Wednesday, November 27, 2013

Second-guessing Walmart executives

“Here's How Walmart Could Pay Workers a Decent Wage Without Raising Prices”

Now this had to be a good one, right?

Turns out the suggestion, carried on Mother Jones, was simple: Instead of buying back some of their stock as planned, Walmart executives instead ought to invest the money in raising employees’ wages.

Gee, why didn’t they think of that?

Now, there can be many reasons why Walmart is buying back its own stock. Perhaps they feel they are the target of an unfriendly acquisition attempt and want to drive up the price of the stock to prevent it.

Now consider the alternative. Walmart executives decline to buy back their own stock, thereby allowing the price of the stock to fall. A prospective new owner swoops in, buyds or merges with Walmart, and increases prices on merchandise.

Or perhaps the new stockholders demand that executives seek savings by laying off employees. Then the employees not only don;t have higher wages, they don;t have jobs either.

There could be myriad reasons Walmart executives  are buying back their own stock. The point is, we simply don’t know.

Unless you are in their shoes you simply don;t know what Walmart executives are thinking.

Those who think they do are parading their economic illiteracy.

It would be better for all of  us if they would find a copy of Thomas Sowell’s “Basic Economics” and read it.

Tuesday, November 26, 2013

Cheney gay marriage dispute unfortunate

Mary Cheney says her sister, Liz, is wrong on the issue of gay marriage.

Liz Cheney said on Fox News Sunday that she believes in the traditional definition of marriage involving a man and a woman. Mary Cheney is involved in a gay marriage.

The disagreement between the two became public when Mary Cheney responded to and criticized her sister’s stance in a Facebook post.

That a family spat is public is sad enough. That this should come up in a Senate race between incumbent Mike Enzi and Liz Cheney is the saddest part of all, however.

Enzi has chosen to grandstand on the issue by supporting a federal constitutional amendment banning gay marriage. This despite the fact that any dispute over gay marriage is clearly under the purview of the individual states in the nation. Enzi knows a constitutional amendment will never happen and ought to be honest enough to say so.

When asked about the issue herself, Liz Cheney could have taken the high road — and a solid conservative stance — by making it clear that the issue had no place in a U.S. Senate race since it is a question of states’ rights, and not within the prerogative of the federal government. Her personal views are of no relevance. Her father, former Vice President Dick Cheney, has taken the states’ rights position on the issue since 2009.

When our country has such serious economic issues on its plate, the real shame is that Enzi is trying to portray Liz Cheney as soft on gay marriage — a question that has no pertinence in a Senate race. Both Republican candidates are in a position to teach the folks of Wyoming the difference between state and federal prerogatives and that isn’t happening.

Thursday, November 21, 2013

Few hardships among insurance cancellations

From what has been reported, you would think that 5 million Americans were risking bankruptcy due to the cancellations of their health insurance policies.

The actual truth is in a far different place.

First, these are not people who are part of employee groups, most of whom will not see major coverage changes. Instead, it is a small slice of the population — those who purchase health insurance individually — that has many valid alternatives.

The individual market covers 5.7 percent of the non-elderly population. The overwhelming majority of those people will obtain more affordable coverage under the health care law because they will be income-eligible for financial assistance to help pay for comprehensive insurance at a lower cost, according to a new report from Families USA.
“Individuals with household incomes that do not exceed four times the federal poverty level  — $94,200 for a family of four in 2013 — are income-eligible for either premium tax credit subsidies to buy coverage in the new health insurance marketplaces or Medicaid, which charges no premiums for most enrollees,” the report states.

Conversely, the number of people at risk of not keeping their current individual health insurance and who also will not be income-eligible for financial help to purchase new coverage under the Affordable Care Act is just 0.6 percent of the non-elderly population, the report states.  

And these are hardly hardship cases. For one thing, their income exceeds $94,200, meaning they are not destitute.

 And “according to peer-reviewed research, the average duration of individual-market coverage before the Affordable Care Act was very short. Its median duration was eight months, with individual plans often bridging periods of job-based coverage,” according to the report.

Also, “altogether, 64.5 percent of consumers with individual market insurance kept that insurance for a year or less — a result not affected by income.”

 Many of the 0.6 percent of Americans who have incomes too high for financial help and, without the ACA, would have kept their individual insurance for more than a year would prefer new coverage options, even without subsidies, the report states.

“A recent survey found that 45 percent of people with individual coverage described their insurance as ‘fair’ or ‘poor,’ compared to 18 percent or less for every other form of coverage, including Medicaid,” the report states.

Once again, the truth about Obamacare rests somewhere between the extremes of the heated debate between Republicans and Democrats.

Tuesday, November 19, 2013

The purpose of insurance

The current debate over “if you like your plan, you can keep your plan” has revealed a shocking ignorance of the purpose of insurance.

We buy insurance for our automobiles because it is basically required by law. But there’s a bigger reason: It protects us.

Furthermore, in purchasing car insurance — or any other kind of insurance, for that matter — we hope we never have to use it.

You may go years paying $2,400 annually to insure two vehicles and never make a claim. But you are willing to do so because it is there if you need it. Others are also paying for similar policies so that in case you do have a problem, there is enough money to pay your bills.

You see, this is how insurance works. You create a pool of money large enough to handle anyone’s claims, of which there may be a wide variety. This is why it is necessary for everyone to have insurance, to create a large enough accumulation of money so that all contingencies can be handled. The higher the participation, the lower the cost for everyone.

That’s why it is so difficult to understand why people don’t comprehend this in the medical realm. No one wants to get sick. But if you do, medical expenses are prohibitively high. No one can afford cancer treatment. Pediatric care can be very expensive. Pregnancies also cost a lot of money.

So why is it that people who are 58 can’t understand why they need coverage for everything. Yes, perhaps their child-bearing years are a thing of the past but it is a very real expense for younger people — perhaps even the 58-year-old’s daughter and son in-law. Similarly, why should young people have to be insured against diseases  normally associated with old age? 

Get the point? Everyone participates in order to share a burden when it happens.

It’s just like public schools or roads or military defense. Everyone pays equally — or should pay equally — so everyone can benefit.

Wednesday, November 13, 2013

What Bill Clinton said

Well of course we’d like people to keep their insurance and their doctors if they want to. Now how can we make this happen?

U.S. Rep. Fred Upton, R-Mich., says his legislation will do so. It will do nothing of the sort.

You see, in America we have free enterprise. Government cannot make a company sell something it doesn’t want to sell.

Yes, President Obama went overboard when he made that promise. And yes, former President Clinton is correct in saying the government should keep its promise, even if it takes changing the Affordable Care Act (Obamacare).

But here is the only way that could happen: the government would have to provide the insurance.

Congress could, if it wanted to, enact a law very narrowly targeted at the 1 percent of the population that has been hit with a health insurance policy cancellation due to Obamacare. It could make up the difference, from our tax dollars,  between what they were paying under their old policy and what a new policy meeting the requirements of Obamacare would cost.

Do you honestly believe Republicans will vote for such a law? No, they’d rather skewer the president and raise funds for their congressional re-election campaigns than solve the problem.

People really need to try to understand that the law was adopted to provide insurance to people who have no insurance. Yes, a few people are going to have to pay more, but the truth is, they can probably afford it.

 See for yourself. Listen carefully to what Deborah Persico is saying in this video. She says she is going to have to pay $5,000 more per year for insurance. Is hers a hardship case? Do you think the government should make up the $5,000 difference?

Tuesday, November 12, 2013

Now if we had a real Congress ...

People who have decent jobs are experiencing some wage growth, according to The Wall Street Journal.

 But there has been little recovery for the young, the less educated and those who remain unemployed.

 Put another way, the rich are getting richer and the poor are, at best, only staying the same.

Seems like an ideal subject for Congress to discuss. But the issue has no pizzazz, and politicians could not use it to raise campaign money as they do with subjects like gun control, Obamacare or abortion.

And maybe there is nothing Congress can do, though it is a historical fact that income equality tends to increase when Democrats are in power and the wealthy have a harder time when Republicans are in office.

 Given the reputations of the two parties — with Democrats the supposed friend of the working person and Republicans favoring business — you would think it would be just the opposite.

 But here we are, sitting on a record stock market with fewer sharing the success. Banks are swimming in money.

There are probably many reasons why public policies often produce the opposite of the results that are sought. But that isn’t the point today.

 The point is that the people are growing impatient with Congress because it doesn’t seem interested in such practical bread-and-butter issues as how more of us can enjoy the good life. If we had a functioning Congress, such issues would be discussed all the time.

Wednesday, November 6, 2013

Can Pontiac handle democracy?

Turnout for Pontiac’s first bonafide election in over four years was only 13 percent but let’s take the positive view: The return of democracy to the city is off to a good start.

The city has elected a highly qualified mayor in Deirdre Waterman. If she can accomplish half of what she has led the way for at the city’s library it will be outstanding.

Outgoing Mayor Leon Jukowski deserves a hearty salute for his role in Pontiac’s necessary transformation under an emergency manager. Jukowski, since he had no real authority, could have sat on the sidelines and criticized the EM as Detroit’s Dave Bing has done, but he chose instead to support all of the EM’s unpopular decisions.

Voters often claim they want politicians to just do what is right in spite of popularity, but when they do, they suffer Jukowski’s fate at the polls.

Pontiac residents lost their democratic rights in March of 2009 after then Gov. Jennifer Granholm declared a financial emergency in the city. Fred Leeb was then named as the city’s emergency financial manager with near-dictatorial authority.

Democracy began to be restored to Pontiac in August of this year when Emergency Manager Louis Schimmel left his position.

Now the mayor and city council are back in charge, with some restrictions.

Elected officials do not have a good track record in running city government in Pontiac. The public shares the blame because it is the voters who choose the leaders.

Waterman is the city’s first woman mayor. Perhaps she can also become the city’s first successful mayor in recent memory.

Tuesday, November 5, 2013

Obamacare transformational? You didn't know?

We can talk about what President Obama did or did not promise about the new health-care system.  It’s here and what do we do about it now?

First of all, if the media is surprised that the Affordable Care Act is transformational then they didn’t do their job to begin with. The wealthy class knew it would equalize things and that is why it fought the changes — and continues to fight them — so strenuously.

Just because the new law is transformational doesn’t mean it’s bad. There may be better systems but the Congress didn’t adopt them.

Consider the ways in which Obamacare is transformational and then — and only then — decide whether it is good or bad and how it should be improved.

• Obamacare inches away from our third-party payment system, in which employers bear the cost of health insurance. Why is this bad? By placing all the cost on employers, employers, as a result, cut back on wages and number of people hired. Are these good things? Perhaps it is why no other industrialized country has the third-party payment system.

•  ACA includes generous subsidies even for the middle class — that is, those in that class who don’t work for a large employer, perhaps employ themselves, and thus find themselves looking for their own insurance. Again, why shouldn’t these folks have access to affordable insurance?

• The new law makes everyone pay for health care. The premise is: there is no such thing as a free lunch. Yes, that’s a philosophy spawned by the evil Republicans, which begs the question as to why they are opposed to the system.

• Obamacare promotes a competitive marketplace that forces insurers to advertise for customers. And why is this bad? Suddenly, Michigan, 70 percent of whose market has heretofore been sewn up by Blue Cross Blue Shield, has 14 companies competing for your business. More choice. And what, exactly, is wrong with that?

• The upshot of the system may be less care for the wealthy (unless they pay more) and more care for the less fortunate. And this is an ungodly notion? As one informed knowledgeable observer in France said, folks in that country would never dream that the valet is entitled to less care than the president of the country.

Next time someone grouses about Obamacare, ask them what they would do? An inquire about their insurance. It’s probably pretty secure.