Twickle-Down Twumpcare

It is 8 pm Austrian time. If new reports are correct, about one hour from now, the House of Representatives will vote on their health care insurance accessibility plan.

As I have occasionally mentioned on this blog, our messed up free(d) enterprise(r) system, tweaked into dysfunction by years of corporate lobbying and legislation written at Round Tables and then conveyed by the hand of some bought and paid for politician to the floor of Congress and voted unread into law (pause . .  to take a breath), has made sure that American money now acts like a gas floating upwards rather than a liquid trickling down. Not that I ever really bought into that particular theory either. But Republicans clearly cling to it with an almost religious conviction. In order to sell it to their minions, they coin neat phrases like “job creators” or “makers and takers” or conjure up economic evil-doers like “welfare queens” or “deadbeat dads”. They opine incessantly that “Obamacare” is merely a “disaster” in a “death spiral”, a weapon in the big hand of government wielded to enslave the once-free . . . And now they have their chance – the new tiny hand of government will be more than happy to sign a law designed to bring back the invisible hand. Supply and Demand. Those market forces will make everything healthcare great again.

Except that we all know they won’t. Because as we saw before the ACA, with a health insurance industry orientated toward profit, the demand was universal (we ALL get sick and need care) and the supply was based on ability to pay.  These companies did not magically rise up to meet the needs of the consumers. They found ways to avoid paying the bills of the sick (e.g. “pre-existing conditions”) in order to keep the premiums of the wealthier and healthier lower.

Maybe, just maybe, the health care concerns of our nation cannot be addressed only through insurance industry products being bought and sold. Maybe, this is one of those economic sectors where cooperation is just as necessary – or more so – than competition. Maybe, merely “everyone having access” to health care isn’t enough. I mean, I “have access” to a Rolls Royce. That doesn’t mean I can afford to buy one.

I am in no danger of being financially ruined because I don’t own a Rolls Royce.

Not having a Rolls Royce does not put me at risk of dying or losing a loved one earlier than necessary.

 

While defending the proposed budget, Twump’s spokesperson feigned social consciousness by asking can we really continue to ask a coal miner in West Virginia or a single mom in Detroit to pay for these programs?”  He wasn’t talking about the ACA specifically, but about all larger government actions. My answer to him: “YES! Yes, we can!”

It is certainly better than asking that coal miner or single mom to contribute to the next insurance company CEO’s obscene bonus.

Is this all really so hard to understand?

 

It is now 9 pm Austrian time. I just checked the news and heard that the vote will not happen after all.

Rainmaker Riposte

First – a re-blast from the past . . .

Metaphorical Money

March 6, 2015

Over the years of listening to hundreds of business student discussions, it started to occur to me that the way we talk about money –– the idioms and metaphors we use –– have changed over the decades. I started collecting those idioms and metaphors and discovered that they generally fell into three distinct groups. One for each of the three physical states any substance can take: solid, liquid, and gaseous. Let me explain.

A hundred or so years ago, money had the physical properties of solids. It was dough or bread. You could hold a big wad of cold hard cash in your hand or jingle the coins in your pocket. You could stockpile money, put it where your mouth is, throw it around, or stuff it in your mattress. Like Scrooge, you could stack up your wealth against someone else’s or squirrel it away. You could pinch pennies, hold the purse strings, have money to burn or have money burn a hole in your pocket. Money talked.

Then something changed –– maybe it was abandoning the gold standard or deregulation. Who knows? But it seemed that the revved up economic motor got hot and money melted. Liquidity was born and savings turned into cash flow and liquid assets. Companies no longer went broke, they became insolvent. They didn’t fuse, they merged. A small amount of money was a drop in the bucket. More and you were awash in it. See a good investment? Then dive in! Some of the money evaporated. Some of it trickled down.  But even in its liquid form, there were still some natural barriers to keep money contained; you could pool it, but not for too long, because then it would go stagnant. Money had to keep circulating. And some of those pools had bubbles in them.

The economy heated up a little more and then, in 2008, came the “Great Economic Meltdown” which strikes me as a misnomer. The economy had been melting for a good long while. This was more like the ”Great Economic Vaporization”. We suddenly discovered that money had become a gaseous substance somewhere along the way. At first it had seemed to be everywhere and limitless; you could just breathe it in. You could make money out of thin air. No need to produce anything or do actual work –– let the Chinese do that. We could just buy and resell stuff to make money because it was not connected to anything on the ground anymore. The FIRE economy (Finance, Insurance, Real Estate – in which nothing is actually produced) ascended, while roads, bridges and schools crumbled. But in money’s new form, it started, like most gases, to rise upward, collecting in the stratosphere. For the 95% of us down here on earth, huge portions of it simply floated away; there was suddenly no financial oxygen around anymore, no cash flowing or trickling, nothing solid or tangible to put in your pocket. Poof. Gone.

What now? As I admitted at the start, I am a language teacher, not an economist –– or a chemist for that matter – but it seems to me there is no way to get all those escaped gasses back. And simply printing more money as some have suggested won’t do anything to reverse the chemical processes that have been set in motion. I think we have to start building things again. Let’s start with things that keep the planet cool. Like wind turbines. And solar panels. And schools.

I generally don’t like re-blogging stuff (even when it was written at the start when I had a readership of one), but I have found myself returning to this old idea lately because it still seems completely relevant to what is going on today, and more particularly in how economic issues have been dealt with in this election. One hears continually that decades of increasing financial frustrations turned into rage (with some help from a well-meaning socialist senator and a de-meaning wannabe strongman), leading us into our current political quagmire. Now we are being asked to choose between the classic medicines of the political left and right. Put her in office and she will try to push through her hundred ideas of how the government can help us. Give him the chance and he will wield the magical powers of money to save us.

Although I definitely fall in the camp that sees government as a useful and necessary institution, I believe now that old ways of thinking are no longer valid. For over thirty years of deregulation, wealth has slowly consolidated upward as the lion’s share of the tax burden shifted consistently downward to lower earners. All of these developments have made our economy precariously top-heavy and in constant danger of tipping.  Left/right solutions no longer make sense for an up/down problem. The core of our predicament is neither political nor economic – it is chemical . . . and mythological.

Ironically, the arguments behind three decades of deregulation have been disproven by their own implementation.

 

Myth #1: “Job Creators”
Let large companies keep their money and they will reinvest it, creating new opportunities for workers.

In reality, the vast majority of people are employed either by government or by smaller companies. When the large ones have more money, is it their first instinct to think “let’s go hire more people”? Or do they go shopping for smaller competitors, take them over, fire employees with redundant positions and make those remaining take on the extra workload? Seeing as how the prime directive of corporations is now “shareholder value”, the choice seems clear.

 

Myth #2: “Dishwasher to Millionaire”
A person can work their way from nothing to fabulous success.

At some point I learned that a person now needs money to make money. Horatio Alger might disagree, but it seems to me that there are more people working harder and harder just to decrease the rate at which their standard of living is sinking. We have become Gatsby’s, believing “in the green light, the orgastic future that year by year recedes before us . . .So we beat on, boats against the current, borne back ceaselessly into the past.”

 

Myth #3: “Taxation without Representation”
Paying taxes means “the government is taking your money”. You are a much better judge of how your money should be spent than those bureaucrats in Washington.

Really? Personally, I don’t want to have to home school my kids, check the quality of my food, build my own roads, put out my own fires, dig my own well, confront the burglar myself, build my own generator, drive my injured friend to the hospital (on roads I built myself) or pay every individual (home-schooled) doctor out of my own (already empty) pocketbook (-and I haven’t even had lunch yet!) I don’t want to dine on cat food when I am seventy or build my own playground or define and defend my own rights.

And I don’t want others to have to do all that alone either.

Until the day arrives when not only the obscenely rich up there in the stratosphere, but ALL of us, down here at ground level, can afford private daycare, private schools, private transport, private doctors, private libraries, private security forces and private pension funds, I think we are going to have to keep working together. It would help us all a lot if we had more cash flow.

So let’s start by making it rain.