Say Hello to the Hood Economy

Copy, paste and save to hard drive this outstanding article. Or print it out. Years from now, when you are bankrupt and/or on the lam from the government that is trying to force you to pay money you don't have to health insurance fat cats, this article will be needed when you want to review who exactly is responsible for the demise of your financial health and perhaps your actual health as well.

The only thing I want to add at the moment, after being treated to such an excellent and thorough review of this mess, is that for many decades, in many of the long-deprived urban "hoods," cash rules and oppressions such as government mandates to buy a worthless product mean nothing in the daily operations of the "hood economy".

I mean for example, South Chicago is not going to even begin to worry about yet another impossible to comply with and unenforceable "requirement of citizenship" added on to the already long list of "requirements" that can not be met. Like employment when there are no jobs, laugh out loud.

Specifically, no one with half a brain and an income less than roughly $30,000 in South Chicago (or South Los Angeles, or North Miami, or Central Minneapolis etc. etc.) is going to be buying $6,000-$24,000 a year individual or family health insurance policies, with the deductibles, co-pays, and exclusions adding on $5,000 to $50,000 (and possibly more) a year more, regardless of any bogus and invalid “laws", "regulations", or "subsidies". Period. End of story.

Even for incomes between $30,000 and $60,000, there will be few takers in places like South Chicago. The health insurance companies are thinking that by hiring the IRS as their collectors and enforcers, that they can capture this market segment, one that is inherently resistant to their lies and cheating of people. But the insurance fat cats are going to be schooled otherwise. I can assure Matt Taibbi (who mentions the need for a future revolt) and everyone else that there will be, among other revolts, a revolt in these areas, which ironically include Obama's original stomping ground.

The hood economy of course goes way beyond legal but unlicensed and totally illegal drug sales. There is also everything from fresh vegetable sales on street corners to charity but sometimes unlicensed health care that by definition no one knows about.

It seems inevitable, with the jobs going away and the impossible to meet government dictates piling up, that the "hood economy" will be more and more coming to your hood.

Progressives are Barking up the Wrong Tree

Yes, David Sirota either doesn't understand, or in his day to day activities usually suppresses his knowledge that neither of the two viable parties are middle of the road, let alone progressive.

The term "barking up the wrong tree" comes to mind with respect to progressives foolishly giving money and support to Democrats, a substantial majority of whom could not care less about progressive objectives. Most right wingers, as dumb as most of them are, would not be caught dead wasting their time and money like this.

I posted on CD the other day the best ways I can think of for solving the problem of US progressives being lost in the woods:

http://unity-progress.blogspot.com/2009/08/two-ways-to-change-us-politics-far-to.html

Aside from this, it goes without saying that the progressives, who are atomized into literally dozens of currently unviable and obscure political parties and hundreds of "internet projects," are going to have to unify behind one new political party.

All of this is simplistic politics that even an economist who is sometimes almost incompetent with respect to certain aspects of nuts and bolts marketing and politics can correctly figure out.

The fact that what I am talking about does not seem realistic speaks volumes: the US is a political desert, and progressives are going to remain lost in that desert for the foreseeable future.

By contrast, European countries are known for creating viable parties that fill a gap in political representation almost overnight. One of the most spectacular examples of this from the last century was Solidarity in Poland, which seamlessly morphed from labor movement to political party to governing party. That was real democracy for you.

Obama's Bubble

In a way, what is being threatened is just a new kind of bubble. This bubble will be more dictatorial, more fascist, and still more regressive than were previous bubbles. People who were smart enough to steer clear from previous bubbles will be liable by government decree to getting caught up in and losing out from this bubble.

But this bubble will have the same ultimate objective as other bubbles: to make the rich richer.

The scheme this time will be to have the government order the people who are not able to or who do not want to buy grossly overpriced private health insurance from huge corporations with obscene profits and obscene executive salaries to buy it. And so then the big corporations get to have many more receivable type assets on their balance sheets. They can then leverage these assets for more short term and phony riches.

Of course, these assets will eventually be toxic, since they are going to be based on a foundation of sand. The foundation will consist of, among other things, illegal coercion which will be countered by widespread disobedience, unaffordable borrowed money from China and other creditor nations (for any subsidies) and ever poorer "customers" who, even if they can technically afford the private insurance now, will sooner or later not be able to afford it.

Due to this ultimately undependable revenue stream on the one hand and due to what will be a sharp increase in the actual demand for expensive actual health care on the other hand, the health insurance companies will eventually have to receive direct (lump sum style) bailout money straight from the taxpayers, laugh out loud.

Americans can be downright funny when they try their hand at economics. Of course, its not really funny if you are living in America.

"Health Care is Just Around the Corner"

Herbert Hoover: "Prosperity is just around the corner."

Barack Obama: "Health care is just around the corner."

Laugh out loud.

[The above is in response to this article.]

Obama is a Third Bush Term so far

This is a completely on point article here. Yes, it might as well be a third Bush term. There would be almost no difference if it was. Voting for Obama was a complete waste of time.

What we have is a moneytocracy: dictatorship by the rich. Strictly speaking, I would not use the increasingly common "corporatocracy” term, because (a) there are many small corporations that have small amounts of money and capitalization and little if any political power, and (b) even within the large corporations, it's only the large shareholders, the executives and the directors at the top who have political power.

It goes without saying that a new political order is needed. Whether that comes from new laws, new parties, or new something else is well beyond the scope of this comment.

The article writer could have added that the economy is almost exactly the same as it would have been if Bush was still the President. For one thing, Bush in 2009 would have had another stimulus package too.

There are already and there will increasingly be claims that the economy is recovering, and eventually there will be claims that the economy has recovered. Take all of these claims with a grain of salt unless you have a whole lot of money.

The US inequality is so extreme that it is indisputable that there are at least two largely unconnected economies in the country. There is an economy for the rich and high income individuals, and there is an economy for everyone else. The high end economy serves the "upper crust," roughly 15-20% of the population. The low end economy serves the lower crust, roughly 80-85% of the population. (You could waste a lot of time arguing about the cut-off points.) There are more people in the upper crust than many people believe, but nonetheless, it is still only a small minority.

It is quite simple to determine whether you are in the upper crust or the lower. If you now or will within say, the next five years, have to have some kind of a traditional job for basic economic well being, you are in the low end. If you don't need a job for basic economic well being now or in the next five or so years, you are in the high end.

Obviously, the number of jobs in existence, the changes over time in that number, the pay for the jobs that are in existence, and the changes in the pay over time, are the primary factors for the low end economy. So for 80-85% of the population, those things are what matter the most.

For the upper crust, what matters are such things as executive pay rates, corporate profits, the price of stock shares, dividends, capital gain tax rates, income tax rates, and so forth. As long as the jobless are not rioting or striking en masse, the number of jobs is of little concern to the upper crust, at least to the extent that profit can be wrung out of an economy regardless of the number of jobs and regardless of the payroll of that economy.

Unfortunately, as the radical right wing US has been increasingly demonstrating in the past few decades, it is possible to some extent, at least in the short term, for an economy built around the rich to extract a substantial amount of profit regardless of the number of jobs and the amount of payroll.

Any and all talk about "economic recovery" for the foreseeable future (for at leas the next 12 months) will be referring to a recovery for the upper crust. The factors that affect the lower crust will still be in recession or depression during at least the next 12 months, and it appears at this time for much longer than that.

Obama: Oblivious to Political Incompetence?

Along with all the lying to and the deluding of the commoners, you have the disconcerting fact that Obama seems to be so far oblivious to the fact that he is politically incompetent, even judged within the narrow context of right wing US politics. Although Obama's incompetence opens the door wide for Pawlenty or Romney to take over 40 months from now, at least it also opens the door a crack for a third party that might represent the interests of the non-rich.

[The above is in response to this article.]

Health Care Injustice and an Implication of it

The obvious lack of justice in the health care system and the fact that that lack of justice is virtually unique among reputable countries strongly suggests and perhaps proves by itself that the actual US justice system is unjust and bogus.

Likely Developments If the Fake Health Reform Passes

I recently spent several hours reading numerous Daily Kos diaries, (which I never did before, by the way). The diaries often attract a lot of comments.

What I discovered is that if the mandate passes but the public option does not pass, there will be widespread and I do mean widespread civil disobedience, and the Democrats will be severely hammered in the next several elections. Furthermore, many believe that the Republicans are intentionally trying to maneuver the gullible Democrats into ending up with the mandate but no or a weak public option, because they know that they will be able to successfully run against the Democrats for many years to come when the public rebels against the ultra regressive taxation that a mandate without an extremely strong public option is.

Whether it is possible for even a strong public to reduce and keep in check health insurance prices is dubious. It's not clear that Americans in their present state could make a "strong public option" work even if they set out to do it.

It is likely that even a "strong public option" would be a complete flop and would eventually result in heavy civil disobedience and heavy political losses for the Democrats. But you know how the Republicans are: they always want and frequently get the whole loaf. In this case, they are holding out for no public option or a fake, weak public option, while allowing the mandate to slink through, probably through the backdoor. This combination will allow the Republicans to optimize their power to clean up against the Democrats in the elections down the road.

Back in the real world of the American peasantry, there were actually a large number of posters at Daily Kos guaranteeing right here and now that unless there was a true and strong public option, they would refuse to buy grossly overpriced private health insurance from corporations with obscene profits.

Rather, they would continue to in effect be self insured. Interestingly and importantly, several pointed out that they have, in recent years and in the real world, financially come out ahead by paying for health care needs out of pocket rather than paying all the premiums, deductibles, co-pays, uncovered invoiced items, disallowed invoiced items, and other fees associated with a private insurance policy.

Although it was nice to see that Daily Kos folks have become aware of how they are being played in the health care debate, I like Common Dreams better because people there are not as liable to being fooled and played in the first place.

Health care for all and with costs under control is the only way life can be completely worth living. Without it, the country is really nothing more than a hell hole where people die early deaths.

A RESPONSE:

SayBlade September 2nd, 2009 5:04 pm
Yes! There's no such thing as the "free market." Just like there's no Santa Claus, Easter Bunny, Tooth Fairy or Flying Spaghetti Monster.

There is, however, a god. Apparently it is worshiped by profits and shareholders across the financial universe.

I once thought I saw the flying spaghetti monster at an Italian restaurant, but then I realized I had drunk twice as much wine as usual.

[The above is in response to this article.]

Growing Third World Tendencies in and the Ultimate Destiny of the USA

On the one hand the US is indisputably a country with numerous and growing third world tendencies. There are many, many millions (at the bottom of the economic ladder) in the US who for all practical purposes have the same well being and prospects as they would have if they were living in an above average third world country, such as Jamaica or Kazakhstan.

Meanwhile, on the other hand, the US Government continues to, in high and mighty fashion, dictate economic and security doctrine and parameters to the world. While not all of this doctrine is followed in every country, some of the "highest levels" of the doctrine is slavishly followed in almost every relevant country.

To the rest of the World, the US is like a supersized and on steroids version of the 1980's Soviet Union: failing badly but armed to the teeth with nuclear weapons. But unlike the Soviet Union, the US, based on its legacy prosperity and power, is the linchpin of the globalized economic and security system. Like the banks within the US that were bailed out, the US is "too big to fail" within that globalized system.

But “too big to fail” only goes so far. When the US system finally completely collapses sometime within the next 120 years, the relevant question becomes who will bail out the US? Who will come to the rescue when, among other things, the dollar collapses, when the US can't float more debt, when even Chinese and other Asian goods become too expensive for Americans, and when it becomes permanently impossible to add a substantial number of jobs to (an increasingly inadequate number of) jobs?

Well, actually, when that day comes, the US will probably be bailed out by some combination of the IMF, World Bank, and the treasuries of other countries, which will be by then clearly and by a wide margin much wealthier countries. All third world countries are “bailed out” to one extent or another from time to time.

But obviously these kinds of bail outs are merely triage, don’t do much to solve the root problems, and don’t do much to boost the country out of third world status. Basically, the bailouts of third world countries merely keep such countries from going up in flames and keep the population of them from starving en masse.

But what will the terms of the US bailout be? Well, they most definitely will not be easy or favorable terms, because for one thing, there is so much to bail out. I mean, the country is not exactly small in size, geographically or population wise.

Trust me; we don't want to wait until the day the terms of the bailout are announced. It's time to abandon the corpse of a system now and proceed as free men and women who don't need to be bailed out from economic failure and debt slavery. It’s becoming more and more overdue that we move beyond talking about how to rearrange the deck chairs on the Titanic.

That’s all the 2009 “health care debate” in the US is: it’s nothing more and nothing less than a discussion about how to rearrange those Titanic deck chairs. The real health care debate is not being held. The real one is a discussion about how to remove profit, obscene salaries, and other unsustainable and obscene costs from the sinking health care system, which is taking the whole economy down with it.

[The above is in response to this article.]