Category Archives: Money & politics

Russia & the United States:  Two Different Countries, Two Different Styles of Kleptocracy

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Dave Kingsley

Stealing from Taxpayers is Kleptocratic Behavior in Any Government

    After the collapse of the Soviet Union, Russia began to transition from totalitarian communism to an oligarchy of politically connected apparatchiks and mobsters from the Soviet era.  The productive sectors of the economy such as oil and gas and manufacturing were looted in a crude takeover by a powerful criminal cabal including the KGB and high officials of the Communist Party.  There was nothing subtle about it.  The economy was dismantled and carried off by an in-group of thieves and criminal enterprises.  The health and lifestyle of the Russian people dropped precipitously.  There was no longer any pretense about an economy designed for the rise of the workers.  That era was over and kleptocracy became de rigueur.[1]

    As Soviet Communism was failing, the United States was transitioning from a “golden age of capitalism” to a dark age of government regulatory retrenchment, Wall Street dominance, loss of faith in government for the general welfare, a sinking middle class, stagnant working-class wages, and deteriorating population health.  The kleptocratic facet of the current U.S. economic dark age is far more refined than the brutish nature of the Russian oligarchy.  The conditioning of the American people has been sophisticated and in most instances difficult to recognize.

    The kleptocrats of Russia merely took what they wanted right out in the open.  U.S. kleptocrats applied an abstruse intellectual justification for weakening government checks and balances, dismantling regulatory agencies, and privatizing government services.  Mythical beliefs about a nonexistent free market were generated in leading universities and sold to legislators and the public.  Hence, a thing no more real than a unicorn was concocted by academic economists and marketed as the ultimate decision maker.  The idea of “the market” was reified into an entity – an entity has never been observed or measured – endowed by theorists with complete knowledge and the ability to make the best decision about how government should work vis a vis private industry.[2] Indeed, it has been working increasingly well for the rich and powerful.

A Kleptocrat by Any Other Name is Still a Kleptocrat: An Example

Peter G. Peterson: Multi-Billionaire Founder of Blackstone

    The late multi-billionaire Peter G. Peterson along with Stephen Schwartzman, founded the Blackstone Group, a financial services conglomerate.  Mr. Peterson dedicated a billion dollars to the privatization of Social Security and Medicare.  The trillions of dollars expended by the SS Trust Fund and Medicare program make an inviting target for a vulture capitalist.  Unfortunately, Peterson had a stellar reputation inside the Washington, D.C. beltway where cliques of corporate and individual wealth roam. His front groups such as the Committee for a Responsible Federal Budget (CRFB), the Concord Coalition, and the Peter G. Peterson Foundation, jelled into a highly influential network of “go to” organizations for public policy.

    Maya MacGuinness, CEO of CRFB, is frequently the only person quoted when federal budgeting is covered in leading mainstream publications such as the New York Times.  Her mantra is that Social Security and Medicare are leading causes of budget deficits. This is not true and she either knows that and is lying or she is seriously incompetent and ill informed.  Either way, representatives of mainstream media – including PBS – are irresponsible for consulting her.

    Medicare is undergoing rapid privatization, and an increasing amount of public funds are diverted from care to a bevy of private for-profit financial intermediaries.  This has increased the cost of Medicare.  But this increased expenditure is not devoted to better care.  Rather it is siphoned off into shareholder earnings and benefits a few wealthy individuals.

    Medicare wasn’t privatized solely under the influence of Peter G. Peterson.  The Medicare Modernization Act of 2003 included Part D – a prescription drug benefit – and was pushed by Big Pharma.  The insurance industry pushed the act because it included Part C –  privatization of the entire program under what has become known as Medicare Advantage.

    Social Security remains un-privatized and administered at a cost of ½ of 1 percent of revenue.  Wall Street would love to privatize it in the same manner as Medicare and earn huge management fees that would rake off up to 25% of revenue, which has been the experience in the privatized Chile SS program.

Nursing Home Kleptocrats

    Investors have a vast interest in frail elderly and disabled Americans institutionalized in the disgraceful U.S. nursing home system.  They can get by with a minimal, substandard, quality of care while extracting and pocketing optimal amounts of cash.  It is a shabby business carried out by sleazy businessmen in a weakly regulated government funded skilled nursing system.

    A richly funded propaganda machine and political contributions are responsible for a veil of secrecy around the corruption of an industry with little interest in optimal care of the people in their charge and from whom they are expropriating assets that would otherwise be passed to their heirs, thereby causing even more maldistribution of wealth.  While tunnelling excess amounts of government provided revenue through subsidiaries and shell companies, they have effectuated a first-class propaganda machine that has sold lies about financial hardship and underfunding from government.  I even see this lie promoted in peer reviewed journals – mostly from economists.

    Propaganda works.  The industry lobby has an effective PR campaign that leads the public to believe that it is tough to make money running nursing homes.  They rely on the lack of financial literacy among most people by noting a general low operating margin reported by most facilities. These misleading statements regarding nursing home facility cost reports submitted to state regulators and CMS are often taken at face value by academics, the media, and advocates.  Consequently, supposedly peer reviewed publications include findings from data dumps of information taken from facility-specific reports. 

Right Wing Fanaticism Didn’t Shrink Government.  However, It Did Shrink Democracy.

    A well-known anti-government fanatic once said that he wanted to shrink government down to a size small enough that he could drag it into the bathroom and drown it in the toilet.  Cute.  Grover Nordquist is the guy we are talking about here.  Although he is clearly an idiot, politicians have lived in mortal fear of his condemnation and avoided any hint that they might raise taxes – meaning individual and corporate taxes.  Reaganites, Nordquististas,  Paul-groupies (Ron and Rand) and indeed the libertarian extremist, government hating, right-wing of American politics believe that taxes feed “the beast.”  So, they were successful in collapsing individual income tax brackets, lowering corporate income taxes, and devolving taxes to the states in the form of regressive sales, excise, and user taxes.  At the same time, executive branch agencies with the purpose of protecting the public from corruption and abuse and implementing legislation have been weakened considerably.

    The middle- and lower-income classes are not paying lower taxes.  Billionaires and corporations are.  Furthermore, an increasing amount of middle- and lower-class income and wealth is being distributed to families and individuals with the highest level of income and wealth (think “spend downs” in nursing homes).  Along with privatization of government services – especially healthcare – a weakened regulatory system has been conducive to a refined form of looting through Medicare, Affordable Care Act, Medicaid, Pentagon/defense budgeting, and a multitude of other forms of privatization.  Well, maybe not so refined, if we just take a closer look at it.

    Without a robust federal regulatory framework, the rights of Americans are now trampled by special interests who have been able to tilt the tax codes in their favor and takeover government services at costs higher than would be if the services were provided by federal agencies.  One unfortunate result of this form of looting is that Americans are increasingly gouged by health insurers and paying more than their peers in Asia and Europe, but their overall health is worsening. 

The U.S. Supreme Court is About to Seriously Dilute Executive Branch Regulatory Power

    Federal laws can be sweeping and complex.  The Clean Water Act, the Occupational Safety & Health Act, and the Medicare Modernization Act are examples of laws that have induced systemic change in U.S. government and society.  These laws cannot anticipate, nor can they address every contingency in day-to-day implementation.  Congress has traditionally considered technically qualified agency personnel to be responsible for filling in the “gaps” in highly complex legislation.

    Industries affected by major legislative changes have typically fought administrative regulations issued by the EPA, OSHA, FDA, and a host of other regulatory agencies.  They have attempted to blunt regulations through the courts, propaganda, and the political process. However, in the 1984 case Chevron USA, Inc v. The Natural Resources Defense Council, Inc., the Supreme Court enhanced the legitimacy and legality of agency regulations and strengthened Executive Branch oversight.  The Court held that deference should be accorded to administrative agencies with the technical capability and scientific knowledge for addressing ambiguous issues in legislation.

    That precedent is likely to be overturned when the Court hands down decisions on two cases already heard this session: Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Department of Commerce.  The cases concern regulations issued by National Marine Fisheries Service (NMFS) under the Magnuson-Stevens Fishery Conservation and Management Act (MSA).  The forthcoming decisions will address two major questions:

 1. Should Chevron v. Natural Resources Defense Council be overruled?

2. Does statutory silence concerning controversial powers expressly but narrowly granted elsewhere in the statute constitute an ambiguity requiring deference to the agency?[3]

     The six conservative idealogues on the court are expected to answer question 1 in the affirmative and question 2 in the negative. This is a particularly horrendous prospect for the U.S. healthcare system, which has outsourced trillions of dollars to some of the largest corporations in the United States.  These corporate behemoths with very deep pockets or trade associations with vast resources will take their dislike of particular regulations into court and will often find  friendly judges who will interpret regulations in their favor even though they – the judges – will have no scientific credentials to make technial decisions.  This has already occurred in the Alliance for Hippocratic Medicine v. U.S. Food & Drug Administration[4], which was heard before the Supreme Court last week. 

    In that case, a federal judge in West Texas issued a ruling that overrides the scientific research undertaken by the FDA in the approval process for mifepristone (also known as “RU486” and “Mifeprex”) – more commonly called “an abortion pill.”  The S.C. will no doubt find that there is no standing to sue on the part of the anti-abortion doctors.  Nevertheless, the question of whether a judge can override reasonable regulations issued by the FDA will be left open.  That is where this case intersects with the Chevron deference principle that will most likely be overturned.

    This does not bode well for women’s reproductive rights specifically and for healthcare in the U.S. generally.  As these court cases pertain to kleptocracy, a corporate friendly and extreme right-wing majority on the S.C. is in a position to neuter federal agencies and strengthen the hand of kleptocrats.

Summary

    Acts of government sanctioned cheating and stealing from the American people are permeating the multi-trillion-dollar government funded healthcare system.  As government funded medical care is increasingly privatized and corporations in the business become bigger and more powerful than the agencies regulating them, more funds will be diverted illegally from care into owners’ pockets.  For instance, I’ve noticed an increasing number of nursing home facilities maltreating and underpaying employees, which discourages applicants for work and induces turnover.  At the same time, they contract for labor from subsidiaries of their parent/holding companies at an extremely high rate.  We have examples of facilities contracting with related parties for 50 to 63 percent of their labor.  State and federal agencies have failed to even notice let alone deal with this egregiously illicit practice.

    This example of labor contracting is only one of many, many forms of cheating.  MCOs often deny authorization for physician prescribed treatment in their networks to keep their cost below capitation rates.  Hiding and distorting information on cost reports, overcharging for services, upcoding therapy services, funneling funds through shell companies to hide excessive extraction of funds, and pressuring congress through bribes (campaign contributions) to unjustifiably increasing reimbursement, i.e., rent seeking are a few more examples of cheating and stealing.  It should come at no surprise that the American people pay two to three times more per capita for healthcare than the people of our Asian and European peer countries with universal, single payer, government managed healthcare systems.

    My purpose in writing this blog post is to encourage attention to psycholinguistics in advocacy, scholarship, and public discourse in general.  Professionals and scholars are reticent about applying terms such as kleptocratic to behaviors that are best described as that.  The media avoids harsh and condemnatory terminology – even when it called for in describing events and acts.

    Stealing is stealing, thievery is thievery, whether they happen through a home/business break-in, or through cheating on forms submitted to the federal and state governments.  White collar crime is unfortunately placed on a higher plane and is less punishable than street crime generally committed by the poor and powerless members of society. How we describe behaviors and what we call them has significant influence on how they are perceived and treated in political discourse and the criminal justice system.

[1] Terms such as plutocracy, oligarchy, and kleptocracy are not mere words and are not used in this blog for name calling.  In public discourse words should be taken seriously and utilized in a technically correct manner as scholars in political philosophy would theoretically utilize them.. Kleptocracy is defined as: “ a form of government by individuals who primarily seek personal gain at the expense of those they govern.” Kleptocracy | Definition, Examples, Kleptocratic Leaders, Dekleptification, & Facts | Britannica.”  Given this broad definition of kleptocratic behavior, examples of it abound in the U.S. and are manifested even more crudely in Russia.  Terms such as oligarchy, plutocracy, and kleptocracy can all apply to any one government in any one nation state. Oligarchy pertains to rule by a small number of individuals sans democracy.  Plutocracy is rule by the wealthy – also contrary to democratic governance.  As wealth is distributed away from the masses to a small number of superrich individuals, plutocracy is intensified and becomes more salient in political processes.  Hence, the system becomes more oligarchic because the power is posited in a smaller number of individuals.  The intersectionality of plutocracy and oligarchy is of importance in this discussion.  Furthermore, the correlative increase of rule by the few in their private interest, contrary to the public interest, and the concentration of wealth in a tiny minority leads to corruption on a wide scale.  Therefore, resources that could be dedicated to elevating the health and lifestyle of the masses are diverted to a wealthy few.  For instance, government tax receipts flowing from wage and salary earners have been increasingly and excessively diverted to shareholders at the expense of government services intended to improve the health and welfare of all classes of U.S. residents.  Kleptocratic behavior is expressed in the healthcare system by the proliferating number of financial intermediaries such as insurance companies, pharmacy benefit managers, etc. who drain resources from care without adding effectiveness and efficiency to the overall system.

[2] Reification is a frequent fallacy in pseudoscientific thought processes.  Naming and describing something abstractly do not prove that the thing exists concretely.  The free market as an abstraction is a description of trillions of daily interactions in which people buy and sell things.  It is fallacious to call all of those interactions a thing.

[3] Relentless, Inc. v. Department of Commerce | Oyez

[4] AllianceForHippocraticMedicineComplaint.pdf (windows.net)

Philanthropic Foundations, Quasi-governmental Science Organizations, and Universities Often Act as Corporate Shills: How the Industrial Complexes Work.

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Dave Kingsley

President Eisenhower’s Warning

    In his 1961 farewell speech, President Eisenhower recognized danger in the development and growth of a new phenomenon in U.S. economic and political history – a permanent, massively funded, and rapidly growing complex of government agencies, military-related industries, and universities.[1]  His prescient concern was that we would pay for and get more defense than we need; that the military establishment would grow beyond reason and purpose; and that the Pentagon would become a vehicle for special interest power and enrichment – which indeed it has.

    A decade after Eisenhower’s warning about a mushrooming defense network, Barbara and John Ehrenreich suggested that an emerging medical-industrial complex was to healthcare what  the military-industrial complex was to defense.[2] In 1980, the late Arnold Relman, M.D., editor of the New England Journal of Medicine, stated that “The most important development of the day is the recent, relatively unheralded rise of a huge new industry that supplies healthcare services for profit.”[3]

    Industrial complexes like healthcare and defense have proliferated over the past few decades.  We have witnessed the growth of financial services, fossil fuel, agricultural, and a host of other industrial complexes.  These systems are not static.  Rather, they are dynamic, steady state, adaptive, social systems in a constant process of elaboration and complexification.[4]  Consequently, in Washington, D.C., and state capitals these elaborate, special interest networks have become horrifyingly powerful and effective – like nothing seen before. Indeed, this unprecedented facet of U.S. history is a major threat to future generations.  Unfortunately, it is hidden from the public and rarely discussed in the mainstream media.

The Policy Planning Network[5]: A Granular Understanding of “Industrial Complexes.”

    Politicians initiate legislation but not policy.  Rather, they respond to policy proposals from institutions representing special interests.  Agglomerations of these special interests working on policy are always complex systems of interactions between foundations, non-profit entities, e.g. think tanks, for-profit corporations, and powerful individuals.  In general, organizations such as the Brookings Institute, the Cato Institute, the Johan A. Hartman Foundations, the Commonwealth Fund, the National Association of Realtors, the Chamber of Commerce, the Heritage Foundation, the American Enterprise Institute, and the National Bureau of Economic Research are major players in policy percolating through special interest channels at the national level.

    Industries have their own self-serving propaganda organs and armies of lobbyists in the mix of interactions leading to policy proposals.  For instance, the real estate industry is represented by the National Association of Realtors, the pharmaceutical industry by Big Pharma, Hospitals by the American Hospital Association, Wall Street by a hoard of financial-services associations, and so on and so forth – there are too many to count.  When an issue is favorable to conservative causes or private enterprise (not necessarily capitalistic though), the Chamber of Commerce will weigh in with its immense financial resources.

    Some of these powerful entities like the John A. Hartman Foundation and the Commonwealth Fund[6] hold forth as “do gooder” organizations with no other mission than the public good.  With vast amounts of wealth pouring into their foundations, they have piled up huge amounts of capital on their balance sheets.  Since, they are required to dispense only 5% of their revenue to individuals and organizations related to their ostensible missions, they have in fact become status quo maintenance organizations and investment firms looking for optimal returns. Furthermore, they serve the interests of private wealth by ensuring that policy remains from the center to the center right. Major foundations are intent on ensuring that policy is not transformative, will not threaten the status quo, and will not upset the current distribution of wealth and power.

    In reality, these powerful players in Washington policy making are tax shelters for superrich individuals and their families who desire to keep their vast wealth out of the hands of the IRS and to maintain considerable control over public policy.  The most influential foundations typically solicit financiers and corporate executives to sit on their boards.  Representatives of labor, consumers, and the poor are not found on the boards of dominant special interest influencers in Washington, and the policy they induce reflects that fact.   

A Case Study of the Policy Planning Network: Commissions, Think Tanks, and Trade Associations that Help Keep So Many Institutionalized Elderly and Disabled “Nursing Home Patients” in Dire Conditions.

    How does a nation deal with the embarrassment of indecent and inhumane treatment of the elderly and disabled in government funded institutions run by private industry?  Recent and ongoing history tells us that the Nation’s elected representatives and agency heads have passed the problem off to foundations, think tanks, trade associations, and quasi-governmental science entities (i.e., to industrial complexes). 

    For instance, the incredible incompetence and indifference to prevention and infection control in nursing homes before and during COVID was referred to the Mitre Corporation – a shadowy Washington entity with roots in military intelligence and other defense activities. The John A. Hartman Foundation initiated a commission by the National Academies of Science, Engineering & Medicine (NASEM)[7] in 2020.

    Consequently, we’ve had two nursing home commissions in very recent history: the NASEM Commission and the Mitre Corporation Commission, both of which glossed over the nastier side of the industry, which is the dominant side.  Neither commission covered any territory that would result in holding the industry accountable for substandard worker treatment and pay, overall low quality of care, excess extraction of funds for shareholders, unsavory, unethical, far too often criminal owners, and problematic financial reports. 

    To the contrary, the commissions seemed sympathetic to the industry’s false claims of financial hardship and lack of government support.  Indeed, the Mitre Commission concluded that the industry needed more help in the form of personal protection equipment and other government assistance.  The industry’s excuses for the deaths of 200 employees and 2000 patients were never questioned by either commission.

Whitewashing & Window Dressing[8] the Inhumane Treatment of Disabled and Elderly Americans.

   The NASEM Commission has been institutionalized as the Moving Forward Coalition – a think tank funded by the John A. Hartman Foundation. The two nursing home commissions and the subsequent MFC are basically “tweaking-organizations,” which propose changes at the margins without a serious threat to the status quo.  Furthermore, The American Healthcare Association (AHCA) and LeadingAge (LA) – the well-funded and powerful nursing home trade associations –  and other private industry representatives appear to have a dominant position in the organization.  Special interests dominate the steering committee and are represented on all the other MFC committees.[9]

    Advocates and scholars serving on the two major commissions and the MFC tend to be passive and compliant with the industry’s self-serving wankery. The systemic problems of corruption and commoditizing of human beings for the sake of cash flow are ignored while the committee members engage in pretentious noodling over meaningless technical issues and “pie in the sky” ideas that will not be implemented.[10]  

    Like most major philanthropic corporations, the John A. Hartman Foundation is a vehicle for tax avoidance and superrich control over public policy.[11] The Mitre Corporation board is primarily a mix of current and former military intelligence officials and for-profit corporation managers and executives[12] with a displaced mission to grow their organization and enhance their power. 

    Interestingly, it is very easy to find the bios of the Mitre board members, which are on their website, but finding the bios of the John A. Hartman Foundation board takes some work.  Although board members’ names are listed on the JAH website, their bios are not. However, one can safely say that consumer, poverty,  and labor representatives are notably absent from these types of foundation boards.

Summary

    Important policy affecting the rights and welfare of the American people is generally generated in an interrelated system of foundations, special interest think tanks, trade associations, advocacy groups, and former high level government officials.  The money and power behind this policy planning network is controlled by super-rich individuals/families and corporations for the purpose of protecting their wealth and maintaining control over government policy. 

    The power wielded by the American power elite through their lavishly funded network in Washington and state capitals is unrecognized by the media and hidden from public view. This system will not change without exposure initiated by scholars and honesty from those who willingly participate in it. 

    The corruption and deceit in the making of policy – including nursing home and healthcare policy – is pervasive and intensifying.  Extensive system change begins with exposure.  The Tallgrass Economics blog and the nonprofit Center for Health Information and Policy have a mission to expose policymaking on behalf of the rich and powerful at the expense of ordinary Americans.  We will be discussing do gooder foundations, think tanks, trade associations, and advocates who assist them in policy contrary to the best interests of the public.

[1] https://www.archives.gov/milestone-documents/president-dwight-d-eisenhowers-farewell-address

[2] https://www.nybooks.com/articles/1970/12/17/the-medical-industrial-complex/

[3] https://www.nejm.org/doi/full/10.1056/NEJM198010233031703

[4] See Walter Buckley, (1960) Sociology & Modern Systems Theory

[5] Professor G. William Domhoff, an acolyte of C. Wright Mills described the major foundations, think tanks, trade associations, and other entities and individuals initiating policy on behalf of corporations and the wealthy as “the policy planning network.” See, G. William Domhoff (2010), Who Rules America: Challenges to Corporate and Class Dominance, pp. 85-115.

[6] The Commonwealth Fund board includes a representative from UnitedHealth and Margaret Hamburg, former FDA Commissioner in the Obama Administration among a bevy of board members from investment banks, private equity, and other for-profit businesses.  Dr. Hamburg also serves on the board of a pharmaceutical company for which she receives compensation in the amount of $500,000 per year.

[7] Seventy percent of NASEM funding is from government agencies while 30% is from private sources.  The NASEM reputation has been sullied due to funding and influence from industries with a stake in the outcome of its commission studies.  For instance, the Sackler’s donated $19 million to the agency prior to a study on opiates. In 2011, Purdue Pharma and the Sackler’s were rewarded with a study that minimized the danger of opioid pharmaceuticals of the type manufactured and distributed by Purdue Pharma, see e.g.: https://www.nytimes.com/2023/04/23/health/sacklers-opioids-national-academies-science.html  In contacting NASEM for the purpose of determining how individuals were selected for their nursing home commission, I found them to be removed from public purview and operating behind a veil of secrecy.  I could find out absolutely nothing.

[8] “Window Dressing” is used as a verb transitive in this context rather than as a noun – as in “they are window dressing an injustice.”

[9] https://movingforwardcoalition.org/committees/

[10] For instance, the effects of replacing “resource utilization groups” (RUGs) with a “patient driven payment” (PDPM), a major issue  in pervasive over billing practices, has been taken up by the JAH and MFC. This is a technical argument beyond the grasp of legislators, the lay public, and journalists that will do very little to stop the industry rip off and will certainly not improve the lives of patients.

[11] For an in depth analysis of major charitable organizations and the superrich, see:  David Wagner (2000), What’s Love Got to Do with It? A Critical Look at American Charity, pp. 89-115.

[12] https://www.mitre.org/who-we-are/our-people/our-leadership

Capitalism Exists Only Weakly in America These Days. Consequently, An Economic Dystopia Has Developed

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Dave Kingsley

Words & Mindsets Matter: It is Time to Change the Narrative

    The U.S. economic system is in bad shape. Economic growth is sluggish, wealth has become badly maldistributed, and government policy has been tilted in favor of Wall Street and capital at the expense of Mainstreet and labor. Because of a perverse, toxic, mythical free market mindset –  generated by economic departments in elite universities [i], –  the public has been conditioned to swallow a “government is bad, corporations are good” mantra. This potent narrative has had unfortunate social and political consequences. These consequences are becoming increasingly serious.

    Over the past few decades, the productive economy consisting of manufacturing, and small and medium sized businesses of all sorts has been been diminished, while the financial services industry has blossomed into a dominating economic force.  The valuing of maximized short term returns for shareholders over a healthy economy and the public interest is a barrier to a real capitalist system for a democratic society.

    By leveraging their immense wealth, massive corporations and the superrich have rigged the political system in their favor. Consequently, politicians have become increasingly venal and driven solely by campaign contributions and protecting their tenure in office. The media’s shallow and transitory coverage of this system is highly influenced by deceitful, sophisticated, and well-funded propaganda.

    As an ardent capitalist with considerable experience in the business world, I’m horrified by what is passed off as capitalism these days.  What we are witnessing is not truly free market capitalism functioning in accordance with the U.S. constitution and a democratic society.  Nor are we experiencing the proper role of government in regulating business for the purpose of protecting and enhancing population health and welfare. Federal, state and local legislatures are failing the American people while politicians scramble to meet the narcissistic needs of the wealthy and powerful who keep them in office.

    For instance, healthcare now constitutes 20% of the U.S. economy, much of which is not productive.  Practically all healthcare is underwritten by taxpayers with burdensome out of pocket expenses for patients.  But about half of national expenditures on medical services are excessive and extractive in the form of dividends, executive pay, stock buybacks, and price manipulation.  That is why about 10% or less of GDP in capitalist countries like Canada, France, the UK, Japan, and Korea is due to healthcare – these countries have government run medical care,

     Unlike the residents of our peer countries, Americans can and do go bankrupt due to medical expenses.  An inferior medical program for poor people doesn’t exist in the typical developed country, but that is what Medicaid is in the U.S.  It should not be acceptable to deny access to medical care because of poverty while the wealthy have concierge care and while taxpayers fund government largess for enriching the already rich (For instance, the CEO of UnitedHealth has been receiving at least $30 million per year in compensation).

Ethical Deterioration: A Consequence of a Financialized, Winner Take All Economy

    Yesterday, the former president of the United States claimed on television that the loans he received through deceit and fraud were justifiable because he paid the loans back and that his behavior was victimless.  Both statements are false,[2] and he knows that.  But let’s assume that he paid the loans back. Is the “crime” still victimless?  What are the effects of a powerful political leader’s cavalier attitude toward business ethics?  What does this behavior signal to the rest of the country?

    I’ve noticed over the past few decades that conflicts of interest and other unethical behavior are increasingly met with indifference in business, science, the media and practically every other institution of society.  Unethical data manipulation in scientific studies – especially in pharmaceutical research – is more widespread than we heretofore imagined.[3]  Individuals are lying or ignoring their egregious conflicts of interest and getting by with it.[4]

    Some behavior considered unethical – even illegal –  in the past has been legalized and normalized.  For instance, stock buybacks are a form of insider trading and a practice that was illegal until 1982. In September, Cigna announced a $10 billion stock buyback, which propelled their shares up 17% on the day of the announcement.[5] “Swiss giant Novartis announced plans to buy back up to $15 billion worth of its shares over two years, while US-based Bristol-Myers Squibb also authorized a $15 billion buy back.”[6]  These examples are merely the proverbial tip of the iceberg. Major medical care corporations are expending hundreds of millions worth of their excessive returns from taxpayer funded healthcare programs each year on stock buybacks and dividends instead of investing it in a more fair, efficient, and effective medical delivery system.

If we are going to change the economy for the better, we have to change narratives that undergird a “government is bad,” “privatization is good,” Belief System

    It is the duty of thinking Americans to look honestly at the real economic system and call it what it is – an increasing conglomeration of taxpayer capitalized enterprises with stagnant wages and a sinking middle class. It is up to all of us to stop ignoring reality and believing this economic system is “the best there is in the best of all possible worlds.”

    When I speak to professional groups and legislators, I make it a point to emphatically tell them that UnitedHealth, Centene, The Ensign Group – indeed the entire network of pharmaceutical, nursing home, health insurance, and privatized hospital systems – are not capitalistic enterprises.  Strange libertarianism and Friedmanomic fanaticism have taken over our economy and our lives with very little pushback.

    No doubt, a large proportion of my audiences consciously believes what I’m saying, but subconsciously doesn’t believe it.  Narratives work well when the public has been inundated with signals that are processed subliminally.  The dominant flow of memes coming from industrial propaganda sources through the media, education system, and day-to-day political-economic activities are effective because they are met with little organized resistance.

[i] Basically, I’m referring to the University of Chicago Economics Department and the late Milton Friedman – their star scholar – and the other economic celebrities and universities all across America mimicking the fanatical Chicago School free market ideology, which subsumes the “efficient market hypothesis,” “the agency theory of management,” “the virtues of deregulation,” and the notion that policy for diverting income and wealth to the superrich will “trickle down” to the lower SES quintiles.

[2] See, e.g.: Dan Alexander, “Donald Trump’s Great Escape: How the Former President Solved His Debt Crisis,” Forbes, July 20, 2022. 

[3] See, e.g.: Charles Piller, “Probe of Alzheimer’s studies finds ‘egregious misconduct,” Science, Vol. 382, October 2023, p. 251.  The journal Science is delivered to my home weekly.  Issues consistently include articles pertaining to cheating by scientists and the necessity for journals to retract articles submitted by the culprits that are caught.

[4] An example of conflict of interest that I discovered and fought to no avail occurred in the Gerontology Department at Kansas State University.  Professor Gayle Doll was the administrator of a state grant providing incentive funds to nursing homes who were improving their “homelike culture.”  Professor Doll also served on the board of one of the largest for-profit nursing home chains in the State of Kansas to which she awarded incentive funds.  My complaints about this egregious conflict of interest were met with indifference by officials and advocates.

[5] This was announced in the New York Times business section, which I read daily.

[6] Nick Dearden, 2024, Pharmanomics: How Big Pharma Destroys Global Health. New York: Verso, p.63.

Gray Panthers’ Statement on the American Nursing Home System: “Restructure the Industry and Defund the Existing System.”

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Dave Kingsley

Reissuing an Important & Elegantly Written Document by the National Council of Gray Panthers Networks.

    A couple of years ago, the Gray Panthers issued a statement on the nursing home industry in the United States.  Entitled “Restructure the Industry and Defund the Existing System,” it was elegantly written and to the point of what we need in public discourse regarding the suffering of institutionalized disabled and elderly Americans in long-term care – suffering due to the precedence of shareholder value over humane care.  Hence, the document is well worth reading today since recognized reform movements in Washington, D.C. over the past couple of years have been sympathetic to the industry and unwilling to confront the truth.

    The authors were too modest to take credit and list their names on the statement.  I assume that Jan Bendor, Art Persyko, Lydia Nunez, and Clint Smith had a hand in writing it.  But perhaps it involved more members or perhaps all of the GP Senior Housing Committee.

    The following are excerpts from the summary:

    “The ‘enemy’ is a monster created by federal policy, allowing for-profit corporations to own chains of long-term care facilities, and lavishing on the owners the incentives and benefits in our tax laws regardless of their performance in caregiving.”

    “These corporations are engaged in buying and selling of real estate with very favorable tax rewards.  The corporations can practice medicine and also profit from Medicare, Medicaid, and other programs that can be hijacked for the corporation’s benefit rather than for the benefit of those in their care.”

Problems & Recommendations

    In stating the problems on page 2, focus of the statement was on lack of accountability for the massive loss of life due to COVID, weak regulation by government agencies, underpaid staff in understaffed facilities, and the political clout of the industry through lobbying.  Recommendation appropriately included accounting of Medicare length of stay fraud, wrongful discharges that occur, accountability for misreporting of data regarding harm and finances, overuse of antipsychotics.

   Download the Gray Panther Statement on Nursing Homes Here:

2021-08-09-Nursing-Home-Crisis-Action-to-Restructure-NHI-3Download

If the U.S. Moved in the Direction the Gray Panthers are Suggesting, Americans May Not Hate the Thought of Needing Long-Term Care in a “Nursing Home.”

Inside the Washington, D.C. beltway reform efforts are beset with influence from the powerful forces that have a vested interest in keep the nursing home system the way it is. It is time for some honest discussion about why the status quo is only gaining strength with a small tweak here and there that serve as appearances and nothing more.

Misinformation About Social Security & Medicare is Harming America’s Elderly

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Dave Kingsley

Scapegoating the Elderly for U.S. Budget Deficits & Debt

Pie charts, bar charts, tables, graphs, and other depictions of the federal budget abound in the media. These pictorial representations of what Congress budgets for such things as education, agriculture, health care, and so forth invariably include all of Social Security and Medicare. Hence, they are consistently wrong. None of the expenditures for Social Security are budgeted and have absolutely no impact on the budget or deficits. Less than half of Medicare expenditures are budgeted because beneficiaries pick up a large amount of the costs.

Social Security benefits are “earned” by beneficiaries who have paid in during their working years through a payroll tax. Benefits for each beneficiary are actuarily tracked and payouts are based on what is paid in.

Dr. Max Skidmore, University of Missouri Curators’ Distinguished Professor of Political Science (Emeritus) explains the history and functioning of Social Security in an accompanying blog post today. Dr. Skidmore is a leading expert on Social Security and colleague of those of us contributing to this blog (see e.g. his book Securing America’s Future: A Bold Plan to Preserve and Expand Social Security with a Foreword by former senator George McGovern).

Over Half of Medicare is Paid for by Beneficiaries Through Payroll Taxes, Premiums, and Out of Pocket Expenses. All of Social Security is Off Budget Because it is Earned by Beneficiaries.

In calendar year 2021, Medicare expended $839.3 billion, of which $405.4 billion (48.3%) was budgeted. None of the $1.14 trillion expended by Social Security for earned benefits are part of the federal budget. Hence, my estimation is that of an approximately $5.5 trillion 2022 FY budget, only $.405 trillion (7.4%) was budgeted for all of Social Security (0%) and Medicare (7.4%).

The Harm Done by Misinformation

Claims that the elderly are receiving the biggest share of the annual budget dampens the public’s support for much needed assistance with out-of-pocket Medicare costs, home health care, housing assistance (including assisted living), and other essential services and financial needs for daily living. Financial moguls such as the late multi-billionaire Peter G. Peterson and conservative politicians have been leading a propaganda war against Social Security and Medicare from their inception in the 1930s and 1960s.

Many seniors are suffering due to the cost of pharmaceuticals and co-pays, deductibles, and premiums. Transportation, housing, food, along with medical care and other costs for the needs of daily living are robbing a huge proportion of the growing 65+ population of a decent life in their elderhood. The blatant falsehoods coming from some super rich Wall Streeters and conservative politicians are causing pain for hardworking people who are being denied a decent quality of life. We intend to fight back!

CENTENE CORPORATION, AMERICA’S 26TH LARGEST CORPORATION AND A MEDICAID CONTRACTING FIRM, REPORTS STRONG 3RD QUARTER EARNINGS

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Dave Kingsley

Centene Corporation’s Business & 3rd Quarter Results

Centene Corporation contracts with states to manage Medicaid programs.  Two-thirds of the company’s revenue flows from means-tested, welfare, programs.  The other one-third of its revenue is derived from Medicare, Tri-Care, and their prison contracting subsidiary Centurion.  Basically, the bulk of this corporation’s business is poverty medicine. 

Centene purchased a non-profit organization in the 1990s and took it private.  In 2001, the company issued an IPO.  In a mere two decades, Centene increased its revenue to $111 billion (2021 revenue).  In 2021, Fortune magazine placed it at 24th in the “Fortune 500.”  Ahead of Centene was Anthem at 23rd with revenues of $122 billion, at 22nd was General Motors with revenue of $122.5 billion. As an illustration of the rapid growth of this poverty-medicine company, in 2018, it was ranked 63rd in the “Fortune 500,” with revenue of $48.6 billion.

Centene’s 3rd quarter revenue of $35.9 billion was a 11% increase over their 2021 3rd quarter revenue of $32.4 billion.  The company is on track to increase its 2022 revenue to $135 billion.  According to the 3rd quarter report, “The increase was driven by organic Medicaid growth, primarily due to the ongoing suspension of eligibility redetermination, 22% membership growth in the Medicare business, and [our] acquisition of Magellan Health, Inc. (Magellan), partially offset by the PANTHERx divestiture.”

Centene is predicting (called guidance in finance lingo) an increase in 2022 earnings per share of $5.65 to $5.75.  The company’s stock which is trading above $81 per share as I write this, has been outperforming the DOW & S&P since the equities market moved lower at a rapid rate in late November of 2021.  On November 29, 2021, Centene closed at $73.77 and has been incrementally moving up while the overall market has been moving down.

Executives, Board Members, & Shareholders

The recently retired Centene CEO/Chairman John Neidorff is one of the highest paid corporate executives in the United States.  Over the past 3 years his compensation has totaled $72,033,192.  He owns 1.5% of 560 million outstanding shares of Centene stock – today worth over $80 per share.  Hence, his wealth in stock alone is worth approximately $680 million.

Sarah London – Neidorff replacement as CEO – earned $15 million in 2021 before her promotion to CEO.  The eleven 2021 board members earned from $335,000 to $426,000.  In 2021, two powerful former congressmen on the board, Richard Gephardt and Tommy Thompson, were paid $426,923 and $403,046 respectively. 

An activist investor (Quinten Koffey of Politan Capital Management) acquired 2 percent of the stock and made a successful move to oust Neidorff.  London, his successor, was most likely in on the move.  The board has been restructured as part of the company’s long-term plan to improve its profit margin (https://www.healthcaredive.com/news/neidorff-retire-centene-activist-investor-board-shakeup/611465/).

A right-wing religious PAC just received a $1.6 billion donation, and the medical-industrial complex will now be a whole lot harder to fight.

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Dave Kingsley

Leonard Leo and the Marble Freedom Trust

As head of the Federalist Society, Leonard Leo has had a major role in picking Catholic right-wing Supreme Court justices such as Alito, Roberts, Kavanaugh, and Barrett.  Leo is himself a fanatic, right-wing, Catholic who has no respect for the separation of church and state.  This brand of Catholicism works well with the Christian Nationalist Movement[1] that cuts across most fanatical, fundamentalist, Protestant sects.  

Although the Federalist Society is an organization for the promotion of legal conservatism and includes a variety of far-right believers in a sort of faux libertarianism and assorted other rightwing philosophies, Leo has locked in the Notre Dame law school theocrats as a powerhouse in the grooming and promotion of suitable candidates for future government legal positions and jurists.

Barre Seid, a Chicago industrialist, and ardent libertarian, has donated his entire company – Tripp Lite – to the Marble Freedom Trust, a 501(c)(4) political entity controlled by Leonard Leo.  The Marble Freedom Trust sold the company to the Eaton Corporation for $1.6 billion. This intersection of radical, libertarian, industrialists and the assortment of theocratic movements does not bode well for those of us who are working to deindustrialize healthcare, and other government functions.  The religious right shares many values of super-rich, self-proclaimed libertarians such as the Koch brothers. They believe that wealthy industrialists are godly insofar as they either share or are willing to tolerate the Christian Nationalist value system.

History has taught us that major religious institutions and industrialists are willing to accommodate regimes and politicians that serve their interests no matter how corrupt, anti-democratic, and debasing to the public interest.  The Supreme Court’s decision in Citizens United has already placed corporate political activities in a protective bubble.  We can look for corporations threatened with movements for reform to look to the current lopsided court and politicians on the make to protect their interests.

Therefore, Marble Freedom Trust money will be directed toward politicians and court actions that place property over people, profit over health, capital over labor, and the super-rich over the broad mass of citizens.  This will make changing a life-shorting, inhumane nursing home system far more difficult.  Gouging the public for life-saving medications and denial of medical care to the uninsured will be difficult to end. Let’s face it, we cannot ignore politics in our quest for social justice. 

[1] Christian Nationalism has been studied and reported on by journalist Katherine Stewart.  In her book, The Power Worshippers, she discusses this movement’s belief that the U.S. is a Christian Nation, and that the U.S. should be ruled in accordance with what they consider “Christian values.”  The values they endorse include are anti-gay, anti-democratic, pro-super wealthy, and freedom from government, except when they want to leverage government for imposing their radical beliefs on the rest of society.

Which Politicians & Political Organizations Receive the Most Money From the Nursing Home Lobby?

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Dave Kingsley

The AHCA/NCAL has invested $millions in politicians and the Democratic and Republican Parties in the past few years. This is an investment that returns large financial rewards and weak regulation to its corporate funders. This appalling corruption is costing lives of patients in long-term and skilled nursing care.

Summary of Overall Spending of Nursing Home Lobby in 2017-2018 is shown below. Later years will be posted soon. I don’t want to overwhelm readers with data in one post. The expenditures below total $1,221,772.

SectorDescriptionTotal Expenditures
AdministrativeMiscellaneous administrative$4,398
ContributionsContributions to federal candidates$623,617
ContributionsContributions to committees$317,000
ContributionsContributions to joint fundraising committees$121,000
ContributionsContributions to national parties$115,000
ContributionsContributions to state & local candidates$12,600
ContributionsMiscellaneous contributions$10,000
FundraisingFundraising fees$17,533
UnclassifiableUnclassifiable$624
From OpenSecrets.org:https://www.opensecrets.org/political-action-committees-pacs/american-health-care-assn/C00006080/expenditures/2018.

Politicians & Political Entities Receiving the Largest Donation from the Nursing Home Lobby:

RankVendor/RecipientTotal Expenditures
1Team Ryan$45,000
2Democratic Congressional Campaign Cmte$35,000
3National Republican Senatorial Cmte$30,000
3Democratic Senatorial Campaign Cmte$30,000
5National Republican Congressional Cmte$20,000
6McCarthy Victory Fund$15,000
7Hoyer’s Majority Fund$10,000
7Montanans for Tester$10,000
7Young for Iowa$10,000
7Committee for Hispanic Causes-BOLD PAC$10,000
7Friends of Sherrod Brown$10,000
7Support to Ensure Victory Everywhere PAC$10,000
7Friends of Jim Clyburn$10,000
7Nancy Pelosi for Congress$10,000
7Bridge Pac$10,000
7Friends of Chris Murphy$10,000
7Ameripac: the Fund for A Greater America$10,000
7James E Clyburn Research & Scholarship Foundation$10,000
7Heidi for Senate$10,000
7Scalise Leadership Fund$10,000
7Stabenow for US Senate$10,000
7People for Ben$10,000
7Victory by Investing Building & Empowering PAC$10,000
7Stivers for Congress$10,000
7Pac To the Future$10,000
OpenSecrets.org

Lobbying inside the Washington, D.C. beltway and all 50 state capitols is responsible for continuation of low quality care in America’s nursing homes. It’s that simple. The highly profitable industry is providing low quality and deadly care because they can. We will keep the data flowing to the public as long as this blog exists. The 2019-2021 AHCA lobbying data will be posted within the next 24 hours.

Liberals & Democrats Need to Change the Conversation: Too Much of Our Federal Medical Care Funding is Flowing to the Wealthy

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Dave Kingsley

Rogue Corporations Scamming the System

You may have never heard of Centene Corporation. But we need to talk about this company which derives most of its revenue from Medicaid – medical care for the poor. With revenue of $111 billion in 2020, it is 24th on the Fortune 500 ranking of corporations (by size of revenues). CEO Michael Neidorff earned $25 million last year – among the five or six highest paid executives in corporate America. Not bad for “welfare medicine.”

Compensation for the top four Centene executives and the board of directors totaled $64 million in 2020. The board includes former congressmen Tommy Thompson (also former head of HHS) and Richard Gephardt. Two very powerful former members of congress.

So, what exactly does this company do for Medicaid? It is known as a “managed care organization” or MCO. The idea underlying the MCO concept is that private, for-profit corporations can do a better and more economical job of managing government funded medical care than government employees. Evidence overwhelmingly points in the other direction but the myth nevertheless persists.

Humana, Cigna, and other corporations have jumped into the MCO business. Let’s face it, the $600 billion+ Medicaid budget has opened opportunities for corporations to rake off untold billions for wealthy investors, executives, and board members, while poor people in states that have expanded Medicaid are humiliated through character tests such as proof they aren’t taking drugs, or too lazy to look for a job. Poor people in Arkansas for instance are facing administrative road blocks and state bureaucracies that see their role as keeping people from receiving benefits.

I’m certain that wealthy executives and investors are enjoying their concierge medicine while poor people can’t get treatment for an abscessed tooth, screening for cancer, diabetes, or medical care that most of us take for granted. This is what the Democrats and liberals need to be screaming about – not means testing and making people prove they are worthy of medicine taken for granted by every citizen in most affluent countries. No doubt, progressives in the U.S. House of Representatives are doing just that. However, silence on this issue from most senators and congresspersons on the Democratic side of aisle is deafening. Forget the now cruel Republican Party. There is no hope there.

This is Not the Democratic Party’s Finest Hour

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Dave Kingsley

Democrats Have Both House of Congress & A President’s Proposed Budget We Badly Need: And They Are Blowing It!

Last night I heard an interview with Texas Congressman Henry Cuellar – a Democrat – in which he said that he’s insisting on “means testing” for eligibility in President Biden’s proposed medical care and other programs benefitting ordinary Americans. I’ve heard Senators Manchin and Sinema say the same thing. In other words, people needing child care, medical care, and home based care must prove they are worthy of receiving government assistance to see a doctor, have a place for their child while they work, or need assistance to stay in their home and out of a nursing home.

If past is prologue, this means that American citizens in many states badly needing these humane programs must suffer the humiliation of proving that they are not taking drugs, looking for work if they are unemployed, and too poor to buy these services on their own. This is an anti-worker, anti-people attitude that Democrats need to lose.

As someone who spends a lot of my waking hours researching finances of corporations benefitting from privatized, taxpayer funded, medical programs, I can say with certainty that corporate executives and investors are becoming fabulously wealthy by diverting an excessive amount of Medicare and Medicaid revenue into family and individual trusts for the purpose of avoiding taxes. They undergo no universal character test and yet fraud committed by low and middle income people pales in comparison to what clever CPAs are able scam out of the system on behalf of their high net worth clients.

It is interesting that so many Democrats think that spending a piddly few trillion on its non-rich citizens is excessive in a nation with a $25 trillion economy and a federal budget providing trillions in tax benefits to its wealthiest citizens. In a government funded, privatized health care system, corporations and wealthy investors and their families are able to capture trillions they don’t deserve through dark money and an ability to fund political campaigns.

If conservative Democrats think that catering to the wealthy and demeaning the wage/salary workers of this country is a formula for success, they are delusional. Furthermore, they are weakening a president with a program crucial for staving off crises the likes of which we can’t imagine. This country, this economy, this planet cannot sustain the perverse, toxic, corrupt form of economics and politics exhibited by medical care, agriculture, finance, real estate, energy, and other industrial sectors – it is not capitalism, rather it is a corrupt, debauched economic system in which government and businesses collude at the expense of the public.