Wednesday, January 31, 2018

A Progressive State of the Union:
   Teddy Roosevelt, Progressive corporate
   leaders, and 21st Century healthcare

In the 21st Century American Progressives find themselves lost in a sea of words which opponents use to confuse, hide, or sublimate their message. Progressives know that in the 20th Century their message about government and the economy was accurately expressed by Teddy Roosevelt:

“Liberals” generally today in the United States focus on using taxpayer money to help create better society.

“Progressives” focus on using government power to make large institutions play by a set of rules while using a "progressive tax structure" to fund local, state, and federal government activities such as providing streets and highways, schools, medical services, and defense. The goal is to create equitable communities and an equitable world.

Importantly, Progressives are aware of history and know that Teddy Roosevelt was cast out by the Republicans and rejected by the Democrats - he had to create his own political movement. As explained in this website, the 21st Century Neoliberal takeover of the state Republican Party organizations and the Third Way takeover of the National Democratic Party effectively shuts out the Progressive Pacific Message.

It superficially seems ironic that it is not a Progressive government as envisioned by Teddy Roosevelt but 21st Century Progressive corporate leaders who propose to exercise the artificial powers of government-granted corporate franchises on behalf of the public good - in this case taking on the healthcare problem in the United States.

Read the above news release carefully because the media has already misrepresented it, explained why it won't work, called it the end of health insurance or healthcare as we know it, predicted it will reduce the fed's anticipated inflation rate, and otherwise became creative about limited known facts.

There are some related known facts beyond the text of the news release:
  • All three companies are international is scope.
  • Taken together the three companies employ more than 950,000 people worldwide.
  • Amazon:
    • Has a history of creating an internal product which then develops into a product for an external market.
    • For current business activity holds wholesale licenses covering the distribution of medical-surgical equipment, devices, and other healthcare related equipment in at least 12 states (called wholesale pharmacy licenses which have been misrepresented in the press as for drugs).
  • Berkshire Hathaway
    • Is #3 on Forbes list of The Worlds Biggest Public Companies ranked by profit.
    • Its wholly-owned subsidiary unit, General Re, in addition to other wide ranging services and products provides:
      • reinsurance to the health insurance industry;
      • offers health reinsurance protection in various lines of business, such as critical illness, disability, life, and Medicare supplement;
      • underwriting services for individual life, individual disability, and individual critical illness;
      • claim management services;
      • industry wide studies and research services for life and health reinsurance clients;
      • services in the areas of risk assessment for biometric insurance risk;
      • medical underwriting and claims assessment services;
      • underwriting services for medical professional liability, personal accident, personal injury liability, workers' compensation/employers' liability;
  • JPMorgan Chase
    • Is #3 on Forbes list of The Worlds Biggest Public Companies ranked by profit, the largest bank in the United States, the world's sixth largest bank by total assets, and the world's second most valuable bank by market capitalization.
So it isn't as if three CEO's of an auto company, a construction company, and a shipping company got together and decided to cut their insurance costs by creating a subsidiary company to buy group insurance through.

And it isn't as if three CEO's met for the first time last week. As explained on CNBC:
    Two decades ago, Jamie Dimon almost joined Jeff Bezos at Amazon before deciding to run Bank One instead. Both considered joining each other's boards, but did not because of potential conflicts.
    Warren Buffett has long admired Bezos and lamented not owning Amazon in its early days because he didn't understand it. The Oracle of Omaha's love of Dimon's annual letters are well-known.
    And all three are customers of each other.
    But the initiative that was announced Tuesday turned from a casual conversation into a real effort after Berkshire Hathaway's Todd Combs joined J.P. Morgan Chase's board in September 2016, sources familiar with the situation said. That meant there was an insider to pull the group together in a formal way.
    Talks about forming this partnership, which will be "free from profit-making incentives," really began to pick up in pace over the last two to three months, according to sources. It was during this period when the decision was made to actually form a new company and share all health-care data with this entity.
An all three CEO's have been staunch supporters of Democratic candidates.

In presenting this story one thing the American media seems to ignore, or perhaps they just lack historical awareness, is the peculiarity of how the provision and funding of healthcare occurs in the United States came to be and how consistent this new initiative is with that history.

Today, most Americans under 65 have some version of a private health insurance program covering the cost of routine, preventive, and emergency health care procedures, and also most prescription drugs, but this was not always the case.

During the 1920s, individual hospitals began offering services to individuals on a pre-paid basis, eventually leading to the development of Blue Cross organizations in the 1930s. The first employer-sponsored hospitalization plan was created by teachers in Dallas, Texas in 1929. Because the plan only covered members' expenses at a single hospital, it is a forerunner of today's health maintenance organizations (HMOs) as was the Kaiser Permanente program.

In 1933, Henry J. Kaiser and several other large construction contractors had formed an insurance consortium called Industrial Indemnity to meet their workers' compensation obligations. Dr. Sidney Garfield had just finished his residency at Los Angeles County-USC Medical Center at a time when jobs were scarce; fortunately, he was able to secure a contract with Industrial Indemnity to care for 5,000 construction workers building the Colorado River Aqueduct in the Mojave Desert.

Soon enough, Garfield's new hospital was in a precarious financial state (with mounting debt and the staff of three going unpaid), due in part to Garfield's desire to treat all patients regardless of ability to pay, as well as his insistence on equipping the hospital adequately so that critically injured patients could be stabilized for the long journey to full-service hospitals in Los Angeles.

However, Garfield won over two Industrial Indemnity executives, Harold Hatch and Alonzo B. Ordway. It was Hatch who proposed to Garfield the specific solution that would lead to the creation of Kaiser Permanente: Industrial Indemnity would prepay 17.5% of premiums, or $1.50 per worker per month, to cover work-related injuries, while the workers would each contribute five cents per day to cover non-work-related injuries.

And that was the beginning of the model of employer-employee shared cost for employee plus family healthcare and the current Kaiser-Permanente HMO model.

Employer-sponsored health insurance plans dramatically expanded as a direct result of wage controls imposed by the federal government during World War II. When the War Labor Board declared that fringe benefits, such as sick leave and health insurance, did not count as wages for the purpose of wage controls, employers responded with significantly increased offers of fringe benefits, especially health care coverage, to attract workers.

In the 1930s, The Roosevelt Administration explored possibilities for creating a national health insurance program, while it was designing the Social Security system. But it abandoned the project because the American Medical Association (AMA) fiercely opposed it, along with all forms of health insurance at that time.

President Harry S. Truman proposed a system of public health insurance in his November 19, 1945, address. He envisioned a national system that would be open to all Americans, but would remain optional. Participants would pay monthly fees into the plan, which would cover the cost of any and all medical expenses that arose in a time of need. The government would pay for the cost of services rendered by any doctor who chose to join the program. In addition, the insurance plan would give cash to the policy holder to replace wages lost because of illness or injury.

The proposal was quite popular with the public, but it was fiercely opposed by the Chamber of Commerce, the American Hospital Association, and the AMA, which denounced it as "socialism".

Foreseeing a long and costly political battle, many labor unions chose to campaign for employer-sponsored coverage, which they saw as a less desirable for their members but more achievable goal as well as more favorable to the union movement, and as coverage expanded the national insurance system lost political momentum and ultimately failed to pass.

The rest of the story of the mostly hodgepodge of American health insurance and healthcare providers is history which has left the U.S. with the most cost and least cost-effective healthcare in the developed world - right up through Medicare and Obamacare. (You can explore this history further at the Wikipedia articles Health insurance in the United States and Kaiser Permanente.

Given the chaos the federal government is in and given the Neoliberal control of two-thirds of the state governments, real Progressives will be supporting the Amazon-Berkshire Hathaway-JPMorgan Chase initiative as a possible means to further evolve American healthcare into a more cost-efficient system and a more universal coverage model.

They may fail to achieve one or both goals. But anyone who thinks "the government" can do it alone doesn't understand American political history. And they most certainly have a better chance at success than Trump and/or Congress.

Tuesday, January 30, 2018

This past weekend the Koch network formally announced the Neoliberal plan to take over the local public school education system

In the last post we reported that The Neoliberals met last weekend to create a strategy to stop the Democrats in November. But that wasn't the intended focus of that seminar.

This week the Neoliberal Koch network opened up to the press regarding their plan to take over the American public education system. In Koch network laying groundwork to fundamentally transform America’s education system we read:
    Changing the education system as we know it was a central focus of a three-day donor seminar that wrapped up late last night at a resort here in the desert outside Palm Springs.
    “We’ve made more progress in the last five years than I had in the last 50,” Koch told donors during a cocktail reception. “The capabilities we have now can take us to a whole new level. … We want to increase the effectiveness of the network … by an order of magnitude. If we do that, we can change the trajectory of the country.”
    Leaders of the network dreamed of disrupting the status quo, customizing learning and breaking the teacher unions. One initial priority is expanding educational saving accounts and developing technologies that would let parents pick and choose private classes or tutors for their kids the same way people shop on Amazon. They envision making it easy for families to join together to start their own “micro-schools” as a new alternative to the public system.
    “The lowest hanging fruit for policy change in the United States today is K-12,” said Stacy Hock, a major Koch donor who has co-founded a group called Texans for Educational Opportunity. “I think this is the area that is most glaringly obvious.”
    Tim Phillips, the president of Americans for Prosperity, highlighted field operations that the network has built in 36 states to advance its agenda, including on education. “We have more grass-roots members in Wisconsin than the Wisconsin teachers’ union has members,” he said. “That’s how you change a state!”
    “We all need to be fully committed to a society in which everyone has an opportunity to make a better life for themselves,” Charles Koch said. “To succeed, each of us has to be all-in. What I mean by that is that we have to make these kinds of efforts a central part of our lives. You don’t need to be as obsessed as I am … although that wouldn’t hurt … but you can’t just make it a sideline.”
In 1980 David Koch became the Vice-Presidential candidate for the Libertarian Party. Included in the Party platform were these two provisions:
  • We advocate the complete separation of education and State. Government schools lead to the indoctrination of children and interfere with the free choice of individuals. Government ownership, operation, regulation, and subsidy of schools and colleges should be ended.
  • We condemn compulsory education laws … and we call for the immediate repeal of such laws.
Today, 38 years later, the Koch Brothers are older and, having learned many lessons about our system of government and politics, they are much wiser. One of those lessons is that it is much cheaper and easier to forge new elements within each of the taxpayer supported state public school systems to support the Neoliberal objectives for the American economy as can be seen here:

For a deeper look at this, read Koch High: How The Koch Brothers Are Buying Their Way Into The Minds Of Public School Students.

And consistent with their willingness to use bigotry as residents of one school district learned in 2009, they will do what is necessary to take control of our local schools:

In 2011 they founded The LIBRE Initiative® specifically to make inroads into the Hispanic community offering dreams to the Dreamers:

For a deeper look at this, read How the Kochs are trying to shake up public schools, one state at a time.

If you watched the video above, what should hit you in the face is the absolute "deer in the headlights" images projected by folks who have a Progressive outlook but who, like 95% of Americans, obviously have ignored politics except in fun Presidential elections.

As the two losing school board candidates project, Progressives have left the real politics to the politicians - elections of local and state government officials are boring hard work. As the kids in the video probably did not learn but should have, marching is fun but it is mostly a waste of time (as is millionaire stars dressing up to promote a change on a single social issue).

What some of us old Americans remember is that even at the national level, it wasn't the civil rights marches that finally delivered the 1964 Civil Rights Bill, it was Lyndon Johnson, a Progressive politician with a moral compass who was not afraid of the drudgery of hard work over an extended period of time. Sure, the marches brought the civil rights issue to the forefront. But without the Progressive politicians holding office at the time, the Civil Rights Bill would not have happened.

Today we need a 24/7/365 network of organizations in every state dedicated not to some hot-button issue or identity-politics-group-betterment issue, but to promoting as public policy in every city and county in every state the core of the Progressive Pacific Message.

Without it, the goal of assuring equitable communities which permit every person the opportunity to pursue personal productive goals within an atmosphere of equality in personal dignity and human rights will remain on the back burner of America.

Monday, January 29, 2018

The Neoliberals met last weekend to create a strategy to stop the Democrats in November

Quite literally some think a 21st Century civil war has erupted on the American political scene as Democrats bask in the awards season while having won a few elections.

How silly of them. They think their opponents are Republicans when, in fact, their opponents are America's most organized, well-funded political ideologues - the Neoliberals.

While the Grammy weekend kept blue state entertainment millionaires busy, a wealthy, well-organized group of 550 Neoliberal militants led by the Koch family again met Indian Wells, California as they do every year. Consider who the Progressives are up against as reported in the press:
    “This midterm is going to be hard,” said Gail Werner-Robertson. “We need everybody to help. We can’t lose the progress that you all have fought so hard for. So I would tell everybody to get ready to fight. Get ready to double down.”
    Turning to billionaire industrialist Charles Koch, she quipped: “I’m happily helping my dad spend my inheritance and moving much of it your direction.”
    Werner-Robertson is one of 550 members of the Koch network who have come to a resort outside Palm Springs for a three-day seminar, each of whom commits to contribute at least $100,000-per-year to Koch-linked groups. This is their biggest gathering since the Koch brothers began convening like-minded donors twice annually in 2003.
On our website page Wealthy Neoliberals Matter: How an Economic Ideology Took Control of U.S. State and National Legislative Agendas the history, organization, and success of the Neoliberal movement in the United States is reviewed. Last weekend, confronted with several Democratic candidates winning special elections in the past few months, more Neoliberal millionaires gathered than ever before.

Unlike in the British press over the past two decades, the American press appears to have finally figured out there are Neoliberals, albeit they seem to think they need to identify them in newspaper articles with a celebrity name, the Koch Brothers:
It's clear the Neoliberals intend to spend a much larger than normal sum of money on the 2018 midterm elections. And the Neoliberals intend to have Republican candidates undermine the Democrats on key issues such as immigration:
    The network associated with conservative billionaires Charles and David Koch is calling on Congress and the White House to compromise on an immigration deal that provides a permanent legal status for 1.8 million undocumented young adults known as Dreamers, while also enhancing border security.
    "We welcome a debate about whether our current legal immigration policy properly balances family and skills-based migration," Daniel Garza, president of the LIBRE Initiative, said in a statement. "But that broad debate should not distract from the immediate goal of providing certainty to Dreamers and enhancing security."
    "We look forward to working with Congress and the White House on balanced legislation that enhances border security, protects the Dreamers, and wins bipartisan support," he said.
What you have to understand is that the Neoliberal's aren't particularly conservative beyond economic issues. Here's how the LIBRE Initiative describes itself:
    The LIBRE Initiative® is a non-partisan, non-profit grassroots organization that advances the principles and values of economic freedom to empower the U.S. Hispanic community so it can thrive and contribute to a more prosperous America.
Who could be against that?

And the Neoliberals are backing a real prison reform effort while "downplaying the challenge Attorney General Jeff Sessions might pose to their objectives on criminal justice reform, which the network said would be a key policy focus this year [instead of] a broader criminal justice reform proposal that some lawmakers and the Koch network have championed."

As explained on our web page, the Neoliberals have no right-wing social policy agenda. Their sole government policy concern is the relationship between government and the economy.

At any point in time, to win they can easily advocate for liberal causes except anything resembling socialism or restricting business activity. In fact, they don't like government doing more than the minimum necessary to protect property. Looser immigration policy? Why not as it expands the labor pool. The same thing could be said for reversing the Clinton Administration policies that created prison overpopulation.

Since Third Way Democrats support Neoliberal economic policies, the Progressive Pacific Message has a hard time finding political support.

As of this moment, there is no Progressive billionaire rounding up his 550 rich Progressive friends for a meeting twice a year and having them fund multiple Progressive policy advocacy organizations in every state to gain control of government. There certainly hasn't been such activity since 2003 or 1947.

This year the Neoliberal goal will be to minimize the loss of Republican members in state legislatures and Congress. Then they will plan for expansion of their control in 2020 while putting their economic policy goals into place state-by-state.

Democrats will still be laughing at a comedy bit done by Hillary Clinton presented on the fun Grammy awards show while the Neoliberals implement their economic polices which neither the Democrats nor Donald Trump understand.

Tuesday, January 16, 2018

Neoliberal Ideology is Dangerous
  Failures are examples of why public sector
  responsibilities need public sector workers

For Progressives, one key truth is that certain tasks should never be "outsourced" to the private sector.

Since the 1980's, the Neoliberal movement in the United States, Britain, and Canada has been working successfully to change that. Today, headlines in newspapers in voters in both countries offer opportunities for learning.

In the U.S. we read G.E. to Take $6.2 Billion Charge Tied to Finance Unit's Insurance Reserves and GE CEO Renews Pledge to Study Breakup After $6.2 Billion Stumble. We'll explore this further below because its connection to the private v. public debate is less obvious. But first we'll look at the more obvious.

The Massive Carillion Debacle

Britain began outsourcing public services nationwide in the late 1980s under Neoliberal ideologue Margaret Thatcher and the model expanded under successive governments. It is now the world’s second-largest outsourcing market behind the United States.

British citizens, who last year voted for Brexit and are geniuses much like Donald Trump followers, this week are reading Carillion crisis deepens amid scramble to save jobs after firm collapses and Carillion collapse: Here's a list of the construction jobs that are most at risk.  Canadian's are reading Liquidation of British firm Carillion threatens 6,000 jobs in Canada  and Carillion's collapse leaves Canadian road, hospital, military contracts in question.

Carillion employs more than 43,000 around the world, including 19,500+ in the United Kingdom, 6,000+ in Canada, with most of the balance in the Middle East and North Africa. It was working on 450 British government projects, including the building and maintenance of hospitals, schools, defense sites and a high-speed rail line. Carillion was responsible for providing per month millions of pounds worth of public services.

Swamped by debt and pension liabilities and burning through cash, Carillion went into liquidation on Monday, threatening suppliers, merchants and big banks. The British government relies on Carillion to provide services from school dinners to road building, and initially stepped in to guarantee that key government contracts would be unaffected. But firefighters in Oxfordshire were put on standby to serve school dinners and U.K. officials said other work would only be paid for 48 hours after the collapse.

Britain’s Specialist Engineering Contractors’ Group estimated that Carillion had left a trail of 1.2 billion pounds in unpaid bills to thousands of small subcontractors.and thousands of small suppliers face unpaid bills totaling millions of pounds.

This is, of course, the behavior the majority of Americans outside the Pacific States approved when they voted for Donald Trump who on a smaller scale has long history of bankruptcy and not paying subcontractors and suppliers.

Outsourcing Long-Term Care for the Elderly

Which brings us to the GE (aka General Electric) situation. GE CEO John Flannery said in the release Tuesday that after a review of its GE Capital GE long term care insurance portfolio that it will take a $6.2 billion after-tax charge for the fourth quarter of 2017 and expects to contribute $15 billion over the next seven years to shore up the portfolio's reserves.

Long-term care insurance in its modern form began in the 1980s along with the election to the Presidency of former GE spokesman and avowed Neoliberal ideologue Ronald Reagan. The insurance was to cover health-related care costs not paid by Medicare or standard health insurance.

As more-and-more people started to live longer, the Reagan-era choice was to expand Medicare by raising payroll taxes paid by individuals and corporate employers or encourage a surpisingly imprudent, short-sighted (and maybe too greedy?) private insurance sector to start selling "affordable" long-term care insurance.

Some would generously say that insurance was undermined by faulty actuarial and underwriting assumptions such as how long people would live and how expensive their care would be, along with grossly overestimating future return on safe investments of premiums. But the truth is, all that was predictable in the 1980s.

“Things really started to fall apart” for the long-term care market in the early 2000s, said Joseph Belth, professor emeritus of insurance at Indiana University. “Companies found that they had to raise rates frequently and substantially, and everybody was unhappy.”

Most long-term care insurers have reduced or ended their participation in the long-term care market since the beginning of the 21st Century, including MetLife Inc. and Prudential Financial Inc.

Long-term care was the death knell for Penn Treaty, which was liquidated last year in a rare failure for the insurance industry.

“The problem that these insurers face is very real,” said Peter Goldstein, CEO of LTCG, a business-process outsourcing company that manages policies on behalf of insurers in the long-term care market. “People are working hard to figure out what to do here.”

The Odd GE Ties to Chinese Communists

That brings us to Genworth, which was spun out of GE in 2004, incurred billions of dollars in losses on the long-term care policies, and has agreed to be bought by China Oceanwide Group Holdings Co.

The CEO of China Oceanwide is billionaire Lu Zhiqiang whose other investments include Lenovo, China Minsheng Banking, and other companies in the banking, securities, insurance, construction, energy, hotel, pawn broking, commodity trading, infrastructure, film and media sectors. Being a leader in what is known as the"Chinese private sector", he now serves as a vice chairman for All-China Federation of Industry and Commerce.

In 1985, Lu Zhiqiang founded the China Oceanwide Holdings Group while a local Communist Party secretary. He is also a member of standing committee of 12th Chinese People’s Political Consultative Conference, a political advisory body in the People's Republic of China. Other than this, he is the deputy chairman for China Foundation of Guangcai Program.

Organized and promoted by the United Front Work Department of the Central Committee of the Communist Party of China and the All-China Federation of Industry & Commerce, the China Foundation of Guangcai Program has as its mission " prioritizing social responsibility while seeking profits " with the goal to eliminate poverty in poverty-stricken areas mainly through investments by private enterprises.

This sounds weirdly like Neoliberal ideology slipping its way into Chinese politics. How this ties into the GE, with its long history of ties to Neoliberals including Reagan, is complicated and a conspiracy nut's delight.

Last year, John Rice, President & CEO, GE Global Growth Organization, joined President Donald Trump in his visit to China where on behalf of General Electric Rice signed deals with three Chinese companies worth a total of $3.5 billion including;
  • an engine and repair agreement with Juneyao Airlines worth $1.4 billion, 
  • a $1.1 billion deal with ICBC Leasing for engines to power Boeing planes, and 
  • a $1.0 billion agreement with China Datang Group to supply gas turbines.
Also China’s Silk Road Fund and General Electric signed an agreement to cooperate China’s “Belt and Road Initiative.”

"The two sides will make joint investment in infrastructure projects in the fields of power grid, new energy, and oil and gas, in countries and regions along the Belt and Road. The cooperation between the Silk Road Fund and GE will not only boost cooperation between high-end manufacturing companies from China and the US, but also promote economic development of the regions where their investment goes," a statement from the Chinese State Administration of Foreign Exchange said.

And so GE expects to dump $23 billion into its spunoff long-term care insurance debacle which is to be purchased by a corporation operated by a billionaire member of standing committee of 12th Chinese People’s Political Consultative Conference and a former Party Secretary.

And GE's ties to China have been endorsed by U.S. President Trump.

No one knows what the future will bring, but to a Pacific States Progressive two serious lessons are offered by these stories. Looking at the weird truth that Britain just found it necessary to put firefighters on standby to serve school meals, we should continue to be steadfastly opposed to outsourcing basic government services.

And looking at an even weirder truth that Ronald Reagan's General Electric has teamed up with Chinese Communists to take care of our elderly, we should be sure that the private sector isn't attempting to effectively invade what should be in the public sector.

Also, according to the American press apparently it is really important news that Donald Trump uses some swear words and it was news this week that he is racist. Neither of those things is news to Progressives.

Thursday, January 11, 2018

Pacific Progressives are Non-Ideologues Seeking to Assure Equitable Communities

In 21st Century American Progressives find themselves lost in a sea of words which opponents use to confuse, hide, or sublimate their message. Progressives know that in the 20th Century their message was accurately expressed by Teddy Roosevelt:

 “Liberals” generally today in the United States focus on using taxpayer money to help create better society.

“Progressives” focus on using governmental power to make large institutions play by a set of rules “Progressives” use  a "progressive tax structure" to fund local, state, and federal government activities such as providing streets and highways, schools, medical services, and defense. The goal is to create equitable communities and an equitable world.

Importantly, Progressives are aware of history and know that Teddy Roosevelt was cast out by the Republicans and rejected by the Democrats - he had to create his own political movement. As explained in this website, the 21st Century Neoliberal takeover of the state Republican Party organizations and the Third Way takeover of the National Democratic Party effectively shuts out the Progressive Pacific Message which is presented here on this blog (use link near the top of the page) as well as on our website (use link below).