"Nonprofit" Corruption

A revealing article, dubbed wonkishly enough “The Pennsylvania Community Health Reinvestment Agreement”: http://www.statecoverage.net/pdf/monograph0806.pdf

This article provides an overview of one of the many, many problems with a private health care system. Here we see the many opportunities for corruption available to the insurers that enjoy non-profit status, Blue Cross/Blue Shield.

The historical roots of Blue Cross/Blue Shield are in the efforts of the AMA to maintain “provider sovereignty”–that is, to prevent the majority of Americans from access to health care, so that the health care market would be calibrated to the incomes/wealth of the most affluent Americans, thus maintaining medical doctors’ financial elitism in addition to their elite status.

It should be made clear to non-Americans that Blue Cross/Blue Shield do not primarily service needy populations.

These insurers’ unregulated status makes public accountability impossible, as this article demonstrates.

Blue Cross/Blue Shield provide an excellent case of the widespread corruption and inefficiency that dominates US businesses via “creative” accounting. They went from no reserves to pay claims in the 1980s and 1990s–when they poured insurance income into outrageous golf junkets and Paris headquarters–to a new amassing of massive wealth at the public and social expense. While companies and individuals paying for health insurance fork over ever higher premiums for the “confidential” ends of the private healthcare insurers, this wealth has been dedicated to ridiculously high executive salaries, the retention of armies of ridiculously overpaid legal firms, and political lobbying.

In exchange for minimal and insecure commitments to low-income health insurance subsidization (covering 100,000 people), the Pennsylvania Agreement effectively relieves these unaccountable companies and their for-profit subsidiaries from contributing to the public welfare through taxation. Crazily enough, the PA Community Investment Agreement appears to be the very best the privatized US health care system can do to provide health care coverage. It is hailed as a cutting-edge model for states hoping to cope with the devastating health care crisis. For in most states, governments have no ability to regulate these “nonprofit” monsters.

And by regulate, I mean to say: Governments have no ability to determine whether a nonprofit is acting in any “benevolent” (as opposed to bilking) manner whatsoever. They have no access to information about rates and expenditures. This brings into question the whole point of even having a “nonprofit” category in public governance. Since its a capitalist country, why assume that any private business is “benevolent” at all? Blue Cross/Blue Shield themselves deny it! Here is the reason for the “nonprofit” category in the US: It’s an avenue for graft.

Blue Cross/Blue Shield are a clear cut case that privatized health care is socially inefficient and socially damaging.

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Sliding Into an Extraordinary Recession

New York Times
January 23, 2008
ECONOMIC SCENE
Worries That the Good Times Were Mostly a Mirage

By DAVID LEONHARDT
So, how bad could this get?

Until a few months ago, it was accepted wisdom that the American economy functioned far more smoothly than in the past. Economic expansions lasted longer, and recessions were both shorter and milder. Inflation had been tamed. The spreading of financial risk, across institutions and around the world, had reduced the odds of a crisis.

Back in 2004, Ben Bernanke, then a Federal Reserve governor, borrowed a phrase from an academic research paper to give these happy developments a name: “the great moderation.”

These days, though, the great moderation isn’t looking quite so great — or so moderate.

The recent financial turmoil has many causes, but they are tied to a basic fear that some of the economic successes of the last generation may yet turn out to be a mirage. That helps explain why problems in the American subprime mortgage market could have spread so quickly through the world’s financial system. On Tuesday, Mr. Bernanke, who is now the Fed chairman, presided over the steepest one-day interest rate cut in the central bank’s history.

The great moderation now seems to have depended — in part — on a huge speculative bubble, first in stocks and then real estate, that hid the economy’s rough edges. Everyone from first-time home buyers to Wall Street chief executives made bets they did not fully understand, and then spent money as if those bets couldn’t go bad. For the past 16 years, American consumers have increased their overall spending every single quarter, which is almost twice as long as any previous streak.

Now, some worry, comes the payback. Martin Feldstein, the éminence grise of Republican economists, says he is concerned that the economy “could slip into a recession and that the recession could be a long, deep, severe one.” In Monday’s Democratic presidential debate, Barack Obama made the same argument: “We could be sliding into an extraordinary recession,” he said.

In the next breath, of course, Mr. Obama suggested that the right policies might still help, while Mr. Feldstein has said that a recession isn’t yet a sure thing. And much of the great moderation is real. Computers allow managers to run their businesses more efficiently and avoid some of the wild swings. The Fed and central banks in other countries have learned from their past mistakes.

But a recession is now more likely than not. It may well have started already. The Philadelphia Fed reported Tuesday that the economy shrank in 23 states last month, including Ohio, Missouri and Arizona, and was stagnant in seven others. California and Florida, with their plunging home values, may soon join the recession list.

The bigger question is how severe the recession will be if it does come to pass. The last two, in 1990-1 and 2001, have been rather mild, which is a crucial part of the great moderation mystique. There are three reasons, though, to think the next recession may not be.

First, Wall Street hasn’t yet come clean. Even after last week, when JPMorgan Chase and Wells Fargo announced big losses in their consumer credit businesses, financial service firms have still probably gone public with less than half of their mortgage-related losses, according to Moody’s Economy.com. They’re not being dishonest; they just haven’t untangled all of their complex investments.

“Part of the big uncertainty,” Raghuram G. Rajan, former chief economist at the International Monetary Fund, said, “is where the bodies are buried.”

As Mr. Rajan pointed out, this situation is more severe than the crisis involving Long Term Capital Management in the late 1990s. That was a case in which a limited set of bad investments, largely at one firm, had the potential to drive down the value of other firms’ holdings in the short term. Those firms then might have stopped lending money because they no longer had the capital to do so. But their own balance sheets were largely healthy.

This time, the firms are facing real losses, which will almost certainly curtail lending, and economic growth, this year.

The second problem is that real estate and stocks remain fairly expensive. This shows just how big the bubbles were: despite the recent declines, stock prices and home values have still not returned to historical norms.

David Rosenberg, a Merrill Lynch economist, says that the stock market is overvalued by 10 percent relative to corporate earnings and interest rates. And remember that stocks usually fall more than they should during a bear market, much as they rise more than they should during a bull market.

The situation with house prices looks worse. Until 2000, the relationship between house prices and rents remained fairly steady. The same could be said about house prices relative to household incomes and mortgage rates. But the boom of the last decade changed this entirely.

For prices to return to the old norm, they would still need to fall 30 percent across much of Florida, California and the Southwest and about 20 percent in the Northeast. This could happen quickly, or prices could remain stagnant for years while incomes and rents caught up.

Cheaper stocks and houses will benefit many people — namely those who don’t yet own a home and still have most of their 401(k) investing in front of them. But the price declines will also lead directly to the third big economic problem.

Consumer spending kept on rising for the last 16 years largely because families tapped into their newfound wealth, often taking out loans to supplement their income. This increase in debt — as a recent study co-written by the vice chairman of the Fed dryly put it — “is not likely to be repeated.” So just as rising asset values cushioned the last two downturns, falling values could aggravate the next one.

“What people have done is make an assumption that these prices could continue rising at the rate they had been,” said Ed McKelvey, an economist at Goldman Sachs. “And that does seem to have been an unreasonable assumption.”

Certainly, there are some forces to push in the other direction. Outside of Wall Street, corporate balance sheets remain remarkably strong, while the recent fall in the dollar will help American companies to sell more goods overseas.

But it’s hard not to believe that the economy will pay a price for the speculative binge of the last two decades, either by going through a tough recession or an extended period of disappointing growth. As is already happening, banks will become less willing to lend money, households will become less willing to spend money they don’t have and investors will become more alert to risk.

The Narrow World of Neoliberalism

ALAN GREENSPAN: Well, I stated that I’m a libertarian Republican, which means I believe in a series of issues, such as smaller government, constraint on budget deficits, free markets, globalization, and a whole series of other things, including welfare reform. And as you may remember, Bill Clinton was pretty much in the same—was doing much that same agenda. And so, I got to consider him as someone—as he described it, we were both an odd couple, because he is a centrist Democrat. And that’s not all that far from libertarian Republicanism.

September 24, 2007. Greenspan interviewed by Amy Goodman on Democracy Now.

Addendum:

The transcript of this interview is from “Alan Greenspan vs. Naomi Klein on the Iraq War, Bush’s Tax Cuts, Economic Populism, Crony Capitalism and More.” Hit the “Narrow World of Neoliberalism” title above to get to the Democracy Now page. It shows how unused Greenspan is to being confronted by real journalists. He flops terribly in efforts to misdirect, evade, and dissimulate (lame efforts that would work with a teevee reporter or newspaper reporter), because Goodman and Klein have done their research. Check out how he tries to present an alternate case for “pre-emptively” invading Iraq–that both avoids the WMD excuse debacle and mentioning Israel’s imperial interests in the region–but manages to promote violating international law. Check out how he tries to pretend his Republican libertarianism has had nothing to do with crony capitalism graft: “Ohh, well now that you confront me with the evidence, let me stutter on here for awhile…”

The Young Idealists lyrics

“The Young Idealists” from Antidepressant by Lloyd Cole

I know I said I favoured peaceful resolution
But that was when we were the young idealists
The Young Idealists
Raging through the coffee shops and bars
Make believe the world was really ours
Still supposing we could make a difference
Then we bought into the neocon economic dream
And we were trading in futures we believed in
The Young Idealists
Careering through the markets to the Mall
Venturing that we could have it all
Still supposing we could make a difference
And then the markets fall
And the heavens open
And there’s no synergy at all
The synergy is broken
So maybe now I’d take that wholesale revolution
we were talking about
Maybe now I’d take a future we can breathe in
The Young Idealists
Raging through the forests and the streams
Breaking into your laboratories
Still supposing we could make a difference
I never dreamed I’d want a slogan on my people
mover
But that was when we were the young idealistsTHE YOUNG IDEALISTS

Colombian Spook Yamhure threatens Swedish lives

NORDIC NEWS NETWORK
9 January 2008

Colombian “Diplomat” Threatens Lives
Of Regime Critics and Swedish Journalist

A Swedish journalist with long experience of Latin America is the primary target of thinly veiled death threats from the former head of intelligence at Colombia’s Stockholm embassy.

Writing in the leading Colombian weekly El Espectador , Ernesto Yamhure has accused reporter Dick Emanuelsson of being, among other things, “the FARC guerrillas’ representative in Europe” and “one of FARC’s more important ambassadors in Europe”. Similar accusations have also been aimed at Swedish and Colombian parliamentarians, and two solidarity organizations based in Sweden.

In the past, such accusations have often been followed by the torture and murder of the accused. Over 120 journalists are known to have been murdered in Colombia during the past twenty years, while others have fled into exile, sought safety in self-censorship or switched to less deadly occupations.

“Of course, there is not an ounce of truth in the absurd statements of Yamhure,” says Dick Emanuelsson, whose reporting has been a source of irritation to brutal regimes in Latin America for over a quarter-century. “This is just one more example of the Uribe government and its henchmen attempting to frighten journalists and others into silence.”

The reaction of the Swedish government has not been especially visible or robust, reflecting the transformation that the country has undergone since the assassination of Olof Palme in 1986– from widely respected, independent voice of reason in world affairs to just another vassal-state within the U.S. empire.

Details in PDF document at: http://www.nnn.se/nordic/colombia.pdf

Phillip Agee

CIA whistleblower Phillip Agee dies

modified from the story by
Fred Attewill and agencies
Wednesday January 9, 2008
Guardian Unlimited

Philip Agee, a former CIA agent who became a critic of Washington’s Cuba policy, has died aged 72, Cuban state media reported today.

Bernie Dwyer, a Radio Havana journalist, said Agee had been in hospital since last month, where he died following several operations for perforated ulcers. Dwyer said friends planned a remembrance ceremony for Agee on Sunday at his Havana apartment.

Granma, Cuba’s communist party newspaper, said Agee died on Monday night and described him as “a loyal friend of Cuba and fervent defender of the peoples’ fight for a better world”.

A Brief Biography of Phillip Agee:

Agee quit the CIA in 1969 after 12 years in which he mainly worked in Latin America.

His famous 1975 book, Inside the Company: CIA Diary, cited CIA violations against leftist people in the region and included a 22-page list of agency operatives.

In Britain, Agee worked with journalists to list the names of the agents, leading to many spies being sent back to Washington (at least temporarily) with their cover blown.

In comments published last year, Agee explained his decision to expose the CIA: “It was a time in the 70s when the worst imaginable horrors were going on in Latin America. Argentina, Brazil, Chile, Uruguay, Paraguay, Guatemala, El Salvador – they were military dictatorships with death squads, all with the backing of the CIA and the US government. That was what motivated me to name all the names and work with journalists who were interested in knowing just who the CIA were in their countries.”

His intent to destabilise the organisation’s own disruptive operations by revealing the identities of CIA agents infuriated the right wing US intelligence community.

Agee wanted to settle in Cambridge, England with his partner, Angela, a Brasilian who had been jailed and tortured by the right wing in her own country, and his two young sons by his former wife. He intended to continue exposing the CIA, but he was deported from England in 1978 as a “threat to the security of the state”. Agee thinks that the British prime minister Jim Callaghan acted under the instruction of the US secretary of state, Henry Kissinger. Kissinger’s vengeance was meted out because he believed that Agee’s exposure of CIA activities in Jamaica influenced the Jamaican elections in favour of progressive Michael Manley and against the US’s own preferred right wing politicians.

Agee settled in Germany with his new partner, the ballet dancer Giselle Roberge, and later split his time between Hamburg and Havana. In 1979, his US passport was finally revoked and was never returned.

Though he was punished, Agee had no regrets about his decision to blow the whistle on the CIA. He said: “There was a price to pay. It disrupted the education of my children [Phil and Chris, then teenagers] and I don’t think it was a happy period for them. It also cost me all my money. Everything I made from the book, I had to spend.

“But it made me a stronger person in many ways and it ensured I would never lose interest or go back in the other direction politically. The more they did these dirty things, the more they made me realise what I was doing was important.”

Under the US Freedom of Information Act, Agee was able to discover the CIA had accumulated 18,000 pages of information on him.

Agee was denounced as a traitor by George Bush Sr and was threatened with death by his former colleagues in the CIA.

The US right wing repeatedly blamed Agee for the death of Richard Welch, the CIA station chief in Athens who was assassinated in 1975. Explained Agee, “George Bush’s father [George Bush Sr] came in as CIA director in the month after the assassination and he intensified the campaign, spreading the lie that I was the cause of the assassination. His wife, Barbara, published her memoirs and she repeated the same lie, and this time I sued and won, in the sense that she was required to send me a letter in which she apologised and recognised what she wrote about me was false. They’ve tried to make this story stick for years. I never know what government hand or neocon hand is behind the allegations, and I don’t pay too much attention, but I know I haven’t been forgotten.” While the Bush family tried to hang the Athens CIA chief’s death on Agee’s work to counter state terrorism, George Bush Jr. outed CIA agent Valerie Plame when the politics suited the right wing’s interests.

Agee was a great supporter of Cuba’s progressive policies providing universal healthcare and education, and he regarded the current US president, George W. Bush, as the “antithesis” of those achievements.

Writing in the Guardian last year, he said: “All Cuba’s achievements have been in defiance of US efforts to isolate Cuba. Every dirty method has been used, including infiltration, sabotage, terrorism, assassination, economic and biological warfare and incessant lies in the media of many countries.”

Agee denied claims from a former Cuban intelligence officer he had received $1m from Cuban intelligence.

Despite the long-running bitterness between him and the US authorities, Agee was allowed to return to the US many times without being arrested and was allowed back into Britain under John Major’s government.

In the 1990s, Agee set up a company to bring visitors to Cuba. Many travellers came from the US, even though Americans are forbidden by law from visiting the country.

Until his death, Agee remained committed to exposing the repressive operations of the CIA. Last year, he was working on a book about the CIA’s activities in Venezuela.