Tuesday, August 29, 2006


The Power and Influence of Privateers

Perhaps some of you would prefer that I had used the word "privatizers" in the title. I like privateers because it expresses my own feeling of disgust, alarm, and fear about two items of news in the Los Angeles Times this morning.

The first item is the news that the State Legislature in California has passed a bill to set the State on a path to create a single-payer health insurance plan to cover every resident of the State. The State Legislature has a Democratic majority in both houses. Our Republican governor, Mr. Schwarzenegger, is reputed to oppose the single-payer plan and will veto the bill. He favors an approach like that of Massachusetts, in which private insurers continue to sell and provide health insurance to residents, and in which all residents are legally required to buy health insurance. The State has a budget surplus these days and will provide a subsidy for low-income residents to help pay for the insurance.

We have a constrast here between what I call the Democratic and Republican plans for fixing our broken system of public health care. The Democratic, or single-payer plan, gets rid of the profit and overhead costs of multiple private health insurance providers and replaces it with an efficient, low-overhead universal provider. The Republican plan would protect the profits of the private insurers.

The other item was an opinion article by Naomi Klein, entitled The flood next time -- disaster relief for profit. She cites the pitiful, inept performance of the Federal Emergency Management Agency in dealing with the crisis a year ago in New Orleans when the city was flooded by the hurricane Katrina. She reports that the Red Cross has decided to team with Wal-Mart to provide disaster relief in future crises rather than depending on any help from FEMA or other government agency. In fact, the federal government has already started outsourcing or privatizing some emergency relief functions. Some firms are enjoying generous contracts at present and are using the money to built up their own infrastructure and other equipment for use in future disasters. Ms Klein foresees that this equipment will then be leased and sold back to the government during the next devastating natural disaster. In time, she predicts, this approach to disaster relief will lead to help for those who can afford to pay the private providers. If you need to be rescued from the roof of your home during a flood, a helicopter will be available for a fee. If you need an expensive medical procedure, the service will be available for a hefty co-payment to your insurance company.

The privateers seem to be having things their way. Primarily it is the Republican Party that advocates for them and, as we know, the Republican Party dominates the federal government.

You can read these articles for yourself by going to the web site of the Los Angeles Times.
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