Posts Tagged ‘radical’

I still don’t know what I was waiting for
And my time was running wild
A million dead-end streets
And every time I thought I’d got it made
It seemed the taste was not so sweet
So I turned myself to face me
But I’ve never caught a glimpse
Of how the others must see the faker
I’m much too fast to take that test

Ch-ch-ch-ch-changes
(Turn and face the strange)
Ch-ch-changes
Don’t want to be a richer man
Ch-ch-ch-ch-changes
(Turn and face the strange)
Ch-ch-changes
Just gonna have to be a different man
Time may change me
But I can’t trace time

I watch the ripples change their size
But never leave the stream
Of warm impermanence and
So the days float through my eyes
But still the days seem the same
And these children that you spit on
As they try to change their worlds
Are immune to your consultations
They’re quite aware of what they’re going through

Ch-ch-ch-ch-changes
(Turn and face the strange)
Ch-ch-changes
Don’t tell them to grow up and out of it
Ch-ch-ch-ch-changes
(Turn and face the strange)
Ch-ch-changes
Where’s your shame
You’ve left us up to our necks in it
Time may change me
But you can’t trace time

Strange fascination, fascinating me
Changes are taking the pace
I’m going through

Ch-ch-ch-ch-Changes
(Turn and face the strange)
Ch-ch-changes
Oh, look out you rock ‘n rollers
Ch-ch-ch-ch-changes
(Turn and face the strange)
Ch-ch-changes
Pretty soon now you’re gonna get older
Time may change me
But I can’t trace time
I said that time may change me
But I can’t trace time

David Bowie, Changes, Hunkey Dory, 1971

Yanis Varoufakis, will be Syriza’s new finance minister. He has been a brilliant critique of EU economic policy for many years and is a splendid choice for the difficult task at hand: radically reforming the European Union’s political-economy.

 

 

 

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Here’s a nice illusion of the main process of policy in the US today called “revolving door” in this case showing how food and agricultural policy is controlled by the giant monopoly Monsanto.

This has been operating for decades but is today the norm today with very few exceptions. A similar list can be drawn for education, environmental, health, communications, EVERYTHING.

Politics:

To my libertarian friends: Are you enjoying this “self-regulatory” system? After all isn’t this what Ayn rand advocated: government by and for the business elites?

To my liberal friends: Yes we must have effective regulation for a market-system to work. But tell me exactly HOW we would get that when the government (Dems or Reps) are completely in the pocket of multinational?

THERE IS NO GETTING AROUND DECENTRALIZING POWER AND RETURNING IT TO THE PEOPLE.

The radicals are (as usual) correct!

After a long time off the air with only blogging and social net to vent our outrage and banter, we’ve finally launched ourselves on YouTube!

… yeah, we know, we’re considering calling these long segments: 2 Fat Old Guys and a Dog lol

We did what we used to do on the radio/podcasts and chewed on some current ugly fat for over an hour (no station manager to shut us up).

AUDIO (right click Punkonomics2014-2-23 and “save as” to download):

Topic: The Post-Occupy/Post-Arab Spring Co-opting of Media and Social Media for the Ends of Destroying Democracy and Promoting the Interests of the Upper Class/1%

This is based on a recent blog post: We are STILL being PLAYED! Venezuela and Ukraine in context
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Collection of links:

1966695_780730285289579_1013551254_nWhere does one even start to answer the question everybody is asking: What is going on in Venezuela and Ukraine?!? So in the spirit of punk (and French postmodernism), I’ll just stick a bunch of things together (bricolage). I provide a number of good sources at the bottom for you to get a fuller picture.

So is it a bunch of democracy-loving students engaged in non-violent resistance being violently oppressed by totalitarian governments? No it is not. But it is hard to see the big picture without getting into the long history of Venezuela and Ukraine and many other places. Hell, you need to look at the past 500+ years to really get the picture–oh yeah, that is why education is important but a good real-world education is almost impossible to get and requires many years.

I’ve been having lots of arguments with relatively rich and some very rich ex-students and their friends from Venezuela and have been trying very hard to be as civil as I can because I’m honestly trying to be open and understanding. Knowing that the Venezuela has eradicated hunger while here in the US 20% of kids are hungry today, it breaks my heart and makes me both sad and angry to hear a Venezuelan blogger complain about not being able to bake a cake due to milk shortages!? The economic problems in Venezuela are also not what they seem but on that later. I guess I’ll get some hate for this but the truth is ugly and complicated.

Disclaimer: let’s put Ukraine aside for a moment–I know less about it’s internal politics and will make a special post about it soon. Watch this for now.

In attempting to be “fair and balanced” (pun intended), I tried to watch the mainstream media and anti-government Venezuelan rhetoric too to see if perhaps I’m the one being misled… no, it was BS propaganda to anybody aware of the long and medium term facts of economics and politics–sorry.

I watched Jehane Noujaim’s documentary The Square (2013) about the revolutionary struggles in Egypt in order to catch the current romantic feel of heroic youth uprisings that seem to motivate all the Web 2.0 gushing about Venezuela and Ukraine. Well the Egyptians really did have a genuine uprising against a US supported dictator by poor and rich, secular, and religious youth and they lost their heroic battle, were successfully played by the military, and crushed with the continued support of the US. In the film, an exiled father of one of the revolutionary tells him: “The rich don’t need freedom. The rich are already free.” Now stop for a second and ask yourself: how does this fit into the “struggle for freedom” in the streets of Caracas these past days? It doesn’t!

Why? Because it is entirely orchestrated and run by rich Venezuelans. The majority poor aren’t involved in this at all. A significant minority in Venezuela are critical of their democratically elected government and have been exercising their right of expression and political participation but have not been able to gain power by legal means though Henrique Capriles came close in the previous presidential elections. His moderate minority is also overwhelmingly rich and upper middle-class urban people and he deserves credit for NOT supporting the radical right-wing takeover of the opposition by, most notably Leopoldo Lopez, a billionaire from an old power-family who has been taking violent actions against the Chavez government since the previous CIA backed coup against democracy in 2002. He is and continues to be a rich oligarch thug who deeply resents not being able to rule over his domain like his ancestors before him. Despite his wealth, US support, global financial support, and a sophisticated propaganda machine, he only won the hearts of rich people and it looks like all he accomplished is to break up the legitimate opposition. The violent clashes were rather small and mostly located in their rich neighborhoods and private schools and much of the violence came from Lopez’s followers themselves. Oh yeah, and more innocent civilians are murdered by the government of Colombia (a close ally of the US and Lopez and friends) every week than have died in Venezuela’s riots–double standards?

YES Venezuela has some serious economic problems. These are complex issues I’ll try to tackle in a future post but let’s say that at the very least, we should know that over the past decade, Venezuela has accomplished a tremendous feat of poverty-reduction never seen anywhere in recent times. The lives of a vast majority of the poor population have improved dramatically while everywhere else on Earth over the same time, the opposite has happened–even in China. Furthermore, they accomplished this despite aggressively hostile global economic players who have been funding coups and radical groups and even engaging in direct economic sabotage that are, at least in part, responsible for Venezuela’s economic woes. So whatever legitimate problems they have with street violence, food-prices, and inflation, the Bolivarian democratic regimes in South America have been the first good thing to happen to the vast majority of the people there since the European conquest 500+ years ago and would not have been possible without the leadership of the Venezuelan people and Chavismo–something for Venezuelans to be very proud about!

The Postmodern Twist:

People in supposedly free countries not knowing what is being done in their name is not new: Manufacturing Consent: The Political Economy of the Mass Media (1988), by Edward S. Herman and Noam Chomsky should be required reading (here’s a very short intro about their Propaganda Model). BUT I think it has gotten more dominant especially in the current media coverage of Venezuela and Ukraine. Today, there even is a twist within a twist in that people are posting their outrage about how “the media” is not “covering” the situation. They then post blatant propaganda in support of a what is in actuality a well-engineered propaganda campaign by oligarchic elites to undermine democracy (wow! despite my training in postmodern philosophy, my head spins).

But it gets crazier! The power-elites (aka the 1%) and the military-financial-complex (more on this soon–check this out) are using the well-meaning non-violent work of liberals such as Gene Sharp to execute their coups. No need to send death squads (trained at School of the Americas in Georgia), or militarily support nasty dictators and juntas (like in Egypt among numerous examples). Today they can use well-meaning naive and propagandized students to spark the process of post-colonial oppression: it’s colonizing version 3.0!

Question: ok ok we get it, but what IS going on in the Venezuela?

Answer: An attempted “Soft Coup”:

I’ve adapted this from TeleSUR which is funded by the left governments of America including Venezuela and even Cuba! Not disinterested and independent but a good summary of work by the (IMHO well-meaning) philosopher and political scientist Gene Sharp. Also, consider my previous bla bla, history, provided links (see below), history (yes; again), and judge for yourself if this is not a damn good model for the current goings on:

How to overthrow a government through non-violent methods
(in this context, non-violent implies not organizing guerrillas or invading from abroad):

  1. “Softening”

    • creating climate of opinion focusing on deficiencies

    • disseminate discontent

    • promote shortages, criminality, internal fractures, sabotage

  2. “Delegitimization”

    • ethical and political fracture

    • media campaigns accusing government of being totalitarian (and/or communist) and contrasting opposition as fighting for freedom and human rights

  3. “Street heating”

    • promote conflict and street mobilization

    • promote struggle for globalized political and social demands

    • create state reaction and consequently public discontent in order to radicalize the confrontation

  4. Reaction:

    • Armed actions to justify repressive measures and create climate of ungovernability

    • Smear campaign among state forces to demoralize security forces

  5. “Institutional Fracture”

    • Increased street actions

    • Occupation of institutions

    • Force resignation of government (especially figure -head)

In case of failure to overthrow government, rinse and repeat:

  • escalate stage 3, 4, and 5

  • seek international intervention: sanctions and/or military

  • develop prolonged civil war

Tell me this doesn’t sound awfully familiar!?!

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Collection of links:

In the Name of Love

 “Do what you love” is the mantra for today’s worker. Why should we assert our class interests if, according to DWYL elites like Steve Jobs, there’s no such thing as work?

Illustration by Leslie A. Wood

Illustration by Leslie A. Wood

“Do what you love. Love what you do.”

The commands are framed and perched in a living room that can only be described as “well-curated.” A picture of this room appeared first on a popular design blog, but has been pinned, tumbl’d, and liked thousands of times by now.

Lovingly lit and photographed, this room is styled to inspire Sehnsucht, roughly translatable from German as a pleasurable yearning for some utopian thing or place. Despite the fact that it introduces exhortations to labor into a space of leisure, the “do what you love” living room — where artful tchotchkes abound and work is not drudgery but love — is precisely the place all those pinners and likers long to be. The diptych arrangement suggests a secular version of a medieval house altar.

There’s little doubt that “do what you love” (DWYL) is now the unofficial work mantra for our time. The problem is that it leads not to salvation, but to the devaluation of actual work, including the very work it pretends to elevate — and more importantly, the dehumanization of the vast majority of laborers.

Superficially, DWYL is an uplifting piece of advice, urging us to ponder what it is we most enjoy doing and then turn that activity into a wage-generating enterprise. But why should our pleasure be for profit? Who is the audience for this dictum? Who is not?

By keeping us focused on ourselves and our individual happiness, DWYL distracts us from the working conditions of others while validating our own choices and relieving us from obligations to all who labor, whether or not they love it. It is the secret handshake of the privileged and a worldview that disguises its elitism as noble self-betterment. According to this way of thinking, labor is not something one does for compensation, but an act of self-love. If profit doesn’t happen to follow, it is because the worker’s passion and determination were insufficient. Its real achievement is making workers believe their labor serves the self and not the marketplace.

Aphorisms have numerous origins and reincarnations, but the generic and hackneyed nature of DWYL confounds precise attribution. Oxford Reference links the phrase and variants of it to Martina Navratilova and François Rabelais, among others. The internet frequently attributes it to Confucius, locating it in a misty, Orientalized past. Oprah Winfrey and other peddlers of positivity have included it in their repertoires for decades, but the most important recent evangelist of the DWYL creed is deceased Apple CEO Steve Jobs.

His graduation speech to the Stanford University class of 2005 provides as good an origin myth as any, especially since Jobs had already been beatified as the patron saint of aestheticized work well before his early death. In the speech, Jobs recounts the creation of Apple, and inserts this reflection:

You’ve got to find what you love. And that is as true for your work as it is for your lovers. Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do.

In these four sentences, the words “you” and “your” appear eight times. This focus on the individual is hardly surprising coming from Jobs, who cultivated a very specific image of himself as a worker: inspired, casual, passionate — all states agreeable with ideal romantic love. Jobs telegraphed the conflation of his besotted worker-self with his company so effectively that his black turtleneck and blue jeans became metonyms for all of Apple and the labor that maintains it.

But by portraying Apple as a labor of his individual love, Jobs elided the labor of untold thousands in Apple’s factories, conveniently hidden from sight on the other side of the planet — the very labor that allowed Jobs to actualize his love.

The violence of this erasure needs to be exposed. While “do what you love” sounds harmless and precious, it is ultimately self-focused to the point of narcissism. Jobs’ formulation of “do what you love” is the depressing antithesis to Henry David Thoreau’s utopian vision of labor for all. In “Life Without Principle,” Thoreau wrote,

… it would be good economy for a town to pay its laborers so well that they would not feel that they were working for low ends, as for a livelihood merely, but for scientific, even moral ends. Do not hire a man who does your work for money, but him who does it for the love of it.

Admittedly, Thoreau had little feel for the proletariat (it’s hard to imagine someone washing diapers for “scientific, even moral ends,” no matter how well-paid). But he nonetheless maintains that society has a stake in making work well-compensated and meaningful. By contrast, the twenty-first-century Jobsian view demands that we all turn inward. It absolves us of any obligation to or acknowledgment of the wider world, underscoring its fundamental betrayal of all workers, whether they consciously embrace it or not.

One consequence of this isolation is the division that DWYL creates among workers, largely along class lines. Work becomes divided into two opposing classes: that which is lovable (creative, intellectual, socially prestigious) and that which is not (repetitive, unintellectual, undistinguished). Those in the lovable work camp are vastly more privileged in terms of wealth, social status, education, society’s racial biases, and political clout, while comprising a small minority of the workforce.

For those forced into unlovable work, it’s a different story. Under the DWYL credo, labor that is done out of motives or needs other than love (which is, in fact, most labor) is not only demeaned but erased. As in Jobs’ Stanford speech, unlovable but socially necessary work is banished from the spectrum of consciousness altogether.

Think of the great variety of work that allowed Jobs to spend even one day as CEO: his food harvested from fields, then transported across great distances. His company’s goods assembled, packaged, shipped. Apple advertisements scripted, cast, filmed. Lawsuits processed. Office wastebaskets emptied and ink cartridges filled. Job creation goes both ways. Yet with the vast majority of workers effectively invisible to elites busy in their lovable occupations, how can it be surprising that the heavy strains faced by today’s workers (abysmal wages, massive child care costs, et cetera) barely register as political issues even among the liberal faction of the ruling class?

In ignoring most work and reclassifying the rest as love, DWYL may be the most elegant anti-worker ideology around. Why should workers assemble and assert their class interests if there’s no such thing as work?


“Do what you love” disguises the fact that being able to choose a career primarily for personal reward is an unmerited privilege, a sign of that person’s socioeconomic class. Even if a self-employed graphic designer had parents who could pay for art school and cosign a lease for a slick Brooklyn apartment, she can self-righteously bestow DWYL as career advice to those covetous of her success.

If we believe that working as a Silicon Valley entrepreneur or a museum publicist or a think-tank acolyte is essential to being true to ourselves — in fact, to loving ourselves — what do we believe about the inner lives and hopes of those who clean hotel rooms and stock shelves at big-box stores? The answer is: nothing.

Yet arduous, low-wage work is what ever more Americans do and will be doing. According to the US Bureau of Labor Statistics, the two fastest-growing occupations projected until 2020 are “Personal Care Aide” and “Home Care Aide,” with average salaries of $19,640 per year and $20,560 per year in 2010, respectively. Elevating certain types of professions to something worthy of love necessarily denigrates the labor of those who do unglamorous work that keeps society functioning, especially the crucial work of caregivers.

If DWYL denigrates or makes dangerously invisible vast swaths of labor that allow many of us to live in comfort and to do what we love, it has also caused great damage to the professions it portends to celebrate, especially those jobs existing within institutional structures. Nowhere has the DWYL mantra been more devastating to its adherents than in academia. The average PhD student of the mid 2000s forwent the easy money of finance and law (now slightly less easy) to live on a meager stipend in order to pursue their passion for Norse mythology or the history of Afro-Cuban music.

The reward for answering this higher calling is an academic employment marketplace in which around 41 percent of American faculty are adjunct professors — contract instructors who usually receive low pay, no benefits, no office, no job security, and no long-term stake in the schools where they work.

There are many factors that keep PhDs providing such high-skilled labor for such extremely low wages, including path dependency and the sunk costs of earning a PhD, but one of the strongest is how pervasively the DWYL doctrine is embedded in academia. Few other professions fuse the personal identity of their workers so intimately with the work output. This intense identification partly explains why so many proudly left-leaning faculty remain oddly silent about the working conditions of their peers. Because academic research should be done out of pure love, the actual conditions of and compensation for this labor become afterthoughts, if they are considered at all.

In “Academic Labor, the Aesthetics of Management, and the Promise of Autonomous Work,” Sarah Brouillette writes of academic faculty,

… our faith that our work offers non-material rewards, and is more integral to our identity than a “regular” job would be, makes us ideal employees when the goal of management is to extract our labor’s maximum value at minimum cost.

Many academics like to think they have avoided a corporate work environment and its attendant values, but Marc Bousquet notes in his essay “We Work” that academia may actually provide a model for corporate management:

How to emulate the academic workplace and get people to work at a high level of intellectual and emotional intensity for fifty or sixty hours a week for bartenders’ wages or less? Is there any way we can get our employees to swoon over their desks, murmuring “I love what I do” in response to greater workloads and smaller paychecks? How can we get our workers to be like faculty and deny that they work at all? How can we adjust our corporate culture to resemble campus culture, so that our workforce will fall in love with their work too?

No one is arguing that enjoyable work should be less so. But emotionally satisfying work is still work, and acknowledging it as such doesn’t undermine it in any way. Refusing to acknowledge it, on the other hand, opens the door to the most vicious exploitation and harms all workers.

Ironically, DWYL reinforces exploitation even within the so-called lovable professions where off-the-clock, underpaid, or unpaid labor is the new norm: reporters required to do the work of their laid-off photographers, publicists expected to Pin and Tweet on weekends, the 46 percent of the workforce expected to check their work email on sick days. Nothing makes exploitation go down easier than convincing workers that they are doing what they love.

Instead of crafting a nation of self-fulfilled, happy workers, our DWYL era has seen the rise of the adjunct professor and the unpaid intern — people persuaded to work for cheap or free, or even for a net loss of wealth. This has certainly been the case for all those interns working for college credit or those who actually purchase ultra-desirable fashion-house internships at auction. (Valentino and Balenciaga are among a handful of houses that auctioned off month-long internships. For charity, of course.) The latter is worker exploitation taken to its most extreme, and as an ongoing Pro Publica investigation reveals, the unpaid intern is an ever larger presence in the American workforce.

It should be no surprise that unpaid interns abound in fields that are highly socially desirable, including fashion, media, and the arts. These industries have long been accustomed to masses of employees willing to work for social currency instead of actual wages, all in the name of love. Excluded from these opportunities, of course, is the overwhelming majority of the population: those who need to work for wages. This exclusion not only calcifies economic and professional immobility, but insulates these industries from the full diversity of voices society has to offer.

And it’s no coincidence that the industries that rely heavily on interns — fashion, media, and the arts — just happen to be the feminized ones, as Madeleine Schwartz wrote in Dissent. Yet another damaging consequence of DWYL is how ruthlessly it works to extract female labor for little or no compensation. Women comprise the majority of the low-wage or unpaid workforce; as care workers, adjunct faculty, and unpaid interns, they outnumber men. What unites all of this work, whether performed by GEDs or PhDs, is the belief that wages shouldn’t be the primary motivation for doing it. Women are supposed to do work because they are natural nurturers and are eager to please; after all they’ve been doing uncompensated childcare, elder care, and housework since time immemorial. And talking money is unladylike anyway.


The DWYL dream is, true to its American mythology, superficially democratic. PhDs can do what they love, making careers that indulge their love of the Victorian novel and writing thoughtful essays in the New York Review of Books. High school grads can also do it, building prepared food empires out of their Aunt Pearl’s jam recipe. The hallowed path of the entrepreneur always offers this way out of disadvantaged beginnings, excusing the rest of us for allowing those beginnings to be as miserable as they are. In America, everyone has the opportunity to do what he or she loves and get rich.

Do what you love and you’ll never work a day in your life! Before succumbing to the intoxicating warmth of that promise, it’s critical to ask, “Who, exactly, benefits from making work feel like non-work?” “Why should workers feel as if they aren’t working when they are?” Historian Mario Liverani reminds us that “ideology has the function of presenting exploitation in a favorable light to the exploited, as advantageous to the disadvantaged.”

In masking the very exploitative mechanisms of labor that it fuels, DWYL is, in fact, the most perfect ideological tool of capitalism. It shunts aside the labor of others and disguises our own labor to ourselves. It hides the fact that if we acknowledged all of our work as work, we could set appropriate limits for it, demanding fair compensation and humane schedules that allow for family and leisure time.

And if we did that, more of us could get around to doing what it is we reallylove.


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Jacobin is a leading voice of the American left, offering socialist perspectives on politics, economics, and culture.

The Backroom Deal That Could’ve Given Us Single-Payer

12.9.13

It’s not so much that Obama “sold us out” to a powerful constituency as that he picked the wrong powerful constituency. A quick look at the financial details reveals that health insurance nationalization was always the real “path of least resistance.”

Back in March 2009, leaks from the White House made it clear that a single-payer health insurance system was “off the table” as an option for health care reform. By doing so, the President had ruled out the simplest and most obvious reform of the disaster that is US healthcare. Instituting single-payer would have meant putting US health insurance companies out of business and extending the existing Medicare or Medicaid to the entire population. Instead, over the following weeks the outlines of the bloated monstrosity known as Obamacare emerged; an impossibly complicated Rube Goldberg contraption, badly designed, incompetently executed, and whose intended beneficiaries increasingly seem to hate.

The decision to abandon the nationalization of perhaps the most unpopular companies in the US is correctly attributed to the fundamental conservatism of the Obama White House, and its unwillingness to take on the health insurers, pharmaceutical companies, or any interest group willing and able to spend millions lobbying, hiring former politicians, and donating to campaigns. Obama’s “wimpiness,” his need to always take the path of least resistance, became common tropes among the American left. Obamacare, liberals claim, is the best possible reform that could’ve been wrangled out of the health insurance industry.

But were the many backroom deals that make up Obamacare really an easieralternative to nationalization? A look at the financial details reveals the opposite conclusion. In strictly financial terms, nationalization would have been the easiest way forward, costing relatively little and delivering immediate savings while making access to health care truly universal. Politically, Obama could have counted on the support of a unlikely ally of progressive causes: health insurance shareholders, the theoretical owners of those very companies who would have been relieved of their then-dubious investments with a huge payout.

As of the end of 2008, the private insurance market covered 60 percent of the US population. For-profit insurers accounted for a large and growing share. The top five insurers accounted for 60 percent of the market — all but one of them for-profit companies. Absent a Bolshevik revolution, implementing a single-payer system would have required proper compensation for the owners of these institutions for their loss of future income — shareholders in the case of the for-profit insurers and, allegedly, the supposed policyholders in the case of most non-profits.

How much compensation? Well, in mid-2009, the total market capitalization of four out of the five top health insurers (the fifth is a nonprofit) amounted to about $60 billion. By then, the stock market had already rebounded nicely from the lows of the crisis, and the uncertainty over Obamacare had largely dissipated, so these were not particularly depressed valuations. Extrapolating this valuation to the rest of the health insurers would have a put a price tag of about $120 billion on the whole racket.

This means that buying out the entire health insurance industry at an enormously generous premium of, say, 100 percent, would have cost the Treasury $240 billion – about 2 percent of 2009 gross domestic product. And this figure is highly inflated —premiums for buying out well-established companies rarely exceed 50 percent and are usually closer to 20 percent. Also, I am valuing the dubious claims of non-profit policyholders on par with the more vigorously-enforced property rights of for-profit shareholders.

Other than the big smiles on the faces of health insurer shareholders across the country, what would have been the US Treasury’s payoff for writing a $240 billion check? Once again, the numbers are simple, and startling. US private insurance, whether for-profit or otherwise, may well be the most wasteful bureaucracy in human history, making the old Gosplan office look like a scrappy startup by comparison. Estimates of pure administrative waste range anywhere from 0.75 percent to 2.6 percentof total US economic output.

Extrapolating again from the biggest four for-profit insurers, in 2008, the industry as a whole claimed to spend 18.5 percent of the premiums it collected on things other than payments to providers. (The other 81.5% that is spent paying for actual care is known as medical loss ratio. Keeping this ratio down is a health insurer CEO’s top priority.) Medicare, by contrast, spendsjust 2 percent. The difference amounts to $130 billion, to which we must add the compliance costs the private insurers impose on health care providers — $28 billion, according to Health Affairs. The costs incurred by consumers are difficult to measure, although very real to anyone who’s spent an afternoon on the phone with a health insurance rep.

So, to recap, nationalization of the health insurance industry in 2009 would have cost no more (and almost certainly a lot less) than $240 billion. The savings in waste resulting from replacing the health insurance racket with an extension of Medicare would have resulted in no less than $158 billion a year. That’s an annualized return on investment of 66 percent. The entire operation would have paid for itself in less than 18 months, and after that, an eternity of administrative efficiency for free. And, of course, happy shareholders.

There would have been nothing exceptional about the arrangement, either. Examples abound of states buying out private shareholders on mutually agreeable terms. The British takeover of the “commanding heights” of the economy after World War II is perhaps the best known, but there have also been potash miners in Canada, New Zealand’s railroads, and Swedish ore producers among others. None of these cases were precursors to the Gulag.

In fact, in most of those cases it was the taxpayer who ended up getting fleeced, buying lemons at inflated prices. That would not have been an issue in this case – we’d have been going in knowing that we’re buying lemons.[MU2]  After the deal closed, there would have been very little to do beyond shutting down operations, selling the buildings, and auctioning off the furniture. Everybody wins.

So what would make a self-described market-lover like Obama take such an obvious solution off the table before the discussions even began? As it turns out, Obama is a fan of a very specific kind of market – the kind of complicated, opaque market full of rules, moving parts, variables, exceptions, and complexities that generate lots of opportunities for rent extraction.

Since one person’s waste is another’s income, it is useful to look at the $130 billion (closer to $150 billion today) not so much as waste but as rent extraction. Rent extraction by whom? A look at private insurers’ financial statements sheds some light.

In 2007, the adjusted net profit margin of the average health policy amounted to just 0.6 percent (adjusted to account for the fact that many large employers self-insure, and simply pay an insurer to handle the administration of the plan; the insurer then reports only the fee paid by the employer as revenue, which skews their published profit margins upwards). Out of every $100 paid in premiums to a private insurer, the net profit extracted by its putative owner was just sixty cents. This may not be the appropriate venue to shed a tear for the poor anonymous shareholder, but it is clear that she did not exactly have a privileged place at the trough. Of all the loot extracted by the health insurance companies she invested in, just 4 percent ended up in her pocket.

Where does the rest go? Mostly, salaries for the industry’s nearly half a million employees, who get paid on average 46 percent more than the typical American worker. Health care CEO pay is the highest among all sectors of the economy, and insurance executives are the highest paid of all. United HealthCare’s CEO extracted for himself a very nice package of $42 million in 2011, and the average among the Big Four for-profit insurers was $14.1 million. By contrast, poor old Lloyd Blankfein of Goldman Sachs took home a mere $9 million.

The picture that emerges of health insurance rent extraction is that of college-educated managers in the middle; at the top, a miasma of the impeccably credentialed and connected executives, consultants, lobbyists and PR hacks that make up the backbone of post-industrial America’s upper echelon. Instead of an Andrew Carnegie, we get a hundred Tom Daschles. Except this time, no libraries, just ten thousand MBAs droning on in front of a Powerpoint slideshow – forever. Not exactly an improvement.

So what would be the costs if we had a president willing to nationalize health care now that Obamacare is the law of the land? Since 2009, when single-payer was taken off the table, the stock market has been lifted by the Federal Reserve’s desperate attempts to compensate for fiscal austerity and public and private disinvestment. The Treasury check would have to be bigger today, perhaps on the order of $500 billion – much less if the payoff to shareholders went from colossal to merely enormous, for instance. The public’s return on investment would still be over 30 percent.

The current system is mind-bogglingly wasteful. Its elimination would free up so many resources that a huge payoff for shareholders can be considered almost as an afterthought. However, the half-million people who currently work in the industry would have to seek gainful employment. That would include thousands of seven-figure executives, lobbyists, consultants and PR hacks. Such a tragedy will not unfold on Obama’s watch.

The US does not have a health insurance problem. It has a health care cost problem – the uninsured are a symptom, not the illness itself. The parasitism of the actual health insurance companies is just more obvious than others. But from overpaid doctors, to usurious hospitals that charge $500 for a stitch, to snake oil-peddling pharmaceutical companies charging thousands a year for dubious treatments, there are simply too many people collecting too much money just because they can.

Unfortunately for the rest of us, they all seem to have a very good friend in the White House.


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