Tax me to help us

This is not my typical post. I came across the following rather interesting news story on the BBC website and thought of sharing it with the readers of this blog. What are your thoughts? 

Rich Germans demand higher taxes

http://news.bbc.co.uk/2/hi/europe/8321967.stm

A group of rich Germans has launched a petition calling for the government to make wealthy people pay higher taxes.

The group say they have more money than they need, and the extra revenue could fund economic and social programmes to aid Germany’s economic recovery.

Germany could raise 100bn euros (£91bn) if the richest people paid a 5% wealth tax for two years, they say.

The petition has 44 signatories so far, and will be presented to newly re-elected Chancellor Angela Merkel.

The group say the financial crisis is leading to an increase in unemployment, poverty and social inequality.

Simply donating money to deal with the problems is not enough, they want a change in the whole approach.

“The path out of the crisis must be paved with massive investment in ecology, education and social justice,” they say in the petition.

Those who had “made a fortune through inheritance, hard work, hard-working, successful entrepreneurship, or investment” should contribute by paying more to alleviate the crisis.

The man behind the petition, Dieter Lehmkuhl, told Berlin’s Tagesspiegel that there were 2.2 million people in Germany with a fortune of more than 500,000 euros.

If they all paid the tax for two years, Germany could raise 100bn euros to fund ecological programmes, education and social projects, said the retired doctor and heir to a brewery.

Signatory Peter Vollmer told AFP news agency he was supporting the proposal because he had inherited “a lot of money I do not need”.

He said the tax would be “a viable and socially acceptable way out of the flagrant budget crisis”.

The group held a demonstration in Berlin on Wednesday to draw attention to their plans, throwing fake banknotes into the air.

Mr Vollmer said it was “really strange that so few people came”.

Bankers robbed the banks

Wasn’t it only in October ‘08 that we all were told to believe that the whole financial system had collapsed/was on the verge of collapse and that we need to shell out $780 billion of tax payers money to the exact same bankers has cost us upwards of $5 trillion to-date (per President Obama on the Letterman Show)?

So what happened?

Goldman Sachs (GS) reported $3.4B in profits for the 2Q09. GS plans to pay $18B in total compensation to employees averaging a staggering $600K/employee.

However, Unemployment is still at 16.5% (including semi-employed and people who have given up looking for a job).

That’s what happened.

People are so worked up about the Health Care reform when what we are talking about is A) keeping people alive/healthy which will “actually” benefit the economy B) saving the long term “social” model (yes, social) of Medicare, Medicaid and VA that will not survive unless we control cost and C) most importantly, making it affordable to buy insurance for individuals.

That to me is completely misplaced anger. We all have reason to be angry, reason to feel disoriented, reason to feel like we’ve been had and reason to lose trust. But directing it at Health Care reform is not only wrong it is a disservice to the country. It is much better to focus on reforming our Financial Industry and I contend, the only way to do that by reforming our election campaign finance – remember that issue that was hot before the 2008 elections and oh yes, also before the 2004 elections? Though, I must admit right on the outset that I am not very hopeful that either can happen.

However are some plausible ways to make a dent:

1. Make Banking boring –  Banks should, asPaul Krugman points out, return to being “boring” and provide money at reasonable, conservative rates to support the rest of the society to invest, innovate and develop “real products” not consider credit default swaps as a product….ever! In effect, behave like a Utility Company….like they use to back in the 50s and 60s.

Health Care Reform 2.0

Just like Microsoft and Apple — both of them are poised to launch new versions of their Operating Systems in the fall, President Obama seems ready to launch health care reform 2.0.

An article titled, “Obama Aides Aim to Simplify and Scale Back Health Bills“ in today’s New York Times has these head scratching contradictory paragraphs that I surely couldn’t reconcile and I quoting them below.

“By signaling that they would seek to revise existing versions of legislation moving through the House and Senate, administration officials and Democratic leaders in Congress — many of whom had said earlier in the summer that they saw no need to scale back their ambitions — made clear that their political calculations had changed. With Congressional Republicans standing almost unanimously in opposition to the Democratic approach, the target now for Mr. Obama is primarily a handful of moderate Democrats and the one Republican who seems open to a deal, Senator Olympia J. Snowe of Maine.

“It’s so important to get a deal,” a White House official said, speaking on the condition of anonymity in order to be candid about strategy. “He will do almost anything it takes to get one.” <End Quote>

What is this deal that is so important that President Obama is ready to do almost anything for when it is with only one Republican? Please explain that to me.

Democrats are no saints but Republicans do deserve the label of “Party of No.” President Bush owns the dubious distinction of creating the largest negative swing in the Federal budget but somehow Republicans want to hold the title of fiscal conservatives!

I do agree with the title of the article that President Obama should simplify the message and in my opinion health care reform 2.0 should hit on these basic points:

1. I am a fiscal conservative and that is exactly why we want to reform. Cost of Medicare, Medicaid and cost to your household for health care will sky rocket out of the stratosphere bankrupting the Government and you in the next 20 years if nothing is done.

2. That is why we are proposing regulations on Insurance companies to not raise insurance when you get ill and not to deny coverage if you have a pre-condition. Believe me, they will still make a handsome profit.

3. We are proposing a public insurance option to provide basic coverage for those who cannot afford and also help reduce cost for drugs by using our subscriber base as negotiating power with big Pharma. This will help reduce prices for all of us even those who have private plans and also help insurance companies since they have to pay less for drugs. Believe me the pharmaceutical companies will still make a handsome profit. Case in point: Pfizer is ready pay $2.3B in penalty for illegal promotion of drugs and its stock dropped only 0.61%.

4. Lastly, but very importantly, this is not socialized health care and do not listen to anyone who tells you so. Socialized health care in Britain means all doctors are employed by NIH, all hospitals and hospital workers are employed by NIH and allowed procedures and medicines are recommended by the NIH (which BTW, is a better version of US insurance companies denying coverage for many medicines and procedures).

With this approach we achieve triple play: reduce cost while extending coverage on something as basic and necessary as care for human body and still preserving the businesses that are currently engaged in the health care industry.

Health Care Bill — Where is the reform?

Don’t let anyone fool you — Health Care reform is essential. Why? Because from spending 1 out of $20 on health care in 1960 we have arrived at a point that we are spending 1 out of every $6 on health care now. And of course, this cost is expected to sky rocket. President Obama is right — exponentially growing health care costs, completely independent of making health care universal, will sink the American economy.

Strangely enough though, the current bill being considered by the House of Representatives is not about reform driving cost down and funding universal health care but universal health care without any meaningful reform. 

 Section 1 — CBO Report

To build the case though, allow me to start with some key facts and data points from the Congressional Budget Office’s (CBO) “Long Term Budget Outlook” published in 2007 regarding Health Care:

1. On Total Health Care Spending

A> “Total spending on health care in the United States, including both private and public spending, increased from 4.7 percent of GDP in 1960 to 14.9 percent in 2005, the most recent year for which such data are available.”  That is a greater than 300% increase in share of spending on health care obviously at a loss to other facets of life.

B> The report identifies the primary cause for this increase as, “Most analysts agree that the most important factor contributing to the growth in health care spending in recent decades has been the emergence, adoption, and widespread diffusion of new medical technologies and services.”

C> Other factors for cost increase identified in the report are rise in disposable family income, rise in insurance coverage and aging of the population.

2. On  Medicare Program

A> Overview of Medicare: “Medicare provides federal health insurance for nearly 43 million people who are aged (about 85 percent of enrollees) or disabled or who have end-stage renal disease. The elderly become eligible for Medicare at age 65; the disabled become eligible 24 months after their Social Security benefits start.”

B> Medicare is funded via various sources, payroll tax of 2.9% of taxable income, being a primary source. Think of it as money you are putting aside to be paid for medical care when you get old or, god forbid, disabled. CBO report also states, “As of June 2007, 18 percent of Medicare beneficiaries were enrolled in private health plans under the Medicare Advantage program,” i.e. were paying additional for enhanced coverage.

C> In 2006, Medicare spending totaled $382 billion.

3. On Medicaid Program

A> Medicaid is a joint federal–state program that pays for health care services for a variety of low-income individuals. The program was created in 1965 by the same legislation that created Medicare, replacing an earlier program of federal grants to states to provide medical care to people who have low income. The federal government’s share of Medicaid’s spending for benefits varies among the states and currently averages 57 percent.

B> In 2006, the total spending was $160.9B and total beneficiaries were 60.9M people. Out of which children accounted for 29.5M – approx. 50%.

Section 2 — some more key data points:

1. Americans spend $2.5T (trillion) annually on healthcare.

2. Medicaid is only 6.7% of the total healthcare bill for USA and hence hardly the cause for the crisis.

3. Kaiser Health Tracking Poll from June 2009 finds, “Struggling to afford needed care — The survey continues to find that a majority of Americans (55 %) say that they or another member of their household have put off some sort of needed medical care because of the cost over the past 12 months. About 1 in 4 say they have skipped a recommended test or treatment, and a similar percentage have chosen not to fill a prescription. 26% say they or a family member had problems paying medical bills over the past year, similar to the proportion reporting problems in our April tracking survey. This number rises to nearly half (48 %) among those suffering health problems, and is nearly as high (43 percent) among the uninsured.

Section 3 — Key observations based upon the above data

Iran – Reform Resuscitated?

In an article titled, “Iran Cleric Defy Election Ruling” the BBC reports, “In a statement to the press, the Assembly of Qom Seminary Scholars and Researchers said some members of the Guardian Council had “lost their impartial image in the eyes of the public.”

How can one accept the legitimacy of the election just because the Guardian Council says so? Can one say that the government born out of the infringements is a legitimate one,” it said.”

It goes on to say, “On Saturday, Mr Rafsanjani – an influential figure in Iranian politics and a prominent backer of Mr Mousavi during the election – met with the families of some of those who have been detained.

It was the first time he had spoken publicly since the election. He told the families that nobody with a “vigilant conscience” could be satisfied with the current situation.

“I hope with good management and wisdom the issues would be settled in the next days and the situation could improve … We should think about protecting the system’s long-term interests,” Mr Rafsanjani said.

A BBC correspondent said that Mr Rafsanjani appeared to be hinting that a process was going on behind the scenes, which might resolve the current crisis.”

While it remains incredibly hard to imagine the authoritarian regime buckling under pressure but it is truly unparalleled times in the life of the Islamic Republic of Iran. Never have there been open rifts within the clergy and never has the authority of the Supreme Leader been questioned by the clerics themselves as now.

May be a power-sharing arrangement is still possible? Or at least some reforms announced by the current regime itself to lighten up on social restrictions? May be the death of the 20 people (reported) will not be in vain?

What are your thoughts?

Iran – what next?

The standoff in Iran between the military-theocratic regime of Ahmadenijad-Khamanei and the opposition parties led by Mir Hussein Mussavi has entered a tense phase. Having so clearly defined their positions and by putting so much at stake neither party can back down easily.

Major Newspapers are writing that predicting how the stand-off is  going to end is not easy.  New York Times has an article, “As Confrontation Deepens, Iran’s Path is Unclear.” The BBC has an article titled, “Titanic clash for Iran’s future,” which ends thus, “They may be arguing over a disputed election. But they are really arguing over the future of the country. A momentous, titanic struggle, whose outcome no-one can predict.”

The common wisdom goes that the ones who have the military and the supreme leader on their side are infallible. However, make no mistake, the hundreds of thousands who are turning out daily to protest for the opposition is not the only reason the opposition is so emboldened this time.

Iranian Election

We in the West were fed an image of Iran as a country full of Islamic zealots and a compliant and mind-washed citizenry. A country where there was not a cry for democracy but a whimper — people were too afraid to criticize the mullahs and the right wing politicians in bed with them.  I offer a recent article, The Magic Mountain, by Roger Cohen of his conversations with Iranian youth in the New York Times as testimony. Mr. Cohen, despite being one of the most incisive journalists and a great sympathizer of the democratic movement in Iran, could hear democratic voices only in whispers.

The reaction of the Iranian citizenry to the fraud perpetrated on them blows away that myth. The young and the old alike seem to be craving for democracy, lifting of the Islamic seize, freedom of speech and connection with the rest of the world.

Some interesting facts about the current elections:

All the ballots were cast by hand, i.e. were not computerized. In all a record 40 million people (80% of the electorate) voted. Elections closed Friday evening and given the gargantuan task at hand — of counting 40 million ballots manually — it was projected that the earliest indicators available will be by Saturday evening.

However, as early as Saturday morning Ahmadinejad was announced a winner. That was the first unbelievable part of the unfolding story.

Equally unbelievable, if not worse, was the margin. Supposedly, Ahmadinejad won 62.6% and Mousavi 34%. This made Ahmadinejad’s margin greater, much greater, than the first time he won beating Rafsanjani! The reasons that is so hard to believe are obviously the fury that is there for all to witness on Tehran’s streets and all the commentary pointed to the fact that the turnout was so high due to a lot of 1st time voters coming out to vote for Mousavi.  I encourage you to visit the BBC page “Iran poll results: Your Comments.” You will read comments from a lot of Iranians who are providing the inside story.

In addition to the electoral sham, the Internet connection and cell phone service has been switched off.  Text messaging was shut down during the campaign itself since Mousavi was using text messages to arrange campaign rallies and getting his message out. And lest you think these outlandish excesses of power take place only during election times, I heard an Iranian on a show on National Public Radio mentioning that no purchases over the Internet are allowed from outside of Iran — even an Amazon.com book cannot be purchased from Iran. Of course, facebook, twitter etc. are filtered.

Despite these gross violations of people’s right, I am sure Ahmadenijad will have the gall to stand on US soil when next addressing the UN general assembly and criticize American democracy and extol his implementation of Iranian government.

One of the comments at the BBC page is rather despondent. It is written by one Milad from Mashhad, Iran, “Today I learned that the worst thing in life is to think that you have a chance while you don’t.”

While I fully understand Milad’s sentiment, I see things differently. I see that the generation born after the Iranian Revolution has not bought the lies and deceptions that the mullah regime has successfully imposed upon the pre-revolution citizens. As the current generation of mullahs and corrupt right wing politicians like Ahmadinejad gets old, I see a strong chance for true democracy in the Iran of the future.

Sonia Sotomayor

I was quite excited at the prospect of  a second woman on the Supreme Court bench, a first Hispanic, a first Supreme Court judge from the Bronx projects — an out and out American success story. I thought her confirmation will provide the right representational balance at the highest court of the land.

But then a few news items about Ms. Sotomayor’s views have dulled my enthusiasm.

One of course being her comment that resulted in the Conservatives calling her a “reverse racist.” Her comment, made back in 2001, asserts that her experiences as a Latina woman might make her judgments more sound than those of a white man. Though I am not going to call her a racist but a comment like that shows, among other things, lack of sound judgement and bias.

A piece of writing that influenced  me more was an Op-Ed article written by Ilya Somin (Assistant Professor at George Mason University School of Law) for the LA Times.

Obama’s turn-arounds

A sizable section in the left wing of the democratic party is all up in arms about a few recent Obama decisions that appear to be turn-arounds from campaign promises. I am in favor of the decisions.

Decision 1: Stop the release of detainee abuse photographs

Torture is a terrible thing. It was institutionalized by the Bush administration and untold number of innocent people got tortured. A rather sad and dark chapter in the recent history of the USA. However, all the people who are asking for the release of the photographs sit safely ensconced in the confines of our border and are out of harms way. They have no idea what their demands will result in for the brave Americans positioned in foreign countries.  It is purely for practical and pragmatic reasons I agree with President Obama — release of such photographs inflames anti-American emotions, is played to full advantage by Al Qaeda and its ilk, and will surely result in violence against Americans and justification for torture of captured Americans who had nothing to do with torture in the first place.

The best way to prevent such abuse from happening is to clearly define what torture is and starting from the highest office down state in unequivocal terms that such practices are banned. It is surely not to make the left wing feel happy but lose Americans lives in the bargain.

Decision 2: Has denied calls for investigating the last administration on torture

The noise to investigate past deeds has grown more shrill and people are not listening anymore to the thunderous warning of the impending category five hurricane.

We need to muster all our collective energy and focus them on the Economic, Jobs Market, Health Care, Climate Change and Geo-Political disasters at our hands.

I would love to learn how all the Bushies violated the law but these are truly unique times. I want to know about the past but not if I do not have a future.

Pakistan — you reap what you sow

The Seed

When General Zia ul-Haq led a coup against Zulfikar Ali Bhutto in 1977, and subsequently hanged him in 1978 under the pretence of plotting to kill political opponents, it was then that the present deplorable state of Pakistan was etched in to history in advance.

Irony of irony was that Bhutto himself chose ul-Haq as the Chief of Army in 1976 despite his lack of seniority thinking more senior officers posed greater threat to his survival. But then the history of Pakistan, and indeed the Muslim empire in South Asia is replete with blood letting by benefactors and family members of those that greatly helped them. Aurangzeb, effectively the last Mughal Emperor of India, executed his brother Dara Shikoh and put his father, Shah Jahan — of Taj Mahal fame — under house arrest until his death.

The Soil

Zia ul-Haq started off supremely unpopular both at home and abroad. However, it was the 1979 invasion of Afghanistan by the Soviets that saved his illegitimate presidency. The United States, who had decried General Zia up until that time had no other option but to support him to in turn get support for their agenda in Afghanistan. Zia also courted the Islamic ideologues in Pakistan and abroad. This allowed him stability at home and cash pouring in from United States — to support the destruction of the Soviets at any cost – and Saudi Arabia — to spread the Wahabi form of Islam -  a most conservative form of Islam. Money from both sources funneled to the Islamic ideologues who set up Madarassas to train the mujahedeens that spread across Afghanistan and later became the Taleban and Al Qaeda.