Tag Archives: Economy

Ron Devious Redux

One of my favourite Monty Python skits was the Motor Insurance Sketch where the insurance salesman Ron Devious explained to the customer that he had bought the Never Pay Policy.

Vicar: It’s about this letter you sent me regarding my insurance claim.
Devious: Oh, yeah, yeah – well, you see, it’s just that we’re not… as yet … totally satisfied with the
grounds of your claim.
Vicar: But it says something about filling my mouth in with cement.
Devious: Oh well, that’s just insurance jargon, you know.
Vicar: But my car was hit by a lorry while standing in the garage and you refuse to pay my claim.
Devious: (rising and crossing to a filing cabinet) Oh well, Reverend Morrison … in your policy … in
your policy … (he opens the drawer of the filing cabinet and takes out a shabby old sports jacket; he
feels in the pocket and pulls out a crumpled dog-eared piece of paper then puts the coat back and
shuts the filing cabinet)
… here we are. It states quite clearly that no claim you make will be paid.
Vicar: Oh dear.
Devious: You see, you unfortunately plumped for our ‘Neverpay’ policy, which, you know, if you
never claim is very worthwhile… but you had to claim, and, well, there it is.
Vicar: Oh dear, oh dear.
Devious: Still, never mind – could be worse. How’s the nude lady?
Vicar: Oh, she’s fine. (begins to sob)
Devious: Look … Rev … I hate to see a man cry, so shove off out the office, there’s a good chap.

And it’s worse if you don’t even get the nude lady. Very good about the shove off out of the office. That has the ring of truth.

This has been a chief device for US Health Insurance companies and in the last 15 years or so become their primary business: turning paid customers into never pay policyholders retroactively. At least Devious had the balls to write it in the contract upfront. Even if that contract was crumpled up inside his pocket.

Increasingly insurers are looking to only insure healthy people, which admittedly does seem to be a more profitable model, if it kinda misses the point of insurance to begin with.

How insurers secretly blacklist millions with common ailments

Two things:
1. The whole point of insurance is spreading the cost of risk.
2. These companies sell confidential information that destroy lives

I expect that the mere act of applying for health insurance requires you to waive confidentiality and give the company permission to access and share any health data with any other insurer/HMO/hospital etc. There is no getting around the fact that far too many people have access to health records but at least if they are government employees and subject to large fines and prison terms for violating confidentiality, there is a substantial disincentive. In the US model there are positive incentives for breaking patient confidentiality.

What these insurance companies are doing is perfectly reasonable in an individual business sense. They are trying to collect large premiums and pay out as little as possible. One way to do this is overcharge and insure only the healthiest people, and at the same time to deny payments as much as possible. In pursuit of this strategy it becomes more profitable to hire Private Investigators to get pictures of someone smoking and cancel their non-smoker coverage than it does to pay a doctor to treat their hypertension.

The system as it exists is a criminal oligopoly because of this data sharing. If Humana refuses to insure anyone with any pre-condition they ought to be precluded from sharing that knowledge with their competitors. This is collusion, an obvious antitrust violation and the sort of practice that distorts markets. In a legitimately free market it would be possible for an honest insurer to emerge. They might charge more in premiums since they would take on riskier patients, but they would gain a competitive advantage from actually fulfilling their end of the contract. If they were smart, they could also slash about 30% of their costs devoted to bureaucracy and fighting/denying claims, and therefore actually be price competitive with their scumbag competitors. If you were an employer and you went with an actual insurance company then you would have a huge competitive advantage in the labour market. If I were GE I would stop advertising “We bring good things to life” and start advertising “GE. Work for us, we provide the health care that actually provides health care.” The fact that this has not occurred is evidence that -as with the financial markets – there is not a free market, but a protected criminal oligopoly wherein the profits are privatized (insurance companies) and losses are socialized (medicare/medicaid/public hospitals).

It actually makes things less efficient, more costly. Less health care for more money.

The stakeholders in the US health care system:
Patients
Taxpayers (which is close to 100% overlap with Patients)
Health care providers (doctors, nurses etc)
Health care vendors (Pharmaceuticals, Hospitals etc)
Insurance Companies and HMOs
Employers

Of these, Insurance Companies and Employers are fundamentally extraneous to health care. There is no actual need for their involvement. The fact that US employers have to provide health care for employees is a nearly unique competitive disadvantage vs any other first world nation, and further skews the outsourcing problem. It costs way more to locate a job in the US because of employer provided health care. Employers in the US would love to get rid of this, and it is frankly necessary to remain competitive. Ironically, this may be the winning argument leveraging the power of entrenched interests. eg if GM didn’t have to pay a shitload for insurance coverage of retirees they would not be a month away from bankruptcy. They would still be making shitty cars but…

Insurance companies are a different story. They are completely extraneous to the health care issue. The only role they could possibly legitimately play is creating efficiency or in distributing risk. They have done neither, and instead chosen to go another route which in a true free market would eventually lead to their bankruptcy for failing to provide value.

Just take the market away from them and let them go bust as they deserve.

In an economy where something like 15% of people will be out of work for at least part of the year (and lose their health care) and many people will be taking jobs with less coverage – or perhaps be ruled ineligible at their new job due to pre-existing conditions , or even over pretend preconditions we will see a lot more of this

It is shameful. No society that calls itself decent can let this go on, when there is a cheaper better, more economically competitive way to do it right. But it is the price paid for letting the lobbying money of the Insurance Industry plus the false consciousness of the conservative working class riled up to fear rational health care plans as Communist plots to define what is politically permissible to discuss.

It took the Great Depression to implement previously heretical ideas: Social Security, Banking regulations, limits on leverage in financial transactions, infrastructure spending (rural electrification, TVA etc). I am not a cheerleader of the whole agenda. I think Social Security ought to be means tested. Everybody pays, only those who need it get paid. While bringing electricity to the nation was huge in terms of quality of life and economic competitiveness of rural areas, the persistence of subsidies was insane. But the Pros far outweighed the Cons.

Maybe it takes this meltdown to trigger some overdue common sense, less costly but more effective approaches.

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My Lesbian crush grows

The Huffington Post Reports on Rachel Maddow calling out (sic) guest Dr Laura Andrea Tyson for failing to disclose her role as a Board Member of Morgan Stankley in discussing the Baninking Bailout.

First to disclose my conflict. I think Rachel Maddow is adorable, endearing, intelligent and kind of compellingly shy. I have since the first time I saw her on Olbermann. She is a breath of fresh air. I just wish they had cancelled Chris Matthews instead of Dan Abrams to make room for her.

And just as quickly as my crush developed, I thought there is probably very little chance that it would be reciprocated in any way. It is not that I thought we were incompatible. We are about the same age and share common interests. But while my gaydar is not too finely honed, I had not doubt that Rachel appeared to have suited up for the other team. Again, it didn’t affect my crush at all, because it was you know, a crush on a TV personality.

So I am more than happy to celebrate Rachel. But it is sad to have to celebrate her for doing something that you would just assume would be standard practice for her profession. But sadly in the world of professional log rolling that is the national media, being a ethical professional apparently is worthy of note.

Duly noted. Good for you Rachel.

After Enron and Worldcom and Global Crossing and on and on it became common on Financial television for guests to disclose any relevant holdings or conflicts of interest. So the rah-rah press cheerleaders for the fake economy were suddenly shamed into addressing some of the most basic facts behind the pump and dump stock promoters and “analysts” who had used this access for years to dupe the public.

And 7 years later, after more and bigger scandals, the securitization of junk derivatives, and pumping short term revenue at the expense of unlimited risk, we are astonished when a member of the political media actually calls out a conflict like this? And people are making excuses for Dr Tyson not disclosing this obvious conflict?

What is truly stunning is that his corruption is tolerated. Yes, Dr. Tyson should have disclosed that she was A BOARD MEMBER of Morgan Stanley before making any comments as an “expert” on matters involving the taxpayer funded no-strings attached bailout.

A key piece of data here. Dr Tyson is paid $350K per year to serve on the MS Board, which probably amounts to about $10,000 per hour for actual duties. Big companies do not pay independent directors that kind of money because the job is so onerous, so you might want to consider what they are really buying.

Like maybe access to have their interests represented in the national media by spokeswhores posing as independent experts.

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Ali Velshi corrects me!

Ali (or someone with detailed knowledge of Ali posing as him) has deemed my half-assed post worthy of comment and correction.

Hi there. I’m not sure who you are or how you developed such strong opinions of me, but you are entitled to them. I would, however, like to correct you on a few points. My first “permanent media gig” was with CTV’s Canada AM as a producer. I then moved to CFTO as a reporter, and then to CTV; s Parliamentary Bureau in Ottawa as a producer/correspondent. It was only after a sabbatical running a small business that I returned to CityTV which, I assume, is the “downmarket financial channel” to which you refer.

I got my internship at CNN more than 15 years ago on a strictly competitive basis. I had no connections in media in the United States whatsoever, let alone at CNN.

You have every right not to like or respect me or my credentials, but I would ask that you at least be honest and not misrepresent me.

Thank you.

Ali Velshi

Fair enough, if you wanna get all factual and detail-y on me. Jeesus, if I thought anyone was reading, I would have been more careful.

Anyhow I will assume that Ali’s rendering of his resume is more accurate than my characterization. I worked in Media in Toronto in the mid 1990s including a fair amount of work with CFTO – which probably is and was the largest local TV operation in Canada- but I actually don’t recall Ali being on air at that time. I accidentally saw CFTO news last week and was appalled but not at all surprised to see that at least half of the talent is exactly the same as 15 years ago. So props to Ali for upward mobility.

I may have been vaguely aware of Ali on CITY-TV but the downmarket financial channel I was referring to was actually what was called ReportOnBusiness TV at the time. It was apparently shot with one camera in a studio the size of a small walk-in closet. It was just profoundly weird televsion, especially when guests were on. Partially due to the two-shot being exactly the same as the host shot, and partly from the effort to squeeze another person past the garment rack into the “studio”. This is entirely related to the inherent lameness of all things Canadian, rather than any inherent limitations of Mr. Velshi.

To give Mr. Velshi credit, his on-air skills have improved considerably since then. And even before he corrected me I had started to regret using the term “idiot”, as I don’t think he demonstrates stupidity. I stand behind “fat bastard” 100%, and note that Ali does not attempt to dispute that assertion.

And unlike many who posted on the subject, I don’t think that Ali’s lack of background in Economics makes him unable to report Financial news. I do think that the whole Financial News biz is filled with cheerleading charlatans who lack real insight, or pump up stock promoters or both. And Ali is not a wacked out hype artist like Jim Cramer, or a know nothing like most of the talking heads, or both like Maria Bartromomodoomdo.

I just have the history of seeing in real time Ali’s youthful campaigns against “the man” and finding a certain – I don’t know; irony?, hypocrisy?, personal growth? in his becoming a shill for “the man”. I do think that Ali is a little sensitive to criticism, as demonstrated in his exchange with David Zurawick on Reliable Sources last week

Which brings us to “who I am” – in relation to Ali. No one really. I don’t know Ali. But we have some bizarre connections. We attended the same university at roughly the same time. I think my last year was his second. I knew many people who went to his high school. I think we may have been involved in student government at the same time although I don’t recall if he had a formal position. We had a number of friends in common, who all thought highly of him. I thought his public politics were naiive and demagogic and not helpful to rational discourse. I have many friends in the faculty in which he studied, and my studies were in an area that seemed to hold an interest for Ali. I worked on the student newspaper and student radio. I later worked in media in Toronto in the mid 1990s including with at least one company that he did. I have friends who worked at some of these broadcasters at the same time he did. My next door neighbour for 6 years was a senior exec at a broadcaster that later employed Ali. etc. etc. etc.

So to say that I know Ali Velshi would be an overstatement. To my recollection I never had a conversation with him, although certainly it is possible. I knew him to see him at school. When I later saw him on TV I recognized him immediately. And he keeps popping up.

So I would say that I am not possessed of any great inside info on Ali, and he is correct in pointing out that i misrepresented him. And i don’t think his lack of background in economics disqualifies him.

Still a fat bastard though.

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Cindy McCain made $4.2 million in 2007

http://firstread.msnbc.msn.com/archive/2008/10/17/1562700.aspx

I guess by John McCain’s definition she isn’t rich

http://www.snopes.com/politics/mccain/5million.asp

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Ali Velshi Speaks About CNN’s Business Coverage, The American Job Market, And Why Barack Obama Is Stronger On The Economy Than John McCain

Ali Velshi is an idiot.

At university he was a leader of a political correctness movement, and a typical Mercedes Marxist. He somehow ended up with a CNN internship through some connections.

Ironically this smug bastard landed his first permanent media gig with a downmarket Financial channel in Canada. He had no experience nor interest in the subject, but TV jobs are hard to come by. However it’s hard not to see the irony of how Mr. Politically Correct became an accidental business journalist and running dog lackey of the capitalist oppressors.

The fat bastard makes me want to vomit every time I see him.
Read the Article at HuffingtonPost

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Senate to vote on rescue plan with added tax cut


Why not just spend $700 Billion and given every American $2000

At least the Malt Liquor industry would be revitalized
More on Wall Street Crisis
Read the Article at HuffingtonPost

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Iceberg Dead Ahead! Pay me more or I’m outta here!

After noting that most hedge funds are tanking and face the prospect of massive redemptions from investors prompting liquidity issues and the need to sell off equities to pay out leading to massive bloodletting as the markts spiral further downwards, the Wall Street Journal writes astonishingly

Hedge-fund managers face a basic problem: Many won’t get paid much this year and will have trouble retaining key employees. The reason: Few funds have made positive returns, so they can’t dole out “performance fees,” hefty cuts of trading profits.

Do I need to spell this out? The geniuses who navigated us all into this mess may decide to quit because their “performance fees” for destroying the economy may not meet their usual expectations? I think I read about this in Good Fucking Riddance magazine. You get performance fees when you perform well. Or that is the way it works outside the Financial Services industry.

The hammerheads who ran out of ideas for investing your money and so started creating “funds of funds” to leverage the leverage will leave en masse if their bonuses are less than stellar. And go where? Is there really that great a demand for their services elsewhere?

The absurdity of this is that most of what these people do is not that special. The trading strategies are based on mathematical models developed by nuclear physicists left jobless by the end of the cold war. And these guys are typically paid a lot less than the suspender wearing, WhartonHarvardYale tied Gordon Gekko wannabes who now threaten to take their ball and go home.

Fine. Fuck off. Go home. Who needs you? And while I don’t generally favour the populist “give back some of your past performance fees” maybe they should give back some of the fucking money. Because they didn’t earn it in the first place. They demanded it as extortion to remain manning the decks of the Titanic. The captain of the sinking ocean liner probably ought not to worry too much about paying extra to bribe crewmembers to stick around. Especially when their first instinct is going to be to take all the lifeboats while the passengers are locked downstairs.

I mean it’s not like the Carpathia is right next door and hiring incompetent sailors at top dollar.

In a kinder gentler age these guys would have become snake oil salesmen or personal injury lawyers and been understandably shunned by decent people. Here’s a tip for the Investment Banking refugees: maybe the folks at Dr. McFraudy’s Miracle Restorative Tonic are hiring.

And oh yeah, fuck off.

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