As a thought experiment consider twins of opposite sex. The boy decides to drop out of High School after his freshman year and she resolves herself to get a PHD.
Who comes out ahead twenty years later?
The average highschool dropout earns $20,000 in their first year. And let's assume he recieves a modest annual raise of 5% a year. Both have no living expenses.
By the time she graduates highschool he has earned $63k
By the time she recieves her undergrad he has earned $167k
After her three years as a graduate student he has earned $263k
She now has 7 years of student loans totaling $140k and a PHD
She is hired for a postdoc position which average $20k per year and her loans come due.
Servicing the Interest on the loan is $10k per year at 7% interest.
After her postdoc is completed she now has $140k in debt. $30k in savings. He has earned $378 in the same amount of time.
14 years after the decision she accepts her post postdoc position which average $35k per annum. He is earning $43k per annum.
Seven years later, twenty years after the decision to drop out of highschool he retires with $750,000 and she has just paid off her student loans has a net worth of ZERO.
How can an education system persist where the most educated are worse off than the least educated?
Tuesday, November 3, 2009
Healthcare
Healthcare After spending a long night in the ER looking after my friend Tracy I started to wonder why Healthcare the way it is? Tracy is back home getting better, our healthcare system is still in the ICU.
The media appearing to be completely confounded by the issue actually has an ulterior motive to keep the status quo. With a watered down healthcare reform passing or a substantive bill failing either way we will keep the status quo. The current debate over healthcare has no merit.
How it all started.
Traditionally you would have a doctor come to your home and pay a small fee for services. Insurance did not exist because the cost of healthcare was so low.
In 1927 the first insurance policy was written as an agreement between Baylor University Hospital and a nearby nursing school. It would be a decade before the first person signed up for this healthcare insurance since nobody saw a need to buy it. Health care was relatively cheap and accessible through direct fee for service, club or lodge doctors, and charitable organizations.
Everything changed in 1937 when companies began buying insurance for their employees. Nothing had changed in medicine. People had not become sicker. Companies were not protecting their employees out of the goodness of their heart.
Government policy had changed. 9 years into the Great Depression, FDR had still not found a way to get out of it. The economy was still sinking. The government placed Wage and Price controls on business to try and freeze the economy. They were hoping to prevent further unemployment and pain. Unfortunately it was a bad idea and 1938 saw another dive in the market and a rise in unemployment.
One of the unexpected consequences of Wage and Price Controls was its affect on health insurance. War was raging in Europe. Men were going into the army. There was a shortage of skilled workers.
Employers could not offer raises in pay to get new skilled employees, that was illegal under Wage and Price Controls. Employers discovered a way to get new employees without getting into trouble with the law. They started offering health insurance to new employees. Insurance gave the large employers leverage to get good employees.
The use of insurance grew exponentially during this period. Business found that they could save a great deal on payroll if they bought insurance instead of paying employees cash. When an employer paid cash he had to pay the new social security taxes and unemployment taxes. When the employer bought insurance he only had to pay for the insurance. This provided over a 10% savings in payroll for each dollar paid in insurance instead of cash.
The result of this growth of insurance was the growth of inflation in the price of health care. For the next 25 years medical inflation grew. Remember, “The patient didn’t care about the price and the Doctor knew it.” Costs were rising.
By the early 1960’s the price of medicine had grown so high that the poor and elderly could no longer afford to go to the doctor.
The government had the opportunity at that time to remove the damage done since 1937 by replacing employer based insurance with universal healthcare or private insurance. Instead of limiting the use of employer based insurance, they created Medicare for the elderly and Medicaid for the poor. Band-aids to the larger problem.
Healthcare costs continued to rise unchecked. The employers were enjoying the tax deduction for buying insurance and didn’t care about cost. In fact, most employers were happy to buy more insurance for the tax deduction. In the 60’s they bought dental insurance and dental prices rose. In the 80’s they bought vision insurance and vision care prices skyrocketed. In the 90’s insurance companies started canine insurance and the price of Veterinary medicine became very expensive.
The reality today is healthcare costs are so high, healthcare is rationed for those that have insurance and inaccessible to those that don’t.
If we the people are forcefed healthcare from our employer; we are no freer than a caged animals awaiting a meal from our zookeeper. Employer based healthcare is insideous in that it forces employment, especially of the sick. Forced employment becuase of heritage is called slavery; Forced employment becuase of destitution is called sweat shop labor; Forced employment becuase of illness is called employment based healthcare.
I have two acquantences that show employment based healthcare is forced employment. Travis, 26, diagnosed with terminal cancer and given six months to live is spending his last days on earth working 9-5 to afford the medication that is keeping him alive. Elaine, 33 after getting her PHD had a double masectomy, forced to move away from home to take a job paying $12 / hour with benefits.
The solutions are simple:
Sever the tie between employer and healthcare.
Create private medical savings accounts that are tax free
Make insurance companies compete across state lines
Subsidize doctors and nurses work with the elderly, children and destitute.
Stop lobbyists. Make campaign contributions illegal as many European countries have done. All candidates receive an equal public fund for campaigning. Special interest money is made illegal.
The media appearing to be completely confounded by the issue actually has an ulterior motive to keep the status quo. With a watered down healthcare reform passing or a substantive bill failing either way we will keep the status quo. The current debate over healthcare has no merit.
How it all started.
Traditionally you would have a doctor come to your home and pay a small fee for services. Insurance did not exist because the cost of healthcare was so low.
In 1927 the first insurance policy was written as an agreement between Baylor University Hospital and a nearby nursing school. It would be a decade before the first person signed up for this healthcare insurance since nobody saw a need to buy it. Health care was relatively cheap and accessible through direct fee for service, club or lodge doctors, and charitable organizations.
Everything changed in 1937 when companies began buying insurance for their employees. Nothing had changed in medicine. People had not become sicker. Companies were not protecting their employees out of the goodness of their heart.
Government policy had changed. 9 years into the Great Depression, FDR had still not found a way to get out of it. The economy was still sinking. The government placed Wage and Price controls on business to try and freeze the economy. They were hoping to prevent further unemployment and pain. Unfortunately it was a bad idea and 1938 saw another dive in the market and a rise in unemployment.
One of the unexpected consequences of Wage and Price Controls was its affect on health insurance. War was raging in Europe. Men were going into the army. There was a shortage of skilled workers.
Employers could not offer raises in pay to get new skilled employees, that was illegal under Wage and Price Controls. Employers discovered a way to get new employees without getting into trouble with the law. They started offering health insurance to new employees. Insurance gave the large employers leverage to get good employees.
The use of insurance grew exponentially during this period. Business found that they could save a great deal on payroll if they bought insurance instead of paying employees cash. When an employer paid cash he had to pay the new social security taxes and unemployment taxes. When the employer bought insurance he only had to pay for the insurance. This provided over a 10% savings in payroll for each dollar paid in insurance instead of cash.
The result of this growth of insurance was the growth of inflation in the price of health care. For the next 25 years medical inflation grew. Remember, “The patient didn’t care about the price and the Doctor knew it.” Costs were rising.
By the early 1960’s the price of medicine had grown so high that the poor and elderly could no longer afford to go to the doctor.
The government had the opportunity at that time to remove the damage done since 1937 by replacing employer based insurance with universal healthcare or private insurance. Instead of limiting the use of employer based insurance, they created Medicare for the elderly and Medicaid for the poor. Band-aids to the larger problem.
Healthcare costs continued to rise unchecked. The employers were enjoying the tax deduction for buying insurance and didn’t care about cost. In fact, most employers were happy to buy more insurance for the tax deduction. In the 60’s they bought dental insurance and dental prices rose. In the 80’s they bought vision insurance and vision care prices skyrocketed. In the 90’s insurance companies started canine insurance and the price of Veterinary medicine became very expensive.
The reality today is healthcare costs are so high, healthcare is rationed for those that have insurance and inaccessible to those that don’t.
If we the people are forcefed healthcare from our employer; we are no freer than a caged animals awaiting a meal from our zookeeper. Employer based healthcare is insideous in that it forces employment, especially of the sick. Forced employment becuase of heritage is called slavery; Forced employment becuase of destitution is called sweat shop labor; Forced employment becuase of illness is called employment based healthcare.
I have two acquantences that show employment based healthcare is forced employment. Travis, 26, diagnosed with terminal cancer and given six months to live is spending his last days on earth working 9-5 to afford the medication that is keeping him alive. Elaine, 33 after getting her PHD had a double masectomy, forced to move away from home to take a job paying $12 / hour with benefits.
The solutions are simple:
Sever the tie between employer and healthcare.
Create private medical savings accounts that are tax free
Make insurance companies compete across state lines
Subsidize doctors and nurses work with the elderly, children and destitute.
Stop lobbyists. Make campaign contributions illegal as many European countries have done. All candidates receive an equal public fund for campaigning. Special interest money is made illegal.
Housing
Congress is expanding and extending the first-time homeowner tax credit. The first time around anyone buying a home for the first time would receive an $8,000 tax credit. The second time around anyone who has been in their current house for more than three years and earning less than $250,000 (ridiculous limit) that wants to move can claim a $6,500 tax credit.
The first policy came after the housing bubble imploded in an attempt to prop-up housing prices. The rational was good; there are a lot of empty foreclosed houses that people could be moved into if only they had a little help. The second tax credit can NOT be justified in this same way it is housing-vacancy-neutral, since any new home bought means someone is moving out of their old home. This is a futile shell game in housing meant to artificially prop-up housing prices once again.
Congress is tipping their hand in favor of the financial industry. The real reason is housing prices are primed to fall once again, this would mean astronomical losses for the banks who hold the mortgages. Congress is operating in the best interest of the banks and not homeowners.
The first policy came after the housing bubble imploded in an attempt to prop-up housing prices. The rational was good; there are a lot of empty foreclosed houses that people could be moved into if only they had a little help. The second tax credit can NOT be justified in this same way it is housing-vacancy-neutral, since any new home bought means someone is moving out of their old home. This is a futile shell game in housing meant to artificially prop-up housing prices once again.
Congress is tipping their hand in favor of the financial industry. The real reason is housing prices are primed to fall once again, this would mean astronomical losses for the banks who hold the mortgages. Congress is operating in the best interest of the banks and not homeowners.
Imaginitive Labor
Agrarian Society v Information Age
Advances in technology make it possible for a fraction of the population to engage in substantive production for the rest of us. Why is there this division of labor between those that work in agriculture and those allowed to play with information? Those pedaling information are absolutely reliant on those working in agriculture. Yet, those working in agriculture receive a fraction of those who are reliant on them. This to me is the greatest contradiction in society.
Communication Networks
To get to the bottom of this contradiction we need to better understand communication networks. One communication network is the university system all around the world who publish peer-reviewed articles long held to be the pinnacle of the educated class. Scientific publications have been increasing exponentially with ever increasing degrees of specialization. Science has changed from being a step to understanding the natural world to a process to manufacturing facts. Science has a virtual monopoly on facts; something is fact only when spoken by the scientific community. This ignores that truth transcends current limited words, transcends adopted internal rules of publication and transcends social interactions or lack there of –of scientists. This is not a reprimand of the scientific community, they have contributed greatly. The line of reasoning applied to scientific publications demonstrates that in general networks of communication are self-sustaining and become indifferent to their content or value.
The most pervasive network of communication most of us will ever engage in is our place of employment. The content that circulates in the work place affects the identity of the network and those that participate. It is participation and not production that is rewarded in the information age workplace. The reward for participation within the workplace is modern virtual money.
Participation rewarded; not Production
The change from production being rewarded to participation being rewarded has gone unnoticed. The importance of this unique observation can not be overstated. It stands that subsistence works do not largely participate in communication networks whereas information workers do, making the reward for information workers greater.
Left unanswered is why! Why would companies shift from rewarding production to participation? As technology improved in agriculture there fewer and fewer laborers were needed to provide a substantive living to the population. As workers shifted out of agriculture they moved into manufacturing producing consumables that were not necessary but novel. As workers shifted out of manufacturing they moved into the information industry.
Information proliferation
Information once regarded only for its application to manufacturing production now is viewed as self-sufficient, independent and valuable in and of its self. The ever increasing flow of information has lessened its meaning and value. The loss of meaning of the process to proliferate information does not stop the process it emboldens the process.
Imaginative Jobs
This social transformation caused a great fissure in the labor force between agriculture jobs and all other imaginative jobs. Imaginative jobs are rewarded with modern virtual money. A never ending scale of luxuries drives consumption, an incentive to participate in imaginative jobs and exchange modern virtual money. Entertainment and leisure remove tension from the monotony of imaginative labor.
Imaginative Jobs exist because most of us without structure of an imaginative job do not have the capacity for self development and quickly dissocialize and become marginalized. The marginalized individual becomes a destabilizing factor to society. A collective effort by marginalized individuals revolt and can accomplish extensive social change. The status quo of a civil society is needed for the wealthy elite to maintain their standard of living. The masses have always overcome the use of force to control them. Effective control of masses is done through coercion and management - enter in imaginative labor. The elite operate outside the social framework we are socialized into. They play by different rules.
Television mock rally
The size of a rally shown on television is not important, millions of eyes watch, social effect is felt, and a small rally appearing large is manifested through manipulation. The distinction between information and misinformation has disappeared. There exists only the flow of information, which forms social consciousness. Modern man is not inclined to think; he either grasps the idea, or skips it and goes to the next. The flow of information is moving too fast. Such a man is perfectly manageable.
The vast majority of individuals in the post-industrial civilization does not produce, but just perform a social whirl. Modern money is a mechanism of coercion for participation within your networks. Go forth! Exercise your false freedom to take a niche in society, consistent with your socialized nature, pacify yourself into civility. Put on your chastity belt.
Solution
The delusion is seeing it necessary to go to imaginative jobs. There is no solution proposed here because all that is needed is a higher level of understanding and passive collective action. There are plentiful resources available for everyone already provided by the earth and easily accessible with modern technology and a very small volunteer labor force.
Advances in technology make it possible for a fraction of the population to engage in substantive production for the rest of us. Why is there this division of labor between those that work in agriculture and those allowed to play with information? Those pedaling information are absolutely reliant on those working in agriculture. Yet, those working in agriculture receive a fraction of those who are reliant on them. This to me is the greatest contradiction in society.
Communication Networks
To get to the bottom of this contradiction we need to better understand communication networks. One communication network is the university system all around the world who publish peer-reviewed articles long held to be the pinnacle of the educated class. Scientific publications have been increasing exponentially with ever increasing degrees of specialization. Science has changed from being a step to understanding the natural world to a process to manufacturing facts. Science has a virtual monopoly on facts; something is fact only when spoken by the scientific community. This ignores that truth transcends current limited words, transcends adopted internal rules of publication and transcends social interactions or lack there of –of scientists. This is not a reprimand of the scientific community, they have contributed greatly. The line of reasoning applied to scientific publications demonstrates that in general networks of communication are self-sustaining and become indifferent to their content or value.
The most pervasive network of communication most of us will ever engage in is our place of employment. The content that circulates in the work place affects the identity of the network and those that participate. It is participation and not production that is rewarded in the information age workplace. The reward for participation within the workplace is modern virtual money.
Participation rewarded; not Production
The change from production being rewarded to participation being rewarded has gone unnoticed. The importance of this unique observation can not be overstated. It stands that subsistence works do not largely participate in communication networks whereas information workers do, making the reward for information workers greater.
Left unanswered is why! Why would companies shift from rewarding production to participation? As technology improved in agriculture there fewer and fewer laborers were needed to provide a substantive living to the population. As workers shifted out of agriculture they moved into manufacturing producing consumables that were not necessary but novel. As workers shifted out of manufacturing they moved into the information industry.
Information proliferation
Information once regarded only for its application to manufacturing production now is viewed as self-sufficient, independent and valuable in and of its self. The ever increasing flow of information has lessened its meaning and value. The loss of meaning of the process to proliferate information does not stop the process it emboldens the process.
Imaginative Jobs
This social transformation caused a great fissure in the labor force between agriculture jobs and all other imaginative jobs. Imaginative jobs are rewarded with modern virtual money. A never ending scale of luxuries drives consumption, an incentive to participate in imaginative jobs and exchange modern virtual money. Entertainment and leisure remove tension from the monotony of imaginative labor.
Imaginative Jobs exist because most of us without structure of an imaginative job do not have the capacity for self development and quickly dissocialize and become marginalized. The marginalized individual becomes a destabilizing factor to society. A collective effort by marginalized individuals revolt and can accomplish extensive social change. The status quo of a civil society is needed for the wealthy elite to maintain their standard of living. The masses have always overcome the use of force to control them. Effective control of masses is done through coercion and management - enter in imaginative labor. The elite operate outside the social framework we are socialized into. They play by different rules.
Television mock rally
The size of a rally shown on television is not important, millions of eyes watch, social effect is felt, and a small rally appearing large is manifested through manipulation. The distinction between information and misinformation has disappeared. There exists only the flow of information, which forms social consciousness. Modern man is not inclined to think; he either grasps the idea, or skips it and goes to the next. The flow of information is moving too fast. Such a man is perfectly manageable.
The vast majority of individuals in the post-industrial civilization does not produce, but just perform a social whirl. Modern money is a mechanism of coercion for participation within your networks. Go forth! Exercise your false freedom to take a niche in society, consistent with your socialized nature, pacify yourself into civility. Put on your chastity belt.
Solution
The delusion is seeing it necessary to go to imaginative jobs. There is no solution proposed here because all that is needed is a higher level of understanding and passive collective action. There are plentiful resources available for everyone already provided by the earth and easily accessible with modern technology and a very small volunteer labor force.
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