19 February 2010

Divide and Conquer

Dr. Krugman has at it again about the health care scandal, today taking on Wellpoint. Here's the story. What he doesn't talk about, I suppose for lack of space is what I propose to talk about: divide and conquer.

In economics, there is the term market segmentation, wherein a producer seeks to extract profit by walling off groups and charging each a greater price than would exist without the walls. If you read the Wikipedia article, it's voiced rather blandly, only making a passing remark about monopoly. (You can see how this works by reading about consumer's surplus. The Market Segmentation author doesn't provide the link, which shows the bias.) The fact is, market segmentation (and its other name, price discrimination) is what the health insurance companies have been getting away with for decades.

For those old enough to have been there, in the 1970's health insurance was to be replaced by Health Maintenance Organizations (HMOs); the archetype being Kaiser-Permanente. The driving notion behind the HMO movement was that it is cheaper to take care of problems early rather than late. So, HMOs would engage in preventative care, screenings, and regular visits to a primary care physician. In recent years, studies have been done and promoted by insurance companies claiming that HMO practice is more expensive and no better at maintaining patient well being. It is also true that shortly after HMOs began to proliferate (often as part of traditional health insurance companies) the acronym became Healthy Members Only. Market segmentation.

The point behind insurance is shared/pooled risk. While it may be dismissed as just academics, if you've been an economics student you've known of or taken Risk and Insurance (the most common name). In such a course, you learn the algebra of risk and probability, and how it is that the many can pay a small amount to support the occasional disaster which befalls the individual. The whole point is market aggregation, not segmentation. The Wellpoint assault is purely segmentation. They claim that each segment, which they define as they choose, should make lots o money. The fact that the whole enterprise manages to make billions is denied. Wellpoint, and the rest, of course oppose the public option. The reason, which they'd never admit, is the public option removes the opportunity to segment the market and make monopoly profits.

Lastly, note the similarity here with the Banksters of The Great Recession. Having lost their shirts (and our trousers) in CDOs and such, they now seek to recoup their profits by squeezing those retail customers; most of whom have few other options given that the number of Banksters has shrunk. Again, segmenting the market. We need a revolution, and not the Tea Party sort.

16 February 2010

United We Stand, Divided We Fall

By now, we should all know that the problems with American auto production is purely those pesky, recalcitrant UAW workers. Well, what you want to believe isn't always what's true. Today, Toyota is closing some plants, in the union free South of course, where those broken cars are built. You buy retarded rednecks, you get retarded rednecks. And never forget, the Right Wingnuts want the USofA to be just like Texas and Kentucky and Mississippi. Wake up America, you're being led around by the nose. All that religious pontificating is from hypocrites that just want to keep you poor and stupid. They are succeeding. If the rest of us didn't have to be burdened with stupid senators from your small, and small minded, states, I wouldn't give a rat's sphincter. But you people are evil.

Here's the story.

09 February 2010

Toyota San

Ah, Toyota San. It will be found that NHTSA, during the Bush administration, placated Toyota and those nice right wing southern senators where Toyota got sweetheart deals to put the factories. It won't turn out to be those left wing union workers out to sabotage some capitalists. You read it here first.

Government doesn't work when those running don't want it to work. You're doing a great job Brownie.

04 February 2010

Olde Europe Kicks Ass

The Right Wingnuts' favorite whipping people are the continent of Europe, home of freedom hating welfare queens. Or something like that. Whenever anyone questions why the supposed most powerful nation on the planet has such a domineering ruling class, they trot out the Failure of Europe. Well, Europe has never been a failure. Europeans, until the end of World War II, were parochial and jingoist. The destruction, at their own hands, finally sunk in: let's admit we're in this together.

Through the 1950's, under a titularly Republican president, the USofA behaved similarly. Taxes were progressive not only de jure but de facto. Unions had power enough to balance corporations. The South was still fighting the Civil War, but that's another story.

Then came civil rights and voting rights laws in the 1960's, and the Right Wingnuts found the wedge issue it needed to transform all White People, not just the inbred retards of the South, into the Oppressed Majority. A signficant aspect of this effort was to take back the money. The Rich didn't feel quite rich enough anymore, so they concocted stories. Nixon initiated the plan, and it has largely worked. Our economy is only vaguely different from your average Banana Republic.

The "winners" of the 40 year war then gave us The Great Recession (so far, The Great Depression II is still on the table). The Right Wingnuts continue to blame the workforce for the mess. But what's been going on in Olde Europe?? To believe the Right Wingnuts, it's Oh So Much Worse.

Not really. Today's Times has the real story. You should read it; you will read how it is that a community can survive if the community, in its whole, accepts that the solution lies in equity. There is a reason that the other title of this endeavor is: It's The Distribution, Stupid.