I read "The Creature from Jekyll Island" by G. Edward Griffin, and it has me thinking not only about the precarious means by which the Federal Reserve was put together, but also about the relation between the Federal Reserve and the current recession.
The first fact that everyone has to realize (but I would assume 80% of the population doesn't know) is that the Federal Reserve is not a governmental entity, it is a group of banks. While these banks are "American" companies, the controlling interest in these banks however may not be. While the chairman of the Fed is appointed by the president, in many cases the list of available people to take the helm is so narrow and limited that the president has very little choice except to choose one of those who the banking institutions put forward for the job.
My thoughts then naturally gravitated to "Federal Reserve Notes" which are obviously the currency that we use daily, otherwise known as the U.S. Dollar. Our paper money system is run by the Federal Reserve, they even reimburse the Treasury Department for the cost of printing. Most know that banks "leverage" our deposits typically around twelve-fold, which means that if I deposit $1,000 into my local Chase bank account, they can loan out $12,000 on these solid assets. Griffin brings up a scary proposal in his book where we follow a sensationalized typical government transaction. The treasury department needs more money in order to pay for it's expenditures (Payroll, payments to contracting corps (Lockheed, Raytheon, etc)) so it goes to the Federal Reserve to borrow the money. The Federal Reserve lends the money to the government (with interest) and the government uses the money to pay Joe the local Postal worker his $1,000 salary. Joe goes to Chase and deposits his $1,000, and now Chase has $12,000 that it can lend out. The cycle begins again when the government needs more money, and with Chase being part of the Federal Reserve Network part of the new amount that the government is borrowing from the Fed is hypothetically Chase's leveraged $12,000 from Joe's $1,000 deposit, which is lent to the government to pay Joe his next $1,000. Imagine if other businesses operated in this manner, it seems like the biggest of all Ponzi schemes to me.
There is much more I plan on writing about this in the weeks to come - just something to get off my chest before the weekend comes!
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Friday, July 31, 2009
Tuesday, July 28, 2009
Insurance Companies
We all know that the insurance lobby is a major force behind the resistance of the blue dog democrats and republicans joining the call for true health care reform. I ask myself more and more why do we even have insurance companies, and if we didn't have them what would be the effect on the American people. First here is a list of the top 14 insurance companies as ranked in terms of revenue by Forbes:
Just these top 14 insurance companies bought in $275.6 billion in revenue and about $8.6 billion in profit. This means that with the current US population of 307,025,874 we paid these insurance companies $900 each and they made $28 from every person in the country. If you factor in the uninsured into the equation, each family of four was responsible for $4,240 that went directly to the insurance companies not including that which might have been paid by American families in the form of co-payments and general out of pocket expenses. United Health just reported increased profits of $859 million for last quarter which puts them on pace for making $3.44 billion in profit this year....
While insurance may offer a beneficial role in the health care system (still unproven in my opinion), would it not be better to have these companies operate as non-profits?? Do what you need to in order to employee people and run the company efficiently, but do not raise premiums on families just to suit your investors on Wall St. The public option is drastically needed, but with money like this fighting against it we can see who our congressmen/women really work for.... Sphere: Related Content
| Rank | Company | Fortune 1000 rank | Revenue$ millions | % change from 2007 | Profit $ millions | % change from 2007 |
|---|---|---|---|---|---|---|
| 1 | UnitedHealth Group | 21 | 81,186.0 | 7.6 | 2,977.0 | -36.0 |
2 | WellPoint | 32 | 61,251.1 | 0.2 | 2,490.7 | -25.5 |
3 | Aetna | 77 | 30,950.7 | 12.1 | 1,384.1 | -24.4 |
4 | Humana | 85 | 28,946.4 | 14.5 | 647.2 | -22.4 |
5 | Cigna | 132 | 19,101.0 | 8.4 | 292.0 | -73.8 |
6 | Health Net | 165 | 15,366.6 | 8.9 | 95.0 | -51.0 |
| 7 | Coventry Health Care | 226 | 11,913.6 | 20.6 | 381.9 | -39.0 |
| 8 | WellCare Health Plans | 381 | 6,521.9 | 21.0 | -36.8 | -117.0 |
| 9 | Universal American | 494 | 4,659.2 | 53.5 | 95.1 | 13.1 |
10 | Amerigroup | 509 | 4,516.0 | 14.5 | -50.7 | -143.5 |
11 | Centene | 609 | 3,515.2 | 20.1 | 83.5 | 13.8 |
| 12 | Molina Healthcare | 673 | 3,112.4 | 24.9 | 62.4 | 7.0 |
| 13 | Medical Mutual of Ohio | 806 | 2,387.1 | 2.2 | 73.5 | -18.1 |
14 | HealthSpring | 849 | 2,188.3 | 39.0 | 119.0 | 37.6 |
Just these top 14 insurance companies bought in $275.6 billion in revenue and about $8.6 billion in profit. This means that with the current US population of 307,025,874 we paid these insurance companies $900 each and they made $28 from every person in the country. If you factor in the uninsured into the equation, each family of four was responsible for $4,240 that went directly to the insurance companies not including that which might have been paid by American families in the form of co-payments and general out of pocket expenses. United Health just reported increased profits of $859 million for last quarter which puts them on pace for making $3.44 billion in profit this year....
While insurance may offer a beneficial role in the health care system (still unproven in my opinion), would it not be better to have these companies operate as non-profits?? Do what you need to in order to employee people and run the company efficiently, but do not raise premiums on families just to suit your investors on Wall St. The public option is drastically needed, but with money like this fighting against it we can see who our congressmen/women really work for.... Sphere: Related Content
Monday, July 27, 2009
A thought on home sales..
Disclosure: I currently own a condo that I am trying to sell, therefore I am biased when it comes to this topic.
I am reading the news this morning and come across the top financial news story of the day, "New Home Sales Surge 11 percent in June." (link below) While this is great news for the country and speaks towards the beginning of a recovery, it begs the question - why are new homes being focused on? Granted, there are a gluttony of jobs that are created via home building (sales, architecture, construction, customer service, etc) but wasn't the shear amount of homes on the market and the techniques used by sellers/lenders what got us into the housing crisis to begin with? These builders were raking in profits throughout the middle part of the decade, and now they are cutting their prices which will put Americans who paid to much for their homes to have to wait even longer for prices to recover.
The first time home-buyer tax credit of $8,000 was a good start, but obviously could have been extended to current homeowners looking to upsize. But extending these credits in this manner, people who bought more home than they could afford would have a larger base of potential buyers to help them out. As well, those of us that are likely to loose money on the sale of our existing home would have the confidence that the tax credit would end up making up for most of our losses. Better yet, losses on existing home sales could be tax deductible.
The overall point I am trying to make here is the continued focus to help businesses and hurt the people. A lot of these home builders are responsible for the number of houses on the market and the subsequent crash, they should be almost encouraged into bankruptcy for their part in this mess. The true recovery will come when existing home sales start to truly increase, but I fear our legislators aren't doing all they could be to expedite this process.
http://www.washingtonpost.com/wp-dyn/content/article/2009/07/27/AR2009072700967.html?hpid=topnews Sphere: Related Content
I am reading the news this morning and come across the top financial news story of the day, "New Home Sales Surge 11 percent in June." (link below) While this is great news for the country and speaks towards the beginning of a recovery, it begs the question - why are new homes being focused on? Granted, there are a gluttony of jobs that are created via home building (sales, architecture, construction, customer service, etc) but wasn't the shear amount of homes on the market and the techniques used by sellers/lenders what got us into the housing crisis to begin with? These builders were raking in profits throughout the middle part of the decade, and now they are cutting their prices which will put Americans who paid to much for their homes to have to wait even longer for prices to recover.
The first time home-buyer tax credit of $8,000 was a good start, but obviously could have been extended to current homeowners looking to upsize. But extending these credits in this manner, people who bought more home than they could afford would have a larger base of potential buyers to help them out. As well, those of us that are likely to loose money on the sale of our existing home would have the confidence that the tax credit would end up making up for most of our losses. Better yet, losses on existing home sales could be tax deductible.
The overall point I am trying to make here is the continued focus to help businesses and hurt the people. A lot of these home builders are responsible for the number of houses on the market and the subsequent crash, they should be almost encouraged into bankruptcy for their part in this mess. The true recovery will come when existing home sales start to truly increase, but I fear our legislators aren't doing all they could be to expedite this process.
http://www.washingtonpost.com/wp-dyn/content/article/2009/07/27/AR2009072700967.html?hpid=topnews Sphere: Related Content
Tuesday, July 21, 2009
Heathcare - Continued
While I never intended for my first two posts to be directed towards the healthcare debate, it is such a hot topic everywhere I go that the need for further discussion persists. At issue today are the so-called "Blue-Dog Democrats". First I think we need to take a look at the Democratic party platform as published in mid 2008, during the final months of the presidental campaign. Have a look if you'd like, the link is: http://www.democrats.org/a/party/platform.html
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"Families and individuals should have the option of keeping the coverage they have or choosing from a wide array of health insurance plans, including many private health insurance options and a public plan. Coverage should be made afforadable for all Americans with subsidies provided through tax credits and other means."
The "public-option" that is of such debate as of late is right there in the Democratic party platform, the same platform that these Blue Dog Democrats won election/reelection on. Just who are these Congress members who we are talking about? Here is the list:
Blue Dog Leadership Team
Rep. Stephanie Herseth Sandlin (SD), Blue Dog Co-Chair for Administration
Rep. Baron Hill (IN-09), Blue Dog Co-Chair for Policy
Rep. Charlie Melancon (LA-03), Blue Dog Co-Chair for Communications
Rep. Heath Shuler (NC-11), Blue Dog Whip
Blue Dog Members
Altmire, Jason (PA-04)
Arcuri, Mike (NY-24)
Baca, Joe (CA-43)
Barrow, John (GA-12)
Berry, Marion (AR-01)
Bishop, Sanford (GA-02)
Boren, Dan (OK-02)
Boswell, Leonard (IA-03)
Boyd, Allen (FL-02)
Bright, Bobby (AL-02)
Cardoza, Dennis (CA-18)
Carney, Christopher (PA-10)
Chandler, Ben (KY-06)
Childers, Travis (MS-01)
Cooper, Jim (TN-05)
Costa, Jim (CA-20)
Cuellar, Henry (TX-28)
Dahlkemper, Kathy (PA-03)
Davis, Lincoln (TN-04)
Donnelly, Joe (IN-02)
Ellsworth, Brad (IN-08)
Giffords, Gabrielle (AZ-08)
Gordon, Bart (TN-06)
Griffith, Parker (AL-05)
Harman, Jane (CA-36)
Herseth Sandlin, Stephanie (SD)
Hill, Baron (IN-09)
Holden, Tim (PA-17)
Kratovil, Jr., Frank (MD-01)
McIntyre, Mike (NC-07)
Marshall, Jim (GA-03)
Matheson, Jim (UT-02)
Melancon, Charlie (LA-03)
Michaud, Mike (ME-02)
Minnick, Walt (ID-01)
Mitchell, Harry (AZ-05)
Moore, Dennis (KS-03)
Murphy, Patrick (PA-08)
Nye, Glenn (VA-02)
Peterson, Collin (MN-07)
Pomeroy, Earl (ND)
Ross, Mike (AR-04)
Salazar, John (CO-03)
Sanchez, Loretta (CA-47)
Schiff, Adam (CA-29)
Scott, David (GA-13)
Shuler, Heath (NC-11)
Space, Zack (OH-18)
Tanner, John (TN-08)
Taylor, Gene (MS-04)
Thompson, Mike (CA-01)
Wilson, Charles (OH-06)
I recommend looking through the list and if your representative is listed let them know how important this issue is to you and how it impacts your family - also maybe mention the fact that you voted for them because of their "supposed" stance on the public option. You can contact the Capital switchboard toll free at 800-965-4701.
Sunday, July 19, 2009
Health Care debate
We are hearing a lot about the health care debate all over the media, and there is a lot of pessimism out there. We need to step outside of the fray and look at what is really important in this debate, the people (us!). My family has had its share of strife due to the health care issue, namely when my father had a heart attack 9 years ago. My mother had "good" insurance through the State of Ohio and it didn't matter - little more than two years later they had to declare bankruptcy. The bankruptcy process cost them the only house they ever bought, the house I grew up in - so much for the so-called American Dream. Now years later, they are living in a rental house and still struggling to make ends meet with more bills due to my father's continuing health difficulties.
What I look for as a solution in Obama's health care proposal is a promise that other families will not have to lose their home and/or life's savings just because even with insurance coverage you are never fully insured. The Republicans are completely missing this with their plan that would offer tax credits for families to purchase insurance. The seems to be against everything they've been talking about as of late when it comes to the bailout, this would merely be a huge government sponsored payout to the insurance companies. As well, what would keep costs low in this plan? It would be nice to see a plan that actually benefits the people instead of big business.
I don't have all the answers for this, but here are just some suggestions for ways to truly fix the system - especially since the fear mongers have gotten single payer removed from the table:
1.) A true public option - What we've been talking about, a Medicare-type system that leverages its size to negotiate the lowest prices possible.
2.) R&D - We spend billions on R&D for defense projects, why can't we do the same when it comes to pharmaceuticals? Even if we had a government agency that made generic pharmaceuticals and removed the profit from the health care system it would be an improvement.
3.) Make hospitals non-profits - The large hospital systems are big business in a lot of communities, which causes unnecessary tests and procedures and ever raising costs.
Those are the basics in my opinion, but only one of the three is ever even discussed. We need to make a decide as a society if health care is a fundamental right, if so we need to act accordingly. Sphere: Related Content
What I look for as a solution in Obama's health care proposal is a promise that other families will not have to lose their home and/or life's savings just because even with insurance coverage you are never fully insured. The Republicans are completely missing this with their plan that would offer tax credits for families to purchase insurance. The seems to be against everything they've been talking about as of late when it comes to the bailout, this would merely be a huge government sponsored payout to the insurance companies. As well, what would keep costs low in this plan? It would be nice to see a plan that actually benefits the people instead of big business.
I don't have all the answers for this, but here are just some suggestions for ways to truly fix the system - especially since the fear mongers have gotten single payer removed from the table:
1.) A true public option - What we've been talking about, a Medicare-type system that leverages its size to negotiate the lowest prices possible.
2.) R&D - We spend billions on R&D for defense projects, why can't we do the same when it comes to pharmaceuticals? Even if we had a government agency that made generic pharmaceuticals and removed the profit from the health care system it would be an improvement.
3.) Make hospitals non-profits - The large hospital systems are big business in a lot of communities, which causes unnecessary tests and procedures and ever raising costs.
Those are the basics in my opinion, but only one of the three is ever even discussed. We need to make a decide as a society if health care is a fundamental right, if so we need to act accordingly. Sphere: Related Content
Why a more perfect union?
The objective that I have with starting this blog is to have a (somewhat) coherent log of my thoughts/ideas/suggestions on current events and ways to make the world a better place. My educational background is both political and philosophical, so you can expect a bit of both in my postings.
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