Loco

Today’s discussion of CFLs and LEDs – the graphics are almost done to change the name of this website to A BRIGHTER DAY: Energy Efficient Lighting and Other Subjects – has been bumped by the State of the Union, or at least the health insurance piece of it.

(Kudos, by the way, to the President for his classy and warm recognition of our nation’s first female Speaker.)

But first . . .

L IS FOR LOCO

Bob: ‘Not to kick a dog when he’s down, but when is the best time to kick one? I recently downloaded Robert Kiyosaki ‘Rich Dad’ pod-cast from Apple iTunes. The pod-cast presents Mr. Kiyosaki in front of his company’s management team discussing brand extension . . . including ‘Rich Dad’ for Women, Children, etc. . . . and he starts discussing his joint venture with Donald Trump and his new book deal. He truly seemed excited about the new direction and association with ‘The Donald.’ He starts discussing building wealth and GOLD. He proceeds to discuss the path to GOLD is GOD. He claims the only way to build gold through GOD is to remove the ‘Ls’ in your life. ‘L’ is for the ‘Losers’ mentality, ‘L’ is for ‘Lazy’ . . . and then to my shock, ‘L’ is for ‘Limp-wristed.’ ‘

☞ Well, there you go. Another approach would be to apply L for Logic – and for Living beneath your means.

And now . . .

SPEAKING OF LOCO

It is truly a grand time to be rich and powerful in America. George W. Bush, with the help of an until-recently-Republican-controlled Congress, has done more to shift wealth to the very richest among us than has anyone else – very possibly in the history of the world (you will send me your nominees if you disagree he has earned that distinction) with the possible exception of Ronald Reagan.

Consider that even the wealthiest 5% of American households saw their income real income, adjusted for inflation, ‘rise less than 1% a year since the late 1970’s,’ according to Paul Krugman, while ‘the income of the richest 1% has roughly doubled and the income of the top 0.01% – people with incomes of more than $5 million in 2004 – has risen by a factor of five.‘

And now comes the Bush compassionate health insurance proposal in the State of the Union, previewed Saturday morning.

Professor Krugman, the floor is yours:

Gold-Plated Indifference
By Paul Krugman
The New York Times
Monday 22 January 2007

President Bush’s Saturday radio address was devoted to health care, and officials have put out the word that the subject will be a major theme in tomorrow’s State of the Union address. Mr. Bush’s proposal won’t go anywhere. But it’s still worth looking at his remarks, because of what they say about him and his advisers.

On the radio, Mr. Bush suggested that we should “treat health insurance more like home ownership.” He went on to say that “the current tax code encourages home ownership by allowing you to deduct the interest on your mortgage from your taxes. We can reform the tax code, so that it provides a similar incentive for you to buy health insurance.”

Wow. Those are the words of someone with no sense of what it’s like to be uninsured.

Going without health insurance isn’t like deciding to rent an apartment instead of buying a house. It’s a terrifying experience, which most people endure only if they have no alternative. The uninsured don’t need an “incentive” to buy insurance; they need something that makes getting insurance possible.

Most people without health insurance have low incomes, and just can’t afford the premiums. And making premiums tax-deductible is almost worthless to workers whose income puts them in a low tax bracket.

Of those uninsured who aren’t low-income, many can’t get coverage because of pre-existing conditions – everything from diabetes to a long-ago case of jock itch. Again, tax deductions won’t solve their problem.

The only people the Bush plan might move out of the ranks of the uninsured are the people we’re least concerned about – affluent, healthy Americans who choose voluntarily not to be insured. At most, the Bush plan might induce some of those people to buy insurance, while in the process – whaddya know – giving many other high-income individuals yet another tax break.

While proposing this high-end tax break, Mr. Bush is also proposing a tax increase – not on the wealthy, but on workers who, he thinks, have too much health insurance. The tax code, he said, “unwisely encourages workers to choose overly expensive, gold-plated plans. The result is that insurance premiums rise, and many Americans cannot afford the coverage they need.”

Again, wow. No economic analysis I’m aware of says that when Peter chooses a good health plan, he raises Paul’s premiums. And look at the condescension. Will all those who think they have “gold plated” health coverage please raise their hands?

According to press reports, the actual plan is to penalize workers with relatively generous insurance coverage. Just to be clear, we’re not talking about the wealthy; we’re talking about ordinary workers who have managed to negotiate better-than-average health plans.

What’s driving all this is the theory, popular in conservative circles but utterly at odds with the evidence, that the big problem with U.S. health care is that people have too much insurance – that there would be large cost savings if people were forced to pay more of their medical expenses out of pocket.

The administration also believes, for some reason, that people should be pushed out of employment-based health insurance – admittedly a deeply flawed system – into the individual insurance market, which is a disaster on all fronts. Insurance companies try to avoid selling policies to people who are likely to use them, so a large fraction of premiums in the individual market goes not to paying medical bills but to bureaucracies dedicated to weeding out “high risk” applicants – and keeping them uninsured.

I’m somewhat skeptical about health care plans, like that proposed by Gov. Arnold Schwarzenegger, that propose covering gaps in the health insurance market with a series of patches, such as requiring that insurers offer policies to everyone at the same rate. But at least the authors of these plans are trying to help those most in need, and recognize that the market needs fixing.

Mr. Bush, on the other hand, is still peddling the fantasy that the free market, with a little help from tax cuts, solves all problems.

What’s really striking about Mr. Bush’s remarks, however, is the tone. The stuff about providing “incentives” to buy insurance, the sneering description of good coverage as “gold plated,” is right-wing think-tank jargon. In the past Mr. Bush’s speechwriters might have found less offensive language; now, they’re not even trying to hide his fundamental indifference to the plight of less-fortunate Americans.

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Tomorrow: A Brighter Day