Democracy is when two wolves and a sheep vote on what they will have for lunch. (Benjamin Franklin) Instead of who pays the nation’s medical bills – we all do – better to ask who is getting paid? It’s right there on the front page of The New York Times in “Fiscal Footnote: Big Senate Gift to Drug Maker” by Eric Lipton and Kevin Sack published on January 19, 2013:
“Just two weeks after pleading guilty in a major federal fraud case, Amgen, the world’s largest biotechnology firm, scored a largely unnoticed coup on Capitol Hill: Lawmakers inserted a paragraph into the ‘fiscal cliff’ bill that…strongly favored one of its drugs…The news was so welcome that the company’s chief executive quickly relayed it to investment analysts. But it is projected to cost Medicare up to $500 million over that period.
Amgen, which has a small army of 74 lobbyists in the capital, was the only company to argue aggressively for the delay…Supporters of the delay, primarily leaders of the Senate Finance Committee who have long benefited from Amgen’s political largess, said it was necessary to allow regulators to prepare properly for the pricing change. But critics, including several Congressional aides who were stunned to find the measure in the final bill, pointed out that Amgen had already won a previous two-year delay, and they depicted a second one as an unnecessary giveaway…
The provision’s inclusion in the legislation to avert the tax increases and spending cuts that made up the so-called fiscal cliff shows the enduring power of special interests in Washington, even as Congress faces a critical test of its ability to balance the budget.
Amgen has deep financial and political ties to lawmakers like Senate Minority Leader Mitch McConnell, Republican of Kentucky, and Senators Max Baucus, Democrat of Montana, and Orrin G. Hatch, Republican of Utah, who hold heavy sway over Medicare payment policy as the leaders of the Finance Committee.”
In between the cheat’s sheets, fiscal conservative is code for a bait and switch on the American public. Partisan talking points operate as decoys for corruption in the very act of sequestering America’s punching power while Iran is shuffling the nuclear deck, Russia is stacking another war of attrition deck (in Syria), and North Korea is playing without a deck. “Moreover I saw under the sun the place of judgment, that wickedness was there; and the place of righteousness, that iniquity was there.” (Ecclesiastes 3:16)
It is nothing less than a trick in the contempt and corruption of partisan politics that the United States Congress treats Amgen to a $500 million “entitlement” from the identical legislation whose sponsors pitch the American electorate how imperative it is to curb the growth of Medicare’s budget through “a 30.9 percent cut to physician payment rates mandated by the Sustainable Growth Rate formula and the sequestration process of the Budget Control Act of 2011 (which requires an estimated 2-percent cut to Medicare payments across all types of service from 2013 to 2022)” according to the U.S. Government’s Centers for Medicare and Medicaid Services in the “National Health Expenditure Projections: 2011-2021”.
You can be busted in Arizona for trespassing on American soil without proof of citizenship. In a lot of places, voter registration has become the new normal in Affirmative Action. At the very least, you’ve got to have a pulse to register to vote. Yet domiciling intellectual property in offshore (foreign) tax havens has also become the new normal in corporate citizenship.
Under what rule of law do drug companies – or any other undocumented aliens – get to vote in Congress, when they’re not even eligible to vote for Congress?
Where in the U.S Constitution are elected representatives authorized to option their legislative seats for campaign contributions and frequent flyer miles on the K-Street Shuttle?
Were Civil War battlefields soaked with American blood so that representative democracy could be subordinated to naked patronage?
THE FOX IN A CHICKEN COOP
With a supply side monopoly, the fox in the chicken coop proposes a “Paradise Lost” in market solutions: a species of identity theft by an impostor that’s actually costing America double per capita what we could and should be spending for medical care on a $750 billion order of magnitude.
“As health care costs have grown, so have employer-sponsored health insurance premiums…If real premium growth continues at even 4 percent per year (which is less than the historical average of 5.5 percent) premiums for family coverage will reach approximately $25,200 per year by 2025 and over $45,000 by 2040.” (Executive Office of the President, Council of Economic Advisers. “The Economic Case for Health Care Reform” in June 2009.)
Where Medicare and Medicaid can trade punches with monopoly on the same power pivot – through bargaining leverage parity on the demand side from their own captive markets – both are pork in the barrel of systemic corruption where Beltway peddle meets Congressional meddle.
“[L]ike Medicare patients, the large portion of hospital patients who have private health insurance also get discounts off the listed chargemaster [hospital billing wish list] figures…The insurance discounts are not nearly as steep as the Medicare markdowns, which means that even the discounted insurance-company rates fuel profits at these officially nonprofit hospitals.
Those profits are boosted by payments from tens of millions of patients who…have no insurance or whose insurance does not apply because the patient has exceeded the coverage limits. These patients are asked to pay the chargemaster list prices.” (“Bitter Pill: Why Medical Bills Are Killing Us”)
Unregulated monopoly chokes the uninsured like a reticulated python with discriminatory pricing in its fangs. It’ll devour $322.7 billion this year from uninsured pockets. Even the Affordable Care Act (Obamacare) won’t curb the growth in Out-of-Pocket Payments to a projected $449.2 billion by 2021. (“National Health Expenditure Projections: 2011-2021”)
Biting down on this pain, an “estimated 77 million (37%) Americans age 19 and older have difficulty paying medical bills, have accrued medical debt, or both. Nearly two thirds of people with a medical bill or debt problem went without needed care because of cost – nearly three times the rate of those without financial problems. (“The Effect of Health Care Cost Growth on the U.S. Economy”, Final Report for Task Order #HP-06-12, prepared for the Assistant Secretary of Planning and Evaluation, United States Department of Health and Human Services.)
“In a recent survey of low and middle income households, 50% reported having medical debt and a quarter of those reported subsequent housing problems as a result of the debt…
[A survey of] personal bankruptcy filers in five federal courts…found that about half cited medical reasons as a cause of their bankruptcy. Among those whose illnesses led to bankruptcy, out-of-pocket costs averaged $11,854 since the start of illness.”
“Rationing is basically defined as withholding something from someone that is beneficial…for the 40 million uninsured, we have brutal rationing by price and their income…And I sometimes resent politicians or smug economists who say, ‘We can avoid rationing through the market, through the price system.’ That is so patently false…Markets ration. They ration by price and income. If you’re a waitress, uninsured, and your child has an ear ache and you cannot afford to go to a doctor, you have been rationed out of the system. And I’m appalled that there are politicians who cannot understand this.” (Interview on PBS with Uwe E. Reinhardt, James Madison Professor of Economics and Public Affairs at Princeton University on “Healthcare Crisis: Who’s At Risk?” broadcast on November 3, 2000.)
A market that doesn’t ration scarce resources AND human satisfaction is either a political slogan or out of business. “All societies face the condition of scarcity; hence all societies must ration goods. The question isn’t whether goods must be rationed, but how. (“Economics: Principles, Applications and Tools” – the assigned text for Introductory Economics at Calhoun Community College in Decatur, Alabama – by O’Sullivan, Shefrin and Perez, Pearson Prentice Hall, 7th Edition, 2012)
There is a laissez faire hypothesis about market dynamics that they ought to be like Ebay, where anyone can offer something for sale. Ebay furnishes the electronic exchange or market for making a transaction possible. Listings on the electronic market exchange invite prospective buyers to bid on such offerings with the price that each is willing to pay. Whoever bids the highest price wins the auction and, presumably, buyer and seller are both satisfied with the outcome. It doesn’t get any more efficient, thus, than price in rationing supply to whomever demands it the most.
Such rationing as occurs under Ebay’s auspices or in any perfectly free and competitive market is iterative upon the price bidding and ultimate exchange. In no sense does such a market embody a purposeful rationing agency. So the iconic ‘market solution’ to rationing scarce resources AND human satisfaction marches to the beat of a different drummer than any kind of purposeful rationing agency whether governmental, under a governmental mandate or Capo di tutti capi.
“Arrow and Debreu confirmed mathematically that through ‘exhausting all possible gains from exchange’, free markets reach an equilibrium that is…said to be Pareto efficient when, ‘no other feasible allocation is preferred by one party and is liked at least equally well by the other party’, and therefore any ‘further mutually beneficial moves are impossible’…
“When perfectly competitive, market forces shape price and quantity such that firms receive only normal profits. This type of market is relatively rare, and many would suggest is impossible in practice.” (“Free Market Efficiency: Conditions, Desirability, Optimality”)
From pain and suffering to life and death, what’s the most anyone can possibly get in a perfectly free and competitive market like Ebay for buyers and sellers to be so satisfied with the outcome that ‘further mutually beneficial moves are impossible’? Who dials 9-1-1 and asks first for a price quote?
Even though the 9-1-1 price question might get pushed up the chain of command to a medical insurance administrator or Medicare/Medicaid reimbursement schedule, the health care train will have already left the free and perfectly competitive market station with the doors closed and all aboard, taking it to a different place, no matter what Pareto efficient outcome would live happily ever after in supply and demand equilibrium.
“Rationing of health care services is a contentious topic…for politically motivated reasons…‘Rationing,’ and particularly ‘government rationing’ is politically charged rhetoric. Merely mentioning the possibility of government rationing of health care services has a chilling effect on health policy debates.” (“Improving The Rhetoric Of Rationing: Part 1” by Bryan Dowd and Kirk Allison in Health Affairs Blog on June 24, 2013) One way to “abuse the meaning of rationing…is to use the term so broadly that every consumer choice becomes a form of rationing…”
“Expansive definitions of rationing are a form of linguistic larceny, robbing the term of its ability to distinguish importantly different contexts…[in referring] to all consumption choices as rationing simply because they involve a budget or supply constraint…Expansive definitions of rationing are politically useful to those who favor true rationing, because if every choice is a form of rationing, then having the government deny certain medically effective care to the elderly, for example, is simply another form of an activity that already is pervasive.
[R]ationing involves limits on consumption that are (1) set by someone other than the consumer…with (2) the intent of limiting choices that some consumers otherwise would be willing and able to make…In other words, rationing is a binding restriction (without alternative)…The rationing agent does not need to be an individual. Obviously, the government is able to engage in true rationing”.
COMMERCE SEIZES THE SUPREMACY CLAUSE
Like an iPhone’s weather icon, the temperature is always mild and the sun always shines on politically correct influence peddling children of a lesser god.
No one has done more than the U.S. Supreme Court to amend the Constitution with rights and entitlements for such corporate avatars of the human species.
So the Commerce Clause doesn’t apply to $2.87 trillion worth of interstate commerce, because five rock stars on the bench are either loony tunes or they lied at their job interviews. (Chief Justice John Roberts speaking for the U.S. Supreme Court in National Federation of Business v. Kathleen Sebelius on the constitutionality of the Patient Protection and Affordable Care Act)
In all their flights of fantasy, five Justices of the U.S. Supreme Court can’t carve into a wooden puppet like Pinocchio the organic chemistry of what only God hath wrought. Corporate enterprise goes from ‘Citizen United’ mission and outcome ownership – in say Microsoft under Bill Gates – to the “two-tiered hierarchy” that’s instead the DNA of a “political control structure”, when some hired hand becomes the boss.
Time was I visited a friend at work for what was then Chase Manhattan Bank. From his office in the World Trade Center, he gave me a tour around the entire perimeter of his floor, which surrounded at least an acre of real estate in the clouds. The space was like a ghost town. It was mostly vacant but fully furnished with empty desks and cubicles. I asked him “what’s the deal, Frank?” He’d actually worked for me at Chemical Bank, before it gobbled Chase, and had gotten the axe when the next regime followed in my footsteps. Corporate politics did the same number on both of us at Marine Midland, though, following the acquisition by HSBC. “You know these big banks, Bob” he replied. “They go from gung ho relationship management, one stop shopping, everything under one roof to focus on core competencies and then back again. Citibank decided to shuffle the deck and let everyone go, who’d been working here. We got this space cheap.” Frank was transferred to Metro Tech in Downtown Brooklyn right after that, or he’d have been in the wrong place at the wrong time on 9/11. For everyone whom Citibank had let go, it turned out to be the proverbial silver lining in a cloud. True story.
Chief Justice John Roberts, Associate Justice Antonin Scalia, Associate Justice Samuel Alito, Associate Justice Clarence Thomas and Associate Justice Anthony Kennedy might think that corporations are people but only human spirits haunt Ground Zero, while Citibank is too big to fail.
Teaching to our own Constitutional test, rule of law is supposed be the message in this experimental social media. “No taxation without representation” become key words for “one man, one vote” to democratize influence peddling. Along come political parties and we hit the road to partisan perdition.
Somewhere along the way, Congressional (legislative) committees take over the wheel in the deal. In the wheeling and dealing, commerce seizes the Supremacy Clause to monetize popular representation. Committee assignments award rich commercial constituencies to incumbency. The tenure in seniority – that hypothetically dulls organized labor – checks its balances in legislative and judicial chambers.
Contingencies in a wink and handshake infiltrate Wall Street, Main Street and all of the partisan politics in between. Where palace intrigue creeps in the cobwebs, “uneasy lies the head that wears a crown”. (William Shakespeare, “Henry IV”, Part II, Act 3, Scene 1.)
“Campaigns, Inc., the first political-consulting firm in the history of the world, was founded, in 1933, by Clem Whitaker and Leone Baxter…Campaigns, Inc., specialized in running political campaigns for businesses, especially monopolies like Standard Oil and Pacific Telephone and Telegraph…No single development has altered the workings of American democracy in the last century so much as political consulting, an industry unknown before Campaigns, Inc. In the middle decades of the twentieth century, political consultants replaced party bosses as the wielders of political power gained not by votes but by money. Whitaker and Baxter were the first people to make politics a business. Political management is now a diversified, multibillion-dollar industry of managers, speechwriters, pollsters, and advertisers who play a role in everything from this year’s Presidential race to the campaigns of the candidates for your local school committee.” (“The Lie Factory: How Politics Became a Business” by Jill Lepore in The New Yorker on September 24, 2012.)
“[E]conomic theory suggests that people are likely to act in ways that further their own interests rather than the general public’s interest…[G]overnment activities are undertaken for the best interests of those who govern…[I]t is still more [intellectually] satisfying to explain the government’s activities in terms of the interests of those who make public-sector decisions, rather than in terms of the public interest…Based on simple economic criteria, a theory of government action based on altruistic behavior should not hold up as well as one based on self-interest.” (“A Theory of Public Goods”, by Randall G. Holcombe of the Ludwig von Mises Institute in The Review of Austrian Economics 10, No. 1, 1997)
“At $100,587, the District of Columbia’s average earnings [per job] make even the wealthiest states seem impoverished…the top 5 percent of D.C. households made an average of more than $500,000, while the bottom 20 percent made less than $9,500” (“Where the Money Went” by Nicole Allan in the April, 2013 edition of The Atlantic). “Democracy is a device that insures we shall be governed no better than we deserve.” (George Bernard Shaw)
Both our republic and our (laissez faire) market economy have become endangered species in the competition that crony capitalism breeds for corporate welfare entitlements.
- In what other vocational “Life of Pi” is public service an apprenticeship for zoo keeper?
- In our global ‘race to the top’, how much vapor does high value employment and creative enterprise inhale from such an unholy alliance?
- How much does a bite of this forbidden fruit take out of GDP’s spending ledger and in what direction is it trending?
THE PATHOLOGY OF CORRUPTION
Resolved to suck the air out of putting the popular back in the mandate is a beast with enough fire in its (2012) belly to parse $7.0 billion on tenancy in Washington, D.C. time shares (Federal Election Commision). In the campaign for puppets on a string, disinformation plays both ends against the middle. Campaign treasuries maintain a collective center of gravity for the orbit of polar (partisan) opposites to fait the accompli of divide and conquer.
It is formulaic in contemporary election campaigning, thus, to stuff the ballot box with character assassination. It is also formulaic for an embarrassment of riches to bank roll electoral carpet bombing. Think of this as the new normal in the free speech monetization of trash talk. Who’s not a beggar at this feast of media buyers? “[F]or a twenty-four hour news network, polarization is enormously helpful, because it transforms the chaos of politics into a drama of good ideas against bad ones, enlightenment against ignorance. This is how the world looks to a partisan, although ‘partisan’…is more often an accusation than a declaration.” (“MSNBC Tries to Figure Out What Liberals Really Want” by Kelefa Sanneh in The New Yorker on September 2, 2013)
If the media is the message, they’d all starve without partisanship. That’s why it’s the coin of our electoral realm. It matters less who’s doing what to whom, because “the play’s the thing, wherein we’ll catch the conscience of the king”. (William Shakespeare, “Hamlet”, Act 2, Scene 2.) Never mind conscience is the intended casualty of character assassination. Look no further for a diagnosis of the lethal epidemic that’s decaying America’s economic prosperity.
- “Fiscal Footnote: Big Senate Gift to Drug Maker” by Eric Lipton and Kevin Sack in The New York Times published on January 19, 2013.
- The U.S. Government’s Centers for Medicare and Medicaid Services “National Health Expenditure Projections: 2011-2021”.
- Executive Office of the President, Council of Economic Advisors. “The Economic Case for Health Care Reform” in June 2009.
- “Bitter Pill: Why Medical Bills Are Killing Us” by Steven Brill in Time magazine, published on March 4, 2013.
- “The Effect of Health Care Cost Growth on the U.S. Economy”, Final Report for Task Order #HP-06-12, prepared for the Assistant Secretary of Planning and Evaluation, United States Department of Health and Human Services.
- Interview on PBS with Uwe E. Reinhardt, James Madison Professor of Economics and Public Affairs at Princeton University on “Healthcare Crisis: Who’s At Risk?” broadcast on November 3, 2000.
- “Economics: Principles, Applications and Tools” by O’Sullivan, Shefrin and Perez, Pearson Prentice Hall, 7th Edition, 2012.
- “Free Market Efficiency: Conditions, Desirability, Optimality”, an Economic Discussion Paper by George Mendes for The Strategy Tank.
- “Improving The Rhetoric Of Rationing: Part 1” by Bryan Dowd and Kirk Allison in Health Affairs Blog on June 24, 2013).
- National Federation of Business, et. al., Petitioners v. Kathleen Sebelius, Secretary of Health and Human Services, et. al. in the Supreme Court of the United States, docketed September 28, 2011.
- “The Lie Factory: How Politics Became a Business” by Jill Lepore in The New Yorker published on September 24, 2012.
- “A Theory of Public Goods”, by Randall G. Holcombe of the Ludwig von Mises Institute in The Review of Austrian Economics 10, No. 1, 1997.
- “Where the Money Went” by Nicole Allan in the April, 2013 edition of The Atlantic.
- Federal Election Commission Summary of 2011-2012 Election Cycle Campaign Activity.
- “MSNBC Tries to Figure Out What Liberals Really Want” by Kelefa Sanneh in The New Yorker on September 2, 2013.
ART & PHOTO REFERENCES
- “Trick or Treat”: http://dazzlejunction.com.
- Claiborne County Civil War Project.
- Jean-Baptiste Huet’s “The Fox a Chicken Yard”: http://www.Flickriver.com.
- “Wolf in Sheep’s Clothing”: Estúdio Self — http://designspiration.net.
- “Puppets on a String”: The-Swain on http://www.newgrounds.com.