Bacon's Rebellion

Well, how about that. It appears that privately insured Americans are using fewer medical services these days. Patient visits, drug prescriptions and procedures were down in the second quarter of 2010 compared to year-ago levels, reports the Wall Street Journal.

Weak demand could put downward pressure on spiraling health care costs and insurance premiums, the WSJ suggests. And what could be behind this remarkable change? Health economist Paul Ginsburg attributes some of the new behavior to the weak economy. But, he adds, “This could go beyond the recession. Being a less aggressive consumer of health care is here to stay.”

Perhaps this has something to do with it: More Americans are buying high-deductible health plans that make them bear a bigger share of the cost of their medical services. Eighteen million people have such plans compared to 13 million last year, according to the Journal. Believe it or not, people exercise more discretion and care as consumers when they have to pay for medical services themselves! Imagine that. They don’t go to the doctor as often — presumably cutting back on more frivolous trips — and they look for better deals when buying pharmaceuticals.

Most extraordinary! Who could have predicted it? Is there some body of thought that could explain why people consume more of a product or service when someone else is paying for it, and consume less when they pay for it thmselves? Could the field of economics shed some light on this perplexing question?

Finish reading this blog post on the Boomergeddon blog.

WaPo is full of good stuff today!

Lets start with the front page of Business:

Household Economics writer Michelle Singletary (The Color of Money) sketches out “What Sherrod was telling us” in a column with that subtitle. The money graf:

There is a disturbing and widening gulf between the rich and the poor in America. And it would be even wider except for the fact that so many middle-income families have borrowed their way to a comfortable lifestyle. They are just a paycheck, a divorce or a heath crisis away from financial ruin.

Read it all here: http://www.washingtonpost.com/wp-dyn/content/article/2010/07/24/AR2010072400146_pf.html
Just for you, Peter.

By the way the online version of the story is titled “Race isn’t the problem – economic inequality is.”

This was the theme of Jim Bacon’s post “Webb Shatters the Mold” on Friday.

No one had commented on Observer’s note at end of the comment section on the Webb post. EMR suspects no one saw it so here is a copy:

“Peter:

“Observer”

Perhaps it should have been:

“Give credit to Mr. Bacon for pointing out that Senator Webb is trying to find an answer.”

Item two from today’s WaPo:

On the same page as Singletary’s column there is one by Ezra Klein titled “Digging into finance’s pay dirt.” Klein argues that Broke, USA needs to be read along with The Big Short .

The later deals with what those at the top of the Ziggurat did to cause The Great Recession, Broke, USA documents what those in the middle and at the bottom did to provide the funds.

Same song, second verse: It is the little guy that is having to pay and, as someone said recently:

The Wealth Gap is not sustainable in a world with instantaneous communications, mass literacy and weapons of mass destruction.

EMR thought he had seen a second sentence for the Pulitzer quote cited by Observer. Sure enough it reads:

“The inherent vice of capitalism is the unequal sharing of the blessings. The inherent blessing of socialism is the equal sharing of misery.”

That is a perfect segue to a third item in today’s WaPo.

Check out this book review in the Outlook (Opinion) section: The review by Andrew Higgins is titled “China, a capitalist machine with a communist engine” about The Party: The Secret World of China’s Communist Rulers. (“China’s ruling party has disentangled itself from ideological chains.”)

Sounds like Pulitzer’s worst of all possible worlds.

Is it time to focus on Regional Resiliency, Import Replacement and DeGrowth?

EMR

Josh Dent is an early victim of Obamacare. The lanky, shaven-headed machine operator likes the medical insurance plan his employer, Acorn Sign Graphics, provides him. But under the newly enacted Affordable Care Act, his insurance policy will get less affordable. A provision in the law is putting his insurance company out of business, and whatever replaces Mr. Dent’s current policy will likely be much more expensive.

The way the 29-year-old sees it, Acorn will have to cut benefits or cut pay. One way or another, he figures, the switch to a new insurer will cost him.

Steve Gillispie, Acorn’s president, is distressed by this unexpected development. A year and a half ago, he was facing premiums of $150,000 from an established insurer, up from $80,000 just three years before. Then along came Richmond, Va.-based nHealth. The start-up company, launched with the mission of making consumer-driven health care a reality, rescued him with a plan that kept premiums below $90,000 yearly. The plan insured his 35 employees against hospital expenses, created a $1,500 deductible for doctors’ fees and set up health savings accounts (HSAs) for employees to pay for what the health plan did not. “For most employees,” Mr. Gillispie says, “it netted out money in the pocket.”

Lower insurance charges helped Acorn survive the recession without laying off any of its employees or cutting their compensation. Going back hat in hand to one of the dominant insurers in town, Mr. Gillispie fears, will add tens of thousands of dollars to his cost structure. Profit margins are tight in this slow-growth economy, but he hates to pass on the higher insurance costs to his employees, many of whom are paid $14 to $16 an hour. “Most of these people are living hand to mouth as it is,” he says. He still does not know what he will do.

Such is the unintended consequence of Obamacare, which overhauled the health care industry with the goal of making medical insurance more affordable and accessible to all. The provision that is causing Acorn Signs so much heartache is the so-called 80/20 rule, which requires all insurance plans to pay out at least 80 percent of premiums in benefits. The goal behind the rule is to punish insurers that let administrative expenses get out of hand. In practice, the law punishes innovative, entrepreneurial companies like nHealth that kept premiums low. Read the rest of the column here.

(This column was originally published Friday in the Washington Times, and has been republished on the Boomergeddon blog. Illustration credit: Alexander Hunter for the Washington Times.)

Senator Jim Webb has always been something of a maverick, but now he has done something truly shocking: He has broken from Democrat Party orthodoxy on the intertwined issues of race, diversity and white privilege.

Let me start with a hypothetical. Imagine it’s 2002 and a white supremacist (skinhead) is videotaped on a public sidewalk. Let’s say the skinhead says, “I hate black people. All of them. Every last iota of a n*****, I hate them”. He goes on and on and eventually says something about killing black babies.

Now, imagine it’s two years later. It’s election night. George Bush is running against John Kerry. Bush wins. However, his victory is marred by an incident at a polling place. The same skinhead who was videotaped talking about killing black babies is standing in front of a polling place on election night. He and a friend are videotaped in paramilitary uniforms. The leader (and presumptive black baby killer) is holding a night stick. Eventually, the police are called and the racist duo are forced to leave the polling place.

Post inauguration, George Bush has the polling incident brought to his attention. He watches the videotape of the skinhead making public racist statements. Then, he watches the videotape of the same skinhead standing in front of a polling place with a billy stick. What does he do? He lets his Attorney General (John Ashcroft) decide to forget the incident because it’s just not that important. How does the media react? Hint: They scream bloody murder calling both Bush and Ashcroft racists. How do liberals react? Hint: They scream bloody murder calling both Bush and Ashcroft racists.

Now, let’s leave the hypothetical and enter the world of reality.

New Black Panther leader King Shamir Shabazz was videotaped making exactly the same racist statements about white people as my hypothetical skinhead said about black people. The video can be seen here.

Then, King Shamir Shabazz and another New Black Panther member appeared in paramilitary uniforms with Shabazz brandishing a night stick in front of a polling place during the last presidential election. The video can be seen here.

Now, Obama’s justice department has decided not to follow up on a complaint about this act of voter intimidation put forth in January of 2009 – before Obama took the oath of office. You can read about it here.

If you can’t manage to believe your own eyes (or dear ole Groveton) – consider this interview with a civil rights lawyer, former editor of the Village Voice and certifiable uber – liberal, Bartle Bull. You can watch it here. Bartle Bull was also a campaign manager for both Bobby Kennedy and Jimmy Carter.

If you are a reader of this blog, I’d ask that you consider this post in the context of three possibilities:

1. In the hypothetical situation of the skinheads, Bush and Ashcroft – you would have sided with the Bush Administration in believing that the skinhead with a history of making public racial slurs holding a billy club at a polling place was not a sufficiently big deal to investigate. You also excuse the New Black Panthers for their real life racism and intimidation of voters. Hint: You are not a racist. You are just stupid.

2. You would disagree with both the hypothetical Bush situation and the all too real Obama situation by saying that there is no place for racist intimidation of voters and no administration should tolerate such actions. Hint: You are a normal, non-racist American.

3. You think Bush and Ashcroft would have been racists while Obama and Holder are not. Hint: You are very much a racist yourself.

Eric Holder has apparently selected option 3. He is a racist – pure and simple.

It’s the 50th Anniversary of the publishing of Harper Lee’s “To Kill a Mockingbird” and there’s plenty being written about the novel, the author’s only one published.

A 3.6 scale earthquake rocked the Nation’s Capital Friday morning, leading prominent conservatives to say that Barack Obama’s neo-socialist spending programs are affecting the earth’s tectonic plates.

Sooner or later, someone is going to have to pay for the dogma-saturated legal forays of Kenneth Cuccinelli, Virginia’s firebrand Attorney General.

At long last, the Boomergeddon blog has gone live at its permanent URL address, http://www.boomergeddon.us/. I would have preferred to have nailed down the .com address, but some slimeball snaked it before I could register it, and I refuse to pay money to buy the name. Fortunately, the “.us” domain works in this case — kind of like Boomergeddon USA!

Now, time for a quick little Q&A.

You: Gee, what is “Boomergeddon” anyway?

JAB: To quote from the blog: “Boomergeddon is the day investors stop buying U.S. Treasuries — the day the U.S. government goes into default, the global economy is thrown into turmoil, the American empire begins to crumble, and the social safety net starts to unravel.”

Virginia closed out the fiscal year with a $220 million budget surplus, no mean accomplishment considering that it faced a $1.8 billion deficit in January. The press release from the Governor’s Office has the details.

Some of the surplus will be allocated to a bonus for state employees, who have gone without a pay raise for four years, to local school districts, and to Virginia’s Water Quality Fund, with the balance to be divvied up later. A humble suggestion: Start repaying that $650 million owed to the Virginia Retirement System.

Update: Norm Leahy with Tertium Quids deconstructs the governor’s press release from a fiscally conservative perspective.