J.C. Moore Online

Current Events from a Science Perspective

Journalism’s ethics say that newspapers should seek the truth and print it, and avoid bias and sensationalism. Publisher Steve Haynes violates those principles in his article, “Democrats want to tap every dime you have”, (TS News 12-01-22). The title is sensational to catch your attention. And, even worse, the article is filled with misinformation. It would be somewhat more accurate to say that Democrats want to tax the wealthy and give it to the poor and that Republicans want to tax the middle class and use it for tax breaks for the rich. Which would you prefer? The first paragraph lists things the Democrats are known for giving people, but he left out farm subsidies, something very important in Western Kansas.

As much as he’d like to blame Democrats for inflation, they’re not really powerful enough to cause it. Economists think that 3% to 5% inflation is healthy for the economy, as it means that demand is greater than supply. Recently inflation is because the supply has decreased because of the pandemic, bird flu, and the war in Ukraine. If you want to blame someone, you might consider that inflation has been about 7% in consumer goods but about 30% in the cost of fuel, which pushes the price of everything up. Oil companies have been reporting record profits, and are using the extra money to buy back their own stock which enriches the company executives and the shareholders. It’s probably, as has been suggested, a good idea to put a tax on stock buybacks.

Mr. Haynes also blames Democrats for the national debt. The national debt tripled after Reagan’s tax cuts. Deficits increased under the Bush and the Trump administrations, while deficits decreased under Clinton and Obama, and the jury is still out on President Biden. The money spent on infrastructure helps all of us. The minimum wage would now be $23 if it had grown as fast as inflation. Middle-class workers’ salaries have gone up 18% since 1978 while CEO pay has risen by 1322%. Does that seem fair? Mr. Haynes also claims that the Democrats want to tax Social Security. Taxing Social Security began under the Reagan administration, so how are Democrats to blame?

Mr. Haynes is also against canceling student loans. States used to pay about two-thirds of the cost of a college education. Now, they pay about one-third and colleges have raised tuition to make up the difference, causing a college education to cost much more and the average student to have to borrow money. The terms of the loans allowed the banks and even the federal government to make money off the students, and, like most debts, student loans cannot be discharged through bankruptcy. So perhaps it’s only right that some of the loans be forgiven, especially if those responsible pay the cost.

Mr. Haynes does point out some of the problems our country faces. He says Democrats and Republicans have different approaches to solving them, but better solutions usually result from compromises. Stereotyping Democrats, or Republicans for that matter, interferes with the bipartisanship we need. Articles like Mr. Haynes’ lead to partisan politics, which is a real problem in Kansas. His article is especially concerning since he is the owner and publisher of Nor’West Newspapers in Oberlin, Kansas, and he likely influences many voters in that area.

(C) 2023 – J.C. Moore

Privatization. It is usually assumed that private enterprise will find efficient ways to do things and lower costs to the benefit of consumers and taxpayers.  That assumption is probably true when it comes to providing innovation and developing resources. The recent failure of some of our largest private companies have caused an  economic downturn which, along with tax cuts, have left the federal, state, and local governments with financial problems. Privatizing public services and resources is being considered as a way to reduce costs and raise money.

City Services: As a way to save money, many small towns and cities are considering turning their basic services such as water, trash and sewer over to private companies. This has not always worked out well.  As an example, Coatesville, Penn decided to sell off its drinking water and wastewater infrastructure in 2001 and invest the money in a trust fund to be used for city services. But privatization hasn’t been the economic boon the city hoped.  The residents have seen their water and sewer rates jump 85 percent since American Water, the largest water corporation in the country, took the helm. Last year the company proposed a 229 % rate hike for sewer services, forcing the city to cobble together money for legal fees to fight back. (1) Privatization doesn’t always promote efficiency. The trash in Wichita, Kansas is collected by several private trash companies, and customers in any part of town can contract with any of the companies. The result is that several large trash trucks navigate most streets of Wichita each week, resulting in increased noise, wasted energy, more exhaust fumes, and damage to the streets, which of course, the city repairs.  Even though residents of Wichita pay 30 to 50% more than residents of comparable cities with public trash services, a measure to franchise the trash system was defeated amid criticisms of “government control” and “loss of freedom to choose”.

CompSource. The state of Oklahoma gave its wealthiest citizen a nice tax cut in 2004, which, with the economic downturn,  has left the state government strapped for cash. One proposal to raise money was to sell CompSource Oklahoma, which has been providing workman’s comp to state workers for 76 years – apparently successfully. State Rep. Dan Sullivan pushed for privatization of CompSource because: “It’s a fundamental issue of what is the proper function of government . Is it to compete with private enterprise? We think not.”  He also claimed the increased competition would lower rates. That sounds good, except an expert in comp insurance pointed out it would cost more to insure state employees and 40% -70% more to insure workers in high risk categories, such as volunteer firefighters, oil field workers, and farm workers. The plan fell through, for the time being, when it was discovered that the state might not get the proceeds from the sale and that the politicians pushing the matter had ties to the insurance companies who would profit from the sale. (2)

Medicare and Social Security. Privatization of Government services for ideological reasons often fails as a practical way to lower costs. While privatizing Medicare was ostensibly done to reduce costs, the Medicare Advantage Plans created have increased the cost to the government by 14% and decreased the long term stability of the program. Also, to reduce costs, the plans created the infamous “donut hole“ that costs seniors an additional $25 billion annually. (3) The cost created by privatizing is not a mystery, as the VA and Medicare  have a 3-5% overhead while private insurance companies have an overhead of 15% or more. That is something that should be considered when thinking of health care reform.

Social Security is one of the most effective and popular government programs. It provides a safety net so that no matter how fortunate or unfortunate people are in their choices and investments, they will not be destitute when they retire.  The recent attempts to privatize SS would have been a boon to the financial services industry and money poured in for promotion and campaign donations. After the recent economic downturn, we should all be grateful that the plans to privatize Social Security failed. Some private pension accounts lost as much as 40%, while Social Security paid reliably. The idea that SS is going broke, part of the PR created to try to justify privatizing SS, still lingers on. (4)

Public Service: Our public servants, teachers, firefighters, police, military personnel, and the myriad employees that run our country, actually serve us well. Their pay is usually determined by their responsibilities, experience, and education, as in the GS ratings of federal employees that determine their compensation. Public servants seldom receive bonuses and sometimes little appreciation for doing their job well. The government does not make a profit so their services can be provided at lower cost. And, while we have little say about what goes on in the boardroom, our elected representatives are in charge of public employees.  While it may not be the role of government to compete with private industry, it is certainly not the role of government to make policies that favor private companies over the needs of our citizens. Certainly, privatization for purely ideological reasons is a bad idea that should not override practical considerations.

(1) http://www.alternet.org/story/149725/vision:_how_small,_mostly_conservative_towns_have_found_the_trick_to_defeating_corporations

(2) http://jcmooreonline.com/2009/10/01/will-privatizing-compsource-lower-costs/

(3) http://www.cbpp.org/cms/index.cfm?fa=view&id=2917

(4) http://jcmooreonline.com/2010/08/04/is-social-security-going-broke/

(C) 2011  J.C. Moore

Update on 10/26/2016: Here is another case of a privatized water system that didn’t work out well  that cities should  consider before privatizing.

Update on 10/7 /2021: Privatizing Kansas prisons has not worked out well. “For-profit Kansas prison an understaffed ‘hell hole’ of violence, death and drugs. “ … Report in Kansas Reflector