Deceptive Pricing

If you had to believe one of the following people, who would you choose?

Heather Bresch, CEO of Mylan, makers of the EpiPen: “The misconception about our profits is understandable, and at least partly due to the complex environment in which pharmaceutical prices are determined.”

John Stumpf, CEO of Wells Fargo: “First of all, this was by 1% of our people.”

Janet Yellen, chair of the Federal Reserve Board: “In general, I would not say that asset valuations are out of line with historical norms.”yellen

Two of the three people above were brought before Congressional committees so they could be scolded by U.S. Senator Elizabeth Warren and other upstanding, ethically pure members of Congress. Which two?

And finally, which of the three people above have had the greatest impact on you and on the economy?

Stumpf Grilled

Mr. Stumpf’s days as CEO of Wells Fargo are apparently numbered, because some of his company’s minions decided to open accounts for bank customers who never authorized them to be opened. This was done by employees to make quotas and earn bonuses.

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Take This Quiz before You Vote

Citizens of many countries would envy us for having the right to vote, the right to express our opinions, the right to practice whatever religion suits us, and the right to say, do and think pretty much whatever we want.

Yet many of us take these freedoms for granted.  Many people neglect to vote.  Others vote, but shouldn’t because they don’t know what they’re voting for.  While “get out the vote” efforts have become popular, it’s unlikely that anyone who won’t make the effort to cast a ballot is going to make an effort to know what the issues are and where the candidates stand on those issues.  Voting when you don’t know the issues dilutes the democratic process.screen-shot-2016-09-15-at-1-20-35-pm

So take this simple quiz.  Maybe it will help to inform you.  Maybe you’ll decide after taking it that you shouldn’t vote.  And maybe it will just reinforce what you already believe.

True or false.  The Affordable Care Act (aka Obamacare) is making healthcare more affordable.

False. Health insurance is becoming increasingly unaffordable and, shortly after the November election, the new open enrollment period will bring double-digit rate increases for many.  Healthcare costs jumped 1% just in the month of August, which was the largest increase in 32½ years.

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Obamacare in Massachusetts: $1 Billion Cost, Fewer Insured

The big news last week, if you believe it, is that the Affordable Care Act (aka, Obamacare) has reduced the number of Americans who do not have health insurance to only 8.6% of the population.

In other words, if you provide heavily subsidized insurance and tax those who fail to take it, you can reduce the number of uninsured Americans to 8.6%.  But, in spite of the penalties and giveaways, the number of uninsured is still high.  Even before Massachusetts initiated healthcare reform in 2006 under then-governor Mitt Romney, the uninsured rate in the state was only 7%.obamacare-2

Regardless, all but a small percentage of Americans are now insured, if you believe the estimates of a government agency–the Centers for Disease Control–talking about a government program–the Affordable Care Act (aka, Obamacare).  And it’s taken only five years!

As residents of Massachusetts, we can be proud that we’re number one. That is, we have the lowest percentage of uninsured residents in the country (although the stats we found put the number at anywhere from 2.5% to 3.5%).

Well, that’s great … but are Massachusetts rates low because of Obamacare or because of its predecessor, Romneycare?  And what has the cost of Obamacare compliance been for Massachusetts residents?

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Doubling Down on Bad Ideas

Uh oh.

Until now, about the only thing good you could say about the Federal Reserve Board in recent years is that it hasn’t followed central banks in Europe and Japan by lowering interest rates below zero.

But that may be where we’re going next.

Fed Vice Chair Stanley Fischer told Bloomberg Surveillance last week that he and his Fed colleagues believe that negative interest rates are a legitimate tool for central bankers to use in their efforts to achieve full employment and economic health.Fischer

If by Fed colleagues, he means his imaginary friends, we should be okay.  But if he means his gal pal Janet Yellen et al, look out below.  Over the cliff we go.

Negative rates would be doubling down on failed policies. If you’re a political figure, like Fed Chair Yellen and her Fed brethren, it would be anathema to admit that you’re wrong about anything, so if something doesn’t work, you rationalize that you just didn’t pour enough gasoline on the fire and you pour more.

Anyone who has to pay for health insurance will recognize the doubling-down approach being used in the coming election by the Democrats who gave us Obamacare. The Affordable Care Act, to the surprise of no one who is not a Democratic member of Congress, has become unaffordable, with a majority of exchanges shutting down because they are losing money. But, with premiums increasing by about 30% this year in some states, Democrats believe the answer is more government control of healthcare. The insurers, of course, are the bad guys, because they are no longer willing to lose billions propping up Obamacare.

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