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.