The GOP's magical thinking

Karl Rove is the political operative running the largest funnel of anonymous money into the Republican party's battle for the presidency. On August 15, 2012, the once credible Wall Street Journal gave Rove a forum for the fiction he uses to reshape America:

“… While there would be no changes in Medicare for those 55 or older, starting in 10 years younger Americans … could either pick traditional Medicare or use … money the government spends on each Medicare enrollee to buy private insurance. The reasoning is based on a reliable truth: Competition will lower costs by using market forces to spur innovation and improvement.”

First, the statement is incoherent. Competition is the "market force." Rove is saying competition will lower costs by using competition to spur innovation… or market forces will lower costs by using market forces…" By using two words for the same force, Rove creates an illusion. The creation of a fictional entity to make belief plausible is characteristic of "magical thinking.”

Rove could have written more logically that "competition will lower costs, spur innovation and improvement," but that would have exposed the second magical element of his thought: the market forces he refers to do not actually exist in most areas of health care.

For there to be "market forces" there has to be a functioning "market." A market requires good information available to informed buyers who choose between multiple providers competing for their business. That is not how we make most health care decisions.

That's the GOP sleight of hand. The GOP doesn't support the fundamentals of efficient markets. The GOP doesn't advocate for good information. The GOP doesn't encourage multiple players in a market, especially if dominate companies make campaign contributions.

Instead, the GOP says "government is the enemy" even when government is protecting markets. The GOP calls rules that prevent oligopolies from ruining markets "antibusiness" when those rules are actually business positive. Bank deregulation harmed many businesses in America by turning mortgage markets into gambling casinos.

The delusions of Paul Ryan and Karl Rove that the Wizard of Competition will give us cheaper healthcare that is even better – Cheaper! Better! – is equally distructive. What they mean is that huge health care monopolies, some partly owned by Mitt Romeny's Bain Capital, will get even more of our health care dollars. That's not healthy for anyone.

Romney unhinged

Mitt Romney has become unhinged. Referring to a speech by Vice-President Joe Biden, Romney took words out of context and spewed anger and hate while accusing the presidents campaign of ... anger and hate.

Romney may have paid no taxes for years using off-shore bank accounts to hide his income. He is secretive, burning records and taking hard drives and misleading about his tenure in private industry. Romney is supported by polluters and gamblers and the big banks that nearly destroyed the economy. He wants to turn Social Security over to Goldman Sachs, Medicare over to the insurance industry.

Instead of answering questions about his background or ideas, he lurches into invective about a comment used by the vice president that came from Romney's own campaign.

Romney has done this before. When he was behind his Republican rivals in the primaries, he cranked up the ugly machine. And he won, backed by huge sums of money spreading vile deceit. And since it was successful before, he is going to do it again.

Romney, in his own words spoken by his own lips, has become a caricature of a politician. Avoiding the issues, he has embarked upon a campaign of hatred and fear and misinformation. He has no class.

A four-party system?

It's too confusing. Republicans want individual responsibility but control of what we do to who in the bedroom. Democrats want individual freedom but protection for everyone from the consequences of bad choices.

Maybe we can simplify by making it more complicated.

In fact, let's oversimplify and say there are two primary arenas, social policy and fiscal policy (having to do with government finance). Let's oversimplify again and say most people are either conservative or liberal in each arena.

Then we have Republicans who are socially conservative and fiscally conservative. We have Democrats who are socially liberal and fiscally liberal.

The problem is jamming all the rest of us into those ill-fitting shoes. What if someone is a social liberal and a fiscal conservative? There are a lot of us out here, uneasy that the future is going to be a lot harder than the present and could be a whole lot less fun.

But there is another group I think has been under-appreciated. The social conservative and fiscal liberal, people who feel powerless and humiliated.

Powerless because they know the right-wing is picking their pocket and lying to them, stacking the deck for the benefit of a few and allowing the powerful to destroy opportunity. While they can be distracted by falsehoods that immigrants and foreigners are to blame for the lack of jobs, they also believe in the value of their work.

They also know the left-wing holds them in contempt, does not respect their values nor their traditions. They are humiliated that their belief in flag and family is considered quaint when they can point to alternatives with bad outcomes.

They side with the right against their own self interest because, as Thomas Friedman said, humiliation is the most under-estimated force in politics.

Two parties cannot represent four constituencies. Which is one more reason America is currently a house divided. In the past, it has taken a national crisis to unite us. Unfortunately, that is probably the case today.

Matt Miller for President

Here is the platform:

A Third Party Stump Speech.

Eat your spinach. No whining.

Monopolists harm America

A number of politicians (mostly Republican) have come out in support of the AT&T / T-Mobile merger. But their arguments do not make sense. Primarily, they cite benefits to America of competition in wireless before the merger. These very benefits would decrease if the merger goes through, despite false promises by AT&T.

These politicians are not in favor of the "free market." They are advocating a consolidation that would be bad for the market, and bad for America, while benefiting a monopolist in an industry where freedom is vital for economic security.

America has had to act against monopolists and oligopolies in the past. It needs to be vigilant again, and do what it must to preserve competition in the market place. Like railroads and the oil companies two centuries ago and AT&T itself in the last century, a merger between AT&T and T-Mobile would result in less innovation, higher prices, and less freedom of information. This process is common when new technologies foster a consolidation of power.

In fact, we need more communication companies in America, not fewer. We need more competition, not less. Much of the innovation in America's communications industry came after AT&T was broken up last time.

AT&T and T-Mobile both run on the GSM technology, most common in much of the world. The other two major carriers, Sprint and Verizon, run via CDMA. By allowing only one major player on the GSM side, there will be no one to challenge AT&T if a technological innovation comes to GSM.

AT&T would be the sole buyer of GSM technology in the U.S., giving it monopolist power over cell phone makers and software providers, to the detriment of consumers.

It is extremely expensive to build out a new cell network, acquire customers and put in place a cell phone company, and nearly impossible to acquire radio spectrum on which cell phones communicate.

In economics speak, the "barriers to entry" into the market are extremely high, and would be more so if dominated by a company is as well-heeled and politically powerful as AT&T.

Communications and information flow are the life blood of our nation, and becoming more critical every day. Control should not be allowed to slide toward fewer and fewer companies, especially when vertical integration may allow them to control what we see, how we see it, what we can buy and how easy it might be to find it.

It is naive to think that AT&T in that position would not use its power to fill its coffers at the expense of anyone and everyone. It would be its duty, in fact. We expect companies to make the highest profit allowable under the law.

For these reasons, government must preserve the free market in any way it can, and right now, the best way to do so is to deny the AT&T and T-mobile merger. The alternative, over the long run, is some form of regulation, which would have fewer benefits and higher cost.

If T-Mobile is to be sold, it should go to another company -- Google or Apple come to mind, though there may be issues there. Berkshire-Hathaway, perhaps. But its independence should be preserved.

In a market as difficult to foster competition as mobile communications, a market as critical to our future, America can not afford to allow monopolists to gain control.

Insurance companies need competition

There have been several health care commentaries from the right with important ideas for the debate on health care. John Mackey of Whole Foods has been unfairly beat up for his ideas (read it here). There have been others.

But they often contain one important flaw. They seem to assume that if something goes wrong, it is the fault of the patient. He or she eats too much or smokes too much or drinks too much.

But not all health events are a matter of choice. Everything that happens to us is not the result of bad habits.

I appear to be healthy, I exercise, I am not overweight. I don't smoke and haven't had a drink in decades. I don't do soft drinks.

But I was refused health insurance because I have high cholesterol. Not heart disease, mind you, but high cholesterol, a condition that could cause heart disease. About the time I decided to address this issue with drugs, unsuccessful with diet, I had to change doctors because of a dispute between the insurance company and my doctor's company over how much money insurance would pay for my visits.

My new doctor ordered a battery of tests. Tests that insurance companies don't like to pay for, because they don't really affect treatment. If you have high cholesterol, the treatment is to take statins, it doesn't really matter why you have high cholesterol. They claim the doctors order the test to make more money.

But my doc wanted to know, because it might dictate how to attack my high cholesterol. It turns out I have a genetically-caused situation. I don't know how to describe it, other than remembering that I had something like three markers for the genetic issue, and if I had the fourth marker, chances are I would already be dead, or face dementia because of plaques in the brain, or worse.

The point is that I have a genetic condition, not modifiable by diet, that could affect my health. And for that reason, I was denied health insurance by private companies. I had to scramble to find a "public option" that would take me.

I am not alone. Many have conditions that allow the insurance industry to decide, after being paid many tens of thousands of dollars, as I paid them, that a patient isn't worth the risk. Heart disease. Broken bones. Family history of cancer. Diabetes. Go away.

The game is rigged in their favor. I know this as a citizen, and having watched them from a chair on the Oregon Board of Medical Examiners. The market mechanism does not work very well when talking about health care, nor insurance.

Our system is broken. We can get great care in America, and I know that, too. I have had exemplary doctors, and I am a demanding patient. But the "system of health care" is broken. There is too much paper work. Doctors face unnecessary lawsuits. Insurance codes are designed to deny payment and coverage, not make it better.

It's time for a change.

What is happening to the markets

The post below is not easy reading. But it captures what has really happened to our economy, without a lot of numbers.

Fisher's Debt-Deflation Theory

Essentially, for too many individuals and society as a whole, "capital has been betrayed into unproductive works."

"Had Fisher observed the Greenspan/Bernanke Fed in action, he might have updated his theory with a revision. At some point, capital betrayed into unproductive works has to either be repaid or written off. If either is inhibited by reflation or regulatory forbearance, then a cost is imposed on productive works, whether through inflation, higher interest, diversion of consumption, or taxation to socialise losses. Over time that cost ultimately hollows out the real productive economy leaving only bubble assets standing. Without a productive foundation, as reflation and forbearance reach their limits, those bubble assets must deflate." -- London Banker

We threw too much of our wealth away on things we didn't need. We borrowed to buy things we couldn't afford. When it came time to pay the bills, there wasn't any money.

In the Valley of Elah

“In the Valley of Elah” is not entertainment. It is not an action film, it is not a detective movie. It is an outstanding film about a father looking for his boy, who has gone missing after returning from the war in Iraq.

The acting is supberb. Tommy Lee Jones is understated as the father looking for his soldier son. We are so used to his smart dialogue in other films, here his face tells the tale. Charlize Theron is quite believable as the police detective aiding in that search, and Susan Sarandon owns every one of the few scenes she is in.

Early in the movie, as Jones sets out on his search, he comes upon a school employee of foreign origin who has run the U.S. flag up the pole upside down. Jones educates the man with a soliloquy that requires attention. Listen to his words, to his quiet passion, his love of country.

The movie grinds on in places. It heads full speed at a cliché or two, swerving only at the last minute, especially with Theron’s relationship with her fellow police officers. But the film never loses its believability, the bad guys are not always so bad, the good guys never that good.

We don't find out until halfway through the movie, during a casual conversation in a diner, just how significant the loss of the missing son might be. A lesser director would have played that card, that of the second son, much earlier in the film.

Emotionally, this movie is quite graphic. Not in the blood, guts and gore sense with which so many movies indulge themselves, in that ever-escalating game of overcoming the sensibilities of the audience. Not in the superficially manipulative way that directors of lesser talent whipsaw our emotions.

This movie is emotionally graphic because the emotions are so real, and so honest. Sarandon gives us a mother's loss that will be hard to forget, that should not be forgotten.

Some will see “In the Valley of Elah” as a political film. It actually celebrates values while taking a good look, and makes no apology. “Elah” shows the nobility of the soldier, both active and retired. Tommy Lee Jones, as Hank Deerfield, loves this country, he has sacrificed for this country.

“In the Valley of Elah” helps us understand that war matters. It matters to all of us, it matters to the boys and girls we send to fight in places like Iraq, where the enemy may be hiding behind a child playing in the street. What we ask our young fighters to do has an impact on them, and on us, our culture, our great nation.