It provides transportation for those who can’t drive following an accident, get to their appointments, pick up prescriptions, and stay on track with their recovery. This keeps them out of the ER saving money in the end.

I would also urge you to read RN Julia Pulver’s more detailed article which can be found at the “Medium” to better understand the result of this legislation.

Do Not Be Fooled- You Just Lost More Than You Got.” RN Julia Pulver BSN, CCM; Medium, May 28, 2019

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SOCIAL SECURITY, a little bad news (sorta) and a little good news (sorta)

by Dale Coberly

The bad news is that we have slipped past the day when we could have saved Social Security from ever reporting “short term actuarial insolvency” by raising the payroll tax one tenth of one percent per year (about a dollar per week). This is only sorta bad because it doesn’t really matter . . . sorta. Social Security can still pay ALL promised benefits forever . . . by raising the payroll tax one tenth of one percent per year.

The reason it is sorta bad is that the people who hate Social Security will react to a Trustees Report of “short term actuarial insolvency” as if the world was going to come to a violent end tomorrow and they would lose all their money. “We told you so!” would be their last words. Well, not their last words, unfortunately. They would keep saying it at least every year if not every day, loudly, in the halls of Congress and on a TV station near you. Even the serious and responsible ones.

That’s because at one tenth of one percent per year short term insolvency never goes away; it just gets put back a year every year. Actually, the one tenth percent per year would catch up and “short term insolvency” would go away. But not before the Congress did something stupid and “fixed” Social Security by privatizing it, or by turning it into welfare as we knew it . . . depending on which party gets the votes first.

But the good news is that “short term insolvency” could be made to go away by raising the payroll tax one-and-a-half tenths of one percent per year starting next year. This would be a dollar and a half per week. But the “per year” is misleading. The tax would only need to be raised about every other year for a few years and at increasing intervals after that. This would average less than one tenth of one percent per year until the tax increase stabilizes at a little less than two percent above the current 6.2%

There are many other ways to accomplish essentially the same thing. But this is probably the simplest. It is also the fairest because it spreads the cost more or less evenly over the people who will get the increased benefits from their longer life expectancy. It also avoids creating a large Trust Fund which gives the bad guys so many opportunities for mischief (mostly crying “Social Security is Broke! Flat Bust!”) whenever the Trustees Report says “the Trust Fund may run out of money in seventy-five years or so unless we raise the tax a tenth of a percent or so . . . when wages will be twice as high as they are now.”

Please note, the percent tax goes up, but due to the magic of mathematics and a rising standard of living, you will have more money (real dollars) in your pocket after paying the tax than you have today. AND you will get the “tax” back with interest when you need it most. Without a “means test.”

If we don’t get around to raising the tax one and a half tenths of one percent starting next year (2020), we would still be able to avoid further projections of “short term insolvency” by raising the tax two tenths of a percent by 2021. Again this would be only for a few years, then the tax increases could fall back to one tenth of one percent per year, OR we could continue with the two tenths every other year or so for a few years, and then at decreasing intervals for a few more years until the total tax increase reaches the magic two full percent above what it is today. That would be a sustainable level for as the eye can see into the infinite horizon.

But the really bad news is that you won’t do anything to make Congress understand this, and probably sooner than later they will “fix” Social Security in a way that destroys its value as retirement insurance for workers. REAL insurance. Backed by the full faith and credit of the United States of America, which used to mean something.

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Morehouse Keynote Speaker To Graduates, I am Paying Off Your Student Loan Debt

Morehouse College seniors got a surprise Sunday, Billionaire investor Robert F. Smith announced during his commencement speech he would pay off the student-loan debt for the historically black college’s graduating class. Morehouse President David A. Thomas; “The total amount of student loan debt from the 396 students adds up to about $40 million. He called Smith’s gesture “a liberation gift.”

Smith: “‘When you have to service debt, the choices about what you can go do in the world are constrained,’ (Smith’s gift) gives them the liberty to follow their dreams, their passions.”

It would be an interesting to track these students and compare the results to others who are burdened with student loan debt.

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We Already Passed a Constitutional Crisis into Presidential Autocracy

I don’t think we have entered a constitutional crisis. I think for all intents and purposes we are already past it, because of the ineffectual response to Trump’s autocratic behavior.

On February 15, he brazenly abrogated Congress’s appropriations power with this diversion of funds for his “border wall.” Presidential Proclamation on Declaring a National Emergency Concerning the Southern Border.

On March 15, he vetoed Congress’s downvote of that emergency. Trump Issues First Veto After Congress Rejects Border Emergency.

On March 26, the House failed to override Trump’s veto: House fails to override Trump veto on Southern Border Emergency.

The House did not file suit until April 5. It requested an injunction to stop the President from acting unilaterally. SCOTUS did not “fast-track” the request for injunction. Trump responded to the House’s request last week asking the court to reject the House Lawsuit. Trump Administration Urges Judge to Reject House Lawsuit on Border Wall.

We are now three months past the emergency declaration and action to stop Trump is on the proverbial slow boat to China. By the time the Supreme Court rules, the 2020 election will probably have already passed.

So, tell me, exactly why should any President whose party controls at least 1/3 of either House of Congress simply bypass any Congressional opposition to anything by declaring states of emergency?

Future democratic Presidents might still refrain from doing so, but it is crystal clear to me that, the precedent having been set, future GOP Presidents will pursue this route at will. Such actions are what makes up an autocracy.

We also have the specter of GOP Senators openly telling a witness to ignore a subpoena issued BY ONE OF THEIR OWN PARTY’S SENATORS. Graham Tells Don Jr. To Ignore Senate Intel Subpoena: “You Don’t Need To Go.”

And, of course, Trump is simply refusing to honor any subpoena issued by the House.

Again a future democratic President might play nice; but once again the precedent having been set, future GOP Presidents will simply employ this strategy across the board.

Bottom line we are not “approaching” a crisis, we are in crisis. The precedents for future GOP Presidential autocracy have already been set and they will be followed. We are passing out of the Constitutional rule of law right now.

The burden may rest with John Roberts who cares about his legacy as Chief Justice and has shown such in previous decisions. He will have to decide whether he wants to go down in history as the Chief Justice who cast the deciding vote to de facto end the American Republic.

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Credit Card Interest Rates

Marquette Nat. Bank of Minneapolis v. First of Omaha Service Corp., 439 U.S. 299 (1978). In a unanimous U.S. Supreme Court decision, the court held states anti-usury laws regulating interest rates unenforceable against nationally chartered banks based in other states.

Justice William Brennan: It was the intent of Congress when it passed the National Banking Act, nationally chartered banks would be subject only to federal regulation by the Comptroller of Currency and the laws of the state in which they were chartered, and that only Congress or the appropriate state legislature could pass the laws regulating them.

This was one of the more important decisions by SCOTUS as it allowed banks chartered in one state to have the same interest rates in other states, offer credit cards nationally, and beat out the bank competition in other states who might be subject to stricter regulations.

At the time Justice Brennan felt congress would act to allow states to have more freedom in regulating banks within their borders by changing the National Banking Act. “This impairment may in fact be accentuated by the ease with which interstate credit is available by mail through the use of modern credit cards,” he allowed. “But the protection of state usury laws is an issue of legislative policy, and any plea to alter [the law] to further that end is better addressed to the wisdom of Congress than to the judgment of this Court.”

Of course, it did not happen. And who said Congress had any wisdom or care for their constituents?

Perhaps, someone can point to another time when Congress has altered the National Banking Act. The only other time I can recall was when Congress repealed Glass-Steagall and altered the National Banking Act to allow Sandy Weil’s Citibank to acquire Travelers Insurance and move into investing on Wall Street.

More recently, Bernie Sanders has introduced new legislation. In the past, Bernie had introduced legislation in 2009 to cap interest rates which went “no-where” quickly. There are probably other Senate or House members who have also attempted to cap interest rates and ran thee banking gauntlet opposing any such change to their usurious interest rates and other charges.

In a joint statement;

“The American people are sick and tired of being ripped off by the same financial institutions they bailed out ten years ago. If we are going to create a financial system that works for all Americans, we have got to stop financial institutions from charging outrageous interest rates and fees.”

Both Senator and Presidential Candidate Bernie Sanders (I-VT) and Congressional Representative Alexandria Ocasio-Cortez (D-NY) are teaming up on a bill to cap credit card and payday loan interest rates at 15%. In some cases, this is 50% lower than what is being offered today for what is termed as riskier loans or short term payday, etc. types.

Moving on and considering other presidential candidates who may have a difference of opinion than Sanders. It is no secret Delaware Senator Joe Biden has been a big supporter of banks since the seventies and has sponsored and helped to put into play many new laws which prevented students from getting relief or declaring bankruptcy to them from the signature loans made to them. When then President Obama spoke out against credit-card lenders calling them “‘outrageous’ and ‘looked forward to reviewing additional legislation that caps interest rates,'” VP Joe Biden was silent on the issue. Joe knew which side his bread was buttered on then and for that matter today also. Constituents can expect no help from Joe Biden.

When a similar bill capping credit card interest rates at 15% was introduced, half of the Democrats joined Republicans in 2009. It lost 60 to 33. This gives you an idea of how deep the politics run between Banks and the conservative Republicans and Democrats. Consider for a moment how long it took for either party to make this an issue or at least one party. Since 1978 . . .

In particular, I am eager to see how Joe Biden responds to Bernie Sanders proposal to cap interest rates. “Biden is more reliant on the kinds of big donors and high dollar events Democratic primary voters frown upon.”

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Iran: An Unfortunate Anniversary And Getting Worse

Iran: An Unfortunate Anniversary And Getting Worse

It was a year ago today that President Trump removed the United States from the JCPOA nuclear agreement with Iran as well as Russia, China, UK, France, Germany, and the EU, under the auspices of the UN Security Council.  According to IAEA inspectors, Iran was fulfilling its part of the agreement, and it has continued to do so up until now as well, despite this unwarranted action by the US, although that may be about to change.  The other signatories have strongly opposed the US action, although it has been supported by Israel, Saudi Arabia, UAE, Bahrain, and Egypt somewhat less enthusiastically.  Nevertheless, the nations opposing this US action have been ineffectual in blocking US actions following up on this.

These actions have involved reintroducing economic sanctions on Iran. Oil exports from Iran have fallen by half since then and are likely to fall further as the US ended waivers on May 2 for a set of nations from the oil sanctions, although reportedly at least China and maybe Turkey will ignore these sanctions.  The decision to end these waivers has been followed by increased volatility in world oil prices.  The sanctions have also been imposed on any businesses operating in Iran, with many large European companies such as Total in France withdrawing from Iran, even as their governments oppose the US actions.  Efforts have been made to establish alternative payment systems, but so far the US effort has had a large effect on reducing foreign economic activity in Iran.  The upshot has been to increase economic problems in Iran, with GDP down by at least 6 percent in the last year as well as the inflation rate rising.

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