BEWARE OF THE CHRONIC CARE ACT

The recently passed “Chronic Care Act” provides for some additional benefits for seniors in Medicare Advantage.  Although it includes some seemingly fine items such as transportation to outpatient care, some home health care, and a few other enhancements of the program, America’s elderly should be very leery of this legislation.  Because the new benefits under this act are accorded only to beneficiaries in Medicare Advantage, it is another step toward privatization of Medicare, which will not be an advantage to seniors in long run.

Overt proposals to privatize Medicare through some form of voucher system have failed so far and are not likely to succeed in the immediate future.  So, dangling goodies in front of beneficiaries in attempts to move them into Medicare Advantage is one way to accomplish the goal of ending traditional Medicare (which is efficiently and effectively administered by the government) and turn every part of the program over to the insurance industry.

As it is now, Medicare Advantage has appeal to beneficiaries with fewer medical needs.  Insurance companies can “cherry pick” their customers.  This leaves beneficiaries with the greatest amount of illness in traditional Medicare, thereby weakening it.  Because of the Medicare Modernization Act in 2003 – a major move toward privatization – Medicare Advantage HMOs are paid a premium and thereby take more of our Medicare dollars than traditional Medicare.

So, who, other than insurance companies, have been pushing for this legislation?  It might surprise you to know that liberal Democrat Ron Wyden of Oregon and conservative Democrat Mark Warner of Virginia were major players in bringing it to fruition.  But Senator Wyden’s role in this privatization scheme doesn’t surprise me.  In the Fall of 2013, as a board member of the Gray Panthers, I was attending a meeting in Washington, D.C.  As chance would have it, the press reported during that time that Senator Wyden and Congressman Paul Ryan had floated a proposal for voucherizing Medicare.

The Gray Panthers and Senator Wyden had a close relationship.  Indeed, he was a friend of Maggie Kuhn and considered himself one of us.  Consequently, Judy Lear, president of the Gray Panthers at that time, and myself were able to immediately see the senator in his office.  It is rare for advocates in Washington, without lots of money, to have an opportunity to work directly with a senator.  We did work with him and his staff over the next few months and convinced him to drop the idea. However, we didn’t know then and don’t now know now what sort of Washington machinations led Senator Wyden down the privatization path.  But it appears as if he is still on it.

 

 

Unfortunately, the Gray Panthers became defunct in 2015.  Consequently, seniors in the United States have no militant representative in Washington or in any other part of the U.S. for that matter.  Some nonprofits holding themselves out as representatives and advocates of older people are ardent supporters of the Chronic Care Act. However, organizations such as the AARP, the SCAN Foundation, and LeadingAge have serious ethical conflicts.  They are vendors in the business of selling insurance, operating continuing care retirement communities, or lobbying for those who run enterprises marketing their goods and services to the elderly.  Furthermore, the powerful insurance industry and the ride share company Lyft have been potent forces behind the legislation.  

It may seem like congress, by passing the Chronic Care Act, did something nice for senior citizens.  However, it is important to pull the curtain back and look at all the gears and pulleys moving things about.  If traditional Medicare goes away, we will all be at the mercy of insurance companies, their purveyors in the nonprofit world, and lobbyists with gobs of cash to spread around.

BERNIE: STOP CATERING TO TRUMPINISTAS

With all due respect to Bernie Sanders, I have no intentions of romanticizing and/or sentimentalizing Trump supporters as disaffected working classes abused by the Democrats.  Nor do I condemn Hillary Clinton’s remarks about “a basket of deplorables.”  Anyone who voted for Trump acted deplorable – they are not deplorable human beings and some will probably regret their vote.  Ms. Clinton could have worded her comments differently so that it was clear that she was talking about behavior and not “the person.”

The estimated U.S. population, as of December 31, 2016, had reached 325,032,763. (https://www.census.gov/popest/data/national/totals/2015/index.html). Of the total resident population, 24% are under age 18.  Therefore, the adult, voting-age, population is approximately 247,024,900.  So, slightly over 25% of U.S. adults voted for Trump (62,379366).

This mere one-fourth of all U.S. adults voted for a pathological, demagogic, billionaire who will further tilt an obscenely tilted tax code further in favor of the super-rich.  These are people who were willing to vote for an arrogant, insensitive, heir to a fortune who thinks he can sexually assault women because he is rich, powerful, and famous.

A minor proportion of the U.S. population – a proportion which includes a significant number of anti-Semites and white- supremacists –  voted a ranting, racist, empty-headed, goon into the presidency.  Any U.S. adult who cannot surmise the dangers this psychopath poses to democracy does not deserve the favors of misguided liberal congressmen and senators.  They are not the people we need to move back toward democracy.

I don’t think Democrats should go about sucking up to Trump supporters and moaning about how they were so let down by President Obama who attempted to provide some public works jobs and a health care program over the virulent opposition of Republicans.  I certainly have my differences with President Obama but he cannot be blamed for a robust fascist movement whipped up by demagoguery.

If exit polls are to be believed, 53% of voters earning less than $30,000 per year overwhelming supported Hillary Clinton (53% to 41%; http://www.cnn.com/election/results/exit-polls).  These people are of the working class.  However, the “white, working class” shibboleth has effectively declassed all working class people who don’t vote like idiots. 

I know that Bernie is a nice guy and that he wants to play nice with racists and misogynists out in the heartland.  But I’m not a nice guy and I say that we fight back against the creeping fascism that received a major boost by people who have no compassion and can see nothing but their own little piece of the world.

FASCISM IS A LEGITIMATE TERM FOR DESCRIBING TRUMP

For the first time in the history of the United States, a fascist movement has taken power and will be running the country for at least the next four years.  Liberals have a history of passivity and acquiescence in the face of the kind of fascism we have seen throughout history and are now experiencing in the U.S.  One manifestation of liberal weakness is the unwillingness to confront anti-democratic movements and call them what they are.

Robert O. Paxton, in his excellent book The Anatomy of Fascism, lists the characteristics of these types of movements.  He states, that “’mobilizing passions,’ mostly taken for granted and not always overtly argued as intellectual propositions, form the emotional lava that set fascism’s foundations.”  He then lists them as follows on page 41:

• A sense of overwhelming crisis beyond the reach of any traditional solutions.
• The primacy of the group, toward which one has duties superior to every right, whether individual or universal, and the subordination of the individual to it.
• The belief that one’s group is a victim, a sentiment that justifies any action, without legal or moral limits, against its enemies, both internal and external.
• Dread of the group’s decline under the corrosive effects of individualistic liberalism, class conflict, and alien influences.
• The need for closer integration of a purer community, by consent if possible, or by exclusionary violence if necessary.
• The need for authority by natural leaders (always male), culminating in a national chief who alone is capable of incarnating the group’s destiny.
• The superiority of the leader’s instincts over abstract and universal reason.
• The beauty of violence and efficacy of will, when they are devoted to the group’s success.
• The right of the chosen people to dominate others without restraint from any kind of human or divine law, right being decided by sole criterion of the group’s prowess within a Darwinian struggle.

The important thing is to resist!  However, it is important to know exactly what you are facing.

FIGHT FASCISM! DON’T COOPERATE!

Please take a look at the post below and take heed.  If you know  liberals, progressives, Democrats, or any persons from the left of center on the political spectrum who believe that cooperation with Donald Trump in any of his endeavors is a good idea, please dissuade them of that notion.  It is a fantasy – a delusion. Trump has led the U.S. version of the international fascist movement into control of the U.S. government.

We should never cooperate with fascism.  If your liberal friends or your Democratic representative(s) (assuming you have any Democrats representing you) think that somehow they should compromise and form some sort of  pact with evil, please let them know that what you really want them to do is resist! Resist plans to deport undocumented workers, resist plans to end health care for millions, resist plans to give big tax breaks to the wealthy,  – indeed, resist all of Trump’s looney and harmful plans.

Liberals are generally good people and tend to project their view of the world onto others and see positives in most everything around them.  They believe that progress toward a better America is inevitable. They believe often times that they can work things out with the likes of the Republican party as it has evolved.  Our liberal friends are decent people. This is what I see in them.  What the venal Trumpinista’s about to take control of the government see in these good folks and their Democratic representatives in congress are pigeons.  Trump, Bannon, Conway and the rest of the Ult-right see marks to be conned, bullied, and abused as they see fit.

President Obama had no choice but to welcome Trump into the White House.  He (Trump) didn’t win the election but is president-elect by virtue of the electoral-college stacked deck – an anachronism unfair to the urban areas, minorities, and liberals.  Trump is not fit to be in the same building with President Obama, let alone in the same room.  This humiliation of and insult to the first African American president has been difficult for me to stomach, as I’m certain it has been for most of the left – it was truly beyond the pale.

The right thing to do is to keep taking to the streets.  The right thing to do is to tell our Democratic and Independent representatives and senators to never give anything away willingly (think Medicare, Garland on the Supreme Court, funding for a wall, tax cuts for the rich, etc.).  I’m already hearing some progressives in congress talking about how they are willing to work with Trump (like even Elizabeth Warren and Bernie Sanders – imagine how the moderates and Blue Dogs will be vulnerable to the bullying that coming).

FASCISM SHOULD NOT BE A TABOO WORD

During the past few decades, we have excised the word fascism from our vocabulary.  Instead, we given fascist movements around the world watered down and meaningless labels such as “populism,” or “right-wind populism.”  Words, titles, labels, and monikers have an impact.  Sometimes words become euphemisms and distort the danger of political forces.

From the standpoint of technical, political theory, the movements across Europe and the United States exhibiting nativism, anti-Semitism, racism, authoritarianism, and other fascist factors (see latest post), we can say that populism is a misnomer.  But it certainly sounds better than fascism.  When you hear the British National Party, the American Ult-right, the Marine Le Pen followers in France, and the myriad other such movements called populists, say “no, they are fascists!”

TRUMP & THE INTERNATIONAL FASCIST MOVEMENT

TRUMP AND THE INTERNATIONAL FASCIST MOVEMENT*

By Dave Kingsley

We have seen an interconnected, global, fascist movement growing across Europe, the United States, and other parts of the World over the past several decades.  Nowhere has it succeeded like it has in the United States (except for Duterte in the Philippines perhaps, but I’m referring to advanced industrial countries).   The Marine Le Pen movement in France, the Haider-neo-Nazi movement in Austria, the British National Party, and a strong-man demagogue in Hungary, are a few examples of how fascism is spreading across Europe.  Nigel Farage of the United Kingdom Independence Party and leader of the pro-Brexit forces was a speaker at a Trump rally.  Like Trump, he admires Putin and refers to President Obama as a “loathsome creature.”

Unfortunately, some people are calling Trump’s movement “populism;” sometimes it is called “far-right populism;” and, sometimes, it is called something like “ultra-conservative.”  These are meaningless euphemisms. Fascism by any other name is fascism. In the past few days, many important Democrats and liberals have been failing to make it clear what this election has wrought.  Instead, legitimate conservatives, the media, and even progressives like Bernie Sanders have set about to normalize Donald Trump. Sanders’ op. ed. piece in the New York Times this morning was particularly disturbing to me.

Sanders minimized the movement that put Trump in the White House. Making Donald Trump out to be just another normally elected U.S. president is a tragic mistake – the type liberals tend to make.  Trump is not another William Jennings Bryan.  He reflects the Nazism and plain old vanilla fascism that have reared their ugly heads in the United States since the 1930s.  The Trumpinista movement better reflects the Gerald L. K. Smiths, Father Coughlin’s, and Charles Lindberg’s of the past – their movement didn’t succeed, but Trump’s has.

This is not your grandfather’s or your great grandfather’s prairie populism.  Donald Trump is not William Jennings Bryan.  He and his movement are about power and acquiring it through bigotry, nativism, thuggishness, misogyny, lying, violence, deceit, white supremacy and the maintenance of white-male dominance.   He and his followers have no deep seated theoretical framework based on constitutional principles, or economic-racial-gender justice or any other form of justice.

Stephen K. Bannon, it is said, will become Trump’s chief of staff.  As head of Breitbart News and doyen of the so-called Ult-right, Bannon worked to provide a platform for formerly marginalized fringe groups pushing their hateful theories, such as “the international-Jewish-banker-cabal,” white supremacy, anti-woman/anti-reproductive rights, denigration of people of color, and Christian extremism.  Not only are these fringe groups now brought into the mainstream, they a being given entree to the White House.

I remember a movie about Charlie Chaplin, which I saw years ago.  In the 1930s, Charlie was invited to a party at a mansion somewhere in Los Angeles.  Also, present at this party was a Nazi in his uniform.  The Nazi tried to shake hands with Charlie who wouldn’t shake his hand and merely said, “I don’t shake hands with Nazis.”   Charlie Chaplin has been one of my heroes ever since that time.

 

 

 

The American Enterprise Institute (AEI) & Racism

The American Enterprise Institute (AEI) is one of those conservative, Washington “think tanks” ( so-called) that have been quite influential.  And they are becoming even more influential in both political parties.  Generally, these types of institutions are fulfilling a mission to protect the interests of corporations and the wealthy elite (see G. William Domhoff, Who Rules America, 2010, pp. 85 – 115).  For instance, the Brookings Institute produces mildly conservative propaganda – passed off as scholarly research (and sometimes it is scholarly and helpful).  The Heritage Foundation is an example of an extremist-conservative think tank, which has been invited into the mainstream by media organizations such as PBS.   The Koch funded Cato Institute represents a radical form of free-market, libertarianism.  Explaining the nature of even the most widely recognized and influential array of these propaganda organs would take a rather long blog post.  Suffice it to say, that public policy is now designed by these elite front groups and often blindly voted into policy by the Senate and House of Representatives.

The purpose of this post is to highlight the AEI – arguably the most dangerous to Democracy and yet most influential of all the propaganda institutions in what Domhoff calls the “policy planning network” (see reference above).  Although the AEI has been in existence since 1943, over the past half century it has become the flagship policy/lobbying group for the neoconservative movement.  Indeed, the neoconservatives have gained complete control over the institution and now use it to further a  racist, classist, and sexist agenda.  For instance, Charles Murray, author with the late Richard Herrnstein of The Bell Curve is one of their most famous resident, so-called scholars.

The Bell Curve, as most people know, is full of rank, racist, pseudoscience.  The thesis of the tome is that African Americans are genetically inferior to whites and Asians (please excuse my loose use of such nonsensical racial descriptions – I’m only quoting The Bell Curve authors).  In 1996, the AEI helped promote this disgraceful piece of atavistic culture by flying journalists to Washington, D.C. for a preview of the book before it was published.  Because it is so full of jargon and phony but abstruse statistical analyses, many mainstream journalists treated it as a serious, plausible piece of scholarship.  They did not have the background or competence to evaluate the white supremacist and neo-Nazi league of academics and propagandists on which Herrnstein and Murray relied for support of their thesis, e.g. Phillipe Rushton, Arthur Jensen, R.A. Flynn, and the Pioneer Fund).

Other despicable racist, classist, sexist propagandists are harbored at the AEI (e.g. Dnesh D’Sousa) but in the larger scheme of things, neoconservatives are fixated on, and obsessed, with what they see as the cultural and genetic inferiority of African Americans.  Neoconservative heavyweights from James Q. Wilson (Crime & Human Nature) to William Bennett, John DiIlulio, and John Walters (Body Count, think “superpredators), have laid the groundwork for mass incarceration, cruel slashes to the safety net, and destruction of the public school system – to mention a few of their successes.  Most of their ranting on domestic policy is extremely racist.  On the foreign policy side of the ledger, they are militaristic and were able to bring about the Iraq War fiasco.

As I have stated,  neoconservative ideology has infected both the Democrats and the Republicans.  They were successful in pushing draconian sentencing laws and severe, cruel, cuts in welfare during the Clinton Administration.  They have been, indeed, successful in destroying humane successful programs and in having them replaced with inhumane forms of incarceration and public assistance for the poor (I presented a paper about this at the American Political Science Association meeting in September and have a forthcoming article on the same topic in the journal Poverty & Public Policy).

It is my belief that Hillary Clinton will be elected president of the United States.  If that is the case, I will be relieved that Donald Trump was not elected.  However, it is highly likely that the neoconservatives will have considerable influence on her presidency, just as they did during her husband’s administration.  Only truly progressive Democrats such as Elizabeth Warren and Bernie Sanders will serve as obstacles to the enactment of AEI policy – about which there will be more in later blog posts on The Tallgrass Activist.

The Tallgrass Activist Is Back

I, the Tallgrass Activist, have been away for quite a while.  It was a time to take stock of some things following retirement from teaching statistics in a health policy & management department in a medical school.  It was a time to work on an innovative statistics textbook (nearly completion with Jones & Bartlett) and to continue research without distractions.  It was a time to engage in some serious political activism (e.g., getting arrested with a group of clergy folks by disrupting the Missouri Senate due to Republicans’ refusal to pass Medicaid expansion).  It was a time to publish years of research pertaining to health care costs and the elderly – that can be checked off.  Also did some traveling, relaxing, looking at art, working at organic gardening and fixing up property in a blighted Kansas City neighborhood.

In the months and years ahead, some of the activities mentioned above will be discussed on this blog.  Mostly it will be about Social Security, health care and the elderly, but from a radical perspective.  Speaking of radical – it doesn’t take much criticism of the neo-liberal capitalist system dominating the United States to be labeled radical and marginalized.  A lot of the marginalization will be carried out by nice, comfortable, liberal/progressives who think that Facebooking, policy wonking, and rallying will somehow reverse the current catastrophic system failure occurring in the global economic system.  Unfortunately, the liberal/progressive enterprise isn’t clearly recognizing the breadth and depth of the atrocity under way as the fanatical, toxic, perverse faux-free-market system wreaks havoc throughout the world.

In the United States, the most pathological manifestation of neo-liberal capitalism can be seen in the ghettos of our major cities such as Detroit, Chicago, Washington, DC, and right here in Kansas City.  From an economic perspective, we are seeing something akin to the European and American colonization of various impoverished countries around the world.  A large portion of the African American population has been isolated through discrimination, force, and manipulation in the historic ghettos of urban areas.  These neighborhoods are neglected by federal, state, and local government while more poor African Americans are being driven from gentrifying portions of cities into these ghettos.

As these neighborhoods are demolished through neglect, the remaining homeowners pay property taxes at a rate that exceeds those paid in wealthy, white suburban cities.  More and more government revenue is being pushed from a progressive, income tax to a regressive sales tax.  Sales taxes, user fees, and other forms of regressive taxation place a much heavier burden on the poor. Cities are using repressive and inequitable policing tactics to collect revenue from poor African Americans – most of which is not returned to the ghetto for basic amenities, jobs, and improvement.  Predatory corporations with the assistance of government at all levels are engaging in subprime unsecured personal, real estate and  auto lending that indentures inner city residents to a never ending cycle of spiraling debt.  Examples of exploitation of poor, African American, ghettoized residents abound.  Suffice it to say, that we are talking about classic colonialism:  colonial powers exploit the resources of a colonized population without an equitable exchange of goods, services, and capital (in this case, the colonial power is the wealthy elite).  A lot is taken but not much is given back.  We can call this “internal colonialism.”

In the future, posts will discuss the health effects of the atrocity currently being carried out by  corporate powers and neo-capitalist elites against the poor masses of the United States and the world.  Incarceration, loss of life expectancy (for poor whites too), unemployment, miseducation, and ghettoization in general all lower the quality of life and lead to a miserable, subhuman condition of tens of millions of Americans.  It is time for liberals and progressives to recognize reality and call it what it is.  It’s good to be back.

GOVERNMENT SHUTDOWN, OBAMACARE, SOCIAL SECURITY, & MEDICARE: CONNECTING THE DOTS

There is a connection between the current government shut down, Obamacare, Social Security, and Medicare.  Let’s connect those dots.  The inter-linked individuals and corporations, comprising what C. Wright Mills called the “power elite,” is the force that explains  practically everything that happens in Washington and state capitals.

We need to take a look at what is happening and the evidence that explains the influence of the wealthiest one-tenth of one percent.  In the first instance, the failure to pass a budget continuing resolution and the resultant government shutdown is a charade, a sideshow leading to the main act, which is the “grand bargain.”  The grand bargain is the deal dreaded by advocates for Social Security and Medicare. This is the deal in which most Democrats would like to offer up cuts in these programs.

The evidence is this:  Boehner and Boehner alone made the decision to shut the government down.  How did he manage that?  He merely refused to allow a vote on a continuing resolution, which would have passed the House.  The right-wing crazies didn’t have the votes to defeat it.  And yet, most everyone is taking it for granted that it was the wing nuts that caused the thing to happen.  They didn’t. They are, however, getting the blame.

Make no mistake about it, the U.S. Government would not shut down if old wealth, heads of major corporations, and Wall Street moguls (think Peter G. Peterson, David Rockefeller, General Electric, Exxon/Mobil and the like) did not want it shut down.  They could squash Boehner like a little bug.  So, why does it work to the advantage of the one-tenth of one percenters?

The reason is simply this:  the shutdown and alarm over a possible failure to raise the debt limit will allow the Democrats to give the Republicans “entitlement reform,” or more accurately, cuts in Social Security and Medicare.  With a few exceptions, the Democrats in the House and Senate have wanted to give away these cuts in negotiation with Republicans but were getting too much blowback from the public because it is a rotten and unfair deal.  Now they will look unreasonable if they don’t. After the sequester and other cuts in the safety net, there really isn’t much more with which to bargain.  They have to give the Republicans something – or so they will say.

So now they have no choice.  The Republicans will back off of Obamacare – it’s a done deal anyway – and they will agree to settle the budget deal with cuts in Social Security and Medicare. Obama has no more choice in this than Boehner.  The elites and their front groups in Washington have created a narrative in which the so-called “Baby Boomers” are a threat to the fiscal stability of the United States.  In this narrative the elderly will simply be unaffordable due to Social Security and Medicare.

This is not true of course, but $billions have been poured into a propaganda effort to convince the public of it.  For instance, the anti-Social Security crusade of Peter G. Peterson and the many front groups he has funded such as the Committee for a Responsible Federal Budget, the Concord Coalition, etc. have been laying the ground work for further cuts in SS and MC for decades.  Now is the time they will go for it.

Obama will now make the deal.  Look for it to happen sometime before the deadline to raise the debt limit in a couple of weeks.

THE CPI-E FOR THE ELDERLY MAKES NO MORE SENSE THAN THE CHAINED CPI, THE CPI-U, OR THE CPI-W

The chained CPI is a statistically flawed and inequitable approach to determination of the cost of living.  It should be opposed as a means of indexing Social Security and other safety-net programs with all of the vigor advocates for the elderly can muster.  Nevertheless, the unfairness of the CPI enterprise in general should not be reduced to a discussion of its impact on the elderly.

One argument against the chained-CPI by my fellow progressives is that the elderly have a different purchasing pattern than the non-elderly.  This is a specious argument.  Goods and services purchased by upper income elderly households will be much different than the goods and services purchased by low income elderly households (say expenditures of the person living on the average monthly Social Security benefit of $1,230 versus a retiree with an income of $5 to $10 K per month).

Well-heeled retirees will devote more of their income to travel, entertainment, and other purchases unaffordable to the poor elderly.  Furthermore, regressive taxes, user fees, and other necessary services will consume a larger proportion of the budget of a poor household than that of an upper income household.  For instance, increases in charges for city services such as water, sewage, and trash pick-up* are amongst the largest increases we’re seeing in the CPI but these necessary services are weighted extremely low for the purposes of calculating the aggregate CPI.

Other current big increases in the CPI include state and local sales taxes, child care, and education.  Furthermore, food and clothing purchases are taxed at approximately 8% in most locales in the United States.  These are regressive taxes, which have increased over the past 30 years while income taxes have decreased.  Due to a shrinking (and already shrunk) tax base, the elderly in low income, distressed, inner-city neighborhoods pay a much higher property tax than their peers in affluent, suburban neighborhoods.

For instance, in Jackson County Missouri – the county in which a government-abandoned-neglected, African-American ghetto is located – the assessed valuation of a home is 19% of market value while it is only 11% in Johnson County Kanas – one of the most affluent suburbs in the United States.  The mill levy is 40 mills in Johnson County, Kansas and 80 mills in Jackson County, Missouri. If this isn’t bad enough, the equity of many home owners in Jackson County has been practically wiped out due to the subprime fiasco, foreclosures, flipping of houses, absentee owners, and neglect by city, state, and county government.

Cost of living is not a matter of old and young.  Rather it is a matter of poor and rich and everything in between.  The poorer you are, the more unfair the current methodology treats you.  Except for the brouhaha over the current chained-CPI gimmick proposed by the President and misguided congresspersons, the CPI is not a subject of much interest to the public.  Given the major impact of official measures of price fluctuations on the masses, this is rather unfortunate.  Goods and services reflecting the largest price increases constitute a major share of budgets for middle and low income households while they hardly impact an upper-income household.

*For example, the aggregated May 2012 – May 2013 CPI-U percent change increase was 1.4%.  The increase in water-sewer-trash collection services was 5.2%; intracity bus transportation was 3.4%; health insurance was 4.3%; tuition, other school fees, and child care was 3.6%.  No major category such as food in the aggregate (1.4%) and energy (2.4%), or shelter (2.3%) was less than the overall aggregated CPI of 1.4%.

TIME FOR AN HONEST CONVERSATION ABOUT THE COST OF LIVING IN AMERICA

We want to thank the New York Times for pointing out in an editorial today (January 13, 2013) that the “chained CPI” is a bad idea.†  As the editorial claimed, this attempt to lower Social Security benefits is based on bad math and bad logic.  Nevertheless, the flawed and unfair notion of suppressing cost of living increases with a “chained CPI,” is not the worst CPI problem facing retirees and workers. The way in which the CPI is calculated now and has been calculated for a considerable time in the past is a much bigger problem.

It is time that we have an honest conversation in this country about the statistically and scientifically flawed – absurdly flawed – methodology for determining the overall increase in the cost of living.  In this discussion, let’s not sugar coat the role of the Bureau of Labor Statistics – the agency responsible for the gargantuan task of measuring changes in prices of literally thousands of goods and services.  Inside the Washington beltway, it is not considered acceptable in polite company and polite conversation to tell the truth about such things as professional wankery on behalf of the rich and powerful.  But we are not in the Washington beltway.

Twelve Month Increase in the Overall Cost of Living: November 2011 to November 2012

The latest BLS report on the change in prices for commodities and services indicates that the overall cost of living between November 2011 and November 2012 rose 1.8%.*  The final report has not been released yet but it will not vary significantly from the most recent release.

If you are a senior on a relatively low, fixed income or a low wage worker, this will come as something of a surprise.  In fact, this news will probably make you angry because you are amongst the folks struggling to pay rapidly increasing inner-city bus fares, rapidly rising costs of child care, health insurance premiums – if you have health insurance at all – rapidly rising water, sewer, and trash pickup services, rapidly rising elementary and secondary tuition and fees, and rapidly rising higher education tuition for training that the power-elite says you need to become competitive in the labor market – to name a few inflationary aspects in the exchange of goods and services in today’s America.

The primary problem is this:  The BLS claims that many items with the largest price increases are not a big part of household budgets – even those household budgets in the lower income strata of society (I doubt if folks in the middle income strata would think the BLS understands their budgets very well either).  Professionals in the agency responsible for a fair measure of price increases can justify this statistically by simply considering overall averages for what surveys indicate is spent by households on a huge variety of goods and services.

Below is percentage price increase of a select set of items and the weight assigned to them by the BLS (the weights are the proportion or percentage of a theoretical household budget – all weights sum to 100):

 

Category	Percent Increase	Weight
Health   Insurance	11.2	.651
Intracity   Transport (bus/rail, etc.)	3.8	.262
Elementary   & HS Tuition & Fees	3.5	.386
Child   Care & Nursery School	2.5	.776
Water   & Sewer Services	6.9	.897
Garbage   Collection	2.8	.290
Rent	2.2	31.389
Food   at Home	1.8	14.175

 Imagine a single mother with one or more children or a senior citizen depending upon Social Security – think of any middle class family.  Does it seem likely that health insurance, school tuition and fees, child care/nursery school, and public utilities such water, sewer and trash collection services comprise only 3.872% of a household budget?  With rent and food, these items made up 49.436% of a household budget, on average, in the year between November 2011 and November 2012 – according to the BLS.

Overall inflation was low for the past year because of such items as energy (.3% increase, 10.184 weight), commodities less food and energy such as new vehicles (1.4% increase, 5.507 weight), household furnishing and supplies (-.1% increase, weight 3.292), food at home (1.8% increase, 14.175 weight) and rent (2.2% increase, weight 31.389).

In the real world, working people struggle with paying rent, accessing health care, paying for child care, school tuition, and food.  If only they would, after meeting all those needs plus others too numerous to mention in this short document, have half of their earning left over for entertainment, vacations, and other pieces of the American pie to which we all aspire.

Things Will be Getting Harder for the Masses

 Most certainly, readers of this bulletin noted the big increases in items related to city services.  As the Federal government cuts taxes and devolves an increasing number of services normally undertaken at the Federal level, local governments will be strapped for funds to provide essential services.  Regressive but increasing state and local user fees and sales taxes will consume ever larger portions of household budgets.

The relatively low increases in energy and food during the past year can be explained by the volatility in these commodities, which fluctuate due to speculation in the commodities markets, weather, and other factors.  It is unlikely that food prices will not spike in the near future.  Drought, an oligopolistic grain commodity industry,  rising demands in developing nations, and other issues will most certainly put upward pressure on food prices in the near future.

Due to a restructured production system in the United States – the shipping of jobs to cheaper labor markets and robotization –  fewer and fewer people have the income to buy new cars, new homes, and other large ticket items. This has created a negative feedback loop – fewer jobs, less income, less demand, and the cycle reiterates.  As worker income drops, government revenue drops, which is also due to the chutzpah of wacky, right wing, libertarian ideologues and their billionaire funders. Increasing costs of state and local government, education, and child care hit the lowest income groups the hardest but it’s not easy on the middle class either.

Artificially Low Inflation Benefits the Power-Elite

 It is not easy to adequately explain the CPI to most people who have little time in their busy lives to read about and think about something as complex as price economics in the largest economic system in the world.  This bulletin certainly doesn’t do justice to the issue.  But we must begin to work at communicating the basics of the BLS system and its unfairness to all but the very affluent.

Much more than suppression of Social Security benefits is at stake.  Measures of such phenomena as poverty and worker income growth are defined and measured in relation to the CPI.  Workers’ wages and salaries are impacted in significant ways by what the BLS publishes as the official CPI.  If the government – at the behest of the power-elite – can create a price change reality to the advantage of the power-elite, employers can much more easily justify stagnant wages/salaries and legislators have an easier time denying increases in the minimum wage.

In this series of posts, more will be written about the cooperation of the BLS with the power-elite in suppressing the CPI.  Evidence abounds that this one agency in charge of fairly and validly calculating prices and their impact on the cost of living is not acting in the peoples’ interest.  Look for several upcoming bulletins in the next few weeks, which will further explain flaws in BLS methodologies and the reason that agency is promoting these flawed practices.

†see: “Misguided Social Security Reform,” New York Times, The Opinion Page, January 13, 2013, page 10

*see report at:  http://www.bls.gov/news.release/pdf/cpi.pdf