Tag: Inflation

Thanks Obama

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In news that should surprise no one, the cost for workers’ health insurance policies, as well as deductibles have skyrocketed over the past decade. 

This is not a surprise.  Obamacare was all about appeasing the malefactors in the insurance industry, and so it brought the fox into the hen house:

The high cost of health care is persisting during the pandemic, even for people lucky enough to still have job-based insurance.

The average annual cost of a health plan covering a family rose to $21,342 in 2020, according to the latest survey by the Kaiser Family Foundation, a nonprofit group that tracks employer-based coverage. Workers paid about a quarter of the total premiums, or $5,588, on average, with their employers picking up the rest of the cost.

An analysis of the results was published Thursday online in Heath Affairs, an academic journal. While premiums rose only slightly from the 2019 survey, the increase in premiums and deductibles together over the last decade has far outpaced both inflation and the growth in workers’ earnings. Since 2010, premiums have climbed 55 percent, more than double the rise in wages or inflation, according to the foundation’s analysis.

………

The survey also underscored how much workers with health insurance still have to spend out of pocket for their care. In addition to paying for their share of premiums, most employees face a hefty deductible — an average of $1,644 for an individual. That is more than twice as high as it was in 2010, when the average for a single person was $646, according to the foundation.

This was foreseeable in the plan, and made inevitable with Obama’s dissembling over the public option.

Federal Reserve Open Market Committee Issues Report

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 A brief summary of their statement is, “Sh%$ is f%$#ed up, and we have to do something.”

Federal Reserve officials expect to leave interest rates near zero for years — through at least 2023 — and will tolerate periods of higher inflation as they try to revive the labor market and economy, based on their September policy statement and economic projections released Wednesday.

The announcement codifies that the Fed chair, Jerome H. Powell, and his colleagues plan to be extraordinarily patient as they try to cushion the economy in the months and years ahead.

The policy-setting Federal Open Market Committee “expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the committee’s assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time,” officials said in their statement.

………

The Fed updated its Summary of Economic Projections, a set of estimates for how the economy and interest rates will develop in coming years. Officials saw unemployment ending 2020 at a lower rate than it previously forecast: The median official expects the rate to average 7.6 percent over the final three months of the year, compared with 9.3 percent when the Fed released its last set of projections in June.

It’s not a bad policy, but it comes from a horrible reality.

How Our System Screws the Ordinary People

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The Cost of Thriving Index

A right wing economist has come up with a concept called the, “Cost of Thriving” which describes how well being of the average American has been declining.

The argument is that core expenses have increased more rapidly than the CPI, and additionally that “Hedonic Adjustments” which subtracts a deflator because the quality of the products consumed increase, makes the government supplied cost of living data inaccurate.

At its core, a TV shows you shows you shows, no matter how flat it is, a car moves you no matter how many options have become standard features:

Economists and financial experts have been telling us for years how great things are for U.S. workers and consumers. The stuff we buy is dirt cheap, and living standards are higher than ever. Wages are keeping pace with inflation. Inequality probably isn’t as bad as you’ve been led to believe. The stock market is booming!

So why, then, do so many of us feel like we can barely make ends meet?

A new report published by the Manhattan Institute, a conservative think tank, offers a clear explanation for the disconnect between the economy described by economists and the one experienced by regular people. It all boils down to the startling shift illustrated in the chart below. (Above and to the right here)

Lead author Oren Cass distills it as follows: “In 1985, the typical male worker could cover a family of four’s major expenditures (housing, health care, transportation, education) on 30 weeks of salary,” he wrote on Twitter last week. “By 2018 it took 53 weeks. Which is a problem, there being 52 weeks in a year.”

Cass calls this calculation the Cost-of-Thriving Index. It measures the median male annual salary against four major household expenditures:

  • Housing, defined as the annual rent for a three-bedroom house in the 40th percentile of the local housing market.
  • Health care, defined as the annual premium on a typical family health insurance policy.
  • Transportation, defined as the average cost of owning and operating a car driven 15,000 miles per year.
  • Education, defined as the average cost of tuition, fees, and room and board at a four-year public college.

………

It’s these realities, Cass writes, that are most salient for the middle-class families who tell pollsters they live paycheck to paycheck and worry that their kids’ standard of living will be lower than theirs. Traditional economists might look at the plummeting price of flat-screen TVs as a sign that standards of living are increasing. But how useful is a cheap TV when you can’t afford your insulin?

The fact that a very right wing economist understands that the current metrics of the cost of living are wrong, and that they are obscuring a fall in standard of living.

This is not the sort of thing that I would expect the Manhattan Institute.

Our Broken Pharmaceutical System

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Insulin has been around for 95 years, but the price keeps increasing more than twice as fast as inflation:

At first, the researchers who discovered insulin agonized about whether to patent the drug at all. It was 1921, and the team of biochemists and physicians based in Toronto was troubled by the idea of profiting from a medicine that had such widespread human value, one that could transform diabetes from a death sentence into a manageable disease.

Ultimately, they decided to file for a patent — and promptly sold it to the University of Toronto for $3, or $1 for each person listed. It was the best way, they believed, to ensure that no company would have a monopoly and patients would have affordable access to a safe, effective drug.

“Above all, these were discoverers who were trying to do a great humanitarian thing,” said historian Michael Bliss, “and they hoped their discovery was a kind of gift to humanity.”

But the drug also has become a gift to the pharmaceutical industry. A version of insulin that carried a list price of $17 a vial in 1997 is priced at $138 today. Another that launched two decades ago with a sticker price of $21 a vial has been increased to $255.

The magic of the market is a myth when it comes to drugs.

We need to stop evergreening minor changes in drugs, and we need to adopt the price controls used by the national health systems of other industrialized nations.

This is insane.