For those who watched the six hour health care summit Thursday, as Beezer did, my sympathies.  The Republicans made an effort to explain themselves, but eventually got quite frustrated because unlike the tea party parties and town hall meetings, there were other people at the summit who knew when the Republicans were blowing smoke.  And said so.  Got kind of embarrassing I suspect.

Eventually they fell back on their ideological underpinnings and just said they believed free market solutions were better than what would arise from health care reform.  Well heck, we all knew that was their ideology.  Why waste everyone’s time talking about reforming what one doesn’t, in fact, want to reform?

There was one part of the discussion about whether premiums would rise, or fall, if the reform passed.  Republicans said they would rise.  Democrats basically said if they did rise, it would be because a lot of people would have the chance to receive far better policies compared to what they have now, and would take advantage of the opportunity to trade up.

But that’s about as far as the discussion got.   It needs more explaining.  And the explaining has been done by the New York Times.  The author is journalist Catherine Rampell who writes about economics for the Times.

“Better health doesn’t seem to explain why so many young people forgo health insurance. Rather, income does, according to new survey data released by Gallup.

First, some background. One of the explanations for rising health care costs is that relatively healthy people are taking their chances and going without insurance.

The relatively sick pool of insured customers who are left then drives up the cost of premiums, at least if there is any form of risk-sharing (like community rating) within that pool. Which drives out the healthiest people who are willing to take their chances, which drives the cost of premiums up further, and so on. This is sometimes referred to as the “death spiral” of health insurance.

The trend shown in the chart below — which shows what percentage of people at each age is uninsured — is sometimes used as empirical evidence for the presence of this “adverse selection” in health insurance:

As you can see, young adults are significantly less likely to have health insurance than their older counterparts. The percentage of people with health insurance troughs at age 22, when just 66 percent of Americans are covered.  Many people assume that this is because young people are also less likely to have health problems than their older, presumably more decrepit peers. Perhaps young adults don’t buy health insurance because they don’t think they’ll need it; this would be a relatively rational conclusion for young people to make, statistically speaking.

But if you look a little closer at health insurance purchases among young people alone, this demographic actually appears more risk-averse about their health than is commonly believed.

In fact, last year, healthy young adults were much more likely to have health insurance than their sicker peers, according to Gallup:

Of course, figuring out why healthy young people are more likely to have health insurance coverage is tricky; maybe the causality runs in the other direction, in that insurance helps keep people healthier. There is some debate about the effects of health insurance on health, however.

Perhaps people who are likely to have health insurance are also likely to be healthy for an independent reason: It costs money to buy health insurance, and it costs money to maintain a healthy lifestyle. In other words, perhaps it is money, not perceived risk of getting sick, that determines whether young people get insurance.

As it turns out, people who can afford health insurance are much, much more likely to get it:

Among young adults, 86 percent of those in the top third of the income distribution (people earning $48,000 or more annually) have health insurance. In the middle third (those earning between $24,000 and $48,000), 72 percent have health insurance. And in the bottom third (those making less than $24,000), just 58 percent are on a health plan.

It appears to be affordability, not recklessness (or even rational cost-benefit analysis of health risk), that is driving young people away from insurance policies.

One policy implication of all this is that cheaper health insurance premiums — or, I suppose, across-the-board real wage gains — might encourage more people to buy insurance voluntarily.”

Economies grow because capital is being invested in labor and technology to grow one or more industries.  But this doesn’t happen just because one wants it to happen.  There has to be one or more “triggers” creating the need for more capital and labor.

Triggers could be a strong rise in population growth or some strong form of ”game changing” innovation that literally creates new companies, industries and products.  Or, as is often the case, governments decide to support certain industries by directing subsidies or tax incentives their way to insure growth. 

China is an excellent example of growth created by government actions to support exports.   If Ford wants to build a factory in China, Ford would have to partner with a Chinese firm, would have to use local labor and some portion of local product supplies and would have to export half of what they make.  These and several other official government policies, including pegging their currency to a value just under the dollar which guarantees China a price advantage, have been successful in creating jobs, income and overal economic growth in China.

In the US, taxpayers pump billion of dollars into basic research in several industries which, in turn, results in innovations that are made available to private industry.  Two related industries, medical devices and pharmaceuticals, have received much of this money.  It is no accident, therefore, that these two industries have been shining stars in terms of growth and income.  In the 1950s under President Dwight Eisenhower, taxpayers subsidized building the interstate highway system, which in turn guaranteed an explosion in the automotive industry.  The all important internet was invented, tested and installed by the government and then handed over, literally without charge, to private markets.  The internet has been a tremendous job and income creator not only in the US, but worldwide.

But America, for a number of reasons, has forgotten how important government action can be for supporting real job and income growth.  In fact, a common theme in Washington DC today is that government can’t do anything but waste taxpayer dollars and destroy jobs and income.  This belief may be the single most important cause of America’s fall from economic grace.

The US should take a page or two from the Chinese.  Running huge trade deficits is like having a hole in a tire you’re trying to inflate.  Every pound of pressure you try to put in the tire, just goes out through the hole.  China’s policies insure that investments they make results in the export of native made product.   Having local labor and product requirements, plus export requirements of product made, do just that.

The US should have the same requirements.  That we don’t have sensible requirements insures that US corporate and private investment capital results in jobs and income growth outside the US.   We’ve been making more product and hiring more people–just not in the United States.  

At the same time, we have subsidies that are wasteful and inhibit native job and income growth, among other ills.  Take the annual $4 billion subsidy for corn.  It has made corn cheap and plentiful, but it has created a giant industry that is destroying agriculture and making our country, literally, physically ill.  Ill health and the destruction of farm jobs (not to mention all the related supporting industry jobs) has helped weaken the nation for the benefit of the few.

From the blogsite accidental hedonist:

01/24/06, by Kate Hopkins 33988 views • Categories: Food Politics, High Fructose Corn Syrup (HFCS)

Financial regulatory reform.  Considering what the country has suffered, and still suffers from, one would think this “trigger” would be obvious.  But amazingly it isn’t.  Setting strong limits on what the taxpayer will guarantee in the financial industry and setting strong groundrules on speculation and leverage would appear to be screamingly obvious.  But because of the same philosophy of lousy government and tax cuts, we still have strong opposition in Washington DC to even these basic requirements.  Reform here will avoid financial disruptions in the economy, an economic boon all by itself. 

From 1932 until the late 1980s (almost 60 years) the US was spared financial meltdowns when these common sense rules were in place.  But because of the same philosophy the rules were weakened beginning in the 1980s, and eventually eliminated entirely in 1999.  The result: Seven financial economic crisises, including the last one which may still outdo the one that created the Great Depression of the 1930s.

Health care reform.  Again what should be obvious to everyone (we can’t afford the system we now have) became merely a side item on the menu.  The real opponent to reform was (can you guess?) fear of government, and unwillingness to actually pay for (read lower, not more taxes) a new system.  The main issues of better healthcare, cost control, and universal access to health care services for more than 30 million uninsured, became irrelevant under the onslaught of this misogynist (one of hate) philosophy.

So there’s some triggers.  To Beezer they should be as obvious as the nose on one’s face.  But our belief in the myth that government, due to some mysterious illness (despite more than two centuries of evidence to the contrary), can’t even pull up its figurative pants by itself remains virulent in DC and within the Republican political party as well. 

Too bad.  We’re well on our way to becoming a declining nation with a declining economy and declining standards of living.  So much we could do, so little understanding and will to do it.

So almost everyone who’s not rich knows they are working harder and making less.  And that the trend downward has been in place for a long, long time.

Yet Republicans still spout the old nostrum that, if only we’d cut taxes more, we’d all be better off.  This folks, is a loaded pile of crap.

Now even Business Week is showing what’s really going on in America.

Feb. 17 (Bloomberg) — The average income reported by the 400 highest-earning U.S. households grew to almost $345 million in 2007, up 31 percent from a year earlier, Internal Revenue Service statistics show.

The figures for 2007, the last year of an economic expansion, show that average income reported by the top 400 earners more than doubled from $131.1 million in 2001. That year, Congress adopted tax cuts urged by then-President George W. Bush that Democrats say disproportionately benefits the wealthy.

Each household in the top 400 of earners paid an average tax rate of 16.6 percent, the lowest since the agency began tracking the data in 1992, the statistics show. Their average effective tax rate was about half the 29.4 percent in 1993, the first year of President Bill Clinton’s administration, when taxes were increased.

The statistics underscore “two long-term trends: that income at the very top has exploded and their taxes have been cut dramatically,” said Chuck Marr, director of federal tax policy at the Center on Budget and Policy Priorities, a Washington research group that supports increasing taxes on high-income individuals.

The top 400 earners received a total $138 billion in 2007, up from $105.3 billion a year earlier. On an inflation-adjusted basis, their average income grew almost fivefold since 1992, the data show.

Political Ammunition

The data may provide ammunition for President Barack Obama and Democrats led by House Speaker Nancy Pelosi of California who say they intend to increase the capital gains tax rate and let tax rates for the highest earners increase in 2011.

Almost three-quarters of the highest earners’ income was in capital gains and dividends taxed at a 15 percent rate set as part of Bush-backed tax cuts in 2003, the statistics show. Of the 400 earners, 289 paid a total effective federal tax rate of 20 percent or less in 2007, the last year for which figures were available, the data show.

Bill Ahern, director of policy and communications for the Tax Foundation, a Washington research group that advocates lower taxes, said the 2007 data doesn’t reflect the current economic circumstances.

“In a good year like 2007, it’s not surprising to see that the owners and managers of the nation’s largest firms made a fortune,” Ahern said. “Notice that two-thirds of their 2007 income was in capital gains, which have dropped like a rock since then.”

The data were first reported by Tax.com, a blog run by Virginia publisher Tax Analysts. 

After my recent post based upon the book “Omnivore’s Dilemma,” written by journalist Michael Pollan, the question inevitably comes up:  “If we can’t eat meat being produced by Industrial Ag, what do we eat?”

One possible answer comes from a surprising place.  Hollywood.  Alicia Silverstone, star of numerous movies, including “Clueless,” has authored a New York Times bestseller entitled “the kind diet,” with a subtitle of “A Simple Guide to Feeling Great, Losing Weight, and Saving the Planet.”

In short, Ms. Silverstone’s answer is don’t eat meat or dairy.  To her the American consumer is the one who’s being kept “clueless.”

The book clearly describes how a person can eat a plant based diet that’s not only super nutritional and delicious, but it eliminates harmful foods “like meat, dairy, refined sugar, and over-processed products.”

On meat.  “There is absolutely no reason you need meat in order to survive or thrive.  In fact, it’s just the opposite:  Your old friend flesh is keeping your body tired, weak, and toxic.”

Milk really gets the hammer from Silverstone.  ”The medical world acknowledges that some of the biggest factors in breast cancer are fat, animal protein, and excess estrogen.  Well, since milking cows are pumped full of extra estrogen to make them lactate, dairy is your best and cheapest source of all three.  Moreover, cows injected with bovine growth hormone have higher levels of a naturally occurring hormone called IGF-1 (insulin-like growth factor-1), which is also connected to tumor growth.”

Milk also contains casein, the protein in dairy foods, which is not only addictive but has been fingered as something that can cause tumors to grow.  In one study, writes Silverstone, “The conclusions were consistent and stunning:  Even when huge doses of cancer-causing toxins were given to study subjects, tumors grew only  when they were fed casein, the protein of dairy foods.  Conversely, wheat and soy protein–combined with the same doses of cancer-causing toxins–triggered no tumors.”

And she blames dairy for making allergies and asthma worse.  After having asthma for the first 20 years of her life, where she needed an inhaler and took allergy shots, Silverstone became a vegan.  After that “I stopped experiencing allergies or any asthma-type symptoms.  They just disappeared…

“You see, the human immune system recognizes milk from another species as an attacker–or allergen–that causes the body to go on red alert.  This is why many people walk around with chronic runny, stuffy noses–even asthma and allergies–and think it’s normal!  But actually it’s the body’s own defense system trying to ward off a foreign invader.  Dr. John Oski, chief of pediatrics at Johns Hopkins School of Medicine, believes that up to 50% of all children are allergic to milk, although they remain largely undiagnosed…..Get rid of dairy, and you should breathe easier within a week.  You’ll be amazed.”

And as for milk helping to prevent osteoporosis there’s this.   “We’ve come to believe there is a straight line   between milk and strong bones despite the fact that dairy-free countries have the lowest rates of osteoporisis on Earth.  In fact, the more milk a population consumes, the weaker its bones get.  That’s the real straight line.  So why does this fallacy that milk is inextricably linked to strong, healthy bones persist so stubbornly?  It’s true that cow’s milk does contain calcium, which is necessary for strong bones, but that’s not the whole picture.  Although milk offers calcium, it causes the body to release even more of it.  It’s like someone giving you $1,000 but driving away in your car!….Meat and dairy are the chief causes of osteoporosis, not the cures.  There are tons of sources of calcium on a meat-and dairy-free diet, and the calcium they contain is actually more readily absorbed by the body.”

While Pollan might eat meat if it came from a pasture fed cow or chicken, he stays away from what Industrial Ag produces by using growth hormones and antibiotics to churn out meat quickly and in great volume.

Silverstone also has a website thekindlife.com.  Read her book and check out the site.

Health Insurance premiums on individual policies are going up as much as 39% percent in California.  This on top of a more than 10% rise last year.

Paul Krugman has a nice piece in the New York Times explaining that this is a “death spiral” for the private insurance model.  And I agree with him.

“Why the huge increase? It’s not profiteering, says WellPoint, which claims instead (without using the term) that it’s facing a classic insurance death spiral.

Bear in mind that private health insurance only works if insurers can sell policies to both sick and healthy customers. If too many healthy people decide that they’d rather take their chances and remain uninsured, the risk pool deteriorates, forcing insurers to raise premiums. This, in turn, leads more healthy people to drop coverage, worsening the risk pool even further, and so on.”

Beezer here.  The private insurers are undergoing an inevitable shrink where they will retreat into the profitable cohorts:  The wealthy, the large corporate buyers and those who live in a healthy way and are not likely to demand much health care.

Which leaves a huge swath of Americans–many more than those who are currently without insurance for one reason or another.  The surprise to many people now employed is that they are on the verge of losing their insurance and, at minimum, having their current policies become that old standby -”Major Medical” insurance.

Beezer has said before this “death spiral” was inevitable.  It might be wise for Obama to start building up a national non profit system before the current private system starts abandoning large segments of our population.  First he needs to subsidize medical education in return for taking a salary once becoming a doctor.   Concurrently he needs to expand the existing non profit hospital system, including military hospitals and the Veterans’ Administration hospitals.

Congress has shown that it is owned by large industries.  The word for this is an “oligopoly” where powerful, wealthy interests control the political system in some way–usually with money.  All that means is that attempts to “change” the existing health care system, an oligopoly, won’t be successful. 

It also means that, short of simply deciding the best course is to abandon the millions who can’t get health services, a system separate from the private one needs to be constructed.  We already have a decent system of government and other non profit medical providers, but it is not large or deep enough to handle the coming deluge. 

Congress could pass a bill.  The Senate and the House have already done so.  But the process of enacting legislation at this point, called “reconciliation” which needs only majority votes, hasn’t been used for lack of political will.  The California debacle might change that equation but before you get too hopeful, remember that we’re dealing with a powerful “oligopoly.”

Which leaves plan B: Construct an alternative system that doesn’t need comprehensive legislation.  It already exists, it just needs to be expanded.