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

With Crumbling Bridges and Roads, the Nation is Excited to Build a Giant Wall

WASHINGTON (The Borowitz Report) August 31, 2015: As America’s bridges, roads, and other infrastructure dangerously deteriorate from decades of neglect, there is a mounting sense of urgency that it is time to build a giant wall.

Across the U.S., whose rail system is a rickety antique plagued by deadly accidents, Americans are increasingly recognizing that building a wall with Mexico, and possibly another one with Canada, should be the country’s top priority.

Harland Dorrinson, the executive director of a Washington-based think tank called the Center for Responsible Immigration, believes that most Americans favor the building of border walls over extravagant pet projects like structurally sound freeway overpasses.

“The estimated cost of a border wall with Mexico is five billion dollars,” he said. “We could easily blow the same amount of money on infrastructure repairs and have nothing to show for it but functioning highways.”

Congress has dragged its feet on infrastructure spending in recent years, but Dorrinson senses growing support in Washington for building a giant border wall. “Even if for some reason we don’t get the Mexicans to pay for it, five billion is a steal,” he said.

While some think that America’s declining infrastructure is a national-security threat, Dorrinson strongly disagrees. “If immigrants somehow get over the wall, the condition of our bridges and roads will keep them from getting very far,” he said.

With Crumbling Bridges and Roads, the Nation is Excited to Build Giant Wall

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Newsy Stuff

2018 – The Year of the Complicated Suburb, Amanda Kolson Hurley, CityLab

In the past several years, a much more complex picture has emerged—one of Asian and Latino “ethnoburbs,” rising suburban poverty, and Baby Boomers stuck in their split-levels. 2018 really drove home the lesson of when Americans say they live in the suburbs (as most do), the suburbia they describe are vastly different kinds of places where people of every stripe live, work, pray, vote, and vie to control their communities’ future.

A century and a half after Frederick Law Olmsted laid out one of the first planned American suburbs in Riverside, Illinois, and seven decades after the builders Levitt & Sons broke ground on the ur-tract ’burb of Levittown, New York, we haven’t fully mapped the contours of modern suburbia—not just who lives there and why, but the role that suburbs play in politics and society.

“A continuum of densities” correlates closely to suburban politics. Rural-suburban areas are strongly Republican; urban-suburban places are overwhelmingly Democratic. But sparse and dense suburbs are more divided—and these were the battleground of the 2018 election. On November 6, Democrats picked up at least 22 seats in sparse- and dense-suburban districts. A suburbanite is now twice as likely to be represented in Congress by a Democrat as by a Republican.

Deciding who we throw away, Cassady Fendlay, Medium

“When millions of us showed up to march, there was a prevailing feeling among women of color, especially black women, that the white women who were showing up to march were not really ready to be allies in this fight. They brought signs with fiery quotes from black feminists and reminded us that the suffragettes didn’t want to march with Black women, didn’t care about their right to vote. The image of activist Angela Peeples, looking cynical with a lollipop and a sign about the 53% of white women who voted for Trump, went viral for its perfect encapsulation of this uneasy suspicion of the “well-meaning” white women.

This moment, with Alyssa Milano, is exactly the type of thing black women were expecting. Alyssa is acting in accordance with the tradition of white women who use the labor of women of color when it’s convenient for them, and then use their power to trash those women when it becomes more expedient. Without being invited to speak at all, Alyssa brought up a 7-month-old controversy in an attempt to force women of color to do exactly what she wants them to do. Yet these things weren’t a problem for her last month, when she was posting pictures of herself in D.C. protesting Kavanaugh at demonstrations organized in large part by Women’s March.”

The Year of the YIMBY, Kriston Capps, CityLab

A few weeks ago, Minneapolis made zoning history when its city council endorsed a comprehensive plan that would enable denser housing development across the city. Elements of the Minneapolis 2040 plan still need to be passed into law, so it falls short of an outright ban on single-family housing, as both supporters and critics have described it. But it’s still the most progressive legislative push by any city yet to face up to the affordable housing crisis, and it’s turning heads in Philadelphia, Dallas, Seattle, and other cities.

“Such an ambitious, large-scale overhaul of zoning rules is practically unheard of in U.S. cities, where single-family neighborhoods with their rows of houses set behind landscaped front yards have typically been off the table during discussions of citywide ‘Smart Growth’ and affordable housing,” reads the Los Angeles Times editorial board’s green-with-envy endorsement.

Differences Bernie Sanders versus Elizabeth Warren, David Dayen

I happen to like Elizabeth Warren more so than I do Bernie Sanders. So, if this comes off in a manner favoring Warren, I apologize. As Dayen notes, “Warren and Sanders are hardly identical progressives. They have different approaches to empowering the working class. In the simple terms, Warren wants to organize markets to benefit workers and consumers. Sanders wants to overhaul those markets and take the private sector out of it. This divide, and where Warren or Sanders’s putative rivals position themselves on it, will determine the future of the Democratic Party for the next decade or more.”

The differences I think you can pick up in the New Republic article I linked to so I will not try to detail them here. Again, as Dayen notes the two progressives are on a collision course and could conceivably split the Democratic vote. In Michigan alone during the 2016 election, it accounted for the state voting for a Repub candidate (first time since 1990), low voter turnout, and a historical high vote for Communist and Libertarian candidates. The same occurred in Wisconsin. Pennsylvania is another state which goes Dem in national elections even though pundits cast doubt upon how it will go.

Watch ‘House Hunters’ to Understand Segregation Natalie Y. Moore, CityLab

House Hunters is on in my home as it is a source of entertainment. Other than the Flip or Flop now divorced couple (she remarried [to keep you up to date]), you can expect to see this at night. I kid my wife about both as it is more like watching the soaps and the dialogues sounds too contrived. Who knew, you could redo a complete bathroom for $5,000 and it always takes 7-weeks to remodel the most ancient of homes? Then too the economics of these shows has given rise to a series of other taunting couples searching for homes or flipping houses just as quick as they can. I guess there is money in those shows.

As the author points out in one episode, “a couple, both in their 20s, paid $1 million for a home in a tony (stylish) North Shore suburb with no backyard . . . insane.) Naturally, we viewers are not privy to the Hunters’ bank statements or financial portfolios, although a few Twitter parody accounts take note.”

I guess if you are born halfway up the ladder, you have a much bigger head start in life than many others of which minorities make up a substantial part. The chances of you slipping backwards on the ladder lessen dependent upon where you are on it. The Center for American Progress in “Understanding Mobility in America” discusses the impact of intergenerational mobility and the degree to which the economic success of children is independent of the economic status of their parents. There is a vast racial wealth and income gap which finds that a U.S. family earning the median black household income of $39,466 would be able to afford fewer than half of all homes listed for sale last year in 17 of the country’s 50 largest markets. The show is a reminder of the impact of US policy towards minorities.

SCOTUS Takes up Electoral Map Disputes, Lawrence Hurley, US News

Partisan gerrymandering is becoming more extreme with the use of precision computer modeling to the point that it has begun to warp democracy in certain states by subverting the will of voters.

June 2018 and SCOTUS failed to issue definitive rulings in cases from Wisconsin and Maryland which election reformers hoped would prompt the high court to crack down on partisan gerrymandering.

In the case in North Carolina, Democratic voters accused the state’s Republican-led legislature of drawing U.S. House of Representatives districts in 2016 in a way that disadvantaged Democratic candidates in violation of the constitutional guarantee of equal protection under the law. A lower court sided with the Democratic voters.

In order to assure reasonable Congressional Districts to eliminate packing and the deliberate construing of boundaries to give one party an advantage over the other, the Congressional Districts will still have to be gerrymandered as they are too large.

Dollar Stores Tanvi Misra, CityLab

“While dollar stores sometimes fill a need in cash-strapped communities, growing evidence suggests these stores are not merely a byproduct of economic distress,” the authors of the brief write. “They’re a cause of it.”

Like Walmart before them, these retailers present themselves as creators of jobs and sources of low-cost goods and food in “left-behind “areas—both urban and rural. The 2008 recession bolstered their numbers, simultaneously restricting the resurgence of traditional grocery stores and swelling the potential customer base. Middle-class shoppers started frequenting these stores. In 2009, the New York Times picked up on the trend: “Those once-dowdy chains that lured shoppers by selling some or all of their merchandise for $1 are suddenly hot.”

Restaurants are Scrambling for Cheap Labor, Leslie Patton, Bloomberg

In 2019, it is expected fewer teens will be in the workforce reducing the number of job seekers for low-wage work. Due to the shortage they are helping raise the pay rates needed to woo those who are. Minimum wage increases for lower-skilled workers at companies such as Amazon.com, Walmart, and Target have made it more difficult for restaurants to compete for talent and forcing them to try everything from social media campaigns to quarterly bonuses to entice applicants. “The last 18 to 24 months, it’s been very competitive, no matter what time of year.”

Bjorn Erland, vice president for people and experience at Yum Brands Inc.’s Taco Bell chain. “I don’t think it’s going to ease up much just because the holidays are over.”

Why Not Hold Regular Union Representation Elections? , Andrew Strom, On Labor

Citing polls (NLRB) showing many non-union workers would like to have a union at their workplace, each year only a tiny fraction of workers get a chance to choose whether or not they want union representation.

When the Obama NLRB modernized the Board’s election rules and eliminated some unnecessary delays, employers characterized the result as “ambush elections.” The companies insisted they would no longer have enough time to wage their anti-union campaigns.

The NLRB found substantial evidence that employers are generally aware of union organizing drives long before an election petition is filed. A solution as Samuel Estreicher and Michael Oswalt have previously suggested and to give even more notice is to hold regularly schedule representation elections the same way we regularly schedule elections for political office. There is no magic number to how often the elections should take place, but every three years might be optimal. The elections would occur both at unionized and non-union facilities.

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Asking the Wrong Questions: Reflections on Amazon, the Post Office, and the Greater Good

The author of this post which was published in April 2018 on Save The Post Office is Mark Jamison, a retired North Carolina Post Master. From time to time, I have featured both Marks and Steve’s post office advocacy on Angry Bear. Steve is a literature professor who teaches “place studies” at the Gallatin School of New York University. One of these days I will visit Mark in the mountains of North Carolina.

“If they can get you asking the wrong questions, they don’t have to worry about answers.” — Thomas Pynchon, Gravity’s Rainbow

I have not written or said much about postal issues for the last couple of years. After seven years of writing articles for Save the Post Office and other websites, as well as contributing numerous comments to the Postal Regulatory Commission, what more was there to say?

I spent thirty years of my working life at the Postal Service. I’ve put in countless hours reading USPS reports, OIG reports, GAO reports, and who knows how many pleadings before the PRC. I have written numerous articles about the general idea of the postal network as an essential public infrastructure, the arcane minutiae of postal costing and the actions of the PRC, and the machinations of a Congress that seemed more inclined to bloviate and posture than attempt to solve a serious problem affecting millions of Americans and thousands of communities, large and small, rural and urban.

I never stopped thinking about these issues, but what more was there to say? And why bother, really, when the politicians and managers that could actually make changes seemed inclined to let inertia and the status quo slowly erode the capabilities of the postal network while degrading hundreds of thousands of good middle-class jobs?

And then President Trump had one of those brain farts he periodically shovels out over Twitter.

Motivated by his dislike for Jeff Bezos — who has far more money than Mr. Trump will ever have or imagine having and who also owns the Washington Post, which tends to say things that are not particularly complimentary of Mr. Trump and his Alphonse-and-Gaston act as president — the president let forth a blast about how Amazon was ripping off the Postal Service.

It was obvious from his Tweets and subsequent comments Mr. Trump did not have a clue about postal policy, let alone any sort of command of the details. Then again, when the president speaks, people tend to listen. And, as the English poet William Cowper once observed, “A fool must now and then be right, by chance.” (Here in the mountains of North Carolina we might say that even a blind hog finds an acorn once in a while).

But was Mr. Trump right about Amazon? A good many folks in the media wanted to know, since if the president says it, it may not be true but it is certainly news.

As it happens, I had written a number of pieces here on STPO specifically about Amazon’s Negotiated Service Agreement with the Postal Service and about package costing and pricing methods in general. In 2013, I also filed a motion with the Postal Regulatory Commission seeking access to the non-public materials in the PRC docket approving Amazon’s NSA. Both the Postal Service and Amazon immediately filed comments opposing my request.

Not content with making an argument for why the NSA should remain secret, Amazon went on to disparage me personally by quoting my articles on Save the Post Office. Amazon observed that I had written that the “postal rate system has become a morass of embedded privilege,” business mailers “are doing fine,” and the Postal Service is a “wholly owned subsidiary of Mailers Inc.” I had also opined, noted Amazon, that PMG Donahoe lied in recent testimony to the Senate, and “Donahoe and the [Board of Governors] have demonstrated an unrestrained contempt for Congress, the rule of law, and most importantly, the American people.”

For what it’s worth, the PMG did give “misleading testimony, and later said he “misspoke.” Everything else I wrote about the rate system, the mailers, and the BOG was true, too. Not that this should have had anything to do with the PRC’s decision not to allow me to see the Amazon NSA it had approved

Anyway, Google being what it is, my pieces about Amazon and the post office showed up in searches, and a few intrepid or at least curious reporters contacted me with questions.

I should give those reporters credit for caring enough about their work to attempt a thorough job. While some of them just wanted a simple answer to, “Is Trump right or wrong?” a couple of these reporters really did want to understand the issues that were involved. Rather than go with a Citibank report that was seriously flawed both methodologically and factually (which just goes to show that highly paid financial analysts writing for elite firms are just as prone to self-delusion and tipping the scales towards their preferred narrative as the rest of us), there were at least a couple of outlets that made the effort to dig beyond the headlines.

The problem is that even the more thorough journalists were asking the wrong questions. Their questions were based on an ingrained narrative about the post office. And, as has become the case in much of our political dialogue, the narratives that prevail and the agendas that drive them originate not from a broad civic space balancing the interests of the American people but from relatively narrow interests. As discussed in a recent post here on STPO about postal retirement and benefit liabilities, it is these agendas that tend to drive the policy prescriptions.

In 2015 I wrote a piece titled “When Titans Collide: UPS petitions the PRC to change USPS costing methodologies.” The piece examined a year long attempt to gerrymander postal costing and pricing systems in ways that best served those in the mailing and package delivery industries. Some of the players have changed over the years as the mail mix has changed, but the goal remains the same – find a way to defenestrate the Postal Service.

The piece looked at the issues that were at the crux of Mr. Trump’s complaint – the Postal Service wasn’t charging enough and it was making “bad deals.” I looked in detail at some of the costing and pricing methods and tried to engage those specific arguments. But the heart of the matter was that the Postal Accountability and Enhancement Act, the 2006 law that in many ways governs the operation of the Postal Service, had set up an impossible and counterproductive environment that failed to recognize the value of the postal network as an essential national infrastructure.

PAEA had many aims but good policy wasn’t really the focus. After decades of trying to fit the Postal Service into a box it was ill-suited to occupy — that of simply another mailing business rather than an infrastructure — PAEA took a big step in the direction of privatization. By separating postal products into market-dominant and competitive categories and by creating a rate mechanism designed more to satisfy mailing interests than create and sustain a reliable and ongoing postal network, PAEA set up a system that would engage a lobbyist’s feeding frenzy. Other provisions of PAEA were designed to lead to the elimination of postal jobs by saddling the Postal Service with unwarranted and punitive liabilities for its retirees. Though the legislation was filled with all manner of technical provisions, it was largely ideological.

After examining all the arguments in the PRC docket on costs and prices, all the briefs and studies presented by the Postal Service, UPS, the PRC’s Public Representative, and various stakeholders, I came to the conclusion that we had lost the forest for the trees. We had lost sight of the big picture in the sense that the ideas of universal service and access became wholly secondary considerations. We were no longer discussing the broadly-based concerns of national infrastructure. Instead, we had waded into a swamp of special interests where every group of mailers sought the best and highest advantage.

I sent a link of the Titans piece to the journalists who called wanting to understand the current kerfuffle created by Mr. Trump’s comments. I suppose it’s immodest of me to include the response I got from one of the journalists, but I will because it makes a greater point. After reading the piece he e-mailed: “I think this is probably the most insightful and brilliant blog post that synthesizes a generation of (misguided) political thinking and explains how that altered the trajectory of the USPS.”

He said some other nice things, went on to thank me for spending an hour and a half on the phone with him, and then continued to call and email with more questions. But despite my efforts to get him to look at the big picture, he kept coming back to the issue of whether or not the Postal Service could and should be charging more for Amazon packages and if other mailers were also getting sweetheart deals.

So there we were, back to talking about the wrong questions.

What we should have been talking about is how to preserve an essential national infrastructure that connects every American while providing good solid middle-class jobs with salaries and benefits that sustain families and get spent in local communities, an infrastructure that provides affordable rates that benefit American consumers and businesses.

Instead we were arguing about whether charging more for packages would make the Postal Service more profitable and whether big companies like Amazon ought to be paying more, while neglecting to factor in that most increases in package prices would simply be passed on to consumers while allowing UPS and FedEx more freedom to raise prices.

At this point I thought that maybe I was missing something, so I went back and looked at a couple of PRC dockets and recent Annual Compliance Determinations, which review how well the Postal Service is fulfilling its general legal obligations. I also looked at a recent docket on costing methodologies, a subject UPS has repeatedly sought to litigate even though they have never made a credible case the methodologies currently in use aren’t reasonable. Most particularly I looked at RM2017-1, the PRC docket that reviewed the level of institutional contribution that competitive products had to make. This was the one area where I thought UPS had at least a reasonable point in its 2015 filings.

After reading a few hundred pages of legalese and lobbyist pleadings and maneuverings, I came to the conclusion maybe Macbeth had a point, this was all sound and fury signifying nothing. (Macbeth’s greater point is that it still ends in death.)

But Mr. Trump Tweeted.

Recalling Mr. Cowper’s admonishment that a fool could be right and still be a fool, I thought maybe we should look for some validity in his Tweet. Mr. Trump seemed to be making two points. First, the Postal Service was making bad deals, and second that Amazon was destroying retail across America. Let’s take the second one first: Is Amazon destroying local retail?

Maybe, perhaps probably, but that’s not a new phenomenon. Before there was Amazon there was Wal-Mart. In 2006 Tom Slee wrote a wonderful little book titled “No One Makes You Shop at Wal-Mart: The Surprising Deception of Individual Choice.” Slee uses game theory to demonstrate that the cumulative total of what appears to be a series of rational choices by individuals turns out to have a vastly negative aspect for local communities.

Actually, it’s not a new idea. Back in the 1930’s, Keynes made the same observation in describing what he called “The Paradox of Thrift.” Keynes noticed that in an economic downturn, individuals make the rational choice of spending less and saving more. If the economy is sour, it’s better to be conservative than a spendthrift. That makes a lot of sense for the individual, but when lots of individuals make that same perfectly rational decision, the end result is that consumer spending dries up, which makes the downturn even worse.

Slee’s updated version of Keynes’s insight is that people rationally value low prices. They also have preferences for nice communities, for vibrant downtowns, and a healthy local business sector. But in most cases those other preferences are somewhat indistinct or at least not entirely obvious.

What is obvious is that saving a few cents on a loaf of bread is a good thing. And while many of us valued wandering around the local grocery market and hardware store, talking to the local owner who probably knew a little bit about a lot of things, we also value the convenience of one-stop shopping. It’s just convenient to be able to look at that new drill in the same store where I’m doing my grocery shopping, and the fact the new drill costs a few dollars less doesn’t hurt.

So lots of folks make the perfectly rational decision to shop at the big box everything store because it’s convenient and cheaper. Oh maybe a few diehards make a conscious effort to give at least some business to local retailers, but margins are slim for local businesses, so the loss of a few customers makes a big difference. So one day we wake up and that vibrant local downtown suddenly has several vacant stores. And because Wal-Mart is big, it can exercise economies of scale like squeezing suppliers for lower prices. And as local retail businesses die so do jobs, which gives Wal-Mart more power in dictating wages.

One day we wake up and those cheap prices we rationally valued have cost us a lot of elements that we valued in our community. Things seem to tilt towards the lowest common denominator. The end result filters through all parts of the community. There’s been no end of reporting on how Wal-Mart instructed employees how to apply for food stamps or Medicaid or other benefits since they didn’t make enough to afford the basics. On balance local tax revenues may suffer. Perhaps the hardest things to measure are the damages to the quality of life and community cohesion.

Amazon is Wal-Mart writ large for the internet age. Amazon started out selling books, but now it calls itself “The Everything Store.” More importantly Amazon is much more than a retailer. It’s a logistics company. Jeff Bezos has simply used retail to generate the revenues to build a vast network of warehouses and backroom data support services. Amazon has a presence in nearly every sector of the economy.

It appears that we love it too, or at least the stock market which, unfortunately, seems to be the gauge by which we measure the success not only of the economy but of our communities and lives. The last I looked Amazon’s P/E ratio was nearly ten times higher than that of the average of the market generally. That means that investors value the company so much that the price of its stock is at historically high multiples of earnings.

Is Amazon killing American retail? Probably, but as Tom Slee might point out, no one makes you shop there.

That brings us to Mr. Trump’s other complaint, that the Postal Service is making terrible deals. Maybe but maybe not. If he’s basing that argument on the fact that the Postal Service is losing money, it’s important to remember that the Postal Service was designed to lose money. It is intentionally built to shovel funds back into the Federal budget, not through profits but from accounting trickery that saddles it with excess liabilities.

By all measures the package business that Mr. Trump focused on is adding to the bottom line with regularity. It’s also important to remember that the Postal Service has only about a 16% share of the package delivery market. It really isn’t in a position to dictate prices.

Much of the noise that followed Mr. Trump’s Tweets seemed to ignore the fact that forcing the Postal Service to charge more for packages would give its competitors, UPS and FedEx, an excuse to raise their prices. In the end, consumers would end up paying higher prices. Plus, forcing the Postal Service to charge more for packages would not only violate the basic market principles it has supposedly been designed to serve but also the structure of the free market itself.

We’re asking the wrong questions and it’s not because we’re stupid. We’re asking the wrong questions because those are the questions a large part of corporate America and the financial elites want us to ask. Mr. Trump got elected by sleight of hand – promising this and doing that – and that’s exactly what is happening with respect to the Postal Service.

So what are the right questions?

First of all, if competition is so important, why is 85% of the package delivery market controlled by two companies? Why aren’t the FTC and the Anti-Trust division of the Justice Department paying attention to this?

Do we value good jobs, local communities, and quality of life? Or do we value low prices more than anything else? If Amazon is too big and powerful, if it’s doing the same thing to local retail that Wal-Mart did a generation ago, then perhaps we should be asking ourselves what it is we really value.

Are we being given an honest accounting of the consequences of government policies? Why, given that 94% of the American public favored some form of protections for Net neutrality, did the FCC ruled in favor of monopoly providers? After a tax cut that was supposed to encourage more investment in the economy and higher wages for workers, why are we just seeing more stock buybacks? And are we going to have to pay for those tax cuts and avoid crippling deficits by cutting the wages and benefits of workers and further eviscerating the safety net?

Do we value the institutions that leveled the playing field and brought to millions of people the benefits of an economy that worked for the many and not merely the few? Do we value essential infrastructures like the postal network?

And finally, this. Are we content to play the duped mark in an oligarch’s confidence game? Are we going to watch valuable public assets and healthy public spaces and public participation in the economy get shuffled around in a game of three-card monte when the winner can only be the entitled elite?

(Mark Jamison is a retired postmaster. His articles on Save the Post Office can be found here, and the comments he’s filed with the Postal Regulatory Commission are listed here.)

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Merry Christmas

Back down from the mountains where it was snowing yesterday, a silent beauty. Sitting in my daughter’s kitchen drinking a cup of Keurig manufactured coffee. The household is quiet as I think about the events of the last months and attempt to pen a few words.

Washington is still shut down and one man pouts. Thousands of people suffer the impact of a hurricane in Puerto Rico, floods in the South, and wild fires in California due to our impact upon the environment. Legislatures in Wisconsin, North Carolina, and Michigan are still trying to steal an election from the voters. There is no peace amongst the peoples of this world and many live in poverty.

If this message finds you more fortunate than those around you or others in the world today, it is Christmas today and a time to give of yourselves in celebration of this day. Peace to you and family and I hope this note finds you good in health and prosperous.

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Man of The Year

“WASHINGTON (The Borowitz Report)—Capping an extraordinary 2018, Donald J. Trump announced on Thursday that he had been named Man of the Year by the terrorist organization known as ISIS.

Trump made the announcement after receiving the news from the leader of ISIS, Abu Bakr al-Baghdadi, whom Trump called ‘a terrific, fabulous guy.’

‘I got along great with him, and he said a lot of nice things about me,” Trump said. “He said ISIS didn’t even consider anyone else.’

Trump, who is expecting to receive an official Man of the Year plaque from ISIS in the next few weeks, said that the award ‘came as a total surprise to me.’

‘It’s a particularly impressive honor when you consider ISIS was co-founded by Hillary and Obama,’ he said.”

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Neoliberalism as Structure and Ideology

Neoliberalism as Structure and Ideology

As someone who has looked at the world through a political economic lense for decades, I am restless with the “cultural turn”.  Once upon a time, it is said, the bad old vulgarians of the left believed that economic structure—the ownership of capital, the rules under which economies operate and the incentives these things generate—were everything and agency, meaning culture and consciousness, were nothing.  The latter was sometimes claimed to be derivative of the form.

Then we had a cultural turn.  Now it seems it’s all about consciousness and ideology, of which economic structures are a pale reflection.  Neoliberal ideology is said to have seeped its way into the heads of intellectuals, journalists and politicians—perhaps even the public at large—and this explains things like deregulation, privatization and the ubiquity of outsourcing and global value chains.  It’s even possible to have 500-page treatises about the failures of capitalism that make no reference at all to the empirical structure of the economy, only modes of thought, as I point out here.

According to this view, the various failings of our society, from the inability to act on climate change to mass incarceration to the imposition of market logic on higher education, all converge as consequences of neoliberal hegemony.  But what is neoliberalism?  It is usually described as a philosophy, born sometime between the fall of the Hapsburgs (Slobodian) and the postwar convening of the Mont Pèlerin Society (Mirowski et al.), and surely there is truth to these well-documented accounts.  But should we understand the past four decades or so as primarily the product of a sea-change in thought, the end result of these precursor currents?

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The Gender Pay Gap

The most recent year for reported year-round earnings data available for full-time workers revealed the gender earnings gap to be 20 percent between men and women or said a different way women earned 20 percent less than men (Hegewisch 2018).

The earnings gap between women and men has been measured (in the past) by taking a snapshot of both genders who have worked fulltime year-round and in a given year. Reviewing a 15-year period from 2001 through 2015, The Institute for Women’s Policy Research examined the different labor force experiences of women and men. The report “The Slowly Narrowing Gender Wage Gap” showed 28 percent of women and 59 percent of men worked consistently full-time, year-round between 2001 and 2015.

In previous reports, it has been stated women earn 80 cents to every dollar a man would make which understates the pay inequality issue for women. Looking only to full time women labor leaves many of them out of the picture when compared to men. Some of the highlights coming out of this study:

“Women today earn just 49 cents to the typical men’s dollar, much less than the 80 cents usually reported.” Total earnings are measured across a 15-year period for all workers, not just full time workers, and who have worked at least one year. Earnings for women were 49% of the earnings for men in 2015. Over the 15-year period, progress or gains in salary for women versus men has slowed when compared to the previous 30 years.

“The cost of taking time off from the labor force is high.” Women taking one year off from work resulted in annual earnings 39% less than women who worked the 15-year period. When compared to a 15-year period starting in 1968 the 2001 through 2015 period saw a 12% decrease in pay. Men were also penalized; but, it was not to the same degree as women much of the time.

“Strengthening women’s labor force attachment is critical to narrowing the gender wage gap.” At nearly twice the rate of men, 43% of women had at least one year off with no earnings over the last 50 years. Polices such as paid family and medical leave and affordable child care can help woman participation rate improve and men to share unpaid time off.

“Enforcement of equal employment opportunities and Title IX in education is critical to narrowing the wage gap.” Enforcement would assist women in gaining access to those higher paying fields which are now off-limits and has been for decades.

Expanding policies and programs to other parts of the country beyond what a few states have done or adopting national policies could help close the comprehensive, long-term earnings gap in the United States and equalize women’s pay with men’s across the lifetime.

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100 Percent Of US Senate Against MBS

100 Percent Of US Senate Against MBS

Wow. Sometime ago here, I called for Crown Prince of the Kingdom of Saudi Arabia, Mohammed bin Salman bin Abdulaziz al Sa’ud, (MbS) to be rmoved from his position. How he is punished beyond that for his crimes, I do not care, especially as I think being prevented from becoming the King of Saudi Arabia will be for him the worst punishment.

So for once the US Senate agrrees with me, 100%, really. Hey, I have to cheer such an event that has never happened brfore and probably will not again. Yay! The US Senate has voted 100% to declare that MbS is guilty for ordering the murder of Kamal Khashoggi. They are right. He is guilty guilty guilty.

He needs to be removed, and the sooner the broader Saudi royal family figures this out and moves to replace him, the better, really, for the world as a whole, given the ongoing important role that nation plays in the world economy worldwide. It is clear thart he came to power thanks to Jared Kushner and the Trump admin, who supported his coup removal of his predecessor, Mohammed bin Nayef bin Abdulaziz al Sa’ud, who was deeply respected by US mil-intel apparati. MbS had become Defense Sec and was able to send his guys to MbN’s palace and imprison him until he gave up and let MbS replace him as Crown Prince. None of this would have happened without Trump and Jared Kushner approving of it, which they did.

 

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Department of Education to Cancel $150 million in Student Loans

CNN, Thursday: The Department of Education will implement a rule known as the Borrower Defense to Repayment created during President Obama’s Administration and blocked by Secretary of Education Betsy DeVos in 2016. The rule or regulation grants federal loan forgiveness automatically for students who could not complete their education due to the schools shutting down before their education was completed while they were enrolled. Unfortunately students are not eligible if they moved to another school to complete their education. The later part sounds ridiculous to me as a fraud is a fraud regardless of where you end up. Anyway, it is a partial victory for a minority of students caught up in the bad student loan environment. Given the magnitude of the issue, more than 1,400 schools closed between 2013 and 2015 stranding many students with excessive loans and an incomplete education by for-profit schools. 15,000 former students are impacted by the court’s ruling and mandate to complete the forgiveness process.

The Michigan Queen of For-Profit Charter Schools who also draws on the local taxes to pay for the unaudited costs of the schools blocked this rule when she took office giving For-Profit so called colleges and mostly bankrupt a chance to challenge (why?) the ruling. 18 states and the District of Columbia took exception to Betsy and the Department of Education blocking the relief to students defrauded by colleges. The Judge ruled in October against the Department of Education, Betsy, and the For-Profit College industry. In December, The Department of Education decided to begin the debt cancellation process and not appeal. The cancellation will take 30 to 90 days to complete or 3 -6 months over all from October 2018? How quick they move.

Meanwhile Ms. DeVos through a spokesperson says: “she ‘respects the role of the court’ but still believes that many provisions in the Obama rule are ‘bad policy.’ The department will continue the work of finalizing a new rule that protects both borrowers and taxpayers.”

Ms. DeVos is promoting a new rule which would proportion the amount of education received from the school against the cost of a completed education and also compare it to earnings of those who completed their education. She conveniently forgets, no completion, no earnings at that level acquired from a complete education. Her comment justifying such actions moves from talking of “saving taxpayers money” to talking of “saving the government money.” Anything to pay down the deficit created by this administration.

Another hypocrisy, bankruptcy protection for business, Trump, and individuals but little or no protection for students.

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Heads Up on Out of Network ER Doctors, etc. in 2019

Last December 2017, Envision Healthcare Corporation paid an approximate $30 million to settle allegations for subsidiary EmCare doctors getting bonus payments for admitting patients to hospitals when it was not necessary.

History:

A subsidiary of Envision, EmCare is a provider of physician services to emergency departments, inpatient services for hospitals, acute care surgery, trauma and general surgery, women’s and children’s services, radiology / teleradiology programs and anesthesiology services. If you have ever been hospitalized, Radiology is one service which always seems to have someone other than the hospital billing you. One study of billing practices of 194 hospitals in which EmCare handled billing and was out-of-network; the average out-of-network billing rate was 62% higher than the national average of 26%. When EmCare’s billing was compared to that of a competitor TeamHealth, the latter’s billing in other hospitals was less and there was a smaller increase in out-of-network service billing.

If you remember a while back, Rusty and I would discuss the ongoing consolidation of hospitals, clinics, and pharmacies. The reasoning behind the consolidation was to have enough market clout when negotiating with insurance and Medicare. Having a larger presence and being able to set pricing nationally and regionally is a big factor in the rising cost of healthcare.

Envision is the biggest player in staffing ERs and Anesthesiology departments with 6% of the $41 billion emergency department and hospital-based physician staffing and 7% of the $20 billion anesthesiologist staffing. Two-thirds of all Emergency Departments (ED) do some type of outsourcing even if it is short term.

Present:

United Healthcare insurance is pitted against Envision’s practice of over pricing for it’s 25,000 emergency doctors, anesthesiologists and other hospital-based clinicians charge to patients and pass through. The disagreement over pricing and how it is paid for by insurance as billed by 3rd party providers will spill over into patients being billed more frequently for higher prices not accepted by insurance.

UnitedHealthcare’s 27 million privately insured patients could face expensive and unexpected doctor bills as of 2019 if Envision doctors become out-of-network for United Healthcare. According to the research group NORC at the University of Chicago more than half of Americans have received an unexpected medical bill. In another study by economists from the Federal Trade Commission in 2017, 1 in 5 emergency-room admissions resulted in a surprise out-of-network bill.

While the ACA increased the numbers of people insured, approximately 20% of people have problems paying medical bills largely because healthcare is still rising faster than most other costs and income. One source of increased costs has been the billing from out-of-network doctors billing patients utilizing in-network facilities such as hospital Emergency Departments. NEJM recently published a Yale Study by Zack Cooper, Ph.D., and Fiona Scott Morton, Ph.D. (Out-of-Network Emergency-Physician Bills — An Unwelcome Surprise) reported on the increased occurrence of surprise-billing for out-of-network services.

Patients typically do not choose to use out-of-networks doctors or facilities. They will choose an in-network facility and expect an in-network doctor(s) to care for them. Healthcare insurance expects its buyers to use in-network services or pay a penalty for not doing so. When one arrives at an in-network Emergency Department, they expect to be cared for by an in-network doctor. I have yet to hear a doctor on duty offering up he or she is not employed by the hospital but instead by a third party. The patient is not aware of in-network or out-of-network issues until they get the bill. The market place is not working for the customer and the doctor still gets the business regardless of the price and there is no competition from other facilities or in negotiated pricing due to having insurance. The third party employer knows this issue as well as the hospital. The only fool in the room is the patient waiting to be cared for and be used. Insurance will pay a portion of the cost or negotiate with the hospital for a price. The third party company employing the doctor may yet charge the patient for the balance of the costs associated with the doctor and at a higher percentage than normal. The uncovered and unexpected higher cost is the rub.

The authors of the Yale study analyzed the claim’s data of a large commercial insurance company insuring tens of millions of people, focusing on ED visits for people under 65 years of age, occurring between January 2014 and September 2015, and at hospitals registered with the American Hospital Association. They chose hospitals with over 500 ED visits and identified the Hospital Referral Region (HRR). Utilizing the breakdown criteria yielded “more than 2.2 million ED visits Broken in 294 of the 306 HRRs, covering all 50 states, and capturing more than $7 billion in spending.” The map of the United States (above) is a pictorial representation of the data.

Summarizing their finding and estimating cost impact, Yale: “of the 99.35% of ED visits occurring at in-network facilities, 22% involved out-of-network physicians. The greater than 1 in five ratio (22%) masks a significant geographic variation in surprise-billing occurrence to patients among HRRs. 89% and 62% of surprise-billing rates occur in McAllen, Texas and St. Petersburg, Florida as compared to Boulder, Colorado and South Bend, Indiana with the surprise-billing rate there near zero.”

Envision questions the validity of the study and blames United Healthcare for not paying the billing and claiming insurance is the problem. Insurance coverage is a problem; but, it is not of the same magnitude when one starts to look at the increase in costs of $1 trillion from 1996 to 2013 of which 50% was due solely to price increases.

Additional Costs?:

And yes there are “potential” extra costs for patients who are treated by an out-of-network ER physician or any out-of-network service. In one hospital I was in, Radiology was out of network as well as one surgeon. Both negotiated a rate with United Healthcare. Then too, this was written into the ESI policy. I had no choice in doing in-network as I came through the ER each time and was too ill to decide and/or go to another hospital.

In a Kaiser/New York Times Survey: Among the insured with problem medical bills, a quarter (26%) said they received unexpected claim denials and about a third (32%) say they received care from an out-of-network provider that their insurance wouldn’t cover. The out-of-network charges were a surprise for a large majority: 69 percent were unaware that the provider was not in their plan’s network when they received the care.

The same NEJM/Yale study which had looked ay frequency of surprise Out-of-Network Emergency-Physician Bills also looked at the costs of the bill and what was left over for patients to pay. On average, in-network emergency-physician claims were paid at 297% of Medicare rates. For reference in the Yale study, the authors used other medical disciplines as a benchmark. Orthopedists are paid at 178.6% of Medicare rates for knee replacements and internists are paid at 158.5% of Medicare rates for routine office visits. The Yale study showed out of-network emergency physicians charged an average of 798% of Medicare rates resulting in a calculated, potential, and additional cost for patients. The difference between the out-of-network emergency physician charge and 297% of the Medicare rate for the same services in the patient’s location could be billed for an average balance of $622.55 (unless their insurer paid the difference). It is also important to note that the potential balance bills can be extremely high; the maximum potential balance bill faced by a patient included in our data set was $19,603.

The suggested solution from the study was for states to require hospitals to sell a bundled ED care package that includes both facility and professional fees. In practice, that would mean that the hospital would negotiate prices for physician services with insurers and then apply these negotiated rates for certain designated specialties. The hospital would then be the buyer of physician services and the seller of combined physician and facility services. If physicians considered the hospital’s payment rates too low, they could choose to work at another hospital.

The hospital, doctors, and the insurance companies would compete for the best package to service the patients utilizing them. In the end, this is a stopgap measure until healthcare costs can be brought under control in a better manner.

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