Archive for October, 2008

The Coming Apocalypse

October 29, 2008

I just saw an ad on television the other night for an “extended warranty” for car repairs. You can buy one for your car, regardless of its age, and it will then cover the cost of repairs. Got that? THIRD-PARTY PAYMENT FOR CAR REPAIRS! As we have previously noted, third-party payment corrupts the market wherever it occurs. It has virtually taken over health care, higher education, and large segments of the legal profession. It is starting to make inroads in health care for animals. And now, car repairs. Well, yes, dealer warranties have been around for a long time, and are now starting to be offered for amazingly long time spans, like 10 years. But those of us whose cars are older than 10 years (an increasing proportion of the driving population) are now being offered a chance at health insurance for our clunkers.

Since it was only a tv ad, it didn’t tell us whether the warranty includes deductibles, co-pays, and lists of covered and non-covered procedures. Or how much one pays for it. Or whether the staff of the company offering the warranty are the people who were too rude and unsympathetic (the mind boggles!) to handle managed health care.

Other questions arise: When the cost of the premium exceeds the Blue Book value of the car, is it worth the trouble? Well, maybe. The Blue Book value doesn’t necessarily reflect the value of a particular car to its particular owner. The owner who has owned that car since its first day on the road, and nursed it from infancy, may with good reason consider it to be worth a lot more than Blue Book. So maybe the rubric should be that the warranty premium has to be less than the value of a particular car to its owner. Beyond that point, the owner is well-advised to revert to good old-fashioned drive-it-into-the-ground economics, perhaps with the assistance of practical magic. (I once wrote a book called Repair Your Car With Psychic Healing, but couldn’t sell it, partly because my illustrator copped out on me.)



The Blindness of Strangers

October 29, 2008

“Clever terrorists can use innovative ways to exploit vulnerabilities. But don’t forget that most bombers are not, in fact, clever. Living bomb-makers are usually clever, but the person agreeing to carry it may not be super smart. Even if “all” we do is stop dumb terrorists, we are reducing risk.”

Well, yes. Most criminals are pretty dumb, which is why they generally end up behind bars. Most tyrants are, if not dumb, at least inadequately advised, since nobody tells Attila the Hun anything he doesn’t want to hear. Which is why most tyrants do ultimately fall. And most governments are inefficient, which is why we have any civil liberties at all.

But is it possible to devise a society that is law-abiding and free, but governed and inhabited by intelligent, well-informed people? Or are we always dependent on the stupidity of strangers to leave gaps in tyranny and crime in which we can continue to survive?

It may be time to start worrying about this problem, as governments, for instance, get more efficient and better informed. Chicago has almost as many video cameras in public spaces as London, for example. Most of the time, I like that. It’s nice to know somebody is watching the idiots who zoom through stop signs and red lights, and the mopes who lift my wallet. But do I want those same people, or maybe a more maliciously disposed subset of those people, to watch me on my way to a political meeting?

I mostly don’t care that my phone calls and emails are probably the subject of some overworked spook’s surveillance, because we have learned from the lessons of 9/11 that merely possessing information does not necessarily improve the Establishment’s ability to use it. As one spook pointed out to the 9/11 Commission, you don’t improve your chances of finding a needle in a haystack by increasing the quantity of hay. Once again, our freedoms are dependent on the inefficiency of government. What happens if They find a solution to this particular problem? Do we just presume—not unreasonably, so far—that another problem will arise out of the solution, and so on? It was good enough for Hegel and Marx. Maybe for now, it’s the best we can do.

Red Emma

Health Care Reformation

October 19, 2008

I.                 Catch-up


I’ve just been through a horrendously busy three weeks, including several trials, a surprisingly short-term cold, and the High Holidays.  So I haven’t had much time to post, or even to read the excellent stuff on here with any degree of serious attention.  And in the meantime we have stumbled into a certified recession which may at any moment get officially declared to be a depression;  the odds in the election have shifted to the point where the GOP may be unable to steal it even if they like McCain well enough to try; and I am starting to think seriously about writing a book.  So right now I’d like to talk some more about health care, with apologies to anybody who has already said what I’m about to say, or has already provided irrefutable facts to contradict it, because I haven’t had the time to read your posts with the care they deserve.


II.               Health Care


Much though it pains me to say it, McCain’s proposals are not all bad.  In particular, yes, they would ultimately destroy the current link between employment and health care.  Which I have long believed would be a really good idea.  


That link was created when FDR and John L. Lewis made a deal with the devil for reasons having nothing whatever to do with providing health care for everybody who needed it.  That deal was made back when most people not only didn’t have health insurance, they didn’t need it.  It was a nice luxury, but not a necessity.  When I was a kid, the local hospital charged $11.00 a day.  Admittedly, that was about two or three times the average daily rental for an apartment or a house.  But it was still a whole lot cheaper, both relatively and absolutely, than hospital costs today.  When I was in college, doctors made house calls, and made them for only ten dollars more than the cost of an office visit.  And those doctors had gotten their education at schools that charged what their (usually middle-class) parents could afford to pay, and a few scholarships thrown in.  None of them had even heard of student loans.


But third-party payment keeps the free market from doing its job.  Pop quiz:  what do the following have in common:  health care, higher education, and legal fees?  There are in fact two answers:  the costs for all three have increased much faster than the rate of inflation in the economy at large, and they are all, to a very great extent, paid for by third parties, rather than by the actual recipients of services.  This is not a coincidence.


If I want to buy a widget from Joe the Widget-Maker, I will decide:

v    how badly I want or need that widget

v    whether the widgets made by Joe provide what I particularly want/need from a widget, and then

v    how much I am willing/able to pay for a widget that does what I want/need. 

At the same time, Joe will be deciding

v    how much he has  to charge for a widget, to cover the costs of making and selling it and his household’s reasonable cost of living, and

v              how much more than that he can squeeze out of me. 

Somewhere between the maximum I am willing/able to pay and the minimum Joe wants/needs to charge, we will probably arrive at a bargained-for price.  If, after buying the widget, I am disappointed in its quality or functional capability, I will buy my next one from somebody other than Joe.  If enough other customers have the same response, Joe may improve his product or service, or lower his price, or both.  That’s the free market, at its ideal best.


But introduce a third party payor and the picture changes.  Let’s say my rich uncle wants to save me the trouble of shopping for widgets, and tells me he will take care of shopping them and paying for them.  At the outset, this sounds lovely, and I gladly take him up on it.  But my uncle may have totally different ideas on what I want a widget for, and what kind of quality and function I expect of it.  He may make a deal with Joe, based on an annual contract, so that every year all of my widgets come from Joe, and my uncle therefore gets a special price.  About halfway through the year, I become dissatisfied with the quality of widgets I am getting from Joe.  I call him and complain.  He says, “Sorry to hear that, but your uncle seems perfectly satisfied.”  So I call my uncle, and he says, “Sorry you’re having a problem.  I’ll see if I can get Joe to straighten up.  But he gives me a really good price.”  In all likelihood, Joe is not going to straighten up.  And, over the years of comfortable dealing, he and my uncle may allow the price of my widgets to go up.  I don’t much care about that, since I’m not paying for them.  I may not even know how much my uncle is paying.  What I do care about is the quality of the product/service. And I can’t get any action there, since my uncle doesn’t much care about it, and may not even know what kind of service I am getting.


An example from real life:  some years ago, my godson, who was 7 years old at the time, had to have surgery to keep him from getting repeated ear infections.  The hospital scheduled him for a particular day.  The day before, he came down with a cold.  His mother called the surgeon and told him, “The kid has a cold.  Maybe he shouldn’t have surgery?”  And the doctor said, “Don’t worry about it.  Just bring the kid to the hospital tonight so we can prep him properly.”  So she did.  Early in the evening, they took a chest X-ray.  The rest of the night, mother and child dozed in his hospital room, where there was, alas, absolutely no humidity in the air.  At about two a.m., somebody finally read the chest X-ray, which indicated some congestion in the lungs and definitely contraindicated any surgery.  At about five a.m., the people preparing the kid for surgery read the X-ray report and told his mother, “Sorry, we can’t do surgery right now, your child has a cold.”  So she took him home. His cold, of course, was a lot worse than it would otherwise have been because of spending an entire night breathing dry air.  And the hospital, of course, billed her insurance company for the night he spent there.  She called the insurance company and asked them not to pay, If the doctor had listened to her in the first place, she pointed out, or even if the chest X-ray had been read immediately rather than twelve hours after it was taken, the kid wouldn’t have spent the night in the hospital at all.  But the insurance company said, “Sorry, ma’am, we have a contract with the hospital.  We have to pay this bill.”


I assigned this case to a couple of my legal writing classes at a local law school, just to see what kind of research skills it would generate.  I got a lot of very good, well-researched answers, but they all came out the same.  The only contractual relationship that mattered in this case was between the hospital and the insurance company.  If that contract required the hospital to pay, they had to pay, period.  The relationships between

v    the surgeon and the child,

v    the surgeon and the child’s mother,

v    the surgeon and the hospital,

v    the radiologist and the hospital,

v    the radiologist and the child’s mother,

v    the radiologist and the child,

and so on through all of the possible combinations and permutations of the people and entities involved in this transaction, might conceivably have generated other forms of legal liability.   But for the purposes of whether the hospital got paid by the insurance company for a night of services which were not only unnecessary but actually deleterious to the patient, they were utterly irrelevant.


The same thing happens, mutatis mutandis, to higher education.  You send your kid to college, or she sends herself to graduate school.  You, or she, borrow money from some public or private lender to pay the tuition.  You may think the tuition is outrageously high, especially if she comes out of college unable to get a job.  But the lender doesn’t care, and will keep paying until she graduates or drops out.  Kids graduate from college knowing less and less and owing more and more.  The money the college gets paid is passed on to “star” faculty who spent more time at conferences and consulting than in the classrooms, and to the creation of luxurious buildings in which the students will live, and eat, and recreate, and attend classes, and study.  The people actually doing the teaching are now mostly part-timers who get no benefits and are paid well below minimum wage per hour of teaching and preparation.  They do a surprisingly good job, under the circumstances, but it isn’t worth what the lenders are paying.  Probably nothing could be, short of the full-time attention of Stephen Hawking. 


The third-party payment of legal expenses is a bit more complicated.  Tort lawyers are mostly paid by the losing parties.  Prosecutors and public defenders are paid by the taxpayer.  Corporate lawyers are paid by the shareholder, ultimately.  Only the lawyers at the bottom of the totem pole get paid directly by the client. Not coincidentally, they also make less money than tort and corporate lawyers, though still more than prosecutors and public defenders.  Without getting into the exhausting details, the basic scheme is the same; in legal areas where third-party payment predominates, the actual client has no control over the costs and very little control over the quality of service.  The market, once again, is stymied.


So anyway, I think weeding out the third-party payors in the health care system could squeeze out a lot of the cost inflation, and might improve the level of service.  If we just went immediately to a fee-for-service model, the short-term results would be a public health catastrophe.  Most Americans really can’t afford to pay for all their health care out of pocket at its current prices.  But even the Republicans realize this is a bad idea. McCain is proposing to tax health benefits provided to employees by employers, which is perfectly reasonable, since those benefits are a part of compensation.  Often a very large part of it. 


Strictly speaking, the employers are actually a fourth-party payor.  Getting them out of the picture, McCain says, will provide the government with enough money to be able to give workers a $5000 annual tax credit to spend on getting their own insurance.  I’d be more comfortable with his scheme if he just destined the credit for payment of health care costs, either through insurance or directly.  That might encourage more health care providers to demand direct payment and reduce their fees by the money they save not having to do insurance company paperwork.  Some providers have already decided to do this.  And an insurance company is still a third-party payor, regardless of who pays the premium.  Weeding out insurance companies could squeeze out most of the cost inflation, and improve the level of service a lot. 


Watch this space for Part II.



Bennigan’s Index 10/19/08

October 19, 2008

A costume jewelry store near my office has closed recently.  Also a GAP branch.  And this week’s Newsweek came with only one cardboard insert, instead of the usual 5 or 10—a blurb for Flomax, BTW. 


Jane Grey

An Open Letter to Sarah Palin

October 5, 2008

A guest post from Mr. Wired:

We found the vice-presidential debate last week to be interesting and even refreshing.  We liked the respect and liking the candidates exhibited toward each other.  We were impressed by the values of the Abrahamic religions the candidates shared.  The debate left us relieved that, no matter who wins the election, the country will be in good hands.


And then we heard Governor Palin’s accusations against Senator Obama of “palling around with terrorists.”  To see someone who so publicly and emphatically espouses biblical values to stamp the Ninth Commandment into the dirt was a serious disappointment.  Governor Palin knows that the relationship between Obama and Professor William Ayres arose from common membership on the board of directors of a community organization.  She knows that Professor Ayres’ SDS days were over long before Obama was out of grade school.  But she nonetheless says “it’s an issue that’s fair to talk about.”  She has moved beyond the bounds of political civility, turning an opponent into an enemy. 


In previous elections, candidates left this kind of behavior to their “independent committees.”  For a candidate personally to engage in such personal attacks tells us that the McCain campaign is getting desperate.  Unfortunately, in the process, this behavior can only give that campaign more good reason for that desperation. 




Prior to Changing Events

October 5, 2008

Heard something this morning on NPR that I really liked—right before a talk show was aired, the announcer warned us, “This show was taped prior to changing events.”  I didn’t actually hear anything on the show that warranted that warning, but then I wasn’t really listening that carefully. I just like the warning that almost all “news” is subject to being pre-empted by even newer news.


Anyway, that sort of raises the issue of Palin’s latest attack on Obama as hanging out with “domestic terrorists.”  She was talking about Bill Ayres, with whom Obama served on the board of a public interest organization.  Ayres used to belong to the Weather Underground, back well before Obama was born.  In that capacity, he is believed to have been involved in a bombing of the US Capitol Building, which resulted in damage to some plumbing in a men’s room there. No one was killed or injured.  Currently, Ayres is a professor of education at the University of Illinois at Chicago. 


This is neo-McCarthyism, although Palin undoubtedly wouldn’t recognize the word, the concept, or its eponym.  Guilt by the most remote and long-past association.  The fact that Palin’s husband was once a member of, and Palin herself once spoke before, an organization supporting the secession of Alaska from the United States, apparently doesn’t rate the same level of attention. (Umm, isn’t secession treason?) 


Lots of currently respectable people have disreputable pasts.  Most of the leaders of the post-colonial states of Africa, the Indian subcontinent, and the Middle East had previously done time in British jails, under “terrorism” charges.  Many of the winners of the Nobel Peace Prize have done time for similar reasons. 


Many of the most successful Oscar-winning film writers and directors were members of, or closely associated with, the Hollywood Ten who were blacklisted for refusing to cooperate with the purge of communists from the movie industry.  Did Palin ever see the movie “Spartacus”?  It’s from a book written by a communist, and a screenplay by one of the Hollywood Ten.  Does that make her an associate of reds?  Did Palin ever watch the tv horror series “Svengoolie”?  The first Svengoolie was Jerry G. Bishop, whose mother was a communist.  I know—I’ve met her.  Did Palin ever see “The Maltese Falcon”?  It’s from a book written by Dashiell Hammet, who did time for refusing to testify before a red-baiting congressional committee.  You get the picture (so to speak.)


In previous elections, candidates left such sleaze-peddling tactics to their “independent committees.”  It’s a bad sign, or at any rate a sign of McCain’s increasing desperation, that this year, one of the candidates is doing it hands-on.  One can only hope that we are not in for a decade of making “the children of the 60s” and their younger associates sit in the stocks repenting for some of the best things they have ever thought, said, and done.


Red Emma

The Politics of Mistaken Identity

October 5, 2008


Sarah Palin has us all thinking about identity politics these days.  My godson has Down Syndrome, and his mother, my dearest friend, says people keep saying things to her like “of course you’re going to vote for McCain, since Sarah Palin has a child with Down Syndrome.”  She finds this terrifically offensive, and has no intention whatever of voting for McCain.  She says, not only does she not share an identity with Palin by virtue of having a child with Down Syndrome, but her child does not share an identity with Palin’s child by virtue of having Down Syndrome. 


And an increasing number of women are saying that their gender does not make them any more likely to vote for McCain now than they would have before he picked Palin for a running mate.  Would African-Americans have voted for Condi Rice if she were running?  Would Hispanics have voted for Alberto Gonzales?  One suspects not.


I think identity politics works only for people with very uncomplicated identities.  For that reason, I’m surprised that it has caught on as well as it has in the US, and I suspect it may not last much longer here.  The identities of most Americans are anything but uncomplicated. 


Sample case—me:  my biological ancestry is Sefardic Jewish, highland Scot/US redneck, with dashes of Dutch and Italian.  My cultural ancestry is British, Hispanic, and New England.  I am Jewish by religion, but my parents were Catholic, several of my uncles and cousins were/are Christian Scientist, one of my other cousins is Buddhist, and my brother characterizes himself as a Reform Druid.  By education and occupation, I am an overeducated professional; by income I am working-class.  My personal life is a model of traditional family values, except that I spent my late college and early grad school years as a hippie of sorts, and I now hang out with a congregation most of whose members are gay and lesbian.  Politically, I consider myself a radical, but since most of the people who ask me these days don’t remember the word, I call myself a liberal. I can still remember when liberal was a synonym for wishy-washy. For many years, I was part of a Jewish collective that spent a great deal of time discussing the relationship between their Jewishness and their leftist/feminist politics.  I have inclinations toward communitarianism and socialism, but also toward anarchism and libertarianism.   If I were to try to practice identity politics, i.e., to find a candidate enough like me that that would be sufficient reason to vote for her (obviously it would have to be a her), the search would exhaust all of my political energy, and I would probably never get around to voting at all.


This situation raises a serious philosophical problem: What is it we want our elected representatives to represent? Are we, increasingly, accepting the proposition that African-American voters can be represented only by African-American representatives, and Hispanics by Hispanics?  If so, does it follow that Italian-Americans can be represented only by Italian-Americans, Polish-Americans by Polish-Americans, and so on?  And does that in turn mean that ethnicity is the most important characteristic of the voter or candidate?  Or should Episcopalians vote only for Episcopalians, football fans for fellow fans, and free-lance writers only for their own kind?  Where do we draw the line? Is it a line that should properly be drawn at all?


This is a triple issue: First, do we believe that a citizen can be effectively represented only by a representative who shares with the citizen some important defining characteristic? Second, if so, must that defining characteristic be ethnicity? And third, whatever that defining characteristic may be, what does it do to our current system of  legally defining a constituency by geographical residency for purposes of political representation?


There was a time when representative government meant electing someone whose integrity and judgment you trusted, and then leaving him alone to be guided by that judgment and restrained by that integrity.  This was pretty much what the Framers of the constitution had in mind (except for the more cynical Madison.) When American politicians turned out to be as human as anybody else, that model fell out of fashion.


For a while afterward, the elected representative’s job was defined as representing the obvious interests and expressed desires of his constituency (or at least its most vocal components.)  This might be done through the mechanism of the political party, which was expected to take a particular set of ideological positions. The voter voted for the candidate of the party that most nearly represented his positions.  It didn’t matter who the representative was or what he personally believed. His job was to do what his constituency wanted. If he failed to do it, he was unlikely to be re-elected.


Now, apparently, we are not willing to trust our elected officials even to that limited extent.  I can trust my representative to represent his own interests. That’s human nature, after all.  So I had better make sure his interests are the same as mine (a  thoroughly Madisonian position.)  Which means he has to be like me in some way that shapes his interests, as it shapes mine.


The persisting realities of racial segregation do make a powerful argument that race has a stronger effect on a person’s interest than many other components of personal identity. Conveniently, that same racial segregation results in geographical agglomerations of African-American voters easily large enough to constitute legislative districts. Does this mean the geographic district is still a reliable way to organize political representation? Is where I live a reliable index to my most important interests and concerns?


On the micro-district level–for instance, wards and precincts–it appears to be all too reliable. Our metropolitan areas are segregated not only by race but even more rigidly by income (this is assured by the real estate market and zoning codes) and by age and family status (assured by the kind of housing available, as well as its price.) Singles congregate in certain urban neighborhoods and suburban complexes, young married couples with children in the less pricey suburbs and outer city neighborhoods, senior citizens in their public and private housing developments, and so on. Geography is a remarkably useful tool for organizing political representation on this level.


The problems arise in macro-districting, and still more in at-large, statewide, or nationwide elections, in which the electorate, of necessity, consists of a widely diverse assortment of micro-districts.  Who, if anyone, does a senator represent? The interest of the nation as a whole, as seen by the senator (and, perhaps, by her party?) That was pretty much what the Founders had in mind.  The predominant economic interest of her state (tobacco, or coal, or tourism, or whatever?) Historically, most senators try to represent both. A senator, who, on top of these delicately balanced considerations, is a member of some group which is sparsely represented in the upper reaches of government–women, gays, people of color, Vietnam veterans, people with disabilities, or whatever–is also likely to become the de facto representative of that group, even if most of its members live in various other states and are in no position to vote for her or him.


And finally, what kind of representation can legitimately be demanded by a white voter who happens to reside in a mostly African-American district with an African-American representative (or vice versa)?  Science fiction writer Robert Heinlein once suggested a system in which, instead of election by geographical district, representatives were chosen by petition.  If a person could collect enough signatures from whatever constituency s/he chose to appeal to, s/he could represent them.  So there could be no sore losers, since every citizen could choose whose petition to sign, and every representative by definition represented only his/her supporters.  This still doesn’t solve the problem of citizens with such complex and idiosyncratic identities that there aren’t enough of them to elect anybody, but it’s a start, and a whole lot better than what we have now.