The American Health Care System is Despicable

Just how despicable is the U.S. health care system?  Although the U.S. spends over $8000 per capita and 18% of GDP on health care – more than any other country – at least 50 million Americans are uninsured.  According to the Organization for Economic Cooperation & Development (OECD), countries such as Japan, Sweden, Canada, France, Germany, Italy, and England generally spend half as much per capita and as a percentage of GDP  while providing health care access to all of their citizens.

So who pays and who benefits from  the bloated, corrupt, immoral U.S. health care system?

Here is a list of who pays: (1) all wage & salary earners who pay a 1.5% tax on everything they earn, (2) the U.S. government, i.e. taxpayers in general, which transfers the 1.5% tax and hundreds of billions more to the medical-industrial complex, (3) businesses offering health insurance to their employees, (4) employees lucky enough to have employers provided health insurance, i.e., premiums, co-pays, and deductibles, (5) Medicare beneficiaries forced to pay large premiums, co-pays, and deductibles, and (6) uninsured patients and consumers stuck medical bills that often drive them into bankruptcy.

Here is a list of who benefits from the massive wealth transfer through health care gouging: (1) for profit hospital chains, (2) nursing home chains, (3) pharmaceutical companies, (4) medical device manufacturers, (5) corporate owned physician practices, (6) insurance companies, and (7) senator and congresspersons who receive untold millions in political contributions from the medical-industrial complex.

The American Medical Association Has Played a Major Role in Shaping the Shameful U.S. Health Care System

The Occupy Wall Street Movement needs to turn some of its attention toward Occupy the American Medical Association.

Amongst political groups fighting to block humane and decent health care, the American Medical Association – the association representing healers of sick people – has  been one of the most effective and potent forces throughout the past century.  It is hard to understand how an organization representing physicians, who have taken an oath to heal, could fight universal health care and, by virtue of that fight, insure that tens of millions of U.S. citizens will suffer and often die due to medical neglect.

Who are the 50 million uninsured Americans resulting from AMA efforts?  A couple of years ago, I spent two days volunteering at a free clinic sponsored by the National Association of Free Clinics at Bartle Hall.  I met some of the 50 million medically neglected people in our country.  By the thousands, they streamed through the convention center – humbly, thankfully, without rancor and resentment.  They came for help with complications of diabetes, hypertension, abscesses, tumors, and generally the full array of ailments needing medical attention.

The AMA and the politicians they pay off to perpetuate the current national health care embarassment should have spent a couple of days at Bartle Hall looking the uninsured in their eyes and explaining why they scream socialism and extol the virtues of an unbrided free market health care system that has failed our country so miserably.  Perhaps this representative of doctors could come forth and explain how its fight for a cruel health care system is compatible with medical ethics.

Who are the Politicians Raking in AMA Dough and Other Medical-Industrial Complex Pay Offs?  Let’s Take a Look at One Democrat on the Undemocratic, Super-Secret, Super-Committee

Democratic congressman Chris Van Hollen of Maryland is a darling of the medical-industrial complex.  If you check the top contributors to the members of the undemocratic, super-secret, super-committee, you will notice that Van Hollen does best amongst health care industry lobbyists and better amongst that group of givers than other members of the committee.  For instance, the AMA, which donated $22,000 to Van Hollen, ranks 27th in the amount donated out of the nearly 3,000 contributors to the senators and congresspersons.  Van Hollen received more than other members from the AMA and other medical-industrial givers.  Nevertheless, Democratic congressman James Clyburn did very well amongst the this group of givers as well.

According to the Sunlight Foundation, Dr. Jeffrey Drezner, owner of Clinical Care options and a founder member of the CME Coalition (a medical industry front group) held a fund raiser for Van Hollen days after the first meeting of the super committee.  The foundation blog noted that “Drezner sent tens of thousands of dollars to multiple committees associated with Van Hollen from 2007 to 2010, including the Democratic Congressional Campaign Committee, which Van Hollen led during those years, according to to data from the Center for Responsive Politics” (http://reporting.sunlightfoundation.com/20ll/van-hollens-alternative-fundraising-vehicle-wakes/).

Congress and the President are seriously considering a cut in Medicare benefits.  There is no doubt that Republicans are itching to cut both Medicare  and Social Security benefits.  I will not be surprised if the proponents of cutting Medicare and Social Security as a means of reducing the federal deficit succeed – especially considering Obama’s and many Democrats’ willingness to cave in to the whacky right wing. 

Propaganda blaming a growing elderly population for health care inflation and, consequently, a ballooning Medicare budget, is pervasive, and unquestioned.  The mainstream media has bought, lock-stock-and-barrel, the narrative created by power-elite and conservative think tanks such as the Cato Institute, the Heritage Foundation, the Committee for a Responsible Federal Budget, the Bipartisan Policy Commission, etc., etc.  This narrative – i.e. all these old people are busting the budget – is, at best, based on ignorance. At worst it is an out and out lie.

As CBO research determined in 2008, an increase in the elderly population adds very little to health care cost inflation (see Technological Change & the Growth of Health Care Spending at http://www.cbo.gov/ftpdocs/89xx/doc8947/01-31-TechHealth.pdf). Furthermore, the so-called “Baby Boom” generation will not become eligible for Medicare instantaneously.  Currently, the 65+ population comprises 13% of the U.S. population.  This age group will gradually increase to 21% by 2035.  The elderly population will level off at 21% and remain at that level into the foreseeable future (U.S. Census Bureau at http://www.census.gov/population/www/socdemo/age/).

What you don’t hear on NPR, PBS, NBC, ABC or read in the New York Times, USA Today or in any other media outlet is this:  the United States devotes approximately 17% of GDP and nearly $8,000 per capita to health care.  The following GDP and per capita health care expenditures pertain to some other industrialized nations – none of which come close to spending what the U.S. spends:  (1) United Kingdom, 9% GDP & $3,200 per capita, (2) Sweden, 10% of GDP & $4,000 per capita, (3) Spain, 9.2% of GDP & $3,000 per capita, (4) Japan, 10% of GDP & $3,000 per capita.  Norway is the country that comes closest to the U.S. in per capita spending: $5,500 per capita.  However, health care spending is only 10% of GDP in Norway.  You can check health care spending in all advanced industrialized countries at http://www.oecd.org/document/16/0,3343,en_2649_34631_2085200_1_1_1_1,00.html.

All of the countries listed above – along with all other countries listed by the OECD – provide health care to all of its citizens, while 50 million U.S. citizens have no health insurance and at least 150 million are under insured or at the mercy of power health insurance companies that could terminate coverage under some pretense or other.  Another thing happens in the U.S. that happens in no other country of the world:  the U.S. Congress and the “medical industrial complex” collude to restrict competitiveness and reward corporate conglomerates.

Medicare has served as a conduit of U.S. taxpayer money to corporations such as G.E., Johnson & Johnson, Merck, and Siemens (a German company that helped exterminate Jews during the Holocaust).  As the eminent economist Dean Baker has indicated, health care in the U.S. operates outside of the basic free market concept of “marginal cost pricing.”  The cost of an X-ray is not priced at what the next X-ray costs to provide plus a profit.  The price of X-rays and all other medical services set by oligopolies in collusion with the government.

The elderly are not responsible for out of control government spending.  Corruption in the U.S. Congress is responsible.  It will be the poor and the middle class that will take the blame while the health care industry continues to reap the benefits.

Some of the major “buzz” amongst Washington insiders and the national media these days is about a so-called “moderate” group of Democrats who are eschewing extremists on the left of the Democratic Party and making ready to make the “hard choices” on the budget deficit. This relatively new organization is called the Third Way.  Since this group is just one more power-elite and Wall Street front group, you can translate “hard choices” to mean “cut the budget deficit on the backs of the middle class by reducing Social Security and Medicare benefits.  “Extremist” can be translated to mean any Democrat unwilling to buy into the mean spirited Simpson/Bowles recommendations, e.g.  Representative Jan Schakowsky, Senator Sherrod Brown, and all other progressives in the Democratic Party.

Democrats associated with this “let’s whack Social Security” wing of the Democratic Party includes a smattering of rather moderate Democrats plus some very conservative current and past office holders.  Past office holders include Blanche Lincoln, Mark Pryor, and our very own Kathleen Sibelius.  Current office holders associated with the Third Way include Claire McCaskill, James Clyburn, Kay Hagen, John Dingell, Chris Coons and others.

I can’t find any evidence that these Democrats display much interest in reining in the defense budget or restructuring the tax system in such a manner that it is not rigged against the middle classes.  Perhaps that has something to do with the Third Way Board of Trustees – almost all of whom come from Wall Street.  The following is the list of the Third Way Board of Trustees:

·         John L. Vogelstein: Chairman, New Providence Asset Management, LLC and Senior Advisor to Warburg Pincus, LLC

·         Bernard L. Schwartz:  Chairman & CEO of BLS Investments, LLC.  Mr. Schwartz retired in 2006 after 34 years as Chairman of the Board and Chief Executive Office of Loral Space & Communications Inc. (NASBAQ:LORL)

·         David Heller:  Global Head of Equity Trading for Goldman Sachs.

·         Dwight Anderson:  a Principal and Portfolio Manager of Ospraie Management, LLC, an $8billion investment firm focused on four investment strategies in the basic industry and commodities sectors – hedge fund, private equity, incubation/seeding and long only.

·         Georgette Bennett:  Sociologist, criminologist, and journalist

·         Jonathan Cowan:  a co-founder of Third Way, has served as a high level bureaucrat in the Clinton administration.  With funding from the anti-Social Security billionaire Peter Peterson, founded a Social Security benefits reduction group called Lead or Leave

·         Lewis Cullman:  Founder and President of Cullman Ventures, Inc.

·         John Dyson:  Chairman of Millbrook Capital Management, Inc. (MCM) – A hedge fund.

·         Robert Dyson:  Chairman and CEO of Dyson-Kissner-Moran Corp., a privately owned, diversified invest holding company that was founded by his father Charles H. Dyson in 1954.

·         Brian Frank:  Director and Portfolio Manager at MSD Capital, L.P., the private investment firm founded by Michael Dell.

·         Michael Goldberg:  Joined Kelso & Company in 1991 as a Partner and Managing Director.  Prior to joining the firm, he spent two years as a Managing Director and co-head of the mergers & acquisitions department at The First Boston Corporation.

·         Peter Joseph:  Managing Director of Palladium (investment firm).

·         General Claudia Kennedy:  First woman to achieve the rank of three-star general in the U.S. Army.

·         Derek Kirkland:  Managing Director and Co-Head of the Global Financial Institutions Group at Morgan Stanley’s Financial Institutions Group in Investment Banking

·         Reynold Levy:  President of Lincoln Center for the Performing Arts

·         Daniel Loeb:  CEO of Third Point (investment firm).  Prior to founding Third Point, Mr. Loeb was Vice President of High Yield sales at Citigroup.

·         Thurgood Marshall, Jr.:  A Partner at Bingham McCutchen LLP, and a Principal of Bingham Consulting Group (lobbyist for Wall Street)

·         Herbert Miller:  former CEO and Chairman of The Mills Corporation, one of America’s most innovative and successful mall developers and managers

·         Michael Novogratz:  President and Director of Fortress Investment Group LLC (spent 11 years at Goldman Sachs)

·         Andrew Parmentier:  Founding and Managing Partner of Height Analytics (has worked in the financial services industry since 1997)

·         David Roberts:  Senior Managing Director of Angelo, Gordon & Co. (manages the firm’s private equity and special situations area)

·         Howard Rossman:  President and Founder of Mesirow Advanced Strategies, Inc, and a Vice Chairman of its parent, Mesirow Financial Holdings Inc.

·         Tim Sweeney: President and CEO of the Denver-based Gill Foundation

·         Ted Trimpa: Lawyer active in conservative wing of the Democratic Party

·         Barbara Manfrey:  Specialist in venture capital and specialized equity investing.  A past Partner of Apax Partners & Co. Ventures, a leading worldwide venture capital firm

·         Joseph Zimlich:  Chief Executive Officer of Bohemian Companies, a group of family-owned real estate and private equity holdings.

The Kochs are seen as the money and power behind the recent spate of radical governors who came into office to wage a war on the middle class. However, they are only one amongst 23 major corporations behind the movement to reduce the rights and economic security of  workers.  Radical, right-wing governors that came to power in the 2010 elections are unified in their radical actions through the American Legislative Exchange Council (ALEC), which is funded by a cabal of major corporations (see list below).

Kasich, governor of Ohio, and a host of other conservatives were driving forces behind ALEC, which was organized to reduce state governments to nothing more than entities to promote business through tax breaks and to eliminate worker protection through reduction or elimination of unemployment, workers comp, public employee unions, Medicaid, etc..  They also are determined to eliminate environmental protections.  You can read the ALEC version of its history at:

http://www.alec.org/AM/Template.cfm?Section=History&Template=/CM/HTMLDisplay.cfm&ContentID=13643

The following is a list of the ALEC “Private Enterprise Board:”

• W. Preston Baldwin – Centerpoint360
• Sano Blocker – Energy Future Holdings
• Don Bohn – Johnson & Johnson
• Jeff Bond – PhRMA
• Bill Carmichael – American Bail Coalition
• Derek Crawford – Kraft Foods, Inc.
• John Del Giorno – GlaxoSmithKline
• Matt Echols – Coca Cola
• Jim Epperson, Jr. – AT&T Services, Inc.
• Michael Hubbert – Pfizer, Inc.
• Teresa Jennings – Reed Elsevier, Inc.
• Ken Lane – DIAGEO
• Kelly Mader – Peabody Energy
• Bernie McKay – Intuit
• Mike Morgan – Koch Industries
• Kevin Murphy – ExxonMobil Corp.
• Sandra Oliver – Bayer Corporation
• David Powers – Reynolds American Inc.
• Maggie Sans – Wal-Mart Stores, Inc.
• Russell Smoldon – Salt River Project
• Toby Spangler – Altria Client Services, Inc.
• Roland Spies – State Farm Insurance Co.
• Pat Thomas – United Parcel Service

Although these companies are being rewarded with huge tax breaks and relieved of responsibility for the environment and workers, they will not be providing more jobs because state government largesse is directed their way.  Quite the opposite will be happening.  In general, these corporations will increasingly eliminate jobs through globalization and cybernation (robotics and artificial intelligence).  Furthermore, they will continue to feast off of the taxpayers as a result of privatization of governmental services – a major objective of conservative fanatics.

It should be mentioned that the board members of ALEC (not the corporate board) is comprised of state legislators of the theocratic, Christian, right wing variety.  State Senator Susan Wagle of Kansas is a board member.  Anyone who knows anything about Susan Wagle knows what is meant by the theocratic, Christian, right wing.

The ALEC staff includes the illustrious Arthur Laffer who happens to be famous for the “Laffer Curve,” (perhaps “laughable curve” is a better term), which serves as the underlying theoretical justification for “trickle down” economics.  The latest heavy duty project of Mr. Laffer and his fellow staffers is a request for all of the e-mails of a highly respected University of Wisconsin history professor who wrote a New York Times op ed piece they didn’t like.  Academic freedom for liberals and moderates is not a major objective of ALEC.

Governors on the far right of the Republican Party – backed by the Tea Party and by the money of billionaire conservatives – have played their hand in Wisconsin, Ohio, Indiana, Michigan, and Kansas.  Having a passionate belief that the time to bust public employees and their unions is now, they made their move.  They went for broke.

What has been accomplished by right wing assaults on public employees so far?  We went to Madison on Saturday to join the protests and learn what we could.  Given that the Republicans acted without transparency and perhaps illegally, the legislation stripping employees of their rights is tied up in court at this time (Tuesday, March 22^nd).  Nevertheless, should the legislation succeed,   employees like the teachers pictured below (and who were our fellow protestors on Saturday), will take a major cut in their pay and benefits.  Furthermore, they will be left without bargaining rights and, for all intents and purposes, any protection from abusive bureaucratic and legislative abuse.  

Wisconsin Teachers & Our Fellow Protesters on Saturday

 What will the cuts in pay and increases in payroll deductions mean to Wisconsin public employees – including the teachers above on whom we depend for educating our children?  According to the Sunday State Journal (the Madison newspaper), Susan Sprecher, a school secretary, has an annual salary of $30,000 before taxes.  She will lose $2,400 due to the Republican cuts.  Ms Sprecher already works a second job; she is contemplating trading in her car for an older model.

Ann Armstrong, a custodian for the University of Wisconsin at Oshkosh, has an annual salary of $24,000 before taxes.  The cuts will cost her $1,800.  The Sunday State Journal article stated that Ms Armstrong “finally edged into the middle class last year – after decades of struggle – when she bought a 600-square-foot home in Omro for $43,000, her first.”  Now she will drop her health insurance rather than default on her mortgage.

An eighth grade math teacher by the name of Don White will lose $4000 of his $60,000 annual salary.  That may sound like a lot but this 42 year old father of 5 children with a master’s degree is taking a job delivering pizzas on the weekend to keep his family afloat.

These are the people paying the price for an economic crash, tax cuts for corporations, and a radical right wing agenda.  Just imagine, an employee making $24,000 must take a pay reduction of $1,800 as a punishment for what?  Being a public employee?  Working in education in some manner?  Having a union?

I would hope that by reading this you are outraged and scared enough to get involved.  Join the protests.  Send money.  Tune in to what is happening to the working people – working includes all middle class workers as well as very low paid workers.  Think about  the poor and middle class people in the states that will lose their health care (like “Badger Care for poor children in Wisconsin). 

Also think about the successful efforts of right wing with the help of a whole bunch of Democrats (but not Democratic heroes such as the “Fab-14 in the Wisconsin legislature) to keep inheritance taxes nonexistent, to keep an income tax system in place slanted in favor of the very rich, and to keep tax dollars flowing into a bloated Defense Department – just to name a few of the crony capitalist-plutocratic congress now in place.

The concerted effort to reduce the economic well-being of the U.S. middle class has been under way for several decades.  The economic forces arrayed against working people in the form of globalization, union busting, decimation of retirement plans (i.e. move to 401Ks), health care and housing rip-offs, and assaults on Social Security, is a juggernaut.  Added to all of their successful efforts to reduce pay, benefits, and rights of workers, the wealthy elite has developed a powerful propaganda machine in the form of  Washington think tanks such as the Heritage Foundation, the Cato Institute (Koch funded), the American Enterprise Institute

Working people in U.S. mines, mills, factories, offices, classrooms and in every occupation imaginable do their part by showing up, putting in their time and effort, and often risking their health and safety.  Overwhelmingly, workers are sincere, responsible, and contribute mightily to corporate and investor profits.

Corporations and government agencies benefiting from this labor have a responsibility to provide for the economic security of the low and middle income employees, without whom they could not achieve their missions.  As U.S. workers reach a sensible retirement age of 60 to 65, many are unemployed and experiencing virulent age discrimination.  Many have occupational-related health problems for which they have not received disability compensation.

 In an enlightened capitalist society, the final stage of life would be seen as one in which everyone would have an opportunity to stop their daily work grind and fulfill needs that leisure would allow.  They have given to corporations and the government throughout their life. Their life past 60 should be a time when they are given leisure time with a modicum of economic security.  At the very least, they should have decent shelter, adequate nutrition, and basic health care.

So what is happening in the United States today?  We are seeing a mean-spirited move to decimate the social safety net for people of all ages.  This move is funded by billionaire funded conservative political movements ensconced in phony “think tanks” such as the Heritage Foundation, the Cato Institute, and the racist Bradley Foundation (funder of the Bell Curve).  The billionaire Kochs are pouring money into the Tea Party, which feeds propaganda and ignorance to that portion of the masses responsive to scapegoating of teachers, public employees, the elderly and myths about budget deficits – as well as who is to blame for unemployment.

Social Security – along with Medicare, one of the two most decent and humane old age programs ever conceived – has been on the “hit list” of the right-wing, wealthy elite from its very inception (see my The Tallgrass Activist blog post, “The Koch Funded Cato Institute Waged Guerilla Warfare on Social Security and the Mainstream Media Bought Into It,” October 10, 2010).  The money poured into the propaganda campaign against Social Security has been so effective that even so-called moderate Democrats such as Senators Richard Durbin and Claire McCaskill are supporting extending the Social Security retirement age.

Obama Administration support for Social Security has been tepid at best.  These days, with the exception of a few representatives and senators, the Democratic Party is failing to “fight” for the rights of working people (for one exception, see The Tallgrass Activist, “Jan Schakowsky’s Deficit Reduction Plan: A True Progressive Plan For the Working People,” November 18, 2010).

The usual propaganda and mistruths about Social Security are typically penned for Peterson and his operatives by Ms Maya MacGuineas.  Ms MacGuineas has made the rounds of the usual elitist Washington think tanks (e.g. Brookings Institution) doing the bidding of the power elite and is now acting as the director of the Committee for a Responsible Budget.  She has a set repertoire of lies about Social Security, which are: (1) Social Security is broken due to an aging population, (2) Medicare & Social Security are, in sum and substance, the same program known as “entitlements, and(3) these entitlements must be reformed – by which she means benefit cuts are necessary.

Maya Macguineas

It is hard to believe that Democratic senators Claire McCaskill, Mark Warner, and Richard Durbin have joined this right-wing crusade.  Instead of ending the crony capitalism that characterizes Medicare (not Social Security) and raising taxes to insure long-term stability of Social Security (past 2037), these faux-Democrats are pushing for an increase in the retirement age and a cut in benefits.  Unbelievable!  Why would rank and file Democrats put up with that?  

Any of my fellow progressives in Illinois, Virginia, and Missouri reading this should be on the phone to the offices of Durbin, Warner, and McCaskill.  Let these Democrats know that their pleas for support and votes in the next election may go unheeded.  Warner is immensely wealthy, which makes his efforts to impoverish the elderly even more disgusting.

One thing that we are not hearing from the mainstream media and a whole bunch of politicians is that the Social Security system is in good shape.  Conservative think tanks and politicians are spreading misinformation in an attempt to undermine the program, which they have always loathed.  Lies and half truths spread around by the Cato Institute and other conservative outfits are picked up by unquestioning journalists and further disseminated.

One lie they love to spread is that the Social Security system is going broke.  Another big one is that Social Security is largely responsible for the federal deficit.  By merely checking the latest Social Security Trustee’s report, this lie can be easily debunked.  Page 5 of the report includes a table with the following information:

• Assets at the end of 2008         =          $2.42 Trillion
• Asset at the end of 2009           =          $2.54 Trillion
• Total Income in 2009                =          $  .81 Trillion
• Total Expenditures in 2009    =          $  .69 Trillion

Aside from the fact that the program is increasing the size of the assets it holds, there is obviously no relationship between the deficit and the Social Security system.  Nevertheless, journalists and politicians, on a regular basis, lead the voters and public in general to believe that “if we don’t reign in” Social Security, we can’t reduce the deficit.  Ms Jackie Calmes of the New York Times is one of the most persistent disseminators of this misinformation.  In her most recent article, she stated the following:

“[A variety of deficit reduction commissions] – including in November, a majority of Mr. Obama’s fiscal commission – each concluded that the growth in the nation’s debt could not be reined in with spending cuts alone.  They said the required reductions, including for Medicare and Social, would be deeper than anything the public would accept.” (“Poll Finds a Willingness to Cut Spending, Just Not Medicare or Social Security,” New York Times, Friday, January 21, 2011).

No doubt, she was quoting deficit reduction commissions but she was quoting them unquestioningly – without presenting any contrary information.  In fact, she, and other mainstream journalists, always accept the claim that Social Security must be “reigned in for the sake of the federal deficit” at face value.  Furthermore, journalists completely ignore Congresswoman Schakowsky’s recommendations (see my blog post dated 11/18/2010).

According to a report of the Pew Center on the States (The Trillion Dollar Gap), the Kansas Public Employees Retirement System (KPERS) is in trouble – very serious trouble.  Why?  If you listen to the mainstream media, right-wing conservatives, so-called moderate Democrats (i.e., the Third Way), and various and sundry other sources, you would have to conclude that the cause of the state pension problems can be laid at the doorstep of those powerful, greedy, public employee unions.

However, “The unions as state budget busters hypothesis,” when considered in the light of objective research, can be easily falsified.  For instance, Appendix B of The Trillion Dollar Gap is a listing of state-by-state data in the following categories: (1)” percentage of accrued liabilities funded, “(2) “unfunded liability as a percentage of covered pay roll,” and (3) “percentage of actuarially required contribution made, 5-year average.”

If your eyes are glazing over after that bit of “in the weeds” jargon, please stick with me for a bit longer.  Kansas is shown to have funded 59% of accrued liabilities while New York has funded 107%.  This simply means that Kansas is really falling short in the amount of money it should be putting into its retirement system to meet the obligations it has toward its retirees while New York is doing quite well in that regard.

The point here is that states are in financial trouble when they have huge debt obligations they can’t meet.  The primary unfunded obligation facing states in trouble is in the area of pensions.  New York, a strong union state, is not in danger of defaulting on its pension bonds or reneging on the promises made, through legislation, to its retirees.  Conversely, Kansas, a quintessential right-to-work state, has a pension program, which, in order to survive, needs some real and immediate attention from its legislature.

“This is only two states,” you might say.  But, if one peruses Appendix B of the Pew Center report, one will note that there appears to be no correlation between union strength in a state (i.e. right-to-work versus non-right-to-work states) and the financial condition of state pension programs. On the three measures mentioned earlier, states were given grades by the Pew folks from 0 to 4, with 0 being the worst to 4 being the best.  Kansas and Illinois, for instance, received grades of 0, whereas New York and Ohio received grades of 4.  I find it interesting that the newly elected Republican governor of Ohio has vowed to bust public employee unions by convincing the legislature to declare them illegal.

Research into KPERS reveals that many long-running issues that have nothing to do with unions are responsible for the near bankruptcy of the system.  In a long conversation yesterday with an expert at the Kansas State Legislative Research Department, I learned that KPERS has been rendered unsound by a variety of factors, including, but not limited to, an incompetent actuary who, in the 1970s, led the legislature to believe benefits could be increased to a specific level but failed to indicate the adequate level of funding needed to meet the increased liabilities.

The legislature has not adequately increased the level of funding needed to keep the program sound.  Furthermore, in the 1990s, the legislature, the KPERS board, and investment advisors made a decision to invest money in Kansas business as a form of eco devo.   Not only did this strategy fail to earn a decent return, it caused losses in the amount of approximately $220 million dollars.

That quarter of a billion dollar loss, along with the 1 ½ billion dollar loss in the 2008 U.S./worldwide economic collapse, when added to the Kansas legislature’s failure to adequately fund the program, has placed the income of many Kansas retirees in jeopardy.  Furthermore, you can’t blame the unions for the mess at KPERS.  Rank and file union members did not make investment decisions; they did not bundle subprime mortgages into bonds and then give that toxic waste AAA ratings; and they did not produce an incompetent actuarial study.

I am told that there are 20 Legislative Post Audit Reports concerning the 1990s investments.  I plan to get my hands on them.  I also know some other people that know what has been going on and I plan to interview them. So stay tuned.  You will be reading more on this blog about KPERS and how the Brownback Administration and the Kansas Legislature plans to make whole the retirees who have paid into the system.  I do not intend to stand by and listen to the scapegoating of public employee unions that is becoming de rigueur these days.

The end of “don’t ask/don’t tell,” some help for “9-11,” responders, and the START treaty were bright spots in the otherwise miserable year of 2010.  These three very decent and overdue legislative actions suggest that Americans can be fair, empathetic, and generous – in spite of the potent, ideological, right-wing, meanness that has been so influential for at least the past three decades.

It is gratifying to see the beginning of the end of de jure discrimination against gay people.  No doubt, de facto discrimination in many forms will continue against gays, just as it has against African-Americans, women, the elderly and other groups.  Anti-gay acts have been, and will probably continue to be, particularly vicious and often violent.  The struggle against this form of hate will need to go on for some time.

Although we saw some “socially liberal” progress in 2010, it was an economically conservative and miserable year for middle and low income Americans.  Earners and wealth holders in the top 10% can thank their lucky stars that the U.S. Congress and the Obama Administration have decided to maintain a favorable tax status for the wealthiest Americans at the expense of all other income classes.  

The $3.5 billion spent on lobbying congress did not come from median income, struggling households.  Consequently, Wall Street is back in business as usual.  The incestuous relationship between the financial services sector, the congress, and the Obama Administration along with various industrial-you-name-it complexes, such as the medical-industrial complex, present a very dark cloud on the horizon for the masses.  The Citizens United case and the massive corporate campaign spending it unleashed make that cloud ever so much darker.

The revolving door between congress, the administration, and Wall Street is spinning faster than ever.  A case in point is the recent move by Peter Orszag to Citigroup for some really big bucks in salary.  This happened after he helped engineer a $10 billion U.S. Treasury deal/benefit for Citigroup.

In fact, the perfect economic storm is shaping up and is headed right for the working classes.  As one who visited the staffs of several members of the President’s “deficit reduction commission,” I believe that things don’t look too good for the last remnants of the New Deal and the Great Society.  A seemingly liberal Democrat like Senator Durbin of Illinois is signaling that he is supportive of proposals that would reduce Social Security and Medicare benefits.  This is not surprising.  Of all the offices we visited, it seemed to me that his was the one where we were confronted with the vaguest, most platitudinous, and even mealy mouthed verbiage.

In the meantime, employment, pension funds, college opportunities, and economic opportunities in general are going south.  The states are in really sad shape.  Any stimulus derived from raiding the Social Security Trust Fund, as happened in the deal between the President and the Republicans, will be offset by failure to provide massive stimulus dollars to the states for infrastructure building and other forms of employment. 

Corporate profits are better than ever and the middle class situation is continuing to deteriorate.  If the working classes remain passive or locked in a heated political fight with each other (think Tea Party and us), then the corporate juggernaut will continue to roll over us.  On a positive note, however, I do believe that as economic conditions worsen, groups that are now shouting at each other will begin to discern the real culprits and will learn to talk to each other.  In fact, I have had some success with that lately.