Tuesday, March 16, 2010

Hang 'Em High

The Federal watchdogs saw all the misleading activity and illegal behavior and yet did nothing to bring those responsible to justice. Instead, they all got on board a giant cash giveaway to keep these miscreants in power - USING OUR MONEY! 

I'll admit that I supported the bailout program. All the experts were saying that we needed to do this to avoid a huge and catastrophic global economic collapse. Now these experts' opinions are becoming suspect in light of what they knew at the time. 

Here’s how Repo 105 worked in simple terms: At the end of each quarter, to reduce its all-important leverage levels, Lehman would “sell” assets (typically highly liquid government securities) to another firm in exchange for cash, which it would use to pay down its debt. The assets were typically worth 105 percent of the cash Lehman received. Several days later, after reporting its earnings, it would buy the assets back. Normally, this would be considered a loan, or repurchase agreement, but instead it was booked as a sale.
Huge piles of cash were moving in and out. According to the examiner’s report, “Lehman reduced its net balance sheet at quarter-end through its Repo 105 practice by approximately $38.6 billion in fourth quarter 2007, $49.1 billion in first quarter 2008, and $50.38 billion in second quarter 2008.”
Before this, Harry Markolos was waving large red flags about Bernie Madoff's creative accounting for over 8 years, but no one would listen - explained in his recent book titled, ironically enough: NO ONE WOULD LISTEN.  

Our SEC and Federal regulators are not doing their jobs. Your money is not protected, and if you are not one of the big fat cats stealing citizens' money, then you are probably one of the poor citizens suffering from the fallout of this fiasco. It's really difficult for me to put into words how disgusted I am with this whole scene. If our capitalist system is to work, there is no such thing as a company that is too big to fail. And certainly there should be no one above the law. 

Friday, March 12, 2010

The Healthcare Problem Solved

I've said this before, many times, and I'll say it once more: the key to the problem of healthcare is that our current American system of healthcare is profit-based and it should be HEALTH-based.

Drug companies make money by providing chemicals that alleviate or cure disease. The cynic within me says that they are more focused on alleviating symptoms than finding cures, because the profit is higher for treating a symptom than it is for curing a disease. After all, some diseases can last for years before you croak. But that is not likely the case, so I'm comfortable with thinking that they are diligently researching the cure side of disease. Still, a drug company who comes up with a new cure (or relief) can pretty much set the price for that magic pill.

The concept of hospitals is a bit ironic to me. If someone were to suggest today that we gather all the sick people into a single building, you might hesitate to think that is a good idea. But that is the system we have, and there are some benefits at having all that expensive equipment and highly trained medical specialists in one spot to deal with our myriad maladies. But let's assume that hospitals are a good idea and look at a different aspect. Hospitals make money when you are ill. If you are healthy, you never enter their doors. In fact, some surgeries are "optional" and are "sold" to patients who might be better served by not having them performed. One example is installing stents for heart patients (a case I'm too familiar with). Turns out that the chances of surviving a heart attack are improved very little by the installation of a stent. What's worse, some patients suffer damage from the operation itself, even though it is considered a very minor surgery.

Medical specialists also have a vested interest in applying their expertise in resolving disease rather than keeping a patient healthy. A cardiologist will get paid several thousands of dollars if you get a bypass surgery, while he will get paid nothing if you watch your diet, keep your stress levels low, and exercise wisely enough to keep your arteries flowing like they should.

Cancer is a big killer, now that we've sucessfully tackled some of the other older threats. Researchers are working around the world on curing and preventing this wide category of disease. But some of what we know is that cancer results from ingesting and inhaling oddball chemicals - chemicals that occur in our industrial nation and in our highly processed foods. Why are natural foods so much more expensive (and hard to obtain) than chemical-laden snack foods?

Obesity is a peculiarly American health problem. If weight loss wasn't such a huge industry, do you think we would be seeing more or less fat people? When I watch commercial television (something I try to avoid as much as possible), I notice how many commercials are focused on junk food and weight loss. I am not blind to the connection.

If someone asked you to bet a large amount of money that you would get ill before they thought you would, you might think they were slightly crazy. But that is exactly the concept of health insurance. You "bet" that your expenses for medical care will exceed your payments at some point in your life. How about a bet that I can remain healthier by making wise life-style choices? I would be willing to put some money on that one - and do every day.

If doctors, hospitals, HMOs, and medical insurance companies were rewarded for us being healthier, the problems would almost disappear. To reward higher profits to the medical industry and health insurance companies for our illnesses is a sure way to bury us all poor.