Election Highlights Health Care Problems

Three of the main issues in this election concern health care: the Covid-19 virus, Obama Care, and Roe v. Wade.

The health industry, particularly doctors’ groups and hospitals, has been remarkable quiet about the Covid crisis.  Only a few academics and government officials have been outspoken.  Local news shows often have individual doctors advising people to wear masks, but the AMA, hospital owners such as the Hospital Corporation of America, or insurance companies such as Aetna, have been quiet.  The exception has been the pharmaceutical companies, because they stand to make tons of money from a Covid vaccine.  They have mainly sung their own praises, rather than work on a strategy for dealing with the Covid-19 crisis.  In fact, the health industry has been reluctant to criticize Trump, because he has been good for their profits, leaving the criticism mainly to the media and some academic pundits.

The talk about “Obama Care” in this election illustrates how bad the American health care industry has become.  While the political debate is focused on health insurance costs and availability, the real issue has been the inability or unwillingness of the health care industry to care for the American population.  For sure, certain sectors of the population have good care, but the population as a whole is not well served.

The main problem with the American health care system is its focus on money rather than wellness.  Doctors make money when people get sick; they don’t make money if people stay well.  Therefore, their focus is on treating an acute ailment, rather than on keeping people healthy.  In addition, because of the obsession with money, poor people cannot get treatment for their acute illnesses, much less for care that would keep them well.  Obama Care is basically a way to get treatment for some poor people while keeping doctors very rich.  Doctors have tended to deal with Covid-19 as acutely sick patients to be threated individually rather than as a public health crisis to be dealt with by focusing on keeping people well, just as they treat people for a broken leg or a heart attack, rather than focus on wellness to keep people out of their offices or hospitals.

Roe v. Wade, the abortion case, is a medical issue because it is a medical procedure.  It is an image problem for some doctors with some people, because they perceive doctors who perform abortions as murders, and being a member of a profession that includes a number of murderers tends to sully the reputations of all the members of that profession, at least with those who avidly oppose abortion.

The fact that three of the main issues in this election are about health care indicates the depth of the problem for the industry in the US. Health care is a misnomer.  There is no care or love in the health “care” system.  It’s about money.  Many doctors start out performing real health “care” working in emergency rooms or small private practices, but they graduate to high paying specialties or lucrative private practices, and it is these well paid doctors who lead the industry publicly and politically.  They look out for their financial interests.

The Economist Expects Market Fraud to Be Revealed

The Economist Magazine expects the covid-19 market turmoil to reveal lots of fraud:

Besides exposing old schemes, the pandemic is likely to give rise to new ones. When economic survival is threatened, the line separating what is acceptable and unacceptable when booking revenues or making market disclosures can be blurred. Mr Kroll reckons that “amid such massive dislocation, some will inevitably cheat.”

Bruce Dorris, head of the Association of Certified Fraud Examiners, the world’s largest anti-fraud outfit, says the effects of covid-19 look like “a perfect storm for fraud”. It may engender everything from iffy accounting to stimulus-linked scams as thousands of firms—including bogus applicants—hustle for help. One fraud investigator points to private-equity-owned firms as potential targets. “There are lots of them, they are highly leveraged and they may not qualify for bail-outs because they have deep-pocketed sponsors,” he says. That increases the temptation to resort to unseemly practices. The ebbing tide is likely to reveal plenty of corporate nudity. That will not stop some businesses from taking up naturism.

https://www.economist.com/business/2020/04/18/the-economic-crisis-will-expose-a-decades-worth-of-corporate-fraud

Manipulating the Stock Market

The dramatic ups and downs of the stock market indicate to me that it is being manipulated by big, wealthy investors.  If the stock market is really representative of America’s business value, it is hard to believe that America is worth 3 to 5 percent more on one day than it was  the day before or will be the day after.

These huge market swings seem to be the result to algorithmic trading by wealthy investors, such as hedge funds or wealthy individuals.  The big swings seem to be in part momentum trading, fast traders staying just a little ahead of market increases or declines, but making money whichever way the market goes.

Often these big swings happen before the market even opens.  The market will open 2 or 3 percent above of below where it closed the previous day.  I don’t know how the momentum traders play this.  If they close out their positions at the end of the day, they miss the big swing that occurs during the night.  I don’t think the futures market is big enough for all these traders to play in, although there may be “dark” trades that take place off the public market.

In any case, it looks suspicious.  It looks like on most days the fix is in to either shoot up or drop down, often for no particular reason.  If the market goes up on bad news, the commentators often justify it by saying that the news was not as bad as expected.  Of if it’s good news and market goes down, then it’s “buy the rumor, sell the fact.”

In fact it’s just a bunch of powerful computers and smart guys watching the market and the news and staying one step ahead of the ordinary investor.  On the one hand you can argue that over the long term, the market operates as it should; the ordinary investor can make money if the economy improves despite the daily ups and downs.  On the other hand, you have the Jim Cramer meme showing the Dow’s best week while 16 million Americans are laid off their jobs.

The Wall Street Journal reported:

Retail sales, a measure of purchases at stores, gasoline stations, restaurants, bars and online, fell by a seasonally adjusted 8.7% in March from a month earlier, the most severe decline since record-keeping began in 1992. Earnings for the first quarter among big U.S. companies are expected to decline nearly 15% from a year earlier, according to FactSet, which would mark the biggest decline since 2009.

Still, as the data has darkened, investors have been buying stocks, extending the Dow’s rally from its March low to 30%. It is a sharp about-face from March, the most volatile month in the stock market’s history, when the 11-year bull market in equities abruptly ended.

https://www.wsj.com/articles/the-stock-market-is-ignoring-the-economy-11587160802?mod=hp_lead_pos1

Where is all of this money coming from that is pouring into the market?  A lot of it comes from 401(k) pension plans.  According to Wikipedia:

Direct ownership of stock by individuals rose slightly from 17.8% in 1992 to 17.9% in 2007, with the median value of these holdings rising from $14,778 to $17,000.[13][14] Indirect participation in the form of retirement accounts rose from 39.3% in 1992 to 52.6% in 2007, with the median value of these accounts more than doubling from $22,000 to $45,000 in that time.[13][14] Rydqvist, Spizman, and Strebulaev attribute the differential growth in direct and indirect holdings to differences in the way each are taxed in the United States. Investments in pension funds and 401ks, the two most common vehicles of indirect participation, are taxed only when funds are withdrawn from the accounts. Conversely, the money used to directly purchase stock is subject to taxation as are any dividends or capital gains they generate for the holder. In this way the current tax code incentivizes individuals to invest indirectly.[15]

Retirement plans like 401(k)s tend to be less active and basically become a huge pot of money that the fast traders can make money from.  If the market is much bigger, every little blip up or down can be more profitable.

Nasdaq has already warned about the possibility of market manipulation:

https://finance.yahoo.com/news/nasdaq-warns-market-manipulation-amid-155303069.html

There are many old-fashioned forms for market manipulation, but I’m not sure the current process is covered and is illegal, although the result is the same as with the old methods.

The other thing that has changed is the overall size of the market.  This is significantly driven by the decision of large corporation to quit funding retirement plans and force employees to fund their own retirement through 401(k)s.

84% of all stocks are owned by the wealthiest 10% of households, according to the NYT.

 

When Arizona Was a Confederate Territory

To most Americans, Arizona seems as far from the battlefields of the American Civil War as one can get.

But it was in the first year of the Civil War that what we think of as Arizona came into being — as a Confederate territory. In fact, Confederate actions in the Far Western theater of the war reveal the extent to which the Confederate flag became a symbol of white supremacy and conquest….

By late July 1861, the vanguard of Confederate Manifest Destiny arrived in New Mexico Territory. A lawyer and rancher named John Robert Baylor led 350 soldiers from the 2nd Texas Mounted Rifles across the border, occupied the town of Mesilla and forced the surrender of 400 soldiers at Fort Fillmore, the Union’s southernmost military installation in New Mexico.

On Aug. 1, 1861, Baylor sat down at his headquarters in Mesilla and, putting pen to paper, created the Confederate Territory of Arizona and appointed himself its governor.

https://www.washingtonpost.com/outlook/2020/03/06/latest-battle-over-confederate-flag-isnt-happening-where-youd-expect/

Virus Model Numbers Going Down

Something important is happening as the coronavirus crisis continues: Estimates of its lethality keep going down. On March 31, the White House estimated that, even with social distancing policies in place, between 100,000 and 240,000 Americans would die of covid-19. Anthony S. Fauci recently indicated the government’s estimates will soon be revised downward.

The University of Washington model — which has been cited by the White House — predicted on March 26 that, assuming social distancing stays in place until June 1, U.S. deaths over the next four months would most likely be about 81,000. By April 8, it had made more than five revisions, to get to the current number: 60,415. That’s on par with the number of people estimated to have died of the flu in the 2019-2020 season.

https://www.washingtonpost.com/opinions/without-mass-testing-were-flying-blind-through-this-crisis/2020/04/09/bf61e178-7a9b-11ea-a130-df573469f094_story.html