Big Government

An Update on healthcare reform.

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Cash medical practice or, in the phrase favored by leftists critics, “Concierge Medicine,” seems to be growing.

Becker is shifting to a new style of practice, sometimes called concierge or retainer medicine. With the help of a company that has been helping physicians make such shifts for over 13 years, he will cease caring for a total of 2,500 patients and instead cut back to about 600. These patients will pay an annual fee of $1,650. In exchange, they will receive a two-hour annual visit with a complete physical exam, same-day appointments, 24-hour physician phone access, and personalized, web-based resources to promote wellness.

The article suggest that all these doctors choosing to drop insurance and Medicare are primary care. Many are but I know orthopedists and even general surgeons who are dropping all insurance.

The concierge model of practice is growing, and it is estimated that more than 4,000 U.S. physicians have adopted some variation of it. Most are general internists, with family practitioners second. It is attractive to physicians because they are relieved of much of the pressure to move patients through quickly, and they can devote more time to prevention and wellness.

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The Rough Beast, Slouching Towards Destination Unknown

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Adrift without a map, we are, in the sea of current events. Especially after this last week, which brought us a ground war in Gaza and the shoot-down of a passenger airliner over Ukraine; both situations a little out of the depth of the past experience of Chicago community organizer, even one who spent his grade school years in Indonesia. Quite a large number of the blogs and commenters that I follow have speculated over the last couple of months at least since last year and have predicted disaster. They know not the day nor the hour, but they have read the various augurs according to their inclinations, suspicions and particular expertise, and gloomily speculate on the odds of various events occurring. There is something bad coming, the air is thick and heavy with signs and portents, never mind the cheery cast that the current administration and its public affairs division attempts to put on it. It’s like a makeup artist, plying the art on a six-months-dead corpse; it’s just not working.

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History Friday – American Biowar Preparations in the War with Japan

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Never trust the American government about weapons of mass destruction (WMD). This a lesson learned about American government behavior with the late 1990’s ‘Gulf War Syndrome’ scandals which eventually turned up the suppressed bombing of a 1991 Saddam Hussein nerve gas depot that trace-poisoned thousands of Gulf War Vets. See CIA analyst Patrick G. Eddington’s 1997 book Gassed in the Gulf: The Inside Story of the Pentagon-CIA Cover-Up of Gulf War Syndrome.

Little did I know that this thought about official American government WMD narratives applied for decades longer than the first Gulf War. In a past column “History Friday: A Tale of Balloon Bombs, B-29s and Weather Reports” I said the following about the Japanese strategic balloon bombing campaign —

American authorities — through the Chinese intelligence reports and captured Japanese documents — knew of the Japanese biological weapons program and greatly feared that the Japanese would use these balloons to deliver disease to the American heartland.

It turns out that the American War Department, and particularly Secretary of War Henry L. Stimson, was seriously interested in Japanese biological warfare experiments far earlier than the November 1944 through April 1945 Japanese strategic balloon bombing campaign. In fact, he had instituted a blood screening program of Japanese prisoners of war five months earlier to get an early warning of Japanese biological weapons (AKA bio-weapons).

See this 1 July 1945 follow War Department letter Ryan Crierie found recently in the US National Archives:

Biowar July 1945
Secretary of War Stimpson message to Pacific Theater General MacArthur and China Theater General Albert Wedemeyer requesting blood samples be taken for tests once a month for the 15 most recently captured Japanese prisoners and air freighted to Washington DC for testing to screen for bioweapon exposures.

This letter was a follow up letter to a 19 July 1944 radio instruction that complained to both Generals MacArthur and Wedemeyer that they were not regularly following the 19 July 1944 War Department directive and directing them how to properly draw package and ship the desired blood samples to the Director of the US Army Medical School in Washington DC.

Given this recently uncovered background data, plus the dodgy behavior by American military prosecutors at MacArthur’s War Crimes tribunal in Manila to cover up the Japanese biological program from the American public for decades, it is easy to see why diplomatic historians like Gar Alperovitz started talking about great “Atomic Diplomacy” cover ups.

There _was_ a weapons of mass destruction cover up…just not one dealing with atomic bombs.

The first act of the Cold War wasn’t President Truman sending arms to stop a Communist takeover of Greece. It was his administration’s cover up of the Japanese biological weapons program. This, just by itself, is a good reason not to trust the American government on the subject of weapons of mass destruction. If they did it once, they will do it again…and have, as Patrick G. Eddington documented.

Adding to Illinois’ Debacle

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This billboard is in my River North neighborhood in Chicago. It is an advertisement for a mall and entertainment location in Rosemont, a small city near O’Hare airport.

Rosemont was profiled by the Chicago Tribune in this excellent article. A single family has run Rosemont for generations, and they benefit from a levy on taxi rides from O’Hare and spend this money on no-bid contracts for friends, family and politicians as well as large entertainment complexes underwritten by large amounts of debt.

The suburb is digging itself deeper into debt to subsidize a new bar district, professional softball stadium and outlet mall. With $370 million in taxpayer-backed loans outstanding, Rosemont has one of the top debt loads in the Chicago region.

Another Chicago suburb, Bridgeview, hosts a stadium for the Chicago Fire, a major-league soccer team. Their debacle is chronicled here, in a typically great Bloomberg article.

The mayor of Bridgeview, Illinois, said building a taxpayer-financed arena for the billionaire owner of Major League Soccer’s Chicago Fire would bring hotels and restaurants to his suburb. Instead, the town has more than doubled property taxes and may raise them again to pay more than $200 million in stadium debt.

One of the big problems in Illinois is that we have so many various overlapping public bodies, many with the ability to issue debt and all of whom have expensive board members, employees, and often public contracts doled out to associated cronies. This article, from the “Illinois Policy” web site, describes the myriad overlapping public entities in the State of Illinois and how we dwarf ALL states and especially neighboring (and much better managed) states like Indiana.

Illinoisans suffer from the second-highest property tax rates in the nation.

Their state is the third most corrupt in the nation.

And driving this expensive and corrupt reality on the local level is the fact that Illinois has more units of local government than any other state in the nation. With 6,963 units of local government, Illinois beats its nearest competitor by more than 1,800.

When Illinois finally hits the wall, and we won’t be able to issue new debt (and thus an immediate fiscal crisis will occur), we will have to have a reckoning with all of these various entities, each of whom has their own debt problems and the ability to create NEW problems by issuing MORE debt. On one hand, the market will constrain their ability to sell debt by the fact that these insolvent entities survive through the “implied” promise that they will be bailed out by some higher power, whether that is a county, state, or Federal government.

The act of unwinding all of the problems of the inter-related corrupt and insolvent entities will be a herculean task, made even more difficult by the fact that there will be little incentive for the politicians to solve the crisis if the end result is that they won’t have these same public entities for no-bid contracts, jobs for themselves, and their campaign workers and donors once the clean-up is complete.
The only thing for certain is that the lawyers in the state will feast at the trough of lawsuits from all parties. They just need to make sure that they find a way to get paid themselves on a timely basis…

Cross posted at LITGM

Incentives and Economics

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A few years ago I went to Norway and had a great time. In this post I described how expensive everything was in Norway due to their highly valued currency (tied to oil riches) combined with the relentless decline of the US dollar (tied to ZIRP and other dubious economic moves). In the simplest terms, a fast food meal or a beer in Norway cost over $20 USD which is complete madness.

Business Insider discussed the Scandinavian economic experiment, where high taxes are applied to goods and services in order to fund a vast social safety net. From the article:

In Norway, a burger and fries at a fast food joint will set you back $23. A six-pack of warm grocery-store beer is nearly $30.
These hefty price tags are due, in part, to high wages for low-skilled service jobs. But high taxes play a role too.
Most products have a 25 percent value-added tax, which means that $5.50 of the cost of that burger goes to fund Norway’s generous social programs.
As a visitor, you get little for the added price. But, as a resident, your daily spending helps to fund an expansive package of benefits, including health care, child care, high-quality education, pensions, and unemployment insurance.

Some are now proposing this high-cost method, with large taxes embedded in everyday prices, as a solution to the inequity in incomes and wealth that is discussed widely in politics and economics today.

From the perspective of someone who is highly interested in economics and tax policy, my two rules of thumb are:
1) that the tax policy raise the money that it intends to raise
2) that the tax policy not significantly distort economic activity

Any society that implements high taxes such as Norway needs a comprehensive surveillance model in order to collect these taxes. It is difficult to avoid taxes that are broadly assessed on fast food, for instance, because each corporate location will set up cash registers and controls to remit these taxes onto the state. The same types of processes can be installed in liquor stores, formal bars and nightclubs, grocery stores, and restaurants.

In a less-homogeneous society such as the USA, we already have major problems with tax evasion on cigarettes and likely liquor, and these are in responses to our sales taxes. The problems would be compounded if we placed value added taxes on all goods at a higher level and on services such as restaurants, hair care, etc… Smuggling would become rampant and informal or barter methodologies would increase in size and scope. These sorts of costs would have to be applied across the USA or some areas would become uncompetitive and see an out-migration of economic activity, starting with incremental additions (no one has opened a new manufacturing plant in Illinois in years, for instance) and eventually leading to the lock, stock and barrel out migration of existing industries (such as the exodus of car manufacturing out of the Midwest and California to the American South).

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