This is What "Democracy" Looks Like

So, like many of you, I said lots of words when I heard about Joe (fun fact - Stalin was also a Joe - coincidence??? I kid, I kid) Lieberman playing the role of Vito Corleone in this health care reform saga. I used phrases comedians would find offensive. I think I even made up a few new profanities. What can I say, I have many talents. Anyway, point being, the Obama administration pushed generally-spineless Harry Reid to kowtow (Obama kowtows like it's going out of style) to Lieberman and scrap the Medicare buy-in from the bill, which was already a substitute for the public option, which was a self-imposed compromise from Obama (love that hope, baby) away from a broader push for universal coverage or at least some regional-based private system that could maximize economies of scale and competition to get us the best coverage for the most people at the lowest cost. None of this is exactly shocking. Joe Lieberman is, well, a lot of words I won't write here. But none of them are good. And Obama is doing what I thought he would all along, except people seem to be more content with letting him do so than I had hoped. But this is bigger than health care. What the Lieberman affair speaks to is, very simply, the heart of democracy in America today.

What do I mean by that? Simple. Lieberman was always going to push hard against any progressive health care reform. Not just because he's an ass - he is. Not just because he despises the left and wants to stick it to them - he does. Not because his soul is composed of arsenic and sulfuric acid - it is. (Okay...you got me...it isn't. Or I should say, I don't know that it isn't. Prove me wrong!) Take all of that away. You could argue against any of those points with some success. There's still one that is far more important than the others - unless Lieberman is, of course, the earthly version of El Diablo, which might be slightly worse. (Again, I kid. But seriously...can you prove he's not? Provide me the proof!) Joe Lieberman runs for office. In order to run for office, Joe Lieberman needs to get loot. Lots of it. It cost almost $6 million to win a Senate seat in 2008. The amount of TV ads, and the rising price of said ads, is part of the reason spending has increased. You know, the 7 ads you see over the course of one episode of Lost in October/November telling you candidate John Smith is actually a terrorist, kills babies himself, or will drop nuclear weapons on every country whose leaders so much as looks at him the wrong way. Ah, nostalgia.

So, Joe Lieberman needs to raise a lot of money in Connecticut. He probably doesn't have to raise that much most of the time, though. There is lots of research looking at entrenchment...so, once you get elected, you're much more likely to stay in office. Not only that, but Lieberman hasn't really faced too many serious challengers. Ned Lamont was, of course, an exception, and forced Lieberman to run as an independent/de-facto Republican to win his current term. But, he wants to have the money on hand because it's always good to have money on hand in politics. He wants to obliterate whoever his competition is with TV ads. He wants to outspend his rivals by a lot just to make sure he stays in office. So, he wants lots of money, both hard (from individuals) and soft (from PACs, etc.). Thus, he, like many of his colleagues in Congress, spend a hell of a lot of time fundraising, as opposed to, I don't know, governance. You can't raise millions of dollars that quickly, especially because their are limits on how much donors can give. Thus, it takes time to build up your treasure chest.

Now, who does Joe Lieberman get money from? A lot of sources. But he gets a lot from the health care industry. This includes pharmaceutical companies, the American Medical Association, etc. In other words, organizations that stand to lose a lot if any large-scale health care reform gets through. Lieberman gets a decent amount of money from them. Over his career, he ranks 10th among sitting senators in terms of industry contributions. This amounts to over $1 million - he ranked second in the Senate in contributions from the health insurance industry during his re-election campaign in 2006. Connecticut also happens to be home to a lot of big health insurance companies. Over 22,000 jobs in the state are directly in the health insurance industry. This is obviously problematic. This doesn't account for the loopholes, either. One way Congressional leaders get around campaign finance rules is by having the industry pay their spouses a lot of money through jobs and speaking gigs. Now, if they are highly qualified people for these positions, I get it. If they're not, you're basically filtering money to the candidate through a huge loophole. Lieberman has been getting slammed about this lately, as his wife pockets quite a lot of money from the insurance and pharmaceutical industries...several hundred thousand/year for, essentially, photo-ops. And that's after they actually got cleaner about it. So, yeah, lots of money. And the results seem to follow eerily well. Lieberman's flip flop on the Medicare buy-in came after the insurance industry slammed it.

Some argue that Lieberman's about-face has more to do with ideology - Lieberman did this to oppose the progressive left, something his comments do suggest. Maybe. But what's he going to say? The guys who bankroll me decided it wasn't good, so I did their bidding? At least the anti-liberal argument wins him some points among conservative democrats and Republicans. The admission of following the money could piss everyone off.

So, yeah, let's put the pitchforks down for a second and stop frothing about Lieberman. I hate his guts more than most of you. But his killing the already-compromised Medicare buy-in was almost a given. It's the last fact that's really got me boiling. It was almost a given. The industry owns him. He directly benefits from their avoiding any real competition (since, as I've noted before, health insurance companies resemble oligopolies in America) through universal coverage, regional plans, a public option, or even a Medicare buy-in. Good business for them is good business for him. He's not alone. This industry spends a lot of money in lobbying Congressional leaders, both legally, and through the loopholes. It doesn't matter that most Americans want real reform - too many of their leaders get their marching orders from the health insurance companies. This is the real story in the Lieberman affair.

It extends well beyond health care, obviously. Look at any major industry in the United States and the amount of money they spend lobbying Congressional leaders. It is disgusting. Now, they like to give money to everyone (as it would be politically stupid to only give to one party), so they sometimes do donate to leaders who won't vote their cause. However, a lot do. The revolving door makes it even worse, as people move regularly from the industry, to regulating the industry, to the industry. Something just stinks here. And, of course, these companies have huge swaths of money, which make it hard for people to challenge them in the competition for Congress.

This isn't a left/right issue. It isn't even an anti-corporation issue. It's a democracy issue. If we want to have a strong democracy, the fact that Washington is owned by, and serves, corporations and industries, is a real problem. Look, it's in these companies' interests to lobby. It only makes sense for them to do so. The issue is, we don't check them on it. What we get are policies that are often bad for the majority of Americans, bad for the country in the long-run, but good for industries. We know they're problematic before they even get implemented, but they happen, anyway. Health care is a good example. We badly need to slow down the growth of health care spending, for the sake of our economy in the long-run. However, to do so, we need to implement some major overhauls of the system. Are we doing that? No. In fact, some of the best ways to lower costs in the long-run, like the public option, have already been dropped from the bill.

We can debate the specifics about many of these issues all day and night. And, so long as its on the actual facts, that's a good thing. But when the debate gets hijacked by companies, we have a serious problem, for both liberals and conservatives, and those of us who refuse to be categorized as either of those. When our government no longer works for us, but rather for companies who do not necessarily share our long-term interests, we need to bum rush the show. I don't even blame the industries themselves - it's in their interests to do this. The problem is when we let this kind of thing happen.

Democracy is a very precious thing. It came with a lot of blood, a lot of struggle, and a lot of pain. It is not something we can ever take for granted. The age of Obama is, I think, a scary time, though not because he's a Kenyan Muslim baby-killing gay-loving socialist-capitalist terrorist. It's about issues like democracy itself. I fear that people are becoming complacent, just because he's in power (at least on the left). Contrary to what he says, he is just a politician. His game is to stay in power, just like Joe Lieberman and others. Just because he's in power and there are Democratic majorities in Congress does not mean things are going to go well.

If you haven't seen it, there was a fantastic documentary on this past weekend, The People Speak, which should remind everyone that the things we value the most are the things we must fight for the most, at all times. That means, even with this supposedly liberal administration, that doesn't mean things will change. We have to hold our leaders accountable at all times. The way health care reform has unraveled over the past few months is a prime example. It has become one concession after another. Many say, trust Obama, he's looking out for us on this, it'll be fine. I say, do you know anything about American history? Yes, there will obviously be differences between an Obama administration and a Bush administration (though fewer than you'd think), but this one problem, illustrated by the Lieberman affair, that Washington serves industry over the populace, will remain with us unless we are willing to confront it. It's bad news for all of us, too, from the left and the right. That sacred pledge made hundreds of years ago, to have a government for the people, by the people, is at stake. Obama isn't looking out for us, people. We are looking out for us. We cannot go silent about this, we cannot wait to see how things play out. We need to act in whatever ways we can. In Voices of a People's History of the United States, Howard Zinn and Anthony Arnove give use examples of the power of both the big and little guy/gal who stood up for democracy, freedom, and justice, throughout American history. What has happened in health care reform is indicative of what has happened in a number of other issues, and shows just how fragile our democracy is. Today, democracy, it don't look so good in America. We mustn't wait for our leadership to turn the tide and bring us back to some utopian state. We must put pressure on them ourselves. The great advances in American history only came after great pressure and struggle from Americans who saw wrong and gave everything to right it. We must follow the footsteps of those who came before us, and fight for that democracy. Let's start with health care reform.

p.s. - this has little to do with partisanship. People on the right should be angry about this trend as much as those on the left. While I think Democrats are definitely better than today's brand of Republican, they take a lot of money and allow their corporate interests to override the interests of their constituents and their country a lot, too. A website which has provided a lot of information about who's paying who (although it gets harder when we get to the loopholes, like jobs for wives discussed above) is opensecrets, which is run by the Center for Responsive Politics. Check it out!

Lies, Damn Lies, and the Health Reform Debate: Hello Insanity!

I personally would have preferred a "hello, Cleveland!", but alas, it is not to be. The health care debate has been absolutely absurd, our leaders in Washington have been absolutely moronic at times discussing it, and the media hasn't really done a great job reporting some basic facts about what is going on - though I give some of them some credit, because their showing the ignorance and straight-up gangsta behavior by people at these town hall meetings is illustrating just how looney some of these folks are. Anyway, we here at the "Spoon" decided to do a little PSA of sorts on health care reform. We hope to have a more detailed analysis up soon, but here's a quick read that we hope will be informative. (Note: this was supposed to be a quick-read piece, but damn it all, I couldn't stop writing!)

First of all, I want to address the town hall meetings and "widespread" public dissent about President Obama's health care reform. #1, a lot of these people that are disrupting these meetings are doing so on the bill of the health insurance industry. So, that tells you something. Rachel Maddow did a nice piece detailing the connections and ties behind this nonsense the other night. Straight-up Hessians, to some degree. #2, those who aren't are saying some of the most incredible things I've heard. So, even if they're actually angrily opposed to reform (as opposed to angry because a paycheck from the insurance industry tells them to be so), they have no clue what they're talking about. That's kind of the media's fault - I realize they're sort of helping by playing these incredibly ignorant comments, but maybe they could spend more time providing basic facts about parameters of the debate on a constat basis to help. "The government needs to keep its hands off my Medicare" is priceless (since Medicare is a government-run program), along with the GOP talking point that health care reform will include a provision that will essentially force euthanasia on seniors, another ridiculous statement. Craaaa-zeee. So, yeah, the "widespread" dissent is largely either being paid for, or is informed by ignorance. Oh, and while I am happy to see public discourse and dissent, "paid for by" and ignorant dissent is not good, particularly when it gets dangerous, especially in settings where the public is actually allowed to participate, as opposed to other boisterous protests where the opposition is loud particularly because it is not ever allowed anywhere near the discussion. A fight broke out at one of the town hall meetings in Tampa where cops had to calm things down, a Texas Democrat was shouted down by right-wingers who didn't even live in his district, a Maryland congressman had an effigy of him hung in opposition to reform (following the loud cheers Rep. Todd Akin received when he joked about Democrats getting lynched at these town hall meetings), and Rep. Brad Miller from North Carolina cancelled his town hall meetings after his office received a death threat. These are troubling signs, and very emblematic of where this debate has gone. Former Right-to Lifer Frank Schaeffer offers us some chilling words on what the reform debate has become.

Second, let's talk about the government role in all of this. Look, the "bureaucrat" in the system that is going to make decisions about your care isn't the government! We already have bureaucrats in the system, except they work for the insurance companies, are often called actuaries, are not health care or medical experts, and make decisions about what is and isn't covered. Again, private insurance...bureaucrat. The public option is the government part of the plan that many on the right are angry about, arguing its socialist and will destroy the private insurance industry. I've already written a little about that in an earlier post. Well, okay, so what is the public option? Its still a work in progress, but basically, it will function as a national health exchange of sorts, essentially being a plan organized and facilitated by the government, not necessarily run by them in the classic sense of the word. The various bills on the Hill right now basically put regulations on the public plan that will require the plan to meet the same benefits and cost requirements of private insurance companies. Obviously, there will be some differences, but no government bureaucrat will sit at a desk and decide what is covered.

Plus, this isn't a single payer system AT ALL! The government is not taking over health care IN ANY REAL WAY with this plan. I can't emphasize the fact that this point needs to be made clear every single time someone raises it. Again, like I said before, the public option involves more government involvement, certainly, but its primarily setting up particular regulations on the type and scope of coverage that can be offered, which is to be modeled on regulations for private insurance. There will most likely be some level of sliding scale subsidies for coverage, based on family income. So, yes, the government will be more involved. But this in no way is even remotely equivalent with government-run health care. And, by the way, I'm not sure whether government-run health care isn't better than private insurance. Medicaid, for instance, covers a substantially sicker population at relatively reasonable per-person rates. Yes, overall Medicaid spending certainly has increased over the past handful of years, but that is being driven primarily by more individuals being covered by Medicaid...largely because employer-based care has eroded. That is to say, public programs like Medicaid and SCHIP have come through to help prevent a larger increase in the uninsured than we've actually seen. Research shows that, when adjusting for health conditions and socioeconomic status, Medicaid is actually less expensive than private insurance. That is to say, if Medicaid patients were on private insurance, getting the same care, their care would cost quite a bit more. Conversely, if people on private insurance were on Medicaid getting the same care, their care would cost less. Again, the reform being postulated isn't the government-run socialist medicine "nightmare" that people are saying it is in any way, shape, or form, but if it was, that might actually not be a bad thing.

Third, about rationing...look, there is a finite supply of money and services, so care is going to probably be rationed to some extent. This is a very hard thing to deal with when the person it affects is someone you love, but understand that we already ration care. Of course, our rationing is primarily based on class. If you have money, you usually get a distinctly different type of health care than if you're not rich. So, the 55 year-old high executive at one of the major banks, who totally blew it and should have been fired on the spot, not only keeps his job, gets bailed out by the government, gets a ridiculous bonus, this person also has great health insurance coverage for the ulcers they got when they thought they were going to be fired because they completely screwed up. A hard-working twenty-something employee at said bank, who did everything right, was a model worker, got laid off, lost a lot due to all types of investments gone awry due to the economic problems partly caused by their own executives, and is now uninsured and is now facing some serious financial difficulties due to a few medical bills. So, what we have is a highly immoral type of rationing of care. I want to have a moral rationing of care, where things like medical conditions and projected health outcomes help determine who gets what. Its far more efficient and far more humane. Again, it makes it tough for those whose loved ones are on the losing end, but at least there is a method to the madness, and we're ultimately helping more people with our difficult calls. That is not the case at all right now.

Fourth, our health care system is not the best in the world. It is, in fact, a middle-of-the-pack health care system, at best. The WHO World Health Report had us at #37 in overall system performance, and #72 in overall health. Not exactly numbers to write home about. A more recent study compared us to six other major nations, and we rank last in pretty much every category. We also ranked last among 19 countries in a survey looking at preventable deaths. We do pretty poor on both issues of access to care and quality of care, and are going in the wrong direction. But, we are number 1 in one thing...spending. This tells you one thing...we are doing a terribly inefficient job. Tons of spending, mediocre (at best) results. Any argument that we need to stay away from reform because our system is already the best in the world...is crazy as hell.

Fifth (or fif...damn, do I miss Chappelle's Show), about choice. The proposed plan does not scrap the current system (which I think it should, but that's another story). If people feel their current employer-based insurance or whatever other form of health care coverage they have is good, they can stay on it. Nobody is being mandated to go onto government-facilitated (that is much more accurate than government-run) health care. Also...I'm sorry, choice is nice, but real coverage that is affordable, period, should be the main concern. I hate this line of arguing...I won't be able to see my normal doctor in this plan, blah blah blah. Yes, its valid to argue about that, but when you're looking at comparing that against not having real (i.e. no smoke and mirrors high-deductible plans, or other types of coverage that don't pay for much in the end, which, ultimately lead to patients foregoing necessary care) and affordable health care, I go with the latter as the most important point every time. And...again...if you like your current insurance, you can stay there!

Sixth, about costs and the problem of health care spending....we need to curtail our health care spending, no doubt about it. It will take up a greater and greater portion of our budget, but the problem with the system as it is is that we're not really going to get much for that spending. There are so many inefficiencies present - we need to alter incentives, financing mechanisms, etc., in order to really start seeing a true deceleration of costs, as opposed to just cutting back coverage (which, I'm sure the insurance industry would have no problem doing - I linked to it in my previous post, but please check out Wendell Potter's damning testimony against the insurance industry, which has not gotten nearly as much media play as it should have...Potter was a whistleblower from CIGNA who really spilled some beans on just what our insurance industry has been doing - here is a ton of info about him, his testimony, and a great interview he did with Bill Moyers. Because so many patients are underinsured or uninsured, health care providers often have to game the system to ensure that they don't lose money. This means they might perform a variety of tests that aren't quite necessary, but are expensive, for patients with good health insurance, in order to compensate for the care they provide to patients who don't have insurance, or whose insurance doesn't really cover much of anything. The incentives of the system, in general, are to do as many tests as possible, too. I'm not saying this is what providers necessarily do, but the way they are compensated, as well as how the system is financed overall, often doesn't help this issue. A major step in the right direction would be to alter the mechanisms by trying to lower the number of uninsured and underinsured. This would likely lead to a change in efforts to game the system. The public option, some other type of hybrid system that the Senate Finance Committee is looking at as an alternative to the public option, and expanded public coverage for the poor and low-income, would be ways to address this issue. Additionally, we do need to reconsider how we finance care overall. A real emphasis on prevention, with some money behind it, could help. But, keeping the disjointed system as-is, or simply providing "more choice" through tax credits, etc., will do nothing to lower costs. The tax credit argument has serious flaws in it, which research has clearly illustrated. We need a real change in the system in order to stave off major financial problems down the road. Yes, the bill isn't low - about $100-150 billion/year, or around $1 trillion over 10 years. This, of course, doesn't exclude cost savings that will occur from reform. Yes, it's still going to cost us money, but under 1% of a national income that grows at around 2.5% each year. That's not cheap, but that's not going to destroy the country's economy.

Finally, this is a point I abstractly discussed in my previous post, and intimated above, but here it is more bluntly: is an increased government role in health care a bad thing? Seriously, think about it. Again, the point of clarification (in case I didn't make it obvious enough yet), Obama's plan will NOT create government-run health care in any real sense of the word. According to the CBO report, the public option will NOT drive insurance companies out of business. However...maybe it should. Spend a few minutes going through the info Potter shells out in the link above. This is what private insurance is. Innovation? Hardly. Better prices and better services? No way in hell. I'd argue there is both correlation AND causation between our highly inefficient health care system and the private insurance industry. Look, I have no problem with profits. I'm generally cool with capitalism, in concept (not what we call capitalism, which is borderline socialism for corporations, in America - again, prior post!). But, here's the thing. These private insurance companies have clearly sacrificed the health of Americans to make money. I mean...that's the point, right? Its not exactly easy to regulate a lot of private insurance, due to ERISA preemption. For instance, many state efforts to require Wal-Mart to pay more of the costs of its health insurance for its employees (having done some research on this, I'll say that Wal-Mart health insurance plans were very expensive, which, combined with low pay, resulted in many employees not only not being able to afford insurance coverage, but then enrolling in Medicaid - California had a big fight over this, as did Maryland, and a bunch of other states) were attempted, but defeated due to ERISA preemption - its not easy to mess with employer-sponsored plans.

So, here's the thing...when we are dealing with people's lives, which we literally are with health insurance, is this really an instance where the private sector is appropriate if it is not easily regulated, and has not exactly been doing a good job up to this point? I mean, its one thing when we're talking about televisions, stereos, iPods, etc. It is entirely different when we are talking about lives. I'm not saying the private sector can't have a role in health care. I'm not even saying it can't have the major role. I'm saying that the private sector model of profit maximization is highly problematic in this area, because lives are at stake in a very direct way. Given the track record, I don't quite get why people are so dead-set on ensuring the health care industry survives intact in this debate. We can be a capitalist society (it would help if we actually were one, of course!) without every single thing being pure free market. Health care is an area where I'm not sure a free market is ideal. It could work, if we could get some real regulations in place that required certain conditions, such as ensuring people had access to real insurance at affordable prices that didn't discriminate against pre-existing conditions (or maybe even create a national high risk pool for people with pre-existing conditions). Let private insurance companies bid on big regional or national contracts for insurance, let them run things their way so long as they comply with a reasonable set of federal regulations, let them innovate and compete...they'll almost certainly still do quite well, simply because you're talking about an incredible number of people they get to enroll in their plans. But, if the industry is left as it is, where we don't have any real innovation or competition, but much more of an oligopoly, where it is hard to really regulate plans to ensure they are providing real coverage at reasonable rates and not discriminating, and where they profit more from cutting people off from coverage when they need it the most (this isn't some made-up highly-cynical scenario, this is what continuously happens)...why is this something to defend at all? Look, it is not the idea of private insurance, or the idea of a free market, that is problematic - this can certainly work if implemented correctly. However, what we have right now absolutely isn't working, so I don't understand why critics use terms like capitalism and the free market as abstract ideas that need to be defended against increased government involvement, when it is painfully obvious that the private insurance system we have in place has done a terrible job. We need a real debate about whether a real free market, or increased government involvement, in health care is the better option. This would be healthy and helpful to all. What we don't need is this nonsensical discussion where the government involvement is linked to the Soviet Union and fascism, and the current system we have is tied to Adam Smith. Neither is true.

And in the end, we get the insane debate that has happened thus far on health care reform. We're talking about nonsensical stuff, most of it based on pure lies and deception. We should be discussing far-more important issues, like what kind of delivery system works best, how do we best incentivize the incorporation of health IT and quality of care standards, what are the optimal levels of cost-sharing to ensure appropriate use of care, what are the best pooling options to maximize economies of scale, whether we can we find a way to regulate private insurance companies in a manner to ensure that they stay in check while maximizing their flexibility to capture the benefits of true capitalism in terms of competition...these are all really important discussions to be had by supporters and critics of the type of health care reform being proposed right now. There's plenty of factually-based dissent to be heard from all sides. I don't think Obama is going far enough, whereas some old-school Republicans (do they exist anymore?) might say we need to keep the government out, but stop protecting the insurance industry and make the system truly a free market. These are real and valuable discussions to be had. But, what do we get? Discussions about euthanasia, unfounded fears of a fall into autocratic socialism, and, of course, Senator Grassley talking about dragons and health care like a lunatic. I'd say shoot me now, but I might not be able to afford the co-pay for the hospitalization.

American "Capitalism" (it 'ain't quite capitalism) and the Health Care Debate

The health care debate (more on that soon) got me thinking a little about the whole capitalism/socialism thing. And my conclusion is...I wish I was a full-time comedian (no, I'm not even a part-time comedian, but I should be - you know I got jokes!), because this debate has so much ridiculous material. The central thrust is that Obama and the advocates of health care reform, or I should say, reform of his kind, are threatening to take the U.S. health care system and paint it socialist. In general, the Know-Nothings (what I call the Republicans who pretty openly shun knowledge, which, sadly, is quite a few of them) use the socialist label pretty often anytime there is any sort of discussion about corporate responsibility, progressive tax reform, etc. Well, their argument is full of holes, anyway (not surprising from know-nothings), but they seem to gloss over a major issue - America has had a lot of socialism in it, and I argue, not in a good way, either.

Okay, lets try to keep this simple, and not turn into a long-ranging discussion on political economy, etc. (which I couldn't do, anyway). A basic selling point of capitalism is that a free market pushes innovation at a greater pace than a controlled market. By making firms compete against each other, you not only theoretically get better products, you also get lower prices - everybody wants to win in the marketplace, so they make better products than the next guy, and then sell it for less. On a theoretical level, I'll say that I personally tend to favor the incentives of a free market.

So, you're thinking to yourself, this is kind of what America is based on, right? Isn't this system the basis of our economy? Isn't this one of the main points of contrast between us and the Soviet Union in the Cold War? Well...sort of. See, the problem with all of this is, we're not exactly a capitalistic society. Not for the big boys, at least. And the health care debate reminded me of that.

What am I talking about here? Simple...if America was truly a capitalistic society, it would not protect its large firms, which are among the largest and most powerful in the world, anyway. We do not have infant industries in any stretch of the imagination. The US, if truly adherent to capitalism, would limit tariffs. We would not shield these companies in any way - the whole point is to use global competition to create better products, right? Well, that's where we fall short on a lot of levels. We do indeed protect a lot of our industries. Not all, of course, but there are quite a few corporate tax loopholes, corporate welfare, and other forms of financial protection for some of our biggest firms.

So, when Bill Maher laments that America doesn't make anything anymore, there's a reason for that...we cover our industries collective behinds to a point that they don't have to compete so hard in the global economy. This hurts innovation, competitive prices, etc. Hence, we no longer lead in producing "stuff". And some of this has other real consequences, too. For instance, our protection of the textile industry here really hurts Pakistan, which can't really penetrate US markets because of this fact. Now, if Pakistani textiles could get in, they would do pretty well and generate some wealth for Pakistan, no small thing considering the major economic issues the country is experiencing, which are undoubtedly playing a big role in larger security issues. This would also push our own textile industry to get their act together as well.

Now, on the other hand, when it comes to a massive comparative advantage, we are pure capitalism, baby! Iraq is the most obvious example of this, and we see this type of thing when US aid gets distributed to other countries. Part of the condition is to open their markets to the US/buy US products with the aid money. What happened in Iraq was one of the more disgusting examples of this. Iraq, post-war, was obviously a mess (and it still is). In terms of its economy, what it really needed was a more socialistic approach. There was no way its industries could compete with foreign firms. Of course, this kind of approach didn't fly with US capitalism promotion abroad. Bremer wrote in laws that opened Iraq for foreign business early in the occupation, and not surprisingly, foreign firms came in and wiped the floor with native industries. Hooray capitalism! This kind of thing has happened quite frequently, though maybe not to the degree of the CPA in Iraq. Andrew Bacevich, a noted military and US foreign policy historian, talked about the concept a bit, referring to it as economic imperialism, something a lot of people missed during the Clinton years. We made many across the world "liberalize" their economies, which isn't bad at all, but we often insisted that they open up their markets fully, as opposed to nurturing some of their own native industries, which ended up being a major win for us. I realize this kind of goes in between imperialism and foreign capitalism, but I'm just trying to illustrate the point of open markets here.

This has some similarities to the economics of European colonialism. It's not the same, but there's a lot of overlap. Europe, coming off its Industrial Revolution, needed markets to sell these goods in, as well as markets to buy cheap raw materials. Hello, Middle East and Africa. European powers came in, made deals with rulers to open the markets, and did a killing. But wait...didn't I say earlier that global competition is necessary to improve industries? If so, doesn't that make all this foreign capitalism okay? Well...not exactly. When I talk about keeping open markets, etc., I'm talking about cases where the countries have somewhat similar economies. So, the domestic country has a chance to compete with the foreign one. This is not quite so applicable for countries with true infant industries, which need time to grow to a point where they can compete with global firms. The US, for instance, obviously has a huge economy, and should be able to try and compete with European, Russian, and Gulf companies, whereas a war-torn Iraq, which had been depleted by years of sanctions, had no chance in hell of competing with US firms.

So, yes, we are all about capitalism when we have a massive advantage, but not quite so much when we don't have a massive advantage. That's not really pure capitalism, you know. That's more like capitalism for our companies when its convenient, and kind-of-socialism when it's not. Which is why the cry of socialism by the Know-Nothings cracks me up. It's like, morons, otherwise known as members of Congress, we're not exactly a capitalist society! What we have, I'd argue, is the worst of both worlds. On the one hand, we have an exploitative brand of capitalism abroad that is unlikely to win us many allies, and could come back and bite us pretty bad one day. Nothing says revolutionary overthrow of a regime like massive economic strife caused by domestic industries killed by large foreign multinational corporations! Now that's what I call a bumper sticker! At home, we allow some of our industries to become more and more noncompetitive in the global economy by sheltering them with socialism...this is the place where capitalism is the most important thing, of course. And, where socialism would actually help, like providing a social safety net for the market failures that inevitably occur in capitalism (namely, the poor), we back away from it like it was the plague.

I'm not necessarily advocating either system here - like I intimated earlier, I think the incentives of capitalism are good, but I understand that it will ultimately fail when it comes to the poor and marginalized, so I think we need a more socialistic response there. All I'm trying to point out here is the hypocrisy in the use of these terms, and particularly of socialism by people who support its worst aspects for our own firms in many cases. I understand that great powers have incentives to exploit the economic system, which is in theory what we're doing, but when you shelter your own corporations, not making them earn their keep globally, I think it will come back and bite you in the long-run. And, I mean, look at Britain in the 19th century. The colonial aspect is awful, obviously, but in terms of their economy, unlike other European powers, they did actually keep an open market at home, irrespective of whether other countries did or did not reciprocate. I'd argue this played no small role in their becoming the dominant power of the time - their industries were forced to compete as opposed to being sheltered. Of course, brutal British colonialism abroad helped, too, but at least domestically, I think the British empire got the capitalism/socialism thing better than others.

The health care debate made me think about all of this because some are going after the public option with a cry that it will kill insurance companies - even though a recent report from the Congressional Budget Office (CBO) said it would do no such thing. (For the entire report, click here). Hmmm....health insurance companies have been running inefficiently for years in the US. So providing a public option plan that might run better due to (presumably) lower administrative costs is bad - how? I mean, isn't that the point of capitalism? If you have a company that has been doing a crappy job, you want a company that is doing a better job to come in for a) production purposes; and b) to get the crappy company in line or out of the game. So, lets be very clear. The argument to protect the "poor insurance companies" at the behest of millions of Americans is, in a way, an argument for socialism.

Now, I realize a public option isn't exactly the same as another health insurance company coming in and competing, but the private health system is, in some ways, an oligopoly, and I can't fathom private insurance companies becoming more efficient without competition from a plan that limits administrative costs, return on equity for shareholders, and advertising. I agree with Howard Dean in that I don't really give a damn as to whether private insurance companies get hurt by a public option, because they are doing a terrible job. We spend more on health care than any nation, but rank, depending on what evaluation tool you're looking at, as somewhere between #30 and #60 in terms of how good our health care actually is. A major reason is the private insurance companies. The most efficient private health insurance companies spend over 20% of costs on administration...you can expect that number to be halved by a public option plan, if not more. They keep about half of your premium dollars for themselves, and sometimes deny payment on claims to make more profits. They could do business better, but have no incentive to do so, since they profit from taking additional money from their customers while not paying themselves. I mean, did you pay attention to Wendell Potter's testimony to Congress in late June? Dear god. (Click here for a transcript of the testimony). If you think the insurance companies are reforming without competition, albeit from the government to keep them honest, I have some prime real estate I'd like to sell you. You're not getting a well-functioning health care system with private health companies - we've seen the results, and they've been pretty awful. Hence, the need for some competition, albeit not exactly a private firm.

So, like I said, the argument to protect the insurance companies that have done such a (sarcasm alert) wonderful job up to this point amounts to an argument to protect inefficient and, ultimately, ineffective companies, which is pretty similar to other arguments to protect our "threatened" corporations, which smells more like socialism than capitalism. It's like pulling for King Kong Bundy as the "little guy" in a fight against Al Bundy. And...here's the best part...at the same time, Obama's health care reform itself is also socialism (it's not, but whatever) that must be defeated at all costs before it destroys America. Wow. So, basically, they're trying to win on both fronts. See, I told you, great stand-up material.

We hope to have more on the actual meat of health care reform up soon on the blog

Note: I want to clarify something here - the point of this point is not to debate whether capitalism or socialism are better systems, or what precisely comprises each. Rather, I want to highlight the problematic and hypocritical nature in which these terms are being used. Like I point out, America is not exactly the bastion of the free market, so I find the socialist argument against a greater US government role (even though it isn't remotely as big as many are making it out to be) in health care to be a ridiculous argument. The government is plenty involved in plenty of our big businesses in ways that I posit may not be all that good. In health care, the government needs to be more involved, given the many problems of private health insurance. Paul Krugman and I are clearly thinking on the same wavelength, as he published a pretty good article about this today. He must have read our blog first...ha. Anyway...so that it's clear, this isn't so much a detailed analysis of capitalism versus socialism as it is an exercise to illustrate the insanity of the way the health care debate is regressing thus far.