Blog Archives

Costs Are Spiraling Out of Control

If we had to choose one “big picture” reason why the vast majority of households are losing ground, it would be: the costs of essentials are spiraling out of control. I’ve often covered the dynamics of stagnating income for the bottom 90%, and real-world inflation, i.e. a decline in purchasing power.

But neither of these dynamics fully describes the relentless upward spiral of the cost basis of our economy, that is, the cost of big-ticket essentials: housing, education and healthcare.

The costs of education are spiraling out of control, stripping households of income as an entire generation is transformed into debt-serfs by student loan debt. The soaring costs of healthcare are a core driver of higher costs in the education complex (and government in general), and to cover these higher costs, counties raise property taxes, which add additional cost burdens to households and enterprises as rents rise.

(more…)

Tagged with: , , , , , ,

Why Are so Few Americans Able to Get Ahead?

Despite the rah-rah about the “ownership society” and the best economy ever, the sobering reality is very few Americans are able to get ahead, i.e. build real financial security via meaningful, secure assets which can be passed on to their children.

As I’ve often discussed here, only the top 10% of American households are getting ahead in both income and wealth, and most of the gains of these 12 million households are concentrated in the top 1% (1.2 million households). (see wealth chart below).

Why are so few Americans able to get ahead? there are three core reasons:

(more…)

Tagged with: , , , , , , ,

Big Pharma and the Rise of Gangster Capitalism

Thanks to decades of gangster films, we all know how gangster capitalismworks: the cost of “protection” goes up whenever the gangster wants to increase revenues, any competition is snuffed out, and “customer demand” is jacked up by any means available– addiction, for example.

This perfectly describes the pharmaceutical industry and every other cartel in America. You might have read about the price increase in Acthar gel, a medication to treat Infantile Spasms. (via J.F., M.D., who alerted me to the repricing of this medication from $40 in 2001 to the current price of $38,892.)

The compound first received approval in 1950, and various branded versions have been approved in recent years. Let’s be clear: this medication did not require billions of dollars in research and development, or decades of testing to obtain FDA approval; it’s been approved for use for the past 68 years.

Yes, you read that correctly: a medication that’s been in use for 68 years went from $40 a dose in 2001 to $38,892 today. Don’t you love the pricing? Not a round 38 grand, but $38,892. You gotta love these gangsters!

(more…)

Tagged with: , , , ,

Is This Why Productivity Has Tanked and Wealth Inequality Has Soared?

One of the enduring mysteries in conventional economics (along with why wages for the bottom 95% have stagnated) is the recent decline in productivity gains (see chart). Since gains in productivity are the ultimate source of higher wages, these issues are related. Simply put, advances in productivity are core to widespread prosperity.

But that’s only half the problem–productivity gains have flowed to the top of the income-wealth pyramid as financialization and cartels have replaced real-world wealth creation as the source of wealth-income.

(more…)

Tagged with: , , ,

Are Profit and Healthcare Incompatible?

As I have been noting for a decade, the broken U.S. healthcare system will bankrupt the nation all by itself. We all know the basic facts: the system delivers uneven results in terms of improving health and life expectancy while costing two or three times more per person compared to our advanced-economy global competitors.

U.S. Lifestyle + “Healthcare” = Bankruptcy (June 19, 2008)

Sickcare Will Bankrupt the Nation–And Soon (March 21, 2011)

How Healthcare Is Dooming the U.S. Economy (Three Charts) (May 2015)

You Want to Fix the Economy? Then First Fix Healthcare (September 29, 2016)

This chart says it all: the global outlier in low life expectancy and exorbitant cost is the U.S.

(more…)

Tagged with: , , ,

Our Hopelessly Dysfunctional Democracy

Democracy in America has become a hollow shell. The conventional markers of democracy–elections and elected representatives–exist, but they are mere facades; the mechanisms of setting the course of the nation are corrupt, and the power lies outside the public’s reach.

History has shown that democratic elections don’t guarantee an uncorrupt, functional government. Rather, democracy has become the public-relations stamp of approval for corrupt governance that runs roughshod over individual liberty while centralizing the power to enforce consent, silence critics and maintain the status quo.

Consider Smith’s Neofeudalism Principle #1: If the citizenry cannot replace a dysfunctional government and/or limit the power of the financial Aristocracy at the ballot box, the nation is a democracy in name only.

In other words, if the citizenry changes the elected representation but the financial Aristocracy and the Deep State remain in charge, then the democracy is nothing but a PR facade for an oppressive oligarchy.

(more…)

Tagged with: , ,

Why Is the Cost of Living so Unaffordable?

The mainstream narrative is “the problem is low wages.” Actually, the problem is the soaring cost of living. If essentials such as healthcare, housing, higher education and government services were as cheap as they once were, a wage of $10 or $12 an hour would be more than enough to maintain a decent everyday life.

Here are some examples from the real world. In 1952, it cost $30 to have a baby in an excellent hospital. If we adjust that by official inflation as measured by the Bureau of Labor Statistic’s inflation calculator to 2017, the cost would be $275. ($1 in 1952 = $9.16 in 2017).

What does it cost to have a baby delivered in a hospital today? $5,000? $10,000? Who even knows, given the convoluted billing process in today’s sickcare system?

The pharmaceutical cartel jacks up medication costs per dose from $3 to $600, even when the medication has been around for decades: the Pinworm prescription jumps from $3 to up to $600 a pill Parents, doctors angry over drug price gouging (via John F.)

(more…)

Tagged with: , , ,

Want to Bring Back Jobs? It’s Impossible Unless We Fix these Four Things

If there is any goal that might attract support from across the political spectrum, it’s creating more fulltime jobs in the U.S. But this laudable goal is dead-on-arrival (DOA) unless we first fix these four things. Why is job growth stagnating? Many point to automation, and yes, that is a systemic dynamic that will only expand going forward.

But much of the stagnation is the direct result of the high costs and structural failures in these four inputs to the job market. U.S. healthcare costs more than twice as much per person as healthcare per person in our advanced-economy competitors. Why would anyone open a business in a nation so poorly run that healthcare costs twice as much as it does everywhere else?

The American people are not healthy. Obesity / obesity-related diseases and opiate addiction are both epidemic. Workers struggling with lifestyle-caused chronic diseases cost more to hire and to help.

If you set out to destroy the nation’s ability to create jobs, you’d impose the unaffordable healthcare system we have, and the overly complex and costly tax / regulation system we have. And you’d push your students to get useless credentials instead of the real-world skills, moxie and values they need to get ahead and fulfill their potential in a fast-changing economy.

You want to create jobs? First fix these four things, or your goal is DOA.

(more…)

Tagged with: , , , , , , , ,

Be Your Own Medicine

I recently saw a slogan that encapsulated what’s wrong with the U.S. healthcare system: Be Your Own Medicine. To Be Your Own Medicine is the essence of prevention, and a way of taking full ownership of one’s health, body, mind, diet, fitness and daily habits.

Alas, being your own medicine strips the $3.5 trillion healthcare system of profit, power and control, so the last thing the healthcare cartels want is for us to be our own medicine, as that would reduce our reliance on highly profitable pharmaceuticals, tests, procedures and high-cost facilities.

Note the slogan isn’t “take your own medicine” or “make your own medicine”–it’s be your own medicine, which suggests that health is a way of being, not just a way of consuming, though what we consume is integral to being your own medicine.

Our materialist-consumerist culture focuses almost exclusively on data, so “health” is quickly reduced to FitBit readings, test results and an obsessive monitoring of calories and diets, to the general exclusion of the mind-body as an integral system.

The importance of what we put in our mouths is expressed by the old Chinese saying: disease comes in through the mouth, i.e. what we consume. But what we consume is not limited to food (or what is sold as “food”): it also includes what our minds consume in the way of “news”, entertainment, knowledge, etc., and what inputs we experience as stress.

There is also what we might call a spiritual component that includes beliefs but also purpose, meaning and positive social roles. People who have lost (or been stripped of) positive social roles, goals and purpose are prone to a Devil’s brew of psychological and physical ailments that cannot be understood or treated as separate from being.

Yet this is precisely what the U.S. healthcare system does: separate conditions into specialties that can each be treated by medications or procedures. What cannot be “fixed” by medications or procedures–for example, a loss of purpose and positive social roles–are ignored: these realities simply do not exist in the U.S. healthcare system.

Any physician or nurse who attempts to understand and co-treat (with the patient themselves) a patient’s entire state of being will encounter multiple layers of institutional resistance or even active hostility.

There’s no time or money to address the state of patients’ being; treatment is defined by tests, data and diagnoses that then trigger “standards of care” that rely heavily on medications, for a number of systemic reasons: drugs satisfy the patients’ demands for the system to “do something” that “fixes” their condition instantly; it enables overworked physicians and providers a ready treatment that can be defended in the courts as current standard-of-care, and it enables every cartel in a system of cartels to reap huge revenues and profits.

What would a healthcare system based on prevention and be your own medicine look like? Such a system would still be called upon to treat diseases such as brain tumors, genetic conditions, traumatic injuries, etc., but the front line of the system would be designed to help individuals be their own medicine, not just in the context of provider-patient but within the day-to-day contexts of households, communities and enterprises.

The idea that actions have consequences is not alien to us, yet our healthcare system is based on giving lip-service to the causal consequences of what we put in our mouths, what we do with our bodies and minds, and what we consume in the material, spiritual and psychological worlds.

Treatment of atomized individuals in a setting of atomized symptoms and treatments is by any measure the opposite of a system that encourages and enables everyone to be their own medicine.

My new book is in the top 20 of Amazon’s Kindle ebooks > Business & Money > International Economics: A Radically Beneficial World: Automation, Technology and Creating Jobs for All. The Kindle edition is $8.95 and the print edition is currently discounted to $20.82.

Tagged with: , ,

Why The Status Quo Is Doomed: Income Stagnates, Costs Rise

Even if nothing else doomed the status quo, the widening gap between household incomes and costs will push the corrupt contraption over the cliff by itself. The status quo (whatever you wish to call it) requires “growth” to sustain itself–growth in consumption, spending, sales, debt, asset valuations, profits and of course taxes, and ultimately all of those “growths” depend on household incomes.

Incomes even for the most highly educated workers are stagnating:

(more…)

Tagged with: , , , ,

A Fatal Accident Waiting to Happen: U.S. Healthcare

Many of the systems we take for granted are historical accidents. Either based on legacy systems hundreds of years old (higher education) or assembled in a short-term, ad hoc fashion (post-1940 national defense/ national security), these systems have expanded into vast patronage systems that are completely out of touch with 21st century needs, costs or realities.

The U.S. healthcare system was not planned; it is largely accidental.

(more…)

Tagged with: , , ,

The Critical Difference Between Rentier Wealth and Wealth Creation

If you want to understand why our economy is stagnating and wealth inequality is rising, look at the rise of rentier skims and the resulting decline in wealth creation.

To understand why the real economy is stagnating, we have to understand the critical difference between rentier wealth and wealth creation. Rentier wealth is skimmed by fees that provide little to no value to the to the person paying the fee.

The classic example is a fee collected to pass from one fiefdom’s border to the next: no value is provided to the person paying the border fee; it is a rentier skim that transfers wealth from serfs to the fiefdom’s landowning nobility.

In the modern economy, rentier skims take a variety of forms.

(more…)

Tagged with: , , , , , ,