Category Archives: Economics

Guest blog: “If We Were Emperor!” by jan howard “wombat” finder

Jan Howard Finder died February 26, 2013.  He will be remembered and missed by many people around the world.  I’m proud to say jan was a friend and will leave this entry here as a reminder of his character and convictions.

This is a first for my little blog.  A friend of mine, jan howard finder, wanted to post this piece online and I volunteered to host it on my WordPress blog.  Mind you I did offer to set him up with his own WordPress blog, but here we are.  The topic is how to get the US moving again economically.  I’ll have a comment at the end, but for the moment, here’s jan:

If We Were Emperor!

by jan howard “wombat” finder

[“If We were Emperor” is the style I am using in order to frame my opinions.   I do not advocate the overthrow of the current US government or the Constitution.]

There are several things We would do in order to get the country and economy back on track:


  1. Repeal the two big tax cuts instituted by President Bush, in 2001 and in 2003.
  2. Stimulus plan:  A cheque for $5,000 to everyone who has filed a 1040-based tax return in 2011.  [Assuming 150 million taxpayers, corporations NOT included, this would cost $750 Billion.] This would put the money into the hands of those who would give a boost to the economy, the consumers, by buying durable goods, paying down mortgages, etc. It would do what The President Bush said we should do, just after Sept 11, “go out and spend money”; it was said to individuals, not to corporations.
  3. Boost for Lower and Middle-classes:  Raise the personal deduction to $7,500, indexed to the Cost of Living.
  4. Cap the amount of taxable deduction for interest on home mortgages to $25,000 to $50,000 per year.  The interest cap could be indexed to the Cost of Living Index for that area.
  5. Cap other governmental agencies at current spending levels for 5 years.


  1. Grants: We would expand grants to students attending accredited institutions of higher education.
  2. Loans: Students would pay off the Federally Funded Student Loans either: (a)    by paying a percentage of  their GROSS income, 1%, 2%, or other suitable percentage. This allows graduates to accept a lower paying job of their choice rather than be forced to accept a job that will not advance their careers.  (b)   or a standard loan agreement over 10 years at the Prime Rate plus 1%, payment to start one year after graduation.
  3. Tuition Rebates: We would set up tuition rebates for students in Mathematics, Sciences, and Engineering at accredited institutions of higher education who achieve a cumulative 3.5 GPA or better by the end of their 3rd academic year.  The rebate would be up to $10,000 or $20,000 in tuition rebates for the 3rd and 4th academic years.  This tuition rebate would also apply to Graduate Students.


  1. Energy Production: Accelerated depreciation [5 years on a plant designed to last 40 years.] on the Capital Costs of creating non-fossil fuel energy production assets, e.g., Wind turbines, Photovoltaic cells, Solar Updraft Towers, Hydrothermal plants, etc.
  2. Equipment Installation: 100% deduction, depreciated over 3 years, for equipment and installation of alternate energy producing units by individuals and businesses in the tax year of installation.


  1. Increase Federal gas tax: Add a10 cent a gallon increase in the Federal tax on petroleum products with the money going to maintenance and repair of existing infrastructure. NO NEW CONSTRUCTION! The Federal tax is earmarked for existing roads and bridges. We would add up to 10 cents every year for 5 years.  Each one cent [0.01] increase brings in about $1 billion dollars in revenue.  This is equivalent about 25,000 new jobs.  Each new job will bring in about 2 or 3 additional jobs into the market.  The 10 cent a gallon or equivalent increase in the Federal tax on petroleum products could result in approximately 500, 000 and 1 million new jobs.
  2. State gas tax fund: Require states to put state gasoline taxes into a separate fund, to be spent on roads, bridges, and other transportation infrastructure. Most state gasoline taxes go into the General Fund and never get spent on infrastructure.
  3. State funding: All states would be required to spend, not allocate, a minimum of 90% of the previous year’s road transportation budget or lose ALL Federal DoT funding the following year.
  4. The cost of the increase in the tax is about $48 a year to the motorist who drives 12,000 miles a year and gets 25 mpg.  If one drives less and or has a more fuel efficient vehicle, the cost would be less.  What is the cost of a new tire, wheel alignment, wheel balancing, shock absorber, ball joints, etc.? The US’s poor infrastructure costs motorists $67 Billion a year.  [Taken from an ad by Audi.]

Social Security:

Raise the taxable limit for Federal Insurance Contributions Act (FICA) tax to $250,000.  Increase this to $500,000 24 months after the previous increase.

Currently, someone who earns $102,000 pays 6.2%.  Someone who earns $250,000 pays 6.2% on the first $102,000, and pays 0% on the remaining $148,000.  Someone who makes $500,000 pays 6.2% of the first $102,000, and 0% on the remaining $398,000.

The first change would mean:  Someone who earns $250,000 pays 6.2%.  Someone who makes $500,000 pays 6.2% of the first $250,000, and 0% on the remaining $250,000.

6.2% of that $148,000 is significant. When the limit moves to $500,000:  Someone who earns $500,000 pays 6.2%.  Someone who makes $750,000 pays 6.2% of the first $500,000, and 0% on the remaining $250,000.

If someone currently making $102,000 or less can pay 6.2% of their income to FICA, certainly someone making $250,000 or more can manage.


  1. Medicare/Medicaid: All Medicare, Medicaid, etc., payments would be frozen at current levels for 5 years.
  2. Health Insurance:  Any US citizen would be allowed to sign up for The Federal Employees Health Benefits [FEHB] plan, the plan that is available to all federal government  employees. (It’s the same one members of Congress use.)  This would be a “Public Option.”  The Federal Government would pay approximate 75% of the premium and the individual-family would pay the other 25%.  The insured would be free to choose any of the several private insurance plans in the insured’s area: Blue Cross/Blue Shield, Kaiser Permanente, or in my case for example, the Capital District Physician’s Health Plan [CDPHP].  I get to choose my doctors [I easily switched urologists recently]. 

Department of Defense

  1. A 5% across the board increase in pay and benefits for all Military Service personnel.  They don’t get anywhere near what they deserve.
  2. The DoD budget would be frozen for 5 years.  While research would be encouraged, development would be limited to proof of concept prototypes.
  3. DARPA would be encouraged to expand  its challenge programs: Set standards and let private inventors meet the challenge.  Sort of small X-Prize offer.
  4. Decrease the DoD budget, potentially 5% a year or more, for 5 years:
    1. by evaluating the necessity of building expensive equipment simply because it’s “new”, when existing equipment is more than adequate for current and near-future projections of enemy capabilities (we’re not fighting the Soviets any more);
    2. by evaluating the necessity of building more of the expensive equipment that no longer meets the operational needs against current and near-future enemies (how many aircraft carriers do we need to fight, or support fights, in small towns in the Middle East?);
    3. and by bringing our service personnel and materiel back home. The ability to mobilize quickly, to transport personnel and materiel needed for quick strike missions, no longer requires the tremendous expenditures of overseas bases.


We would set up a series of Federally funded X-Prizes in areas of  need, i.e., energy, space exploration, engineering challenges.  The money would go to the winning teams, not to the institutions for whom they may work.  X-prize funds are not paid out until the established goals are met!

[This is my opinion.  I encourage you to write your own screed.]


This is Mary again. It’s an interesting proposal. I think an open debate would probably not decrease the DoD budget, most of which goes to pensions, as I understand it. And if we want to encourage R&D, in my humble opinion we need to invest in it, not offer prizes to be awarded when the work is done, since it may never be economically possible to provide a proof of concept.  Still, lots of these things are good ideas.  Your thoughts?

While I’m on the topic, if you do a Google Images search for “jan howard finder” you will find lots of photos from Science Fiction conventions and other places which are the natural habitat for wombats. The lower case spelling is traditional for jan, although they have it wrong on Wikipedia. But then they didn’t mention jan as fan guest of honor at a Sci-Fi convention in Metz, France, either… when Robert Bloch was the guest of honor… or lots of other things, so maybe he’ll write a memoir!

Movement for a 28th Amendment to the US Constitution

I received an email today which asked me to forward it to still another 20 people.  I thought this might be more useful.

It’s time for another Amendment to the US Constitution.  I do believe this.  And I like everything in the proposal below.  See what you think and you are more than welcome to copy and forward it to your friends and Congresscritters.  It will take a huge amount of effort to get this passed because it is not in the best economic interests of the members of Congress.  But it’s worth raising the possibility.


“Behind the ostensible government sits enthroned an invisible government owing no allegiance and acknowledging no responsibility to the people.”  —Theodore Roosevelt


“Do what you can, with what you have, where you are.” —Theodore Roosevelt


The rest of this post is the content of that email:

“The 26th Amendment (granting the right to vote for 18 year-olds) took only 3 months and 8 days to be ratified.  Why?  Simple!  The people demanded it.  That was in 1971… before computers, before e-mail, before cell phones, etc.

“Of the 27 Amendments to the US Constitution, seven (7) took 1 year or less to become the law of the land… all because of public pressure.

“I’m asking you to forward this email to a minimum of twenty people on your address list; in turn ask each of those to do likewise.

“In three days, most people in The United States of America will have the message.  This is one idea that really should be passed around.



Congressional Reform Act of 2011

1. Term Limits.

An elected Congressperson may serve a maximum of 12 years only, defined as one of the possible options below:

A. Two 6-year Senate terms

B. Six 2-year House terms

C. One 6-year Senate term and three 2-Year House terms

2.  No Tenure / No Pension.

A Congressperson collects a salary while in office and receives no pay when they are out of office.

3.  Congress (past, present, and future) participates in Social Security.

All funds in the Congressional retirement fund move to the Social Security system immediately.  All future funds flow into the Social Security system, and Congress participates with the American people.

4. Congress can purchase their own retirement plan, just as all Americans do.

5. Congress will no longer vote themselves a pay raise.

Congressional pay will rise by the lower of CPI or 3%.

6. Congress loses their current health care system and participates in the same health care system as the American people.

7. Congress must equally abide by all laws they impose on the American people.

8. All contracts with past and present Congresspersons are void effective 1/1/11.

“The American people did not make the current contract with members of Congress.  Congressmen made all these contracts for themselves.

“Serving in Congress is an honor, not a career. The Founding Fathers envisioned citizen legislators, so ours should serve their term(s), then go home and back to work.

“If each person contacts a minimum of twenty people then it will only take three days for most people (in the U.S. ) to receive this message.


Me again.  I poked around on the web and found the organization which is working to make this happen.  Amendment to Reform Congress is on Facebook.  And their website is here. In my humble opinion it’s time we got together and agreed on some, most, or all of these changes to our representative government.  The current approach creates a divide between the governed and the government which is hurting our country.  With this Amendment can can continue to be a government OF the people, BY the people, and FOR the people.

It’s time to align the self-interest of Congress with that of the American people and not with that of lobbyists.

So tell me more about this economic recovery thing

Forbes magazine, both in paper and on-line, has always struck me as one of the good places for intelligent people to explore economics and investing ideas.  John Mauldin, shown below, has a nice blog piece entitled:  Impossible Things And Our Economic Recovery. This is well worth reading and is presumably the first of a group of pieces he will write on the topic.  I encourage you to read it/them.

I responded with the following comment which may have a delay in being posted or may not appear at all.  Who knows?  I just write these things.  Forbes controls the “publication,” at least on their site.  So here’s the comment:

Well done, John. It’s all true, unfortunately. That so few people understand basic economics and continue to vote for the status quo is sad.

As you say, an increase in GDP depends upon an increase in (working age) population and/or workforce productivity. Back in 1999 Harry Dent’s book The Roaring 2000s Investor described the international demographic and technology trends we could expect to see play out in the 2000s. Country by country, I’d say he did pretty well with it. Dent’s book is now too old to be on the World Future Society’s current book list. Those folks who never read Dent’s book aren’t reading the rest of the WFS’s book list, either. (Here’s where we mumble something about those who do not study history, or the future in this case, are condemned to relive it, or play it out, or mumble mumble mumble…) Dent’s arguments, much like yours, rely on inescapable economic concepts.

The US has “outsourced” most of our manufacturing jobs. Big mistake. The US has created a pink puffy cloud of financial nonsense to spur personal consumption. Big mistake. The political structure of the US has enabled powerful, wealthy individuals to become ever more so. Big mistake. Increasing disparity in wealth translates into increasing political partisanship. Big mistake. The founding fathers are spinning in their graves.

Don’t you wonder what happens when somebody brings a war to our soil? Whoops, they already did that. I meant to pose the question: what happens when we can no longer manufacture anything of value? What happens when we don’t or can’t produce steel or silicon or the basic components of our modern lives? Maybe vertical integration isn’t always the best path for a corporation, but it has a lot of strategic safety for a country. It isn’t likely the US government will try to reverse our decreasing ability to manufacture. We are far along on our way to becoming a farming and service economy. That will not permit us, ultimately, to pay off our consumption debts. And if the rest of the world becomes angry because they believe the US is responsible for economic problems faced everywhere today, what leverage do these other countries have against us? A lot. Financially and production-wise.

The US has the benefit of observing economic laboratories around the world. Some have worked better than others. But the results of those lab experiments are not readily visible to the average American. Our media would rather produce cheap junk reality shows. One thing the world laboratory has proven is that universal healthcare is a good economic foundation for a country. But that doesn’t play out well with the power and wealth entrenched in the USA. The US used to have a small wealthy class, a small poor class, and a large middle class.  The middle has been crushed over the last 10 to 20 years. Now .1% of the US population controls some 20% of the country’s wealth. Big mistake.

I love the French. Their food, their wine, their art, their language, their French Revolution. Watching the Enron, Adelphia, Countrywide, etc. stories unfold, who wouldn’t want to see a guillotine factored into the proceedings?

Let’s just say it establishes a threshold beyond which tyranny is unacceptable to a rising middle class. Whoops, the US middle class is not rising and it lacks leadership to establish significant changes. So it goes. The US government reflects the best interests of the wealthiest citizens. Capitalism and democracy have lead to politicians being hired by the wealthy and their corporations in return for the campaign funds that get them elected. Long term big mistake. Looking forward to see if you have any ideas how we can dig ourselves out of this hole!

Repeal 40B has a great map of Massachusetts showing the percent of “affordable housing”  for all 351 MA cities and towns.  You can take a look here and click on any town or scroll down through the complete listing:


There is also a one-question poll which asks the question: Should the government encourage economic diversity in communities through affordable housing laws like 40b? And your possible answers are Yes / No / No opinion/other   I have a problem with the question because I DO believe the government should encourage affordable housing.  I don’t think affordable housing and economic diversity are exactly the same thing.  The two concepts come with different problems and opportunities.  I personally KNOW that 40B does not encourage economic diversity, nor does it encourage affordable housing.

If you respond to that question you will see something below that which says

Discuss: Should government encourage economic diversity in communities through affordable housing laws like 40b?

If you read through the comments, you will find mine, some of which I include here below with modifications and additions:

40B is a disaster for cities and towns. The question posed is itself a problem.  I firmly believe that the government can help improve the overall economic health of its citizens by encouraging the production and maintenance of “affordable housing.”  Unfortunately that is not what 40B does.  MA Inspector General Sullivan has completed many studies of 40B projects, calling the law the greatest source of corruption in the Commonwealth and a “pigfest” for developers.  (It’s all up there on the web.)

The MA South Shore is 38% wetlands.  It was settled in the 1600’s.  Over the last 400 years, the good land has been built on.  Our strange road systems where you have to go North on Route 3 up to 128 then down 24 to go what should be a straight shot West is due to wetlands, rivers, and stretches of unusable land.  In Norwell we had an area on Route 53 that had 30 families renting trailers and small cottages.  Very affordable.  But a horrible local developer and his builder buddy (Murphy and Sullivan are the names) bought the land, threw the tenants out on the street in a New England February, cleared the land and built LUXURY CONDOS… all under 40B.  The town fought it in court, but the land courts and appeals courts are all under the illusion they are promoting “affordable housing.”  Karma is such that none of the luxury condos have sold in 2 years.  Who wants to live in a condo in a swamp when you can buy a house in the same town for less?  These luxury condos are still for sale, look it up.  The developer and the builder have moved a few units back and forth between themselves, but nobody is living there.  Just so you get the idea:

40B enables developers to bypass zoning bylaws.  Those bylaws are there for a reason.  Norwell, for example, has town water, but the land is very wet and every home that is built at this point generates further local flooding and requires mounded septic systems.  40B enables a developer to build dense housing on wet land, raising the water table and flooding property for a half mile circle or more around it.

Town Zoning Boards have learned that they cannot “reject” 40B proposals because the housing courts overrule the towns and approve the projects.  So Zoning Boards “approve” the 40Bs with enough conditions to protect the town.  Those conditions would make construction impossible or unprofitable, so back to court we all go.  40B results in local neighborhoods spending tens of thousands of dollars on lawyers and engineers to demonstrate to the housing court that these dense developments are inappropriate.  And still they get approved.  Look at the MA South Shore.  For the most part we have low levels of “affordable housing.”  Those are the reasons why.  There is no more buildable land.  Certainly not large tracks of it to build 40 to 100 units of dense housing.

Norwell has an Affordable Housing Committee.  The best we can do is find small, individual lots and build one or two affordable units at a time.  Even that is dependent upon when such properties become available.  There is no public transportation in Norwell.  There are very few jobs.  There is a lot of water and flooding.  And we’re fighting 40B for our survival with lawsuits brought by neighbors and the town.  This is a nightmare none of us expected.  The state government is killing us.

Did I mention traffic?  Norwell is a rural town.  Because of the wetlands, we have narrow, winding, twisting roads with dense vegetation often right up to the road.  The line of sight on these roads is ridiculously small because the road curves away from you so often.  The town does not have a drainage system, so they have open trenches alongside many of the roads.  That means no place to pull off.  No shoulders on the road.  If you are forced off the road or you skid off the road you land in the drainage ditch or you hit a stone wall, a tree, or a telephone pole.

Just as a point of information, the above accident – one of many at that very spot – is on Forest Street in Norwell.  As I type this there are two, count them…2, telephone poles on this one mile long street that are now double poles because Verizon knows how often they are hit.  And, by the way, that car crashed about 20 feet from where a road into a new 40B project is proposed.  Want to see this same piece of road after a rainstorm (the broken telephone pole is just off to the left):

That house has been bought by the developer proposing the 40B project.  It is scheduled to be torn down to put in a road to access the project.  Get the idea?  Water is a problem.  Traffic is a problem.  It will only get worse.   This is 40B in Norwell, Massachusetts.  Well meaning, but a nightmare for cities and towns on the South Shore.  And a nightmare for other MA cities and towns, too, just a slightly different nightmare.

I’ve been trying to get Governor Deval Patrick to recognize the problems caused by 40B since BEFORE he was elected.  I explained the problem to him at campaign rallies before his election.  I’ve mentioned it to him since then.  He doesn’t want to hear it.  The only person on Beacon Hill who is fighting for the South Shore against 40B is the Republican state senator Robert Hedlund.  That’s Senator Hedlund and Governor Patrick in the photo above at a speech the governor gave in Hull back in the summer of 2008.  I wore my green 2006 Deval Patrick campaign tshirt so he’d know I was a supporter.  (Dear Ghod, it’s a horrible photo, but there it is.)  None of the three candidates for governor in 2010 will say anything about 40B.  Officially they are all FOR it.  It is a complex subject and nobody wants to be caught with a sound bite that might be against “affordable housing.”  It’s a complicated subject.

This fall, let’s REPEAL 40B.  Encourage your state level politicians to pass some better legislation.  Stop this “pigfest” for developers.  Last year proponents of repealing 40B needed around 65,000 signatures to put it on the ballot statewide.  They gathered around 85,000.  The state threw out about half of those signatures, so the petition was not on the ballot last year.  This year another grassroots effort has gone forward to repeal this miscarriage of justice and hopefully it will be on the ballot statewide this fall.

We need to replace 40B legislation with something that works.  We need affordable housing in Massachusetts.  40B is not the way to do it.

Note:  Repeal 40B signature collection ended Wednesday June 23rd and by all reports, we are well over the 11,099 needed to put 40B repeal on the November ballot.

A tweet from @dougknowles76 – also of Norwell, MA – provides some corrections to the original July, 2008 slide presentation.  The West End Way 40B was originally proposed as 40 units; Silver Brook finished at 30 units, with 8 classified as affordable.  I will assume he is correct.  The original slide presentation is located as a Slideshare upload: Experiencing 40B in Norwell, MA Presentation to MA Housing & Community Development Agency in Boston, July, 2008.

There is no dialog with Fox News

I made the mistake of reading and then commenting on a WSJ piece about healthcare entitled The Health-Care Wars Are Only Beginning by Fred Barnes.  Mr. Barnes is a conservative of the deepest hue, so any comment that does not agree with him is likely to draw rounds of flak from his supporters.  And, yes, I knew that, but started typing anyway.  If not me, who?  If not now, when?  Yeah, yeah… so my initial comments were:


(1) Only the jerks from Faux News call it “ObamaCare”. These are the same folks who brought you “HillaryCare”. You can tell how willing they are to engage in intelligent discussion.

(2) There is some truth to this opinion, unfortunately. Conservatives will battle healthcare reform as long as the insurance companies and healthcare related companies continue to put millions of dollars into lobbying and campaign contributions.

(3) What we need is either access to Medicare for everyone or a simple universal, single-payer system. This country cannot return to its former position of strength and economic power with a poorly educated, unhealthy population. It’s a rising tide that lifts all boats, moneybags. Didn’t you learn anything from Henry Ford?


Yes, item (1) was a tad intemperate.  Item (2) is obvious to me.   And item (3) is my opinion laced with a couple cultural references (and some name calling) I hope we all share.  Conservatives do bring out the worst in me.  In all fairness that was in response to the outrageous nature of the original article.

Mr. Barnes article was published on March 18, 2010.  When I logged in this morning I found a number of responses to what I’d written and a total of 539 comments as of 9:30 am on March 19, 2010.  That says something about the intensity of emotion around the topic.

Most of the comments I could dismiss as coming from sad Kool Aid drinkers.  Then I came across one from conservative Gerald Meazell which inspired me to respond:


Wow, Mary, please explain to me how this country got to its “former” position of strength and economic power without government run health care. The fact is that this economy produces best when it is left alone. Henry Ford is a good example. He didn’t invent the automobile, he discovered a way to build them more cheaply. Now, if ol’ Henry had been working for the government and not allowed to profit from his work building cars, would he have cared to invent the assembly line? What would be his incentive? Government intervention in health care and its accompanying third-party payer distortions are what have brought the health care business to the state it’s in today. The solution simply is NOT more government, but less.


Since I was asked, however retorically, to respond, I did.  People like that make me feel like Dennis Miller.  Actually I’m a big fan of Dennis Miller, or was until he became still another conservative mouthpiece.  But I enjoy Miller’s humor and consider listening to him an exercise much like a crossword puzzle.  (How many references do I get? Never all of them.)  My point here being that we share a culture.  Unfortunately it is a big, complex culture and references to some obscure component thereof will not and cannot be understood by everyone.  This leads to misunderstandings.  Kind of makes you nostalgic for the 1700’s or 1800’s where, presumably, English speaking peoples had more universally accessible cultural references.  What I think is common knowledge may not be.  So this was my response:


There is no point responding to most of the comments above since there is no possible dialog with true believers. With respect to your comment, possibly a little reading of history and economics would help you. Europe was the world power up until World War II. There are a number of geographic reasons for this. After the Industrial Revolution we see power shifting to countries who actually make things. The US became increasingly good at making things. We built superior educational facilities for our children. We had great natural resources. World War II and its aftermath gave us incentives to activate production on all burners, so to speak. Our federal and state governments nurtured productivity and growth. Meanwhile Europe was becoming, as everyone would agree, somewhat more socialistic, if by “socialist” you mean concerned about the living conditions for everyone, not just the wealthy. As time went by in the US, some very smart people learned how to game the system really well. They developed risky financial instruments and they outsourced production jobs out of the US. Both of those activities have ultimately resulted in our current situation which consists of bad economic conditions and chronic unemployment due to jobs that aren’t coming back.

I did not say that Henry Ford invented the automobile. Please consider the history of the thing. Henry Ford developed assembly line techniques to improve production and he was admirably clever in saving money. He did, after all, make his suppliers deliver engines in wooden boxes to his specifications which were then broken down and used to make floorboards. He was brilliant and the sort of capitalist we can all admire. He also recognized that if he paid his workers well, they could buy cars and the cycle would spiral upwards. Ford paid his people extremely well for the time. Look it up. My point in mentioning Ford, which seems to have been lost on so many people, is that a rising tide really does float all boats. Economies tend to spiral up or down as conditions reinforce each other. Guess which way we’re going now? What do you think is driving our economy today?

Keep swallowing the conservative line and your children will be lucky to be dirt farmers in the ruins of the suburbs of Levittown. Have you been exposed to an economist named Hyman Minsky? Do you see why the recent economic explosion was called a “Minsky Moment”? Please, look it up. The conservative line expressed by so many is blind to the fact that we are less and less productive in this country. In recent years we substituted rising debt for the give and take of a productive economy. I’ve gone on long enough here. I hope you see where I’m coming from. Healthcare is just one factor which is making us uncompetitive today. Our superexpensive healthcare system is similar to the housing bubble. It can’t last. As a country our competitors all have universal healthcare. We pay a heavy price as a country, all 308 million of us, to make a few people wealthy via our healthcare system.

The solution actually is “big government” to dampen risk and provide economic stability, with an ongoing dialog about our values and our future.


There really is something about addressing conservatives that brings out the worst in me.  Sorry.  I’m also a big fan of Henry Ford.  I could be wrong about him, but he strikes me as a very sharp businessperson, successful capitalist, and a man who understood that improving the life of his employees would improve his life, too.  THAT is a capitalistic way of thinking which I can support.  On the other hand, the people at the top of the financial and healthcare insurance pyramids add nothing of value to our country.  They absorb wealth from our economy and drain it from the rest of the working class.  Ultimately this will hurt not only our country but their own positions.

We all, I believe, want to live in a country where shared values include the best possible education for our children, steady advances in science which result in new businesses, and a healthy life for everyone while they pursue their view of “happiness.”  Am I wrong here?  I’d love to hear your view.

“Thinking is the hardest work there is, which is probably the reason why so few engage in it.” — Henry Ford

What I Learned from Mom’s Hip Replacement

Being involved on the business side of the medical device industry in recent years, I have taken a keen interest in all things healthcare related. I also have a mother who is over 65 by a good deal and has dealt with Medicare and Medicare Advantage programs (in Florida) for some years now. I have had the dubious distinction of sorting through the hundreds of Medicare Advantage programs out there to find some that are appropriate for her and then guide her to reasonable choice. (Thank heaven the government has a website to help with that. I cannot imagine most folks on Medicare coping with that project, but that’s another post entirely.  You can start here if you’re researching the matter yourself: )

Before the Surgery

My mother complained of a painful right hip for a couple years. Her primary physician finally said mom was a candidate for a hip replacement and she would recommend the operation whenever  mom would like to have it done.  This is a very common operation these days and a good, experienced surgeon will normally yield good results.  Recovery progresses fairly quickly, you can walk again within a couple days, and the patient is back to mostly normal (pain free) in 3 to 4 months.

A separate request had to be made to my mother’s primary doctor to obtain a recommendation on a surgeon, which I thought was odd.  I would have expected her primary care physician to help guide her to a surgeon, but I guess not.  We were given 5 surgeon names, 3 of which, upon investigation, were participating in her insurance plan. Of the 3, we requested that the primary care physician’s office recommend one of the three. We asked around (in the over 55 community in which she lives) about hip replacement surgeons and got additional recommendations, eventually all converging on a particular nearby surgeon.  Surgery was scheduled at Blake Medical Center in Bradenton.

Surgery, the Hospital, and Rehab

Surgery was scheduled and then moved to an earlier date as one became available. She was in surgery maybe 3 hours, then in the hospital for 4 days, then transferred to a physical therapy rehab facility a short distance away that was highly recommended.

I arrived in Florida the day she entered rehab and my sister flew out the next day. We were initially told she’d be in rehab for maybe 10 days. She was in rehab for 15 days. It was clear to me that it would have been longer if I hadn’t kept asking questions about her progress and their expectations.

The rehab facility did physical therapy for patients 5 days out of 7.  Why it was not 7 days out of 7 I don’t know.  Their website claims 7 days out of 7.  I never received an answer.  I was at the rehab facility several hours a day, every day,  bringing what my mother considered “real” coffee, walking around with her, giving her outdoor wheelchair rides, monitoring her medications, and so on.

Her first roommate (two people in every room) was a nearly deaf lady who would turn her TV on so loud that you could hear it from the nurses station down the hall.  It took several days to have my mother transferred to a different room.  Moving was dependent upon somebody else leaving the facility.  There were 55 beds and all were full, pretty much all the time from what I could learn.  Did I mention the food was surprisingly good?!

The staff was wonderful. Everyone we met was helpful, kind, and gave 110% to every task. That was encouraging. I did ask about the medications being supplied in the morning, during the day, and in the evening. Some meds were things we had agreed with her primary care physician that she no longer needed. It was disturbing to see them pop up again. It turns out that older people are seen by several doctors (primary, surgeons, specialists) who do not talk to each other. Each prescribes meds. Sometimes without looking at what has been prescribed by someone else. (My mother-in-law had been prescribed near lethal levels of one med by several physicians before her two sons figured out what was going on with her.)

My mom is becoming a bit forgetful, not Alzheimer’s but forgetful.  Doctors and therapists should not assume that telling older people something is adequate. Things need to be written down and should be transmitted to family members. Even if the older person does not appear to have dementia, it seems to be a natural issue as people age. It is very clear to me that both in hospitals and in rehab facilities, people needs advocates watching out for them when they are not completely able to manage their own care. This appears to be true for everyone, regardless of their age.

Upon entering rehab, we were told that my mother was now under the care of one of the two physicians associated with the rehab facility.  She was there 15 days.  She NEVER saw a doctor of any size, shape or color while she was there.  Her second roommate had been there for a month and she said a woman doctor had popped her head into the room once during that time and asked her “How are you doing today?” and then left.  Without being overly cynical we all assumed that both doctors were charging everyone in the facility (55 patients) on a regular basis for “visits.”  Let’s see, 55 people a day times let’s call it $100 a visit would come to $5,500 a day that Medicare is paying this place for absolutely nothing.  Let’s assume that these two doctors are on call.  Maybe they do get called to deal with a patient once or twice a day, maybe.  Still, $5,500 a day is pretty good.  Times 7 days a week that’s, let’s see, $38,500 a week.  Not bad for being on call and walking through the building maybe twice a week. The nurses and staff do all the work and are very good. I thought the references to patients being under the care of these doctors was pretty clearly fraudulent.


(1) Ask questions. What is being done? Why? When and where will it be done? How long will it take? What are the expectations? When does the patient transition from one stage to another and what are the criteria for transitions?

(2) Watch medications. Who prescribed what? Was the surgeon aware of the person’s previous medications? Does anything conflict with anything else? Are any of the medications to be given on an “as needed” vs. “regular” basis? What are the meds and what is each being given for?  Assuming some of the meds are sent home with the patient, find out again what needs to be given and when.  Then make an appointment with the person’s primary care physician to review.

(3) Watch what you are being billed for. Since most bills will be transmitted directly to Medicare or to the Medicare Advantage health insurance program, this is not always something you see.  I remember when my father died, the doctors charged for several visits “to him” after he had already died. (That was also at Blake Medical Center in Bradenton, FL.) These people have no shame. They simply game the system for their own benefit.  If that explanation seems harsh, the only other explanation is that they are too disorganized to bill correctly, but somehow the errors are always in their favor.  You pick.

That’s what I learned.  I hope it helps you.

And today (3-17- 2010) I learned something else

Martha Coakley, the Massachusetts Attorney General, published a preliminary report titled Investigation of Health Care Cost Trends and Cost Drivers dated January 29, 2010.  I highly recommend you read it.  All 21 pages.  Don’t worry, there are some large graphs!  It will either enlighten you or confirm whatever cynical views you may have about our healthcare system.  The conclusion is that in our free market system, healthcare providers charge what the market will bear.  And that drives up costs. Let’s put it this way: you can pay 280% more for the exact same market basket of healthcare services, depending on where you go in the state of MA.  And we have some pretty fancy, well known medical institutions here.  Mind you, I am not condemning them for this, because I believe those that charge more are also doing more in the community that they are not being paid for.  But the overall report helps explain how broken the system currently is.  I hope you can read this below.  It shows the variation in price for the same services is, broadly, 100% from lowest to highest paid, with the exception of one heck of an outlier which is 280% of the lowest paid.  Still, a 100% difference is a heck of a market premium for healthcare.

Pages 19 and 20 have conclusions, including the following:

Our preliminary findings show that the current system of health care payment is not value-based – that is, wide disparities in payment levels are not explained by differences in quality or complexity of the health care services provided. These findings have powerful implications for ongoing policy discussions about ways to contain health care costs, reform payment methodologies, and control health insurance premiums without sacrificing quality or access in Massachusetts. The Office of the Attorney General looks forward to completing its investigation and to presenting a fuller exposition of its findings through the DHCFP cost containment hearings.

Although our investigation continues, it is clear that prices paid for health care services reflect market leverage. As a greater portion of the commercial health care dollar shifts, for reasons other than quality or complexity, to those systems with higher payment rates and leverage, costs to the overall system will increase and hospitals with lower payment rates and leverage will continue to be disadvantaged. If left unchecked, there is a risk that these systemic disparities will, over time, create a provider marketplace dominated by very expensive “haves” as the lower and more moderately priced “have nots” are forced to close or consolidate with higher paid systems.

The present health care marketplace does not allow employers and consumers to make value-based purchasing decisions. Our findings show the system lacks transparency in both price and quality information, which is critical for employers and consumers to be prudent purchasers.

These market dynamics and distortions must be addressed in any successful cost containment strategy. Payment reform, such as the global payment methodology recommended by the Special Commission on the Health Care Payment System, may result in system benefits such as better integration of care. But, a shift to global payments may not control costs, and may result in unintended consequences if it fails to address the dynamics and distortions of the current marketplace.

We need universal healthcare.  And we aren’t likely to get it in the near future, no matter what Congress does.