Friday, March 31, 2006

Woe Unto Them Who Make a Pretense To Devour Widows Houses

Shocks Seen in New Math for Pensions
A proposed new method of reporting pension obligations is likely to show that many companies have a lot more debt than was obvious before.

“The board that writes accounting rules for American business is proposing a new method of reporting pension obligations that is likely to show that many companies have a lot more debt than was obvious before.

In some cases, particularly at old industrial companies like automakers, the newly disclosed obligations are likely to be so large that they will wipe out the net worth of the company.

The panel, the Financial Accounting Standards Board, said the new method, which it plans to issue today for public comment, would address a widespread complaint about the current pension accounting method: that it exposes shareholders and employees to billions of dollars in risks that they cannot easily see or evaluate. The new accounting rule would also apply to retirees' health plans and other benefits.

A member of the accounting board, George Batavick, said, "We took on this project because the current accounting standards just don't provide complete information about these obligations."

The board is moving ahead with the proposed pension changes even as Congress remains bogged down on much broader revisions of the law that governs company pension plans. In fact, Representative John A. Boehner, Republican of Ohio and the new House majority leader, who has been a driving force behind pension changes in Congress, said yesterday that he saw little chance of a finished bill before a deadline for corporate pension contributions in mid-April.

Congress is trying to tighten the rules that govern how much money companies are to set aside in advance to pay for benefits. The accounting board is working with a different set of rules that govern what companies tell investors about their retirement plans.

The new method proposed by the accounting board would require companies to take certain pension values they now report deep in the footnotes of their financial statements and move the information onto their balance sheets — where all their assets and liabilities are reflected. The pension values that now appear on corporate balance sheets are almost universally derided as of little use in understanding the status of a company's retirement plan. ”

A Benefit for Insurers
Critics who say the insurance industry got too big a role in the new Medicare drug program may not know the half of it.

“While the stand-alone Part D drug plans are expected to give insurers a small profit, the margins are likely to be thin — 1 percent to 3 percent before taxes, Humana estimates. That is partly because Humana is offering low premiums and co-payments to attract customers. And the federal subsidy for each customer in a stand-alone Medicare drug plan is only about $75 a month.

But for providing a full Medicare Advantage health policy to a patient, the government pays the insurer $900 to $2,000 a month beyond whatever premium, if any, the patient pays. With that revenue, come bigger profit margins — 3 percent to 5 percent, according to James H. Bloem, Humana's chief financial officer.

For UnitedHealth, the Part D drug business by itself would not be particularly lucrative, adding only 5 to 7 cents to earnings a share, according to Jason Nogueira, an analyst who tracks health care companies for the investment firm T. Rowe Price. That would be no more than 2 cents on the sales dollar for UnitedHealth, which had $45 billion in 2005 revenue and expects profit of $2.90 a share this year.

So the real financial opportunities lie in upgrading Part D enrollees to other Medicare-linked policies. In essence, the high federal subsidies for Medicare Advantage policies are the government's reward to insurers for taking people out of traditional, federally supervised Medicare and into the commercial world of managed care. In fact, Medicare now pays private insurers 15 percent more, on average, to take a patient than it spends in a traditional government program for each patient.

Critics of Medicare's approach, including a number of senior Democrats in Congress, have asked the Congressional Budget Office to examine the issue. The budget office estimated that Medicare could save more than $40 billion over the next 10 years if subsidies to insurers were scaled back to the levels the program now pays directly to doctors and hospitals.

Representative Pete Stark of California, the senior Democrat on the Ways and Means Committee, said in an interview that insurance agents "are out trying to promote seniors into Medicare Advantage plans, and switch them out of plans they are in."

The Medicare law that created the Part D program, Mr. Stark said, "was written by insurance company lobbyists with the help of pharmaceutical company lobbyists."

In a telephone interview, Michael O. Leavitt, the secretary of health and human services, defended the administration's market-based approach to Medicare, saying that market forces were pushing prices lower and that any kinks in Part D would be worked out.

"The market will become simplified because consumers want that," Mr. Leavitt said.

As long as the incentive of federal subsidies stays at current levels, insurers have every reason to pursue them, especially as the industry struggles with slowing growth in its traditional core business of managing employer-sponsored health benefits.

Charles Boorady, a health care securities analyst at Citigroup, said that by expanding Medicare-subsidized offerings, the insurance industry had a potential revenue opportunity of more than $450 billion a year "or enough to almost double the revenue of the managed care industry." ”

1 Then Jesus spoke to the crowds and to His disciples:
2 “The scribes and the Pharisees are seated in the chair of Moses.[1] Perhaps a special chair for teaching in synagogues, or a metaphorical phrase for teaching with Moses’ authority
3 Therefore do whatever they tell you and observe [it]* The bracketed text has been added for clarity. . But don’t do what they do,[2] Lit do according to their works because they don’t practice what they teach.
4 They tie up heavy loads that are hard to carry[3] Other mss omit that are hard to carry and put them on people’s shoulders, but they themselves aren’t willing to lift a finger[4] Lit lift with their finger to move them.
5 They do everything[5] Lit do all their works to be observed by others: They enlarge their phylacteries[6] Small leather boxes containing OT texts, worn by Jews on their arms and foreheads and lengthen their tassels.[7] Other mss add on their robes
6 They love the place of honor at banquets, the front seats in the synagogues,
7 greetings in the marketplaces, and to be called ‘ Rabbi’ by people.

8 “But as for you, do not be called ‘Rabbi,’ because you have one Teacher,[8] Other mss add the Messiah and you are all brothers.
9 Do not call anyone on earth your father, because you have one Father, who is in heaven.
10 And do not be called masters either, because you have one Master,[9] Or Teacher the Messiah.
11 The greatest among you will be your servant.
12 Whoever exalts himself will be humbled, and whoever humbles himself will be exalted.

13 “But woe to you, scribes and Pharisees, hypocrites! You lock up the kingdom of heaven from people. For you don’t go in, and you don’t allow those entering to go in. [
14 “Woe to you, scribes and Pharisees, hypocrites! You devour widows’ houses and make long prayers just for show.[10] Or prayers with false motivation This is why you will receive a harsher punishment.][11]

I guess the market is supposed to solve these problems too, but will it solve our problems or business' problems?

Tuesday, March 28, 2006

Iraqi Documents Are Put on Web, and Search Is On - New York Times

Iraqi Documents Are Put on Web, and Search Is On - New York Times

"There's no quality control," said Michael Scheuer, a former Central Intelligence Agency specialist on terrorism. "You'll have guys out there with a smattering of Arabic drawing all kinds of crazy conclusions. Rush Limbaugh will cherry-pick from the right, and Al Franken will cherry-pick from the left."

American intelligence agencies and presidential commissions long ago concluded that Saddam Hussein had no unconventional weapons and no substantive ties to Al Qaeda before the 2003 invasion.

But now, an unusual experiment in public access is giving anyone with a computer a chance to play intelligence analyst and second-guess the government.

Under pressure from Congressional Republicans, the director of national intelligence has begun a yearlong process of posting on the Web 48,000 boxes of Arabic-language Iraqi documents captured by American troops.

Less than two weeks into the project, and with only 600 out of possibly a million documents and video and audio files posted, some conservative bloggers are already asserting that the material undermines the official view.

On his blog last week, Ray Robison, a former Army officer from Alabama, quoted a document reporting a supposed scheme to put anthrax into American leaflets dropped in Iraq and declared: "Saddam's W.M.D. and terrorist connections all proven in one document!!!"

Not so, American intelligence officials say. "Our view is there's nothing in here that changes what we know today," said a senior intelligence official, who would discuss the program only on condition of anonymity because the director of national intelligence, John D. Negroponte, directed his staff to avoid public debates over the documents. "There is no smoking gun on W.M.D., Al Qaeda, those kinds of issues."

All the documents, which are available on, have received at least a quick review by Arabic linguists and do not alter the government's official stance, officials say. On some tapes already released, in fact, Mr. Hussein expressed frustration that he did not have unconventional weapons.

Intelligence officials had serious concerns about turning loose an army of amateurs on a warehouse full of raw documents that include hearsay, disinformation and forgery. Mr. Negroponte's office attached a disclaimer to the documents, only a few of which have been translated into English, saying the government did not vouch for their authenticity.

Another administration official described the political logic: "If anyone in the intelligence community thought there was valid information in those documents that supported either of those questions — W.M.D. or Al Qaeda — they would have shouted them from the rooftops."

Sunday, March 26, 2006

Another Problem Markets Can't Solve!

Retraining Laid-Off Workers, but for What? - New York Times:

Layoffs have disrupted the lives of millions of Americans over the last 25 years. The cure that these displaced workers are offered — retraining and more education — is heralded as a sure path to new and better-paying careers. But often that policy prescription does not work, as this book excerpt explains. It is adapted from "The Disposable American: Layoffs and Their Consequences" by Louis Uchitelle, an economics writer for The New York Times. Knopf will publish the book on Tuesday.

“They were, in nearly every case, family men in their 30's and 40's who had worked for United Airlines since the mid-1990's. Summoned by their union, they had gathered in the carpeted conference room at the Days Inn next to Indianapolis International Airport, not far from United's giant maintenance center, a building so big that 12 airliners could be overhauled in it simultaneously. That no longer happened. Most of the repair bays were empty. The airline was cutting back operations, and the 60 mechanics at the meeting were in the fourth group to be let go.

Confrontation had brought on the layoffs. Influenced by militants in their union local, Hoosier Air Transport Lodge 2294 of the International Association of Machinists, the 2,000 mechanics at the center had engaged in a work slowdown for many months, and then a refusal to work overtime. But rather than give ground, United responded by outsourcing, sending planes to nonunion contractors elsewhere in the country.

That scared the mechanics. They quieted down and, in effect, authorized the leaders of Lodge 2294 to make peace. Their hope was that if they cooperated, United would ease up on the layoffs and revive operations at, arguably, one of the most efficient, high-tech maintenance centers in the world. In this state of mind, the union was helping to usher the 60 laid-off mechanics quietly away. It had rented the conference room on this cold January evening in 2003 to introduce the men to what amounted to a boot camp for recycling laid-off workers back into new, usually lower-paying lines of work.

SIMILAR federally subsidized boot camps, organized by state and local governments, often in league with unions, have proliferated in the United States since the 1980's, and now many cities have them. Unable to stop layoffs, government has taken on the task of refitting discarded workers for "alternate careers." In deciding as a nation to try to rejuvenate them as workers, we put in place a system, however unrealistic, that implicitly acknowledged layoffs as a legitimate practice.

The presumption — promoted by economists, educators, business executives and nearly all of the nation's political leaders, Democrats and Republicans alike — holds that in America's vibrant and flexible economy there is work, at good pay, for the educated and skilled. The unemployed need only to get themselves educated and skilled and the work will materialize. Education and training create the jobs, according to this way of thinking. Or, put another way, an appropriate job at decent pay materializes for every trained or educated worker.

If the workers were already trained, as the mechanics certainly were, then what they needed was additional training and counseling as a transition into well-paying, unfilled jobs in other industries.

If the transition failed to function as advertised, well, the accepted wisdom suggested that it was the fault of the workers themselves. Their failure to land good jobs was due to personality defects or a resistance to acquiring new skills or a reluctance to move where the good jobs were.

That was the myth. It evaporated in practice for the aircraft mechanics, whose hourly pay ranged up to $31. Not enough job openings exist at $31 an hour — or at $16 an hour, for that matter — to meet the demand for them. Jobs don't just materialize at cost-conscious companies to absorb all the qualified people who want them.

You cannot be an engineer or an accountant without a degree; in that sense, education and training certainly do count. Furthermore, in the competition for the jobs that exist, the educated and trained have an edge. That advantage shows up regularly in wage comparisons. But you cannot earn an engineer's or an accountant's typical pay if companies are not hiring engineers and accountants, or are hiring relatively few and can control the wage, chipping away at it.

For the mechanics at the Days Inn, the retraining process would begin in a few days with workshops in résumé writing and interviewing skills, personality evaluations and job counseling — and, for a lucky few, tuition grants to go back to school. The mechanics were being "counseled out" of their well-paying trade… ”

The real myth, the one that's killing our hopes and dreams, is the myth that markets, and that's markets alone, solve all economic problems and every social problem with a major economic component.

The invisible hand of the market has been credited for the subtitles under the ‘American Dream,’ before that dream had a name, before there was an America to dream about.

When we wrote our constitution we left the words slave and slavery out, counted on the market to solve the problems of all those other persons it terated as three fifths of a person for purposes of representation.

Nearly a century after our civil war we were still waiting for the market to solve segregation. We're still waiting for the market to enable Pulitzer prize winner Clarence Page to have the certainty of being able to catch a taxicab near the Chicago Tribune's headquarters in downtown Chicago.

Markets failed to enable auto workers the ability to afford the cars they made. Nor did markets solve the post World War Two housing shortage, create the suburbs as we know them, or guarantee their racial composition.

They won't solve their racial problems either. Not anymore than markets get black people test drives at auto dealerships.

Deliberate systematic government actions created all white suburbs in the forties and fifties. Policy and politics created the inner city ghettoes. Banking regulations made most urban blight inevitable, simply by failing to mandate equal access to loans for people in equal financial circumstances.

Peoples livelihoods are threatened by National policies far more than global markets, because there are no truly free markets. There are certainly no markets where everyone is regulated by the same rules.!

Saturday, March 25, 2006

No Surprises Here

Our conceit is that we’re the world’s sole superpower

But Katrina shows us treating our own citizens in the same ways as third world despots.

We act or fail to act based on class, caste, ethnicity, creed and race.

So is it any wonder that we don’t even count Iraqi casualties?

In the official American world view they don’t count at all.


The Bush administration bungled the Iraq occupation, arrogantly throwing away State Department occupation plans and C.I.A. insurgency warnings. But the human toll of those mistakes has not been as viscerally evident because the White House pulled a curtain over the bodies: the president has avoided the funerals of soldiers, and the Pentagon has censored the coffins of the dead coming home and never acknowledges the number of Iraqi civilians killed.
American soldiers are immune from the laws of Iraq, so al-Hillali sought justice from the American military, which charged the soldiers with two counts each of armed robbery and discharging a firearm. Although Army officials found some of the missing items in the soldiers' possession and they admitted to robbing houses under the guise of looking for illegal weapons, the Army dismissed the charges. In exchange, Barron said, both soldiers agreed to leave the military.

Using previously undisclosed Army records, the Dayton Daily News found that dozens of soldiers have been accused of crimes against Iraqis since the first troops deployed for Iraq. But despite strong evidence and convictions in some cases, only a small percentage resulted in punishments nearing those routinely imposed for such crimes by civilian justice systems.

In a number of other cases, there was no evidence that thorough or timely criminal investigations were conducted. Other cases weren't prosecuted, and still others resulted in dismissals, light jail sentences or no jail sentence at all.

In several cases, crimes involving military property and violations of military rules such as drinking or adultery — many not crimes at all under civilian law — were treated more harshly than cases involving killing, robbing or kidnapping Iraqi civilians.

"I've been surprised at some of the lenient sentences," said Gary D. Solis, a former military judge and prosecutor who teaches military law at the U.S. Military Academy at West Point. "I have an uneasy suspicion that it relates to the nationality of the victim."

Criminal acts by soldiers — and the lack of punishment — add to the hatred that is fueling the insurgency in Iraq, putting soldiers at greater risk, Solis and other experts said.

"There's been a decline for the respect for the rule of international law and a failure to understand that we, the United States, have to be the good guys," Solis said. "Misconduct only breeds contempt for those who engage in the misconduct, and if we do what we accuse them of doing, then we are in a losing position."

A Daily News analysis of records from the Army Court-Martial Management Information System database found that 226 soldiers were charged with offenses between the first deployments and Jan. 1, 2005. Of the 1,038 separate charges, fewer than one in 10 involved crimes against Iraqis. Virtually all of the rest, more than 900 charges, involved crimes against other soldiers, property, drug or alcohol offenses and violations of military rules.

Charges involving Iraqi victims were three times more likely to be dismissed or withdrawn by the Army than cases in which the victims were soldiers or civilian military employees, the examination found.

Are you disturbed by our total disregard for Iraq's innocent dead, whether killed by the ‘insurgents’ or killed by us?

Do you believe Iran is more of a threat to us than North Korea?

North Korea has long range missiles and nuclear weapons, but we negotiate with them multilaterally and bilaterally.

So, is it OK to threaten muslims?

Sunday, March 19, 2006

This Essay Breaks the Law - New York Times

This Essay Breaks the Law - New York Times

Published: March 19, 2006

• The Earth revolves around the Sun.

• The speed of light is a constant.

• Apples fall to earth because of gravity.

• Elevated blood sugar is linked to diabetes.

• Elevated uric acid is linked to gout.

• Elevated homocysteine is linked to heart disease.

• Elevated homocysteine is linked to B-12 deficiency, so doctors should test homocysteine levels to see whether the patient needs vitamins.

ACTUALLY, I can't make that last statement. A corporation has patented that fact, and demands a royalty for its use. Anyone who makes the fact public and encourages doctors to test for the condition and treat it can be sued for royalty fees. Any doctor who reads a patient's test results and even thinks of vitamin deficiency infringes the patent. A federal circuit court held that mere thinking violates the patent.

All this may sound absurd, but it is the heart of a case that will be argued before the Supreme Court on Tuesday. In 1986 researchers filed a patent application for a method of testing the levels of homocysteine, an amino acid, in the blood. They went one step further and asked for a patent on the basic biological relationship between homocysteine and vitamin deficiency. A patent was granted that covered both the test and the scientific fact. Eventually, a company called Metabolite took over the license for the patent.

Although Metabolite does not have a monopoly on test methods — other companies make homocysteine tests, too — they assert licensing rights on the correlation of elevated homocysteine with vitamin deficiency. A company called LabCorp used a different test but published an article mentioning the patented fact. Metabolite sued on a number of grounds, and has won in court so far.

But what the Supreme Court will focus on is the nature of the claimed correlation. On the one hand, courts have repeatedly held that basic bodily processes and "products of nature" are not patentable. That's why no one owns gravity, or the speed of light. But at the same time, courts have granted so-called correlation patents for many years. Powerful forces are arrayed on both sides of the issue.

In addition, there is the rather bizarre question of whether simply thinking about a patented fact infringes the patent. The idea smacks of thought control, to say nothing of unenforceability. It seems like something out of a novel by Philip K. Dick — or Kafka. But it highlights the uncomfortable truth that the Patent Office and the courts have in recent decades ruled themselves into a corner from which they must somehow extricate themselves.

For example, the human genome exists in every one of us, and is therefore our shared heritage and an undoubted fact of nature. Nevertheless 20 percent of the genome is now privately owned. The gene for diabetes is owned, and its owner has something to say about any research you do, and what it will cost you. The entire genome of the hepatitis C virus is owned by a biotech company. Royalty costs now influence the direction of research in basic diseases, and often even the testing for diseases. Such barriers to medical testing and research are not in the public interest. Do you want to be told by your doctor, "Oh, nobody studies your disease any more because the owner of the gene/enzyme/correlation has made it too expensive to do research?"

The question of whether basic truths of nature can be owned ought not to be confused with concerns about how we pay for biotech development, whether we will have drugs in the future, and so on. If you invent a new test, you may patent it and sell it for as much as you can, if that's your goal. Companies can certainly own a test they have invented. But they should not own the disease itself, or the gene that causes the disease, or essential underlying facts about the disease. …”

Pay close attention here. The people who want to own your genes are the people who are promoting what they call the “ownership society.” They aren't trying to create anything new here. they're just trying to recreate what they consider to be the natural order of things. For them, property is the what our society is all about. Property rights trump workers rights, regulation, civil liberties and even public health and safety.

To you and I this appears to trump common sense. To them this is common sense.

Welcome to a world where workers don't own the benefits of their labor, women don't own their own bodies. Where despite the worship of “ownership” homeowners can lose their homes if the government can claim they'll get higher taxes from newer, more politically connected development.

We had a society like this once before. Perhaps you've heard of slavery?

con·cept: March 2006