Gaming the System

So-called Washington gridlock appears to work for the top one percent of America.  The economy is improving, and CEOs, top management, and professionals are raking it in.  Not so, for most others. That’s probably why it continues, and there is no end in sight.

The average American has seen his income decline over the past few decades, while the affluent American has seen his income dramatically increase.   The income gap between rich and poor is about as great as it was in the Gilded Age when the Robber Barons ran things.  After an anarchist assassinated President McKinley, his successor, President Theodore Roosevelt, became concerned about a revolution and started reforms, things like anti-trust laws to break up the monopolies.  The idea was to save American capitalism by reforming it.

President Franklin D. Roosevelt, who admired and wanted to emulate his cousin Teddy, took the same tact during the Great Depression, and for the same reason some historians report, to save American capitalism.   While the Russian revolution of 1917 brought on the communist state and the dictatorship of the murderous Joseph Stalin,  and the Great Depression set the stage for ruthless dictators Hitler and Mussolini to come into power in Germany and Italy,  the United States elected a president that promised it a New Deal. He is the only president in American history to  be elected four times to the office.

From about 1937 to 1947 income inequality dropped dramatically. This was brought about  by highly progressive taxation and the strengthening of unions, according to an article in Wikipedia. “And,,” the article says,”regulation of the National War Labor Board during World War II raised the income of the poor and working class and lowered that of top earners.” The middle class was at its peak and a “relatively low level of inequality remained fairly steady for about three decades ending in early 1970s.”

No doubt, the one percent leaders understand the lessons of those times.  When things get bad enough for the masses, they will revolt, maybe not violently in every case, but they will revolt.  There are ways to keep and increase the income gap while preventing revolt, and at the same time funnel tax dollars into their enterprises. They have figured out how to game the system.

Conservatives, including the American Medical Association, fought  the creation of Medicare with everything they had.  President Lyndon Johnson was a master at getting Congress to do what he wanted and he pushed through Medicare.  It was and is a very popular program and costs a lot less to administer – compare 3 percent to 20 percent – than private healthcare insurance. 

Recognizing this fact,  the healthcare industry’s leaders, for instance, obviously now understand that the majority of Americans want the government involved in providing healthcare.  Why not give them tax supported programs, but under the healthcare industry’s terms?

A good example is Congress passing of the Medicare “B” drug plan.   That plan doesn’t  allow Medicare to negotiate prices, which could lower them, but it does help senior Americans pay for their drugs, which means that billions in tax dollars are funneled into the coffers of the pharmaceutical companies. The CEO’s of the top eleven global pharmaceutical companies were paid  a total of $1.58 billion last year.  The top salary was $40 million.  Tax dollars paid a great deal of that.

Now, in spite of all the anti-Affordable Healthcare Act or “Obamacare” propaganda, guess who is not going to lose in that scenario?  The program calls for mandatory insurance for all Americans.  The lobbyists were successful in keeping out a government option healthcare insurance plan,  That was the one sure way of lowering premiums.  Only private healthcare providers will sell that mandatory insurance.  Do the math. 

Yes, the system can be gamed.

 

    

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