SHORT TAKES ON IMPORTANT STORIES #7

Here are short takes on three important stories that have gotten little attention in the mainstream media. Each provides a quick summary of the story, a hint as to why it’s important, and a link to more information. They range from encouraging responsibility in the media to a major victory for workers to the corruption of our economy and politics by a billionaire.

STORY #1: I urge you to sign the Media and Democracy Project’s open letter to news organizations demanding that they cover the upcoming elections in a substantive and meaningful way while making the threats to democracy clear and actively exposing and discrediting disinformation. The Media and Democracy Project describes itself as a non-partisan, grassroots, civic organization engaging in actions in support of more informative, diverse, independent, and pro-democracy media operating in the public interest. It is urging news organizations to follow a detailed set of guidelines summarized by these three principles: [1]

Cover elections like they matter more than sports scores (stop the “horse race” analysis).
Make the threats to democracy clear.
Protect Americans from disinformation.

STORY #2: In a stunning victory for workers, 73% of Volkswagen workers at a Chattanooga TN plant voted to join the United Auto Workers union (2,628 to 985). This is the first major successful union vote in the South and the first at a foreign-owned auto plant in the U.S. (However, every other VW plant in the world is unionized indicating how far behind the U.S. is in supporting workers and the middle class.) Not only had plant management opposed the union, but six southern state governors had issued a joint statement attacking unionization as a threat to liberty and freedom.

This is major step in the rebirth of the labor movement, which had been languishing since 1980. Public approval of labor unions is close to 70%, the highest level in 50 years. The last couple of years have seen a resurgence of union organizing and successful bargaining efforts, including by Hollywood writers, UPS employees, health care workers, university employees, and auto workers, among others.

In the 1950s, one out of every three private sector workers belonged to a union. Today, it’s only one out of every 16 workers. This decline in union membership has caused a decline in the bargaining power of workers, the reduction of wages and benefits, and the decline of the middle class. Corporate America’s war on unions and on workers included changes in government policies that supported unionization, global trade agreements that pitted American workers against foreign labor, and financial deregulation that allowed corporate takeovers, private equity’s vulture capitalism, and abuse of bankruptcy laws to undermine workers and their benefits, particularly retirement benefits. [2]

STORY #3: The ability of billionaires to corrupt our political and economic systems was in evidence as former president Trump reversed himself on whether TikTok should be banned in the U.S. after a recent meeting with Jeff Yass, a billionaire who owns 15% of TikTok’s Chinese parent company, Byte Dance. Yass’s investment company is also the biggest institutional investor in the shell company that merged with Trump’s Truth Social online media company. This merger provided Trump with a windfall profit at a time when he apparently badly needs cash. [3]

As-of March 2024, Yass is also this election cycle’s biggest donor to non-candidate, Republican-affiliated Political Action Committees, having given over $46 million. [4] Yass is also a big donor to right-wing groups in Israel that have supported Netanyahu’s efforts to weaken Israel’s democracy and Palestinian’s rights.

[1] Hubbell, R., 4/15/24, “Biden’s steady hand, part II,” Today’s Edition Newsletter (https://roberthubbell.substack.com/p/bidens-steady-hand-part-ii)

[2] Reich, R., 4/22/24, “The stunning rebirth of the American labor movement,” Robert Reich’s daily blog (https://robertreich.substack.com/p/the-rebirth-of-the-american-labor)

[3] Kuttner, R., 3/27/24, “The corrupt trifecta of Yass, Trump, and Netanyahu,” The American Prospect blog (https://prospect.org/blogs-and-newsletters/tap/2024-03-27-corrupt-trifecta-yass-trump-netanyahu/)

[4] Open Secrets, retrieved 3/28/24, “2024 top donors to outside spending groups, “ (https://www.opensecrets.org/outside-spending/top_donors/2024)

OUR DEMOCRACY’S CHALLENGES ARE SERIOUS AND LONGSTANDING Part 1

Our democracy is in real trouble – and always has been. The current crisis of ensuring a peaceful transition of power based on election results is very serious. However, there are other serious problems with our elections including voter suppression, gerrymandering, huge sums of money from wealthy interests, and the Electoral College. This post provides an historical overview and then focuses on the Electoral College and how to fix it.

(Note: If you find my posts too long to read on occasion, please just skim the bolded portions. Thanks for reading my blog! Special Note: The new, more user-friendly website for my blog is here.)

Our democracy is in real trouble – and always has been. The current crisis is ensuring a peaceful transition of power based on election results and it’s an immediate, very real, and very serious threat. The possibility of electing an authoritarian, dictatorial government in the next presidential election, one that would ignore the will of the voters in policy making and in future elections, is significant.

However, the problems with our elections go much deeper than simply honoring the will of the voters. Other serious problems include voter suppression (using many strategies), gerrymandered districts, huge sums of money in campaigns from wealthy individuals and corporations, and the Electoral College, which allows someone to win the presidency with far less than a majority of the votes.

Before delving into these issues and solutions for them, a little history and perspective are valuable. Our Founding Fathers had limited confidence in true democracy, despite their truly radical statement that all men are created equal. Even putting aside their limited vision that included only white men and no women, they put serious limits on a government supposedly operating based on the consent of the governed, which is reflected in multiple elements of the government they created. [1]

For example, U.S. Senators were appointed not elected (until a Constitutional Amendment in 1913), the Electoral College not the voters select the President, the Constitution is very difficult to amend, and the checks and balances of the three branches of government have a built in a bias toward the status quo and make major policy changes difficult. Furthermore, elections are winner take all; proportional representation (to ensure that minority voices are included in government) is not included.

In part this was because the Founding Fathers were designing a government for a small, agrarian country and could not envision the demands on government of today’s complex, fast changing society and world. They created a government where major policy changes are difficult unless there is a strong, broad consensus – and it’s painfully obvious how difficult that is to achieve these days.

The national government today is unstable because it often does not respond expeditiously to the will of the voters. This is typical of political systems where a strong president is elected separately from the legislative branch and where the legislative branch has two equally powerful chambers. This structure and the status quo bias of the government’s checks and balances make responsiveness to voters difficult. Voters quickly get frustrated with the inability of the officials they have just elected to respond to their wishes and therefore tend to vote for the other party in the next election.

In the national elections since 2006, party control of at least one chamber of Congress or the presidency has changed hands in every election except in 2012 (when President Obama was re-elected, Democrats maintained control of the Senate, and Republican maintained control of the House). Since 1980, there’s been a politically divided federal government over 70% of the time. In other words, the presidency and both chambers of Congress have been held by the same party less than 30% of the time. Therefore, it’s been rare that either party has been able to definitively advance its policy agenda.

Winner-take-all elections (as opposed to proportional representation in multi-candidate districts) are a major reason the U.S. has two party politics and a fluctuation of control back and forth. Other parties have little chance of electing any of their candidates and, therefore, are seen as spoilers, not serious options, in elections.

When democratic governments have been setup around the world, including in U.S.-led efforts after World War II and the war in Iraq, the U.S. model has not typically been used. Of the 78 relatively stable democracies in the world, only four use the U.S. model of a strong, head-of-government president and a legislature that are elected in separate voting in winner-take-all elections (U.S., Ghana, Liberia, and Sierra Leone).

The more frequent model for democracies is a parliamentary system. In a parliamentary system the head of the government, usually the prime minister, is the leader of the party or coalition that controls the parliament (i.e., the legislative body). (There is typically only one legislative chamber and if there is a second one, it typically has very limited power.) The president is typically a largely ceremonial figurehead (i.e., a head of state rather than a head of government). If the governing party or coalition in parliament cannot pass its policy agenda, an election is usually quickly held to elect a parliament that can advance its policy agenda.

The Electoral College system of selecting the U.S. President is particularly undemocratic and unstable. A state-based, winner-take-all model prevails in awarding Electoral College votes to the presidential candidates. (Only two states, Maine and Nebraska, split their electors between the presidential candidates.) What this means is that the presidential election is decided in a small number of “swing” states (typically four to maybe 12) by the tiny share of the overall electorate in those states who are the “swing” voters (about 400,000 voters or ¼ of one percent of the total votes cast of roughly 160 million). Moreover, because each state’s electoral votes are the sum of its number of U.S. Representative and Senators, the Electoral College votes are far from the democratic one person one vote standard. Most dramatically, each California Elector represents more than 700,000 people while each Wyoming Elector represents fewer than 200,000 people.

The easiest way to fix the Electoral College problem is to get states with a majority of the Electoral College votes to pass a National Popular Vote (NPV) law. This law simply states that the state’s electoral college votes will go to the presidential candidate with the most popular votes nationally. However, the law won’t go into effect in any state until enough states have passed it to make up a majority of the Electoral College votes (i.e., 270 votes). So far, it has been enacted in 17 states and Washington, D.C., which adds up to 209 electoral college votes. (D.C. has 3 votes even though it has no votes in Congress.) So, only 61 more votes from as few as five more states are needed for NPV to go into effect. In eight states with 80 electoral college votes, it has passed either one or both chambers of the state legislature. You can see the status of NPV in your state here.

If your state is one that hasn’t passed NPV, particularly if it’s one of the states where at least one chamber of the legislature has passed it, please contact your state legislators and urge them to pass it. There’s a nice one-page description of NPV and its status that you may find of interest or want to share with your state legislators here.

There will be more on the challenges facing our democracy and ways to strengthen it in future posts.

[1] Dayen, D., 1/29/24, “America is not a democracy,” The American Prospect (https://prospect.org/politics/2024-01-29-america-is-not-democracy/)

SHORT TAKES ON IMPORTANT STORIES #6: GOOD NEWS!

Here are short takes on five important good news stories that have gotten little attention in the mainstream media. Each provides a quick summary of the story, a hint as to why it’s important, and a link to more information.

STORY #1: States Newsroom, the country’s largest state-focused non-profit news organization, now has a full-time presence in all 50 state capitals. Its network has 39 freestanding newsrooms and, in the other 11 states, partnerships with state-focused, non-profit news organizations. It has 220 full-time employees and an annual budget of over $22 million. Statehouse policy and politics are the major focuses of its reporting, with full-time reporters covering every state legislature. It does not accept any corporate funding and publicly discloses all contributions of over $1,000. In addition to news, it publishes commentary that is clearly labeled as such, is completely separated from its news reporting, and is pro-transparency and pro-democracy. It does not publish commentary from current office holders or candidates. [1]

STORY #2: A recent study by the Economic Policy Institute updated a previous analysis from 2016 of the performance of the U.S. economy under Democratic and Republican presidents. [2] It confirmed and extended the finding that the economy consistently performs significantly better under Democratic presidents across a wide range of economic indicators. This is true for market-based data that are not affected by government supports or subsidies, dispelling the contention that the superior economic performance is due to Democratic spending on safety net programs. The report acknowledges that these findings cannot claim to prove there’s a cause-and-effect relationship between the party of the President and economic outcomes. It also acknowledges that the President has limited control over the economy and that luck plays a role. In terms of luck, it notes that both Obama and Biden inherited depressed economic conditions where the economy had been damaged by severe shocks, and, nonetheless, the strong economic performance under Democratic presidents persisted.

Examining economic data both from 1949 to the present and from 1981 to the present finds that economic performance under Democratic presidents was noticeably better on:

Growth in Gross Domestic Product,
Job growth,
Wage and income growth,
Unemployment,
Business investment,
Inflation, and
Interest rates.

At the growth rate typical under Democratic presidents, per capita living standards would double every 28 years, while with the growth rate typical under Republican presidents, per capita living standards would take 56 years to double. Moreover, income growth is much more equitable under Democratic presidents than Republican ones, with much higher income growth for those with higher incomes under Republican presidents.

STORY #3: In a major antitrust settlement, Visa and Mastercard, the two dominant corporations in the credit card business, have agreed to limit the fees they charge merchants for purchases using their credit cards. It’s estimated that this will save merchants at least $6 billion a year. Some of these savings may be passed on to consumers. Currently, the typical 2% credit card fee costs merchants over $100 billion a year.

Merchants are also now allowed to charge consumers differentiated fees depending on the credit card they use for their purchase. This incentivizes consumers to use lower cost cards.

The antitrust case has been in the courts for almost 20 years and five years ago Visa and Mastercard paid roughly $6 billion to merchants in what was, at the time, the largest settlement ever in a class action lawsuit. [3]

STORY #4: The Biden administration has taken a stand for safety and workers with a new federal regulation requiring most freight trains to have two-person crews. Ever since the February 2023 toxic train derailment and fire in East Palestine, Ohio, train safety and working conditions have been under intense scrutiny. However, little has changed and the railroad safety bill in Congress has stalled. The Biden administration has been working on this new regulation for two years. The process garnered 13,000 public comments with only about 60 in opposition to two-person crews. Nonetheless, the big railroad corporations have lobbied hard against it and have now gone to court to block the new regulation. The typical train these days is about a mile long (5,300 feet) with roughly 100 cars; some are three miles long. Despite the railroad corporations’ stated commitment to safety, particularly since the Ohio derailment, they are strongly opposing two-person crews and there are currently an average of almost three derailments every day. [4]

STORY #5: As an update on a previous post, Please sign this petition to reduce the Medicare Advantage rip off, the Biden administration held the line on the proposed 3.7% increase in Medicare Advantage payments despite intense lobbying by the insurance industry, which sponsors and makes big profits off Medicare Advantage plans. As a result, Medicare’s payments to Medicare Advantage plans are expected to increase by over $16 billion in 2025, to a total of over $500 billion. In the past, the federal government has usually succumbed to industry lobbying and upped the annual Medicare Advantage increase from the initially proposed amount. Although some advocates were disappointed that the Biden administration didn’t reduce the proposed increase or do more to rein in the abuses by Medicare Advantage plans, this shows that advocacy can change past precedent and result in at least a first step in reining in the for-profit rip off of Medicare Advantage plans. [5]

[1] Joseph, C., 4/5/24, “This nonprofit has newsrooms in all 50 state capitals. Is it the future of state journalism?” Columbia Journalism Review (https://www.cjr.org/the_media_today/states-newsroom-local-politics-policy-model.php)

[2] Bivens, J., 4/2/24, “Economic performance is stronger when Democrats hold the White House,” Economic Policy Institute (https://www.epi.org/publication/econ-performance-pres-admin/)

[3] Smith, P., 3/27/24, “Visa, Mastercard reach $30 billion deal with US retailers,” The Boston Globe from Bloomberg News

[4] Funk, J., 4/3/24, “Freight railroads must keep two-person crews,” The Boston Globe from the Associated Press

[5] Corbett, J., 4/2/24, “Campaigners beat ‘greedy’ insurance giants exploiting Medicare Advantage,” Common Dreams (https://www.commondreams.org/news/medicare-advantage-plans)

PLEASE SIGN THIS PETITION TO REDUCE THE MEDICARE ADVANTAGE RIP OFF

Please join me in signing this petition (sponsored by Social Security Works) calling on the Biden administration to take steps to stop the undermining of Medicare by the Medicare Advantage plans offered by for-profit insurance corporations. They maximize their generous profits by denying and delaying care for seniors, as well as through fraudulent billing.

The Biden administration will be finalizing the annual increase in payments to Medicare Advantage plans in early April. As you probably know, Medicare Advantage plans are the privatized alternative to regular Medicare. They are very profitable for the for-profit insurance corporations that run them. They cost more per enrollee than regular, public Medicare, even though their enrollees are younger and healthier than the population on regular Medicare. Medicare Advantage plans also deliver poor treatment when enrollees get sick. (More on this below.)

The Biden administration is proposing a 3.7% increase, but the insurance corporations and their lobbyists are pushing hard for a bigger increase. Medicare needs to start holding these insurance corporations accountable for their greed and poor performance. If anything, this proposed increase should be decreased, and certainly not increased. [1]

Therefore, I urge you to join me in signing this petition (sponsored by Social Security Works) calling on the Biden administration to reclaim Medicare from the for-profit Medicare Advantage insurance corporations. As a start, it should stop overpaying them and work to recoup past overpayments.

If you have a minute, I urge you to also contact President Biden to ask him to stop the undermining of Medicare by for-profit insurance corporations whose Medicare Advantage plans are overbilling Medicare while underserving their patients. You can email President Biden at http://www.whitehouse.gov/contact/submit-questions-and-comments or you can call the White House comment line at 202-456-1111 or the switchboard at 202-456-1414.

Here are some of the negative attributes of the for-profit Medicare Advantage (M.A.) plans:

10,000 lives could be saved each year if Medicare eliminated the worst performing 5% of M.A. plans.
M.A. patients are 1.5 times more likely to die within a month after complex cancer surgery than regular Medicare patients.
M.A. patients cost Medicare roughly 6% more per patient than patients in regular Medicare, despite worse outcomes with younger, healthier patients.
M.A. insurance corporations cost Medicare between $88 billion and $140 billion extra every year over what it would cost if their patients were in regular Medicare. [2]
Almost every major M.A. plan sponsor has been found guilty of fraudulent billing of Medicare, many of them multiple times. They claim their patients are sicker than they really are and game the payment system in other ways despite repeated attempts to stop this.
M.A. plans regularly deny or delay coverage of treatment through complex prior authorization procedures. They want to pay out as little as possible to maximize their profits. (See more on this below.)
M.A. plans limit patients to the doctors and health care facilities in their networks (while regular Medicare lets you pick any doctor and medical facility that you want).
M.A. plans attract younger, healthier seniors through aggressive (and sometimes misleading) marketing and by offering coverage for services (such as dental and eye care) that they lobby to keep regular Medicare from being able to offer.
M.A. plans have high overhead costs for profits, advertising, executive pay, and complex administration, such as prior authorization procedures. They spend 15% – 25% less on medical services than regular Medicare, because their overhead is so much higher.

A very important strategy for maximizing profits is to minimize how much the M.A. plan pays for medical care. Therefore, they impose complex prior authorization procedures, particularly for expensive care. A recent study of prior authorizations estimated that there were 35 million prior authorization requests in 2021 (the most recent data available) and that 2 million were denied. Roughly 220,000 of these denials were appealed and in 82% of those cases the denial was overturned. The researchers estimated that, overall, there are 1.5 million unfounded denials of care by M.A. plans each year. If more patients went through the complex and time-consuming process of appealing denials, up to 75% of denials would be overturned. Surveys in 2023 found that 94% of doctors reported that the prior authorization process had delayed needed medical care, 89% reported that prior authorization requirements had negative effects on patients’ outcomes, and 33% of doctors reported that the need for a prior authorization had led to an avoidable serious medical event, such as hospitalization, a permanent disability, or death. [3]

The privatization of Medicare through Medicare Advantage plans only benefits for-profit insurance corporations, while patients, Medicare, and, ultimately, taxpayers pay the costs. In 2022, the seven large health care corporations that cover 70% of M.A. patients had over $1 trillion in revenue and over $69 billion in profits. They spent more than $26 billion buying back their own stock, which artificially boosts the stock price rewarding big stockholders, including their corporate executives. [4] For example, in 2023, giant M.A. plan sponsor UnitedHealth spent $8 billion buying back its own stock and another $7 billion on dividends to stockholders. Its CEO was paid nearly $21 million in 2022 (the 2023 figure isn’t available yet), it spent almost $11 million lobbying Congress, and paid $10 million for memberships in industry associations that also lobby and engage in political activity to its benefit. However, it claims that if the Biden administration doesn’t give its M.A. plans a bigger increase it will have to reduce patient benefits and make them pay more! [5]

I’ve been writing about the problems with Medicare Advantage and how this privatization undermines Medicare for over four years. See previous posts here, here, here, here, here, and here if you’re interested.

[1] Rhodes, C., 3/28/24, “Ady Barkan’s legacy: Reclaiming Medicare from for-profit corporations,” Common Dreams (https://www.commondreams.org/opinion/ady-barkan-medicare-advantage)

[2] Physicians for a National Health Program, 2023, “Our payments their profits,” (https://pnhp.org/system/assets/uploads/2023/09/MAOverpaymentReport_Final.pdf)

[3] Cunningham-Cook, M., 3/6/24, “Between you and your doctor: How Medicare Advantage care denials affect patients,” The American Prospect (https://prospect.org/health/2024-03-06-how-medicare-advantage-care-denials-affect-patients/)

[4] Johnson, J., 3/15/24, “Patients, advocates push Biden to ‘reclaim Medicare’ from privatized Medicare Advantage,” (https://www.commondreams.org/news/medicare-advantage-action)

[5] Cunningham-Cook, M., 3/6/24, see above