Monday, September 17, 2012

The sad case of Medicaid expansion


At the recent Republican National Convention South Carolina Governor Nikki Haley took the stage.  “Sadly, the hardest part of my job continues to be this federal government, this administration and this president,” she said.
But a story in today’s Charleston Post & Courier clearly shows that the hardest part of the Governor’s job is convincing state legislators not to do what is in the best interest of South Carolina. 

According to the story Haley and Tony Keck, who heads the state’s Department of Health and Human Services (SCDHHS), have been meeting and talking with legislators to convince them to vote against expanding Medicaid in the state to cover up to 600,000 uninsured South Carolinians. 

Under Obamacare the feds would pick up all the cost for the expansion for the first three years and 90% after that so the uninsured at or below 138% of the federal poverty level could get the healthcare they desperately need.  Small businesses employing these working poor would benefit from healthier workers that would no longer need covering under employer healthcare plans.   Premiums for everyone would be helped by eliminating the hidden premium tax we all pay for the uninsured.  Healthcare providers would benefit from the increased revenue.  And the economic boost to the whole state’s economy would be enormous. 

But Haley wants the state to reject the $13 billion in federal money over the next six years because, she says, it would hurt the state in the long run. 

Haley complains that the state can’t afford the expansion.  She cites a highly criticized study paid for by Keck’s agency.  In analyzing this report John Ruoff of The Ruoff Group concludes, “As the General Assembly explores a Medicaid expansion, it should do so with realistic numbers based on empirical research and taking into account all costs and savings directly attributable to an expansion and not just SCDHHS costs and savings. To date, SCDHHS has failed to provide estimates of those other savings.”

The Haley administration also contends that the Medicaid program doesn’t provide the most healthcare for the lowest cost.  But instead of crafting a new approach and asking the feds for waivers to implement a more “cost effective” Medicaid program as it claims it wants, Haley and Keck would rather do the political work of convincing the legislature and public that an expansion is not good for the state. 

Sadly for South Carolinians, the hardest part of our job is seeing the health of our citizens and economy suffer at the hands of partisans looking to make national names for themselves.

 

Thursday, September 13, 2012

Fewer Uninsured People

Editorial
The New York Times

September 13, 2012

The number of Americans who lack health insurance declined last year, the first drop since 2007. This is, in large part, the result of the health care reform law and better coverage under public programs like Medicaid. This also shows why repealing the health care law or revamping and shrinking Medicaid, as many Republicans want to do, would be disastrous moves.
Read more

Wednesday, September 12, 2012

Stop needed regulations now, big problems tomorrow

The efforts in Congress to eviscerate regulations that protect small businesses and consumers continue.  The letter below from the American Sustainable Business Council oulines the danger of S.3468.  This bill may soon go through a markup so if you want to weigh in, do so now.
American Sustainable Business Council
August 28, 2012

Dear Members of the Senate Homeland Security and Government Affairs Committee:

The American Sustainable Business Council (ASBC) opposes The Independent Regulatory Analysis Act, S. 3468. ASBC believes the proposed Act will further put at risk consumers and businesses; particularly small businesses, who benefit from the work of independent agencies charged with ensuring product safety, financial transparency and market competition.

The need for S.3468 is also called into question by ASBC polling of small business owners that shows weak customer demand is their top concern.  Very few small business owners cite regulations as a top problem or an impediment to hiring.  Regulations are also not seen as a problem for larger businesses.  GOP presidential candidate Mitt Romney recently observed on the campaign trail in Minnesota that “big business is doing fine” and “they can deal with all the regulation.” 

With regulations not seen as an important hindrance to our economy’s growth, the negative consequences of S.3468 far exceed any possible positive impact.

The proposed Act would strip a number of federal agencies of much of their independence, requiring them to spend already limited resources completing detailed cost-benefit (C/B) analyses – even when Congress has not required this. In addition, these agencies already have sufficient procedures in place that carefully consider the economic implications of their actions. ASBC believes that while cost-benefit analyses are important, other factors including the environmental and public safety impact of a regulation must also be carefully considered.

Unlike executive agencies, independent agencies are accountable to Congress and not under the control of the President. Where executive agency heads serve at the pleasure of the President, independent agency heads have a defined tenure that is independent of the election cycle. Congress frequently chooses to establish independent agencies when, in its judgment, the policy area affected needs to be insulated from the political pressures associated with being part of the executive branch. Intended or not, SB 3468 would override Congress' direction to each agency and instead require a preeminent focus on economic impact. This is simply bad policy.

Agencies such as the Consumer Financial Protection Bureau, the Securities and Exchange Commission, the Commodities Futures Trading Commission, the Consumer Product Safety Commission, the Nuclear Regulatory Commission, and the National Labor Relations Board are accountable to Congress not to the President.  That’s a good thing. ASBC believes this ensures a smart balance of power between the legislative and executive branch. In many cases, independent regulatory agencies' independence has allowed them to respond nimbly to emerging crises. For example, on Aug. 15, 2012, the Consumer Product Safety Commission recalled 4 million Bumbo Baby Seats in response to evidence that babies had been injured while sitting in them.
The Independent Regulatory Analysis Act would politicize independent regulatory agencies and make it harder for them to protect Americans.

As Senator Collins noted on May 12, 2009*, “… the whole reason that Congress creates independent regulatory agencies is to insulate them from administration policies, whether it’s a Democratic or Republican administration. Congress has deemed that this particular area needs to be protected from the changing agendas of different administrations.

For all these reasons, the American Sustainable Business Council opposes SB 3468.

Sincerely,
Richard EidlinPolicy Director

 

Tuesday, September 11, 2012

Catholic's going after Medicaid expansion


First, I’m not a Catholic.
Second, let’s hear it for the Catholic Church!

Back in April the U.S. Conference of Catholic Bishops sent a letter to Congress opposing cuts in program funding for the poor such as Medicaid.  In August, Father Stephen Umhoefer, Paul Ryan’s family pastor for a number of years, revealed his worry over VP candidate’s budget proposal that would cut funding for Medicaid-something Father Umhoefer believes is would be “inconsistent with Catholic teachings.”
Yesterday the President of the Leadership Conference of Women Religious, Sister Pat Farrell signed onto a letter encouraging governors to expand Medicaid in their states as allowed under Obamacare.  Most American nuns are members of the Conference.

The Catholic Church believes in the shared responsibility we all have for making sure that there is an adequate safety net for the less fortunate.  Medicaid that provides access to healthcare is part of that safety net that the Bishops, Father Umhoefer and the nuns do not want to see cut by Ryan’s budget and instead expanded in the states under Obamacare.
Enter South Carolina’s director of Health and Human Services Tony Keck who, like his boss South Carolina Governor Nikki Haley, opposes expanding Medicaid even if the Federal government pays for it for several years.

In a blog posted on September 6th in the well-respected online journal “Health Affairs, Mr. Keck partially justifies Governor Haley’s opposition to expanding Medicaid saying, “she does so because she believes that its version of expansion will ultimately hurt the poor....”

I don’t know if Mr. Keck is a religious man and we read that Governor Haley, Sikh turned Methodist, attends church.  But while these two rightfully should be concerned about government policy, their combined credentials for having hands-on experience with the poor pales in comparison with those in the Catholic Church. 
So let’s not hear some “we know better” (or “holier than thou”) comments about how providing low income uninsured with access to healthcare is somehow bad for the poor.  If South Carolina officials don’t like the way it is delivered under Medicaid, take the Federal money and ask for permission to make systemic changes in how the healthcare will be delivered.  They’ll probably get a positive response from the Feds and definitely a thumbs up from the Catholic Church (and maybe even from someone at a higher level).

Monday, September 10, 2012

How many jobs were REALLY created in August?

Last week there were two very divergent estimates of the number of new jobs created in August.  The most widely reported number came from the Bureau of Labor Statistics that estimated 96,000 new jobs.  ADP National Employment Report reported that 201,000 new jobs were created.  Quite a large discrepancy and which one should we believe?

Friday I talked with Joel Prakken, chairman of Macroeconomic Advisers that produces the data and analysis for the ADP report. (Listen to the interview here.)  
Mr. Prakken told me that the two reports come from different samples of businesses. The Bureau of Labor Statistics draws a sample of about a half a million businesses to receive its survey which is then filled out by someone (who knows who) in the businesses.  ADP surveys a similar number of its clients and actually uses a computerized count of names on the payrolls.

Mr. Prakken obviously believes that his numbers are more accurate but says that the two employment projections correlate up to 95% over time. 
Unfortunately the vastly different projections come at a time when the media and voters are paying close attention.  Mr. Prakken disagreed with my assertion that almost all the media primarily reports the Bureau of Labor Statistics numbers but the proof is in the headlines.  It is the 96,000 new jobs figure that is impacting the presidential election. 

My wish would be that the media and politicians look within the ADP report and talk about small businesses doing more than their fair share in creating new jobs—49% created by businesses with under 50 employees.  Since I and many others define a small business as one with less than 100 workers, it is clear that just like every other month this year over 50% of the new jobs created in August came from small business.
That was my prediction I made to Neil Cavuto when I appeared on his Fox Business News show just before 9 PM last Thursday night live from the Democratic National Convention. 

My prediction for September is that small businesses will again outperform every other category in creating new jobs.

Tuesday, September 4, 2012

Summit for a Sustainable Economy


The organizers of the Democratic National Convention this week in Charlotte have put in place a number of efforts to make the event as green as possible.
Theo LeCompte, CEO of the Democratic National Convention Committee told The Hill, “We are doing a lot, on a number of fronts, to maximize the sustainable elements of everything we are doing.”

But sustainability is more than just about the environment.  It’s also about the economy.
Tomorrow I will moderate the first panel of the American Sustainable Business Council’s (ASBC) “Summit for a Sustainable Economy” in Charlotte.  The ASBC, of which I am vice chair, and its fifty plus partner organizations represent over 150,000 businesses and more than 300,000 individual entrepreneurs, owners, executives, investors and business professionals who can speak firsthand to the value of “triple bottom line” sustainable, socially responsible and environmentally sound policy initiatives.

The ASBC summit is a two-day event that will feature business leaders sharing how their businesses are helping achieve a sustainable economy—one that doesn’t borrow from the future to achieve artificially high levels of consumption today to the detriment of the next generation of businesses and citizens.

A similar summit was planned for the Republican National Convention in Tampa but was cancelled due to the hurricane threat.
Below is ASBC summit scheduled for tomorrow and Thursday.  If you are going to be in Charlotte, come join us.

American Sustainable Business Council“SUMMIT FOR A SUSTAINABLE ECONOMY"Democratic National ConventionCharlotte, North CarolinaK&L Gates LLP, Hearst Tower214 North Tryon Street, 47th Floor, Charlotte
September 5, 2012 – 8:30 am to 1:00 pmBuilding a Sustainable Economy

Join us in an interactive discussion with business leaders and elected officials exploring how public policy and business engagement can help build a more sustainable economy.

Photo Identification required for access to building. (Media is welcome)

The Summit will explore:
 How public policies can help promote a more sustainable economy
 Strategies for using financial capital for responsible, transparent and tangible investments
 Initiatives for building vibrant local economies
 Developing economic metrics that reach beyond GDP and factor in environmental and social factors
 Best practices by leading socially responsible companies, and,
 The transition that American market-based capitalism is undergoing in which new values and new business coalitions are emerging to ensure future prosperity.

The Summit will tell a consistent story: Business prospers when the larger economy resets its priorities to ensure a robust middle class, transparent financial markets, affordable healthcare, clean energy, fair tax system, reliable infrastructure, a campaign finance system not controlled by the wealthiest companies.

8:30 am
Coffee, Tea, Registration

9:00 am Welcoming

9:15 – 10:15 SESSION ONE: RESPONSIBLE CAPITAL: INVESTING IN A PROSPEROUS AMERICA
Financial capital can be deployed to create new jobs, stabilize communities, catalyze new productive technology and services and increase overall societal well-being. It can also to be used to reduce competition and enable a relatively few to consolidate market and political power. This session explores ways to use capital to have a broader societal impact. We’ll also explore how tax policies can encourage more of what the economy needs. And finally, we’ll look at how ‘responsible capital’ can foster local economic development where the metrics of success account for externalities and hidden costs.

Speakers:
Roger Smith, President, American Income Life
Bonny Moellenbrock, Executive Director, Investors Circle
Brian Schneiderman, Self Help Credit Union
Shivani Siroya, CEO and Founder of InVenture

Moderator
Frank Knapp, President, South Carolina Small Business Chamber of Commerce

10:15 – 10:30 Congressman James Clyburn, D-SC ‘The Importance of Hearing from Sustainable Businesses
10:45 – 11:45
SESSION TWO: BUILDING SUSTAINABLE COMMUNITIES
Healthy economies; rural, suburban, urban – require the same ingredients: clean and affordable energy, jobs with a future, quality products and services, affordable health care, a robust food system, a sense of place and leadership from responsible businesses. This discussion looks at the degree to which government factors in such sustainability issues as: the value of a diversified local economy, quality of life, good infrastructure, TOD, education and strong environmental standards when seeking to attract new business.

Speakers:
Jeffrey Hollender, Co-Founder, Seventh Generation
Betsy Blaisdell, Environmental Stewardship, Timberland
Nikhil Arora, President, Back to the Roots
John C. Komisin, AIA, Little Architects

Moderator:
Bryan Howard, USBGC

11:45 – 12:45 SESSION THREE: BUSINESS MODELS & ACCOUNTING FOR A SUSTAINABLE ECONOMY A key to creating a more sustainable resilient economy is changing what we measure and value, balancing financial success with social impact and introducing full cost accounting. We’ll also explore trends that require businesses to measure financial, social and environmental impact and efforts to move beyond GDP as our sole measure of success.
Speakers:
Kim Jordan, CEO, New Belgium Brewing
Lew Daly, Senior Fellow, Demos
Beth Richardson, B Lab
Kathrin Winkler, Chief Sustainability Officer, EMC Corporation
Elected Official (TBA)

Moderator:
Richard Eidlin, Public Policy Director, American Sustainable Business Council

September 5, 2012 – 4:00 pm to 6:00 pmRECEPTION, Harvey Gantt Center, 551 South Tryon Street

September 6, 2012 – 9:00 am to 1:00 pm, K&L Gates LLP, Hearst Tower, 214 North Tryon Street, 47th Floor, Charlotte

WOMEN, BUSINESS & THE NEW ECONOMY
SCALING POLICY – PROMOTING EQUITY

9:00 am
Welcoming

Roundtable/Q&A
9:30 – 10:00
A Conversation on The New Economy with Natalia Oberti Nogurera of Pipeline Fellowship featuring women innovators across the corporate, business, social enterprise, and economic development sectors; including Congresswoman Jan Schakowsky (D-IL), Kim Jordan of New Belgium Brewery, Denise Boyer of American Income Life, and Kathleen Rose of Rose Associates.

Break/Networking
10/30-11

Keynote/Q&A
11-11:30
Fran Dresher, CancerSchmancer’s Trash Cancer Campaign
                          Modeling advocacy, policy and action
Dialogue/Q&A
11:30-Noon 
A Conversation on Climate Change, Corporate Social Responsibility and Sustainability
with Danielle Deane of the Joint Center for Political and Economic Studies and Faith Taylor, Director of Sustainability Wyndam Group Worldwide.


Human Rights Learning
“Actors “ with ASBC
12:15-1:00
A Holistic Framework – Scaling for Impact
with Melissa Fizgerald, The West Wing and Chasing the Hill, and April DeSimone, Access the Change in an exploration of the human right to a sustainable environment; and the role of women in promoting a just economy driven by responsible business,  economic engagement and policy reform.

 

Monday, September 3, 2012

When Capitalists Cared

This Labor Day as we honor the workers of America we should also be mourning the loss of the middle class that was almost single-handedly created by Henry Ford in 1914. 

Ford understood that he could sell more Model Ts if his own workers could afford them.  So he dramatically increased the pay of his employees and demonstrating to other industry leaders the benefits of economically secure workers—they turn into big consumers that drive the economy.

We’ve lost this sustainable economic model with a race to the bottom in investing in the middle class worker in exchange for massive corporate profits.  The unraveling started in the 80's with Reagan union-busting and continues today with the failed supply-side economic model that says we must protect the mega wealthy and multinational corporations from paying their fair share of taxes so they can create jobs. 
Hedrick Smith’s op.ed in today’s New York Times (below) tells this sad story of how we have broken the “virtuous circle of growth: well-paid workers generating consumer demand that in turn promotes business expansion and hiring.” 

While corporate execs and some wealthy shareholders have gotten embarrassingly rich, the middle class worker and Main Street small businesses that depend on them are suffering. 
If we don’t once again find our way back to the “virtuous circle”, someday soon the meaning of Labor Day will only be a memory for those of us who lived when the American economy was truly thriving.

---------------------------------------
The New York Times
September 3, 2012



By HEDRICK SMITH

IN the rancorous debate over how to get the sluggish economy moving, we have forgotten the wisdom of Henry Ford. In 1914, not long after the Ford Motor Company came out with the Model T, Ford made the startling announcement that he would pay his workers the unheard-of wage of $5 a day.
Not only was it a matter of social justice, Ford wrote, but paying high wages was also smart business. When wages are low, uncertainty dogs the marketplace and growth is weak. But when pay is high and steady, Ford asserted, business is more secure because workers earn enough to become good customers. They can afford to buy Model Ts.

This is not to suggest that Ford single-handedly created the American middle class. But he was one of the first business leaders to articulate what economists call “the virtuous circle of growth”: well-paid workers generating consumer demand that in turn promotes business expansion and hiring. Other executives bought his logic, and just as important, strong unions fought for rising pay and good benefits in contracts like the 1950 “Treaty of Detroit” between General Motors and the United Auto Workers.
Riding the dynamics of the virtuous circle, America enjoyed its best period of sustained growth in the decades after World War II, from 1945 to 1973, even though income tax rates were far higher than today. It created not only unprecedented middle-class prosperity but also far greater economic equality than today.

The chief executives of the long postwar boom believed that business success and workers’ well-being ran in tandem.
Frank W. Abrams, chairman of Standard Oil of New Jersey, voiced the corporate mantra of “stakeholder capitalism”: the need to balance the interests of all the stakeholders in the corporate family. “The job of management,” he wrote, “is to maintain an equitable and working balance among the claims of the various directly affected interest groups,” which he defined as “stockholders, employees, customers and the public at large.”

Earl S. Willis, a manager of employee benefits at General Electric, declared that “the employee who can plan his economic future with reasonable certainty is an employer’s most productive asset.”
From 1948 to 1973, the productivity of all nonfarm workers nearly doubled, as did average hourly compensation. But things changed dramatically starting in the late 1970s. Although productivity increased by 80.1 percent from 1973 to 2011, average wages rose only 4.2 percent and hourly compensation (wages plus benefits) rose only 10 percent over that time, according to government data analyzed by the Economic Policy Institute.

At the same time, corporate profits were booming. In 2006, the year before the Great Recession began, corporate profits garnered the largest share of national income since 1942, while the share going to wages and salaries sank to the lowest level since 1929. In the recession’s aftermath, corporate profits have bounced back while middle-class incomes have stagnated.
Today the prevailing cut-to-the-bone business ethos means that a company like Caterpillar demands a wage freeze and lower health benefits from its workers, while posting record profits.

Globalization, including the rise of Asia, and technological innovation can’t explain all or even most of today’s gaping inequality; if they did, we would see in other advanced economies the same hyperconcentration of wealth and the same stagnation of middle-class wages as in the United States. But we don’t.
In Germany, still a manufacturing and export powerhouse, average hourly pay has risen five times faster since 1985 than in the United States. The secret of Germany’s success, says Klaus Kleinfeld, who ran the German electrical giant Siemens before taking over the American aluminum company Alcoa in 2008, is “the social contract: the willingness of business, labor and political leaders to put aside some of their differences and make agreements in the national interests.”

In short, German leaders have practiced stakeholder capitalism and followed the century-old wisdom of Henry Ford, while American business and political leaders have dismantled the dynamics of the “virtuous circle” in pursuit of downsizing, offshoring and short-term profit and big dividends for their investors.
Today, we are all paying the price for this shift. As Ford recognized, if average Americans do not have secure jobs with steady and rising pay, the economy will be sluggish. Since the early 1990s, we have been mired three times in “jobless recoveries.” It’s time for America’s business elites to step beyond political rhetoric about protecting wealthy “job creators” and grasp Ford’s insight: Give the middle class a better share of the nation’s economic gains, and the economy will grow faster. Our history shows that.

Hedrick Smith, a former correspondent and Washington bureau chief of The New York Times, is the author of “Who Stole the American Dream?”
http://www.nytimes.com/2012/09/03/opinion/henry-ford-when-capitalists-cared.html?_r=1&nl=todaysheadlines&emc=edit_th_20120903