How to Corrupt the Government Insurance Programs

Tony E Hansen

12 August 2012

With the addition of Paul Ryan to the GOP Presidential ticket, we now have a clear choice between visions of the two major candidates.  We can see a clear divergence of political philosophies that could shape the future of our country, just in the way that New Deal policies have shaped the past half century.  While cost structures for Social Security (SSA) and Medicare (HMS) could use some attention, we have to seriously consider the possible consequences to Mr. Ryan’s proposal for overhaul of those programs.

According to his proposals in Congress, Mr. Ryan wants the private sector to take over SSA and HMS. In his theory, this will save the Federal government the costs of handling these programs and leave more money for the HMS and SSA beneficiaries (otherwise known as the American people). 

We have to remember that SSA, HMS, and workforce benefits were set up to combat poverty, especially for the elderly. They were set up exclusively for the elderly to keep private companies in business for the rest of the population.  As well, people are not prohibited from using other retirement savings. SSA and HMS programs, however, are designed to be stable and conservative investments to keep the funds at or above inflation with the idea that no one should be using the money on risky investment schemes that could ultimately rob Americans of their elderly livelihood. The people that manage SSA and HMS are not allowed to defraud the beneficiaries or use their money for risky schemes, hedge funds, or the like. Also, people are given a single entity from which to claim benefits, and there is little-to-no confusion as to the rules since they are equal across all plans and beneficiaries.  This is meant to promote faith in the funds being there for the beneficiaries when they retire. 

A side benefit (whether a good thing or not) of the SSA and HMS funds is that the federal government can borrow against its own funds rather than from foreign entities (see the Clinton years). Consider how this is similar to where people today can borrow against their Roth or 401K retirement accounts where they are essentially loaning to themselves from money they have in bank. There are rules to this, but essentially, these same people could instead borrow from a loan shark and pay relatively high interest rates to someone that is not even a friend. By borrowing against your own savings, you are repaying your own capital.

The intent here is not to debate whether My Ryan’s characterization of the Social Security program as a Ponzi scheme is accurate.  The program’s intended design, however, is that millions of Americans pay into a retirement savings for themselves with an expectation that it remains as part of their retirement income. The GOP has been licking their chops at the prospect of getting capitalist hands into the money pot that is SSA and HMS. Just think of the tremendous amounts of capital that the United States could reap in revenue from aggressive (e.g. risky) forms of investment using the trillions of dollars from those accounts. If one can invest $5000 and get a modest 6.25% return that is roughly an average of $325 per year. If one can invest say $5 trillion and get that same return which is roughly $325 billion and suddenly, California no longer has a deficit issue?  Yet, that 6.25 % return is a great day if the investment is sound and in actual capital, but we all know what happens when people are given a bunch of money and told to create profit (e.g. Lehman Brothers, Goldman Sachs, Merrill Lynch, Madoff). Odd, consider that people were giving money to a man named Madoff that actually “made off” with their money and left the beneficiaries penniless.

That is precisely what we can envision with the Ryan-Romney plan for SSA and HMS. We all know "why" because that is what caused the crashes in the Great Depression, 1980s and 2000s: greed.   Private investors will be granted access to this huge mountain of cash with the idea that these "qualified" people know how to capitalize.  These people will then design complex instruments, funds, ETFs, bonds, derivatives, transaction fees, balloon profits, and this will be backed by the full faith of the federal government (see Fannie Mae and Freddie Mac). They will sell to beneficiaries that they can maximize their return using these complicated or expensive instruments, and supposedly, with the assurance of the federal government, the money will be safe. One firm will be able to handle the retirement account differently than the other, and thanks to the recent ruling by the Supreme Court with respect to the Affordable Health Care Act, people can be compelled to pay into the system or fear a tax penalty. That is until the next bailout is needed from the American people to re-fund the eventually destroyed SSA and HMS systems. Then, while the Americans are wondering what happened to their retirements, the fat cats that engineered the schemes will be able to continue living the high-life and toasting their “success”. 

We have a clear choice between the Obama and Romney teams, and the future of SSA and HMS are at the heart of the difference. Further, the collapse of the entitlement programs will mean a collapse in the American markets and financial system that will paralyze the global economy where 2008 will seem like a bad fart.  I may have painted a dire prediction of privatization of those funds, but given the recent balloon and bust of the mortgage crisis, can we seriously expect something different than this? Can we risk losing our retirements? That is a recipe to corrupt our government insurance programs.

 

Irony of Priorities

Irony of Priorities
Tony E Hansen
10 July 2012

There is nothing more telling about political priorities than seeing a new stadium being built for a professional sports team. When Major League Baseball began its season this year, another team opened with a brand new ball park in Miami. The new stadiums, or renovations, are dazzling displays and bring the “experience” of the game to a whole new dimension. There is an awful, if not, uncanny irony in the priorities that were considered around the new stadiums. This grand experience comes with a rise in tickets prices, and this comes while critical public services are being defunded.

One irony is, in the particular example of Miami, how the city is still facing major foreclosure problems and unemployment. Consider the massive investments that private and public institutions made in the new ball park while public schools are facing budgetary shortfalls. Consider that billion dollar investment while roads go unrepaired, cops cannot get gear, or teachers get salaries cut. This was a point made by former Minnesota Governor Jesse Ventura when reporters asked if he would support new stadiums for the Twin Cities professional teams. The logic of the question seemed consistent with the fact that Mr. Ventura was a professional athlete before being governor, but Mr. Ventura had the good sense to realize that there are more critical things to consider in the budget than entertainment venues.

Another irony is the price of tickets does not go down after this major investment in a larger venue (despite having more available seating), but instead, the price to watch these games also rises (both the ticket as well as the concessions). A family of four can easily wind up spending over $200 per game and still have to use binoculars to watch the game. If you want to watch at field level, the price rises exponentially (New York Yankees price some of these seats around $2000 each). If you are a family of means, this may not be an issue, but with a game that is supposedly considered the “national pastime”, it is clear that many Americans are not able to afford the experience. If one thinks about this a bit, this may imply and reveal that the owners of the teams are completely disconnected from what is available to the many Americans. Maybe this reflects an interest, by the wealthier among us, to segregate society between those who have and those who do not.

We see yet another irony in these cases where the investment for ballparks involves the limited time of the sports season where supposed tourism will be concentrated. For NFL football, there are 10 home games (MLB has 81 home games) not including any playoffs, and we are to justify the civic expense because of the estimated tourism and revenues brought in because of these few games. Thus, commercial interests can plan on having business related to the games at least 10 to 81 days out of 365 days. There must be some serious business that is accumulated during those days that the rest of the year is not considered.

In parallel, we see significant donations from private donors to political campaigns that waste considerable money on a limited time political campaign in order to keep these same people from paying their fair share in taxes that would benefit the whole public (far beyond the campaign season). Interestingly though, the masses have been willing to approve tax supported measures to improve these big arenas or build new ones while they reject tax measures for schools, prisons or revitalization projects. For example, Jackson County Missouri approved beautiful upgrades to Kansas City’s stadiums but balked at sales tax increase to improve Kansas City public schools. All the while, the owners still need the masses in order to profit from the tickets and concessions at the stadiums, regardless of how smart the masses are.

In these cases, the wealthy owners are looking for financial support from the community to off-load some of the costs. This is little different than Wal-Mart requiring the city to provide new infrastructure to be built in order for a new store to be built. However, Wal-Mart will be open more than 10 or 81 days. Here, the wealthy puts some money forward, receives public assistance, and then pockets the profits. This shows why when people like Mitt Romney put money in non-taxable offshore accounts, that method of profit should not be a surprise to people. He was able to profit off his communities here, reduced his tax burden and still pocketed the profits. As one reporter suggested, if you have the means to avoid paying taxes and yet reap the rewards, why would you not? Of course, one has to have the means to set up these ventures and then, convince the public to accept this arrangement. All the while, that person can still whine about the taxes (even if the taxed amount is only a small fraction of the whole).

As someone who has enjoyed going to sports games, I am being hypocritical in arguing against these public arenas due to the personal benefit I have had. Yet, one has to consider that Roman emperors would build large coliseums, hold brutal games, and stage massive orgies in order to appease the masses to help the citizens forget that food supplies were short. Thus, this type of investment gives what the public wants instead of what the public needs. The most logical aim of this line of priority suggests that those with means are all too willing to help appease the masses in order to hide that they are actually taking more from the masses. Perhaps Karl Marx was wrong that the working classes will stop being appeased by the scraps from the bourgeois and realize the worth of the labor is powerful.

Time for Work or Politics?

Time for Work or Politics?
Tony E Hansen
25 Jan 2012

Over the course of the past few months (and years), GOP candidates have been ramping up claims that there are problems with President Obama’s leadership. Interestingly, they have also frankly stated that their number one goal is to “stop” Obama. Their focus is upon making Obama a one-term president: not job creation, not deficits, not wars, not civility and definitely not helping middle class Americans survive the Great Recession. Workers, rights, jobs, research, cost of education, military and such clearly are not in the interests of the GOP.  

There has never been any hope for bipartisan efforts because that has been contrary to the GOP focus since Obama was elected (especially since gaining control of the House).  Within hours of his election (before even taking office), his policies were declared “failures” with no alternative proposed and no evidence to showcase these purported failures. Just because the talking heads say “Obama” and “failure” in the same sentence, herds of “sheep” go around bleating mindlessly this characterization with an eye on embarrassing Obama rather than addressing serious issues facing the United States. Perhaps the economy could have a chance to recover quicker with help from those on the right, but instead they choose to play the role of hecklers and thorns-in-the-side of Obama. 

The right-wingers have continuously voted to block government efforts without regard to the needs of the American public.  Essentially, they have put politics ahead of doing the work they were elected to do (e.g. governing). This, at a time in American history, when people need responsible government and the government needs to keep the economy from going into tailspins. They want to discuss the validity of birth certificates, failed notions of supply-side economics, or bailouts of companies (forgetting that we subsidize large corporations with far more money year after year). They have brought our financial stability into question without handling deficit spending, rather than attempting to solve the issues.  They want to argue morality issues despite acting like spoiled adolescents willing to jeopardize global markets through their inaction towards budgets and fiscal matters. Even fellow Democrats have been willing to throw Obama under the bus when he is not as progressive or liberal as they would like.

We hear so much about freedom of religion so long as you are practicing a certain type of Christianity. That is a mockery of religious freedom.  As if to believe something different is painfully inconvenient, people like Santorum want to reverse the gains in equality and recognition of rights because that does not fit his contorted view of fundamental Christianity. These people want to protect the unborn but are completely happy with sending kids to die overseas fighting in Islamic countries.  Are we fighting terrorists or are we becoming them?  These people want to introduce legislation that extends “personhood” to the unborn, but does that also change when the “birthday?” Maybe these God-fearing right wingers are content with sending kids that are not even old enough to drink to die in battle because they do not want to clean up the streets at home.

One has to question whether these people even care to read the material (e.g. bills and laws) they are discussing or just wait for O’Reilly and his type to declare baseless talking points.  Consider some of these guys did not believe there was a recession and they thought that the pessimism of the past years was completely unwarranted.  As someone who works in the utility industry, I can assure you that there were dramatic reductions in commercial and industrial energy use during the past few years that warranted pessimism.

People are so blinded by rhetoric that they do not see what Obama has accomplished in the last few years. We forget there were some really pressing issues that needed to be handled, and without intervention, these issues would have sunk the domestic and global economies. Even without the help of Congress, the Obama administration has managed to save entire domestic industries from collapse. Despite the posturing by the GOP in the Senate, we have long awaited health reforms that will surely breed more changes to cut medical costs. Despite the behavior of the GOP, Obama has moved forward with programs to help homeowners and to help with education loans.  Despite the Congressional impasses, Obama has signed measures that will reduce budget deficits by half over the next few years. Despite the roadblocks set by Congress, he managed to keep our economy from going into a complete depression while he got Bin Laden and helped to topple Gaddafi.

We know that job creation does not happen simply when taxes are low (we have the lowest tax rates in decades despite high unemployment numbers).  We know that more money to the top 1% does not “trickle down” to “raise all boats.”  That 1% benefits when the 99% are able to do things. We do know when more people have discretionary incomes; the economy can grow because more people can buy more products.  Yet, the GOP cares more about protecting the 1% than letting them share the burdens of capitalism.

Over the next few months, we are going to hear more distortions and ridicule from various candidates.  Americans have to realize that despite the awful set of circumstances; Obama helped the United States weather a big storm.  Hopefully, we can realize a better future when we are able to fully implement a recovery instead of these temporary emergency bandages. Maybe with a little help from others in government, we can see a recovery that works for all Americans rather than a select few as proposed by the several GOP candidates.

We need substantial work from Congress rather than this rhetorical garbage that paints falsehoods and ignores reality. Tell Congress to get beyond the pettiness and do what they were elected to do: govern.

Why We Should “Occupy”

Why We Should “Occupy”                

Tony E. Hansen

12 June 2012

The recent protests, called “Occupy”, or the 99%, have echoed a chord with people in this country.  Occupy needs to go beyond the protest into a viable reform movement. For decades, powers have been able to sidestep issues and pacify people into believing marketing campaigns and rhetorical nonsense. Some are all too willing to accept the rhetoric and deceptions as part of a “gospel” of capitalism being good for all Americans. Remember capitalism is essentially justification to exploit resources and inequalities in society. Something needs to change or our democracy faces potential unraveling on a grand scale because all boats do not, in fact, raise when more water is given only to the 1%.

Due, in part, to the supposed gospel of capitalism, we have seen the rapid disintegration of faith in government and public sector institutions while corporations have become multi-national, “too-big-to-fail” behemoths with a corollary increase in power and influence upon public policy.  The only recourse that the public has against these powers is through the public institutions, but, with the deregulation, as well as revolving doors between government and Wall Street, we can see why so many people have lost faith in the public institutions that were created to protect the little guy from those big guys. Yet, Americans are willing to allow private firms, beholden only to their shareholders, manage public institutions with a belief that these private firms will do a better job. Further, these corporations want the public taxpayers to pick up the tab to build supporting infrastructure or insist upon tax breaks because they are “job creators.” If government is made of people and private companies are made of people, where do we see improvement?  Perpetuation of economic inequality and gross over glorification of corporate power is central grief raised by the Occupy movement.

With the pervasive influence of corporations upon public policy, Americans feel excluded from the process that is supposed to include them.  This coincides with research I did with my dissertation.  Regulations and the tax code are rigged so that only corporations can take advantage of capitalism rather than the individual entrepreneurs. Both political parties are willing to give corporations and the wealthy bailouts and tax breaks, but they balk at the idea of helping people forgive student loan debt or stay in houses. People may have made “poor decisions” to get the loans and houses, but the wealthy made money from accepting those decisions. Yet, they do not want to be responsible for their part in those decisions. I guess you have to be a millionaire before you “deserve” government assistance.

Education is supposed to be a means to achieve social status: a social power equalizer. A simple high school education is no longer enough to sustain a person into the working world.  Increasingly, employers are looking for people with expensive college degrees, and with that requirement, many Americans also build up substantial debt when they cannot pay for school costs up front.  Thus, people want to get high paying jobs with “stable” companies and banks, but we have to rack up large amounts of debt to get the credentials that may get a job (let alone a well-paying one). This is one of the big issues being echoed in the Occupy protests: that of the crippling costs of education loans.

Debt obligates people to creditors; in this case, the creditors are the banks. The banks barely service the loan but instead just shuffle papers with a guarantee by the federal government.  One should wonder how we can allow young adults to rack up education loan debt without a job and with no way to discharge, and yet, no bank will loan the same people money for a mortgage without jobs or resources. Banks should not even be involved. Increasing debt levels will not help stimulate the economy.

There is an increasing unwillingness of people to compromise, especially from the TEA Party. There is increasing unwillingness to allow alternative opinions, and there is even growing willingness to profess complete falsehoods in the name of policy positions that service only the most able in this country (e.g. supply-side economics, military build-ups, defund public schools, unregulated health care and financial systems). Ironically, there is a complete disregard for the concept of frugality (a core conservative value) with a perpetuation of gluttonous appetites for all things material through a vain, and an adolescent, boastful, selfish claim “It’s mine”. This is incivility at its core, and is a primary objection raised by many of the Occupy.

There is an ugly and heavy hand of religion being deployed into public policy. Respect for religion has morphed into an idolatry of religion, specifically Evangelical-Protestant sects, as a framework for public policy. There is little room for alternative ideas about religion in the media or public arena with the heavy pronouncement by the various religious zealots despite the Constitutional limitations upon American government with respect to religion. Religious fundamentalists are among the worst with respect to compromise since they consider their “marvelous superior” position, or cause, as a calling rather than a simple viewpoint. All other opinions cannot possibly matter because the apparent “will of God” is on their side, and thus a forgone conclusion of other opinions being inferior, regardless of just nature or destruction that the zealots’ opinion may justify. 

The late author Ray Bradbury stated, “we insure the future by doing it”. Thus, if we do not want to see the rollback of programs and services that protect Americans, we should occupy. If we want civility in government rather than adolescence, we should occupy!  If we want respect for religion rather than religious law, we should occupy! If we want to restore faith in the society as an aggregation of the individual goods, we should occupy! If we want government for the 99% instead of the 1%, we should demand accountability from lawmakers, occupy and VOTE!

Father to Son

Father to Son

Tony E Hansen

April 2012

During high school, I was introduced to a poem by Langston Hughes entitled “Mother to Son” where the mother explains to her son about some of life’s unpleasant realities through a metaphorical approach of stairs. The lessons being taught in this poem are similar to what I am poised to illustrate to my own son because “…life ain’t been no crystal stair.”  As my son turns sixteen, I suddenly found myself with a discussion about what it means to be a, or to have a, gay parent with all of the goofy “taboos” surrounding this.  Thus, I pen this open letter to him. 

Son, life can be tough and sometimes not so great.  We are given many things in life for which we have no choice (e.g. our parents, our siblings, our athletic ability, our intelligence, our ethnicity, or our sexuality.)  Some would decry these as reminders of the inequalities of life through miserable feelings about how we have been treated unfairly or destructively. Yet, I say we can find these as examples of our diverse natures and how we can embrace those differences while learning to enjoy them with a little laugh.  Thankfully, we have differences because life would be considerably boring if we were all vanilla. 

If we look at everything given to us as a tragedy, then our whole outlook is founded in negativity, and then, how people perceive us, in turn, will ultimately be negative.  Interestingly, similar-minded people tend to congregate together and reinforce those ugly dimensions of life upon each other rather than looking at circumstances as learning opportunities or even realizing the shear comedy of our lives.   

The thing is that this idea took a long time for me to understand because I felt that I was missing good role models in my life. Yet, I cannot sit and stew about what did or what did not happen. 

When I found people with good nature in their hearts and learned different philosophies of life, I found an appreciation for the present moment.  In that, we do not know the eventual outcome of many paths in our lives, but things do happen for a reason, whatever that might be. We cannot worry ourselves about the past since there is literally nothing we can do about that except to acknowledge our part and learn.  There are many things in life that we wish we could undo or decisions we may have done differently for potentially better outcomes. We cannot agonize over what may happen in the future or what people may think since that is only a possibility. We can wait for things to happen, we can wait for that perfect opportunity, we can wait until there is more time to do something, or we can fret over the possibility of something going wrong. Yet, at those points, we are not living today because our focus is not here and now. 

Instead, get busy living! You can focus your effort on the present moment, and you can do good in the present moment.  This does not mean, however, to forgo planning or to always be reckless about the present moment.  Good things will reveal themselves to us if we are willing to plan, to do good, to look at the whole picture, and to do that with a smile. You could worry about someone’s opinion, wait for someone to act or even agree with someone. Ultimately, you have to decide what you are willing to do and if that action is appropriate.  No one else can do more for your own happiness, your own future, your own work, and your own family than yourself.  That is neither selfish, nor egoistic, nor inconsiderate because with compassionate heart and action, you are promoting positive influences upon people all around you and beyond.  The rest will take care of itself. 

You have to decide what you are going to do to make your world a better place despite the “…splinters and boards torn up” along the way. Keep moving forward and climbing, even when life gets tough.  Be proud and look up. Believe in the moment because you are destined to be in that moment, and only you can make the most of what you have here and now. Learn, grow, have compassion, work diligently, and trust in yourself. Consider what Steve Jobs said: “be a yardstick of quality” and “if today were the last day of my life, would I want to do what I am about to do today?” If you can affirm the first and if you can answer positively to the latter, then no matter what anyone else says, you can say today that you are your best (and the rest will fall where they may.)

I am proud that you are my son! Congratulations on your birthday and may you continue to enjoy life with a good heart and good mind.  With loving kindness, Dad