John Lawrence

Thumbnail image for Should the Big Wall Street Banks Have Been Allowed to Fail? – Part 4

Should the Big Wall Street Banks Have Been Allowed to Fail? – Part 4

by John Lawrence 05.17.2013 Business

by Frank Thomas and John Lawrence

Frank has eloquently argued “Yes” here in Part 2 and continued here in Part 3 of our examination of the financial crisis of 2008. Part 1 dealt with Republican economic philosophy over the last 30 years which had produced disastrous results for the economy leading up to the crisis.

This week John argues that AIG should have been allowed to fail and that this would not have affected Main Street banks or the banking activities of average Americans. But the real question is ‘If American taxpayers and the Fed had not given billions of dollars to AIG and the other large banking institutions, would they have indeed failed or would they, on the other hand, have survived quite nicely even without the bailouts?’

What’s clear in the financial crisis of 2008 is that Washington rescued Wall Street while abandoning Main Street.

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Benghazi: the More You Stir a Turd, the More It Stinks

by John Lawrence 05.16.2013 Government

by John Lawrence

Determined to make a scandal out of the Benghazi incident, Vista, CA Congressman Darryl Issa has launched an investigation. What else do Republicans have to do?

They certainly aren’t going to pass any legislation that might be on Obama’s agenda. So they’ve got nothing else to do but to launch an investigation.

Here are the facts:

Four people were killed, including US Ambassador J. Christopher Stevens on September 11, 2012. Ten others were injured.

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Thumbnail image for Should We Have Saved AIG and Other Wall Street Banks? (Con’t)

Should We Have Saved AIG and Other Wall Street Banks? (Con’t)

by John Lawrence 05.13.2013 Business

Frank Thomas: The Rescue of AIG in 2008 was the Right Decision, Con’t.

Part 3 of a multipart series,  John will give his “NO” answer in Part 4. Part 2 can be found here 

by Frank Thomas and John Lawrence

Was The Bailout A Success?

Up to the financial crisis in 2008, AIG’s very poor risk management and operational complexity overwhelmed prudent and strictly enforced risk controls. By year-end 2008, AIG had at least a $1.8 trillion exposure in derivative liabilities from 35,000 to 45,000 separate contracts.

As an insurer for 100,000 entities from retirement plans to major firms, AIG was drowning in mortgage-linked derivatives and gambling the entire house on a single pile of hedge fund-like casino debt. AIG was in effect insuring the banks against the default of their borrowers.

Thus, it was in essence using CDS derivatives to speculate on the value and credit risk of the underlying mortgaged assets.

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Thumbnail image for Should We Have Saved AIG and Other Wall Street Banks?

Should We Have Saved AIG and Other Wall Street Banks?

by John Lawrence 05.11.2013 Business

Frank Thomas: The Rescue of AIG in 2008 was the Right Decision

Part 2 of a multipart series, Frank will continue his “Yes” answer in Part 3, John will give his “No” answer in Part 4. Part 1 can be found here

by Frank Thomas and John Lawrence

In his book, The Great Deformation, David Stockman presents a broad “no prisoners taken” indictment of our systemic social-financial-political maladies or ‘deformations.’ I share his view we have descended to a gamed, distorted system where almost “nothing is working”coherently that can save it from the next Boom-Bubble-Bust implosion unless there is fundamental change.

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Is College Really Worth It?

by John Lawrence 05.09.2013 Education

Many PhDs Can’t Find Jobs

By John Lawrence

Former Secretary of Education, William Bennett, has written a book, Is College Worth It?  Evidently even education experts are starting to question the value of obtaining a college education especially if it means taking on a mountain of debt, and there is no guarantee that once graduated there will even be a job there waiting so that payments on that debt can even begin.

If not, the college graduate faces delinquency, default and penalties that can add greatly to the original debt making it all but insurmountable and one that will follow the individual for the rest of his or her life.

There seems to be a myth that a college education is part of the American dream and that not having acquired one makes one a loser. However, consider this. Some of the greatest contributors to society and some of the richest people never graduated from college.

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Two Year Old Girl Shot and Killed by Five Year Old Brother Wielding ‘My First Gun’

by John Lawrence 05.06.2013 Business

Guns Marketed Directly to Kids!

by John Lawrence

Caroline Sparks, age 2, was fatally shot in the chest by her brother Kristian who had been given “My First Rifle” by his parents. The mother had stepped outside for a minute when the gun went off.

Officials identified the single-shot rifle as a Crickett, which is produced by  Keystone Sporting Arms in Pennsylvania. This is a gun designed specifically for children four to ten years old and comes in hot pink for girls and a variety of other colors including a red, white and blue swirl. These guns are directly marketed to kids just like Happy Meals or Barbie dolls.

The website www.cricket.com has been taken down and they’re not answering their phones.

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Thumbnail image for Reagan’s Budget Director Excoriates Republican Economic Philosophy

Reagan’s Budget Director Excoriates Republican Economic Philosophy

by John Lawrence 04.29.2013 Business

David Stockman calls GOP economic policies “bubble finance” and “crony capitalism”

Part 1 of a multipart series

By Frank Thomas and John Lawrence 

David Stockman, an integral part of the Reagan administration, has produced a great book, “The Great Deformation,” in which he blames Republican Presidents starting with Richard Nixon for the sad state of the US economy, but he saves his worst invective for Ronald Reagan and George W Bush for their abandonment of sound economic policy and their wild “deficits don’t matter” spending.

He indicts the Reagan administration for a needless, wasteful military build-up and the creation of what he calls the “warfare state.” He also condemns the fiscal profligacy of Republican economic policy for condoning any and all tax cuts for any reason whatsoever, for coddling Wall Street and for decades of money printing and market rigging by the Federal Reserve.

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How Much Is Your Life Worth?

by John Lawrence 04.28.2013 Business

Price of some cancer drugs exceeds $100,000. a year

By John Lawrence

How much is your life worth?

In a free market economy like the US, that question is settled by ability of the individual to pay. If you can’t pay over $100,000 a year for a life-saving cancer drug, your life isn’t worth as much as someone who can.

In a free market economy your life is worth exactly your ability to pay. In countries where the government pays the cost of drugs, they decide how much your life is worth. In Britain it’s $50,000; that’s the price the British government has negotiated the most expensive drugs down to. Is there a moral limit to how much Big Pharma can charge for some life saving drugs?

Some doctors seem to think so.

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Thumbnail image for Extreme Weather Watch: Records Set as Flooding in Midwest Takes Its Toll

Extreme Weather Watch: Records Set as Flooding in Midwest Takes Its Toll

by John Lawrence 04.27.2013 Environment

By John Lawrence

There was definitely a lot of extreme weather in the Month of April as records were set for rainfall, snowfall, flooding and low temperatures and the month is not even over yet! However, none of it occurred in sunny San Diego so we should appreciate how lucky we are.

In Rapid City, S.D. April 2013 is the snowiest month on record with 39.5 inches. This beats the previous April and all-time monthly snow record of 38.5 inches set in April 1927. For Duluth, Minn. April 2013 is the snowiest month on record with 50.8 inches. This breaks the previous all-time monthly snow record of 50.1 inches set in November 1991. April’s snow total is more than Duluth saw all of last winter!

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Thumbnail image for Banks Wrongfully Foreclose: Get a Slap on the Wrist

Banks Wrongfully Foreclose: Get a Slap on the Wrist

by John Lawrence 04.20.2013 Business

Those illegally foreclosed on get a pittance in return.

By John Lawrence

Banks foreclosed on military service members, homeowners who had been approved for a loan modification and even homeowners who were current on their payments. At least 53 homeowners who weren’t behind on their payments were successfully foreclosed on and lost their homes for no reason.

There was widespread criminal behavior on the part of the banks, but in a recent settlement they got off relatively cheap.

A foreclosure settlement between the government and 13 banks on April 9 spread $3.6 billion in cash among millions of borrowers. The consultants who determined how much each homeowner would get happened to be bank employees and will get $2 billion for their efforts.

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Thumbnail image for A Modest Proposal for Reforming the Health Care System

A Modest Proposal for Reforming the Health Care System

by John Lawrence 04.14.2013 Economy

By John Lawrence

The best antidote for a degenerative disease is a regenerative lifestyle

The health care system, what I call the medical-industrial complex, is in reality a disease management system. It does little to promote health and makes money only when people get sick or injured. Doctors only make money when they treat a sick patient. They make nothing for keeping them well. This is the so-called fee for service model and it stinks. It drives up disease care costs. Pharmaceutical corporations create drugs and advertise them on TV in order to get as many people as possible hooked on them. Doctors do little to treat underlying diseases but willingly prescribe drugs to ameliorate symptoms. The big money is in surgery.

Obamacare, aka the Affordable Care Act, while it has placed into law important provisions such as disallowing rescission, disallowing kicking people off of health insurance policies due to preexisting conditions, providing for not quite universal coverage etc, it does little or nothing to actually make health care affordable. Hospitals charge exhorbitant rates according to their Chargemasters. In some cases they won’t accept a patient’s insurance coverage, demanding upfront payment in cash instead. Obamacare does little to keep pharmaceutical costs, health insurance costs or hospital costs down.

I have written a number of critical articles about the health care system. But I don’t want to leave the impression that all I’m doing is to just tear this leviathan down in a critical and negative way and have nothing positive to say regarding the health care system. I do have some positive suggestions about how it could be improved.

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Health Care Industry Charging an Arm and a Leg

by John Lawrence 04.05.2013 Business

Now Doctors are Turning Away Cancer Patients

According to an article in the Washington Post on April 3, 2013, doctors are now turning away cancer patients who can’t pay out of pocket. We previously reported how MD Anderson, a leading cancer hospital in Houston, Texas demanded an upfront payment in cash from Sean Recchi before he would even be admitted to the hospital and about the mind boggling expense of prescription drugs. The patient by the way had health insurance. The admitting agent told him, “We don’t take that kind of discount insurance.” Fortunately, a family member was able to write the check for $83,900. that was demanded before treatment would begin.

Now doctors are doing the same thing - refusing to administer life saving drugs to Medicare cancer patients using the rationale that they they would be losing money because their payments from Medicare are reduced 2% by the sequester.

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Thumbnail image for Pharmaceutical Corporations Gouging US Customers Out of Billion$ Every Year

Pharmaceutical Corporations Gouging US Customers Out of Billion$ Every Year

by John Lawrence 04.04.2013 Business

But Indian Supreme Court Rules Against Big Pharma

America spends about $200 billion a year on prescription drugs. It’s becoming part of American culture from preschool, where kids are started on Ritalin for ADHD, to old age where typical seniors are consuming an entire palette of pills for everything from arthritis to high blood pressure to cholesterol. Drugs are the fastest growing part of the health care bill.

In 2002 the average price for the fifty drugs most used by seniors was nearly $1500. for a year’s supply. That’s for each drug. Most seniors are taking an average of six.

Drug prices are highest for people who are the poorest. That’s because they have no insurance, and, therefore, no bargaining power. Drugs are marketed extensively by means of TV ads. Those ads are usually followed by ads for law firms trolling for clients who have been harmed by said drugs.

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Thumbnail image for Barrio Logan No Longer a Food Desert: Gets Spiffy New Supermarket

Barrio Logan No Longer a Food Desert: Gets Spiffy New Supermarket

by John Lawrence 04.03.2013 Business

The new Northgate Gonzalez supermarket opened on December 12, 2012 bringing fresh foods and groceries to an area long neglected by mainline supermarket chains – Barrio Logan. It is located at the corner of Cesar Chavez Parkway and Main Street. Prior to opening, this ethnic Latino neighborhood had only the usual complement of fast food restaurants offered to poor ethnic neighborhoods such as McDonald’s and Church’s and Popeye’s fried chicken chains.

In a food desert there is little in the way of fresh fruits and vegetables, but thanks to the Mercado Redevelopment Project, Barrio Logan has been considerably spruced up and is a food desert no more! In 2010 The San Diego City Council approved plans to transform two city blocks of vacant land in Barrio Logan into the Mercado Project which also featured 92 affordable housing units.

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Mayor Filner Joins Forces with New York City Mayor Bloomberg

by John Lawrence 04.01.2013 Satire

San Diego and New York City mayors take aim at sugary soft drinks

In a speech yesterday at the Balboa Park Club, Mayor Bob Filner outlined his plans for combating the consumption of large quantities of sugary, fizzy soft drinks. After mentioning all the negative effects from their consumption such as obesity and Type 2 Diabetes, Filner said, “You know we live in America’s Finest City, and we can’t have America’s biggest lard asses walking around in America’s Finest City. Something must be done. Mayor Bloomberg and I are on the same page regarding this issue. So what I’m proposing is this: today I’m declaring that the entire City of San Diego is a Sugary Soft Drink District (SSDD). This will be a counterpoise and eventually take the place of the Tourism Marketing District (TMD) which has created so much controversy lately.

“And in consideration of that tax money which the TMD wants me to turn over to the hoteliers around here, I’ve come to a decision. Instead of turning over that money, I will put it to good use funding the SSDD. These monies will kickstart this project. We will put up ads on billboards and run TV commercials pointing out the negative effects of consuming sugary soft drinks. So not only will San Diego be America’s Finest City, but under my administration San Diego will become America’s Healthiest City.”

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Thumbnail image for Hospitals to US Citizens: Your Money or Your Life

Hospitals to US Citizens: Your Money or Your Life

by John Lawrence 03.22.2013 Business

Chargemaster: Hospitals’ Killer App for Sucking Your Financial Blood Dry – Part 4

Hospital care in the US has morphed into a multi-headed monster in which every advance in medical technology ups the cost of medical care. What Matt Taibbi said about Goldman Sachs in a Rolling Stone article applies to hospitals as well: “[They are] a great vampire squid wrapped around the face of humanity, relentlessly jamming [their] blood funnel[s] into anything that smells like money.”

More expensive technologies like cat scans are used when less expensive ones would be adequate to do the job. In addition to the economic incentives to use more expensive technology and equipment, there’s the legal incentive that doctors are less likely to be sued if they administer every test under the sun and use the most expensive equipment. Drugs that are administered to cancer patients can cost tens of thousands of dollars a shot.

The Chargemaster is a humungus computer file which details every charge that a hospital can add to a patient’s bill from a lowly aspirin to heart surgery. A recent perusal of a Chargemaster for San Diego’s Scripps Memorial Hospital revealed over 54,000 items.

These charges are so far removed from actual costs to the hospitals (most of which are non-profits) that the US spends twice as much on health care as most other advanced nations – 20% of GDP compared to 10%.

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Thumbnail image for How Hospitals Mark Up the Cost of Over-the-Counter Supplies Like Aspirin and Q-tips as Much as 1000%

How Hospitals Mark Up the Cost of Over-the-Counter Supplies Like Aspirin and Q-tips as Much as 1000%

by John Lawrence 03.17.2013 Business

Chargemaster: Hospitals’ Killer App for Sucking Your Financial Blood Dry – Part 3

Hospitals charge their customers … er, patients, through the nose for simple products which anyone can purchase at WalMart for a fraction of the amount. In Part 1and Part 2 we detailed the ridiculous prices hospitals routinely charge their patients – like several thousand dollars a day – just for a room. In this installment we will go over the markups on products that are added on to patients’ bills.

Suffice it to say that for anything consumable, there will be a Chargemaster billing item. The Chargemaster is the giant computer file that lists the charge for every possible medical service and supply that a hospital provides. Nothing is “included.” Everything is billed out separately, ala carte.

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Thumbnail image for Health Insurance Scams Leave People High and Dry

Health Insurance Scams Leave People High and Dry

by John Lawrence 03.09.2013 Business

 Goldman Sachs, Blackstone Group make hundred of millions selling useless mini-med policies

Part Two of a series on the Business of Health

In Part 1 we told about how hospitals have a huge computer file called a Chargemaster that details prices for every possible item a hospital can charge for. These prices don’t have anything to do with reality because in fact there is no market for health care services.

In a truly capitalist economy there would be a competitive market by means of which people could check prices and choose the service that’s the most reasonable in terms of price and other factors. It’s called price discovery.

Hospital charges represent a dark market just like over the counter derivatives because it’s next to impossible to get hospitals to reveal their prices for any of their services. According to an extensive article in Time, the author was given the brushoff and even told it was illegal every time he tried to get pricing information. Therefore, the Chargemaster details prices that are sky high and out of sight compared to the paying abilities of most Americans.

In Part 2 we will cover the plight of many folks who thought they had sufficient health insurance coverage only to be told that their insurance policies were useless and they would be required to pay cash upfront if they wanted to access hospital services.

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Thumbnail image for Chargemaster: Hospitals’ Killer App for Sucking Your Financial Blood Dry – Part 1

Chargemaster: Hospitals’ Killer App for Sucking Your Financial Blood Dry – Part 1

by John Lawrence 03.06.2013 Business

We spend more on artificial knees and hips every year than Hollywood collects at the box office.

A recent exhaustive article in Time magazine details the exhorbitant charges that hospitals are imposing on the American people, charges that have nothing to do with the actual costs of services provided. A woman in Stamford, Connecticut suffering from chest pains called 911. She was taken by ambulance to the emergency room at Stamford Hospital, a non-profit institution, four miles away.

After a few hours of tests she was told that she just had a case of indigestion; her heart was fine. So she went home. Her bill: $21,000 - for a false alarm. That breaks down to $995. for the ambulance ride, $3000. for the doctors and $17,000. for the hospital. Unfortunately, she had no insurance because she had been out of work for a year.

The American medical marketplace is such that those least able to pay are charged the most money. Their prices are determined by what is called a Chargemaster, a massive computer file thousands of items long. Every hospital has one.

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Today’s College Graduates: In Debt and Unable to Find a Job

by John Lawrence 02.28.2013 Business

The American mythology that getting a good job requires a college degree is turning out to be a hollow promise, a mythology devoid of any connection to reality. Today’s college graduates are being weighed down with tens of thousands of dollars in student loan debt, and many of them are either unemployed or working in jobs that don’t require a college degree.

A recent study has shown that half of recent college graduates can’t find jobs. Those who graduated since 2009 are three times more likely to not have found a full-time job than those from the classes of 2006 through 2008. Of those who did find a job, the study indicates that 43 percent had jobs that didn’t require a college degree. Sure the top 10% will get jobs right out of college, but for everyone else disappointment in the job search abounds. Even recent PhDs are facing stiff competition for fewer available jobs, and many of them end up driving taxis for a living.

At the same time that college graduates are not finding work, there are 3.7 million job openings, but these are the kinds of jobs college graduates aren’t equipped to do.

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