The “Elder Justice Past, Present and Future 2022” Conference in Albany, New York: A Synopsis of My Presentation

By:

Dave Kingsley

This past week I spoke at the Elder Justice Past, Present, and Future 2022 conference in Albany, NY.  This conference, organized by the Long-Term Care Community Coalition and supported by the New York Office of the State Long Term Care Ombudsman, was not only a platform for sharing my research and opinions regarding long-term and skilled nursing care, but it was also an opportunity to network with an impressive group of New York professionals providing support to ombudspersons, patients, families, and caregivers.  This blog post includes the main points I attempted to impart to attendees and will continue to impart on a wider scale through this blog, webinars, and podcasts.

I was honored to be included among the other speakers, all of whom gave impressive presentations regarding the legal rights of patients, the state of dementia care, research into corrupt operators, and the availability of data, and other services.  The valuable information provided by each of these highly qualified presenters will be discussed in upcoming blog posts.  I will also discuss the following major points of my presentation in the months ahead:

  • The “nursing home industry” underwent a transformation at the turn of the 21st century as real estate investment trusts (REITs), private equity (PE), institutional investors, and limited liability companies (LLCs) began to define the legal and financial structures of private, for-profit operators.

  • The legal and financial complexification of the “nursing home system/industry” was driven by macro-economic shifts characterized by accumulating pools of capital in insurance, retirement, college endowment, and sovereign wealth funds.  Pressure on legislators by powerful real estate and financial interests to modify tax codes resulted in the entry of REITs, LLCs, and PE firms into the industry in a transformational way.

  • The primary mission of the “big players” entering the industry around 2000 is protecting and enhancing shareholder value.  The large, publicly listed corporations providing LTC/SKN have access to an immense amount of capital from asset managers for institutional investors such as BlackRock, and Vanguard.

  • Chains not listed publicly have developed networks of LLCs for the purpose of escaping liability and taxes, hiding assets, and purchasing goods and services from their related parties, i.e., from LLCs they own.

  • Complex corporate legal structures are designed to hide cash extraction at the expense of patients needing a high level of medical care.  Medical ethics have less priority than shareholder value and most of the time are ignored altogether.

  • Along with the increased dominance of real estate and financial interests with access to immense amounts of capital, the industry has massive resources for influencing legislation and regulation.  Indeed, the power relationship between the industry and advocates is asymmetrical. 

  •  Because of the industry’s financial clout, regulation and oversight of operations are weak and allow for flouting of legal requirements for accurate financial reporting and other procedures.  In the field of political economy, we call this “agency capture.”  The lobbying and political juggernaut comprised of finance, insurance, real estate (FIRE) swamps any effort by the advocacy community to transform the system.  This is the 800-pound gorilla in the room that is far too often ignored.

  • Patients and families have no well-organized lobby with a political narrative and strategy.  Hence, the industry can push its weight around without significant opposition from the advocacy community.  Most legislative hearings and investigations these days are a sham because the industry’s false, propagandistic, narrative of financial hardship and low reimbursement is taken at face value without adequate pushback from those invited to testify on behalf of patients.

I did not, in this post, discuss cost report research by the Long-term Care Community Coalition in collaboration with Tallgrass Economics.  Thanks to Richard Mollot’s leadership, we have been able to collect, organize, and analyze data from cost reports submitted by 525 New York LTC/SKN facilities. We have been led to conclude that the proportions of reported net income and other financial metrics are so extra ordinary and unbelievable that auditing by the state is seriously deficient. My experience in conducting cost report research across the U.S. suggests that New York is not unique in this regard.  Our data has opened up avenues for further research into the actual extraction of cash by investors as they obfuscate the flow of capital through blatantly erroneous cost reports.  This phenomenon will be a major feature of this blog in the days, months, and years (unfortunately) ahead.

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.

By:

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?

By:

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

By:

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

By:

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.

Executive Compensation for CEO’S of Major Nursing Home Chains did not Decline Significantly During 2020: For Most, it Increased by a Significant Amount

    The nursing home lobby operating in Washington and state capitals is continuing its long running financial hardship campaign.  An article in the latest issue of Provider (the main propaganda organ for the industry) claims that COVID presented such a serious financial blow to providers that enhanced financial assistance from government would be the only way to implement needed substantive reform. The reform needed, according to the article, is due to increasing demand in long term care services (Patrick Connole, “COVID Challenges Bring Opportunity for Systemic Changes,” June 2020, 9-10).

    The article states that “With the majority of nursing homes already operating on razor-thin margins, the cost of making improvement will not be possible without financial assistance.”  Perhaps the razor thin margins to which the author is referring apply to the LLC listed as the owner and not to all the other LLCs such as the property LLC, the management LLC, the rehab LLC, the medical transport LLC, etc.  Certainly, holding companies and REITs have not fared badly at all during 2020 and the height of the COVID pandemic.[i]

    One would think that the entities at the top of the financial food chain would have taken a major hit and pared back their CEO pay considerably if the razor thin margins at some point in the flow of capital diminished shareholder value.  However, as the table below suggests, CEO pay for major nursing home operator/real estate chains listed on a public exchange were either enhanced by a large amount over 2019 and 2018 or remained steady.

    The above table does not display the proportion of total pay that is due to an “incentive bonus.”  Nevertheless, in cases where a major increase year over year appears for an executive, a large amount is for performance, which one must assume is financial performance.  The loss of life throughout the companies overseen by the executives in the table was a historical first for institutionalized U.S. populations.  An estimated 132,000 to 140,000 people in the care of these CEOs unnecessarily lost their lives.

    The government funded companies headed by CEOs at issue in this blog post are increasingly powerful players in taxpayer subsidized long-term and skilled nursing. In blog posts ahead, I will be discussing the growth of their power and influence.  For instance, the ManorCare property sold off by the private equity firm The Carlyle Group is now owned by Welltower and operated through a Welltower-Pro-Medica joint venture.

In the future, I will be blogging about the convoluted ownership structures in the nursing home industry and the complexification of that facet of the business due to the creativity of corporate lawyers and financial experts. Without exposing the financial trickery employed by providers, the public will be victimized by falsehoods of lobbying groups such as the AHCA/NCAL and others.

NOTE: The data in this post were derived from proxy statements filed with the Securities & Exchange Commission. In the future, I will be discussing compensation for board members and other officers/executives of major LTC/SKn corporations.


[i] Kingsley DE, Harrington C. COVID-19 had little financial impact on publicly traded nursing home companies. J Am Geriatr Soc. 2021;1–4. https://doi. org/10.1111/jgs.1728

The Impact of Voter Suppression on Elderly & Disabled Americans

The Reason Corporate America is Silent About Restrictions on Voting Rights

Blue Chip corporations such as Delta Airlines, Coca Cola, and UPS, have recently been strong proponents of civil rights for practically every class of citizen suffering from discrimination. They have sent their lobbyists to state legislatures to support anti-discrimination legislation and to pressure legislators for enhanced gay, ethnic, and gender rights. But when it comes to voting rights, corporate America is, for the most part, silent. Why?

It is understandable that more democracy is not in the best interests of corporations as they have evolved over the past few decades. Beginning with the Reagan Administration, the Milton Friedman philosophy of radical shareholder rights became a political movement. Throughout the past 40 years, deregulation has become de rigueur – even among some Democrats. Tax codes have been incessantly modified for increased transfer of wealth from the mass of Americans to ultra high net worth investors.

Corporations may jump aboard with some social responsibility movements, but more democracy is a bridge too far. Indeed, less democracy will be more protective of low corporate tax rates and tax subsidies. The Trump/Republican 2017 Tax Cuts and Jobs Act was an extreme move to subsidize corporations and wealthy individuals. They certainly won’t want to give that up and will fight to keep it.

Voters overwhelmingly favor reforms that would hit corporations in their bottom lines (or in their cash flows). Corporate executives, corporate boards, and major investors do not want to see voters have the power to set things right – to make the system more just and fair. This is not good news for all proponents of democracy, but it is especially threatening to institutionalized elderly and disabled Americans.

Deregulation & Government Capture Are Bad for Elderly & Disabled Americans

Republican voter restriction laws typically undermine the ease of absentee voting, which is of particular importance to people who have difficulty getting out to the polls. Missouri has the most restrictive voting laws in the nation. An absentee ballot must be notarized. It is likely that the draconian voting restrictions (e.g., no early voting) of Missouri will be copied by other states controlled by reactionary Republicans.

Voting restrictions designed to defeat candidates in favor of liberal democracy are particularly dangerous for elderly and disabled Americans, many of whom are institutionalized or could at some point be in need of long-term skilled nursing care. Reactionary conservatives will reward industry with less oversight and increased up-transfer of wealth through privatization and tax expenditures. Money that could be invested in care will be pocketed by investors at the expense of patients – even more so than now. Horrid conditions pervasive in publicly funded skilled nursing facilities will become worse.

The “Reagan Revolution” has not run its course. It has become increasingly fanatical and the politics of the Republican Party have become toxic and sick. Some of the nasty subtexts noticeable during the early phase of the revolution have become glaring and potent in the movement today. For instance, white supremacist, social Darwinist “survival of the fittest,” “winner take all,” “let nature take its course” attitudes can be seen in the treatment of refugees at the Southern border, refusal to increase the minimum wage, lack of safety for workers, and refusal to address debilitating, neglectful care for people in nursing homes – just to name a few manifestations of government for plutocrats rather than for everyone.

In the world of unfettered capitalism and autocracy, the elderly and disabled have little value except as products to be monetized and utilized to add value to revenue producing real estate or to justify excessive prices for privatized medicine. If the current anti-democratic moves on the part of right-wing reactionaries succeed, our lives will be shortened more than they currently are through isolation, segregation, and debilitating institutionalization. Unfortunately, American capitalism has become debauched and only liberal democracy can save us from a very dark future.

The Stock Market Is Going Up & Nursing Home Owners Are Doing Fine: Are You Perplexed?

Monetary Policy & The Rising Stock Market

    Most Americans are perplexed about rising stock markets during the current economic collapse.  As someone with an avid interest in the history of economics, I can say with a high degree of confidence, this is a first.  But when you consider the evolution of the U.S. economic system over the past 50 years, monetary and fiscal policy have been incrementally arranged to support investors and reduce protection for workers and consumers.

    Indeed, the history of the “nursing home” industry reflects these macroeconomic changes.  Advocates and activists should consider the trend toward financialization of corporations in all businesses and prepare a legislative agenda accordingly.  I will return to the nursing home industry later in this post.  First, I want to explain the phenomenon of a roaring stock market in an economic collapse.

    As I’ve been pointing out for months, the Federal Reserve can create an unlimited amount of money and make it available to lenders and corporations.  The Fed can do that in several ways.  One way is to buy debt from banks and corporations.  Where do they find the money to do that? They create it with keystrokes (that’s a metaphor for an accounting gimmick).  It can lower interest rates to practically zero and invite banks to borrow. It can lower bank reserve requirements and allow for increased lending at very favorable interest rates for borrowers.

    In a front page article yesterday (8/19/2020) entitled “The Market Is Nuts: Stocks Defy a Recession,” the New York Times finally decided to provide a partial explanation of the realities of contemporary government policy, which amounts to nurturing of concentrated wealth at the expense of most Americans.  If you read the article to the end, you will find this coming from Michael Hartnett, chief investment strategist at Bank of America Global Research:

“The performance of the market in the face of such dire expectations for growth, he wrote, is just the latest example of investors betting that low growth will prompt the Fed to continue to pushing (sic) money into the financial system, ultimately bolstering stocks.  In other words, stocks are going up not because of economic optimism, but the future looks fairly grim.  Mr. Hartnett titled his report, ‘I’m so bearish, I’m bullish.’”

https://www.nytimes.com/search?query=%22This+Market+is+nuts%3A+Stocks+Defy+a+Recession%22

Nursing Home Corporations Will Come Out Just Fine

    Publicly listed nursing home companies are enjoying the current bull market.  I checked The Ensign Group’s stock on the Nasdaq yesterday (ESNG). It closed at $56.50 per share – near its all-time high. In March, it was trading as low as $29. 

Furthermore, The Ensign Group second quarterly report indicates strong earnings:

“We are pleased to report that despite continued unique challenges presented during the current global pandemic, the operational momentum we experienced in the first quarter continued into the second quarter where we again achieved record-breaking results. While there were many things that contributed to our strong results, we announced today that we returned all of the CARES Act Provider Relief Funds, which are meant to cover lost revenue and increased expenses tied to the COVID-19 pandemic. Therefore, our results do not include any benefit related to those distributions,” said Ensign’s Chief Executive Officer Barry Port. The Company indicated that, like other well-capitalized healthcare providers, they returned these unneeded provider grant funds. He continued, “As we said last quarter, this pandemic arrived at our doorsteps at a time when our organization had never been stronger clinically and financially

https://finance.yahoo.com/quote/ENSG/history?p=ENSG

    Some of the big corporations in the business such as Genesis Health Care don’t appear to be faring so well, but that’s simply because they have been looted.  A number of years ago, for example, Genesis was the victim of takeover artist Arnold Whitman’s Formation Capital.  I’ll be writing much more about that in future blog posts.

    In addition to government largess, companies like the Ensign Group can enhance free cash flow through low interest loans from their lending facilities.  Available liquidity, plus the CARES Act, and Paycheck Protection Program will ensure that the skilled nursing business will land on its feet coming out of the pandemic.

No Better Place to Invest Your Money

    An article by Alex Spanko in Skilled Nursing News yesterday (8/19/2020) with the headline “Skilled Nursing M&A Remains Active: Investors Don’t ‘Have a Better Place to Put Their Money’” indicates that the infusion of cash from Federal and state governments plus ongoing price supports makes it difficult to value real estate.  This simply means that unlike the rest of the commercial real estate market, nursing home real estate is maintaining value due to factors unrelated to market forces (e.g. such as retail and office space).

    Although bed occupancy has dropped during the COVID pandemic, unlike other commercial real estate, lessee revenue remains steady. Operators will be able to meet most or all of their lease payments.  In most cases, real estate corporations are owned by the same holding company as the operator.  Leases are favorable to lessors; hence, a partial modification of lease arrangements combined with the amount of cash infused into the business by governments will hardly lower overall revenue.  As stated in Spanko’s article:

The question of valuations has become complicated by the vast influx of federal stimulus cash for skilled nursing operators. The Department of Health and Human Services (HHS) so far has earmarked nearly $10 billion exclusively for nursing home operators, on top of billions in Medicare- and Medicaid-based CARES Act relief tranches that providers can also access. Providers have also seen state-level bumps in Medicaid rates, and have been able to take advantage of the Paycheck Protection Program (PPP) and advance Medicare payment programs.

https://skillednursingnews.com/2020/08/skilled-nursing-ma-remains-active-investors-don’t-a-better-place-to-put-their-money/

Summary

    The American economy has evolved increasingly toward financialization, which means that finance has morphed from a supportive ancillary function to a dominant business.  No doubt, the primary business of the nursing home industry is finance rather than real estate and skilled nursing as has been the case historically.  The difference between the thousands of corporations involved in skilled nursing and other financialized corporations is the maintenance of a price floor and generous supplemental payments without any relationship to quality of care or competitive performance in a market.

    Due to a powerful, well-funded, and well-organized lobby, the industry has been able to capture government – both elected officials and agencies with an original mission of oversight.  Agencies such the Center for Medicare & Medicaid Services and correlative state agencies protect the industry from public scrutiny while providing a veneer of oversight.  State legislatures have propped up corporations in the skilled nursing business in spite of their low quality and neglectful care for patients.

My Thoughts About President Obama

Even though I disagree with some of President Obama’s decisions, and although I find myself disappointed at times with lack of progress toward cherished, progressive goals, I believe he is the best thing that has happened to the Democratic Party since the administrations of John Kennedy and Lyndon Johnson.  He has inherited an ungodly mess from the worst administration in U.S. history.  Furthermore, the Republican Party, backed by right-wing billionaires, now has a single-minded purpose, which is to make this president fail.

President Obama has an almost impossible mission.  Never in the history of this country has one political party, after leaving messes of crisis proportion,  mobilized so totally, thoroughly, and energetically for no other purpose than to make the presidential administration of the other party fail.  The right wing in this country has no interest in supporting any programs of President Obama – even if those programs are in the best interests of the American people and are badly needed to stop deterioration in our quality of life.

I do not want to hear my progressive brothers and sisters talk of a Henry Wallace-Eugene McCarthy-Bobbie Kennedy type of primary challenge in 2012.  That would be self-destructive and self-defeating.  Jean and I expect to be holding our annual celebration of President Obama’s election through 2016.

Fight Privatization of Kansas Government!

Beware of Privatization of Government Services

In response to today’s editorial, “Privatization caution,” I submitted the following letter to the Lawrence Journal World:

A move is under way to privatize government services and jobs in Kansas.  The so-called Reason Foundation (heavily funded by the Koch Billionaires of Wichita) is pushing this irrational idea.  In pushing their wacky form of right-wing libertarianism, the Koch oil magnates and other far-right billionaires will claim that their purpose is economy and efficiency in government.  Don’t fall for this.

Privatization has historically cost taxpayers more than services provided by government employees and has essentially lined the pockets of executives and investors.  If you don’t believe this, just consider the costs of outsourced defense/war functions.  Logistics and food services provided by KBR are far more expensive than when these services are provided by the military.  One small example:  The Army Times reported on their website on Nov. 1, 2009, that Pentagon auditors are attempting to deal with KBR’s “disjointed processes” and “weak accounting practices.” 

While troop levels are dropping off in Iraq, KBR’s level of employment has remained at the January 2008 level (17,000 employees).  During my service in the Marine Corps in the 1960s, I paid the same dues as every other Marine had paid up to that time.  I served on mess duty.  Cooking and other food services were provided by sergeants, corporals, and privates.  You can bet that this was done far cheaper than it would have been done by KBR.

Consider Medicare Part C (Medicare Advantage Plans).  According to the Center for Medicare Services, the federal government pays private insurance companies on average 14 percent more for providing coverage to Medicare Advantage beneficiaries than it pays for the same services to beneficiaries in the traditional Medicare program (20 percent more in some parts of the country).

Examples of these types of rip-offs of taxpayers abound.  The right-wing, anti-government libertarianism promoted by the Kochs has, as its primary objective, the destruction of government programs.  Furthermore, the main result of privatization is transfer of wealth from the bulk of U.S. taxpayers to the top 5 percent of wealth and income classes.

Legislators are being irresponsible when they hand your government, and in effect your taxes, over to the likes of Halliburton, Cigna Insurance, and the Correction Corporation of America.  One Republican legislator was quoted in the Journal World on Nov. 30 as telling the Reason Foundation representative, “You had me at hello.”  This is a mindless bending to the will of a powerful private interest with selfish motives that are contrary to the best interests of the people of Kansas.