Thursday, October 29, 2009

Cash for Clunkers: Behind the $24K per Vehicle Price Tag

The results are in. is reporting that, according to their analysis, the government's "Cash for Clunkers" program cost the taxpayers a whopping $24,000.00 per vehicle sold. Twenty four thousand dollars per car is a pretty hefty price tag.

(Taking their cue from Prince, the government refers to the "Cash for Clunkers" program as "The program formerly referred to as the 'Cash for Clunkers' program." I kid you not. Its official name is "CARS", an acronym for "Consumer Assistance to Recycle and Save" program. As that's not confusing enough, other government sources simply ignore the name of the law and call it the Car Allowance Rebate System. Either way, who are they kidding? It's never been referred to by the general public as anything but "Cash for Clunkers". Nevertheless, I'll call it CARS from here on in.)

Unsurprisingly, the government disputes the report. True to the Obama White House's established form, Macon Phillips, Director of New Media for the White House, takes the low road to snipe at, saying that the popular company released the a report that is "designed to grab headlines and get coverage on cable TV." Phillips claims that the claim "doesn’t withstand even basic scrutiny."

Except that it does.

Edmunds is no fly-by-night. They are highly reputable experts in the field of auto sales and shopper comparisons. They are so popular that if you type nothing more than "Ed" into Google, then Google will suggest They had a very reasonable approach to costing the CARS program... they took all the sales made under the program, subtracted any sales that would have been made anyway (for which CARS was not an incentive, but rather free money) and divided the result into the $3 billion cost of the program. Determining how many sales were as a result of the program was a scientific endeavor. They analyzed trends of cars not covered by the program, compared them to historical buying habits for economy cars as they relate to the other cars, and estimated sales based on those trends. Deviations would be caused by the CARS program. It seems pretty straightforward, and automobile market trends are Edmunds' bread and butter. They are market experts.

Their analysis concludes that only 125,000 cars were sold as a direct result of this program. The others would have been sold anyway... at best CARS simply accelerated a sale, or prompted an owner to trade in a car he would have otherwise kept or sold elsewhere. Given's trend analyses, it's hard to argue with the estimate. Three billion dollars divided by 125,000 cars is equal to $24,000 per car.

The government prefers to use the figure of 690,000 cars sold under the program irrespective of whether they'd have been sold without the program. That would give you a figure of under $4,400 per car. Phillips also writes that ignores the 4th Quarter GDP increases as a result of car makers ramping up production to replace the depleted inventory.

Well... in fairness, what the government ignores is that 565,000 of those cars would have had to be replaced anyway, which forces us to revise any estimate of the effect on the GDP wayyy downwards. So those are the facts, as reported.

There are a couple of things disturbing about the whole situation.

The first is the tone of the government's response. Seriously... the title is, "Busy Covering Car Sales on Mars, Gets It Wrong (Again) on Cash for Clunkers". "Covering Sales on Mars"? Do we really need that kind of snarky, condescending, unprofessional tone from the White House? I can get away with it here because I'm not a professional journalist and I'm not a government representative, but surely the President could do better than this. Macon Phillips needs to put down the can of Brawndo and take a course or two in professionalism. Granted, this is "New Media", but that's no excuse for an official representative of our executive branch to act like a nine-year old bully in public.

Secondly, why is the government even disputing the cost? This was an incentive to get people to act in ways the government wanted them to act. In that respect alone, it was successful. But the bigger question is, what were the people supposed to do, and why were they supposed to act that way?

Here's what the law provided: if you traded your old gas-guzzling car in on a new, more fuel efficient car, then you got a voucher to offset the price of the new car. A gas-guzzler is one that gets less than 18mpg, according to CARS. Basically, if you bought a car that had 4mpg better mileage (or a truck with 2mpg better mileage) you'd get $3,500. If you bought a car with 10mpg better mileage or a truck with 2mpg better miles per gallon, and your new truck gets 15mpg or better, then you'd get $4,500. Then there are a bunch of restrictions, etc. but you could read about those (as if it mattered... the program was effectively over mere days after it started). The fact is that they were chucking $3500 or more at customers for incremental improvements such as you'd get by using a better air filter.

So my first question is, "why were they giving away so much money for such small improvements?" If it was to reduce carbon emissions it was an Epic Fail.

Look... I drive a 1991 Toyota Camry. The posted fuel efficiency (at is 23mpg city, 31mpg highway, and 26mpg combined. Since I do more highway than city driving and my engine is tuned accordingly, I get somewhat better, but we'll use those numbers. I wouldn't be eligible for CARS because my car gets significantly better than 18mpg. My car, in fact, gets better mileage than many of the new cars covered under CARS. But guess what? My car is 18 years old, and it shows few signs of wearing out.

Furthermore, if my 18 year old car were new, and you traded in your clunker for it, it would qualify for the $4,500 rebate! A query at tells me that I can buy a car just like this, used, for $1,498 at Midlands Honda, just down the road (I bought mine for $2,000 cash). If the goal were as stated... that is, if the government truly wished to improve fuel efficiency, it would have made much, much more sense to extend this same offer to used cars. In fact, in this example, the government would save the taxpayers $3,002 just by GIVING AWAY a used Toyota Camry outright! You will not see any mention of this fact in the report of the President's Council of Economic Advisors. One more reason to trust

Of course the government doesn't want to do that because they don't practice money management, they practice some pretty senseless economics, and we'll get back to that. Their ecological arguments are similarly flawed. The government gave people $3,500 to fire up a factory to build a new car to replace theirs for a measly 2 to 4mpg improvement, and only $1,000 more to increase that to 10mpg. This is in a time when cars getting over 30mpg are commonplace. What you won't see in the Council of Economic Advisors' report is the cost in energy expenditures and carbon footprint for the production of these new cars.

The fact is, by every measure - ecological and economic - it is more cost-effective and "greener" to buy a fuel-efficient used car than it is to buy a new car. I have a friend who leases a hybrid. He replaces it every two years, proud and secure in the knowledge that he has the latest and greatest green technology. In the meantime he's fired up a factory 3 times since I paid $2,000 cash for my car, for about a 6mpg advantage that will never recover the cost of constructing 3 vehicles. Who's greener? I am, hands down. But he sure feels good that he's "doing something about the environment".

To my mind, it's proven beyond a reasonable doubt that the CARS program is ecologically disastrous compared to the truly conservational approach of maintaining fuel-efficient older cars, getting them off of the used-car lots, and on to the roads to replace gas-guzzlers. The math is clear: the government was not looking for conservation, reduction in carbon footprint or anything of the sort. Those requirements were in the law for show. It's a bunch of feel-good posturing with no substance.

So we come to the other reason for the CARS program, which was to stimulate the economy. Or, as John Stewart points out, to stimulate the Japanese economy. Four out of Five of the top-selling cars under the CARS program were foreign imports. So in a time of economic crisis, our government took $3 billion of money it borrowed from the taxpayers to give away, mostly to foreign car makers. All to build 125,000 marginally better cars that would not otherwise have been sold. Sheldon Filger, in the left-leaning The Huffington Post, called it "Economics for Dummies," The right-leaning Wall Street Journal called it "Crackpot Economics." Finally, something everyone can agree on.

The government might have required that the cars be built in the US, but they didn't. They might have required that the cars have better mileage than they did. What they did do was practically force a bailout on US automakers, as a result of which the United States government now owns a large chunk of GM and Chrysler (Ford, being the only company to decline, is the only company to have come out ahead). The conspiracy theorist in me warns that Cash for Clunkers was a bit of meat tossed to one side to distract the dog... which, in part, it is. But there's no need to invoke a conspiracy when simple incompetence explains everything... what the program really does is provide one big tap-dance to show that, like my friend who fires up a factory every two years, the Government is "doing something". It's a way for people who really and truly have no idea what to do to act as though they do.

So we're back to the big question. CARS gave money away whether to people whether or not they were going to buy a car anyway; even if it made no economic sense; even if it made a negative ecological impact. The CARS program was to get people to do something: what was it? They were supposed to ask for money. People need to get used to that, because in the future toward which we're heading, begging the government for things is the only way people will get them.

What do I think?
  • If your concern is is for your personal finances then your most effective strategy is to get a fuel-efficient used car and keep it running as long as possible.
  • If your concern is for your personal carbon footprint you should do exactly the same thing.
  • If your concern is for "the planet", then you should do exactly the same thing, as you would have to conclude that creating more cars to replace those we throw away pollutes more than maintaining those we have.
But, if your concern is for the long-term viability of the American economy, then you might want to consider that we cannot have a double standard for ourselves and "the country". We say we must live within our means, and we almost never do it. We waste too much. We're too dependent on planned obsolescence and constant consumption. We are graded on our ability to borrow rather than our ability to pay. We're judged by the things we have, which fuels the need to borrow. We spend money we don't have, and we think that's a good thing. We ask what can be given to us rather than what we can earn. We confuse entitlements and rights. We save nothing.

I don't want that for our country and certainly not for myself.

Wednesday, October 21, 2009

Appliance trouble

Good gravy... I'm beginning to feel a bit like Job.

First it was my stove: only two of the eyes were working, then the thing started sparking whenever I turned on the left-front eye. So I replaced it. The toaster oven went bye-bye, too... I found that out when while the stove was out of commission. New toaster oven.

Then my kitchen faucet sprang a leak. New faucet, new sprayer, too, since the old one was too worn to move. Since then the new sprayer broke again and had to be replaced. Makes me glad I bought that faucet wrench.

Next it was my dishwasher: The door spring broke, the detergent dispenser broke, and one of the wheels broke on the basket. Rather than fix the multitude of problems, I replaced it. While I was at it, I bought a full-size freezer for my basement... the one I had gave up the ghost a year ago and I hadn't gotten around to doing something about it. These were used, so I felt I got a bargain.

The same day that I replaced the dishwasher, the spin cycle on my washing machine broke. I'm still waiting on a replacement to arrive.

Last night, my refrigerator sprung a leak. It was the reservoir for the water dispenser (located behind the crisper drawer). So, I went to turn off the water. Guess what? The shut-off valve broke, too! This was at 11:30 PM, so no repairman was available. I had to turn off water the the entire house. So I'm here with the appliance repairman today, wondering how fast we can get a replacement reservoir and have the plumbing fixed.

Now, I can ill afford to replace everything, and would rather repair than replace, but with the exception of the fridge, repair wasn't an option. With the exception of the stove, I bought used or refurbished appliances. So to recap, in the last 4 months I've had to repair my fridge and replace my...
  • Stove/Oven
  • Toaster Oven
  • Kitchen plumbing fixtures
  • Dishwasher
  • Freezer
  • Clothes Washer
At the same time we've been accruing medical bills for my wife's stroke. Add in some labor, and even shopping frugally I tally an arm and a leg in replacements and repairs so far. Last year it was my bathroom plumbing, which left a rotted out floor that needed replacing. I'd have never known that had I not been replacing the tile. Turns out that the tile was the only thing holding the floor together.

There's not much left to replace. Oh, wait, there is. The overpressure that popped that reservoir was caused by a faulty valve. That's gotta get replaced. The repairman tells me that the reservoir on the refrigerator can be as effectively replaced with a coil of plastic tubing, and the tubing is less likely to spring a leak. Good news. But the accompanying bad news is that my icemaker needs replacing, as the Teflon lining is peeling off and sticking to the ice cubes. I figure, hell, while he's doing that we may as well put in a water filter under the floor, in the basement. That way I don't have to pull the refrigerator out every time it needs changing. At least he's replaced the shutoff valve and I have water again.

In the Bronze Age there were no appliances. Maybe Job had it easy.

Tuesday, October 20, 2009

Update on the Baucus Healthcare bill.

It's out. Here's the full text of the Baucus bill... not a summary.
Thanks to for the link. Obviously, I haven't had time to read all 1502 pages... I've skimmed through some of it.

Section 1301 describes how you will be taxed if you do not maintain health insurance (whether you need it or not) to the tune of $750 per "applicable individual". This will be phased in over time, and then adjusted with the cost of living. Interestingly, the government is not allowed to collect the tax if you fail to pay it. They can ask for or demand the money; they can refund anything you've overpaid; and they can apply any money they would otherwise owe you to the tax; but that's it.

Paying for the bill is problematic, at best, and it's as if Baucus went out of his way to find the worst possible way of doing so. For instance, there are additional fees and taxes as follows:
  • An excise tax on private plans that exceed the requirements of the government plan (Sec. 6001)
  • Elimination of tax exemptions for private healthcare insurance and health savings accounts (Sec. 6002).
  • A requirement that all covered drugs must be prescribed, even if they are available without a prescription (Sec. 6003).
  • Doubling of the tax on distributions from your health savings account that are not used for "qualified" medical expenses (Sec. 6004).
  • Limiting your cafeteria plan flexible spending arrangements. Savings plans will be ineligible unless your contributions are limited to $2500/year (Sec. 6005). By comparison, I priced a private healthcare plan for me and my family... it came to about $6000/year. This would seem to put health savings plans at a decided disadvantage.
  • Heavy new annual fees on branded prescription drug manufacturers (Sec. 6008).
  • Heavy new annual fees on medical device manufacturers and importers (Sec. 6009).
  • Heavy new annual fees on health insurers (Sec. 6010).

Now, if you were paying attention to this entire healthcare discussion during the Presidential campaign and since then, you'll certainly remember that the core issue was reducing costs to make sure that healthcare is affordable for all Americans. You DO NOT do this...
  • artificially making drugs more expensive to produce;
  • making medical devices like glucose meters, walkers, and other paraphernalia more expensive;
  • making private health insurance more expensive;
  • taxing your health insurance by removing exemptions and punishing people for purchasing comprehensive plans of their own, thus making all plans incapable of competing with the subsidized government plan;
  • ...and by forcing people to visit the doctor for prescriptions for over-the-counter medications
as this bill does. Every funding provision of this bill is geared toward making healthcare costs more expensive. Every cost-saving provision is based on limitation of benefits. READ THE BILL. I'm still reading it, but even at a cursory glance, it is exactly what the Republicans warned about, and what the Democrats claimed would never happen.

You know the tax on those "Cadillac Health Care Plans"? Section 6001 (page 1420) describes the "Excise Tax on High Cost Employer-Sponsored Health Coverage": 40% of the "excess benefit" for daring to opt for a better insurance comprehensive insurance plan than the government offers. This bill dismantles private insurance, to replace it with government-controlled "co-ops" which are private in name only. The reason they do this is simple: in order to make any health-insurance plan sustainable, you have to have many more healthy people signed up than sick people. You need this to be able to collect enough in premiums to cover your expense outlays. Rather than be up-front about the payments and costs, Senator Baucus has chosen to hide what should be premiums in increased costs throughout the healthcare system. The funny thing is that in taxing those things that should be covered by the system, it's effectively reducing the benefit. In so doing, it fails to provide the advertised benefit at all, and makes it more difficult for those people who would simply purchase services, medicines, and equipment outright to do so.

In short, it does exactly the opposite of what was promised.

At a glance it's not 100% bad, especially if you're one of the special interest groups marked for exemption, like illegal aliens. They can rest easy, knowing that they can continue to sponge off the system (page 201). We wouldn't want them inconvenienced. We save the inconvenience and expense for citizens and legal alien workers.

Keep in mind that this is simply the Senate plan. Any plan destined for the President's signature will be an amalgam of this and the House bill. IOW, the strong probability is that it will be even uglier.

As I mentioned a couple of times earlier, I'm still reading this. There may be portions which I mis-read or are revised by other sections. Some portions reference other legislation that's not part of the text of this bill. If I've gotten something wrong and I discover it or someone else brings it to my attention, I'll revise the info here.

Sunday, October 18, 2009

REVIEW: Outlander

From the occasional reviews you read here you might get the idea that I often wait until long after a movie is out of the theatres and onto DVD before I watch it. You'd be right. You might also get the idea that I'm more likely to write a bad review than a good one. Right again. It's very rare for a movie to be good enough to move me to write a review. The reasons are two-fold.
1. Movies that aren't crap are gushed about in the mainstream media, so there's little need for me to do so.
2. Most movies are crap. This includes most of those that are gushed about in the mainstream media.
Put these together and you see that most of my reviews would fall into the category of correcting the paid shills who gush over something undeserving of praise. Sometimes, though, a movie gets short shrift, and needs to be lifted up.

Such is the case with Outlander, a 2008 film by Howard McCain starting Jim Caviezel, Sophia Myles, Ron Perlman, and John Hurt. You should see already that the acting chops are there. So are the production values. So I was a more than a little disappointed to see how poorly it had done at the box office. I picked up the DVD for $5, not expecting much for the price, and boy, was I surprised!

Let's start with the concept. "Beowulf meets Predator", as it states on the DVD box. One would expect some lousy, sloppy "Sci-Fi channel" bug-eyed monster of the week with that admittedly ridiculous concept. But good storytelling doesn't lie in the concept; it lies in what you do with it. Now, with this kind of concept you could go campy, a la Army of Darkness, or you could play it straight. Playing it straight is the hard part, in that you run the risk of looking really, really bad; a trap this movie thankfully avoids.

The story: The year is 709. An alien spacecraft crash-lands in Norway carrying a might-as-well-be-human crew, of which only one individual, "Kainan" (Caviezel) survives. Unfortunately, there is another survivor: a bad-ass alien predatory dragon... uhm... thingy. OK, it's a little hard to describe, but that's the point. It's alien. More alien, in fact, than Ridley Scott's Alien.)

Kainan crosses paths with Wulfric (Jack Huston) and is taken back to the the village of King Rothgar (John Hurt). As it turns out, the village is at war, and Kainan is taken to be a spy. The fact that Kainan answers "I'm hunting dragons" when questioned doesn't help his credibility. The fact that the village is then attacked by said dragon does.

The rest of the story serves up your usual epic poetry fare: there's some monster chasin', and damsel-rescuin', all-out heroics, and a lot of savin'-th'-day. Not to mention a lot of "Oh, shit, didn't we just kill that thing?" The story closely parallels Beowulf:so closely, in fact, that I was frankly surprised that the Kainan doesn't adopt the name "Beowulf" at the end. (Damn! I gave it away. Well, I don't care about spoilers. If you do, stop reading.) That's actually part of the fun. The crew takes this epic, gives it just enough spin to let you see how it could be turned from spaceman to Beowulf in the retelling, and then manages to avoid the obvious cliches.

For instance... the first we see of the king's daughter Freya (Sophia Miles), she's practicing swordplay with her father. So she's going to turn out to be like Xena, or the "re-imagined" Guinevere of King Arthur, or every other kick-ass warrior princes, right? Wrong. She's a girl. They didn't do that in the year 709. She gets to be damsel-in-distress. And while 50 years ago "damsel-in-distress" was the cliche, today it's the other way 'round, and two thumbs up to the writer for his choice.

Then there's the alien. Not the creature, but the spaceman, Kainan. He's just a guy. He doesn't have a truckload of fancy gadgets and lasers, etc. Well, he does start out with a gun, but loses that pretty quick. And the rest of his stuff is at the bottom of the lake with his ship. The one gadget he does get a good bit of use out of early on is the computer which tells him he's lost and pretty much hosed, and which speed-feeds him the Nordic language; a process so painful you'd just as soon walk around ignorant. Job done, he leaves it behind. So we're left with an ordinary guy in a strange land, whose only real advantage is whatever he carries with him in his head. He's no super-genius, either; just a paid grunt getting by like the rest of us. No latex, no webbed feet, no cybernetic implants... he's as refreshing as was Klaatu in 1951.

The other alien ain't too shabby, either. It defies description, yes; but it's plausible in every way. It's sort of panther-like in its carriage; sort of insectoid in that it has an apparent exoskeleton (or really thick plated skin like an armadillos... but not heavy); it has a deep-sea fish's knack of attracting prey with colored light patterns that play across its skin (not in a cheesy way, but in the way that an octopus changes color); and a scorpion-like or whip-like tail. But it's not like any of those things either. It just works, and by that I mean it works on-screen and as a concept. Yeah, it's CGI, but it's really good CGI. It's thoroughly unique among film aliens. It makes the Ridley Scott Alien look like a guy in a suit. Oh wait. It was.

All in all, I don't mind that it's a re-telling of Beowulf. Actually, I picked up on that pretty quickly (as soon as I saw that the king was named (what sounded to me like) Hrothgar. It was frankly a better retelling of Beowulf than Beowulf & Grendel or Grendel, and a damn sight better than 2007's Beowulf with its cheescake Grendel's Mother played by Angelina Jolie. Again, it's not the concept, it's what you do with it that counts.

So I'm a little disappointed about the box office numbers. Frankly, if I'd ever heard of it before I'd have seen it in the theatres myself. I also think it deserves much better than the 38% rating it got on Just remember that Roger Ebert liked Jar Jar Binks and adjust your weighting of his review accordingly. Then watch Outlander and be entertained.

Saturday, October 10, 2009

What Obama's Healthcare Plan DOESN'T Address

Have you read the various healthcare plans put forth by the Democrats? If you're like most of the Democrats voting on these things, you haven't.

In the House, there's H.R. 3200 "America's Affordable Health Choices Act of 2009" (text) (pdf)

In the Senate, there's the Baucus Health Reform Plan (link) Now, this one is interesting, in that Senator Baucus claims that it's too difficult to post the full text of the bill. He claims it would take his staff two weeks to put it on the web. Baucus himself states that
“This probably sounds a little crazy to some people that we are voting on something before we have seen legislative language.”
No, Senator... it doesn't sound a little crazy. If you're not willing for the Senator's staff to get their competence up, you can look at the plan language version of the Bill on Keep in mind that the 223 page "plain language" version is only used in committee. This is not legally binding language, and it is not what gets voted on in the Senate.

The House bill includes a "public option"... that is, a government-run healthcare plan. The Baucus bill in the Senate doesn't, but includes some poorly-defined "co-ops" that would fill roughly the same role. Either option requires significant start-up capital. And it makes no difference to the consumer that Baucus doesn't choose to call his a public option. The biggest difference is that the Senator gets to avoid the messy part of defining the organization. Either way it's government-controlled healthcare.

The Competition Lie.

Now, one of the more laughable things that I've heard about the "public option" is that it is intended to provide competition. Paul Krugman of the New York Times makes this ludicrous statement, as does Obama himself. What makes the statement ludicrous is that these people pretend -- yes, they pretend, because they do know better -- that there is currently no competition. The way they do this is they lump ALL insurance companies together and treat them as one entity, and then they claim that we need the public option to compete with "private insurance companies". As if Aetna and Travelers and Blue Cross/Blue Shield, etc. do not compete against one another already. This "need for competition" is pure make-believe on the part of Liberals.

In reality, the government plan is purely anti-competitive. How so? Well, look at it. Suppose you've gone the extra mile and paid a lot extra to buy a really good insurance plan for you and your family. Good for you, right? Wrong. You've got a "Cadillac insurance plan," which means that in addition to paying the hefty premiums (which you're stretching your budget to afford anyway), the government hits you with a hefty tax. Apparently it's not fair for you to purchase a better plan. The Baucus plan, in retaliation for this unfairness, does its best to make sure you can't afford that plan. Due to the high taxation you then drop the "Cadillac plan" in favor of one you can afford. I.e., the government plan. On the other hand, let's say you've bought a cheaper plan. Because the Baucus plan is to be funded in part by taxing people who don't even take part in the plan itself, as described above, while private insurance must price their benefits and rates based on their membership, the government plan can be priced relatively lower. This artificially lowered premium means that it would be silly to purchase a similarly priced private plan, as it couldn't provide similar benefits. So again, you buy the government plan. A private company that engaged in that kind of artificial price-fixing would be hit with sanctions for anti-competitive behavior.

H.R. 3200 simply levies an unapologetic surtax on everyone who makes more than $350,000.

And hey! You're not some fat cat, but you're a blue-collar union worker with a negotiated healthcare plan? Don't worry, you get taxed, too, you Cadillac-driver, you.

Again, the people who have read and understood the Democrats' plans, know for a fact that these are purely anti-competitive proposals. Nevertheless, they tell you that black is white and up is down so they can socialize health-care. Never mind that this sort of scheme is not in the slightest bit sustainable: as the "Cadillac plans" dry up there will be nothing to tax, and prices will rise in long run, or else benefits will be limited (same thing, really).

Your Choice: Pay or Pay.

President Obama has stated repeatedly that no one would be forced to participate in the public option. Au contraire. If you choose not to buy insurance, you will be fined. Mr. President's objections notwithstanding, this is the very definition of being forced, and that alone puts the lie to the President's statement.

But isn't this for their own good? Shouldn't everyone have insurance? Well... no, not if you really think about it. Health insurance actually doesn't make economic sense for everyone. Suppose for a moment that you're young and in good health. You see the dentist twice a year at $100/visit, and visit your doctor once a year for a checkup. Other than that, you've basically an occasional flu or minor injury. Now, you could spend $250/month on health-care insurance OR you could bank the money and simply pay the doctor. If you buy health-care insurance you'll wind up spending $3,000/year in premiums + your co-pay (typically $20). If you don't buy insurance you spend $300. That's right. Insurance could cost you personally up to ten times as much as no insurance. You can bank $2,700/year into a high-yield savings account and simply pay outright for health costs, or you could use the money later in life for retirement, etc. if you never wound up with a major problem.

Even when you do buy insurance, it makes the most economic sense to keep the premiums low by buying a catastrophic plan, whereby you simply pay as you go for typical visits and use the plan only for major procedures and hospitalization.

But Obama and his liberal friends do not want you to do what makes economic sense for you. They have a plan to pay for, and in order to do it they need your money. So, if you choose to simply pay as you go, you will be fined. The "choice" you are given in this case is to participate or to participate, damn it. And that's no choice.

Self-insurance isn't addressed in the House plan. The Baucus plan only mentions it in passing due to existing non-discrimination requirements, but includes no assurance that such plans would continue to exist at all.

It's Not Insurance.

I had an interesting conversation with a medical admin recently. Last month my wife had a stroke. She spent some time in the hospital, and we do have a plan that covers catastrophic contingencies. When she was released there were a number of follow-up appointments to make, which we're still going through. One of them was a sleep study. When I called to make the appointment I was told that I should call the insurance company first to determine whether the sleep-study would be covered. Of course I asked what difference that could possibly make... if it's covered, fine, but if not, my wife still needs the appointment, the only difference being that I would have to pay for it. The admin acted as if it had never occurred to her that I might actually just pay for something. I drive an 18-year-old car rather than make payments on a new car, and in the last 20 years I haven't bought anything but my house on credit. But that's not how the healthcare/insurance symbiosis has evolved.

What they're looking for is pre-payment, not insurance. The insurance companies want you to pay, and pay, and pay premiums on the assumption that you will, in fact, use them as the method of paying for everything whatsoever to do with healthcare. The government wants to do the same exact thing (and that is their idea of "change"... do the exact same thing you're doing now, only give us the money instead of giving it to someone else).

That's not how insurance works. Take a look at your auto insurance. A lot of things are covered, sure... but probably not oil changes and regular maintenance. Imagine filing an auto insurance claim every time you take your car in to Jiffy Lube. Imagine Jiffy Lube then having to comply with privacy regulations. And imagine that you have to file an insurance claim every time you went to Autozone to buy additives to keep your car in good working condition. Well, that's exactly what you're doing with healthcare, and it's stupid.

Insurance is a hedge against loss. It should be there to pay you when something goes wrong, not to pre-pay regular maintenance. Health-care insurance stands alone in this regard... it's not insurance, it's a pre-payment plan. Why is that? It has everything to do with the fact that healthcare isn't very affordable. So if you want to change something, change that.

Missing in Action: Tort Reform

And why is healthcare unaffordable? Because it's bloody expensive to be a doctor. Once upon a time in the early 1990s a doctor friend and I started a company to market computer software to general practitioners. We re-sold Pacific Medsoft software, and I wrote a bit of software called Medical Office Manager as well as departmental procedural tracking software for Radiology and Laboratory procedures. The point here is that my business partner was a G.P., and malpractice insurance was damned expensive. It was the single highest expense in the practice. Why is that? Because people can sue for anything and get a judgement for any amount.

FoxNews reports that many doctors pay $100,000 to $250,000 a year in malpractice insurance even if they've never had a judgment against them. I'd say that's just about right. Neurologists and obstetricians are hardest hit. Now, tell me... what does it matter that you have health insurance if your doctor has been forced out of the practice of medicine because of outrageous malpractice insurance expenses? When "you-can't-afford-to-pay-more" meets "they-can't-afford-to-charge-less" that's exactly what does in fact happen. And no bill before either house of Congress addresses with any specificity what should be done to solve this problem. "Tort reform" simply means adding some common sense to the bringing of lawsuits and the awards that can be handed out by such lawsuits.

According to the Congressional Budget Office (CBO), Malpractice insurance reform would save the government $54 Billion dollars over the next 10 years (pdf). That's as things stand. And it's only the savings to the government itself. This reflects a direct savings of $41 Billion + $13 Billion in increased revenue due to additional taxable income. It does not estimate or enumerate the savings to private industry, which would likely be many times that.

Obviously, tort reform is the #1 place to start if you want to make healthcare affordable. But why wasn't it introduced in the very first drafts of either house's proposal? Well, the Democrats are in charge, and they're the ones introducing these bills. Does the fact that trial lawyers donate to Democrats' campaigns over Republicans by a ratio of 8:1 have anything to do with it? Actually, I've heard the 8:1 ratio in general, but the Washington Examiner comes up with these hard numbers regarding the American Association for Justice, just one of the many legal PACs.
...employees of the top 15 plaintiffs' law firms contributed $636,000, 99 percent of it to Democrats. AAJ's PAC gave Democrats 96 percent of its additional $627,000 in contributions.
Yeah. Trial lawyers love Democrats. Democrats love trial lawyers. And coincidentally, tort reform remains largely off the table, and as a result no healthcare reform bill has been introduced that does anything more effective than re-arrange the deck chairs. "Change", indeed.

It seems to me that in many cases what is sought is not compensation, but enrichment. To pursue a case a person must have a lawyer, and regardless of the outcome of the case, lawyers are out for enrichment. They then convince their clients of the irreplaceable value of their loss. Faced with the big payday, plaintiffs forget about their grief quickly enough and focus on their greed.

(BTW, lest you think I "just don't understand"... my wife's stroke was brought on in part by smoking, which she's had to quit cold turkey. She's got nobody to blame but herself for that, and neither she nor I are stupid enough to blame "Big Tobacco" for her behavior. If you have that kind of blame in you, then you don't understand and you'd better wake up. You and you alone are responsible for what you put in your body.)

Part of the problem with this "healthcare" debate is that it's not about healthcare, it's about healthcare insurance... it's all about the Benjamins. If you want change... if you want more people to afford healthcare... you have to change your thinking. Stop thinking of the big payday, limit damages to reasonable amounts, reduce malpractice insurance premiums, keep your doctors in business, and make healthcare affordable... not to the insurance companies, but to you and me, the only people who actually pay.

Critics of tort reform say that it's unfair to limit punitive damages, no matter how outrageous. President Obama has grudgingly agreed to fund a study next year to look into the issue, but denies that it should be part of the current healthcare debate. Instead, we should plunge headlong into an $800 Billion program without stopping to post it to the web first in its entirety or read it though.


Missing in Action: Careful Consideration.

Look, there's a lot that can be done to improve healthcare. The right answers don't necessarily involve socialization or even "insurance" for all. Affordability, common sense tort reform and personal responsibility all have to be considered. And sacrificing for the public good doesn't mean everybody but the trial lawyers. It's time that Democrats stopped talking "Big-this" and "Big-that" and got off their own big butts, and shut their ears to their own cash cows.

Don't just take what you hear at face value, not even this. Read the proposals (though I'm telling you now, avoid the summaries, they're all slanted). Read Hold your Congressmen accountable for taking the time to read and understand what he's voting on, and to refuse to allow legislation through unless and until that time is granted.

I'll leave you with this:
The Dope-ler Effect: (n.) The tendency of stupid ideas to seem smarter when they come at you rapidly. See Healthcare Reform.

Wednesday, October 07, 2009

With a capital T and that rhymes with P and that stands for...

...Politics. Yeah, we've got trouble right here in Union. And I hate talking politics.

As widely reported (link), Former Union county sheriff Howard Wells and four others have been indicted for various alleged crimes. (These are on top of two high-profile convictions last year: our former mayor, Bruce Morgan, and former City of Union Building and Zoning director Jeffrey Lawson for extortion and lying to Federal prosecutors.)

Though Wells' name is on top of all of the headlines due to his high profile during the Susan Smith affair, the bigger story locally is that of Donnie Betenbaugh, who faces up to 618 years imprisonment and up to $13 million in fines if convicted of all 40 counts. Former tax assessor Bill Randall faces similar charges (but apparently lower maximum sentences), including accusations of conspiracy, extortion, soliciting and accepting bribes, money laundering, structuring financial transactions to evade federal reporting requirements and knowingly allowing the tax assessor’s office to be used a “stash house” for the storage and distribution of cocaine and hydrocodone. Go ahead and read about the rest, I'm not going to simply repeat the story.

Now, let's be clear that all of the men deny the charges, and plan to follow the legal avenues available to them, etc. Nevertheless, Gov. Mark Sanford has suspended Betenbaugh from his position as County Supervisor (Donnie is the only defendant who is currently in public office).

And since Sanford's name is in there, I suppose I'll digress for a moment and talk about him.

It's one thing when there's a crook or a degenerate in office and you know what he is. Example: Bill Clinton was a horn-dog. We all know that. Tin-foil hat conspiracies to the contrary, I don't think, though that he was out to do anything deliberately corrupt. (After all, people can disagree with your political opinions without being evil). It's quite another thing when someone takes office on the premise that he is better than that. And then turns out not to be. Clinton kept his affair in the White House... at least he was on the job. Sanford was derelict as well as morally corrupt. His moral failure is a far bigger disappointment. Sanford's extra-marital affair was an act of moral turpitude. Nevertheless, he's declined to leave office.

Now, I hate hypocrisy. The reason I'd like to see Sanford voluntarily leave office is the same reason I wanted to see Clinton out of office for his misdemeanors. But Sanford won't leave. That, of course, doesn't mean he's above invoking turpitude when suspending Donnie Betenbaugh. Again, let me be clear. Donnie should be suspended. But Sanford should also leave, and stop playing the hypocrite.

Which brings me back to the local issue. Wells, Randall, and Betenbaugh were all elected with the understanding that they were better than that. They were going to be above reproach... on the square. But they weren't. And that is a huge let-down. Now, this isn't a partisan criticism. I've voted for each of these men, though we don't belong to the same political party (actually, in Union party affiliation is a somewhat nebulous concept... it's not unusual for a strict conservative to run on a Democratic ticket just so they can get their name in the primary). And while I'd like to say, as some do, "They're good men who lost their way. Let's pray for them, that they can make a comeback," I just can't bring myself to do it. These people held themselves up as adhering to a higher standard. And looking at the positions they hold or have held -- Howard Wells, former sheriff; Donnie Betenbaugh, County Supervisor; Bill Randall, Tax Assessor -- there is simply no way in God's green Earth that they can claim mitigating circumstances should the charges be proven true. Wells' charges are probably the least of the bunch, amounting to a bit of loan-sharking and cover-up of the same... but damn it, he was the Sheriff.

So the best I can do is withhold all speculation and hope that the courts find one way or another. Let the matter go to trial and let the court decide based on the facts. If they are acquitted, then heartfelt congratulations are in order... but if they're convicted, I couldn't be satisfied with less than the maximum sentence.