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Mulling over the Credit Crunch

By Patricia Lee Sharpe

In America today, you must borrow money, even if you don’t need to, to get a “credit record,” which is a ticket to borrowing more money, a vicious circle for many people.  Meanwhile, interest paid is money wasted, money that could have earned interest or dividends or capital gains.  Given the miracle of compounding, the less you buy or borrow the faster and larger your nest egg grows.  Then you can pay cash, even for big things.  But financial prudence, aka living within your means and saving regularly, horrifies bankers who dole out mortgages. Savers, in America today, are not creditworthy.  Savers are worthless. 

Buy, Baby, Buy

Why?  People who save present an existential challenge to elements of the banking system. Why didn’t you buy more stuff?  Why didn’t you finance your cars?  Why have you cheated us out of interest all these years?  But the bankers can get their revenge; they can refuse a mortgage if you have no credit record (as defined by those very banks). At the very least they can make you sweat—and they will.  They’ll drown you in paperwork as you try, anxiously, to prove you won’t be a deadbeat now that they’ve finally got you in their clutches.

In fact, I know a case in point, now pending.  This person went the saving route.  Bought nothing on time.  Paid credit card balances down to zero every month.  Saved enough for a 20% down payment without shrinking the remaining nest egg all that much.  Had a secure job with a good salary, so any monthly payments would be comfortably affordable.  But the bank said—Hmm, is this guy a risk or what? 

Is something crazy here or what?  I mean we taxpayers just gave these banks and mortgage companies billions for the express purpose of unclogging the credit pipeline. Solid small businesses are also having trouble obtaining the routine loans they need to maintain workable inventories.  Many are going out of business as a consequence.

What We Really Have to Fear about Health Care

By Patricia Lee Sharpe

We’ve been ruthlessly conditioned  to be afraid—to be absolutely terrified—of medical decision-making by government bureaucrats.  But we’ve got much worse instead:  employees rigorously trained by insurance companies to deny as many requests for care as they can get away with.  The less care you and I get for our  premium money, the happier (which is to say, the more profitable)  the private insurance companies are.

The Balance Sheet

SO:  You thought you would die but you didn’t.  Much as your insurance company tried to deny you access to testing, surgery and recuperative services, to say nothing of the precise drugs your doctor wanted you to have, you won the battle.  You got the care you needed and you are on your feet again.  You rejoice!  Your family rejoices.  Your friends rejoice.  Your employer rejoices.  Your doctor is happy.  Even a few drug companies are happy; you will be taking their products for x amount of time.  And, of course, your dog wags its tail, madly.

Meanwhile, your insurance company makes an entry in red, in the loss column. This year you are  a red blot on the balance sheet.  Next year there will be more red.  Ditto from now on, perhaps. You have been a mere profit or loss center for the company all along.  Now you are an out and out liability.  No matter how long you have been paying premiums to your insurance company, you would be better off dead, from its point of view, and it will drop you as soon as possible—or raise your rates until you are forced to drop out.

In short, those scarey death panels exist.  They obey your private health insurance company.  And people die every day because care has been denied.  Not just granny, folks.  People in every age bracket.

Where, Please, Are the American Media?

By Patricia Lee Sharpe

I was watching the PBS Newhour tonight.  It was followed, as usual, by a half hour segment of the BBC news.  During the latter, I learned that the important debate we thought we were having about possible troop enhancements in Afghanistan is probably over.

Britain’s PM Gordon Brown is sending an extra 500 fighters to Afghanistan, evidently, but only because he can count on an American surge:  President Obama will likely be complying with General McCrystal’s request to beef up the American contingent.  And there’s more.  The numbers may exceed the 40,000 we ordinary American citizens were given to believe was the target number of the General's request. 

Why am learning this from a foreign news medium?  Do the American news media not know?  Have they decided—or been persuaded—that the U.S. public does not need to be informed of what our government is planning to do? 

Either possibility is unnerving.

I saw the BBC videocast at 6:30 pm mountain time.  It is now 10:30 pm mountain time.  A quick look at Google news shows CNN reporting only the proposed British buildup, while the  NYT is opting for process, not substance, a truly unhelpful trend in news reporting.  The Washington Post does mention the British assertions, but the story rests on the well-worn official statement that the President hasn’t made up his mind and won’t for a number of weeks yet.  Of the major US media, only the LA Times seems to be truly interested in the BBC report.  It reproduces a transcript of a press conference with White House Press Secretary Robert Gibbs, who ridicules the notion of getting Obama news from the BBC, not him.  So—do we believe the President’s man or the BBC? 

Yes.  Who are we to believe?  Once it was easy.  I trusted the American press to dig and pry and muckrake.     However, considering the derelictions of main stream media in recent years, especially the tendency to feed us unquestioned official versions of anything delicate, I’m inclined to go with the BBC version.  They’re not likely to go out on a limb without good reason.

All of which makes me sad and angry.   There are many among us who assert that we can no longer count on the U.S. press to keep us fearlessly well informed about our government and those we have chosen to lead us.  I've been slow to resign myself to this possibility, and maybe my doubts will turn out to be ill founded.  But the mere fact that I am doubting is the crux of the matter.

Maybe the Nobel Peace Prize for Obama Wasn’t a Blunder

By Patricia Lee Sharpe

Here is the quickly accumulated conventional wisdom:  If the Nobel wasn’t an out and out joke, it was nevertheless a mistake for Obama to accept it.  Either way, Obama didn’t deserve it.  It's an albatross he’ll regret, as he tries to move forward with his agenda.

All in all, the primary objection to the choice of Obama for this year’s Nobel Peace Prize is this:  He hasn’t accomplished anything or—as the more charitable put it—he hasn’t accomplished enough.

I want to suggest another way to regard this surprising development. 

But first, here’s a relevant bit of news that occurred almost simultaneously: Turkey and Armenia have signed an accord to resume diplomatic relations after more than half a century of enmity.  Pictures of the signing showed Obama’s Secretary of State Hillary Clinton smiling broadly.  Swiss mediators also helped the process along.  Given that Armenian-Americans have been agitating for Congress to apply the word “genocide” to what happened as the Ottoman Empire passed into history and the Turkish military is still trying to suppress memory of the wholesale slaughter, this rapprochement is a major accomplishment for the Obama administration. 

The Nobel Committee could not have known that the Turkey-Armenia accord was reaching fruition, but it lends credibility to the 2009 Peace Prize, which begins by declaring that the Committee is giving it to U.S. President Barack Obama “for his extraordinary efforts to strengthen international diplomacy and cooperation between peoples.” Surely this is something that Obama has “done,” although, like all good diplomacy,  it makes a mishmash of simplistic distinctions between words and actions, a distinction which has been used to belittle the idea of recognizing the very articulate Barack Obama. 

Much has been made of two categories of Nobel nominations, one being aspirational, the other having to do with accomplishment. The award for Obama has everything to do with aspiration—an aspiration for solutions to a world racked by violence and brutality.   There are no Gandhis among us, no Nelson Mandelas, no Martin Luther Kings, and yet there is an ache for leaders who can not only lead but inspire us, as Barack Obama certainly did during his election campaign.

Now I don’t want to sound too gushy here, so let me tell you where I’m coming from.  I was a very strong supporter of Hillary Clinton for President, for three reasons.  One, it’s time for a female president.  Two, I felt Obama was too conservative at heart.  Three, his campaign slogans were a little too facile for me.  In the end, of course, I had to vote for him, but since then I have (to the discomfort of friends who supported Obama from day one) criticized his massaging of Republican obstructionists, his coddling of the financial institutions that took advantage of lax regulation, his delicate treatment of health insurance companies and pharmaceutical manufacturers. So I’m not a charter Obama worshipper.  I’m trying to think outside my own comfy little leftist box.

Homage to Senator Edward Moore Kennedy (1932-2009)

By Patricia H. Kushlis

Ted Kennedy was buried on Saturday August 22, at Arlington National Cemetery next to his two older brothers John and Bobby in a simple grave tended by an eternal flame. The youngest son in Joseph Kennedy’s large clan, his funeral, a co-mingling of family, friends, politics, religion, sport, music, laughter, prayers, eulogies and tears was broadcast live from Boston’s Roman Catholic Basilica Our Lady of Perpetual Hope located in Roxbury, one of the city’s poorest neighborhoods. His struggle with brain cancer had lasted 15 months.

His struggle on behalf of the poor and the forgotten had lasted nearly half a century.

This Kennedy never became president or attorney general. His achievements took place in the U.S. Senate which he entered at age 30, 47 years ago. He grew to become its Lion: the mane of white hair flying and the roar coming from down the corridor. This is where he made the difference. He became one of this country’s single most effective legislators – ever. He knew what he wanted. He learned how to get things done in that cacophonous body because he understood people, power, persuasion and the art of the possible. He realized the need to cut deals, to settle for less rather than nothing but to keep pushing forward and to stand true to his principles, to look for legal loopholes to turn principles into reality, to cross party lines and befriend Republican colleagues in ways increasingly difficult to achieve. He also knew how to use the Senate floor as a bully pulpit to lobby for policies and programs in which he believed.

An unabashed Liberal

Kennedy’s legislative accomplishments were legion. In President Obama’s words, “a man whose name graces nearly one thousand laws, and who penned more than three hundred himself.” Some of these laws were controversial – from federal government supported health care for the elderly to immigration reform which has changed the ethnic mix of this country. Yet how many older Americans would willingly give up Medicare and how many of their children would want them to? And is this country really poorer by welcoming immigrants and refugees from continents other than Europe? Doesn’t the US draw its strength from receiving the “tired and the poor” not by keeping them out?

But Kennedy also championed – as he wrote the Pope in a private letter a month before his death – to open the doors of economic opportunity, to fight discrimination and expand access to health care and education, as well as to oppose the death penalty and end war. His work was far from complete when he died. His presence and perseverance are already missed – but others will step in and press on.

Soul of the Democratic Party

The Irish are known for their oratorical skills and ability to connect with people – all people. They are natural politicians. It’s no wonder then that the family dinner table was often a debating society. It is also as a place where campaign strategies and tactics are discussed and dissected and tasks and responsibilities divvied up among the clan.

The American Way of Medicine: Shirking Responsibility; Profiteering on Illness and Accident

By Patricia Lee Sharpe

My friend’s general practitioner, who was on vacation when my friend went to the hospital with a broken leg and got more than she bargained for, exclaimed: “This is the worst story I’ve ever heard!”

A hospital resident, no less horrified, confided, “I can’t believe this happened to you.”

But it did.  And neither hospital nor insurers want to take responsibility. 

On May 1 a healthy substitute teacher was admitted to a  hospital with a broken leg. She had suffered a very nasty compound fracture on the playground, and by the time the right bone man could be found to pin all the bones together, it was too late to send her home.  She definitely had to stay the night—and then, because her leg was so fragile and attendant dangers were so imminent, doctors judged that she should be kept under observation longer, through healing and rehab.  Look at the scar on her left leg.  The incision was huge, more than 12 inches long.  You can’t see the whole cut, but you can imagine why careful follow up was needed. 

So far, so good.  Then the horrors begin.

Two insurers are involved in this story: a Medicare Advantage plan and New Mexico’s Workman’s Compensation program.  Neither insurer disputes claims for costs directly related to treating the break itself.  But that's almost the least of it, and after that, the fights begin.  The hospital doesn’t want to take responsibility for complications clearly growing out of  the conditions under which the break was treated;  the insurers don’t want to pay for the cost of treating the complications.  Here is a an excerpt from a letter to New Mexico’s Workman’s Compensation program, which has been trying to shove the costs onto Medicare.  Medicare will pay, if necessary.  (This is one reason why selfish seniors are happy with the present medical system—which is pretty nice, for seniors.)  In the letter my friend is arguing that all costs arising from the break and its consequences should be covered.

I found myself in a double room with a patient who defecated on her bed, herself, and the floor next to me three times during the night.  The next morning I told the nurse that I didn’t feel “safe” in this room and that it was not sanitary.  It was one-two days later [my itals.] that I was moved to another room, and subsequently to the inpatient rehab unit. 

Some days thereafter, she writes,

I got severe diarrhea and a fever and was diagnosed with a  c. diff. infection. After a week and a half [in an isolation ward], the requisite 3 stool samples tested negative.  I was discharged...with a prescription for three additional days of antibiotics.

That was May 26, nearly a month after she’d been admitted for a broken leg.  By June 5th, she was back in the hospital. The c. difficile had recurred.  Recurrence is common, evidently, but no one had prepared her for that.  Soon after readmission,  “the c. diff. infection went septic,” another not infrequent complication.  She underwent an emergency tracheotomy and spent nearly a week in a virtually comatose condition.

A tracheotomy!  That means a scar on her throat for the rest of her life.  Well, she lived.  For that she can be grateful.  But without the broken leg and the ensuing c. difficile complications, there would have been no life-threatening sepsis, no hole in her neck, no scar. This chain reaction, so obvious to anyone with half a brain, seems to escape the profit-seeking, Scrooge-like  logic of of those who had her life in their hands and made a mess of it.

During her three-times-in-all hospitalizations, my friend had to spend many many days in intensive care and isolation wards.  Such treatment is extremely expensive.  Neither insurer wants to pay for it.  Each argues that the other is primary, as the lingo goes.  Worse, both hospital and Workman’s Comp have argued that c. difficile  exists in ordinary dirt.  Thus, those horrendously unsatisfactory hospital sanitary practices and conditions notwithstanding, the hospital should be off the ethical hook and Workman's Comp off the financial hook. 

As if my friend had suffered from the runs when she’d presented herself to the emergency room with a broken leg!  As if she had been gardening during those few days at home when she could barely move around her apartment with a walker.  She’d been to church once during that interlude, when home care was provided by a Workman’s Comp contractor.  She’d been once to visit her orthopedic surgeon.  But anything to avoid paying a patient's bills! 

Big Cheezy Swiss Bites Out of the African Economy

By Patricia Lee Sharpe

President Barak Obama and Secretary of State Hillary Clinton have sung the same song in Africa: you can’t have the prosperity Africans need and deserve without good governance; you won’t have good governance or development when your leaders are stealing you blind. 

So better leadership is needed, yet corrupt leaders wouldn’t have much incentive if there were nothing to embezzle in Africa’s poorly run countries.  In fact, there’s plenty to steal.  Also, once greedy leaders have got their hands on what doesn’t properly belong to them, they have a problem.  They need a safe place to hide it, to stash it.  For this they need enablers—and they get them.  At every stage of the wealth-siphoning process, foreigners tend to be complicit.  Ordinary Africans are cheated.  Foreigners profit.

Here a key passage from President Obama’s speech in Accra, Ghana:

...too many [African] nations, even those that have elections, are plagued by problems that condemn their people to poverty.  No country is going to crate wealth if its leaders exploit the economy to enrich themselves–(applause)–or if police can be bought off by drug traffickers. (Applause.) No business wants to invest in a place where the government skims 20 percent off the top–(applause)—or the head of the Port Authority is corrupt.  No person wants to live in a society where the rule of law gives way to the rule of brutality and bribery.

And this version is from the Secretary of State’s address in Nairobi:

True economic progress—(applause)—depends not only on the hard work of millions of people who get up every day and do the best they can, often under overwhelming circumstances; it also depends on responsible governments that reject corruption, enforce the rule of law, and deliver results for their people.  This is not just about good governance; this is about good business.  Investors will be attracted to states that do this, and they will not be attracted to states with failed or weak leadership, or crime and civil unrest or corruption that taints every transaction and decision.

Ordinary people, including many parliamentarians and middle class meritocrats, applauded during these speeches, because they, as well as service-starved subsistence farmers, need the fruits of better governance.  Practically everyone’s standard of living suffers while the kleptocrats, who get a cut from sales of natural resources to foreign companies, who skim as much as they can from international aid packages, whose greed inflates the cost of imports, live lavishly and still have plenty left for luxury living when the rainy days come.  It used to be that African despots could count on “retiring” to a villa in southern France.  The Francophones could, anyway. Anything to get rid of them!  And then their successors, often elected as “reformers,” proved to be no better.  The cycle was discouraging and debilitating to those who dreamed of an Africa that could hold its head up (so to speak) in the world.

For too long there have been too many excuses for Africa’s degradation.  We naive, well-meaning foreigners bought them, because African history was full of terrible chapters our own ancestors had played an unsavory role in.  The slave trade depopulated Africa.  Colonialism exploited Africa.  Raw capitalism drained its resources.  All of these things happened, and even if there was a certain amount of African complicity at each stage, Africa was more sinned against than sinning.  Thus, we in the West were  paralyzed by shame.  We must make up for our crimes and sins, we cried.  Give!  Give!  Give!

Reality, of course, was not so simple. As Barak Obama noted of his father’s country, “Countries like Kenya had a per capital economy larger than South Korea’s when I was born.  They have been badly outpaced.”  Yes.  Outpaced not only by South Korea, but by other Asian tigers, most of them seen as hopeless basket cases when their racist European colonial masters were forced to exit.  When I first went to Africa, Nairobi was admired as the city that worked.  Journalists covering the whole continent worked out of Nairobi.  Unfortunately, Kenya caught the corruption disease and dissolved into bloody tribal warfare during last year’s elections.  

California - Ghost of the Future of the U.S.?

By Guest Contributor Wendi Maxwell

Wendi Maxwell retired after 38 years in California state service. Currently, she is a consultant in adult literacy specializing in long range strategic planning and policy development.

The California Legislature recently enacted an $80 billion budget, cutting $23 billion from the previous year - a tricky process that attempted to save the state’s social safety net without raising taxes. After passage by the Legislature, Governor Arnold Schwarzenegger signed the budget and used his veto power to impose an additional $500 million in cuts. The budget relied on $8 billion in accounting maneuvers that some analysts call “kicking the problem down the road.” Mike Moritz, the British venture capitalist and former member of the Board of Directors of Google, Inc., called the state the “ghost of the future of the U.S.”

California’s budget balancing problem used to be a source of local embarrassment, an in-joke. This year, as the eight largest economy in the world teeters on the brink of insolvency with a 20 percent deficit – paying its bills with IOUs, laying off untold thousands of teachers, mandating state employees take three unpaid furlough days a month, and the majority leader walking out of budget talks – people outside the state started to notice.

How did California end up here? We went from being the Golden State to being the state that can’t pay its own way. Partisan politics certainly play a role in our current impasse, but there are structural problems that run much deeper and are more difficult to address. The current legislative impasse is a clear warning of what happens when good intentions go awry.

Europe Breaks the Microsoft Stranglehold; Time for America to Follow Suit

By Patricia Lee Sharpe

Two fascinating stories on the business front this week.  Neither has terribly good new for Americans.  Here are the headlines:

    Dateline Berlin:  To Avoid a New Legal Battle, Microsoft Offers Europe a Choice of Browsers

    Dateline Washington, D.C.:  Antitrust Chief Hits Resistance in Crackdown

The European Union has long accused Microsoft of abusing its dominant position in the operating system market to foist its media players, browsers and other consumer software products on computer buyers, who might prefer other products, if they could be got to run on XP or Vista or any other Microsoft OS without endless annoying complications, thanks to the bundling process, which tangles up code so hopelessly that the non-nerd hasn’t a chance for independence and sticks, however resentfully, with Microsoft.  Result: smaller competitors haven't a hope of succeeding.  The Microsoft position today verges on monopoly, and the Europeans, thank goodness, object to that.  Under threat of a prodigious fine, Microsoft has reached an agreement with the EU.

From now on, computer buyers in Europe (but not in the U.S. or anywhere else outside Europe) will be presented with a ballot screen that will allow them to choose which browser they want to use.  Explorer will be one of the choices, but it will no longer be confusing and time consuming  to choose a non-Microsoft browser.

Microsoft has evidently also agreed to release “confidential technical information worldwide that would help competitors design software” that works more smoothly with Windows and other Microsoft products.  That’s good news for all of us.

I’ve been using Firefox for years and have been totally satisfied with everything about my choice, except the business of disabling MS Explorer and installing Firefox whenever I buy a new computer.  I have go through all sorts of  stupid rigamarole before I can get on the Web the way I want to get on the Web.  Even so, every so often, Explorer breaks through and tries to take over.  I am not amused.

When are U.S. anti-trust authorities going to have the guts to take on Microsoft so that we American computer users can enjoy the same freedom? 

Sinking Assets

By Patricia Lee Sharpe