Sunday, December 20, 2009


Senate Democrats Friday reported that they finally have the 60 votes needed to pass health care legislation. But is it really health care reform? Does the Senate bill really put the fear of God in the health care industry? The simple answer is no.

We can debate this aspect or that aspect of the bill but an important indicator is to see who likes it. On Meet the Press today (12/20/09) both Vermont Governor Howard Dean and Joe Scarborough, a previous Congressman and currently the morning host on MSNBC, pointed out that "insurance companies' stocks reached a 52-year high on Friday after this so called reform bill got its 60th vote."

The actions of the shareholders tell us all that we really need to know about the Senate bill. Scarborough described it well when he said on the same show concerning President Obama, "He has made a lot of people with insurance stock a lot richer."

The Senate bill doesn’t reform the health industry but instead uses the power of the State to support the shareholders of the insurance corporations. In other words, it’s business as usual in Washington, D.C.

Sunday, December 6, 2009


"The offspring of riches: Pride, vanity, ostentation, arrogance, tyranny" ~ Mark Twain

On November 27th, 2009 the Los Angeles Times ran an excellent Op-Ed piece by Steve Salerno titled, “Can America afford the 'vanity tax'?” Salerno wrote about how he had a found a pendant for the price of $1,195 at a jewelry store in a shopping center and then a very similar one at Wal-Mart for just $39. While he never explains what the hell was he was doing at Wal-Mart in the article he does a very good job of exploring something he calls the “vanity tax.”

According to Salerno a “vanity tax” is “the difference between what a thing needs to cost (to fulfill a given function) and what it ends up costing (after being artificially inflated by imperatives besides function).” This vanity tax isn’t simply an extra cost tacked on for a better product. In fact, the more expensive item is often worse than the less costly. As he states in his article, “It costs more to own a shoe that does a worse job of doing what a shoe is supposed to do.”

While it’s a great article it fails to explain why this “bastardization of value” exists. To understand this phenomenon one needs to understand the role the market plays in modern capitalism.

As I’ve explained previously the market for goods and services was the world’s first market, appearing shortly after the advent of agriculture. And it’s through this market today that we acquire everything from food to cars to yachts. In fact it’s nearly impossible to survive in modern Western society without buying goods or services from the market. But in modern capitalism the market does much more. Rather than simply providing a mechanism to delivers goods and services or the Darwinian effect of Adam Smith’s “invisible hand,” the retail market in a modern capitalist system functions, in conjunction with other markets, as a mechanism to distribute wealth to the capitalist class, often in the form of dividends from profits or increased value of stock.

With this knowledge we can see the origin of the vanity tax. The modern capitalist system creates a false need in consumers to purchase items with artificially inflated prices, a “vanity tax” as Salerno calls it, which thereby increases the amount of wealth distributed to the capitalists via the markets.