Later On

A blog written for those whose interests more or less match mine.

Archive for the ‘Business’ Category

The NFL looks very bad

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Written by LeisureGuy

21 September 2014 at 1:55 pm

Posted in Business

Fighting Global Warming: Cheap and Free?

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Paul Krugman has a hopeful column, although the hope part depends on rational responses from governments…  so perhaps not so hopeful. Still, it’s something:

This just in: Saving the planet would be cheap; it might even be free. But will anyone believe the good news?

I’ve just been reading two new reports on the economics of fighting climate change: a big study by a blue-ribbon international group, the New Climate Economy Project, and a working paper from the International Monetary Fund. Both claim that strong measures to limit carbon emissions would have hardly any negative effect on economic growth, and might actually lead to faster growth. This may sound too good to be true, but it isn’t. These are serious, careful analyses.

But you know that such assessments will be met with claims that it’s impossible to break the link between economic growth and ever-rising emissions of greenhouse gases, a position I think of as “climate despair.” The most dangerous proponents of climate despair are on the anti-environmentalist right. But they receive aid and comfort from other groups, including some on the left, who have their own reasons for getting it wrong.

Where is the new optimism about climate change and growth coming from? It has long been clear that a well-thought-out strategy of emissions control, in particular one that puts a price on carbon via either an emissions tax or a cap-and-trade scheme, would cost much less than the usual suspects want you to think. But the economics of climate protection look even better now than they did a few years ago.

On one side, there has been dramatic progress in renewable energy technology, with the costs of solar power, in particular, plunging, down by half just since 2010. Renewables have their limitations — basically, the sun doesn’t always shine, and the wind doesn’t always blow — but if you think that an economy getting a lot of its power from wind farms and solar panels is a hippie fantasy, you’re the one out of touch with reality.

On the other side, it turns out that putting a price on carbon would have large “co-benefits” — positive effects over and above the reduction in climate risks — and that these benefits would come fairly quickly. The most important of these co-benefits, according to the I.M.F. paper, would involve public health: burning coal causes many respiratory ailments, which drive up medical costs and reduce productivity. . .

Continue reading.

Written by LeisureGuy

19 September 2014 at 3:38 pm

Executives being enriched by “dead peasant insurance”

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From an article by Pam Martens and Russ Martens in Wall Street on Parade:

. . .  The missing witness was Ellen Schultz, a former investigative reporter for the Wall Street Journal who has documented for more than a decade that the retirement system is actually rigged and that serious pension stripping is taking place. Schultz went on to write the seminal work on the subject in 2011: Retirement Heist: How Companies Plunder and Profit from the Nest Eggs of American Workers.

It seemed more than a little curious to us that Schultz was going to be delivering the very testimony that Senator Hatch did not want to hear and that hers was the only chair at the six-witness table that remained empty throughout the hearing. Senator Wyden said that she was having Amtrak trouble. Our email to Schultz inquiring about the reason for her absence went unanswered. . .

. . . Shultz, the winner of three Polk Awards, two Loeb awards, a National Press Club award and a Wall Street Journal team Pulitzer, might have offered some of the following hard data from her book, had her chair been occupied during the hearing.

One set of hard data is the hundreds of billions of dollars of life insurance policies on rank and file workers that corporations are taking out, payable to the corporation, to offer obscene executive compensation and benefits while the average American taxpayer/worker subsidizes the practice: the growth in the policies are booked as untaxed income to the corporation, boosting their profits, and the death benefit is received tax free – all perks of the life insurance wrapper.

Schultz has a chapter in her book titled “How Dead Peasants Help Finance Executive Pay,” writing that “as the costs of salaries and benefits for executives have put huge IOUs on corporate books, companies have begun stuffing billions of dollars into new and existing life insurance contracts taken out on the lives of their employees. The insurance policies serve as pseudo pension funds for executives: companies deposit money into the contracts, which act like giant IRAs.”

While key man life insurance is a justifiable practice for a corporation — where a company insures the lives of its primary principals whose loss would have a significant impact – Corporate Owned Life Insurance (COLI) has become known as dead peasant insurance. Corporations are taking out this insurance in bulk on hundreds of thousands of rank and file workers.

Shultz points to evidence in her book that companies even have the temerity to complain when workers don’t die as expected. Schultz writes:

In a confidential memo in 1991, an insurance agent wrote to Mutual Benefit Life Insurance Co. that American Electric Power (20,441 employees covered), American Greetings (4,000), R.R. Donnelley (15,624), and Procter & Gamble (14,987) were ‘acutely aware’ that mortality was running at only 50 percent of projected rates.

The Procter & Gamble plan covered only white-collar employees, which might explain its poor death rate (34 percent of projected mortality), the memo noted. But the disappointing death rate at card maker American Greetings was a puzzle, since the plan covered only blue-collar employees, who are expected to have higher mortality rates. (The white-collar employees were covered by a separate policy with Provident.)

Diebold, the agent wrote, had been expecting $675,300 in death benefits since adopting the plan; so far, it was expecting only one ‘mortality dividend’ of $98,000. ‘Do you think that a mortality dividend of that size relative to their current shortfall will give them comfort?’ the memo said.

A company the agent called NCC had a better death rate, he noted. People were dying at 78 percent expected mortality. ‘However, this includes three suicides within the first year which is highly unusual’— NCC had not had one suicide in twenty-five years until 1990. ‘Without these suicides, NCC would be running at 33% expected mortality. This fact highly concerns me.’ ” . . .

Once a company starts viewing employee deaths as a good thing—and employee survival as a disappointing event—things are in very bad shape indeed. COLI should immediately be outlawed, in my view. It puts the corporation in conflict with employee health and security.

Written by LeisureGuy

18 September 2014 at 9:18 am

Posted in Business, Daily life

Long-term aftereffects of dousing our environment with lead

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Read about it here.

And they tried to bring it back when George W. Bush was president.

Written by LeisureGuy

17 September 2014 at 1:52 pm

How the US managed to end pay toilets

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A very interesting article on the struggle to provide accommodation for basic human needs.

Written by LeisureGuy

17 September 2014 at 10:41 am

Posted in Business, Daily life

The problem with viewing corporations as persons and giving them a voice in government

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Citizens United has given corporations the right to free speech in that corporations can now give as much money (“speech,” in the eyes of SCOTUS) as they want to political candidates and parties. And Hobby Lobby endowed corporations with the ability to hold religious beliefs (and, presumably, be “saved” and the like).

So corporations are starting to be viewed as a kind of “citizen,” and yet it must be kept in mind that the corporation, as person, is a very narrow and unbalanced person. Whereas a natural person, such as you or I, will have a variety of goals along the lines of seeking a fulfilling life with good relationships with family, friends, and neighbors, perhaps with the hope of a good marriage and raising happy and productive children, corporations have only one goal: to increase profits. All their strategy, all their planning and work are aimed at increasing profits.

That is simply too narrow a range of goals. Corporations like the moral and social balance required to build a good community or a good government. Every corporate lobbyist is working toward one goal: increase profits. That generally means removing consumer protections, removing safety regulations, avoiding fixing problems (cf. GM), and so on.

Corporations are not good citizens. They are feral beasts who can be useful in some arenas but must be watched carefully. Many safeguards are required—and we have a long history that shows what corporations will do if those safeguards are removed. They do not care about their customer’s lives (cf. GM), they care only about increasing profits.

Written by LeisureGuy

17 September 2014 at 8:49 am

Posted in Business, Government

Once they’ve collected your insurance premiums, health insurance companies are loathe to spend that money

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Basically, insurance companies love having the money come in as premiums, but they hate paying out settlements and in general do everything in their power to stall and reduce payments. Now they have adopted a new tactic, reported by Charles Ornstein at ProPublica:

Health insurance companies are no longer allowed to turn away patients because of their pre-existing conditions or charge them more because of those conditions. But some health policy experts say insurers may be doing so in a more subtle way: by forcing people with a variety of illnesses — including Parkinson’s disease, diabetes and epilepsy — to pay more for their drugs.

Insurers have long tried to steer their members away from more expensive brand name drugs, labeling them as “non-preferred” and charging higher co-payments. But according to an editorial to be published Thursday in the American Journal of Managed Care, several prominent health plans have taken it a step further, applying that same concept even to generic drugs.

The Affordable Care Act bans insurance companies from discriminating against patients with health problems, but that hasn’t stopped them from seeking new and creative ways to shift costs to consumers. In the process, the plans effectively may be rendering a variety of ailments “non-preferred,” according to the editorial.

“It is sometimes argued that patients should have ‘skin in the game’ to motivate them to become more prudent consumers,” the editorial says. “One must ask, however, what sort of consumer behavior is encouraged when all generic medicines for particular diseases are ‘non-preferred’ and subject to higher co-pays.”

I recently wrote about the confusion I faced with my infant son’s generic asthma and allergy medication, which switched cost tiers from one month to the next. Until then, I hadn’t known that my plan charged two different prices for generic drugs. If your health insurer does not use such a structure, odds are that it will before long.

The editorial comes several months after two advocacy groups filed a complaint with the Office of Civil Rights of the United States Department of Health and Human Servicesclaiming that several Florida health plans sold in the Affordable Care Act marketplace discriminated against H.I.V. patients by charging them more for drugs.

Specifically, the complaint contended that the plans placed all of their H.I.V. medications, including generics, in their highest of five cost tiers, meaning that patients had to pay 40 percent of the cost after paying a deductible. The complaint is pending.

“It seems that the plans are trying to find this wiggle room to design their benefits to prevent people who have high health needs from enrolling,” said Wayne Turner, a staff lawyer at the National Health Law Program, which filed the complaint alongside the AIDS Institute of Tampa, Fla.

Turner said he feared a “race to the bottom,” in which plans don’t want to be seen as the most attractive for sick patients. “Plans do not want that reputation.”

In July, more than 300 patient groups, covering a range of diseases, wrote to Sylvia Mathews Burwell, the secretary of health and human services, saying they were worried that health plans were trying to skirt the spirit of the law, including how they handled co-pays for drugs.

Generics, which come to the market after a name-brand drug loses its patent protection, used to have one low price in many insurance plans, typically $5 or $10. But as their prices have increased, sometimes sharply, many insurers have split the drugs into two cost groupings, as they have long done with name-brand drugs. “Non-preferred” generic drugs have higher co-pays, though they are still cheaper than brand-name drugs.

With brand names, there’s usually at least one preferred option in each disease category. Not so for generics, the authors of the editorial found.

One of the authors, Gerry Oster, a vice president at the consulting firm Policy Analysis, said he stumbled upon the issue much as I did. He went to his pharmacy to pick up a medication he had been taking for a couple of years. The prior month it cost him $5, but this time it was $20.

As he looked into it, he came to the conclusion that this phenomenon was unknown even to health policy experts. “It’s completely stealth,” he said. . .

Continue reading.

Obviously some laws and regulations will be needed to prevent this sort of discriminatory price.

Written by LeisureGuy

17 September 2014 at 8:40 am

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