Will the Anthem-Cigna deal cost you money?

The question posed by the Los Angeles Times is ludicrous. Dave Jones, California’s insurance commissioner, said he doubts there will be any significant benefits to customers from this latest merger.

This is a no brainer. With reduced competition Anthem will be able to raise their rates and possibly reduce coverage for many with hard to treat illnesses.

In a society where profits are the driving force we all know that this merger will be approved and everyone will pay more for coverage. Even those not enrolled with Anthem or Cigna will see their rates increase.

Imagine the cost of the food you eat if there was only one source. You must buy your food from that one source or grow it yourself. That one giant food store chain sets the prices and the profits rise to the delight of the stock holders.

We need more people like Senator Bernie Sanders. When will this situation change? Not until the majority of the population voices their opposition.

Another Effort to Reduce Competition

Over the past 35 years since Ronald Reagan became president we have seen a decline in competition in the United States. His words “Government is the problem” was a signal to those who could accumulate more wealth and control of businesses at the expense of America’s general welfare. Reagan’s philosophy was government should not interfere with business. Thus we now have just four banking companies that control most finance. There is a handful of pharmacy chains, and a handful of supermarket chains spread across the nation that set the price you will pay for eggs, meat, and everything other food product.

List of largest banks in the United States

Rank	Bank name	Headquarters
1	JPMorgan Chase	New York City, NY
2	Bank of America	Charlotte, North Carolina
3	Citigroup	New York City, NY
4	Wells Fargo	San Francisco, California

Chances are you do your banking at one of the branches of these companies.

List of largest drug store chains in the United States

Walgreens
CVS
Rite Aid
Walmart

Chances are you are buying some part of your drug supplies from one of these companies. Go into any of them and you will find their prices to be almost the same.

Now imagine what the cost of health care will be when the number of insurance providers is reduced. Did you know that Blue Cross and Blue Shield are both owned by Anthem? This is not a new fact.

Yesterday Centene said it will spend $6.3 billion to buy fellow insurer Health Net. Today Hartford, Conn.-based Aetna will spend about $35 billion to buy rival Humana. Now Health insurance giant Anthem presses for Cigna takeover at $54 billion.

Of course these companies argue that their consolidation will lower costs. For Who?

Will the federal government stop these consolidations? Who are the major contributors to presidential campaigns? Who provides the money to help your congressional representative and senator? Small donations are accepted but the big donors aren’t supporting those elected officials without receiving something in return.

“Fast Track” is the Fast Elimination of American Jobs

The Los Angeles Times argues that the ‘fast track’ bill on trade makes sense in a June 10, 2015 editorial. Pointing out that “The nation’s five metropolitan areas with the largest agricultural exports are all in California.” That is clearly a reason to support more free trade agreements that will help farmers sell their crops. However the consequence of selling those crops overseas is higher food costs for Americans.

The United States is a consumer driven economy. That is an established fact. This country has a history of making everything from cars to bed sheets. I just walked through a Macy’s department store and looked at three men’s shirts made by well known manufacturers. All three were made in other countries: Indonesia, Bangladesh, and Chile. Recently purchased towels were made in India, carving knives made in Switzerland, and a desk chair made in China. We all know that consumer tech products are made in Asia. Where does that leave the blue collar, former middle class, Americans? Unemployed! The last thing the United States needs is another free trade agreement.

Update June 13, 2015 – from my congressman:

Dear Friend,

I voted NO on the Fast Track Trade Bill this afternoon. The House stood up for American workers and voted down the package that gives the President Fast Track authority that would force into place job killing legislation such as the Trans-Pacific-Partnership.

Washingtons trade policy in the past few decades has failed the American middle. For far too long, we have seen the U.S. export jobs rather than products. We can no longer afford to continue on this path. We must abandon these failed, so-called free trade policies of the past and take a new direction that creates more jobs here at home in America. We need balanced trade. That is why I have opposed NAFTA, CAFTA, MFN for China, and a host of bad trade deals we have adopted over the last 20 years.

Thank you very much for contacting me and sharing your views, I hope to hear from you further in the future.

Sincerely,

Raising the Minimum Wage Rate

If we lived in a world where everyone has the right to pay whatever low rate they could manage then the least able would be paid a starvation salary. Wait, this is almost exactly the situation today. American society has established a minimum hourly pay rate that will not provide enough money to pay for housing, food, and other basic necessities.

The consequence is that those with limited ability and the resulting minimum pay must share housing and pool their low income to sustain their lives.

On the other end of the scale there are those businesses who need those low paid workers to sustain their low priced products. McDonald’s and it competitors are those businesses that come to mind. If the cost to make a burger goes up then the cost of those low priced burgers goes up. That could impact the very existence of many small enterprises.

We are faced with a conundrum!

I find myself sympathetic to both the poor and low pay employers.

Thus society must decide what is best for everyone in the long run. We see the consequence of not providing support for the poor when we look at nations like Bangladesh, India, and other southeastern Asian nations. The poor live in hovels and eat rice, beans, and anything else they can grow in a small garden. Is that the society we want in the United States?

Since we are a free enterprise society there are those who say “tough” and “it’s not my problem.”

The majority of our elected officials will make the decisions. As it stand today there are many cities and states who have decided it is in their best interest to continue raising the minimum wage. The current target seems to be $15.00 an hour. That is not a living wage but will help those who cannot obtain a higher level of education.

McDonald’s burgers at $5.00 won’t break us but just might help a little.

Sports and Money

Underinflated footballs, drugs, bribery and kickbacks. It’s all part of the sports world.

From World Cup venue picks to draws, international soccer has been surrounded by rumors of alleged kickbacks. Whispers around world soccer and kickbacks now scream from headlines. The media has told us what we already suspected. Finally the U.S. Justice department has filed charges against at least nine top ranking officials and they say this is just the beginning.

Consider the annual Tour de France. Lance Edward Armstrong is the American former professional who previously held seven consecutive Tour de France titles from 1999 to 2005, but was stripped of his titles in 2012 after a protracted doping scandal. Most of us did not care. Maybe we do care. After all Armstrong’s interviews with Oprah Winfrey drew a considerable number of viewers.

Like most high-profile team sports, football and Baseball suffers from recreational drug use. Why do they do it?

The National Football League announced that ESPN had operating income of $1.6 billion in 2013. NBC, CBS, and Fox News all have their own sports channels. ABC owns ESPN.

Football players are likely to be impacted for the rest of their lives from brain injuries. The do make millions of dollars while they are playing.

A football team moving to Los Angeles is all about the best financial deal the club owners can make. Now a bigger and better stadium translates into a move. St. Louis, Oakland, and San Diego are all working on their teams to stay by offering financial incentives and new stadiums.

The most expensive part of pay television is the sport channel fees paid by the providers to the various professional leagues.

What is all of this about? MONEY!

We pay for it but we don’t care. The people who run all of those professional sports teams, college teams and all the other sport events that are broadcast on television are earning millions of dollars. We love the excitement and they love the money.

Cities Grow or Die

Updated May 22, 2015 because of data reported in the Los Angeles Daily News.

Chicago, Detroit, Philadelphia, and Baltimore are examples of large cities that are dying. They all have one common issue. A lack of jobs. Cities that are thriving are growing and they all have one common reason. New jobs. Los Angeles grew in population by 136,243 people since the last census says the U.S. Census Bureau. That is a growth of just the city and does not include surrounding towns such as Long Beach which have all seen similar or greater population increases.

I live near the very end of the northwest part of Los Angeles. The nearby boulevard ends about 2 miles west of my home. Despite that fact the traffic is busy all of the time. It is obviously crowded during rush hours. Simply put, we have run out of space. The land beyond the end of the city has been set aside as protected land to preserve open space with the idea of establishing a wildlife park to protect both animals and native habitat.

The question is how do we provide housing for the growing population? The answer is more apartments and condominiums. With that conclusion in mind the city has decided to permit that kind of construction. Cities do not remain static. They either grow or shrink. The growth is into the suburbs, more high rise buildings, or a combination. Spread of the Los Angeles area is a fact and is probably known throughout the world. The travel times has become nightmares for some people driving as long as two hours to get to work. Finally the city has become wiser and now has started permitting the dreaded high rise housing. Many in our city are continuing to fight this kind of construction.

Thus we have arrived at a time when many new proposals are being submitted to neighborhood councils and the city council for approval. In my area:

Two part with phase 1 for the construction of a 7-story, 193,000 sqft building to house 170 apartments including 13 live-work units and 5,700 sqft restaurant. There will also be parking for 258 cars and 196 bikes. The 2nd phase is for the construction of 166,000 sqft commercial office building with 10,000 sqft for restaurant and retail space. There will also be parking for 490 cars and 254 bikes. The office buildings being replaced are modern two story structures.
A 707 unit apartment complex that was the home of Panavision manufacturing consisting of a one story building and parking lot.
A 300 unit apartment complex most likely replacing one or two story office buildings.
A 4,000 multifamily unit development on the former Rocketdyne facility that is expected take 10 years to complete. That project is in the design phase and has not been released for public scrutiny. The information released to date says that the buildings will vary in height from 6 to 18 stories high.
The former Catalina Yachts manufacturing site will be converted into 600 units.

That is a total of 5,777 housing units which more than likely means an additional 11,000 people and their cars added to already congested boulevards. To make the additional housing more palatable new nearby shopping centers and business offices will provide jobs.

You don’t like it? Some alternative places to live are Fresno, California and Medford, Oregon. Those are two nice communities that are not faced with large growth but do offer a pleasant climate and many of the benefits of larger cities.

Presidential Contradiction

President Barack Obama continues to be a mystery to me. Both in domestic and foreign affairs he speaks words and take actions that contradict. His actions are really alarming.

He raised the troop levels in Afghanistan saying that the United States was there and we were responsible for the outcome. Then he decided to withdraw all of our troops.

“Assad must go” were Obama’s words. Use of chemical weapons was declared a red line but no troops were sent to Syria. Instead Russia provided the president with a way out of the dilemma of his own making.

Ukraine has been part of the Russian empire for over 100 years. My grandparents left Russia in about the year 1900. Actually they left Ukraine. Watch “Fiddler on the Roof.” The fear of the Jews was of the Czar of Russia. Today the United States is contemplating aid to Ukraine to fight Russia. Or are we contemplating aid?

The president has been a leading spokesman in the battle to reduce carbon emissions.

He does not want to approve the XL Pipeline. He set aside additional areas of Alaska where oil exploration will be prohibited. Now he has approved the building of an oil exploration derrick in the Bearing Sea to be built and maintained by Shell Oil.

Obama has said he is concerned about the shrinking middle class but still he wants to implement a free trade agreement that will enable more jobs to be outsourced to countries that have low paid labor that will benefit business with higher net income.

Perhaps it’s the stress of the job as president that has caused Barack Obama to pursue so many contradictory decisions. Then again there might be some conflicts of interest. No matter what the cause his decision making is making other nations uncomfortable and causing Democrats and the entire American population to wonder about the decision making process.

Elected to Office but Unaware and Really Don’t Care

Inside the beltway: Is your representative aware of happenings in the world?

As reported in the Los Angeles Times

A bipartisan group of senators is seeking a federal investigation into alleged abuses in a popular visa program that has been linked to layoffs of U.S. workers in favor of cheaper foreign labor, the Los Angeles Times has learned.

“We are concerned about recent information that has come to light regarding the abuse of the H-1B visa program by Southern California Edison (SCE) and other employers to replace large numbers of American workers,” wrote Sen. Richard J. Durbin of Illinois, the Democratic whip, and Sen. Jeff Sessions (R-Ala.), who led the bipartisan group.

All of these senators are in league because they all know they must show concern for their constituents. This is a case of crocodile tears for those who are have lost their job or about to experience the same fate as Edison employees. Our free enterprise system says employers have every right to lower all their costs no matter who is impacted. Bank and technology companies are two of the most obvious adopters of the programs to cut labor costs. The shock is that it has taken this long for our senators to become aware of the outsourcing of American jobs. Maybe it’s not such a shock. After all some senators deny having ever used e-mail.

One must ask, where have these senators been? Haven’t they had at least one situation when they needed telephone help from a company and been transferred to a help line in India or the Philippines? Wait perhaps it is accurate to say they have been unaware. Senator Lindsey Graham, Republican of South Carolina, said on NBC’s “Meet the Press” on Sunday March 8 said has never, ever sent an email.

As reported in the New York Times

Nor does Senator Charles E. Schumer, Democrat of New York. “Maybe once every four months, I do one email,” he said, with evident relish. “I like to communicate by talking directly to people. I find it’s an important part of humanity to understand not just the words that are said, but how they’re said, the tone they’re said in, the speed they’re said with.”

Jim Manley, a Democratic strategist and longtime former Hill staff member, recalled that one of his bosses, Senator Edward M. Kennedy, Democrat of Massachusetts, could not use his BlackBerry “if his life depended on it.”

Luddite: One who fears technology (or new technology, as they seem pleased with how things currently are…why can’t everything just be the same?)

The Wealthy Paint a Rosy Picture

Who can we believe?

( Bloomberg) — March 12, 2015 / Household wealth in the U.S. increased from October through December by the most in a year as stock prices advanced to an all-time high at the end of 2014. Net worth for households and non-profit groups rose by $1.5 trillion in the fourth quarter 1.9 percent from the previous three months, to $82.9 trillion, the Federal Reserve said Thursday from Washington in its financial accounts report, previously known as the flow of funds survey.

A report like that would make you believe that Americans are all richer and feeling quite confident about the future. The rest of that Bloomberg article was just as upbeat. It proves how numbers can give a distorted view of the world. Those numbers were provided by the Federal Reserve.

Wait this really isn’t what it appears to be. USA Today offered this additional piece of information: But the wealth gains are flowing mainly to affluent Americans. Broad stock market averages have jumped more than 150% from their trough in the spring of 2009. But roughly 10% of households own about 80% of stocks.

The reality is that millions of families live paycheck to paycheck. The majority do not have significant savings for their retirement. The Median Value of Assets for Households in 2011 was $68,828.00. Married couples over 65 years had the highest wealth at a Median Value of $284,790.00. Take away the value of their home and you realize that many senior citizens are primarily relying on their Social Security income. The source for this data is the U.S. Census Bureau.

This data says two things to me. 1) You cannot rely on the reporting from just one publication for complete information. 2) There is a great economic divide in this nation.

Is it Greed or Simply Evolution?

Greed: a selfish and excessive desire for more of something (as money) than is needed. That is the Merriam-Webster definition.

When I was a boy reading comic books there was a character in the Donald Duck series named Scrooge McDuck. He loved money and the cartoon showed him rolling in dollar bills and dancing on the money. That was a characterization of some people in this world. Was that greed?

The stock market continues to hit new highs every several months. The S&P 500 reached another new high on Friday, February 13, 2015. Apple Computer shares are at or near their highest level ever. Most people do not own enough stocks to feel a significant impact. The wealthy, whose source of income is the stock market, are the beneficiaries of this situation.

Meanwhile BBC.com and Fareed Zakaria GPS reports the findings of Oxfam, an anti-poverty group, that the combined wealth of the world’s richest 1% will overtake that of the other 99% of the world’s population by 2016. Furthermore the richest 80 people in the world have collected the same amount of wealth as the bottom 3.5 million people-$1.9 Trillion.

There are two facts that are slowly destroying the middle class and causing even greater harm to blue collar laboring classes.

Without government involvement jobs are performed at the lowest pay rate which moves jobs to the poorest countries.
Technology enables employers to replace workers performing repetitive work with a machine.

These are not new facts. Queen Elizabeth I (queen of England 1558–1603) denied a patent for the first knitting machine in 1589. It was denied because of her concern for the security of the kingdom’s many hand knitters.

Robots install rivets on a 2015 Ford F-150

Paul Wiseman of the Associated Press posted an article titled “Robots replacing workers at a faster pace”. The report was replicated by many news media outlets including ABC, Fox Business, etc. The article said “A new report says that cheaper, better robots will replace human workers in the world’s factories at a faster pace over the next decade, pushing labor costs down 16 percent.” The mechanization has impacted only 10% of the possible uses for robots. 90% of the changeover is still in the future.

Recently two public parking lots I had occasion to use had no pay clerk at the exit. The system was automated. Soon there will be no one to take your order at McDonald’s.

I could go on with more examples of lost jobs thanks to technology or replacing middle income workers with low paid workers but you already understand the point I am making.

The question to candidates for the next president of the United States is what will you do to change the obvious decline in the income of the majority of Americans? You ought to ask your congressional representative and senators that same question.