free and open markets all around...

in commenting about cap and trade on my facebook the other day, i posed a simple question wondering what exactly the end result of such a program would be- carbon reduction or capital market bubble creation?

my friend mike replied:

"Cap and Trade is a good concept, but can it work in the real world? who decides the total carbon amount? Who is grandfathered in? It is an incentive to reduce your carbon usage through technology by increasing the monetary compensation. Carbon commodity trading!! Will the government or free market control it?"

monetary compensation as an incentive to modify behavior? like giving my kid an allowance to clean her room?

so i thought i'd have a little fun with this one... my commentary:

i hear what you're saying mike; i suppose there are two ways to accomplish compliance- incentive or penalty.

for instance, speeding and other laws are enforced through penalty. but if we were to follow the logic of modifying behavior through monetary compensation... how about simply paying drivers not to speed?

of course, this would never happen in our world because speed limits are designed for public safety, right?

actually, i'd argue we've allowed speeding to be turned into a municipal revenue generating monster!

so following the logic any good "small-government/free open market/damn the public good/get mine now" proponent would employ... we should be wondering why cities and states get all the money from speeding!?

ok, just for fun, lets dive into this speeding thing...

why not open it up, and create a "street and driving market"? just like cap and trade will issue the original "permits" to polluters for free, simply issue all drivers permits to go fast! maybe all drivers should be allowed "x" number of speeding credits (the mechanics of this are unimportant for the current discussion; lets just say every driver gets "some").

this way the people who don't want/need to speed- even though they now have the right to speed because of the way the system is set up- can sell/trade their permits to others who want/need to go fast. the market pays them not to speed!

in turn, the "speeders" are in essence "pre-paying" the ability to go faster than posted limits.

and the seller of the permit, having been paid not to speed, won't speed because they no longer have the permit to do so... right?

come on... who's to say they won't speed at sometime in the future? do they go back to the market and buy a permit when they need to speed? and if they speed without a permit, who's to say they will actually get caught and be made to pay a penalty! do we need more speed traps and gestapo-like policing? or do we just trust people to do the right thing?

lets go one step further, and put the middle-man in place here; the broker of speeding permits. this guy matches speeders and non-speeders... for a fee. ah... economic growth!

how about this one... permits to kill people! we already permit for fishing and hunting wild animals to control population and generate revenue, why not permit human murder?

now you're speeding (because you have a permit), get in a wreck and kill someone... ok, simply use your speeding and murder credits to get out of it!

or maybe you truly hate someone, or are just really pissed off... buy a permit to knock-em off!

maybe you don't have the stomach for killing, so you SELL your permit to a professional assassin and have them do the dirty work. and lets say professional assassins buy up a bunch of killing credits. now they can legally operate their business! ah... more economic growth!

simply make it legal and generate revenue from it, rather than having it be illegal, and a financial burden on tax payers paying for prisons?

i can see all kinds of ways to make money on this thing; now the market supports brokers who specialize in bundling groups of assassins for, i don't know... hire by governments? special, military contractors? oh wait, we already have this!

of course, this is all absurd (or is it?)

if you really stop to think about it, aren't some things just too important for the common welfare? isn't our human health/well being too precious to allow it to be compromised by "permiting" something harmful, especially through profit seeking activity?

just like speed limits, carbon and other pollution regulations are designed for public safety (health and environment).

we don't get paid to drive the speed limit... why should there be a monetary incentive to do the right thing with pollution?

because it cuts into profits?

you see where i'm going with this. free markets and unregulated capitalism have limits on their ability to benefit the common welfare.

at some point, they become counter productive, reckless, bubble making implosion machines. and this typically happens at the detriment of society as a whole while benefiting a very select few. in other words, something/someone suffers great inequality or destruction.

examples of this go on and on: extinction of species, depletion of resources, loss of human life/quality of life, and greater spreads between socioeconomic status.

the bottom line... just because something can become a market, doesn't necessarily mean it should become a market.

therefore we use penalties- financial and physical (fines, fees, tariffs, surcharges, taxes, incarceration... and even death) for keeping things in check.

now lets look at cap and trade again...

just because a polluter no longer has enough credits to pollute, how do we know they won't continue to pollute?

just look at how enron was able to cook the books with off-balance sheet accounting! someone, somewhere is going to figure out a way to skirt the system, keep the "real" measure of emissions off the books, and be able to pollute/profit.

maybe they get caught, maybe not.

IN THE MEAN TIME... "WE" (THE PEOPLE OF THE WORLD) SUFFER ENVIRONMENTAL DAMAGE INCLUDING HEALTH ISSUES... LEADING TO MEDICAL PROBLEMS... LEADING TO INCREASED MEDICAL COSTS... LEADING TO DENIAL OF CLAIMS... LEADING TO LOWER QUALITY OF LIFE... LEADING TO MEDICAL INSURANCE PROFITS... LEADING TO GREATER DIFFERENCES IN SOCIOECONOMIC STATUS... LEADING TO UNIMAGINABLE HUMAN SUFFERING, IMBALANCE AND INEQUALITY.

is this the world you want to live in?

lastly...

THE BIGGEST EMITTERS OF CARBON EMISSIONS ARE LOCAL, STATE AND FEDERAL GOVERNMENT INCLUDING THE MILITARY.

are these guys EXEMPT? or do they need carbon permits too? and if they have extra (print up a few more because they can!), should they be able to "sell" them on the open market?

if so, do these revenues REPLACE OR REDUCE some taxes, or become an additional "tax" on the people? or maybe the revenues are used to reduce the national debt or deficit?

or does this government activity in open markets actually aggravate the ability of markets to work freely, thus creating more of a bubble (just like fannie mae and freddie mac aggravated the housing bubble!)?

these are the tough questions and considerations we MUST address going forward in our global economy, global governance and global stewardship.

without dealing with these things, we are destined to repeat the failings every society from the beginning of time has eventually suffered... only worse, i fear.

all i know is cap and trade is a bad idea. anytime you put a for-profit motive above the common welfare, the welfare will suffer. period. peace.

keep asking the tough questions if you want real solutions

the purpose of any organization is for the group to act as a whole on behalf of the participants' interests. organizations don't have souls or consciences... they have people- who supposedly possess these- leading and guiding the group toward the agreed upon goal.

so, if you take the financial profit motive out of the equation, does a corporate entity act the same?

in other words, regardless of the definition of earnings or ROI (return on investment), will non-profits employ the same tactics as for-profits in terms of self preservation and desire to perpetuate their existence to achieve their goals? will non-profits resort to questionable tactics, gray-area ethics, accounting tricks, lawyer driven litigation and lobbying legislation in order to make sure they maintain the ability to function?

and if the same tactics are employed by all organizations, is it just human nature... and does adding financial profit (monetary gain) into the equation lead to stronger, worse, more damaging and more often employed questionable tactics, gray-area ethics, accounting tricks, litigation and lobbying?

seriously, if a non-profit measures ROI in number of people "helped", will it stop at nothing to help as many people as possible?

the sad thing is, the vast majority of humans value their currency (and the associated perceived power) MORE than they value helping others or keeping our living environment worth living in.

how did this happen?

answering these questions, and understanding why we do the things we do, may go a long way towards helping resolve what rules, parameters and regulations ARE NECESSARY in the game of business... and life.

conversations on health insurance and "health care" system reform- try a dose of common sense

each state mandates drivers have liability insurance coverage on their car. additionally, lenders require full coverage if they hold a lien on a vehicle. but it's our choice of whether or not we even want to buy insurance based on our decision to be a driver, and/or take a loan to buy a car. if we don't drive, or don't buy cars we can't afford to pay in full up front, we aren't forced to buy one insurance or the other.

when we buy a house, lenders require we pay PMI if we don't have 20% equity. but again, it's our choice of whether or not to pay PMI simply by renting instead of buying, or waiting until we have 20% down payment before taking the plunge. it's all our choice.

basically, we pay “extra” for these privileges.

but can our elected leaders really require/force/mandate us to buy health insurance just for “existing” in this country? just to "live"? requiring health insurance? is it such a privilege to be born in the USA?

come on, really... what will requiring health insurance truly accomplish?

plain and simple, someone's going to get rich over this. guess who? that's right... the insurance companies! big business. the "financial" world. can you say AIG, banks, investment houses and stock exchanges.

the focus has been shifted away from promoting the healthy well-being of our nation, and put squarely on simply making money, (which, by the way, is a far cry from truly becoming wealthy or even amassing wealth).

now for a dose of common sense...

the concept of “health insurance” is bs. we don't buy “health” insurance to keep us healthy, we buy “medical insurance” to treat us when something goes wrong.

and the way we live, something is bound to go wrong!

so here's the rub... with all this talk about reforming the "health care system"... no one is addressing the real issue, OUR HEALTH! they're just talking about how to pay for the EVER INCREASING MEDICAL COSTS of taking care of people who can't/don't/won't take care of themselves.

now, that's easy for me to say. i'm relatively healthy. i don't suffer from any chronic medical ills. i don't live a "dangerous" lifestyle. i don't do drugs, drink heavily, or hang out with those who do. i live in a “clean” area away from toxic dumps/landfills, factories and high-voltage power lines. living choices make a huge impact on a persons "health" and the likelihood of needed medical care.

the issues we need to solve aren't whether or not any person has "health insurance", or even “medical insurance”, the issues we need to solve are:

(1) the insane costs of "medical care"
(2) the insanely crap food in our stores and poor nutrition in our diets
(3) the insanely toxic levels of environmental pollution and contaminants
(4) the insane phobia(s) of "getting sick", and the over-dispensing of antibiotics
(5) the lack of real "diagnostics” by medical professionals who would rather throw pills at us which are marketed to them by companies engineering "fixes" to problems they caused in the first place
(6) the lack of knowledge, or desire for knowledge, of the general public as to personal responsibility for our own health

it is said insurance is shared risk. in reality, it's a profit driven business, based on legalized gambling, which aggregates a large pool of people and bets the money collected in premiums, once invested (wagered in the markets), will have a future value GREATER than any investment LOSSES and/or claim payouts.

and because it is a profit-driven corporation, it has no tolerance for financial losses... including payouts. in other words, it has no interest in PEOPLE'S best interest outside of the corporation's shareholders. so it relies on minimizing risk. for health insurance companies, this means convincing as many healthy people as possible to pay as much money in premiums as they are willing to tolerate in order to "fund" a portfolio of bets.

let's look at this from a healthy person's point of view...

every year i'll get a cold in the winter and maybe the flu for a week or so, but nurse myself with rest, OJ/vitamin c, soft kleenex, and maybe some aspirin if a headache gets really bad. i haven't been to the doctor in over 5 years, and then it was only for a shot of cortizone for a massive case of poison ivy (btw, i've mitigated my own risk of acquiring poison ivy since then by being more vigilant of where i enjoy my outdoor activities)!

consequently, my personal annual “health care” costs are pretty low, and basically limited to my nutrition and fitness decisions, personal hygiene, and watching where i romp through the woods.

but lets say i'm REQUIRED by law to buy health insurance.

now i have to shell out $xxx per month premium. what did that do? leaves less in my budget to afford natural, raw, organic, hormone/steroid/pesticide free food, other healthy living necessities and all of my other pursuits of life, liberty and happiness.

to minimize my monthly premium, i might choose a high deductible. what does this do? on top of paying a monthly premium and having less in my budget for healthy foods and living, it means IF if MUST go to the doctor for something, i end up paying for most, if not all of the bill.

lets use the poison ivy example...

say my premium is $80/month to get 80/20 coverage with a $2500 deductible, $30 co-pay (that was my actual cost last time i had health insurance). i pay 12 months of premiums ($960), then have an "urgent care" visit costing $630 ($200 for the doctor, $300 for the care center, $100 for the shot and $30 for the co-pay).

i pay the $30, and get a bill for my 20% portion of the deductible as my responsibility for the treatment ($120). this means on top of the $960 i paid all year for "coverage", i end up paying another $150 (120+30).

do the math... total out-of-pocket annual “health care” cost... $1110. hummmmm.... what the...?

DO YOU SEE THE PROBLEM? NO, I DON'T THINK YOU DO!!!

THE PROBLEM IS THE $100 SHOT OF CORTIZONE COSTS $500 TO ADMINISTER!!!!!! Further, i'd like to know if the cortizone itself really costs $100? and THE BIGGEST PROBLEM OF ALL... I WAS WILLING TO PAY $1100 FOR IT!!!!! WTF????

i would have been better off, financially, paying the $600 out of pocket (or even NEGOTIATING with the provider for a lower cost!), and spending the remainder of the $1110 buying locally grown food, and other healthy living choices.

now lets look at the flip side... the sick, chronically ill, injured, whatever.

for instance, lets say i get injured in a car wreck on the way to get my cortizone shot. ironic! end up in the hospital while going to the hospital.

ok, so my ER visit gets expensive... say $5000 for a minor injury/overnight and $25000+ for something reeeeealy bad. with my insurance, i'm on the hook for the co-pay and deductible. i've paid $960 into a system for the privilege of paying another $2600 (2500 deduct + 100 ER co-pay). my "insurance" covers the other 2500 to 22500, right?

no... they NEGOTIATE A SETTLEMENT with the care provider for much less.

you see, hospitals jack up the cost of treatment because they know insurance companies will never pay the full amount. so hospital fee schedules are set HIGH ABOVE THE ACTUAL COST OF TREATMENT so by the time the insurance company settles, the true cost of care is hopefully covered. they are playing games with our money... and our medical/health care!

now lets talk about the seriously ill. I have great sympathy for people with circumstances beyond their control, especially through no fault of their own. but there's a difference between the guy who wrecks his health with drugs and alcohol vs the guy who has a god-given birth defect, degenerative genetic condition, (although it could be argued alcoholism and drug dependency are degenerative genetic conditions affecting the brain) or gets clobbered in a head-on car accident. regardless, choices are made, and everything we do (or happens to us) is preventable and/or treatable with the right attitude and a reasonable approach.

ok, so don't bitch about something unless you are willing to propose a solution, right?

i propose instead of requiring "health insurance", we require “healthy living insurance” for everyone. "healthy living insurance" should simply be an integrated component of things we already do:

(1) if you drive, your healthy living insurance should be part of your auto insurance, fuel costs or road usage
(2) if you are a student, your healthy living insurance should be part of your tuition
(3) if you are a worker, your healthy living insurance should be part of your job

"healthy living insurance" would be a used to help offset the costs of healthy living, and provide medical coverage for you and your dependents. a person would use the benefits to get discounts on fresh organic foods, nutritional supplements, fitness club memberships, exercise/fitness equipment, etc. and if god forbid you "come down" with something major (cancer) or minor (a cold), get in a wreck, or some other emergency, then "medical coverage" kicks in.

further, if you do all three of the above (drive, learn or work), you should have the choice of which one you want your insurance through- you can pick the cheapest if you want. or maybe the one with the best benefits. whatever. but if you don't drive, learn or work, then you are a “dependent” and your insurance should be part of your caretaker's coverage.

ok, we've addressed the issues, we've proposed a solution, and we've attempted to do it with a healthy dose of common sense.

is this a perfect plan? no way, nothing's perfect. is this the best solution, or even a good one? maybe not. but does it address the core of our problems? yes. does it focus on prevention vs reaction? yes. and does it promote PEOPLE'S control over their own health? absolutely!

there are three institutions in our world where corporate profit mentality has no business being involved: education, government and medical care. these are the areas of our lives where "no compromise" should be the rule. no one should be excluded, no one should be exempt and no one should ever be denied full participation. and in our capitalist democracy, it should all be done with a non-profit approach. the focus should be on public service and these institutions should break-even only. money in should equal money out based on audited budgets, fair pricing and reasonable operating expenses- including salaries.

let me say one final thing in terms of our government requiring we buy health insurance; i refuse to pay into a mandatory system, even under threat of fines and penalties, which FORCES ME TO "SHARE THE RISK" OF THE GUY WHO WON'T EXERCISE AND SITS ON THE COUCH ALL DAY EATING CORN CHIPS, DONUTS, CHICKEN NUGGETS AND SODAS WHILE PLAYING X BOX AND WATCHING AMERICAN IDOL.

kiss my ass... i'm moving off-shore!

we need to take control of our lives and our world. we need to take it back from career politicians and run-away corporate greed. and above all, we need to regain a sense of sustainable, healthy living.