Saturday, May 1, 2010

Solutions for our times...

When my Latino friend and housekeeper came to me years ago and told me that Bank of America had approved her and her husband for a loan on a $400,000 house (in a neighborhood where houses should never have cost $400,000) with $25,000 down, and told her their mortgage payments would be about $2000/mo, but that their tax savings would make up for the difference from their $900/ rent, I told her to run as fast and as far as she could. Doing the math and trying to figure out what was up, I first sent her back to B of A to ask, “What will my mortgage payments be in 6 months?” The answer that came back, “We don’t know because we don’t know what the rates will be in six months.” Wow, I thought, what’s the game? Why would Band of America want to take advantage of unsuspecting first time home buyers and get them into loans they can’t pay? I told my friend that we could expect lots of foreclosures down the line and that then she should look to buy a house for a lot less.

The rest, of course, is history. What still surprises me is how B of A came out of it so clean. Being the middle man, they managed to keep all the bad loans off their books; but how is it that none of the financial analysts has pointed a finger at them? Maybe because the majority of their victims were Latino? Just a theory.

The fact that I saw the mortgage debacle coming, and the powers that be did not still perplexes me. But given that I did, I no longer feel that I should keep my mouth shut when I see other things that seem obvious to me and don’t seem to occur to the folks in position make a difference. So here’s what I see now. Tell me what you think.

  • The Problem: Too few jobs. The Solution: Retire the baby boomers.

I heard a story recently on the news about how colleges are struggling because students are taking too long to graduate. Students staying 5 or 6 years in college make less room for incoming freshman since schools have only so many classrooms and so many teachers. The same applies to the job market.

There are many more baby boomers than there are people in the next generation. Furthermore, many boomers have not saved for retirement and, like it or not, are holding on to their jobs much longer than they might have planned. If they retired, the 10% job loss would disappear over night.

So why not craft a stimulus plan to encourage retirement? I am not an economist, but one thought that occurred to me would be to offer those who retire and scale down the opportunity to forego capital gains tax on the sale of their home so that they have some capital to live on. I am sure economists could come up with many more incentives.

  • The Problem: Illegal immigration. One Solution: Remove a primary incentive to illegal immigration by establishing that only those born in this country to parents who are legally here will be American citizens. This might require passing a constitutional amendment or it might be sufficient to change Title 8, Section 1401 of the US Code, which specifies the definition of a natural born citizen, and already contains an exception for children born to foreign diplomats while in the US.

Illegal immigration is a complex problem and one for which reasonable people have a difficult time agreeing on reasonable solutions.

This suggestion in no way takes a position on immigration itself as an issue. In fact, I contend that we have already have plenty of decent laws defining the United States’ immigration policy. My assumption is that we have a difficult time enforcing our borders and need to address the problem that many people come here illegally and establish homes and lives over long periods of time, making it difficult for us to just toss them out, even if we know who they are. Furthermore, since they cannot acquire social security numbers to pay taxes, or (in some states) get drivers licenses or legally be employed, they live under the radar and often compound the social burden of their greater community. Once they are here, they have no alternative but to use resources such as schools and hospitals without paying taxes, drive without a license, and get into car accidents as uninsured drivers.

The fact that many of these illegal aliens, having given birth in the US, are the parents of American children compounds the problem. Having taken away most of the decent jobs, what incentives are left for people to risk their lives and risk jail to enter this country? A big one is the possibility that their children will have a better future—as American citizens.

I consider myself a hard-core liberal. But having lived in California for 28 years, I know that another amnesty without a real effort to stem future illegal immigration would be foolish. If we really want to address the issue of illegal immigration, we need to stop people from establishing lives here before those lives become too difficult to unwind. And we need to be willing to take some tough steps and make some tough choices. But those steps need to be directed at the people whose behavior we are trying to change, not at random folks who look to someone like they do not fit in.

Sunday, August 16, 2009

Health Care For All

Socialism refers to “an economic system in which the production and distribution of goods are controlled substantially by the government rather than by private enterprise, and in which cooperation rather than competition guides economic activity.” ( 

If a country decides that public education is an entitlement and all of its citizens should have access to it, then collects taxes to provide those services, is that an example of socialism?  Not by the definition above, or any other I have found.  And if you substitute health care for education in the above sentence, does that make it socialism?

More to the point, whether you think the government does a good job or a bad job of providing public education (and I will concede that you could be right either way, depending on where you live), I doubt you would want to eliminate it anywhere in America.  So why do we fundamentally believe that every child is entitled to an education, but every citizen is not entitled to health care? 

Today’s AP news reports “White House appears ready to drop public option.”  My reaction: “ Please don’t.”  Like many who have thought it through, I believe that without a public option, we won’t really have health care reform.  Furthermore, I believe that it comes down to a simple choice: do we care about the future of the health care companies or the health of the people? 

Again let’s look at the public school system.  If we did not have a public option, there would no doubt be plenty of entrepreneurs ready to offer schools to meet all sorts of different needs.  But without question, some families would not be able to afford any of them, while others would pay for the cream of the crop.  With a public option, there are fewer entrepreneurs making money from education, but just enough to meet the needs of those who can afford to and choose to pay extra for what they consider better.  I suspect that health care would be the same.  The choice would be the same for consumers, take what the government offers for free or pay extra for more options.  After all, that is exactly what those with Medicare have now.  Lots of private insurers offer supplemental benefits which Medicare recipients can add to their basic plan, but no one goes without. 

There is no question, however, that providing a public option means less business for the existing health care providers.  That is why they are spending so much money to defeat it.  So what do we owe them?  Lately our government has been spending a lot of money to keep big businesses in business.  Where do the big health insurers fit in?  

The answer to that question came to me when I noticed that my neighborhood video store had gone out of business.  I thought about the fact that only a few years ago video stores were on every block; now there are very few left.  Before DVRs and Netflix and Pay-per-view at home, video stores were very profitable for the clever entrepreneurs who thought to go into that business, but no longer.  The smart folks who profited from the sale of VCRs and video rentals and such have either moved on to a new enterprise, are retired on their profits, or are bemoaning their fate.  But time marches on in a capitalist economy. 

Now you could say we have not let that happen to the big banks, or the big auto companies, so why the health care companies?  And I would say that it is happening to banks and auto companies, many of which are going out of business daily.  And five years from now you will not recognize the banking system or the auto companies left standing.  Unfortunately, a huge percentage of our unregulated capitalistic society was sitting on the shoulders of a few big banks and big auto companies, and letting them go under all at once threatened to take the whole country with them.  So wisdom had it that, like it or not, we had no choice but to prop them up while the companies rebuilt their foundations (kind of like a remodel).  

Not so the health insurers.  While hopefully the public system will be more efficient than the private insurers (the Medicare system, with its lack of profit and large-scale purchasing ability is far more cost-effective than private insurance), we will be insuring more people, and thus the number of jobs in the field should at least stay the same.  So the economy will not collapse if we acknowledge that the nation’s health care system has outlived its usefulness. 

Now other people say, if we have a public option, private health insurers will go out of business and people will have no option for health care services.  But under the French system, which offers both a public and a private option, about 75% of people have only the public option, while 25% choose a supplemental or optional private insurer.  This sounds a lot like our public school system which has not eliminated choice for those who want to attend a private school, while Medicare has opened wide a market for supplemental insurance companies. 

So why not a public option?  Because the insurance companies don’t want it? 

Please, President Obama, don’t give in.

Who Thinks and Why

Three days ago I turned 57. I have degrees in psychology and nursing and have worked in a variety of fields throughout my life. I have worked as a counselor, managed a woman's health clinic, done compensation consulting at a large well-known consulting firm, been a senior organizational psychologist in a large health care system, and have owned and run a yarn store and taught knitting. I also serve on two non-profit boards of directors and was president of a multi-unit, city-wide non-profit for two years. I have had a lot of life experiences, and I have a lot of opinions. I remember sitting before a teacher many years ago in nursing school and thinking, "some day, I want to be wise, like she is." Maybe I am, and maybe I am not. You decide when you read what I think.