The State of Health Care

Again, from This American Life comes stories of (completely legal) refusals to pay out for necessary operations. This was the most telling:

REP. BART STUPAK: Let me ask of our CEOs this question, starting with you Mr. Hamm, would you commit today that your company will never rescind another policy unless there was intentional fraud - fraudulent misrepresentation in the application?

DON HAMM: I would not commit to that.

REP. BART STUPAK: How about you Mr. Collins, would you commit to not to rescind any policy unless there is an intentional fraudulent misrepresentation?

RICHARD COLLINS: No, sir. We follow the state laws and regulations. And we would not stipulate to that. That's not consistent with each state's laws.

REP. BART STUPAK: How about you, Mr. Sassi, would you commit that your company will never rescind another policy unless there was an intentional fraud, misrepresentation?

BRIAN A. SASSI: No, I can't commit to that. The intentional standard is not the law of the land in the majority of states.

REP. JOE BARTON: Doesn't it bother you that people are going to die, because you insist on reviewing a policy that somebody took out in good faith and forgot to tell you that they were being treated for acne? Doesn't that bother you?

DON HAMM: Yes sir, it does. And we regret the necessity that that has to occur even a single time and we've made suggestions that would reform the system such that that would no longer be needed.

Burn the private industry down.

How Banks Work

Another week, another amazing This American Life episode. This week they tackle the economic crisis for a third time, and they explain things in plain English for everybody to understand in easy terms. They have a great explanation involving how exactly the banks got into trouble. You should listen, but here's a quick and dirty explanation.

Let's make up a bank. We call it "Bank A", and Bank A starts with $10 capital. That means that initially, the bank has ten dollars to loan out, to invest, to do what have you with. Of course, just sitting there, the bank makes no profit. Right now, their balance sheet looks like this:

Since the bank has $10 in capital, the bank is worth about $10 all in all on the market; the liabilities and assets minus the capital. Now, to make money, banks take deposits and make loans. Let's say that Andrew deposits $90 into the bank, and is promised a 3% interest rate. Now the balance sheet looks like this:


For now, we'll ignore that interest rate; let's say this all happens on the same day, as the interest rate is largely unimportant for the purpose of this explanation. Now, the bank has $100 total in its vault, but if it just sat there, the bank would of course lose money. In a year, the bank would owe back that $90 plus the 3% rate if Andrew returned to withdraw his money. But then, someone else comes along, Scott, who wants to purchase a house. He needs $100 in order to do this. Bank A gives him a loan with a 6% interest rate:


So now, in a year, Scott will owe $106, and the bank owes Andrew $92.70. They would make a profit of about $3.30 after this timespan. This is how banks make money - loan out money at a high interest rate, and take depositor money and give it a lower interest rate.

Anyway, the housing crisis comes along. Suddenly Scott's house's value plummets 25%, down to only $75. Scott, falling on hard times himself, loses his job because of layoffs. He defaults on his loan, and the bank must foreclose and take the asset for itself. This creates a significant problem. Here's the balance sheet:


Now the bank owns a house that is worth only $75. If Andrew came back and wanted his money back from the bank, the bank would be unable to pay it, even after selling Scott's old house. The bank could thus be said to be worth about $75 + $10 - $90, or -$5.

This is obviously a bad thing. The bank is no longer solvent. It no longer has enough capital and assets to pay back the people who put money into it. This is exactly the situation that the banks have been battling; struggling to keep their capital and assets combined above their liabilities.

Obviously, the problem arises when Andrew comes to withdraw his money. The money is not actually all there; if the bank went out of business (and the FDIC did not exist), then Andrew would only be returned $85 of that $90 he initially put in, and the bank is now worth nothing and goes into bankruptcy.

The solution so far has been to give money to those banks in order to ensure that they can pay off the people who want to withdraw their own money from the banks. What the banks have been advocating is that the government uses tax money in order to purchase those homes from the bank, essentially. The homes have a market price, but clearly even if the government paid $75 to Bank A, Bank A still would not have enough to repay Andrew. So the banks have wanted essentially the highest possible price the government could pay. The problem is, though, that banks wish to avoid nationalization at all costs; this essentially means that the bank's "life" as a corporate citizen comes to an end.

Herein lies the problem. If the government gobbles up the assets of the bank, and takes over 50%, it effectively has the majority say in the direction of the company. It can veto things the company tries to do or propose and hammer through its own opinions and methods. Of course, this would probably be temporary; the government would almost certainly sell the company back to private hands once the coast is clear, so to speak.

Anyway, listen to the podcast here for plenty more great talk about what's actually going on.

NPR

Amid layoffs and bad economic times, NPR is asking for its yearly donations to keep rolling. So if you're able, it would be a prime time to toss them a few dollars.

That said, another great This American Life this week, the theme being "people who ruin it for the rest of us." The meat of the program had to do with a family who had opted out of giving their son the MMR vaccine. The kid caught the measles in Europe and brought the disease back to suburban California, where an outbreak caught fire and caused a dozen children to come down with the frequently fatal disease. It's a shame that the link between vaccination and autism was published (later retracted) in a British medical journal.

In San Diego, no one died from the outbreak, although it cost several families lots of money and time to deal with the consequences. Since the MMR is given at about twelve months, even parents who were pro-vaccine were affected. Both sides felt vindicated by the result - no children died so, hey, measles must not be so bad after all, no reason to risk permanent health effects with a vaccine. People who were pro-vaccine saw that outbreaks were a risk of the gaps in the mesh of herd immunity.

The last story is a stark reminder that not everyone sees the world in the same way that you do.

The Forgotten

I've raved again and again over This American Life, and this week's episode is quite interesting and heartfelt. It's all about living alone, so I can definitely relate.

I've been living alone in my own apartment for about five and a half months now. It takes getting used to, especially after sharing not only an apartment but a room with somebody else for the past four years. It takes getting used to, knowing no one within about a thousand miles. I have work friends, definitely, but considering nobody else has set foot in my apartment for around eight weeks, the place begins to be associated with being alone. I've got a duality about me, though; I'm perfectly content to be by myself, and I'm content with being with others. In the former situation, I generally seek to speak to people via online messaging or the phone, and with the latter, the person or people I'm with often get my full attention. Either way, though, I'm happy with the situation I'm in now.

My apartment, sadly, doesn't get utilized as much as one would think; my living room, for the months of July, August, and early September, was where I would hang out with visitors. Now I only venture there to talk on the phone or lie down on the couch. It's curious how my guest bedroom door has been closed for weeks, a kind of no man's land that I don't care about or touch. I have been doing a pretty good job keeping up with cleaning, though; the shower is spotless, and I run the vacuum every week or so to keep everything tidy. I'm not a clean freak by any stretch, but I suppose it could be any day now that a friend shows up looking for a place to stay. If somebody asked me if they could stay with me in my spare bedroom, I would be absolutely delighted. In fact, my Floridian friend Whitney S. asked me if the opportunity would be there for her to move up if she had to. I agreed; a break with rent would allow me to save more money, in addition to having somebody to hang around with when I get bored.

So am I lonely? I wouldn't consider myself so. I definitely seek out interactions with other people, doing my best to make friends in the area, which has introduced several intriguing adventures over the past few months. But lonely? I don't have the time to be lonely. Between work, sleep, said adventures, and phone calls, I don't have enough time in the day. I'm ambivalent, one could say. I like doing my own thing at my own time, but there's no enjoyment that compares with sharing comedy, tragedy, knowledge, and mystery with others.

Regardless, the episode of This American Life this week included the story of a department of the Los Angeles Police that dealt specifically with those who had passed away without any obvious family (or even friends) that should be contacted. They told the story of Mary Ann, a woman who had lived alone for dozens of years, barely speaking to others who lived around her. She was unmarried, had no children, and carried nothing with her to the hospital she checked into to indicate who she knew or who she was related to.

Although a distant relative of Mary Ann had been found, they also told of the people who had no one. Their parents had already passed, they never married or were widows or widowers. They had no children to speak of, and shut themselves in, filling their lives with things instead of people. This amounts to about a thousand people a year in Los Angeles, who are cremated and stored for four years before they are buried in mass graves. Almost no one attends these ceremonies, save a chaplain and a few county employees, less than a dozen usually. It's almost poetic; people who spend their lives alone, whether by choice or not, enter eternity with such company.

The most heart-wrenching story the particular LAPD investigator cited was the death of a woman in her eighties. Her husband died sixty years earlier in World War II after being shot down in Europe. The woman had still had the letters sent to her by the government - the first telling her about the loss of his plane, the second telling of the recovery of the wreckage with no body, and the third telling her about her husband's death and the discovery of the body. She had never moved on, for that six decade period, preferring to remain in mourning for the rest of her days.

Such concepts and stories make the gears begin to turn, thinking about memory, perception, and the intangibility of both. Philosophical discussion aside, though, it's a great listen.

"Because we / Are messengers of memory / Just whispers in time."