Category Archives: Wealth

Quote of the day: The rush to kiss Trump’s ass


The day Littlefingers became president of the united States also brought down the curtain on the 2017 World Economic Forum Annual Meeting, the gathering of 2,500 leading corporate moguls, banksters, elected officials, economists, celebrities [George Clooney attended this year], and media figures in the elite Swiss resort town of Davos.

One of those in attendance was former World Bank Chief Economist, U.S. Treasury Secretary, and Harvard University President Lawrence Summers, a man who played a central role in the deregulation of American banking and the unleashing of the derivatives market.

In of the other words, he bears much of the responsibility for bringing on the Crash of 2008 and the ongoing global Great Recession.

But even he abhors the rush to embrace President Pussygrabber by his fellow Davos elites, as he writes in Financial Times [subscription only]:

I am disturbed by (i) the spectacle of financiers who three months ago were telling anyone who would listen that they would never do business with a Trump company rushing to praise the new administration; (ii) the unwillingness of business leaders who rightly take pride in their corporate efforts to promote women and minorities to say anything about presidentially sanctioned intolerance; (iii) the failure of the leaders of global companies to say a critical word about US efforts to encourage the breakup of European unity and more generally to step away from underwriting an open global system; (iv) the reluctance of business leaders who have a huge stake in the current global order to criticise provocative rhetoric with regard to China, Mexico or the Middle East; (v) the willingness of too many to praise Trump nominees who advocate blatant protection merely because they have a business background.

>snip<

My objection is not to disagreements over economic policy. It is to enabling if not encouraging immoral and reckless policies in other spheres that ultimately bear on our prosperity. Burke was right. It is a lesson of human experience whether the issue is playground bullying, Enron or Europe in the 1930s that the worst outcomes occur when good people find reasons to accommodate themselves to what they know is wrong. That is what I think happened much too often in Davos this week.

Brace for a flood of GMOs after TrumpAscension™


Each of them accompanied by a Rebel Yell.

From teleSur English:

U.S. President-elect Donald Trump picked the last member of his cabinet on Wednesday. Former Georgia Governor Sonny Perdue — who has been linked to big agribusiness and has sympathized with confederate history — has been tapped to become the head of the U.S. Department of Agriculture.

Unsurprisingly, like Trump and the rest of his cabinet, Perdue has links to big business and in particular corporate agriculture. He has been a supporter of factory farms, and in 2009 he signed a bill to stop the local regulation of the industry to prevent animal cruelty.

In 2009, he was named “Governor of the Year” by the Biotechnology Innovation Organization, which the Organic Consumers Association referred to as “a front group for the GMO industry.” During his campaigns for governor, he also received donations from pesticide companies. After finishing up as governor, he founded his global exporting business Perdue Partners.

The 70-year-old was on Trump’s agricultural advisory committee during last year’s presidential campaign. During his time as Georgia governor from 2003 to 2011, Perdue drew the support of many disillusioned white voters and was well known for leading a service at the state capital building in Atlanta to literally pray for rain during a harsh drought in 2007.

“Farmers need a champion in the USDA who will fight for conservation programs to help farmers be more resilient in the face of extreme weather, not pray for rain,” Kari Hamerschlag, from Friends of the Earth, said in a statement.

In 2010, Perdue signed a law that proclaimed April “Confederate History and Heritage Month.” The month, which was also declared in six other southern states, is particularly controversial because it failed to mention the history of slavery in its proclamation.

Headline of the day: It was just chump change


From the New York Times:

Treasury Pick Didn’t Disclose $100 Million in Assets to Senate

  • The revelation about Steven Mnuchin, a former Goldman Sachs banker, came hours before he was scheduled to testify Thursday before the Senate Finance Committee.
  • He also did not list his role as a director of an investment fund in the Cayman Islands on a questionnaire.

Healthcare plan deductibles hit chronically ill


The current healthcare regime doesn’t look so grand either, when seen from the perspective of those of hit hit by lingering maladies.

We are in that number, afflicted by rheumatoid arthritis, a heart attack [maybe two], cancer surgery and its lingering health effects [multiple], and another condition or two [the list of long-term ailments on our healthcare record actually totals nine].

So we can couch for the accuracy of the new report

From the University of Michigan Medical School:

For tens of millions of Americans, the start of a new year means the counter has gone back to zero on their health insurance deductible. If they need health care, they’ll pay for some of it out of their own pockets before their insurance takes over.

As insurance plans with deductibles grow in popularity, a new study takes a national look at what those plans mean for people with common chronic health conditions such as diabetes, asthma, joint problems and heart disease.

The short answer: Those who choose plans with a deductible and have such conditions should be prepared to spend hundreds or even thousands of dollars of their own money on their care, beyond what they spend to buy the insurance plan in the first place.

The results, reported in JAMA Internal Medicine by researchers from the VA Ann Arbor Health Care System, University of Michigan Medical School, and Penn State University, especially show the impact of high-deductible health plans – which now cover 40 percent of Americans who buy their own health insurance or get it through an employer.

Using data from a national survey of Americans under age 65, the researchers find that having a high-deductible plan makes it more likely that health-related costs will take up more than 10 percent of a chronically ill person’s total income. They also find huge variation between patients who have the same condition in the amount of out-of-pocket spending they had, even for those in low-deductible plans.

Despite these out-of-pocket costs, the study finds that few people with chronic illnesses said that costs or insurance coverage issues had gotten in the way of getting the care or prescriptions they needed.

“Increasingly, these plans have become woven into fabric of health insurance in America, so it’s important to look at the impact of deductibles on people who need care on an ongoing basis,” says senior author Jeffrey Kullgren, M.D., M.S., M.P.H., a research scientist in the VA Center for Clinical Management Research of the VA Ann Arbor Healthcare System and an assistant professor of general medicine at the U-M Medical School. “Not only on how they spend their money on care for their day in, day out health needs, but also how that affects spending in the rest of their lives.”

Changes to the insurance market

The findings are based on data from 2011 through 2013, during a time when many more employers started offering high-deductible health plans.

It was also before individuals who needed to buy their own insurance could do so on the Healthcare.gov Marketplace. Since the launch of the Marketplace, more than 90 percent of people shopping there have chosen high-deductible plans.

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Headline of the day: Hang on to your hats, folks


From the New York Times:

18 Million May Lose Insurance After Repeal, Study Finds

  • The nonpartisan Congressional Budget Office said that repealing major provisions of the Affordable Care Act would cost 18 million people their insurance in the first year.
  • The number of uninsured Americans would increase to 32 million in 10 years, while causing insurance premiums to double over that time.

From the study, a report on investigations by the Congressional Budget Office [CBO] and the staff of the Joint Committee on Taxation [JCT]:

Estimated Changes Before the Elimination of the Medicaid Expansion and Subsidies

Following enactment but before the Medicaid expansion and subsidies for insurance purchased through the marketplaces were eliminated, the effects of H.R. 3762 on insurance coverage and premiums would stem primarily from repealing the penalties associated with the individual mandate.

Effects on Insurance Coverage. CBO and JCT expect that the number of people without health insurance coverage would increase upon enactment of H.R. 3762 but that the increase would be limited initially, because insurers would have already set their premiums for the current year, and many people would have already made their enrollment decisions for the year. Subsequently, in the first full plan year following enactment, by CBO and JCT’s estimates, about 18 million people would become uninsured. That increase in the uninsured population would consist of about 10 million fewer people with coverage obtained in the nongroup market, roughly 5 million fewer people with coverage under Medicaid, and about 3 million fewer people with employment-based coverage.

Most of those reductions in coverage would stem from repealing the penalties associated with the individual mandate. However, CBO and JCT also expect that insurers in some areas would leave the nongroup market in the first new plan year following enactment. They would be leaving in anticipation of further reductions in enrollment and higher average health care costs among enrollees who remained after the subsidies for insurance purchased through the marketplaces were eliminated. As a consequence, roughly 10 percent of the population would be living in an area that had no insurer participating in the nongroup market.

Effects on Premiums. According to CBO and JCT’s analysis, premiums in the nongroup market would be roughly 20 percent to 25 percent higher than under current law once insurers incorporated the effects of H.R. 3762’s changes into their premium pricing in the first new plan year after enactment. The majority of that increase would stem from repealing the penalties associated with the individual mandate. Doing so would both reduce the number of people purchasing health insurance and change the mix of people with insurance—tending to cause smaller reductions in coverage among older and less healthy people with high health care costs and larger reductions among younger and healthier people with low health care costs. Thus, average health care costs among the people retaining coverage would be higher, and insurers would have to raise premiums in the nongroup market to cover those higher costs. Lower participation by insurers in the nongroup market would place further upward pressure on premiums because the market would be less competitive.

Estimated Changes After the Elimination of the Medicaid Expansion and Subsidies

The bill’s effects on insurance coverage and premiums would be greater once the repeal of the Medicaid expansion and the subsidies for insurance purchased through the marketplaces took effect, roughly two years after enactment.

Effects on Insurance Coverage. By CBO and JCT’s estimates, enacting H.R. 3762 would increase the number of people without health insurance coverage by about 27 million in the year following the elimination of the Medicaid expansion and marketplace subsidies and by 32 million in 2026, relative to the number of uninsured people expected under current law. (The number of people without health insurance would be smaller if, in addition to the changes in H.R. 3762, the insurance market reforms mentioned above were also repealed. In that case, the increase in the number of uninsured people would be about 21 million in the year following the elimination of the Medicaid expansion and marketplace subsidies; that figure would rise to about 23 million in 2026.)

The estimated increase of 32 million people without coverage in 2026 is the net result of roughly 23 million fewer with coverage in the nongroup market and 19 million fewer with coverage under Medicaid, partially offset by an increase of about 11 million people covered by employment-based insurance. By CBO and JCT’s estimates, 59 million people under age 65 would be uninsured in 2026 (compared with 28 million under current law), representing 21 percent of people under age 65. By 2026, fewer than 2 million people would be enrolled in the nongroup market, CBO and JCT estimate.

According to the agencies’ analysis, eliminating the mandate penalties and the subsidies while retaining the market reforms would destabilize the nongroup market, and the effect would worsen over time. The

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Gasolinazo protests continue to rage in Mexico


The gasolinazo, the name Mexicans have given the the government-mandated 20 percent hike in gas prices as a result of the partial privatization of Mexico’s national oil monopoly, continues to inspire massive discontent.

President Enrique Peña Nieto, whose administration mandated the price hike. Has watched his poll numbers plummet, with only one in four Mexicans approving of his handling of the office.

And now he’s trying to cool things down.

From the Associated Press:

Mexico’s president tried again on Thursday to calm anger over the big jump in gasoline prices this month amid a historically weak currency and continued threats by Donald Trump to steer manufacturers back to the United States.

In his latest speech, the deeply unpopular President Enrique Pena Nieto outlined measures that he said would help families mitigate the impact of the price hike. Yet steps like notifying more than 3 million Mexicans older than 65 that they have money in government retirement accounts seemed unlikely to dissipate the outrage that led to widespread looting in parts of the country and marches calling for his resignation.

Earlier this week, Pena Nieto promised to police price increases for staple goods and invest in modernizing public transportation. But it was difficult to see how any of that could make up for the overnight 20 percent increase in the price of gasoline when the government ended price controls.

After days of seeking ways to strike a calming chord, Pena Nieto tried taking a more relaxed posture Thursday, leaning casually on the podium, cracking jokes — and telling Mexicans to suck it up.

Protests lead to State Department warning

Just how tense the situation in Mexico has become can be judged by this travel advisory from the State Department:

The U.S. Consulate General Nogales informs U.S. citizens that large demonstrations are expected at Port of Entry DeConcini January 14-15, 2017 to protest the increase in gasoline prices.  U.S. citizens are urged to use the Mariposa Port of Entry until further notice. As always, avoid areas of demonstrations, and exercise caution if in the vicinity of any large gatherings, protests, or demonstrations.

Demonstrations in Nogales last Sunday turned violent, with police firing numerous warning shots in an attempt to turn back protesters.

Protests continue, on a reduced scale

A report from Business Insider:

Protests against the gas price hike imposed by the Mexican government at the start of this year have spread across the country, appearing in at least 28 of Mexico’s 32 states.

Many of the protests have been peaceful, but in some areas demonstrators have shut down gas stations and facilities belonging to the state oil company, Pemex.

Elsewhere, protests against the gasolinazo, as the price increase has come to be called, have boiled over into looting and violence.

In Mexico City, one police officer was killed while trying to stop looting at a department store, and elsewhere police officers joined in to ransack stores. At least six people have been killed and more than 1,500 have been arrested.

Looting seen during the first week of the year largely subsided this week, but in Tijuana, which shares the Western Hemisphere’s busiest land-border crossing with San Diego, protesters continue to block traffic and confront authorities. Since the price increase — designed to let prices float in response to supply and demand — Tijuana and Baja California state have seen some of the country’s highest prices.

One protest, a blockade in the city of Rosarita, turned violent earlier this week, with at least seven people hurt when a truck rammed the barricade.

A video via the San Diego Informer:

U.S. gas stations on the border do a booming business

While the gasolinazo had been bad for Mexican businesses, it’s proving a real boon for one kind of business on this side of the border.

From Bloomberg Markets:

Mexico’s fuel market liberalization has done something rarely seen before: make California’s pump prices look cheap.

Drivers are flooding across the border to southern California to fill up on gasoline, after protesters blocking distribution centers near the Baja California capital of Mexicali caused stations to run dry. Antunez’s Shell gas station in Calexico is just five blocks away from the Mexican border and rarely has business been as busy as now. Mexicali drivers wait four to five hours to cross into the U.S. just to fill their fuel tanks and then wait two more hours to cross back into Mexico.

>snip<

Unleaded gasoline in Mexicali was increased in January to 16.17 pesos a liter, or $2.815 a gallon. Seventeen miles north across the border in El Centro, California, pump prices jumped 5.3 cents a gallon to average $2.718 as of 5 p.m. New York time Wednesday, according to GasBuddy, a price tracking company.

“There is a very important commercial exchange happening in the border region,” said Jose Angel Garcia, the president of Mexico gasoline retailer association Onexpo. “There are trucks with large tanks being used to bring fuel into Mexico from the U.S.”

More from CSP News, a trade publication for gasoline retailers in the U.S.:

In Calexico, Calif., gas stations reported a tripling in fuel sales and waits of an hour or more for fill-ups, according to The Desert Sun. The town of 40,000 sits across the border from Mexicali, where protesters had earlier blocked the road into the central fuel distribution center, causing local gas stations to run out of fuel. Federal police cleared the blockade, but waits for fuel in Mexicali were still more than an hour that same day.

“It’s great for us,” Juan Arce, the manager of two SoCo Express gas stations in Calexico, told the newspaper. “I do feel bad for the people to the south.”

Several retailers in Calexico reported similar spikes in business. “It’s been more than double,” said Carlos Vera, manager of a Shell-branded site. On a high-volume day, the gas station typically sells 5,000 gallons of gas; the weekend of Jan. 7, it sold nearly 10,000. Its supplier has had to refill its underground storage tanks each day, Vera said.

Motorists were filling up gallon gasoline containers, empty laundry soap containers and even metal barrels to bring back into Mexico for family and friends.

Cartels add gas to their drug business

And in Mexico, there’s one organization already doing business in a highly valued commodity where the demand is great and the market is eager to buy.

So it should come as no surprise that they, too, are getting into the gasolinazo.

From Bloomberg Businessweek:

The black market is booming. Several states experienced gasoline shortages at the end of last year as more thieves tapped into state-owned Petróleos Mexicanos (Pemex) pipelines. The pilfered fuel was sold to drivers hoping to save money. Pipeline theft in 2015 increased sevenfold, to more than 5,500 taps, from just 710 in 2010. Pemex attributes the company’s 12-year slide in crude production in part to the growth in illegal taps.

The drug cartels have turned to fuel theft as a side business worth hundreds of millions of dollars each year, and crime groups focused solely on gasoline robbery have sprung up, says Alejandro Schtulmann, president of Empra, a political-risk consulting firm in Mexico City. “You only need to invest $5,000 or $8,000 to buy some specific equipment, and the outcome of that is huge earnings.”

Fuel theft creates a vicious cycle: The theft increases costs for Pemex and makes the official gasoline supply more scarce, contributing to higher prices for legal consumers. Theft amounts to about $1 billion a year, says Luis Miguel Labardini, an energy consultant at Marcos y Asociados and senior adviser to Pemex’s chief financial officer in the 1990s. “If Pemex were a public company, they would be in financial trouble just because of the theft of fuel,” he says. “It’s that bad.”

And while on the subject of funny business. . .

Consider this from teleSUR English:

An anti-corruption group in Mexico revealed Tuesday that the energy minister, as well as relatives of President Enrique Peña Nieto, had financial interests in the recent gas hikes that have sparked protests across the country for the second week in a row.

Energy Minister Pedro Joaquin Coldwell is a shareholder of four of the five gas stations on the Caribbean island of Cozumel in partnership with his sister and two sons.

One of the gas stations was closed down in April 2016 over alleged manipulations of prices, as the station was not providing the amount of diesel customers were paying for, Mexicans Against Corruption and Impunity exposed in the official reports by Profeco, the oil watchdog in Mexico. The ruling was appealed.

The investigative paper Aristegui Noticias denounced a conflict of interests even more problematic in the context of the contested gas price hike. “Coldwell is the head of the energy sector in Mexico. As the energy minister, he could access privileged information on the oil business,” said the article.

Coldwell denied any interference in the administration of the four gas stations in an interview with the anti-corruption group, adding he will pass over his shares to a trustee in order to avoid conflicts of interests.

Quote of the day: On America’s plutocratic press


From an essay by musician and writer Will Meyer for Jacobin:

Today, at the same time local newspapers shut down and cut costs, the combination of increasingly concentrated ownership and for-profit technological innovation has convinced a new generation of billionaires to buy up media outlets and launch new media enterprises.

Some have become the personification of avarice and confused priorities. They purchase a newspaper, gloating about their investment in the public interest, and then offer their newsroom a big shrug as they slash jobs to increase profit margins. Others are philanthropists who support adversarial public interest journalism or inject much-needed cash into shrinking newsrooms.

Yet the problem isn’t the character of individual billionaires per se, but the fact that the political system has allowed such power to accumulate in the first place.

While it matters on some level whether these billionaire-owned or privately funded outlets churn out self-interested coverage (as Sheldon Adelson wants his Las Vegas Review-Journal to do) or critical reporting (as Pierre Omidyar justifiably sees his First Look Media as doing), a journalism dependent on the whims of the wealthy is not a media system worthy of a democracy.