The Ugly Truth

In the sequel to an Inconvenient Truth, this movie discusses the abject and overall failure of both Government and the Private Sector in doing anything more than covering their asses, making immense wealth for themselves and their group and the utter failure by the lower 99% to do anything more than watch cable news talking heads rant on with the same ole same ole day after day. My only hope is that the make fresh coffee and those hideous pastries no one eats gets switched out.

We can lay blame and point fingers all we want and do at every percentile, every oligarch, rich fat cat and government bureaucrat who has somehow contributed or failed to resolve the ever surmounting problems that are kicked down the road, saved for a rainy day, buried under a blanket, swept under the rug or become a part of the "national" discussion or Congressional hearing called to debate the subject then do nothing.

I have seen the big whale, Moby Dick, aka Jamie Dimon, testify, seen sports stars crying, famous comedians don their persona's, heard from Joe the Plumber or whomever is this week's spokes model for whatever subject is floating at the top of this scummy pond.  Very rarely, if ever, do I hear of those actually suggesting ideas, offering clear plans and information on what we the "average" individual can do to improve our Governance and in turn our Society.   It is Kabuki Theatre without the Kabuki.

And we still have the ubiquitous tech sector proclaiming themselves "saviors to the world" but in reality they are no different than any plutocrat seeking to ensure their place and status in the hierarchy of the upper percent. Their nasty role in the current immigration bill demonstrates what the "saviors" and "job creators" do with their influence and money.  Meet the new boss same as the old.  My new favorite tech funding, crowd sourcing is now drones.  Yes this year coming to a satellite near you, just in case those Google Glasses don't work out.

I watched Bill Moyers as I do every Sunday and once again very provocative intelligent human beings who don't make the cable lather rinse repeat circuit discuss real issues of import and offer ways to make a difference.  On Sunday,  I read an interesting editorial that clearly reminds us that we have failed ourselves by no longer voting, participating in union memberships actively and by ostensibly bowling alone when it comes to actually doing something to move ourselves out of the muck and mire where we have been the last 30 years.  And another that discusses the celebrification of our culture to the point of extreme.  To think they remade the Great Gatsby, it couldn't have come at a better time.   Taking hubris with the idiocy to a whole new level. Shame Shame Shame. 

I cannot say why we have so little respect for what worked in past and the sheer disdain and anger we seem to have for those who are like us.  We presume that many are middle class and rich and successful and they got there due to "hard work" and the other Unicorn myths that we cling to like lint on rayon.  But we also have generations, yes more than one as in plural, who are so badly educated, so poorly informed, so unintellectually curious and disengaged that may be a large part of the problem. And of course blaming Unions or other extraneous factors are the usual suspects rather than a decline in funding for Education for decades and an antiquated system of electing anyone to a school board and having no central cohesion to determine overall needs academically along with income inequity gets the "unskilled' workforce we hear so much about.

Even Frank Bruni, whom I find idiotic as a NYT editorials occasionally hits one out of the park and this piece that reminds one of Jaywalking only that you are the jaywalker resonates and America the Clueless is something that is neither surprising or shocking. What is is the constant refrain by talking heads saying "Americans are smart enough to know..." Really? Been in a classroom lately? I have.

If we continue to do nothing we will have and be nothing.  Think what happened in Bangladesh could not happen here? It has and it can happen again. We are moving backward and yes those who do not recall history are doomed to repeat it. We may have no choice. Occupy Wall Street started something but like all things did nothing more than open up that national dialog.. enough with the talking.

The Great Divide
 May 18, 2013

The 1 Percent Are Only Half the Problem

By TIMOTHY NOAH


Most recent discussion about economic inequality in the United States has focused on the top 1 percent of the nation’s income distribution, a group whose incomes average $1 million (with a bottom threshold of about $367,000). “We are the 99 percent,” declared the Occupy protesters, unexpectedly popularizing research findings by two economists, Thomas Piketty and Emmanuel Saez, that had previously drawn attention mainly from academics. But the gap between the 1 percent and the 99 percent is only half the story.

Granted, it’s an important half. Since 1979, the one-percenters have doubled their share of the nation’s collective income from about 10 percent to about 20 percent. And between 2009, when the Great Recession ended, and 2011, the one-percenters saw their average income rise by 11 percent even as the 99-percenters saw theirs fall slightly. Some recovery!

This dismal litany invites the conclusion that if we would just put a tight enough choke chain on the 1 percent, then we’d solve the problem of income inequality. But alas, that isn’t true, because it wouldn’t address the other half of the story: the rise of the educated class.

Since 1979 the income gap between people with college or graduate degrees and people whose education ended in high school has grown. Broadly speaking, this is a gap between working-class families in the middle 20 percent (with incomes roughly between $39,000 and $62,000) and affluent-to-rich families (say, the top 10 percent, with incomes exceeding $111,000). This skills-based gap is the inequality most Americans see in their everyday lives.

Conservatives don’t typically like to talk about income inequality. It stirs up uncomfortable questions about economic fairness. (That’s why as a candidate Mitt Romney told a TV interviewer that inequality was best discussed in “quiet rooms.”) On those rare occasions when conservatives do bring it up, it’s the skills-based gap that usually draws their attention, because it offers an opportunity to criticize our government-run system of public education and especially teachers’ unions.

Liberals resist talking about the skills-based gap because they don’t want to tell the working classes that they’re losing ground because they didn’t study hard enough. Liberals prefer to focus on the 1 percent-based gap. Conceiving of inequality as something caused by the very richest people has obvious political appeal, especially since (by definition) nearly all of us belong to the 99 percent. There’s also a pleasing simplicity to the causes of the growing gap between the 1 and the 99. There are only two, and both are familiar liberal targets: the rise of a deregulated financial sector and the erosion of accountability in compensating top executives outside finance. (The cohort most reflective of these trends is actually the top 0.1 percent, who make $1.6 million or more, but let’s not quibble.)

Both halves of the inequality story should command our attention, because both represent a dramatic reversal of economic trends that prevailed in the United States for most of the 20th century. From the 1930s through the 1970s the 1 percent saw its share of national income decline, while the “college premium” either fell or followed no clear up-or-down pattern over time.

At least some of the tools to restore these more egalitarian trends shouldn’t be divisive ideologically. Liberals and conservatives both recognize the benefits of preschool education, which President Obama has proposed making universally available. I’ve never met an affluent 4-year-old who wasn’t enrolled in preschool, but nationwide about one-third of kids that age aren’t.

Another reform both conservatives and liberals have supported — though at different times — is withholding federal aid from colleges and universities that can’t control tuition increases. Mr. Obama proposed it in his last two State of the Union addresses; House Speaker John A. Boehner was a sponsor of a bill to do the same in 2003.

THERE is also more bipartisan support than you might suppose for restricting some of the Wall Street excesses that enrich the 1 percent. The impetus to do so isn’t inequality so much as fear that an out-of-control banking sector will once again create economic crisis and compel Congress to bail out the big banks. Congressional Republicans have been blocking proper implementation of the Dodd-Frank financial reforms, but a growing chorus of conservative voices, including the columnist George F. Will, the former Utah governor Jon M. Huntsman Jr. and Richard W. Fisher, president of the Federal Reserve Bank of Dallas, favor breaking up the big banks. Senators David Vitter, Republican of Louisiana, and Sherrod Brown, Democrat of Ohio, have sponsored a bill to require the largest banks to hold more capital reserves, or become smaller.

One reason the left plays down the growing skills-based gap is that it accepts at face value the conservative claim that educational failure is its root cause. But the decline of labor unions is just as important. At one time union membership was highly effective at reducing or eliminating the wage gap between college and high school graduates. That’s much less true today. Only about 7 percent of the private-sector labor force is covered by union contracts, about the same proportion as before the New Deal. Six decades ago it was nearly 40 percent.

The decline of labor unions is what connects the skills-based gap to the 1 percent-based gap. Although conservatives often insist that the 1 percent’s richesse doesn’t come out of the pockets of the 99 percent, that assertion ignores the fact that labor’s share of gross domestic product is shrinking while capital’s share is growing. Since 1979, except for a brief period during the tech boom of the late 1990s, labor’s share of corporate income has fallen. Pension funds have blurred somewhat the venerable distinction between capital and labor. But that’s easy to exaggerate, since only about one-sixth of all households own stocks whose value exceeds $7,000. According to the left-leaning Economic Policy Institute, the G.D.P. shift from labor to capital explains fully one-third of the 1 percent’s run-up in its share of national income. It couldn’t have happened if private-sector unionism had remained strong.

Reviving labor unions is, sadly, anathema to the right; even many mainstream liberals resist the idea. But if economic growth depends on rewarding effort, we should all worry that the middle classes aren’t getting pay increases commensurate with the wealth they create for their bosses. Bosses aren’t going to fix this problem. That’s the job of unions, and finding ways to rebuild them is liberalism’s most challenging task. A bipartisan effort to revive the labor movement is hardly likely, but halting inequality’s growth will depend, at the very least, on liberals and conservatives better understanding each other’s definition of where the problem lies.





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Wired Up

I have long never understood the stranglehold of the Telecom and Cable industry in most Cities in America. Where we have massive parts of our country still in dial up and others without any internet connection it still makes me laugh back to the days when Bill Clinton and Al "I invented the internet" Gore (ironically now a VC in Silicon Valley) promised to move America into the 21st Century when it came to internet access. What I think he meant was setting up the dot com bomb of his era but close enough.

We are no further along and in fact like many industries in America, the telecom industry is much like others, swallowed up by hedge funds, consolidated, sold off or absorbed into other bigger ones. The baby bells of the past now gone with fewer choices, options and in turn prices to the consumer.

Add to that the fees that are charged for stations and sports programming few watch but thanks to the sports world obsession with high salaries they charge outrageous licensing fees to offset their payroll.  As a result we have little  choices and options to cable packages and in turn costs.

David Carr had a great column about this subject today and the woman who is intent on informing and in turn perhaps changing the climate when it comes to the hot air that emanates from the grand capitalists, be they in Government or not.  In reality they are interchangeable and indistinguishable.

Telecom’s Big Players Hold Back the Future

By DAVID CARR
Published: May 19, 2013


If you were going to look for ground zero in the fight against a rapidly consolidating telecom and cable industry, you might end up on the fifth floor of the Benjamin N. Cardozo School of Law in New York.

Susan Crawford, a professor at the school, has written a book, “Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age,” that offers a calm but chilling state-of-play on the information age in the United States. She is on a permanent campaign, speaking at schools, conferences and companies — she was at Google last week — and in front of Congress, asserting that the status quo has been great for providers but an expensive mess for everyone else.

Ms. Crawford argues that the airwaves, the cable systems and even access to the Internet itself have been overtaken by monopolists who resist innovation and chronically overcharge consumers.

The 1996 Telecommunications Act, which was meant to lay down track to foster competition in a new age, allowed cable companies and telecoms to simply divide markets and merge their way to monopoly. If you are looking for the answer to why much of the developed world has cheap, reliable connections to the Internet while America seems just one step ahead of the dial-up era, her office — or her book — would be a good place to find out.

In a recent conversation, she explained that wired and wireless connections, building blocks of modern life, are now essentially controlled by four companies. Comcast and Time Warner have a complete lock on broadband in the markets they control, covering some 50 million American homes, while Verizon and AT&T own 64 percent of cellphone service. Don’t get her started on the Comcast-NBCUniversal merger unless you have some time on your hands.

But don’t look for a jeremiad, either. A violist who plays in string quartets when she is not hammering telecom companies, Ms. Crawford is precise in her arguments and far from frantic in making them. The captains of industry who kidnapped telecoms and cable are not monsters, she says, merely shrewd capitalists who used leverage to maximize returns, no different or worse than the railroad or electricity barons of times past.

“They have acted in parallel to exclude competitors and used every lever they had to gain control over their markets. My whole book is essentially an argument to buy stock in cable companies,” she said with a laugh.

Her arguments don’t end there. High-capacity fiber connections to homes and businesses are not just a social good, but a business imperative, she says, and the lack of them will cripple American efforts to compete in a global economy.

Ms. Crawford said she believed that cities and states should take back control of their information infrastructure before it is too late. Already, 19 states have bent to the lobbying influence of established players and raised barriers to the public-private partnerships that would compete with legacy companies.

Verizon had been building out fiber optic cable networks — expensive to create but a dream to use — that were part of the competition envisioned by the telecommunications act. But in 2010, the company decided that it was a capital-intensive effort that offered less return than high-margin wireless, so it stopped expanding when just 14 percent of American homes have access to their fiber optic network.

Too bad, that. I have Verizon’s service, and even though it is expensive, it is fundamentally superior to Internet via cable because fiber can carry unlimited data, which means smooth downloading and streaming.

In 2012, Verizon entered into a joint marketing agreement with the cable companies, blessed by the Federal Communications Commission, so the former competitors are now firm allies.

“There has been a division of, ‘You take the wires, we’ll take wireless,’ which means that there is very little competition and investment, and very little access to high-speed connections,” Ms. Crawford said. It is worth pointing out that the billionaire Carlos Slim Helú controls 80 percent of the landlines in Mexico and 70 percent of the wireless market there. His recent appearance at the New York Public Library was accompanied by protests that his outsize presence was hurting consumers in Mexico. (Mr. Slim holds a minority stake in The New York Times Company.)

While consumers love to complain about their cable companies and Internet service, it’s sort of like the weather — no one does anything about it because no one can. And then there is Ms. Crawford. The New Republic recently called her “the next Elizabeth Warren,” suggesting that, just as Ms. Warren had been to the banking sector, Ms. Crawford “has become a dreaded figure to the industry she wants to reform.”

There are signs her argument is gaining traction. In March, the Georgia House of Representatives voted down a proposal that would have prevented cities from investing in their own Internet-access networks.

And she is hardly a lone gadfly shouting against the wind. When the F.C.C. chairmanship came open recently, petitions sprang up all over the Web, suggesting that President Obama select Ms. Crawford in an effort to return consumer fairness and balance to regulatory matters.

Instead, the president has nominated a venture capitalist and former chief lobbyist for the telecommunications industry, Tom Wheeler. As Politico reported, Mr. Wheeler will have to divest himself of a large portfolio of industry holdings in order to take the job. Perhaps that shedding of assets will help him in his transition to an advocate for American consumers stung by hefty Internet, cable and wireless costs.

Ms. Crawford says that Mr. Wheeler is smart and may well do a good job. But Mr. Wheeler may have more than disgruntled consumers to deal with. American business is increasingly stuck with the same creaky, expensive connections while competitors from South Korea, France and other countries are getting much faster speeds at much lower costs.

On Friday, Ms. Crawford was fresh off a visit to Santa Monica, Calif., which is building out its own high-speed infrastructure.

“People there told me that incoming businesses care more about access to fiber than any other attribute in a building,” she said in a phone call. “It’s very much like electricity. They want reliable service at a reliable cost.”

She suggests that because broadband providers are often working inside protected monopolies, there is no incentive for expensive upgrades that would lead to a modern, wired version of America.

Postmerger, Comcast has a large content business in the form of NBC, so any potential competitor realizes that it is going up against a company with control over precious cable and sports programming assets. And because telecoms and cable companies have done a great job of developing relationships in Washington — as a business, it is more generous in terms of donations than the banking industry — there is little pressure from politicians or regulators.

Ms. Crawford, with a smile on her face, says the outlook is grim.

“We are in this position as a country because we assumed that the magic of the marketplace would provide competition and provide world-class communications,” she said. “But history has demonstrated that left to their own devices, companies will gouge the rich, leave out the poor, cherry-pick markets and focus solely on their profits. It isn’t evil, it’s just the way things work.”

It's Jerseyliscious

New Jersey is either the target of a national obsession or a state of mockery in more ways than one.  When the recent Governor Chris Christie admitted to having lap band surgery to assist in his inability to control his weight I had to wonder did they have one for his tongue too. The Governor is not short on his ability to use it to weigh heavy criticisms on anyone who gets in his way, be it the buffet bar or anything else either.

And then comes the article below declaring a hospital in Bayonne as the most expensive in the Nation.  Why doesn't that surprise me?  At this point it would take more than Hurricane Sandy to destroy the hubris that is New Jersey.

It is these stories, these hospitals, these corporations in charge of medicine and care that are driving up the costs and in turn Medicare and Medicaid costs, not the poor and the infirmed Boomers that are being blamed for why these programs must be stopped.  Well Tony Soprano should got out of the Mafia much sooner as clearly medical exploitation pays better.  Just ask Carmela or Nurse Jackie as she is now known.

Honestly this is what is the problem and not the public service programs that try to help those navigate a system sicker than those they treat.  It is a disgrace and shameful as President Obama said this week, just about something else but good enough.

So much for transparency, this glass is dirty and needs more than Windex to see through it and clean it up.


New Jersey Hospital Has Highest Billing Rates in the Nation


By JULIE CRESWELL, BARRY MEIER and  JO CRAVEN McGINTY
Published May 18, 2013 

Bayonne, N.J.- The most expensive hospital in America is not set amid the swaying palm trees of Beverly Hills or the luxury townhouses of New York's Upper East Side.

Data released last week shows how much hospitals charged Medicare for 100 common types of cases. Bayonne Medical Center billed at a rate that was more than four times the national average, the highest in the country.

It is in a faded blue-collar town 11 miles from Midtown Manhattan.  Based on the bills it submits to Medicare, the Bayonne Medical Center charged the highest amounts in the country for nearly one-quarter of the most common hospital treatments,  according to a New York Times analysis of 2011 data, the most recent available. No other hospital was at the top of the price list more often.

Bayonne Medical typically charged $99,689 for treating each case of chronic lung disease, 5.5 times as much as other hospitals and 17.5 times as much as Medicare paid in reimbursement. The hospital also charged on average of $120,040 to treat transient ischemia, a type of small stroke that has no lasting effect. That was 5.6 times the national average and 23.6 times what Medicare paid.

For those prices, the quality of care at Bayonne Medical is no better — or worse — than that at most other New Jersey hospitals. In a 2011 state hospital quality report, Bayonne Medical scored only in the top 50 percent.

But profits at the hospital, which was bankrupt in 2007, have soared in recent years, in part because it has found a way to turn some of those high billings into payments.

The increasingly contentious issue of hospital charges drew renewed attention last week when the federal government released Medicare data showing that facilities nationwide submitted widely divergent bills for the same treatments.

And while the unassuming, six-story brick hospital here holds a notable place in those rankings, others stand out as well. The midsize Crozer-Chester Medical Center in Upland, Pa., was the top biller in the country for urinary tract infections.

One prestigious Manhattan hospital, NYU Langone Medical Center, charged twice as much as the equally high-end NewYork-Presbyterian to implant a cardiac pacemaker. But Medicare considers the two New York hospitals so similar it pays them both about $20,000 for the procedure.

The hospital industry is quick to say that the charges are irrelevant because virtually no one — private insurers, Medicare or even the uninsured — pays anywhere near those amounts. Medicare sets standard rates for treatments and insurers negotiate with hospitals. But experts add that the charges reflect decades of maneuvering by hospitals to gain an edge over insurers and provide themselves with tax advantages.

Until a recent ruling by the Internal Revenue Service, for instance, a hospital could use the higher prices when calculating the amount of charity care it was providing, said Gerard Anderson, director of the Center for Hospital Finance and Management at Johns Hopkins. “There is a method to the madness, though it is still madness,” Mr. Anderson said.

A close look at the finances of Bayonne Medical Center sheds light on how hospital pricing at the extremes may financially benefit an institution. The practices at Bayonne Medical also highlight a new financial strategy used by a small number of hospitals to increase their profits by “going out of network” — severing ties, and hence contractual agreements that limit reimbursement rates, with large private insurers.

Neither officials nor owners of Bayonne Medical responded to multiple calls and e-mail requests for interviews. Because the company is privately held, it does not have to release financial data.

Bayonne Medical, which was founded in 1888, was losing nearly $1.5 million a month before it filed for bankruptcy in 2007. By 2011, under new ownership and a new financial model, its patient revenue had nearly tripled and its operating income had reached $9.3 million, according to the American Hospital Directory, a publication that compiles data from Medicare and other sources about health care facilities.

The hospital’s turnabout started in 2008 when it was acquired out of bankruptcy by a consortium of buyers in a deal valued at about $41 million.

Bayonne’s purchasers included Vivek Garipalli, who worked at the private equity giant Blackstone Group before co-founding the International Sleep Network, a company based in New Jersey that treats patients with sleep apnea and other disorders. Joining Mr. Garipalli was Jeffrey Mandler, the head of a health care imaging firm. To make money from Bayonne Medical, the new buyers made some big changes in the hospital’s business strategy.

First, they converted Bayonne Medical from a nonprofit to a for-profit hospital at a time when such hospitals were a rarity in New Jersey. Next, they moved to sever existing contracts with large private insurers, essentially making Bayonne Medical an out-of-network hospital for most insurance plans.

Under New Jersey law, patients treated in a hospital emergency room outside their provider’s network have to pay out of pocket only what they would have paid if the hospital was in the network. But an out-of-network hospital can bill the patient’s insurer at essentially whatever rate it cares to set. While the insurers can negotiate with the hospital, they generally end up paying more than they would have under a contractual agreement.

In recent years, Bayonne Medical put up digital billboards highlighting the short waits in its emergency rooms in an effort to attract more patients. Insurers complained that the hospital was seeking to take advantage of the higher rates it could charge.

While the law was aimed at giving patients more hospitals to choose from, it “has had the unintended consequence of rewarding folks for these inflated charges,” said Wardell Sanders, president of the New Jersey Association of Health Plans. “When people say these charges are just the sticker price and it’s meaningless, it’s not meaningless.”

Community leaders in Bayonne, fearing the hospital could close, said the buyers were always candid about the methods they intended to use to make the hospital a profitable enterprise.

“That raised a lot of concern, but what other choice did we have?” said Jeanne Otersen, who was a member of the Coalition to Save Bayonne Medical Center and is policy director for the Health Professionals and Allied Employees, a union that represents nurses at the facility.

Not surprisingly, the insurers fought back against the out-of-network model. In 2009, Horizon Blue Cross Blue Shield of New Jersey filed an injunction in New Jersey Superior Court saying Bayonne Medical’s owners had “flatly rejected” and refused to negotiate an in-network hospital contract with Horizon. When the existing agreement expired in early 2009, Horizon said Bayonne sharply increased its prices. Bayonne’s in-network charges to Horizon averaged $13,000 a day in 2008. A year later, when it was out of network, the charges soared to $29,000, the insurer said in a spring 2009 news release.

Bayonne Medical denied allegations in Horizon’s lawsuit that it was artificially inflating prices, and filed its own lawsuit against Horizon, claiming the insurer had intimidated patients and tried to get them to leave the facility before completing their treatments.

The two eventually settled in 2011, and Horizon became an in-network insurance provider. A spokesman for Horizon declined to comment on Bayonne Medical’s charges, citing terms of the settlement agreement.

Still, many other large insurance companies, including Cigna, United Healthcare and Aetna, remain out of network at Bayonne and are paying the higher bills. “Their model is to charge exorbitant rates, particularly for emergency room services, and if the insurance companies don’t pay them, they threaten to go after the member for the balance of billing,” said Carl King, head of national networks for Aetna, whose in-network contract was also ended by Bayonne in 2008.

Like Horizon, Aetna said its bills from Bayonne Medical soared, and it also filed a lawsuit in 2011. The suit was dismissed.

Aetna’s internal data showed that Bayonne Medical’s emergency room charges jumped again in 2012 and are running 6 to 12 times as high as those of surrounding hospitals. Last fall, Mr. Garipalli bought the designer Tory Burch’s oceanside home in Southampton for $11 million, according to public records.

After purchasing Bayonne Medical, the investor group went on a buying spree, acquiring Hoboken University Medical Center in 2011 and the bankrupt Christ Hospital in Jersey City last year. “This hospital is clearly pursuing an out-of-network strategy with a profit motive in mind and taking advantage of members who seek emergency services at their facility,” Mr. King said.

Control Authority Domination

Those are the words that automatically come to mind when I think of the Military. And there is nothing wrong with that when it comes to war and battle.  There has to be Chief's and there have to be Indians and while I have no military experience what-so-ever, well watching war films with my father should count, along with Westerns puts me in a place of informative knowledge right? I do think that you need to realize that many of our Military are young people who have enlisted by choice (or not, what ever) and in turn need to learn the protocol, the dynamics and in turn the strategies that should enable them to save lives and in turn defend the vague and highly subjectivity of war.

And of late the increasing attention to sexual assaults on our Military members by the hand of their commanders or those in position often ignoring, overturning or in turn "blaming the victim" or the idea of a "hook up" culture has shown we can fight on the frontline for defense of our country but not for our rights as individuals.

This is not new, Tailhook anyone?  If you have not seen the Invisible War, I suggest you do as it documents the tragedy of those men (yes men) and women who are victims in this sickness that appears to be spreading throughout the chain of command.  The never ending stories of disturbing behavior by those in our Military are also extended beyond the barrack walls and into our communities. As many of these perpetrators will be ending their terms and moving into them, welcome home!

There are a few bills in Congress right now dealing with the issues of sexual assault in the Military, but the perfect spokes model and talking head for all things Military, John McCain is busy chasing rainbows to actually do anything useful to make this an issue of import and in turn law.

President Obama called this situation "shameful" I have much stronger language but I am exhausted reading about the continual rape and abuse of women (and men) by the hands of men who are anything but men.


Multiple Proposals on Assault in Military, but Also Disagreement

By JENNIFER STEINHAUER
Published: May 15, 2013


WASHINGTON — President Obama, military officials and lawmakers on Capitol Hill are in broad agreement that the sexual assault problem in the military has reached a level of severity that can no longer be tolerated. But that is far different from concurring on how it should be fixed.

After a Pentagon finding that an estimated 26,000 assaults took place last year, a flurry of legislative proposals — seeking changes to the way prosecution decisions are made and how records of sex-crime accusations are kept and perhaps requiring automatic dishonorable discharges for anyone convicted of sexual assault, among other things — is flowing through Capitol Hill, some at cross purposes. 

On Thursday, Mr. Obama will meet with senior Pentagon officials to discuss legislative responses to the sexual assault crisis. 

Also on Thursday, Senator Kirsten E. Gillibrand, the New York Democrat who has made this her signature issue this year, will introduce legislation that would give military prosecutors rather than commanders the power to decide which sexual assault cases to try. Ms. Gillibrand’s goals are to increase the number of people who report crimes without fear of retaliation and to give legal power to military prosecutors.  

The legislation, which many military justice experts said they believed was key to stemming the problem, is gaining some support but also prompting ambivalence on Capitol Hill, where many lawmakers are reluctant, for various and often opposing reasons, to remove prosecutorial powers from military commanders.   

There is also disagreement over whether sex crimes should be singled out for different prosecutorial treatment than other serious crimes. 

It is not clear that Ms. Gillibrand’s measure as written has enough votes to pass even the Senate Armed Services Committee, where a record seven women hold seats and where lawmakers are struggling to balance public outrage over the crimes with alienating military brass or creating a multitiered justice system within the military.  

“I just want to make sure we understand all the consequences here,” said Senator Tim Kaine, Democrat of Virginia, a state with numerous military installations. 

While the dissent breaks down somewhat along party lines, it appears to be more determined by the background of the lawmaker, with many former prosecutors in Congress saying the complex task of investigating sexual assault should not be left in the hands of commanders, and those with close ties to the military uncomfortable with a change to a 200-year-old tradition that many Western allies have abandoned. 

 “When charges are brought,” said Senator Claire McCaskill, Democrat of Missouri and a former prosecutor, “it has to have the power and gravitas of the convening authority. There is not the embedded respect” for a military prosecutor in their place, she said. 

But others said they believed that removing the commander from the prosecution would help increase the amount of widely underreported sexual assault crimes by victims who fear retaliation.

“Reporting is the biggest problem right now,” said Senator Susan Collins, the Republican co-sponsor of Ms. Gillibrand’s bill. “We have to remove the stigma and negative consequences” of reporting crimes. 

The failure of the military to contain the problems of abuse was underscored over the last week, during which an Air Force officer and an Army sergeant who led sexual assault prevention programs were accused of assault themselves.  

Defense Secretary Chuck Hagel has so far offered largely tepid solutions, like retraining of sexual assault program directors. Further measures, however, are expected. 

“The secretary is frustrated, angered and disappointed over these troubling allegations as well as the breakdown in discipline and standards they imply,” said Cynthia Smith, a Defense Department spokeswoman. Mr. Hagel directed the services to retrain, re-credential and rescreen all sexual assault prevention and response personnel and military recruiters, she added. 

Valerie Jarrett, a senior adviser to Mr. Obama, has met and spoken extensively with lawmakers about the issue. 

Ms. Gillibrand’s legislation would transfer authority for all serious crimes, a source of disagreement; Ms. Collins noted that sexual assault had unique problems with reporting that did not affect other crimes and therefore might not need to come under the jurisdiction on an outside prosecutor. (An exemption would be made for performance-related offenses.) 

Some legal experts believe that singling out sex crimes for special treatment would marginalize them and miss the broader institutional reason for the change. 

“We preach the rule of law all over the world,” said Eugene R. Fidell, who teaches military justice at Yale Law School. “You’re talking about legal decisions being made right now by nonlawyers. Congress has to make some hard decisions, and the next step is a significant one, but it is one we should take.” 

Other lawmakers seek modified changes. Senators Patty Murray, Democrat of Washington, and Kelly Ayotte, Republican of New Hampshire, are sponsoring a bill that would provide victims of sexual assault with a special military lawyer and would change some of the procedures for courts-martial in the case of sexual assault charges. “I think we are going to come to an agreement,” Ms. Ayotte said.

Ms. Collins is sponsoring a bill to remove convicted sex offenders from the military. Ms. McCaskill has proposed legislation that would end a commander’s ability to nullify a jury verdict and would require a commander to provide written justification for any decision commuting or lessening a sentence after a guilty verdict in a court-martial. 

Ms. McCaskill is holding up the nomination of Lt. Gen. Susan Helms of the Air Force, for vice commander of the U.S. Space Command, because Ms. Helms overturned a jury conviction in a sexual assault case without public explanation.

On Wednesday, Ms. McCaskill met with General Helms to discuss the matter. 

 She also has a bill with Senator Amy Klobuchar, Democrat of Minnesota, that would require the Pentagon to establish strict criteria on who can serve in sexual assault prevention positions.

Many of the women remain optimistic that a melding of the bills will come together in the Senate Armed Services Committee, “and really do something strong and special,” Ms. McCaskill said.

A Milestone Reached

Well in the never ending "debate" about Climate Change in the US was largely ignored as we are busy here with some non-scandals, some real one's and our usual inertia when it comes to addressing global politics or issues of import and ironically in the week where a milestone has been reached - Carbon Dioxide emissions are now at all time high - or not, what-ever.

And as we here in the United States try to pretend that we are still vested in clean energy while meanwhile continuing to exploit the environment and find endless resources for our ever increasing energy needs, Europe struggles to do the same.  Once a green stalwart and cutting edge leader when it comes to clean energy, they too under the austerity program are finding this also a force of that free market debate.  When they say free market where is that free part?

We are finding that without Government "support" aka "entitlements" aka "tax credits" little is done or vested into the betterment of the planet and in turn the people who live in it.  When the Silicon Valley turned their Google glasses on the green field there was a never ending supply of cash and in turn venture capital in all kinds of billion dollar boys clubs interests - Tesla Motors, Solyndra, etc, etc.  Even going so far as to hire Mr. Greenhouse Gas, Al Gore, to a very "important" VC firm, Kleiner Perkins, as their spokes model.  It has worked out well or not. What-ever.   They are back now looking for dot/app bombs or what-ever.

So where are we globally with regards to this? It certainly is austere so it fits right in with that dynamic and argument. Can we learn from those in Europe? Well who knows and cares, right?  The only thing green that we can agree on is the color of money, right? Oh wait Bitcoin is the next big thing, right?


Clean Energy Learns to Compete

By STANLEY REED
Published: May 15, 2013

LONDON — Europe used to be nirvana for companies in the clean-energy business, but in the past couple of years it has become a much tougher place. With economies anemic, electricity demand is down; and, not surprisingly, once-generous subsidies that encouraged installing swaths of solar collectors in sun-poor Germany or wind farms in relatively calm areas of France are either being reduced or look as if they could be. 

But for some people and companies, the harsher environment is fostering a tough-minded approach that may be healthy for the effort in the years ahead to curb the greenhouse gases that are blamed for global warming. 

Europe’s struggles, for instance, pushed Enel Green Power, one of the world’s largest electricity generators from renewable sources like wind and solar, to explore markets like Brazil, Chile and Mexico, that may turn out to be a lot more promising than Europe. 

The bulk of Enel Green Power’s investments used to be in Europe, especially in Italy, its home, and Portugal and Spain. Now the company is mostly putting its new capital into emerging markets.

It’s a no-brainer. In many emerging economies, demand for power is surging. These countries want to harness power sources like wind or solar — if only so that they can conserve their oil and gas for exports. 

Contrary to the practice in much of Europe, where subsidies are used as a lure for renewables projects, developing countries like Brazil often award contracts to build new power capacity through competitions that sometimes pit clean energy against fossil fuels like natural gas and diesel. For instance, Enel Green Power recently won wind power deals in Brazil in bake-offs that included proposals for natural gas-fired stations. 

“There was a competitive approach to renewables that we liked a lot,” said Francesco Starace, the company’s chief executive.

Mr. Starace especially likes long-term deals like the ones he has worked out in Mexico with Nissan and Nestlé to build wind farms to supply factories with power. He hopes to replicate this sort of arrangement across emerging markets, including east Africa. These private, one-on-one arrangements are more sustainable, he figures. 

“You don’t run the risk of a regulator or a state coming back at you and saying, ‘Guys, the good days are over, now we have to talk about reducing this and that,”’ he said.

Tom Murley, who runs two funds with more than $1 billion in renewable energy investments at HgCapital, a private equity firm based in London, takes a similar approach but closer to his home base. 

His great enthusiasm at the moment is building wind farms in Sweden anchored by a large €180 million, or $235 million, array north of Stockholm called Havsnäs that opened in 2010. Mr. Murley likes Sweden because it has very windy sites that mean his wind turbines spin faster and more often than those elsewhere, producing more electricity to help pay off their construction costs.

He also likes Sweden’s low-subsidy regime, which is less tempting for a regulator to cut.

“The closer you are to the wholesale price of power, the less you are at risk,” he said. He is also investing in onshore wind projects in Ireland, where the operating environment resembles that of Sweden. 

Mr. Murley avoids offshore wind, which requires huge subsidies to make economic sense. He is also veering away from solar projects at the moment for similar reasons. Spain, where he made a large earlier commitment to solar, has cut its subsidies, sharply reducing returns and leading to lawsuits from operators, including HgCapital. 

The goal of the renewables business, Mr. Murley said, should be to be competitive eventually on costs with other energy sources and not to rely on subsidies. He also believes in building businesses like his clusters of Swedish wind farms that have the scale to engage a team of managers and the clout to cut better deals with suppliers. His organization tries to buy turbines and other equipment that are reliable rather than cheap and does not skimp on spending money on maintenance.

Renewable energy, he said, “should be run like any other manufacturing business; it is best to be a low-cost producer.” 

Both approaches seem to be working. Enel Green Power, which is 68 percent owned by Enel, the big Italian utility, has seen returns through stock appreciation and dividend of about 26 percent over the past year. The stock price had plummeted earlier, along with that of many other renewables companies. 

As a private organization, Mr. Murley’s company has returns that are harder to divine, but he says he has sold projects, including a British wind farm business, representing about one-third of the investments by his first €300 million fund for about €225 million. 

And both organizations are still investing. Enel Green Power in particular plans to spend €6.1 billion over the next four years. That is good news at a time when carbon dioxide in the atmosphere has reached the highest levels in millions of years. 

Sounding the alarm about greenhouse gases and global warming is fine, but money is required to do something about the problem. And it is not likely to be forthcoming without competitive returns.

The High Cost of Medicine

This has been a couple of weeks dedicated to the increasing national obsession with Medical care, the high to outrageous costs, the sudden drop in overall price rises and that debate, the continual obsession by Congress to repeal "Obamacare", drug kickbacks by big Pharma to doctors and the overall effect Medical costs have on individuals credit and in turn credit reports, which in the circle of life opens another door and in turn another blog post about credit reports and their use in employment screening. So what a week it has been.

The idea that Medical facilities will now have to post their costs for procedures as a way to enable "patients" aka "consumers' shop for medical care and in turn open the idea up to market forces to be more competitive and in turn affordable is LAUGHABLE.

Medicine is an industrial complex, it is not a retail outlet selling cheaper slave labor T-shirts than the other retail chain next door.  I sometimes in those cases try to discern which country has been exploited more in my quest to get the latest jean fashion by reading the label - Made in China, Indonesia, Bangladesh or are they all the same third world country? But again another blog post.

So even if you need your gall bladder removed to assume you have some type of power to comparatively shop and in turn take your bladder to the quack, whoops, I mean Surgeon down the street to perform the operation is laughable. Many hospitals are now chains equivalent to fast food. There are many merged under the operations of both for profit and that other laughable category - non profit - and yet they retain the original name of the facility on the front door.  Only until you read the fine print do you realize that your once community hospital is now under new management.  Here in the greater Seattle area many hospitals once independent are now owned by the State and run by the University of Washington, many county and rural hospitals are now being managed and run by the Catholic chain of medicine and in turn adopting their religious dogma and philosophy in response to care, so in other words your religious beliefs may be in odd with theirs and theirs may simply be in odd with your medical needs, so good luck with that.

And then I read this editorial in the NYT yesterday and laughed out loud. If anyone believes that lawsuits actually improve care, have never either been in a hospital or been in a lawsuit.  As one who in the past year is still trying to resolve the catastrophic care I received knows that this battle is akin to recovery in an whole new level.   The medical matrix industrial complex is much akin to the defense one, fully vested in protecting its own regardless of the lives cost. 

Learning From Litigation

By JOANNA C. SCHWARTZ

Published: May 16, 2013 7

LOS ANGELES — MUCH of the discussion over the Affordable Care Act has focused on whether it will bring down health care costs. Less attention has been paid to another goal of the act: improving patient safety. Each year tens of thousands of people die, and hundreds of thousands more are injured, as a result of medical error.

Experts agree that the best way to reduce medical error is to gather and analyze information about past errors with an eye toward improving future care. But many believe that a major barrier to doing so is the medical malpractice tort system: the threat of being sued is believed to prevent the kind of transparency necessary to identify and learn from errors when they occur. 

New evidence, however, contradicts the conventional wisdom that malpractice litigation compromises the patient safety movement’s call for transparency. In fact, the opposite appears to be occurring: the openness and transparency promoted by patient safety advocates appear to be influencing hospitals’ responses to litigation risk. 

I recently surveyed more than 400 people responsible for hospital risk management, claims management and quality improvement in health care centers around the country, in cooperation with the American Society of Health Care Risk Managers, and I interviewed dozens more. 

My interviewees confirmed that while hospitals historically took an adversarial and secretive approach to lawsuits and error, that has begun to change. In recent years, hospitals have become increasingly open with patients: over 80 percent of hospitals in my study have a policy of apologizing to patients when errors occur. And hospitals are more willing to discuss and learn from errors with hospital staff. 

What accounts for these changes? Several factors appear to have overcome historical resistance to transparency, including widespread laws requiring disclosure to patients and confidentiality protections for internal discussions of error. Hospitals have also found that disclosing errors to patients and offering early settlements reduces the costs and frequency of litigation. 

My study also shows that malpractice suits are playing an unexpected role in patient safety efforts, as a source of valuable information about medical error. Over 95 percent of the hospitals in my study integrate information from lawsuits into patient safety efforts. And risk managers and patient-safety personnel overwhelmingly report that lawsuit data have proved useful in efforts to identify and address error. 

One might think that hospitals would have little to learn from lawsuits, given other requirements that hospitals report, investigate and analyze medical error. But participants in my study said that lawsuits can reveal previously unknown incidents of medical errors — particularly diagnostic and treatment errors with delayed manifestations that other reporting systems are not designed to collect.

Lawsuits can also reveal errors that should have been reported but were not — medical providers notoriously underreport errors (although studies have shown that the threat of litigation is not responsible for this underreporting) and lawsuits may fill these gaps. 

Moreover, litigation discovery can unearth useful details about safety and quality concerns. Analyses of claim trends can reveal problematic procedures and departments, and closed litigation files can serve as rich teaching tools. 

True, malpractice litigation data also have many flaws: too few malpractice claims are filed to reflect an accurate picture of a hospital’s shortcomings, and the amount awarded in litigation may not reflect the merits of the claims. Yet hospitals say they recognize and account for these flaws in their review.

The assumed negative effects of malpractice litigation on patient safety have been used to justify numerous proposals for reform, including damages caps and “health courts,” administrative bodies that adjudicate malpractice claims outside the tort system. Politicians, patient safety advocates and medical providers argue that such reforms will encourage more open discussions of medical error by removing the specter of liability. 

My study suggests, however, that hospitals can — and have — found ways to increase openness and transparency without these dramatic interventions. Moreover, because lawsuits help to identify incidents and details of medical error, limitations on lawsuits may actually impede patient safety efforts. 

The Affordable Care Act pours millions into patient safety for research centers, demonstration projects and other programs. Proposed reforms and initiatives should not rely on conventional wisdom about the negative effects of malpractice litigation. Medical-malpractice lawsuits do not have the harmful effects on patient safety that they are imagined to have — and, in fact, they can do some good.

Dragging You Down

Two articles this week came out discussing the weight of how student loans are affecting the Economy and overall recovery.

This is not shocking and is the next big bubble bursting.  With the ever increasing amount of debt Student's are aquring with the mythical promise, belief or in fact truth that they are more likely to find employment and do well financially overall is what has lead to this immense weight from which they are never to divest of.

Add to that the fact that American University Presidents are finding themselves at the top of the food chain financially this is one yacht that has no bearings what-so-ever from preventing it from sailing away to better shores and islands. 

I reprint Joseph Stiglitz's article and have provided links to the other subjects mentioned.  Nothing new here to see folks but another ship crashing into the already overflowing pier of despair.  And ironically this does not mention that many aging Boomers are finding themselves also in the debt riddle of student loans as they returned to the classroom in search of skills that would be better suited in learning the art of serving tables and parking cars. Why? Because they will never get hired as they are the terrible toos.. Too Old and Too Educated.  This is the double whammy and I will have fries with that.

The Great Divide May 12, 2013,

Student Debt and the Crushing of the American Dream

By JOSEPH E. STIGLITZ


A CERTAIN drama has become familiar in the United States (and some other advanced industrialized countries): Bankers encourage people to borrow beyond their means, preying especially on those who are financially unsophisticated. They use their political influence to get favorable treatment of one form or another. Debts mount. Journalists record the human toll. Then comes bewilderment: How could we let this happen again? Officials promise to fix things. Something is done about the most egregious abuses. People move on, reassured that the crisis has abated, but suspecting that it will recur soon.

The crisis that is about to break out involves student debt and how we finance higher education. Like the housing crisis that preceded it, this crisis is intimately connected to America’s soaring inequality, and how, as Americans on the bottom rungs of the ladder strive to climb up, they are inevitably pulled down — some to a point even lower than where they began.

This new crisis is emerging even before the last one has been resolved, and the two are becoming intertwined. In the decades after World War II, homeownership and higher education became signs of success in America.

Before the housing bubble burst in 2007, banks persuaded low- and moderate-income homeowners that they could turn their houses and apartments into piggy banks. They seduced them into taking out home-equity loans — and in the end, millions lost their homes. In other cases, the banks, mortgage brokers and real-estate agents pushed aspiring homeowners to borrow beyond their means. The wizards of finance, who prided themselves on risk management, sold toxic mortgages that were designed to explode. They bundled the dubious loans into complex financial instruments and sold them to unsuspecting investors.

Everyone recognizes that education is the only way up, but as a college degree becomes increasingly essential to making one’s way in a 21st-century economy, education for those not to the manner born is increasingly unaffordable. Student debt for seniors graduating with loans now exceeds $26,000, about a 40 percent increase (not adjusted for inflation) in just seven years. But an “average” like this masks huge variations.

According to the Federal Reserve Bank of New York, almost 13 percent of student-loan borrowers of all ages owe more than $50,000, and nearly 4 percent owe more than $100,000. These debts are beyond students’ ability to repay, (especially in our nearly jobless recovery); this is demonstrated by the fact that delinquency and default rates are soaring. Some 17 percent of student-loan borrowers were 90 days or more behind in payments at the end of 2012. When only those in repayment were counted — in other words, not including borrowers who were in loan deferment or forbearance — more than 30 percent were 90 days or more behind. For federal loans taken out in the 2009 fiscal year, three-year default rates exceeded 13 percent.

America is distinctive among advanced industrialized countries in the burden it places on students and their parents for financing higher education. America is also exceptional among comparable countries for the high cost of a college degree, including at public universities. Average tuition, and room and board, at four-year colleges is just short of $22,000 a year, up from under $9,000 (adjusted for inflation) in 1980-81.

Compare this more-than-doubling in tuition with the stagnation in median family income, which is now about $50,000, compared to $46,000 in 1980 (adjusted for inflation).

Like much else, the problem of student debt worsened during the Great Recession: tuition costs at public universities increased by 27 percent in the past five years — partly because of cutbacks — while median income shrank. In California, inflation-adjusted tuition more than doubled in public two-year community colleges (which for poorer Americans are often the key to upward mobility), and by more than 70 percent in four-year public schools, from 2007-8 to 2012-13.

With costs soaring, incomes stagnating and little help from government, it was not surprising that total student debt, around $1 trillion, surpassed total credit-card debt last year. Responsible Americans have learned how to curb their credit-card debt — many have forsaken them for debit cards, or educated themselves about usurious interest rates, fees and penalties charged by card issuers — but the challenge of controlling student debt is even more unsettling.

Curbing student debt is tantamount to curbing social and economic opportunity. College graduates earn $12,000 more per year than those without college degrees; the gap has almost tripled just since 1980. Our economy is increasingly reliant on knowledge-related industries. No matter what happens with currency wars and trade balances, the United States is not going to return to making textiles. Unemployment rates among college graduates are much lower than among those with only a high school diploma.

America — home of the land-grant university, the G.I. Bill and world-class public universities from California to Michigan to Texas — has fallen from the top in terms of university education. With strangling student debt, we are likely to fall further. What economists call “human capital” — investing in people — is a key to long-term growth. To be competitive in the 21st century is to have a highly educated labor force, one with college and advanced degrees. Instead, we are foreclosing on our future as a nation.

Student debt also is a drag on the slow recovery that began in 2009. By dampening consumption, it hinders economic growth. It is also holding back recovery in real estate, the sector where the Great Recession started.

It’s true that housing prices seem to be on the upswing, but home construction is far from the levels reached in the years before the bubble burst of 2007.

Those with huge debts are likely to be cautious before undertaking the additional burdens of a family. But even when they do, they will find it more difficult to get a mortgage. And if they do, it will be smaller, and the real estate recovery will consequently be weaker. (One study of recent Rutgers University graduates showed that 40 percent had delayed making a major home purchase, and for a quarter, the high level of debt had an effect on household formation or getting further education. Another recent study showed that homeownership among 30-year-olds with a history of student debt fell by more than 10 percentage points during the Great Recession and in its aftermath.)

It’s a vicious cycle: lack of demand for housing contributes to a lack of jobs, which contributes to weak household formation, which contributes to a lack of demand for housing.

As bad as things are, they may get worse. With budgetary pressures mounting — along with demands for cutbacks in “discretionary domestic programs” (read: K-12 education subsidies, Pell Grants for poor kids to attend college, research money) — students and families are left to fend for themselves. College costs will continue to rise far faster than incomes. As has been repeatedly observed, all of the economic gains since the Great Recession have gone to the top 1 percent.

Consider another dubious distinction: student debt is almost impossible to discharge in bankruptcy proceedings.

We’re a long way from the debtors’ prisons Dickens described. We don’t send debtors to penal colonies or put them in bonded labor. Although personal bankruptcy laws have been tightened, the principle that bankrupt individuals should be allowed a fresh start, and a chance to discharge excessive debt, is an established principle. This helps debt markets work better, and also provides incentives for creditors to assess the creditworthiness of borrowers.

Yet education loans are almost impossible to write off in bankruptcy court — even when for-profit schools didn’t deliver what they promised and didn’t provide an education that would let the borrower get a job that paid enough to pay back the loan.

We should cut off federal support for these for-profit schools when they fail to graduate students, who don’t get jobs and then default on their loans.

To its credit, the Obama administration tried to make it tougher for these predatory schools to lure students with false promises. Under the new rules, schools had to meet one of three tests, or lose their eligibility for federal student aid: at least 35 percent of graduates had to be repaying their loans; the typical graduate’s estimated annual loan payments could not exceed 12 percent of earnings; or the payments could not exceed 30 percent of discretionary income. But in 2012, a federal judge struck down the rules as arbitrary; the rules remain in legal limbo.

The combination of predatory for-profit schools and predatory lenders is a leech on America’s poor. These schools have even gone after young veterans who served in Iraq and Afghanistan. There are heart-rending stories of parents who co-signed student loans — only to see their child killed in an accident or die of cancer or another disease — and, like students, can’t easily discharge these debts.

Interest rates on federal Stafford loans were set to double in July, to 6.8 percent. Good news came on Friday: it appears that there is a temporary reprieve, as Republicans have come around. But the stay would be temporary and would not address a more fundamental issue: if the Federal Reserve is willing to lend to the banks that caused the crisis at just 0.75 percent, shouldn’t it be willing to lend to students, who will be crucial to our long-term recovery, at an appropriately low rate? The government shouldn’t be profiting from our poorest while subsidizing our richest. A proposal by Senator Elizabeth Warren, Democrat of Massachusetts, for lower student-loan interest rates is a step in the right direction.

Along with tougher regulation of for-profit schools and the banks they connive with, and more humane bankruptcy laws, we must give more support to middle-class families struggling to send their children to college, to ensure that they have a standard of living at least equal to that of their parents.

But a real long-term solution requires rethinking how we finance higher education. Australia has designed a system of publicly provided income-contingent loans that all students must take out. Repayments vary according to individual income after graduation. This aligns the incentives of the providers of education and the receivers. Both have an incentive to see that students do well. It means that if an unfortunate event happens, like an illness or an accident, the loan obligation is automatically reduced. It means that the burden of the debt is always commensurate with an individual’s ability to repay. The repayments are collected through the tax system, minimizing the administrative costs.

Some wonder how the American ideal of equality of opportunity has eroded so much. The way we finance higher education provides part of the answer. Student debt has become an integral part of the story of American inequality. Robust higher education, with healthy public support, was once the linchpin in a system that promised opportunity for dedicated students of any means. We now have a pay-to-play, winner-take-all game where the wealthiest are assured a spot, and the rest are compelled to take a gamble on huge debts, with no guarantee of a payoff.

Even if compassion isn’t a factor — even if we focus just on recovery now and growth and innovation tomorrow — we must do something about student debt. Those concerned about the damage America’s growing divide is doing to our ideals and our moral character should put student debt at the top of any reform agenda.



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