Economist Dennis Ventry of the University of California at Davis said on NPR's All Things Considered today that tax deductions for mortgage interest and property taxes are bad for the economy.
Why? Because homebuyers simply price the expected deduction into their calculation of how much they can afford to pay for a house. This, in turn, artificially inflates the price of homes. Mortgage lenders and real estate brokers benefit but not, according to Ventry, the economy as a whole. And the inflationary effect of the deductions may have also fueled the housing bubble, while suppressed tax revenues helped drive up the Federal budget deficit.
Ventry also pointed out that the deductions for mortgage interest and property taxes are a classic example of an upside-down (i.e., regressive) subsidy, since, contrary to popular understanding, groups at the highest income levels receive many times more financial benefit due to the ability to deduct interest on huge mortgages and high property taxes on very expensive homes.
He also said that the only economist he could imagine taking issue with this argument would be one who works for the National Association of Realtors.
This is a compelling case and, to me, is an interesting inversion on a tax-related concept that I have also argued about in this blog: that popular debate centered on complaints about taxation is basically an irrelevant political straw man aimed at winning votes for conservatives from rank and file wage-earners. In my view, the amount of taxes paid by a wage-earner are similarly “capitalized” into the market price of labor.
Everyday wage-earners would not, as conservatives are fond of arguing, “keep more of what they make” if taxes were cut. Over the long run, tax cuts would simply reduce the real wage levels that workers could command. So they wouldn't "keep more"--they'd simply "make less." Think this isn't true? By all means, offer a cogent argument that persuades me otherwise.
In other words, if your taxes are cut, your employers in the long run won’t let you realize the windfall: they will simply pay you less, because they know your taxes are lower. So you might as well at least get some decent government services out of a bargain that's already a pretty raw deal for the average wage-earner.
On the other hand, cuts on income and capital gains taxes are also “upside down,” regressive subsidies, since they offer a tremendously higher financial benefit to those at upper income levels who earn not only higher wages but also earn much than the average worker from non-wage sources, such as interest income and capital gains.
Upside-down tax policy is by and large responsible for the enormous increase in wealth concentration among a small percentage of the overall U.S. population that has taken place since the 1980s. Again, I'd love to see an reasoned argument that could convince me otherwise. Bring it on.
Sphere: Related Content
Sunday, November 22, 2009
Ventry of UC Davis on NPR: Tax Deductions on Mortgage Interest, Property Taxes "Bad for the Economy"
Sunday, September 6, 2009
“Naked Lunch” Economics: Our Everyday Micro-Vignettes of Money, Morality, and Evil
I once knew an entrepreneur who insisted that, in a free enterprise system, a for-profit entity should have no heart. In this person’s view, every business issue should be described, evaluated, and decided upon solely in black-and-white, financial, profit-or-loss terms.
I am 100 percent convinced that this person sincerely believed that, because it showed. This mindset was reflected in this person’s relationship to every aspect of business--products, employees, customers, vendors, competitors, and so on. And although the final outcome remains to be seen, I believe this mindset will have a profound impact in shaping the ultimate destiny, for better or worse, of the enterprises in question.
It would almost be stating the obvious to say that there is plenty of evidence in our society that this kind of mindset is not at all uncommon. And although I am by no means an uncritical proponent of the new-agey economic ideas of David Korten, I believe that this mindset is perhaps the most compelling reason why Korten’s concept of “The Evil Corporation” is something that we cannot entirely dismiss and must to some extent reckon with.
Evil is not a very popular word in an age of political correctness and relativism, but the examples, small and large, that each day show us the reality of evil are legion, if we only care to look just below the surface. And one of the deepest mistakes we can make as human beings is to try to hide from the moral, good-and-evil dimensions of money and how we use it to mediate our relationships with one another.
Like a Faustus selling his soul for 20 years of unfettered pleasure, we can hide for a time from the reality that there is a moral dimension to money. But sooner or later, one way or another, the party will end, and the thing from which we have been hiding will come back to haunt us. And when it does, the intensity with which that thing tries to reach out and grab us by the throat, or perhaps some other part of the anatomy, may be proportional to the extent to which we have been hiding from it.
I have felt for some time that the evils that each of us, on an individual basis, really need to worry about are not the glaring atrocities of history, but the deceptively small moral decisions that each of us deal with every day. What did you do with money today? Did you make some sort of compromise at work that made you feel just a teensy weensy bit uncomfortable inside? Did you buy something, large or small, that you don’t want your spouse to know about?
Like any of the tools and resources that we homo sapiens create to help us manage, navigate, and negotiate our physical and sociocultural environments, money is in itself neutral. Like the knowledge of how to split the atom or to link up computers in a vast, global network, it creates the capacity for good, both great and small, every bit as much as it does for evil, great and small.
If you want to get a good learning experience about the potential for money to be used for good or ill in our relationships to one another, try going through an estate settlement. There are few experiences in this life that more effectively bring to the surface, for all to see, those aspects of our personalities that we normally try to keep safely closeted away, in the dark. There are few experiences that reveal more about our strengths, weaknesses, hopes, fears, goals, dreams, anger, anxieties, hangups, unresolved early conflicts, petty resentments, seething hatreds… and so on. There are few occasions in life that create a more intense opportunity to evaluate, at an existential level, just what it is that we really are.
It all makes me think of the concept of the “Naked Lunch” from the late novelist William S. Burroughs. Naked Lunch moments are those occasions in life that, suddenly and unexpectedly, yet undeniably, confront us with the sheer, barefaced reality of some abomination that has, all along, been staring at us, in plain sight, from the end of our fork, even in the midst of our previously half-conscious motion to raise it to our lips. Sphere: Related Content
I am 100 percent convinced that this person sincerely believed that, because it showed. This mindset was reflected in this person’s relationship to every aspect of business--products, employees, customers, vendors, competitors, and so on. And although the final outcome remains to be seen, I believe this mindset will have a profound impact in shaping the ultimate destiny, for better or worse, of the enterprises in question.
It would almost be stating the obvious to say that there is plenty of evidence in our society that this kind of mindset is not at all uncommon. And although I am by no means an uncritical proponent of the new-agey economic ideas of David Korten, I believe that this mindset is perhaps the most compelling reason why Korten’s concept of “The Evil Corporation” is something that we cannot entirely dismiss and must to some extent reckon with.
Evil is not a very popular word in an age of political correctness and relativism, but the examples, small and large, that each day show us the reality of evil are legion, if we only care to look just below the surface. And one of the deepest mistakes we can make as human beings is to try to hide from the moral, good-and-evil dimensions of money and how we use it to mediate our relationships with one another.
Like a Faustus selling his soul for 20 years of unfettered pleasure, we can hide for a time from the reality that there is a moral dimension to money. But sooner or later, one way or another, the party will end, and the thing from which we have been hiding will come back to haunt us. And when it does, the intensity with which that thing tries to reach out and grab us by the throat, or perhaps some other part of the anatomy, may be proportional to the extent to which we have been hiding from it.
I have felt for some time that the evils that each of us, on an individual basis, really need to worry about are not the glaring atrocities of history, but the deceptively small moral decisions that each of us deal with every day. What did you do with money today? Did you make some sort of compromise at work that made you feel just a teensy weensy bit uncomfortable inside? Did you buy something, large or small, that you don’t want your spouse to know about?
Like any of the tools and resources that we homo sapiens create to help us manage, navigate, and negotiate our physical and sociocultural environments, money is in itself neutral. Like the knowledge of how to split the atom or to link up computers in a vast, global network, it creates the capacity for good, both great and small, every bit as much as it does for evil, great and small.
If you want to get a good learning experience about the potential for money to be used for good or ill in our relationships to one another, try going through an estate settlement. There are few experiences in this life that more effectively bring to the surface, for all to see, those aspects of our personalities that we normally try to keep safely closeted away, in the dark. There are few experiences that reveal more about our strengths, weaknesses, hopes, fears, goals, dreams, anger, anxieties, hangups, unresolved early conflicts, petty resentments, seething hatreds… and so on. There are few occasions in life that create a more intense opportunity to evaluate, at an existential level, just what it is that we really are.
It all makes me think of the concept of the “Naked Lunch” from the late novelist William S. Burroughs. Naked Lunch moments are those occasions in life that, suddenly and unexpectedly, yet undeniably, confront us with the sheer, barefaced reality of some abomination that has, all along, been staring at us, in plain sight, from the end of our fork, even in the midst of our previously half-conscious motion to raise it to our lips. Sphere: Related Content
Friday, August 28, 2009
The Recovery of One
Referencing my comments in an earlier post about the period of mixed signals we now seem to be entering, one potential concern is that, in this age of the 24-hour news cycle, we may be over-reporting on the indicators.
Just as over-monitoring a stock portfolio can pose the danger of losing out on long-term returns by overtrading based on inevitable short-term fluctuations, excessive real-time news coverage of every tiny bit of released economic data could inflict further damage on public sentiment and, in turn, the economy.
For example, if we are in fact bottoming out or starting to move toward recovery, over reporting negative short-term indicators could needlessly prolong collective pessimism and keep consumer expenditures depressed. It could also drive businesses to maintain a defensive posture on their cashflow longer than they need to.
But the coverage is what it is--for reasons that are largely economic. It’s simple supply and demand. Editorial decisions to supply economic news as the main topical thrust are simply responses to what the audience is demanding. And currently, the public remains very hungry for economic news.
People are consuming economic news on a scale unprecedented in recent history. It‘s basic psychology. People seek out economic news because the feeling of being informed gives them a sense of having some level of control over the situation.
The danger, however, is the element of illusion in this sense of control. Without the big-picture context that a seasoned professional in a field like economics or finance might have, a general news consumer absorbing short-term stories may have the illusion of knowing far more than he or she actually knows. This, too, can drive ill-advised decisions.
Yet the 24-hour cycle self-perpetuates. Especially after the incessant bombardment with bad news, week after week, in the early part of the year, the public is so starved for any little morsel of good news that they’re ready to latch onto the smallest little bite. And when they bite, their raised hopes can then be disproportionately dashed by the next nip of bad news.
This is particularly true among those who are out of work, underemployed, facing strained family budgets or trying to keep struggling businesses afloat. And the danger is that the cycle of raised and dashed hopes could perpetuate the downward curve, or keep us treading water at the bottom for a longer time.
The unemployed may become more frustrated every time they hear bad news on jobless claims, and grow less inclined to pound the pavement. Business owners may hesitate to take the risks necessary to drive renewed growth, especially the risk of taking on new staff. This could prolong the crisis of the unemployed.
It’s a cycle that can be broken only by decisive action. And action, ultimately, must start at the individual level. Gandhi once said that, in terms of the cosmos, “Almost everything you do will seem insignificant, but it is important that you do it.” Echoing this idea in a comment on one of my blog posts on healthcare reform, one of my Facebook friends, Cheryl Batoon, emphasized the importance of “the power of ONE” in effecting political change and countering the destructive impact of misinformed negative rhetoric.
The power of one means you, no matter who you are, or what your current situation is. There is a wry sort of joke that has been much repeated during this crisis: if your neighbor is unemployed, it’s a recession. But if you are unemployed, it’s a depression. And for the out-of-work individual or the financially struggling business owner, the resolution ultimately depends on individual action.
Action has to start somewhere. Spending one dollar triggers a ripple of subsequent transactions that raise the impact of that one dollar by many multiples. And the actions of one individual create a similar multiplier effect within society.
From chaos theory we learn that a butterfly fluttering its wings somewhere along the coast of Africa can alter the course of a hurricane. Similarly, the buck-and-change you spend for a cup of Joe from the 7-Eleven could alter the course of the recovery.
So take some action. Take some risks. Spend an extra buck at the store today. If you’re in business and finally finding a bit more room in your operating margin or credit line, hire one more person, even if it’s for an unglamorous, low-paying position, to take one more person off the unemployment rolls and get them spending again. If you’re out of work, hit the Send button on just one more online job application today. It might be the one that ends your depression of one and your still-working next-door neighbor’s recession of one. Sphere: Related Content
Just as over-monitoring a stock portfolio can pose the danger of losing out on long-term returns by overtrading based on inevitable short-term fluctuations, excessive real-time news coverage of every tiny bit of released economic data could inflict further damage on public sentiment and, in turn, the economy.
For example, if we are in fact bottoming out or starting to move toward recovery, over reporting negative short-term indicators could needlessly prolong collective pessimism and keep consumer expenditures depressed. It could also drive businesses to maintain a defensive posture on their cashflow longer than they need to.
But the coverage is what it is--for reasons that are largely economic. It’s simple supply and demand. Editorial decisions to supply economic news as the main topical thrust are simply responses to what the audience is demanding. And currently, the public remains very hungry for economic news.
People are consuming economic news on a scale unprecedented in recent history. It‘s basic psychology. People seek out economic news because the feeling of being informed gives them a sense of having some level of control over the situation.
The danger, however, is the element of illusion in this sense of control. Without the big-picture context that a seasoned professional in a field like economics or finance might have, a general news consumer absorbing short-term stories may have the illusion of knowing far more than he or she actually knows. This, too, can drive ill-advised decisions.
Yet the 24-hour cycle self-perpetuates. Especially after the incessant bombardment with bad news, week after week, in the early part of the year, the public is so starved for any little morsel of good news that they’re ready to latch onto the smallest little bite. And when they bite, their raised hopes can then be disproportionately dashed by the next nip of bad news.
This is particularly true among those who are out of work, underemployed, facing strained family budgets or trying to keep struggling businesses afloat. And the danger is that the cycle of raised and dashed hopes could perpetuate the downward curve, or keep us treading water at the bottom for a longer time.
The unemployed may become more frustrated every time they hear bad news on jobless claims, and grow less inclined to pound the pavement. Business owners may hesitate to take the risks necessary to drive renewed growth, especially the risk of taking on new staff. This could prolong the crisis of the unemployed.
It’s a cycle that can be broken only by decisive action. And action, ultimately, must start at the individual level. Gandhi once said that, in terms of the cosmos, “Almost everything you do will seem insignificant, but it is important that you do it.” Echoing this idea in a comment on one of my blog posts on healthcare reform, one of my Facebook friends, Cheryl Batoon, emphasized the importance of “the power of ONE” in effecting political change and countering the destructive impact of misinformed negative rhetoric.
The power of one means you, no matter who you are, or what your current situation is. There is a wry sort of joke that has been much repeated during this crisis: if your neighbor is unemployed, it’s a recession. But if you are unemployed, it’s a depression. And for the out-of-work individual or the financially struggling business owner, the resolution ultimately depends on individual action.
Action has to start somewhere. Spending one dollar triggers a ripple of subsequent transactions that raise the impact of that one dollar by many multiples. And the actions of one individual create a similar multiplier effect within society.
From chaos theory we learn that a butterfly fluttering its wings somewhere along the coast of Africa can alter the course of a hurricane. Similarly, the buck-and-change you spend for a cup of Joe from the 7-Eleven could alter the course of the recovery.
So take some action. Take some risks. Spend an extra buck at the store today. If you’re in business and finally finding a bit more room in your operating margin or credit line, hire one more person, even if it’s for an unglamorous, low-paying position, to take one more person off the unemployment rolls and get them spending again. If you’re out of work, hit the Send button on just one more online job application today. It might be the one that ends your depression of one and your still-working next-door neighbor’s recession of one. Sphere: Related Content
Wednesday, August 26, 2009
The Cycle of the Storm
For the past several weeks, and often within the course of a given week, the tone of news about the economy has been like a roller coaster. One week housing starts or corporate earnings are unexpectedly up. The public likes it, and so does Wall Street.
Yet another week a surprising uptick in jobless claims hits. The public turns pessimistic again and the Dow takes a dip. Then Chairman Bernanke says there are strong indications that the economy has bottomed.
So we’ve entered a period of mixed signals and ambiguous indicators. Think back to the first quarter of this year, and it shouldn’t be hard to see the difference. After a brief period of collective optimism as the new administration came took over, the stark realities of an incredible tsunami of layoffs set in. The stories seemed increasingly grim as we stumbled our way through a tough and frightening first quarter.
In keeping with the season, the green chutes stories started showing up in the spring, and early in the summer some of the bolder pundits were among the earliest to pronounce the recession dead.
Against the backdrop of the beginning of 2009, the current mixed signals seem, in contrast, to be a good sign. Recovery doesn’t happen all at once, so it stands to reason that at the beginning of a recovery the signals would be mixed.
Just as there was a succession to the tumbling of the various sectors--starting, of course, with the banks and the big investment houses--there will be a sequence to the recovery. The crisis began with the banks, and the recovery seems to be starting with the banks. There’s really an elegant symmetry to the whole thing. A line from Yeats, “A terrible beauty is born,” comes to mind.
Remember, the signals were also mixed at the beginning of the downturn. Through 2007 and the first three quarters of 2008, the picture was cloudy and confusing. Unemployment began to rise well before the Bear Sterns and Lehman collapses. There were plenty of signs early on that something was amiss with the economy, but most people didn’t really have a clue what was coming.
There were recurring stories in the news about the subprime mortgage crisis, but people were too distracted by the noise of the energy-price crisis. But the true crisis, already well into its formation behind the scenes, wasn’t about energy at all.
Most people who were starting to feel the pinch of a nascent downturn thought it was all about the gas, until the collapse of the big financial firms in the fall of 2008 brought on a storm of a magnitude that no one was expecting. It was an economic equivalent of getting caught off-guard by hurricane Katrina. Few knew how serious the economic storm would actually be, so most of us were unprepared.
Indeed, one could say that the life cycle of a recession is like unto the life cycle of a hurricane. There is a period of gathering clouds, when no one is sure what course the storm will take and how much strength it will gather at sea before making landfall. This was 2007 and most of 2008. Especially given the behavior of the stock market, it would have been just as easy for the casual observer, entering 2008, to conclude that another boom could be in the making rather than a astronomical bust.
But then the storm struck in all of its wrathful, furious glory, leaving an immediate trail of astonishing devastation. This was the fall of 2008.
Then we went “into the eye,” a period of deceptive calm that gives few warnings of the fury that is still to come. This was the period from around just before the election through shortly after President Obama’s inauguration.
Once we were out of the eye, a second wave of fury ensued with the staggering tumult of job cuts as companies were forced to deal with decapitated credit lines, dreadful year-end results, and abysmal first-quarter forecasts.
In the spring the clouds showed some signs of breaking up and the storm signs of weakening. And through the summer bursts of sunlight have begun to show through gaps in the cloud cover. Is it time to send a bird out of the ark to see if it brings back a sprig of leaves?
Let’s just hope, to follow the metaphor through, that this is the end of the current hurricane season, and that there isn’t a Rita building strength in the tropics to unleash a second wave of fury after the economic Katrina. Sphere: Related Content
Yet another week a surprising uptick in jobless claims hits. The public turns pessimistic again and the Dow takes a dip. Then Chairman Bernanke says there are strong indications that the economy has bottomed.
So we’ve entered a period of mixed signals and ambiguous indicators. Think back to the first quarter of this year, and it shouldn’t be hard to see the difference. After a brief period of collective optimism as the new administration came took over, the stark realities of an incredible tsunami of layoffs set in. The stories seemed increasingly grim as we stumbled our way through a tough and frightening first quarter.
In keeping with the season, the green chutes stories started showing up in the spring, and early in the summer some of the bolder pundits were among the earliest to pronounce the recession dead.
Against the backdrop of the beginning of 2009, the current mixed signals seem, in contrast, to be a good sign. Recovery doesn’t happen all at once, so it stands to reason that at the beginning of a recovery the signals would be mixed.
Just as there was a succession to the tumbling of the various sectors--starting, of course, with the banks and the big investment houses--there will be a sequence to the recovery. The crisis began with the banks, and the recovery seems to be starting with the banks. There’s really an elegant symmetry to the whole thing. A line from Yeats, “A terrible beauty is born,” comes to mind.
Remember, the signals were also mixed at the beginning of the downturn. Through 2007 and the first three quarters of 2008, the picture was cloudy and confusing. Unemployment began to rise well before the Bear Sterns and Lehman collapses. There were plenty of signs early on that something was amiss with the economy, but most people didn’t really have a clue what was coming.
There were recurring stories in the news about the subprime mortgage crisis, but people were too distracted by the noise of the energy-price crisis. But the true crisis, already well into its formation behind the scenes, wasn’t about energy at all.
Most people who were starting to feel the pinch of a nascent downturn thought it was all about the gas, until the collapse of the big financial firms in the fall of 2008 brought on a storm of a magnitude that no one was expecting. It was an economic equivalent of getting caught off-guard by hurricane Katrina. Few knew how serious the economic storm would actually be, so most of us were unprepared.
Indeed, one could say that the life cycle of a recession is like unto the life cycle of a hurricane. There is a period of gathering clouds, when no one is sure what course the storm will take and how much strength it will gather at sea before making landfall. This was 2007 and most of 2008. Especially given the behavior of the stock market, it would have been just as easy for the casual observer, entering 2008, to conclude that another boom could be in the making rather than a astronomical bust.
But then the storm struck in all of its wrathful, furious glory, leaving an immediate trail of astonishing devastation. This was the fall of 2008.
Then we went “into the eye,” a period of deceptive calm that gives few warnings of the fury that is still to come. This was the period from around just before the election through shortly after President Obama’s inauguration.
Once we were out of the eye, a second wave of fury ensued with the staggering tumult of job cuts as companies were forced to deal with decapitated credit lines, dreadful year-end results, and abysmal first-quarter forecasts.
In the spring the clouds showed some signs of breaking up and the storm signs of weakening. And through the summer bursts of sunlight have begun to show through gaps in the cloud cover. Is it time to send a bird out of the ark to see if it brings back a sprig of leaves?
Let’s just hope, to follow the metaphor through, that this is the end of the current hurricane season, and that there isn’t a Rita building strength in the tropics to unleash a second wave of fury after the economic Katrina. Sphere: Related Content
Monday, August 24, 2009
More on the Origin of “The Dismal Science”
In an earlier post I promised to elaborate on my research into the origin of the nickname “The Dismal Science” for economics. For the sake of keeping that promise, and for the benefit of those who may not already know, I’ll share my finding that the term appears to originate with the 19th-century British “man of letters” Thomas Carlyle.
However, as some of you also may know already, there is much more than meets the eye behind that deceptively simple citation of historical fact. My exploration of the context in which Carlyle appears to have coined the phrase has taken on such a life of its own that it now appears that the best medium for sharing it will actually be a short e-book rather than a blog post.
Hence, I will take this opportunity to announce the forthcoming e-book Thomas Carlyle, Racism, and the Dismal Science: Clues to Hidden Truths About the Modern Conservative Movement?
I expect to release the e-book sometime in September, and will likely make it freely available to registered subscribers to Undismalization. To reserve your copy, please register per the instructions here.
The release of Thomas Carlyle, Racism, and the Dismal Science may also end up being the debut of the Undismal Press imprint. Stay tuned for further details as the project nears completion. Sphere: Related Content
However, as some of you also may know already, there is much more than meets the eye behind that deceptively simple citation of historical fact. My exploration of the context in which Carlyle appears to have coined the phrase has taken on such a life of its own that it now appears that the best medium for sharing it will actually be a short e-book rather than a blog post.
Hence, I will take this opportunity to announce the forthcoming e-book Thomas Carlyle, Racism, and the Dismal Science: Clues to Hidden Truths About the Modern Conservative Movement?
I expect to release the e-book sometime in September, and will likely make it freely available to registered subscribers to Undismalization. To reserve your copy, please register per the instructions here.
The release of Thomas Carlyle, Racism, and the Dismal Science may also end up being the debut of the Undismal Press imprint. Stay tuned for further details as the project nears completion. Sphere: Related Content
Wednesday, August 19, 2009
On the Profoundly Ironic Illogic of Screaming “Keep Your Government Hands Off My Healthcare!”
When a system has been in place throughout your entire nation since well before you were born, it’s easy to make the conclusion--unwarranted, given a lack of exploration of the evidence--that it's normal and that it makes sense. So it is, it seems, with the opinion of many Americans about our employer-based healthcare system, which is anything but normal among the major economies of the Western world.
It is a natural human phenomenon, one of the faults in our cognitive wiring. Thinking that “the way it’s always been” is normal and sensible is no different than a child who is just beginning to become aware of foreign languages refer to his or her own native tongue as “normal talk.”
To those who, at town hall meetings, are screaming “KEEP YOUR GOVERNMENT HANDS OFF MY HEALTHCARE,” or brandishing signs with similar messages of indignant protest, I would ask you to take a close, critical look at one very fundamental but largely ignored question.
To indulge, for the sake of argument, in some phraseology that might among some readers get my non-party-affiliated, more-or-less centrist self branded as a lot more Lefty than I in fact really am, I would like to ask: why in the WORLD, out of all the scenarios one could possibly envision, would you want your EMPLOYER’S bottom-line-driven hands on your healthcare?
If you are concerned about a government healthcare plan infringing upon your privacy and your constitutional rights to life, liberty, and the pursuit of happiness, I would suggest taking a closer look at whether you might be much more vulnerable to abuses in those areas from your employer.
The right to privacy is all but non-existent in a workplace setting. Once you cross the threshold of your office building, you waive, by implied contract, many of the rights and protections you enjoy when you are out in public. Your employer can archive your e-mails and read them if they wish. Your employer can monitor your activities with hidden cameras, without your knowledge. Your telephone calls "may be recorded for training and quality assurance purposes." And your employer, of course, is involved much more intimately in your daily life than the government could ever be, unless, perhaps, you work for the government.
The potential for abuse may be greatest in small-to-midsize companies, in which the administrative infrastructure for ensuring the protection of employee rights to privacy and non-discrimination may be non-existent, as may the checks and balances to prevent personal and private information from getting into the wrong hands and being misused.
Here is just one of many scenarios. Imagine you work for a small firm of about 25 people, in which, as is often the case in small offices, there is virtually no privacy, and everyone pretty much knows everyone else’s business.
Let's suppose, further, that you or a dependent covered under your plan have had a serious, chronic illness that will require very expensive treatment for some time to come. And everyone in the office knows it, from the owner of the company right down to the guy who comes in to empty the trash at night.
And suppose, for the two years running during which this illness has been an issue, your company's health insurance provider has hit your company with a hefty increase in premiums. In a small office, it wouldn't be hard for the owner, or the operations or HR manager, or whoever else might be responsible for benefits, to put two and two together and figure out just what might be playing an important role in the increasing costs.
And finally, imagine that, after years of glowing performance evaluations, the boss suddenly becomes concerned about some previously undiscussed flaws in your performance, and dismisses you for cause -- or, even more stealthily, promotes you to be head of a new department and then, not long afterward, decides that the new department no longer fits the corporate strategy, eliminates the department and, by extension, the need for your job.
Illegal? Yes. But also difficult, if not virtually impossible, to prove. And even if you could prove it, doing something about it would be very costly--both monetarily and, quite possibly, professionally. Most employees, particularly in small communities, or in smaller industries in which managers in competing companies tend to know one another, would likely rather move on than risk the possible stigma that can follow someone who has sued a prior employer.
Do you think this scenario is unlikely? I don't. I'm sure it plays out in various permutations and combinations all the time, all over the U.S., with its wonderful, employer-based healthcare system. The best healthcare system in the world, say those who are fighting the current reform effort and screaming at the town hall meetings.
Unfortunately, many of us seem to be stuck in a cognitive loop when it comes to seeing the flaws in the most basic attribute of our current system, and to envisioning alternatives. Sphere: Related Content
It is a natural human phenomenon, one of the faults in our cognitive wiring. Thinking that “the way it’s always been” is normal and sensible is no different than a child who is just beginning to become aware of foreign languages refer to his or her own native tongue as “normal talk.”
To those who, at town hall meetings, are screaming “KEEP YOUR GOVERNMENT HANDS OFF MY HEALTHCARE,” or brandishing signs with similar messages of indignant protest, I would ask you to take a close, critical look at one very fundamental but largely ignored question.
To indulge, for the sake of argument, in some phraseology that might among some readers get my non-party-affiliated, more-or-less centrist self branded as a lot more Lefty than I in fact really am, I would like to ask: why in the WORLD, out of all the scenarios one could possibly envision, would you want your EMPLOYER’S bottom-line-driven hands on your healthcare?
If you are concerned about a government healthcare plan infringing upon your privacy and your constitutional rights to life, liberty, and the pursuit of happiness, I would suggest taking a closer look at whether you might be much more vulnerable to abuses in those areas from your employer.
The right to privacy is all but non-existent in a workplace setting. Once you cross the threshold of your office building, you waive, by implied contract, many of the rights and protections you enjoy when you are out in public. Your employer can archive your e-mails and read them if they wish. Your employer can monitor your activities with hidden cameras, without your knowledge. Your telephone calls "may be recorded for training and quality assurance purposes." And your employer, of course, is involved much more intimately in your daily life than the government could ever be, unless, perhaps, you work for the government.
The potential for abuse may be greatest in small-to-midsize companies, in which the administrative infrastructure for ensuring the protection of employee rights to privacy and non-discrimination may be non-existent, as may the checks and balances to prevent personal and private information from getting into the wrong hands and being misused.
Here is just one of many scenarios. Imagine you work for a small firm of about 25 people, in which, as is often the case in small offices, there is virtually no privacy, and everyone pretty much knows everyone else’s business.
Let's suppose, further, that you or a dependent covered under your plan have had a serious, chronic illness that will require very expensive treatment for some time to come. And everyone in the office knows it, from the owner of the company right down to the guy who comes in to empty the trash at night.
And suppose, for the two years running during which this illness has been an issue, your company's health insurance provider has hit your company with a hefty increase in premiums. In a small office, it wouldn't be hard for the owner, or the operations or HR manager, or whoever else might be responsible for benefits, to put two and two together and figure out just what might be playing an important role in the increasing costs.
And finally, imagine that, after years of glowing performance evaluations, the boss suddenly becomes concerned about some previously undiscussed flaws in your performance, and dismisses you for cause -- or, even more stealthily, promotes you to be head of a new department and then, not long afterward, decides that the new department no longer fits the corporate strategy, eliminates the department and, by extension, the need for your job.
Illegal? Yes. But also difficult, if not virtually impossible, to prove. And even if you could prove it, doing something about it would be very costly--both monetarily and, quite possibly, professionally. Most employees, particularly in small communities, or in smaller industries in which managers in competing companies tend to know one another, would likely rather move on than risk the possible stigma that can follow someone who has sued a prior employer.
Do you think this scenario is unlikely? I don't. I'm sure it plays out in various permutations and combinations all the time, all over the U.S., with its wonderful, employer-based healthcare system. The best healthcare system in the world, say those who are fighting the current reform effort and screaming at the town hall meetings.
Unfortunately, many of us seem to be stuck in a cognitive loop when it comes to seeing the flaws in the most basic attribute of our current system, and to envisioning alternatives. Sphere: Related Content
Monday, August 17, 2009
So Now the Public Option Seems to be Off the Table -- And That's a Crying Shame
President Obama, in the spirit of his reputation as The Great Compromiser--which I do in fact applaud as one of his stronger political attributes that enables him, like Bill Clinton, to at least get SOME things accomplished in the face of stiff opposition from within his party and without--has now backed down entirely on the much and very unfairly maligned "Public Option" for healthcare reform.
The fringe contingents of tea-baggers and town-hall-meeting disrupters, spurred on by their deceitful talk-radio gurus, like mustacheoed villains in an old melodrama, appear to be winning the battle.
I think that this is a crying shame, for the following key reasons:
The fringe contingents of tea-baggers and town-hall-meeting disrupters, spurred on by their deceitful talk-radio gurus, like mustacheoed villains in an old melodrama, appear to be winning the battle.
I think that this is a crying shame, for the following key reasons:
- Proposed as the "alternative" to a public option is a seemingly vaguely defined notion of "nonprofit cooperatives," a model that some commentators have argued is virtually untested and has a shaky track record in areas of the U.S. where it has been tested.
- I have a sinking feeling that, without a public option, whatever plan ultimately passes will result only in a very limited change to the status quo. The non-profit cooperatives may not impose sufficient checks-and-balances on the for-profit insurers, with all their clout and public relations, marketing, and lobbying muscle.
- Non-profit organizations that DO become successful usually do so by acting a lot like for-profit organizations. I know that from the experience of having worked for a successful non-profit. And just look at Blue Cross/Blue Shield as a key example from the healthcare industry itself. So the differences between the private insurers and the non-profit "options" may end up being very superficial.
- As I have argued previously, I believe that the biggest flaw in our current system is also its most basic attribute: it is employer-based. Calling any new initiative a "reform" without substantively addressing this basic flaw is, in my opinion, highly suspect.
- The President's backing down on this issue in spite of a strong majority in both the House and Senate--and, for goodness sake, a filibuster-proof majority in the Senate--is a testament to just how powerful are the special interests who support the status quo. For example, as I have discussed in a previous post, there is evidence that the one senator who arguably has the most influence on the process may be vulnerable to heavy pressure from the healthcare industry.
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