Thursday, December 31, 2009

Wave Goodbye to the Decade with No Name

There are two things that I want to say about the decade that is ending.

The first is that the decade sucks. That's really the only word for it. I could go on about all the ways it sucked: the dotcom bubble, USS Cole, 9/11, Afghanistan, anthrax, telecom bubble, Enron, Worldcom, DC beltway sniper, Iraq, space shuttle Columbia, Abu Graib, Katrina, North Korean nuclear tests, Iran, housing and subprime mortgage bubble, Bear Stearns, Lehman Brothers, AIG, stock market collapse, H1N1 flu, ….

The second thing about this past decade is that we can’t decide on a name for it. The Nineties, the Eighties, the Seventies, the Sixties, those decades all have names. The Zeros, the Aughts, the Naughts have all been bandied about for this past decade but none of them have stuck. This truly has been a decade with no name.

And why would we want to name something that sucks so badly? To name something is to remember it. Maybe by not naming it we don’t have to remember it.

So let’s hear it for the new decade, the Twenty-Teens. The Twenty-Teens are going to be great. Here are some of my predictions for the Twenty-Teens:

(1) The Dow doubles to 20,000 and the S&P to 3,000 after businesses finally figure out how to make money on the internet. It’s the new economy, stupid. That 2008-2009 financial crisis was the old economy dying.

(2) The first woman President of the United States is elected in 2016, and she will not be Hillary Clinton or Sarah Palin.

(3) The Muslim world shuns Al Qaeda as nothing more than a cult, as did the Nigerian banker who turned his son in before the Detroit airplane attack.

(4) Israel and Palestine agree on borders for their separate states, and learn to live together in mutual security and peace. Their 40 years in the wilderness are up, or has it been 60?

(5) North and South Korea reunite, Iran throws off rule by the clerics, Chinese capitalists embrace American-style democracy, Russia joins the European Union, and Hugo Cavez as head of Opec apologizes for global warming. OK, maybe not, but a guy can dream.

Here is the problem, when do the Twenty-Teens actually begin? Do they begin on 1/1/2010 or do they not begin until 1/1/2013? We could be in for 3 more years of suckiness before the greatness of the Twenty-Teens can truly reign.

Or do we call this decade the Twenty-Tens? Damn, this coming decade is going to be hard to name too.

Monday, December 28, 2009

New Security Guidelines for Airline Travel

In response to the Christmas Day 2009 terrorist attempt on a plane landing in Detroit, the Department of Homeland Security has issued these new security guidelines for airline travel in or to the United States of America:

(1) Carry on luggage can no longer be carried onto flights and must be checked. All electronic devices must also be checked. And all toiletries and other liquids must be checked.

(2) All checked luggage will be sent via UPS to your final destination on a nonpassenger flight.

(3) All clothing and jewelry must be removed before passing through airport security, and checked through with your luggage to your final destination.

(4) Special jumpsuits will be issued for airline passengers to wear that will appear opaque to ordinary vision but will be see-through to airport security personnel and airline flight crew equipped with special glasses (available for $25.95 on the internet).

(5) All airline blankets and pillows will now also be made of see-through material. Flight attendants may administer a strong sedative to put a passenger to sleep for the duration of the flight, if they deem the passenger to be unruly, creepy, or just plain annoying (such as socialite Ivana Trump or public official Chuck Schumer).

(6) The seat-back tray table and seat-back magazine pouch will be removed. All meals in flight will be served on clear plastic trays without benefit of metal or plastic utensils or napkins. Eat with your hands and, as no reading material or electronic devices are allowed, enjoy the in-flight movie which will be broadcast over the PA for everyone onboard to hear without headsets: Alvin and the Chipmunks: The Squeakquel.

(7) In the unlikely event of a water landing, your seat-back can be used as a floatation device. In the not quite as unlikely event of midair disintegration of the airplane due to explosion or fire, your seat-back can be used as a parachute. Just buckle in your jumpsuit.

(8) All airplane bathrooms will be fitted with see-through windows using the same see-through material as the jumpsuits. At the discretion of the flight crew, passengers using the bathroom for more than 10 minutes may be jettisoned.

(9) The empty cargo hold of every airplane will hold a special ops team, with snipers deployed in the empty overhead bins strategically throughout the airplane. All flights will carry enough fuel so that they can at any time be diverted to Gitmo, or to the prison in Illinois slated to replace Gitmo.

(10) Airline passengers should refrain from fighting or subduing would-be suicidal terrorists while flight attendants douse the terrorist with water or fire extinguishers: "It is just too embarrassing to us at DHS that, despite all our screening efforts, heroic action by passengers and flight crew members is the only security method that actually works."

Sunday, December 27, 2009

Democracy for the Dogs

On Board Balloon "Skylark"
April 5, 2848

I am almost devoured by ennui. Pundit is the only conversible person on board; and he, poor soul! can speak of nothing but antiquities. He has been occupied all the day in the attempt to convince me that the ancient Amriccans governed themselves! -- did ever anybody hear of such an absurdity? -- that they existed in a sort of every-man-for-himself confederacy, after the fashion of the 'prairie dogs' that we read of in fable.

He says that they started with the queerest idea conceivable, viz.: that all men are born free and equal -- this in the very teeth of the laws of gradation so visibly impressed upon all things both in the moral and physical universe. Every man 'voted', as they called it -- that is to say, meddled with public affairs -- until, at length, it was discovered that what is everybody's business is nobody's, and that the 'Republic' (so the absurd thing was called) was without a government at all.

It is related, however, that the first circumstance which disturbed, very particularly, the self-complacency of the philosophers who constructed this 'Republic', was the startling discovery that universal suffrage gave opportunity for fraudulent schemes, by means of which any desired number of votes might at any time be polled, without the possibility of prevention or even detection, by any party which should be merely villainous enough not to be ashamed of the fraud. A little reflection upon this discovery sufficed to render evident the consequences, which were that rascality must predominate -- in a word, that a republican government could never be anything but a rascally one.

While the philosophers, however, were busied in blushing at their stupidity in not having foreseen these inevitable evils, and intent upon the invention of new theories, the matter was put to an abrupt issue by a fellow of the name of Mob, who took everything into his own hands and set up a despotism, in comparison with which those of the fabulous Zeros and Hellofagabaluses were respectable and delectable. This Mob (a foreigner, by the by) is said to have been the most odious of all men that ever encumbered the earth. He was a giant in stature -- insolent, rapacious, filthy; had the gall of a bullock with the heart of an hyena and the brains of a peacock. He died, at length, by dint of his own energies, which exhausted him. Nevertheless, he had his uses, as everything has, however vile, and taught mankind a lesson which to this day it is in no danger of forgetting -- never to run directly contrary to the natural analogies.

As for Republicanism, no analogy could be found for it upon the face of the earth -- unless we except the case of the 'prairie dogs', an exception which seems to demonstrate, if anything, that democracy is a very admirable form of government -- for dogs.

From Mellonta Tauta by Edgar Allan Poe, first published in February, 1849.

Monday, December 21, 2009

Has Harvard University Lost Its Nerve?

Did Harvard University panic during the financial crisis in the Fall of 2008? A recent article on implies as much. The story has to do with interest rate swaps Harvard took out in 2004 during the tenure of Harvard President Larry Summers and endowment head Jack Meyers to help finance its planned expansion across the Charles River into Allston. When benchmark interest rates fell to near zero during the financial crisis, Harvard was suddenly on the hook to its investment bankers for $1 billion.

The article seems to suggest some irony in Harvard President Drew Faust, endowment head Jane Mendillo, and lawyer Anne Olgiby losing their nerve and closing out the interest rate swaps at the worst possible time in December 2008, given Harvard President Larry Summers getting pushed out of Harvard after questioning women’s innate aptitude for math and science.

Larry Summers is now the chief economic advisor to U.S. President Barack Obama, and isn’t making any public comment.

I think the part of this story that the article misses is that these swaps were part of the financing for the Allston expansion. As long as Harvard was going to proceed with the expansion, the losses on the swaps meant Harvard would effectively have to pay a higher but still reasonable interest rate at the 2004 levels. However, with the decision to indefinitely postpone the Allston expansion, these swaps became naked bets on interest rates. So it probably did make sense to close them out, whether they could have gotten a better deal by waiting is easier to see in hindsight than it would have been a year ago.

More generally, many in the Harvard community have wanted the Harvard endowment to move away from the high risk, high reward strategies that characterized the Jack Meyer era. That means unwinding some of the things that were done in that era and living with potentially lower investment returns in the endowment going forward. I think the debate over endowment investment is still going on inside the Harvard community. As of June 30, 2009, the Harvard endowment was at $26 billion. That was down from $36.9 billion in June 2008 but still up from $22.6 billion in June 2004.

Harvard was betting interest rates would go up, and didn’t foresee they could instead go down to near zero. And that exposes a fundamental problem with derivatives. It’s not just that you are making what amounts to a complicated bet, you have to find a big investment bank to take the other side of the bet. Actually, these derivatives are sold, the investment bank finds you.

The old adage applies, if a man walks into a bar and wants to bet you that his pet dog will jump on the bar and sing the Star Spangled Banner while tap dancing, no matter how improbable that sounds to you, you can be sure the dog will do just that. In this case, the collapse of interest rates in the financial crisis was caused in no small measure by other derivative bets these big investment banks were making.

Winter Blooms on a Snowy Night at Club Passim

Winterbloom is Anne Heaton, Meg Hutchinson, Natalia Zukerman, and Antje Duvekot. Their show was a warm holiday festival on a cold snowy night. If you missed the show you can still get the music at the usual places online.

We got a good picture of Antje Dukevot, which reminds us we forgot to blog about her great show with Richard Shindell at the Somerville Theatre in November. What can we say, she plays well with others.

Venue note: Passim has sprung for new chairs and Veggie Planet has fixed the portion size problem by offering small and large. No more backaches and doggy bags.

Sunday, December 20, 2009

Sarah's Market Now Stocking Beer and Wine

Sarah's Market at the corner of Concord Avenue and Huron Avenue in Cambridge is now selling beer and wine. The selection is respectable if not huge. And for those of us in the neighborhood, you can't beat the location.

Friday, December 18, 2009

Wicked Hardcore Christmas Partiers Have Broken Into My Condo

I leave town for a weekend, and some wicked hardcore Christmas partiers break into my condo and film a music video. My apartment is having more fun than I am!

My favorite line: "Shopping drunk, down in Harvard Square. Or was it Davis Square? Who cares."

You can purchase the classic song Wicked Hardcore Christmas along with the Wicked Hip-Hop Christmas remix featured in the video and a few bonus treats for the low, low price of $3.99 (so low I get no kickback).

Massachusetts is a Sad Place to Live

A recent study proves what many of us have long suspected, Massachusetts is a sad place to live. The study asked people to rank various factors that bring satisfaction in their lives. Massachusetts ranked 44 out of 51 states and the District of Columbia.

Here they are from happiest to saddest:

1. Louisiana
2. Hawaii
3. Florida
4. Tennessee
5. Arizona
6. South Carolina
7. Mississippi
8. Montana
9. Alabama
10. Maine
11. Wyoming
12. Alaska
13. North Carolina
14. South Dakota
15. Texas
16. Idaho
17. Vermont
18. Arkansas
19. Georgia
20. Utah
21. Oklahoma
22. Delaware
23. Colorado
24. New Mexico
25. North Dakota
26. Minnesota
27. Virginia
28. New Hampshire
29. Wisconsin
30. Oregon
31. Iowa
32. Kansas
33. Nebraska
34. West Virginia
35. Kentucky
36. Washington
37. District of Columbia
38. Missouri
39. Nevada
40. Maryland
41. Pennsylvania
42. Rhode Island
43. Ohio
44. Massachusetts
45. Illinois
46. California
47. New Jersey
48. Indiana
49. Michigan
50. Connecticut
51. New York

Sunday, December 13, 2009

Was the Fix in on Mike Capuano’s Senate Bid?

Rumor is that this Senate campaign may be Mike Capuano’s last hurrah. The story we heard is that Massachusetts is expected to lose a Congressional seat in the 2010 census, and the seat to be squeezed out in 2012 is Mike Capuano’s district which covers Somerville, Cambridge, Chelsea, and much of Boston.

For example, Cambridge and Somerville might go to Congressman Ed Markey. Brighton, Alston, Jamaica Plain, the South End, and Back Bay might go to Congressman Barney Frank. And the rest of Boston and Chelsea might go to Congressman Stephen Lynch. North Shore Congressman John Tierney and South Shore Congressman Bill Delahunt might figure into this rejiggering as well, which will be done by the state legislature.

All of these Congressmen endorsed Mike Capuano in his Senate run, except Bill Delahunt who didn't endorse anyone. Mike also got endorsements from Massachusetts Congressmen John Olver, Jim McGovern, and Richard Neal.

We heard the deal was that all these Congressman would support Mike for Senate, which if he won would save them the awkwardness of squeezing him out of his district. And save one of them the additional awkwardness of having Somerville with a sitting Congressman added to his district.

But did they keep the deal? Based on the election results showing Mike Capuano winning in Amherst and some surrounding towns, there is evidence that John Olver kept the deal out in Western Massachusetts. But it appears that Mike Capuano got no help in Fall River or New Bedford from Barney Frank, and no help from Ed Markey in the northwestern suburbs of Boston, and we suspect no help from Stephen Lynch in Southie and the other Irish enclaves he represents.

Perhaps they had the best intentions of campaigning vigorously for Mike Capuano, but thought better when they realized they would be asking voters in their districts to vote for Mike, not a good habit to get them into if Mike were later thrown into their district in 2012.

Now that Mike Capuano has lost the Senate primary, he can serve out his current House term, and run for reelection in 2010. A lot could happen in the apportionment and redistricting process between now and 2012, particularly if Mike Capuano doesn’t feel his fellow Congressmen kept up their end of the deal.

On a related note: We tagged Steve Pagliuca as the Joseph P. Kennedy (father of JFK, Robert, and Teddy) candidate in the Senate primary back in October. Joseph P. Kennedy was a successful businessman who never held elected office, but did serve as Chairman of the SEC and Ambassador to Great Britain. We wonder, has Steve been wrangling for an chairmanship or ambassadorship all along?

Second Thoughts on the Primary Candidates

With the primaries behind us, here are a few thoughts on the candidates.

Martha Coakley – If she wins the general election in January, she will become one of 18 women serving in the United States Senate, 4 Republicans and 14 Democrats. The queenmaker behind those Democratic women Senators is DC socialite Ellen Malcolm, the founder of Emily’s List, the political action committee with the single purpose of electing women Democrats. You can be sure that Ellen is looking to groom a woman to run for President in 2016, and possibly take Joe Biden’s place in the VP slot when Barack Obama runs for reelection in 2012. So, if Martha Coakley wins the general election and plays her cards right in Washington, DC …

Mike Capuano – He was a distant second, losing by 19 points statewide. He won narrowly in Greater Boston but he didn’t win the working class cities that used to form the industrial base of Massachusetts. It turns out you can be the liberal’s liberal or the workingman’s workingman, but you can’t be both.

Alan Khazei – Our favorite dark horse finished third. He did get double what a Boston Globe poll was predicting 2 weeks before the election, but he really needed a tighter race between Coakley and Capuano to make his candidacy work. Alan has said he first started thinking seriously about running for the Senate back in 2004, when a John Kerry win in the Presidential race would have opened his Senate seat. That seat would have been a better fit for Khazei’s progressive voice and that more optimistic time a better fit for his message.

Steve Pagliuca – After spending a lot of his own money, he finished in fourth place out of the money as we predicted back in October. His candidacy was always hard to figure, except as some kind of spoiler. But his jobs message resonated well in some parts of the state, even if it felt hollow to us. We thought that Andrea Silbert had the best jobs message when she ran for Lieutenant Governor back in 2006, and it’s too bad Massachusetts didn’t listen back then.

Scott Brown – He won the Republican primary even more handily than Martha Coakley won the Democratic primary. But with 664,795 voters in the Democratic primary versus 162,706 in the Republican primary, his chances don’t look good for the January general election. He’s a handsome guy and will look good in the debates up against the handsome Martha Coakley, but I expect he’ll hit the glass ceiling at 35% to 40% to her 60% to 65%.

Jack E. Robinson – Not sure how he got on the ballot in the Republican primary, as we thought Scott Brown was the only Republican to qualify by the deadline. Scott may have waived the deadline because he wanted a sparring partner.

Joseph Kennedy – He is running as the Libertarian Party candidate and had no primary opponent, so goes straight to the general election. Joe is no relation to the famous Kennedy family. The last time this was tried successfully was John F. Kennedy (F. for Francis not Fitzgerald) who got elected State Treasurer in 1955 and served for 3 terms before losing a race for Governor in 1960, the year the real JFK ran for President.

Massachusetts Senate Primary Results

The short story on the Democratic Senate primary this past Tuesday is that Martha Coakley won big with 47% of the vote statewide, as her three male opponents hit the glass ceiling. In the Republican primary there was really no contest, with State Senator Scott Brown getting 89% of the vote.

Democrat Martha Coakley, Republican Scott Brown, and Libertarian Joe Kennedy (no primary opponent) now face off in a general election in January.

I knew it was going to be a tough evening for the male candidates in the Democratic primary when I went into my Cambridge polling station around noon on Tuesday. I passed four women coming out arm-in-arm who looked to be around Martha’s age in their mid to late fifties. Once in the voting booth, I could hear two female poll workers talking openly about how badly they wanted Martha to win.

But now that there has been time to study the results in a more detail, there is a little more to the story than that:

CandidateStatewideGreater BostonOld Industrial CitiesWestern Boston SuburbsRest of State
% of primary voters100%20%10%3%66%

In Greater Boston, the race was quite tight. Mike Capuano eked out a 769 vote win over Martha Coakley. Alan Khazei did better than he did statewide, and Steve Pagliuca did worse. For Greater Boston, I am counting Boston, Chelsea, Somerville, Cambridge, Brookline, Newton, Watertown, Belmont, and Arlington.

Steve Pagliuca did best in the old industrial cities like Worcester, Springfield, Lowell, Brockton, New Bedford, Fall River, Lynn, Lawrence, Haverhill, Revere, Taunton, Attleboro, Fitchburg, and Leominster. These places are where Barack Obama fell big to Hillary Clinton in the 2008 Presidential primary.

Alan Khazei beat out Mike Capuano to finish second in the western Boston suburbs of Weston, Wayland, Lincoln, Concord, Wellesley, Needham, Dover, Sherbourn, Boxorough, and Harvard. Alan finished second in a number of other towns around the state.

Turnout for the special election primary was very low, lower than other contested Democratic primaries in recent and not so recent memory:

1,258,9232008 Democratic Primary for President
910,8772006 Democratic Primary for Governor
823,7492006 Democratic Primary for Lieutenant Governor
789,8221984 Democratic Primary for Senate
746,1902002 Democratic Primary for Governor
664,7952009 Democratic Primary for Senate

This is the problem with single party politics in Massachusetts. In a state of roughly 4.5 million people, we will likely have the next Senator picked by the votes of the 310,827 citizens who voted for Martha Coakley. Good for them, good for her, and congratulations. But, measured against any ideal of democracy, I don’t see how this is good for us no matter who you support.

Yes, Massachusetts' voters have elected some Republican Governors in the last two decades, so they don't always rubber stamp the Democratic primary results. But the Republican primary vote is even smaller than the Democrats, only 162, 706 voters in the 2009 Republican primary for Senate.

Thursday, December 10, 2009

Matthew Stubbs Band at Toad

The Matthew Stubbs Band played Toad last night.

Tuesday, December 8, 2009

Alan Khazei Concedes at the Omni Parker House

Alan Khazei giving his concession speech on primary election night at the Omni Parker House Hotel in Boston.

Cambridge Armory Flies its Pennants on Primary Election Day

Voting at the Cambridge Armory on Concord Avenue reminds us what we often take for granted. The Armory is home to units in the 1st Battalion, 181st Infantry Massachusetts National Guard.

These units are considered to be descended from the minutemen who fought the British in Lexington, Concord, and Arlington at the start of the Revolutionary War. We hope someday to get a picture of their Lexington-Concord battle streamer.

Vote Here - Special State Election - Senator in Congress for Massachusetts

If you want to vote, best read the fine print.

The special state primary is on Tuesday, December 8, 2009. You had to be registered by November 18 to vote.

The special state election is on Tuesday, January 19, 2010 (the day after Martin Luther King Day). The deadline to register to vote is December 20, 2009.

Monday, December 7, 2009

Ten Reasons to Vote in Massachusetts on Tuesday

I urge you to vote for Alan Khazei in the Massachusetts Democratic Senate Primary on Tuesday, December 8.

I could give you some good reasons, and will come back to that below, but I know that’s not what you want. This is politics and you want some cold, hard, cynical reasons to vote for Alan Khazei.

(1) Stick it to the snobs on Beacon Hill and Capitol Hill. They think, whatever other great experience in public life a candidate like Alan Khazei may have, you have to be a career politician or multimillionaire to run for public office.

(2) Stick it to the PACs and lobbyists. The gall of Alan Khazei thinking he could run as a reformer on contributions directly from individual citizens and not take their PAC or lobbyist money. The gall of not making the usual promises to the special interests to get that money. The gall of you even thinking for a moment of voting for such a candidate.

(3) Stick it to the candidates who’ve cluttered your TV and all your favorite web sites with their incessant ads (that PAC and lobbyist money goes a long way). At least Alan’s ads are entertaining - you’ve got see the talking babies in Change Washington if you haven’t already (it would be a gimmick if it weren’t so true).

(4) Stick it to baby boomer politics. That’s right: Martha Coakley, Mike Capuano, Steve Pagliuca, and even Republican Scott Brown were born in the 1950s and came of age in the 1960s or early 1970s. Alan Khazei was born in the 1960s and came of age in the 1980s. And if you are a baby boomer and reading this, it’s not that we don’t like you, it’s the divisive baby boomer politics we don’t like.

(5) Stick it to Bill Clinton. The news is that he plans to robocall 500,000 Massachusetts households Monday on Martha Coakley’s behalf. He’s the baby boomer in chief.

(6) Vote to let Martha Coakley finish her first term in the job she took on as Massachusetts Attorney General. You notice how whenever a state Attorney General goes on crusade, like New York Attorney General Eliot Spitzer against Wall Street in the early 2000s, they always get promoted to higher office, and put out of the way?

(7) Vote to keep Mike Capuano in his job as Congressman so he can get the MBTA Green Line Extension into his beloved Somerville. Do you think Capuano’s replacement will be from Somerville? His district includes most of Boston, so it’s most likely his replacement will be from Boston and not give a fig about the Green Line Extension. No advocate in the House of Representatives means no money gets appropriated.

(8) Vote to keep Steve Pagliuca creating jobs in the private sector. Come to think of it, where can I buy stock in Pagliuca Industries?

(9) Vote for the two and half year free trial for Alan Khazei. If he’s elected in January 2010, he’ll have to run again in fall 2012 for a full six year Senate term and, if it works out that you don’t like him after all, the other candidates will still be around.

(10) If you are a Democrat or Democratic leaning independent, vote for the luxury that you can vote for whoever you like the most in the Democratic race. It’s not like Republicans Scott Brown or Jack E. Robinson have a chance against any of the four Democratic candidates. If you are a Republican leaning independent or an independent independent, here’s your chance to send the Democratic political establishment a wake up call.

If you find any of these reasons compelling or even just funny, please feel free to forward this article to anyone you know who lives in Massachusetts.

For non-cynics, here are five reasons why you should vote for Alan Khazei:

(A) He’s a great leader who cofounded City Year, the youth service program now in 20 cities around the U.S.

(B) He’s made his career around building consensus and making things happen, and has always shared the credit and given others the spotlight.

(D) He believes in helping innovators and entrepreneurs find solutions.

(E) He’s good on all the issues facing our state and our country from job creation to health care to Afghanistan.

(F) His relationships with political and business leaders around the U.S. would help Massachusetts regain the clout we lost in the U.S. Senate with the death of Ted Kennedy.

Some endorsements Alan has received:

The Boston Globe – “Massachusetts’ best chance to produce another great senator”

The Worcester Telegram & Gazette – “a deeply genuine and expansive vision of public service”

Cape Cod Times – “insight, depth of knowledge on local, national and international issues”Blue Mass Group – “best positions on the issues” and “best philosophy of governance”

West Roxbury Transcript – “knows how to create programs from the ground up”

Caroline Kennedy – “it would be amazing if this guy won”

General Wesley Clark – “we need more patriots and public servants like Alan Khazei representing the people’s interests in Washington”

P.S. Final note to all BHO gamers: you can stop hiding from the pollsters as the regulars in the other camps will have completed their media buys by Monday night. The watchword from BC at ONC: 2 ifg by C

Thursday, December 3, 2009

Harvard Din and Tonics Want You to Shop Harvard Square

The Harvard Din and Tonics sang for their supper tonight on Brattle Plaza in Harvard Square. This was part of a Shop Harvard Square promotion. Free pizza from Bertucci's and chocolate chip cookies were also dispensed.

What is Health Care Reform?

Question from one of our midwestern correspondents:

Precisely what is health care reforming? One complaint I have is that most doctors in this area are employed by a hospital and therefor their 1st master is the business manager who surely tells them to send patients to the plethora of specialists who are also employed by the same entity, to take advantage of the cash flow available from Medicare and health insurance Co's; and the patient is just left to swing in limbo with no good doctor/patient relation available to him.

So regardless of what is being reformed, medical decisions seem to be being made more and more by business managers and government bureaucrats maintaining a cash flow from patients with little regard for their actual health needs.

But what aspects of health care are actually being "reformed"?


In the first instance, I think reform means availability of health care insurance coverage to all Americans. Second, it means reform of health care provision. And I think those are two different things.

What we did here in Massachusetts is to create a system which requires every resident to get health insurance. Actually about 97% now have health insurance (there are some exemptions available, and you can pay to opt out), up from around 85% before. Or, in other words, the uninsured rolls have been reduced by 80%. There is a state-run exchange (called the Health Connector) that has arranged with a list of insurance providers to provide health insurance to people who don’t have coverage from other sources such as their employer, at subsidized rates for those who can’t afford pay. That helps people whose employers don’t offer health insurance and people with chronic illnesses who can’t hold jobs.

In return for the rules requiring everyone to have coverage, the insurance companies were required to eliminate their riders on preexisting conditions, because before there was an obvious incentive for people without insurance through their job to apply for insurance only when they became sick. With nearly universal coverage, that adverse selection problem is greatly minimized.

In order to discourage employers from dropping their plans and throwing more people onto the Health Connector, there is an employer mandate for businesses with more than 10 employees with a tax (initially $295 per employee) if the employer doesn’t offer health insurance. The tax is less than the cost of health insurance, but if the employer opts to pay the tax it gets nothing and its employees still have to get insurance themselves, so there is a positive incentive to offer health insurance. This has worked well to prevent employers from dumping their plans.

This program, by the way, was worked out by Republican Governor Mitt Romney with the Democratic state legislature. The federal reform program being proposed follows many of its features. One big complaint of the program is that it hasn’t realigned incentives for doctors to provide primary care. That’s the issue that you bring up, where the patient swings in limbo between specialists, and it has a cost component as well.

I think that the proponents of the so-called public option see that as a way for the government to set up its own insurance system with better incentives for doctors. For example, the public insurance plans could reimburse doctors at least partly per capita or based on wellness rather than strictly fee-for-service. Whether they could do a better job of that than they have done with Medicare remains to be seen. I’d like to see some state successfully try that before it becomes part of a nationwide program.

Some of the discussion of cost control, involving utilization review, got caught up in the “death panel” debate last August. The proposed revised guidelines on mammograms that came out recently have also stirred concerns about rationing care. The single payer advocates believe that the solution is global budgeting through a health care bureaucracy, but they are out of the U.S. mainstream and for better or worse haven’t been able to get their proposals on the table. Some countries in Europe have single payer, but other countries in Europe don’t, so it has to be said Europe as a whole is not single payer.

There have been efforts at cost control coming from private insurance carriers. The most effective of these seems to be higher deductible plans, where costs for basic or routine services come out of the patient’s pocket up to a certain amount annually, and only amounts beyond that are reimbursed. These plans are usually coupled with health care savings plans from employers to ensure the employee has savings to cover the costs. Patients feel like they are spending their own dollars, and push back more on whether certain procedures or treatments are really necessary. And doctors feels like they are spending the patient’s money, and not some faceless insurance company’s.

Ultimately, I think successful reform has to mean also giving patients as consumers more power in the patient/doctor/specialist/hospital/insurer/employer/government equation. Getting back to that idea of the good doctor/patient relationship is key. But it might be best to go ahead with health insurance reform and get everybody covered, and then come back to health care provision reform.

There is a third aspect of reform which does not appear to be on the table much at all. That is medical malpractice liability. Frivolous lawsuits and outrageous jury awards are essentially a tax on the health care system. In the workplace, the tort system was eventually thrown out in favor of workers compensation, because it was recognized that some level of injuries are inevitable and need to dealt with on a rational, predictable basis that doesn't needlessly destroy companies and jobs.

Wednesday, December 2, 2009

White House Reality TV Show

Below is the smoking email which proves the White House State Dinner crashers were in fact party crashers and not invited guests. It's the old "my cell phone died" trick. An additional incriminating fact is that Michaele Salahi was wandering around DC with a Bravo Network TV film crew filming her getting ready for the dinner for a possible episode of the reality TV-show The Real Housewives of Washington, DC.

This is the second reality TV show inspired hoax, following Balloon Boy in October. These things always happen in threes, so expect a third hoax soon.

Hi Michele,
You are an Angel!
My cell phone battery died early this evening while we were in DC from our country home, so I just got your message now after driving back out. But it obviously worked out at the end... We ended up going to the gate to check in at 6:30pm to just check, in case we got approved since we didn't know, and our name was indeed on the list! We are very grateful, and God Bless you.
We just got home, and we had a wonderful evening as you can imagine!
Look forward to seeing you very sooon. Say when for dinner - we can't wait to see you and catch up and share memories of a true lifetime.
With Love,
Tareq & Michaele Salahi