Business & Economy

I have tried to warn young people and their parents.

Not only do they not want to hear it, they make excuses — like “oh, I can work for the government for 10 years and no matter how much I rack up in loans they’ll forgive it.”

That appears to be going away:

Trump is making good on Republican campaign promises to get government out of the business of student lending, and recently lifted limits on fees debt collectors can charge some defaulted borrowers. The Washington Post has reported he will propose major changes to loan repayment in his forthcoming budget, including eliminating a program that erases student debt for public-sector workers after 10 years of payments.

As I said several years ago in this column: If you in any way encourage or enable your young adult to take on this ball and chain, given that there is no way they have the life experience to understand what they’re agreeing to in full and how badly they can and will get screwed you deserve to be eaten by your progeny if they get screwed as a consequence — and they’re at least somewhat likely to have exactly that happen.

The only answer to the high college cost problem is to remove all government supports and “enhanced” treatment of such loans so they are fully able to be discharged in a bankruptcy just like any other consumer or business loan.

That would instantly collapse the cost of college because nobody in their right mind would lend someone $100,000 to get a degree in social services or similar.  Ever.  But no!  Instead of collapsing the cost of college by 80% you keep arguing for more and more “loan access” instead.

Oh, and if you own a house today and are expecting to sell it to a millennial some day?  Forget it — they won’t have any money or credit to buy it with which means that even if you have either no children or they didn’t get screwed like this you still have every reason to demand that the right thing be done and if you don’t then you deserve the outcome when it occurs.

First appeared at Market Ticker.

The topic line says it all.  It’s the way both sides of the political aisle shut down discussion on any particular topic they don’t want to have a civilized debate on, especially when money is involved and someone’s scamming someone else.

Take the abortion issue generally.  What always comes out at a pro-life march?  Photos of an aborted fetus.

Why? Because it’s guaranteed to nail the emotional response button and as soon as you accomplish that rational debate and discussion on any public policy matter ends.

Where did it start this time?  With a TV host who made an issue out his newborn kid that had a congenital problem and required immediate and very expensive surgery to correct.  He waved the aborted fetus picture and got Obama to chime in immediately on Obamacare and the AHCA.

Then I had a guy who ran that same crap in my thread on my reform bill proposal.  I banhammered him and explained why — that I simply will not tolerate the waving of “aborted fetus pictures” on any topic here and his was one of the most-egregious examples I’d seen in my time writing The Ticker.

So let’s analyze the root of these issues in the context of health care, without waving said pictures around.  Be warned, however, if you choose to comment: I don’t do the aborted fetus thing and if you try it you’ll get banhammered too.  Keep the discussion on policy rather than trying to play the “emotional” game and you’ll be fine.

These issues all turn on what are called “pre-existing conditions”, for the most part.  All of them are very expensive in our current medical system.  About 5% of the population have them in the most-serious (expensive) form at any given point in time but up to a quarter of the population has them in some form or fashion in a means that may not be ruinously expensive now but it will be later.  For the purpose of health insurance how you wound up in that 5% or 25% does not matter — only that you are if in the 5%, or are very likely if in the 25%.  The former will preclude you from being insurable under any rational system because the probability of the bad event is 1.0; it already happened.  The latter will radically increase the cost of being insurable under any rational system because the probability of the bad event approaches 1.0; that is, while it didn’t happen yet it is nearly-certain to do so.  Think of the latter case as being similar to trying to buy house insurance while under a hurricane warning — there’s no guarantee you will get trashed but no insurance company will ever write such a policy because the risk of damage is so high that they’d be crazy to do so.

These issues come in three basic forms distinguished by how and why they occurred.  Let’s enumerate them:

  • Chronic and expensive conditions that are a result of either lifestyle choice or bad luck and which can be relieved or eliminated through a lifestyle change.  Type II diabetes is the poster child for this group and I’ve written an article on the issue called “The Low-Hanging Fruit” for that reason.
  • Chronic and expensive conditions that are a result of lifestyle choice but cannot be relieved through lifestyle changes after the fact.  There are a huge number of conditions for which this applies, including drug or alcohol abuse that has resulted in severe body malfunctions (e.g. cirrhosis, cancer, etc), lung cancer, emphysema, heart disease or strokes as a result of smoking, HIV contracted due to consensual anal sex or IV drug use, the majority of cases of Hepatitis-C (same) and more.  These are all disorders and diseases for which the person involved was responsible for the condition but can’t fix or materially improve it by changing their lifestyle now, although they certainly could prevent or reduce future harm were they to cease whatever they were doing.
  • Chronic and expensive conditions that are the result of bad luck.  We all get one draw at the genetic lottery.  Some of us get a great draw, most of us get an “ok” draw with a few bad spots mixed in, and some get a really crappy draw.  The kid born with hemophilia, a genetic heart defect, Down’s — all are examples.  There are plenty that come along later in life too although many are not obvious.  It used to be that virtually anyone with periodontal disease or a high cavity rate (leading ultimately to root canals and tooth loss) was accused of failing to brush and floss.  We now know that’s false; a huge percentage of the people who have such problems in fact got a bad genetic draw and even with perfect oral hygiene they’re likely to have major problems down the road.

I separate this into three subdebates for a reason, but as a group all three of these are something that a large percentage of the population — somewhere around one quarter of all persons in the country — will fall under at some point in their life, with about 5% of the population under the most-severe (in terms of expense) forms of one of the above in the present tense.

The basic issue with all three is that all are flatly unaffordable under our current medical system.  None are “acute” situations (e.g. a broken leg, a car accident, etc.)

There is a further division found in the latter two of the above categories — whether there is any rational expectation that the condition, even with the most-aggressive treatment, will ever be remedied.

For a huge percentage of the sufferers in the second two categories the answer is no.  If you have MS you will always have MS.  You might control it, at least for a while, but it will never go away.  The same is true for the person with Downs; they will always have Downs.  Ditto for hemophilia.  There are many such disorders and diseases; hell, even Lyme can fall into this category and while many cases are preventable not all are.

One person with such a disorder who goes to work for the hypothetical company with 100 employees can destroy the salary prospects for everyone who works there permanently.  Take the person with MS that has a $70,000 drug they need to take to control their condition.  If they’re hired by an employer with 100 employees that person will literally steal about $1,000 a year from every other employee in the firm for as long as they work there.  Why?  Because with overhead that $70,000 drug is about $100 large and the company will be forced to pay it in the form of medical insurance premium increases.  This means they will be forced to reduce the salaries paid to everyone else by, on average, about $1,000 a year!

What’s even worse is that the employer is forced to conspire with the applicant to screw his or her employees!  It is illegal for an employer to discriminate on this basis and as a result they are actively engaged in stealing the money necessary for that person’s treatment from everyone else on their roster and there is nothing they can do about it. In very severe situations this can actually force a company out of business entirely, at which point everyone winds up out of a job.

This is why “single payer”, incidentally, can’t — and won’t — work.  A “single payer” system provides no incentive for any drug or medical company to figure out any way to reduce that cost — in fact, it provides the exact opposite incentive because everyone gets the treatment!  Single-payer in any form always leads to rationing and the least-able to be paraded around on TV as “victims” are the first to be left out in the cold without a jacket to die.  Governments are brutal in this regard because they’re faceless; witness the fact that everyone “hates” Congress but keeps voting to send their particular Congressperson back to their office!

Let me say this again just in case you missed it in the last paragraph: Single payer will kill 30 million Americans within five years of enactment because government will simply make a list of disorders and diseases sorted by cost and “aborted fetus” factor and draw the line at a point where the cost is high and the  “swing the baby” factor is low.  Anyone with a disease or disorder below the line will have their care denied and will die.  Government won’t do this because it’s “mean”, it will do this because without immediate and continuing collapse in cost the government itself will be unable to fund not only the medical system but the lights in the Capitol.

 A “no insurance” system (at all, at any price) on the other hand provides an incentive for firms to come up with a treatment people can afford to pay because otherwise they die and thus spend zero on health care (or anything else) in the future.  Leave the social side of this alone for a minute and it’s quite clear what happens to cost if you give someone a blank check — and this is demonstrated repeatedly in the real world by the skyrocketing price of chronic disease drugs and treatments.  Obamacare has made this much worse; witness the ratcheting up of Epipens, asthma medications and similar over the last eight years despite the so-called “underpayment” by Medicare and Medicaid that providers continually bleat about.

I’ll just take one example: Epipens.  You may or may not know this but epinephrine, the drug in those pens, costs literal pennies.  A (large) vial intended for veterinary use can be purchased over the counter for under $25.  A 1mg ampule intended for “individual” use (1mg/ml) on humans can be bought for under $5 but requires a prescription.  Diabetic-style syringes cost pennies each.  Note that the usual Epipen dose is 0.3mg which means one “individual” ampule contains about 3 doses; the per-dose cost including the syringe is about $2.00!

It is only the lack of competitive pressure that leads people to be able to charge 100x the retail cost of the supplies for these things, and providing them under ‘insurance’ just makes the problem worse.  If they had to sell them for cash Epipens would be $10 while the company would still make a 500% margin over the cost of the materials for packaging and similar.

For those people in the above three categories the first can be handled quite-effectively by simply cutting them off if they won’t make the required lifestyle change.

There is no answer in any form of public support for the second and third groups.  The only means by which we can resolve that problem in the intermediate and longer term is to stop enabling people to steal a never-increasing cost-spiral from others.  If we do that then companies will be forced to compete and find ways to treat these conditions at prices people can individually afford to pay because the alternative is that they sell nothing.

When you wave the dead fetus around what you are doing is enforcing theft against millions of others.  You are destroying business on purpose by trashing their ability to pay their employees competitive wages because someone with a high-cost condition joins their staff.  If you keep this up for long enough you will keep screaming until the government puts in place single-payer at which point the government will be unable to pay and thus will draw that line on the list of diseases and conditions which will kill millions of Americans outright.

There is one — and only one — answer: We must break the monopolies and enforce existing law.

If everyone has to pay the same price for the same drug or procedure then the only way a company can make money is to provide solutions to problems at a price people can afford to pay.  The 0.1% are, in fact, 0.1%!  If you can’t market your drug, device or procedure to the vast majority of the population of the nation because they can’t afford to buy it then in the medical field you have no market at all since these are not “aspirational” or “luxury” purchases.

This is what it comes down to folks, and if we are to make progress we must stomp on any who try to play a wave the dead fetus game — whether it be politically, in the media or our social circles.

The continuation of our way of life along with the operation of our federal and state governments depend on it.

Story originally published at Market Ticker.

I saw an interesting statistic the other day that put into stark relief what technology does.

Photographer ‘day rates’ at major publications have crashed — from $3,000 or more a day to under $300.

And that’s for the really good photographers.

Why?  Because print media is gone and digital media is increasingly “free” online – although there are traditional publishers trying to “monetize” their digital sites directly via subscription systems and everyone has a camera with them 24×7.

Newspapers and magazines, in short, simply don’t pay any more because they don’t have to.  Everyone and their brother will pull out their iPhoney and send in pictures hoping to get them in print for nothing more than bragging rights, and in addition damn near everyone has one — so the need to dispatch a photographer to cover a “news” event disappears since odds are high that whatever the occasion someone already got the shot.  Yeah, 95% of them are crap but the paper only needs one that isn’t and it no longer has to pay anything to get it.

So what does someone who loves imaging — whether still or video — to do?

First, don’t go to college.  Seriously.  If you want to destroy yourself go ahead and waste $50,000 or more on something that has a career path for the top 10% that make under $100,000 a year.  The average shooter coming out of college will make a literal zero.

Instead look at where the market went: online.

Then cut all the middlemen out.

It’s never been easier to tell a story and if someone’s going to get advertising revenue why not make it you?

Think about the newspaper: Yes, they sell subscriptions but most of their revenue is from ads.  When you work for them you get a small piece of their revenue, because they have to pay for all the printing, distribution and overhead costs.  The editors.  The trucks.  The presses.  The ink, paper and distribution expenses.  That big building full of executives.  All that money comes out first before they can pay you.

Or look at Facesucker in all its forms (including Instagram), Snap and similar.  All of them sell ads that run on your content and they keep the money.

What sort of stupid are you to provide them with content for free and get no cut of the revenue they get from attaching advertising to your content?

Instead publish independently, you tell a story people want to read and see, and you keep at least some of the revenue from doing so.

The cost of doing this has never been lower.

You can put together a low-cost publishing system that works for $50 a month or so — that’s under $600 a year.  Yes, it’s still work, all yours — and the ad brokers, whether “Adsense” or otherwise will still take their cut.

But you get the rest.

If you’re good at telling stories, and let’s face it that’s what media is about, whether in words or images — then this path might well be viable for you provided you can find a niche that is underserved and thus you can stand out in some way against the morass of crap.

Trades rarely die but they often mutate, and those who get blown out are usually the ones who simply refuse to adapt; they instead watch what they believed was their “path” turn to dust.

Find the fork in the road instead and take it before the bridge goes out from under your feet.

Story originally published at Market Ticker.

Earlier this week we published proof that YouTube is selectively choosing which political channels can monetize content and which can’t. In our story it’s pretty clear that YouTube is allowing ads on liberal channels while blocking them on conservative channels.

This is important because it ensures conservative YouTubers cannot conduct their reporting as a business, and therefor cannot in many cases afford to publish content. This while liberal YouTubers are able to make money, thus being able to publish more content.

What we didn’t cover is what kind of policy language YouTube can use to justify the biased move to harm conservative content publishers. Turns out YouTube has a very vague line of rules that enables it to block ads on virtually any conservative news videos.

How, by claiming any video that discussing sensitive news topics violates its advertiser friendly policy.

The following video breaks this down and explains it as simply as it can possibly be explained. And the video will leave you with zero doubt that YouTube is indeed cracking down on conservative news.

Nations are beginning to take more seriously the control of their respective information space after years of allowing US-based tech giants Google and Facebook to monopolize and exploit them.

Vietnam, according to a recent GeekTime article, is the latest nation to begin encouraging local alternatives to the search engine and social media network in order to rebalance the monopoly over information both tech giants enjoy in the Southeast Asian country today.

Google and Facebook: More than Search Engines and Social Media

The two tech giants and others like them may have appeared at their inceptions to political, business, and military leaders around the world as merely opportunistic corporations seeking profits and expansion.

However, Google and Facebook, among others, have become clearly much more than that.

Both have verifiably worked with the US State Department in pursuit of geopolitical objectives around the world, from the collapse of the Libyan government to attempts at regime change in Syria, and using social media and information technology around the world to manipulate public perception and achieve sociopolitical goals on behalf of Wall Street and Washington for years.

The use of social media to control a targeted nation’s information space, and use it as a means of carrying out sociopolitical subversion and even regime change reached its pinnacle in 2011 during the US-engineered “Arab Spring.”

Portrayed at first as spontaneous demonstrations organized organically over Facebook and other social media platforms, it is now revealed in articles like the New York Times’, “U.S. Groups Helped Nurture Arab Uprisings,” that the US government had trained activists years ahead of the protests, with Google and Facebook participating directly in making preparations.

Opposition fronts funded and supported by the US State Department’s National Endowment for Democracy (NED) and its subsidiaries Freedom House, International Republican Institute (IRI), and National Democratic Institute (NDI) were invited to several summits where executives and technical support teams from Google and Facebook provided them with the game plans they would execute in 2011 in coordination with US and European media who also attended the summits.

The end result was the virtual weaponization of social media, serving as cover for what was a long-planned, regional series of coups including heavily armed militants who eventually overthrew the governments of Tunisia, Egypt, Libya, and Yemen, with Syria now locked in 6 years of war as a result.

It was during Syria’s ongoing conflict that Google would find itself involved again. The Guardian in a 2012 article titled, “Syria: is it possible to rename streets on Google Maps?,” would report:

In their struggle to free Syria from the clutches of President Bashar al-Assad, anti-government activists have embarked on a project to wipe him off the map. Literally. On Google Maps, major Damascus thoroughfares named after the Assad family have appeared renamed after heroes of the uprising. The Arab Spring has form in this regard. When anti-Gadaffi rebels tore into Tripoli last August, the name of the city’s main square on the mapping service changed overnight – from “Green Square”, the name given to it by the erstwhile dictator, to “Martyr’s Square”, its former title.

The internet giant’s mapping service has a history of weighing in on political disputes.

Google’s monopoly in nations without local alternatives ensures that public perception is lopsidedly influenced by these deceptive methods.

The Independent in a 2016 article titled, “Google planned to help Syrian rebels bring down Assad regime, leaked Hillary Clinton emails claim,” would expand on Google’s activities regarding Syria:

An interactive tool created by Google was designed to encourage Syrian rebels and help bring down the Assad regime, Hillary Clinton’s leaked emails have reportedly revealed. 

By tracking and mapping defections within the Syrian leadership, it was reportedly designed to encourage more people to defect and ‘give confidence’ to the rebel opposition.

Clearly, more is going on at Google than Internet searches.

Nations would be equally irresponsible to allow a foreign corporation to exercise control over their respective information space – especially in light of verified, documented abuses – as they would by allowing foreign corporations to exercise control over other essential aspects of national infrastructure.

Vietnam Taking Control of its Information Space 

The GeekTime article, shared by the US State Department’s NDI on Twitter titled, “Is Vietnamese campaign to build a Facebook alternative fighting fake news, or fostering censorship?,” claims (emphasis added):

During a parliamentary committee meeting earlier this month, Truong Minh Tuan, Minister of Information and Communications in Vietnam, said that the government is encouraging Vietnamese tech companies to build local replacements for platforms such as Facebook and Google (which are the most popular in their categories in Vietnam). 

The article also reported:

It is part of a wider campaign to “strengthen cyber security” and the integrity of the country’s information. “The plan is to try and address the problem of how ‘fake pages’ with anti-government content grew uncontrollably on Facebook,” said Tuan. “Going further, we need social networks provided by local businesses that can replace and compete with Facebook in Vietnam.”

NDI’s mention of the article is meant to imply that the Vietnamese government stands to profit from the localization of search engines and social media – and it does. However, the localization of Vietnam’s information space is no different than the localization of Vietnam’s defense industry, energy and water infrastructure, schools, and healthcare institutions. They are the Vietnamese people’s to control, not Washington, Wall Street, or Silicon Valley’s.

Whether the Vietnamese government abuses that localization or not is the business of the Vietnamese people. The actual concern NDI has is that once the localization of information technology is complete in Vietnam, forever will these effective vectors of sociopolitical subversion be closed to the corporate-financier special interests driving US foreign policy and the work of fronts like NDI.

Tony Cartalucci, Bangkok-based geopolitical researcher and writer, especially for the online magazine New Eastern Outlook”.  Article first appeared at NEO

If you want to know why fixing “health care” is so difficult you need only read this article.

From Akron to Youngstown and Canton to Cleveland, as in cities and towns across the country, workers who once walked out of factories at the end of each shift now stream out of hospitals.

While manufacturing employment has fallen nearly 40 percent in northeastern Ohio since 2000, the number of health care jobs in the region has jumped more than 30 percent over the same period. In Akron, the onetime rubber capital of the world, only one of the city’s 10 largest employers still makes tires. Three are hospitals.

If these were doctors and nurses that might be understandable.  But they’re not.

They’re nearly all paper-pushers who contribute exactly zero to actual consumer care.

The problem is that all of these people draw salaries and thus drive up the cost of medical care by ridiculous amounts.  In fact last month   some   20,000 people were added to the “health care” employment rolls and nearly all of them will never provide one second of actual care to an actual person — but every one of them has and will massively drive up your health care costs.  In fact if the average “administrator” in that group makes $40,000 in the last month alone a whopping $800 million per year before their health insurance and employment tax cost was added to your medical bills and yet not one single person got one minute of additional actual care out of that expense.

Next month there will be another $800 million added on which you will be forced to pay.

The next, and at least as-large problem is found in the continual bleating of hospitals and similar that “Medicare doesn’t pay what X costs” as their justification to gouge private parties.  But this claim is false; if you look at many of the so-called “non-profits” you can find myriad examples of this being a flat-out lie, and nowhere is it easier to find than in the hospitals’ lab sections.

Direct operating costs are usually about 10% of the revenue amounts!

In other words the hospitals are making 1,000% profit in their labs, net-net including all expenses, on balance.  That is, Medicare and Medicaid, when you look at the actual operating cost of these labs, is paying a price that approximates cost plus a bit.  And oh by the way that’s what the law governing Medicare and Medicaid requires.  If private parties paid 10% more that would be a rational profit margin.

1,000% more is a******job.

This is why alleged “non-profit” hospital administrators frequently get seven-figure salaries even when they’re associated with a university system where the head of said school makes 1/5th to 1/10th as much.

No competitive business can maintain 1,000% net profit margins in any segment of their business for any length of time at all, because as soon as someone figures out that you’re making that sort of profit they come in and open a competing business.  It will happen every time, simply because the new entrant can undercut the other guy by half on price and still make 500%!  There will be dozens of new business entrants within days.

The only way to keep that from happening is to do anti-competitive things, such as conspire with others to fix prices or form “networks” that forcibly lock out competitors.

All of those acts are illegal under law that has stood for more than 100 years yet both State and Federal governments refuse to enforce said laws.

We can solve the “Health Insurance” problem in a literal day by enforcing those laws against everyone in that sector of the economy.  But if we do so then the 1,000% profit margins collapse by at least 90% in an afternoon and along with the screwing on the billing end goes a lot of jobs.  Health care collapses as a share of the economy from over 19% today back to about 3-4% and this is recognized as the mother and father of all recessions — because it will be.

That recession won’t last long though because with the amount of money that now remains in consumer pockets instead of being stolen through extortionate “health insurance” schemes America becomes the most-competitive place to run a business in the Western World.  We would see an enormous influx of firms to the United States beginning within days and it would not be long at all before all of the jobs displaced would be recovered and then some.

If you want an example of what this would look like from the economic point of view have a look at 1920-21.

But the fact of the matter is that those who would lose during that transition whine big, they whine loud, and they lie.

They scare you with knowingly false claims that you’d have no doctors, nurses or hospitals, and thus would die.  This is trivially seen to be a bald-faced lie when one simply looks at the growth of administrators .vs. physicians in medical practice — the latter actually diagnose and treat persons, the former do not and if nearly all of them disappeared tomorrow there would not be any impact on the number of physicians and nurses — and thus there would be zero impact on the ability to deliver medical services either.

If you get the force, fraud and extortion out of the medical system at all levels from pharmaceuticals to hospitals to the local imaging center and testing company you’d find that most of those administrators would lose their jobs — under a competitive market they would produce far less in value than they cost.

Indeed, you only need to look at the quarterly filings for virtually any public company that operates in a competitive market and you will find that SG&A (that’s sales, general and administrative expenses) typically runs about 10% of revenue and most of that is G&A.  Businesses in a competitive market can’t spend more because if they do someone will come in, compete with said firm and destroy it by undercutting their prices.

Really competitive business (e.g. Amazon) have G&A costs of ~2% of revenue!  That’s how they hammer their competition and how you get better prices — they keep their costs down.

Now look at any of the health care public firms. Aetna, for example.  Their G&A is 23% of revenue, and the only reason they get away with it is that they are protected from competition.  In other words they blow 2 and a half times what a business in a competitive market does, and 10 times what Amazon does on administration as a percentage of revenue without fear — because they can without having their head cut off by a competitor.  And oh, by the way, there’s plenty of creative accounting too; health-related firms have every reason to understate their actual G&A expense lest the pitchforks and torches come out.

We will never get health care under control nor will it ever be affordable until and unless the underlying issue — cost — is addressed.  Cost is only addressed through market forces, and that means enforcing the law by hammering every single anti-competitive agreement and practice that these companies engage in.

If we do that the cost of medical care will drop like a stone — 80 to 90%.  There will no longer be a “pre-existing condition” problem because for virtually every situation you will be able to pay cash.  For the few where people literally cannot because even when the $90,000 annual cost of treatment is $500 (as is the case for many MS patient drugs if you buy them outside the United States) our “social safety net” can afford $500 — but not the $90,000 tab today that escalates at 10% or more a year.  In the case of people with Type II diabetes the cost of treatment for most of them would drop to an actual zero were they to stop eating carbohydrates other than green vegetables.  That sounds like a hard sell given how many people like pasta and pizza unless you explain to the 250 (or 400!) lb diabetic that if they do this not only do they spend zero on meds in addition all their extra weight will come off without being hungry or exercising to death and they won’t have a heart attack, stroke or destroy their hips by trying to carry an extra 100+ lbs around either.

What will said Type II diabetic choose if the options are (1) pay for testing strips and medication out of his pocket (albeit at a much lower cost than today) while eating pizza or (2) pay zero for testing strips and drugs because you no longer need either but don’t eat pizza?  The obvious choice is to eat the steak, forego the pizza and as a result drop both the medication and the extra 100+ lbs while keeping the money you used to spend on meds and testing supplies in your pocket.

Those who are screaming about “pre-existing conditions” and similar have a choice to make.

You can either continue to support the blatant rip-off of the current medical system in this country which thus compels you to argue for stealing from others or you can argue for putting the monopolists and extortionists in prison using existing, 100+ year old law which will collapse the cost of your medical care by 90% or more in an afternoon.

Oh, and one of those choices can’t work because there simply isn’t enough money to continue doing it no matter who you steal it from, while the other both can work and will, after the adjustment in the economy takes place, lead to much higher productivity employment throughout America.

That choice, if you take it and demand that it happen right here, right now, today means your wages will go up, your cost of living will go down and your life will dramatically improve.

If you take the other choice — to either sit on your hands or make more and more demands for “single payer” and cost shifting instead of collapsing the monopolies and extortion rackets you will not only fail to obtain the health care you desire you will cause the collapse of our Federal Government, State budgets and the nation’s economic future.

Read here for the answer.

Story courtesy of Market Ticker.

The US House of Representatives voted today to “repeal and replace” Obamacare. Unfortunately, those who use the phrase “repeal and replace” are greatly exaggerating the extent to which the Affordable Care Act is actually repealed.

While perhaps a tiny step in the right direction, the new legislation signals no departure whatsoever from the long-established trend of expanding the role of government programs in subsidizing and regulating the healthcare industry.

Perhaps worst of all, since this is being called a “repeal,” many may be prompted to think that the US health care system is a “free market” system, or that government spending has only a very small role in the industry.

This couldn’t be further from the truth. 

In fact, the US is fourth in the world in terms of per capita government spending on health care, behind only Norway, Luxembourg, and the Netherlands. That’s government spending, not overall spending:

In fact, those numbers from the World Health Organization (WHO) are from 2014, and with the expansion in Medicaid spending under Obamacare, it’s entirely plausible that the US has moved into third place in the past two years.

But how does this translate into actual persons on government programs? Viewed from this angle, we find that a full one-third of all Americans are either currently enrolled in a government health program, or have recently been enrolled in one.

There are approximately 55,504,000 Americans on Medicare, which covers the elderly. But there is also an additional 74,506,000 Americans on Medicaid or CHIP. About 11 million of those are dual-enrolled, which means they’re on both Medicare and Medicaid. If we pull the 11 million out of the Medicaid count to avoid double counting, we find that there is a total of 119 million Americans on government programs — or about one-third.

“But, wait!” you might say. “Obamacare expanded the number of people on Medicare, so maybe if we remove all of those people, the numbers will be smaller.” 

Yes, it’s true, the numbers will be smaller, but as the Kaiser Family Foundation’s research shows, the pre-Obamacare average for Medicaid/CHIP enrollment was 56.8 million. So, if we go back to that pre-Obamacare number, we end up with about 31 percent of Americans on government healthcare — still a hefty number.

Moreover, given the way the Obamacare “repeal” is written, we shouldn’t expect any sizable long-term decline in Medicaid enrollment. That upward trend is going to continue unless major reforms take place.

As an additional illustration of the outsized role of government agencies in the industry, we might also look to the fact that government programs are starting to eclipse private sector insurance within the health insurance industry:

Here’s a nugget that encapsulates the health insurance industry, despite all the noise surrounding the future of the Affordable Care Act: In the first quarter of this year, Aetna collected more premium revenue from government programs (namely Medicare and Medicaid) than it did from commercial insurance for the first time ever.

Why this matters: Most people get their health coverage from their employer, and that historically has been the bread and butter of the insurance industry. But the aging population and expansion of Medicaid managed care means insurers are investing more time and money in the lower-margin (but still lucrative) government programs. Aetna, in particular, has invested heavily in Medicare Advantage.

This “free-market” health care system of ours doesn’t seem to have much in the way of freedom or markets. 

And finally, let’s take a look at growth in federal government spending on health care over time. This is only federal spending and doesn’t include state spending, such as the state-funded portion of Medicaid.

Between 1980 and 2014 — that is, before Obamacare — health care spending by the federal government increased many times over. Yes, there has been a surge in spending thanks to Obamacare, but it’s a surge above what was already an immense amount of spending growth that already took place during the George W. Bush years and before. It was Bush, after all, who gave us an immense expansion of Medicare coverage into prescription drugs ten years before Obamacare.

If we look at federal health care spending in terms of growth compared to GDP, we find that health care spending has been outpacing GDP for many years:

If the GOP plan passed by the House today ends up doing anything to restrain these costs, then we might say it’s a small victory. But let’s not pretend that government programs are not the single biggest driver of spending in the health care industry. Indeed, when it comes to spending on welfare programs, the US is a typical Western welfare state. Even with the “repeal” of Obamacare, the myth of the free-market American economic system will remain exactly that: a myth.

Courtesy of Zero Hedge.

A healthcare collapse storm is on the horizon and it’s going to be ugly.

Bad news for folks in Iowa who get coverage in the individual marketplace. As Iowans probably already know, two of the three largest individual plan providers recently left Iowa, a move that left tens of thousands of Americans without coverage. The move left only one company providing coverage.

Indeed, Medica, a company that currently covers 14,000 Iowans at an annual loss of at least $1.5 million, is the last provider standing. Medica was faced with a choice. Take on tens of thousands of Iowans who lost insurance when Aetna and Blue Cross Blue Shield left or close up shop and leave the state.

Considering they already lose nearly $2,000,000 a year on the 14,000 they currently cover, adding tens of thousands more was simply not a sustainable option.

So closing shop is now the likely outcome. The company just released a statement saying “Without swift action by the state or Congress to provide stability to Iowa’s individual insurance market, Medica will not be able to serve the citizens of Iowa in the manner and breadth that we do today. We are examining the potential of limited offerings, but our ability to stay in the Iowa insurance market in any capacity is in question at this point.”

Why anyone thought saddling insurance providers with a mandate to provide “coverage” for pre-existing conditions and nonsense like maternity services for men was a financially viable scenario is beyond me. It’s an absurd plan and clearly just doesn’t work.

In the past all of this madness could be blamed squarely on Democrats. But now that Republicans refuse to follow through with their promise to repeal Obamacare, these kinds of collapses lay on all of congress, regardless of party.

They win, we all lose.

While we all loved President Trump’s campaign pledge to bring jobs back to America, there are powerful economic forces at work that suggest the shift to cheap labor is pretty much irreversible. Yes, Trump has spoken with the leaders of some of America’s biggest companies and he’s been successful at getting those chief executives to commit to creating or keeping a few thousands jobs here and there, but when you consider that the competing foreign labor force primarily responsible for manufacturing America’s consumer goods numbers in the hundreds of millions of people, the notion that we’re somehow going to see explosive manufacturing growth over the next four or eight years is nothing more than a pipe dream.

But don’t take it from us. A Chinese factory worker explains exactly why we have absolutely no way to compete with the near slave-like conditions found in foreign factories:

Zeng walked CNBC through his decision to spend six weeks in a factory working 12 hours shifts Monday through Saturday, mostly during the night, and what he discovered along the way.

“They just gave me the address of the factory and I just went. I just showed up. When I was there I saw people holding luggage waiting in a long line, so I just stood in the line,” Zeng told CNBC in an interview.

“When it was my turn they asked for my ID, asked to see my hand and asked me to recite the English alphabet. I got in after that. It took less than 30 seconds. You don’t have to apply or have any skills.

“The first thing I can think of from a labor perspective is that the wages are unacceptable for American workers. So, in the factories, I was getting paid about 3100 yuan, or $450, per month. I don’t think American workers can accept those kind of wages based on living conditions and prices here,” Zeng said.

“Even if they relocate factories to the U.S. they’d replace workers with robots,” Zeng said. He said Pegatron already uses robots to apply cameras to iPhones, and to drop batteries into the devices. Robots, Zeng said, are more precise than human workers, and precision is particularly important for those two components.

If President Trump wants iPhones manufactured in the U.S., Apple will need to front the cost to pay the much higher wages required in the U.S., which means that consumers will have to be willing to pay more. Either that, or it will have to rely a lot more on machines, which won’t create jobs, and might end up taking them.

Source: Yahoo News

For those who are having trouble visualizing the cumulative effect of what Zeng describes, this chart pretty much sums it up and shows how much manufacturing jobs as a percentage of America’s total workforce have declined since the 1960’s:

At first glance you may be thinking that we have no where else to go but up.

The problem, of course, is that if you do try to shift jobs back to America, and even if you triple the wages from what factory workers are making in China, those taking a monthly paycheck and benefits from the government already make more money for doing nothing than they would assembling mobile phone components for 12 hours a day.

One recipient of welfare summed it up succinctly in the following shocking interview:

While workers out there are preaching morality at people like me living on welfare, can you really blame us?

I get to sit home… I get to go visit my friends all day… I even get to smoke weed…

Me and people that I know that are illegal immigrants that don’t contribute to society, we still gonna get paid.

Our check’s gonna come in the mail every month… and it’s gonna be on time… and we get subsidized housing… we even get presents delivered for our kids on Christmas… Why should I work?

Ya’ll get the benefit of saying “oh, look at me, I’m a better person,” but when ya’ll sit at home behind ya’lls I’m a better person… we the ones gettin’ paid!

So can you really blame us?

There’s always hope, we suppose, that the millennial generation, currently demanding free college and living in their parents’ basements, will rocket America into its next great manufacturing boom.

But we’re not going to hold our breaths.

Story courtesy of SHTFPlan.

We start a quiet Sunday with a big picture anecdote from Eric Peters’ latest weekend note explaining why what central banks are trying to do is impossible, why the trend of inflation over the past 70 years is “stunning and unprecedented” and why “volatility suppression” always eventually fails.

“Anecdote”, by Eric Peters of One River Asset Management

“For all of history – prior to 1955 – there was roughly equal probability of inflation or deflation in any given year,” said the economic historian.

“But since 1955 we’ve experienced uninterrupted annual inflation. It’s a stunning fact, unprecedented. To an economist in 1955, the coming 60yr inflation would have appeared less probable than a catastrophic meteor impact.”

After enduring a series of world wars, and social upheavals, policy makers conducted an experiment, removing the deflationary left-tail of our economic cycles.

“We created history’s greatest volatility-suppressing machine, and it delivered breathtaking stability.” Of course, we endured volatile periods since 1955. But life is short. And we thus lack the reference points to compare our minor wobbles to the wild booms and busts of our great grandparents.

“Minsky taught us that stability begets instability. And it stands to reason that our volatility-selling machine will break one day. We saw a glimpse of this in 2008-09.”

Perhaps the only thing more surprising than the severity of that crisis was the response of our body politic. “In 2007 if you had shown the top 100 economists a list of the extraordinary measures that central banking and economic elites would unleash in the coming decade, not a single one would have believed you.”

Politicians hate change. With very few exceptions, they stand for stasis. Our central bankers seek stability. And investors have learned to front-run them all, selling volatility into every spike using ever more complex strategies.

“But volatility suppression at the lows is much easier in many ways than at the highs. In a crisis, our central banks simply go full-throttle. At the highs though, they seek the unattainable, which is perfect economic balance in a world that is inherently unstable – they attempt to crystallize the entire ecosystem. Which is as arrogant as it is impossible.”

And this is what central planning looks like visually:

Story courtesy of Zero Hedge.

Email Newsletter