Trickle-down

The news is discouraging, unless, of course, this was the whole point:

The median wealth of white households is 20 times that of black households and 18 times that of Hispanic households, according to a Pew Research Center analysis of newly available government data from 2009.

These lopsided wealth ratios are the largest since the government began publishing such data a quarter century ago and roughly twice the size of the ratios that had prevailed between these three groups for the two decades prior to the Great Recession that ended in 2009.

That is, many have long complained that trickle-down economic theory actually increases wealth gaps in society. The newly-released study from the Pew Center does not shock anyone for suggesting that the wealth gap is growing. But I suspect few trickle-down critics actually expected an eighteen- to twenty-fold gap reflecting ethnicity.

Clowns and Coke

Mr. Fish sounds off on the transformation of modern journalism—

In fact, if you were to compare the old, pre-merger LA Weekly and, while you’re at it, the Village Voice from 5 or 10 or 30 years ago, with today’s versions you’d see how Mr. Fish (not to mention Norman Mailer, Ezra Pound, Henry Miller, Barbara Garson, Katherine Anne Porter, M.S. Cone, James Baldwin, E.E. Cummings, Nat Hentoff, Marc Cooper, Ted Hoagland, Tom Stoppard, Lorraine Hansberry, Allen Ginsberg, Joshua Clover, Jules Feiffer and R. Crumb) no longer fits in with the TMZ/Your-ad-here!/journalism-produced-cheaply-will-produce-cheap-journalism look of the papers.

I recently received a letter from someone bemoaning the obvious drop in quality of the LA Weekly, as evidenced by the paper’s online incarnation, by saying that, “If I knew nothing about LA, I would think all that went on there were Burlesque shows.”

No kidding.

Sure, in response to a shitty economy and a pandemic shift by news junkies from pulp to PC, there have been definite changes in the print media industry over the last five years. And, sure, attempts to restructure the financial model on any business institution that sees its profit margins shrinking will always have some effect on the product that’s being produced, but mustn’t a shift to protect the body of an organization take special care not to jeopardize serious trauma to the head as well?

Does an incoming administration really assert its authority when it rips up the old Constitution so beloved by those it seeks to rule, saying, “This thing is pointless – it was written with a feather! We have Microsoft Office now!” or does it merely demonstrate its own arrogance and self-centeredness and misguided sense of intellectual privilege?

Haven’t we learned anything from the New Coke fiasco from the 1980s, for Christsakes?

—and, of course, his dismissal from the L. A. Weekly newspaper.

Once upon a time ….

Surprise … well, no, not really

What’s that? Business leaders hoping to get what they want out of politicians lied? And politicians believed them?

It’s a seductively simple solution to rising health-care costs. Require workers to pay higher premiums if they flunk tests for measures such as weight, blood pressure and cholesterol. Then, bingo: You not only get a fitter workforce, you slash medical expenses.

Politicians of both parties have embraced that idea and expanded upon it in the Senate reform bill, inspired largely by the claims of Steven A. Burd, Safeway’s chief executive. Burd says he has set an example for employers nationwide by rewarding employees for healthy behavior.

“Safeway designed just such a plan in 2005 and has made continuous improvements each year,” Burd wrote in the Wall Street Journal. “The results have been remarkable,” he declared, adding that “our health care costs for four years have been held constant.”

If only that were true.

Imagine that.

To the one, people shouldn’t need The Washington Post to tell them that politicians are clueless or corporate leaders dishonest, but, hey, if you want the detail, there it is.

Inherent corruption

It’s really quite simple:

One focus of the inquiry is whether the firms creating the securities purposely helped to select especially risky mortgage-linked assets that would be most likely to crater, setting their clients up to lose billions of dollars if the housing market imploded.

Some securities packaged by Goldman and Tricadia ended up being so vulnerable that they soured within months of being created.

Goldman and other Wall Street firms maintain there is nothing improper about synthetic C.D.O.s, saying that they typically employ many trading techniques to hedge investments and protect against losses. They add that many prudent investors often do the same. Goldman used these securities initially to offset any potential losses stemming from its positive bets on mortgage securities.

But Goldman and other firms eventually used the C.D.O.s to place unusually large negative bets that were not mainly for hedging purposes, and investors and industry experts say that put the firms at odds with their own clients’ interests.

“The simultaneous selling of securities to customers and shorting them because they believed they were going to default is the most cynical use of credit information that I have ever seen,” said Sylvain R. Raynes, an expert in structured finance at R & R Consulting in New York. “When you buy protection against an event that you have a hand in causing, you are buying fire insurance on someone else’s house and then committing arson.”

This is capitalism.

The purpose of health care is to make lots of money

Paul Krugman on how insurance companies are gearing up to fight the Obama health plan even as they claim to want to be a part of it:

The Post has the storyboards for the ads, and they read just like the infamous Harry and Louise ads that helped kill health care reform in 1993. Troubled Americans are shown being denied their choice of doctor, or forced to wait months for appointments, by faceless government bureaucrats. It’s a scary image that might make some sense if private health insurance — which these days comes primarily via HMOs — offered all of us free choice of doctors, with no wait for medical procedures. But my health plan isn’t like that. Is yours?

“We can do a lot better than a government-run health care system,” says a voice-over in one of the ads. To which the obvious response is, if that’s true, why don’t you? Why deny Americans the chance to reject government insurance if it’s really that bad?

For none of the reform proposals currently on the table would force people into a government-run insurance plan. At most they would offer Americans the choice of buying into such a plan.

And the goal of the insurers is to deny Americans that choice. They fear that many people would prefer a government plan to dealing with private insurance companies that, in the real world as opposed to the world of their ads, are more bureaucratic than any government agency, routinely deny clients their choice of doctor, and often refuse to pay for care.

As we go forward in this critical and oft-complicated debate, I would simply ask people to keep a certain point in mind:

The primary concern of the health care industry is profit.

What? It’s the way private enterprise works.