Mosque at the Twin Towers

Recently, there has been quite a bit of discussion in the news media about the possibility of building an Islamic activities center in New York near the site of the 9-11 world trade center disaster. Unsurprisingly, there is quite a bit of controversy surrounding this issue for several different reasons, not the least of which was that their faith in Islam is what inspired the people who flew two planes into the Twin Towers to destroy their own lives and the lives of so many innocent citizens.

Most Americans have a hard time with this concept; the idea that someone’s faith in God could inspire them to such senseless violence. Unfortunately, this is a concept that is neither new nor restricted to the followers of Islam. Christianity itself has a long and sordid history of violence against the non-believers, one that eclipses that of Islam in scope for the simple reason that it is more widespread and has been around a lot longer. Christianity springs from Judaism which has an even older and more violent history if one puts any faith in the accuracy of the Old Testament. Monotheistic religion is by definition intolerant to one degree or another. After all, the concept is based upon the idea that an all-knowing omniscient being passed on to man the proper path that his life should take. This does not leave room for the possibility that there may be other ways that are equally correct. Interestingly, all three of the major monotheistic religions have a common source, the Old Testament.

Judaism springs from this collection of books written by members of a nomadic tribe. In point of fact, the Old Testament is quite distinctly the history of this tribe of people and their belief in their God. Some of the earliest writings explaining how Jews interpreted this history and what it meant point out the fact that the early Jews did not believe that Yahweh was the only God, only that he was the God of their people. This point is also supported in some of the books of the Old Testament itself. For example, the first commandment which is widely believed to be this God’s written rule for his people says, “thou shalt have no other Gods before me”. Remember, this is God’s word given to Moses as his most important guidelines that these people were to live by and this is the first rule. It does not say that there are no other Gods; it says that the Jews shall have no other Gods before Yahweh. If one reads some of the writings of Jewish scholars and priests from the time of Jesus it becomes obvious that this was the understanding most Jews held at the time. They did not believe Yahweh was the only God, only the one that protected them and necessarily, the greatest God. This eventually evolved into the idea that he was the one true God but it was not the original understanding. At any rate, this God was a jealous and angry God and often visited great pain and suffering on the Jews for transgressions against him. This was nothing compared to the slaughter that he ordered the Jews to visit upon their enemies however. The Old Testament contains several instances where this God was actually angry at the Jews for not following his directions to wipe out whole tribes of people and sparing some through the weakness of human mercy. All one has to do is read the Old Testament to understand that violence, genocide, murder, and all manner of what we would today consider to be heinous slaughter were regularly carried out on this God’s orders. I would suggest that this God was not the kind of fellow any of us would particularly want for a neighbor.

Christians believe they have a monopoly on what the truth is as God passed it to them through what they believed to be the incarnate son of God. Interestingly, this son of God was actually a rather fundamentalist Jew. This God amongst men supposedly told them that he was the way to everlasting life and salvation. The New Testament collection of books is supposed to compromise a new covenant with God who has by this time evolved into the one true God. This is not a message open to a lot of dissent and Christianity is necessarily a very narrow and intolerant faith accordingly. It is impossible to believe that you know the only true way to salvation and still actually be tolerant of other people that believe you are wrong. After all, if God has spoken; who is man to disagree? There is a lot of talk about tolerance of other religions in most Christian faiths today but the fact remains that for much of the last two centuries Christians have regularly slaughtered dissenters and non-believers in the name of their faith. Even today as Christianity has undoubtedly evolved into a less violent faith there is no room for anything but a sort of mild forbearance of other religions. Christians may believe that other people have a right to worship as they please but they also believe these other people are undeniably wrong or misinformed in that choice. The Bible they so fervently believe in tells them that there is a great Apocalypse coming. This climactic battle will only have two sides; the forces of good and the forces of evil and every man must at that time choose. This type of faith is not a vehicle for compromise or world peace, it is by its very nature a recipe for continuing conflict.

Islam, which is the latest of the three major monotheistic faiths, sprang from this same source. Islam in Arabic means simply “I submit” and the faith is all about submission to God’s will. Mohammed, who was the prophet of God, is believed by Muslims to be the last of the great prophets. Interestingly, Muslims believe that Mohammed is not the only prophet of the one true God, just the latest and therefore most correct. Muslims believe Jesus was one of the prophets and the secondary prophet to Mohammed. A common thread through all three religions is the belief that men often misunderstand God’s true meaning, which is why prophets are necessary to begin with; to get men back on the right track. I find this a little bit of a logical fallacy in that it seems to me that an all knowing and omniscient being should have no problem communicating with men who he created in his own image but then again I never could understand the logic behind the Easter bunny either. The Koran or Q’ran is God’s word as passed on to Mohammed through the angel Gabriel who supposedly spoke directly to Mohammed throughout his later life. I won’t pretend that the possibility of an angel speaking God’s word directly to a chosen prophet is any more unlikely than a burning bush talking or God somehow procreating with a virgin. I will say that none of these things seem to be what we would today consider likely possibilities, yet much of the world is daily filled with violence, anger, and turmoil based largely upon which of these three ancient stories is most correct.

For my money all organized religions are a detriment to our ability to live together as human beings. I have no greater disdain for Islam than I do for Christianity or Judaism and rate all three as little better than ancient superstitions propagated by professional classes of charlatans and snake oil salesmen in order to maintain political and economic control of the population. The real problem is that these charlatans and the superstitions they espouse continue to serve to cause dissension, violence, and widespread suffering across the face of the globe.

This gets back to the point of this post to begin with; the Islamic center that is being proposed to be built in New York near the site of the collapsed twin towers. For the basic reason that I believe anything that furthers the cause of organized religion is basically a net negative as far as human understanding is concerned I am against it. Beyond that, I believe that Islam is presently the most dangerous of the three major monotheistic religions and I will explain why. Islam has two basic tenets which make it so dangerous. They can be summed up in the statement that Mohammed was perfect in word and deed. What this means is that his messages that came directly from God were perfect, unassailable by human logic because they came from the one true omniscient being. This also means that Mohammed’s actions, supposedly carried out with the direct urging of this same omniscient being are also beyond the ability of human beings to question.

One can argue that many Christian fundamentalist believe in the same things as far as Jesus is concerned and I will concede that this is true. I would also point out that these people are what we term fundamentalist Christians. They are defined by their belief that the Bible is inerrant in every statement that it contains. While most people with even a hint of scientific understanding understand that the Bible is literally chock full of factually inaccurate statements there are those that believe it is completely and inalterably accurate. Anyone who takes this position must also find a way to support the violence and devastation that the Bible contains within it which is why most people understand that the relative danger to society that any Christian group offers is proportional to how fundamentalist their group is on the scale of such things.

Muslims have for several years now been trying to separate themselves from Islamic fundamentalist movements such as the one espoused by the people that crashed into the Twin Towers. These efforts have met with varying amounts of success as far as most Americans are concerned. It is a natural reaction to the senseless slaughter of innocents. This reaction manifests itself in the abhorrence of Americans to Islam as well as the efforts of mainstream Muslims to distance themselves from such actions. This is where the basic tenet that Mohammed was perfect in word and deed comes into play. By ascribing to this belief all Muslims put themselves on a par with any reasonable definition of fundamentalist Christians in that they believe the Koran is inerrant. Much like the Bible the Koran is open to a large degree of interpretation so different sects of Islam much like different sects of Christianity interpret it differently. However, the accepted standard by how the Koran is interpreted is contained within the tenet that Mohammed was perfect in deed.

Mohammed lived in Saudi Arabia during his lifetime in what was a very backwards and violent society. He was, like all men, largely a product of the environment he sprang from. During his lifetime Mohammed married multiple wives including young children, ordered the slaughter of prisoners and the enslavement of their wives and female children, assassinated political enemies, and ordered violent Jihad to be carried out against his enemies whom he classified as infidels or non believers. The accepted methodology for interpreting the Koran is to tie its verses to Hadiths or direct sayings and actions of Mohammed himself. These saying and actions are carefully cataloged by Islamic scholars and are the basis for deciding what the Koran means. There are different Hadiths valued by different sects of Islam but all sects of Islam believe that Mohammed’s actions along with his sayings comprise the best understanding of God’s will. This makes it impossible for Muslims to condemn such violence because the founder of the faith not only did not condemn violence; he ordered and carried it out by his own hand throughout his lifetime. His actions, taken together with his words in the Koran overwhelmingly support such activities against the enemies of Islam.

It is true that Mohammed preached against the slaughter of innocents but it is also true that he was the sole arbiter of defining who was innocent and who was an enemy of Islam. After Mohammed died there was a protracted struggle for control of the religion which eventually wound up causing the division of the faith between two basic groups, Shia and Sunni. Although both groups have their own set of Hadiths which they believe is the more accurate record of what Mohammed actually said and did, there is not disagreement with the basic fact that he condoned violence against the enemies of Islam.

This leaves those who argue that Islam is a peaceful religion without a leg to stand upon which is why you will not see such adherents condemn Islamic violence in general. They might condemn violence against innocents but they cannot condemn violence against the enemies of Islam because Mohammed most definitely condoned such violence. The internal struggle we see within Islam today is a struggle to decide who its enemies are; it is not a struggle to condemn violence. It is a struggle not to end violence but to decide who it is to be levied against. In point of fact since Mohammed’s death it has been the duty of Islamic leaders in the faith to make such distinctions. What we are seeing today is inevitable result of such thinking and it is a dilemma for which Islam has no answer.

Islam is a faith that does not believe in separation of church and state. The followers of Islam believe that their God is the only true source of rightful government or indeed correct decision making of any kind. God is at the source of every correct decision in a believer’s life and the written record of Gods will to the faithful was left by a violent, egomaniacal misogynist. This is a formula for continuing escalating violence and the truth of the matter is that Islam has no way out of this cycle because it is based upon the belief that Mohammed himself was perfect in word and deed. The best that we can hope for from Islam is a respite from violence because violence itself is inherent in the faith. Islamic leaders do not debate whether the violence is correct only who it is correct to carry it out against. This is a distinction that is little understood in this country and actually has very little use as far as the possibility of peaceful coexistence of Islam with the rest of the world. The only methodology that allows peaceful co-existence with Islam is contained within its name; submission. Until the whole world is ready to submit to their interpretation of God’s will there can be no peace with Islam.

Part 3 of the AMA... the great communicator

The introduction of the King-Anderson bill in Congress in 1961 began a five year campaign by the AMA and other opponents of the bill to fight its passage. The King-Anderson bill was viewed by many as a necessary compromise for the continuing health care of a growing number of elderly in the United States. As medical procedures increased in efficiency and effectiveness they necessarily increased the life span of Americans. With the increased effectiveness also came increased cost and most American retirees were simply not prepared for the rapid increase in health cost that accompanied these two effects.

Several demographics changed in the early sixties to give impetus to those fighting the AMA and large insurance carriers in their attempt to push a health care initiative for seniors and the indigent. Between 1950 and 1963 the elderly population in the US increased from 12 million to 17.5 million, to about 9.5% of the population. For the first time the AMA and large insurance carriers found some organized opposition pushing for a national health care initiative. Organized labor began to actively push for health care reform because they saw the spiraling health care costs destroying their ability to provide health care for their members that were part of collective bargaining agreements. Ironically, it were these spiraling costs for retired union workers that were later to be one of the main forces that drove Chevrolet and Chrysler into bankruptcy early in the next century. The unions saw it coming as early as 1960 as costs steadily outstripped their ability to provide health care benefits for their members.

While most Americans understood there was a problem, there was no universal agreement as to how to mitigate the problem. Most favored some sort of governmental involvement but the AMA and other private medical groups concerned with profit margins for doctors and hospitals were plainly nervous about what such plans would do to doctor’s standards of living. With the introduction of the King-Anderson bill, the line was drawn in the sand and both sides began an all-out campaign to get their message before the people.

A few days after his inauguration, President Kennedy sent a special message to Congress on health. This was immediately followed by the King/Anderson bill which was later modified to become the Medicare plan. Even though Kennedy had campaigned on National Health Care reform and now had a more organized group of backers pushing for reform, he did not have the votes in Congress to push the bill through. The election of 1960 saw Democrats lose some 20 seats in the house although they increased in the Senate. Kennedy shrewdly saw that it was necessary to postpone pushing for this reform until after the 1962 election when he hoped to gain more seats in the House. Kennedy soon saw his support drop even more after the Bay of Pigs fiasco in Cuba and a crisis with the overbearing Soviet Premier ,Krushchev, over the Berlin wall.

Aside from the normal congressional buttonholing lobbying efforts the AMA utilized by its wealthy members who held some percentage of the all important purse strings that party officials utilized for running campaigns, the AMA immediately instituted several expensive and widespread efforts and convincing the public that the King-Anderson was a bad idea. The AMA bought radio and television ads painting supporters as “socialist” or “communist” agents bent on the destruction of the American system of free enterprise. This was a tried and true methodology that the AMA had already employed several times with great success in the first part of the 20th century and there was no reason to believe it wouldn’t work again. Ads claimed that jack booted federal bureaucrats would violate the sanctity of the operating room and the doctor patient relationship by deciding what doctors could and could not do, whether their patients agreed or not. It has always seemed interesting to me that such arguments can hold up the sanctity of the American free enterprise system by insinuating that our own federal government is somehow bent on making us into socialists or communists. Yet these same proponents of our system insist that all our government’s actions in the way of military involvements in other countries around the world are done in the name of protecting us from these same socialist or communist interests. It seems that our government is the paragon of virtue militarily while at the same time an agent of these same sinister socialist forces it is protecting us from when it attempts to implement domestic policy improvements that might actually help Americans who need help.

The AMA produced and reprinted a vast library of speeches, policy writings, and public information statements that it found ways to get into public media and magazine articles preaching against the “red tactics” that were sure to ruin medical care if the bill passed. The AMA produced high school debate kits that it handed out to local doctors in the hopes that they could use their influence in the community to get this information broadcast as widely as possible. Most of these actions were based upon the idea that any sort of public health care policy would ruin the medical system of free enterprise and necessarily be the first step to a socialist, communist takeover of the country itself.

The AMA organized a large women’s auxiliary effort of doctor’s wives across the country into a grass roots political movement. This organization was the core group that formed WHAM, Women Help American Medicine. The group’s reason for existence was spelled out in a public statement: “This campaign is aimed at the defeat of the King-Anderson bill of the 87th Congress, a bill which would provide a system of socialized medicine for our senior citizens and seriously curtail the quality of medical care in the United States.” It is a little bit of a stretch for me to see how a watered down version of what later became Medicare could seriously curtail the quality of medical care in the country but maybe that is hindsight; or possibly common sense devoid of the hysteria about communism/socialism that existed in early 1960.

The idea of using the wives of doctors as one of the sources for the campaign was an interesting one. As members of the community that we well respected it seemed common sense to use the maternalistic instincts of Americans in general to gain their attention. The idea was that doctor’s wives would organize community get-togethers to discuss the issue. At these get-togethers there were detailed packages supplied by the AMA that included suggestions for how to get the people participating to write letters to their congressmen in opposition to the plan. It was thought that having private citizens instead of doctors write the letters would be more effective and would also necessarily involve a larger number of people and therefore a larger number of letters in congressmen’s inbox. The behind the scenes muscle of campaign contributions was to be enhanced by the public show of disdain for the plan. It was thought that a widespread “motherly” opposition to health care reform would necessarily be a stronger tool than the reality of a bunch of doctor’s wives who were afraid of a loss of income. It must be remembered that the AMA had long been the monopolizing agent of medical care in the United States and had vehemently opposed every attempt at applying free market principles to the medical community since its inception.

The AMA paid for and produced a long play LP record that was to be the convincing argument against the King-Anderson Bill and hopefully would be the nail in the coffin of all future such bills that threatened the autonomy of doctors. The AMA needed a smooth talker; a storyteller and master speaker to encompass its arguments in a homespun narrative that would convince listeners of the danger of a government program that would provide affordable health care for the elderly. It takes quite a salesman to convince people that free health care for the elderly is an evil idea but the AMA found their man in a B-list actor who no longer could find work in the movie industry. In point of fact he had spent the immediately previous years working as a paid shill of General Electric travelling the country making speeches to its employees extolling the virtues of working for low wages while at the same time spelling out the evil dangers of socialist/communist tendencies such as unions. This man’s name was Ronald Reagan and he was to make a career out of saying one thing while simultaneously doing the opposite. As a measure of his ability to preach one thing and do another, he was in fact the president of the actor’s guild while simultaneously working for General Electric in this capacity. How he managed to pull this off without being called on his hypocrisy is remarkable, but he was later to prove even more of a magician in his ability to preach virtue while indulging corruption on a vastly larger scale but that is a subject for a later post.

The LP vinyl record was called “Ronald Reagan Speaks Out Against Socialized Medicine”. It featured an 18 minute speech by the actor and further comments by an unnamed narrator. The idea was that the Women’s Auxiliary members would call informal get-togethers with members of their neighborhood and play the record for the participants. After the record was played they would follow the form letter recommendations as to how to get the participants to mail in letters of dissent to their congressman. The LP came with written instructions and a kit that included the following:

• A cover letter, informing the attendees that “the chips are down, in the next months Americans will decide whether or not this nation wants socialized medicine;”

• A list of members of Congress;

• A ten-point check-list on how to write effective letters to Congress;

• A set of instructions to hosts in what Operation Coffeecup was and how it was to be carried out, including “Provide guests with stationery, pens and stamped envelopes. Don’t accept an ‘I’ll do it tomorrow’ reply—urge each woman to write her letters while she’s in your house—and in the mood!”;

• A report form listing the number of attendees, the number of times the accompanying record was played, and the number of letters written.

The plan was known as “Operation Coffeecup” and was to be used as one tool amongst many the AMA was using to lobby Congress to defeat the bill. There were even detailed plans as to how to carry out the gatherings in an impromptu manner. The organizers were urged to downplay the reason for the get together and simply invite their neighbors for coffee. The kit urged that the letters produced from these gatherings “not have the appearance” of being a part of an organized campaign as this would necessarily reduce their influence with Congressmen who were used to receiving such mail.

Reagan’s remarks on the LP were carefully polished stagecraft, aimed at seeming a neighborly conversation in the beginning but rising to a crescendo of red, white, and blue patriotic duty. The AMA never formally announced the existence of “Operation Coffeecup” or publicized the Reagan LP. As a matter of fact, recipients of the LP were warned that they were not to permit the commercial broadcast of the recording. The LP was to be used only in the controlled informal “Coffeecup” neighborhood meetings.

The LP started as follows:

My name is Ronald Reagan. I have been asked to talk on the several subjects that have to do with the problems of the day. . . .
Now back in 1927 an American socialist, Norman Thomas, six times candidate for president on the Socialist Party ticket, said the American people would never vote for socialism. But he said under the name of liberalism the American people would adopt every fragment of the socialist program. . . .
But at the moment I'd like to talk about another way because this threat is with us and at the moment is more imminent. One of the traditional methods of imposing statism or socialism on a people has been by way of medicine. It's very easy to disguise a medical program as a humanitarian project. . . . Now, the American people, if you put it to them about socialized medicine and gave them a chance to choose, would unhesitatingly vote against it. We have an example of this. Under the Truman administration it was proposed that we have a compulsory health insurance program for all people in the United States, and, of course, the American people unhesitatingly rejected this.

The socialist bogeyman strikes again. Reagan starts out by pointing out that medical services for people who need it is the proverbial foot in the door of socialism/communism that leads to worse things. Never mind that people need health care and cannot afford it; that is a side issue. The truly important thing to remember is that it is the first step to takeover by godless communist if the government starts providing health care for the elderly. The LP then goes on to explain what this “imminent” threat that Reagan wants to warn people against:

Congressman Forand introduced the Forand Bill. This was the idea that all people of Social Security age should be brought under a program of compulsory health insurance. Now, this would not only be our senior citizens, this would be the de¬pendents and those who are disabled, this would be young peo¬ple if they are dependents of someone eligible for Social Security. . . .

There we have it… the Forand Bill which was actually defeated two years earlier is brought to the forefront as being synonymous with the current bill under consideration but the crux of the matter is simply that a health insurance plan for the elderly would be paid for by the government. By necessity that AMA had by this time conceded that there was a problem although they differed considerably with the common perception of the size of the problem. The AMA’s primary interest was at the time and still is today the protection of fees that doctors charged their customers. The formation of a government entity that might tend to set prices was anathema to them and that was the fear that was at the bottom of their campaign against any sort of national health care system and still is today. Reluctantly, the AMA had agreed to passage of the Kerr-Mills bill that implemented a plan for care of the indigent elderly on a voluntary basis. The AMA had no interest in protecting the elderly on fixed incomes who simply couldn’t afford higher health care costs without losing everything they had saved over a lifetime. Reagan goes on to claim that the Kerr-Mills bill takes care of the problem even though by this time it had been effect for some time and obviously did not take care of the issue. The point that Reagan carefully skips over is that the Kerr-Mills bill itself is a socialist bill in that is the government’s attempt to take care of the indigent. While it does nothing to help the problem of seniors on fixed incomes going bankrupt trying to afford needed health care and virtually guarantees that they would either be forced to lose their life savings or do without needed health care, it is at heart a socialist bill which is in reality a continuing part of our system in this country; a blending of pure capitalism with socialism. This has been the case since governments of the people were formed in ancient Greece and it will continue to be the case in the future. A government of the people will always lean towards socialist institutions as long as it is a free government; it is the balance that is important. The idea that the any free government is a purely capitalist or free market society is a willing twisting of the facts. Reagan goes on to greater exaggerations of the facts on the LP as he describes the fictitious slide towards communism:

The doctor begins to lose freedom. . . . First you decide that the doctor can have so many patients. They are equally divided among the various doctors by the government. But then doctors aren’t equally di¬vided geographically. So a doctor decides he wants to practice in one town and the government has to say to him, you can't live in that town. They already have enough doctors. You have to go someplace else. And from here it's only a short step to dictating where he will go. . . . All of us can see what happens once you establish the precedent that the government can determine a man's working place and his working methods, determine his employment. From here it's a short step to all the rest of socialism, to determining his pay. And pretty soon your son won't decide, when he's in school, where he will go or what he will do for a living. He will wait for the government to tell him where he will go to work and what he will do.

One can only wonder where this line of reasoning comes from. There was nothing in the bill under consideration that insinuated that the government would do anything of the kind. The truth of the matter is that doctors work where doctors can have enough customers to pay their bills. Having an insurance provider pay the bills is exactly what was in place at the time and is exactly what is in place today, whether it is a private insurance provider or the government in the form of Medicaid but this is exactly the kind of half baked logic that Reagan would use to prey on fears in a long political career later on. In truth neither the King-Anderson bill nor Medicare, which eventually was the bill that passed, ever intended to regulate the medical industry. It was simply a plan for putting in place the ability of the government to pay for health care for the elderly through private institutions. Medicare does no more to control the industry and in fact does much less than private health carriers. If you should doubt this try to dictate to your health care insurance provider what procedures you want your doctor to perform and see how successful you are in that endeavor. Reagan finished his pitch with a flourish and the kind of look at the future contemplative scare tactics he was to perfect in later years:

What can we do about this? . . . We can write to our congressmen and to our senators. . . . And at the moment the key issue is: We do not want socialized medicine. . . . In Washington today 40,000 letters, less than 100 per congressman, are evi¬dence of a trend in public thinking. . . . Representative Halleck of Indiana has said, “When the American people want something from Congress . . . if they make their wants known, Congress does what the people want.” So write. . . . that you demand the continuation of our traditional free enterprise system.
You and I can do this. The only way we can do it is by writing to our congressman even if we believe he’s on our side to begin with. Write to strengthen his hand. Give him the ability to stand before his colleagues in Congress and say, I heard from my constituents and this is what they want. And if you don't do this and if I don't do it, one of these days you and I are going to spend our sunset years telling our children, and our children's children, what it once was like in America when men were free.

One would suppose that Reagan might consider that other people were spending their sunset years attempting to get health care they couldn't possibly afford or simply dying for the lack of it but perhaps that didn't happen in the imaginary shining city on the hill where he seemed to spend most of his time. In any case, Reagan might have been a good actor and was definitely a good public speaker but his skill at forecasting the future proved to be one that left something to be desired.

Meanwhile, the AMA and a large group of insurance carriers steeled themselves for more confrontation over the issue of allowing the federal government to begin instituting what they saw as price controls. Even though everyone understood that skyrocketing medical costs were the problem, the AMA and insurance carriers were determined to protect profit margins above all else. Just after Kennedy’s election, Dr. Ernest B. Howard, executive vice president of the AMA and chief strategist charged with fighting the passage of a federal health care plan, declared there would be no compromise on the issue. “The surest way to total defeat is to say, we are now going to sit across the negotiating table and see what you will give us. I think no one should underestimate the tremendous strength of medicine; that’s the way we won last time.”

A few weeks later the AMA announced an “all-out effort” against “the most deadly challenge ever faced by the medical profession.” This program included a team of 70 speakers travelling the nation speaking to local chambers of commerce and civic organization against the evils of “socialized” medicine and a whole spate of new radio and TV ads against the bill.

They were joined in their efforts by commercial health care providers and the nonprofit Blue Cross Association. Most of their efforts were aimed at issuing official looking reports suggesting that the cost of such a plan would bankrupt the country. If this sounds familiar now, it is second only to the eternal “socialist bogeyman” in the unending effort by those enriching themselves the most from healthcare for profit in being utilized to fight any and all efforts to bring down costs in this area. While spiraling costs were then and are now the real danger in our system, they continue to suggest that we “can’t afford” a better system while ignoring the fact that every other industrialized nation in the world provides better healthcare at a fraction of the cost of ours.

As time went on, the supporters of reform efforts began to get better organized as well. Efforts of the Democratic National Committee aimed at organizing support in the home districts of the member of the House Ways and Means Committee that continued to hold the bill hostage in the House of Representatives. The head of the Ways and Means committee was a Democrat from Arkansas; Wilbur Mills for sixteen years and was widely known as the most powerful man in Washington to insiders. At the time, the Ways and Means Committee was the originator of fiscal bills in the US Congress. Mills served as the leader of this committee longer than any person in US history. Mills was the son of a school superintendent. His father oversaw the first school district in the state of Arkansas to integrate. Mills studied constitutional law at Harvard under Felix Frankfurter who was later nominated and confirmed as a Supreme Court Justice. Frankfurter was what would be viewed as an odd mix ideologically in today’s world. He was one of the founders of the American Civil Liberties Union yet became the voice for judicial restraint on the Supreme Court for 23 years. He was a life-long supporter of labor rights yet refused to sit in judgments of state courts. Mills, as one of his better students, fit the same mold. He was well respected in Washington yet was hard to predict as far as how he would swing on issues. Previous to his service in Congress, Mills served as a County Judge in White County, Arkansas. There he organized a county-funded program with a public fund to pay medical bills for people who could not afford them. Through this program, prescription drugs were sold at costs and doctor’s fees paid for the indigent. Patients were qualified for the program through the Justice of the Peace while Mills himself made the final approvals.

A grass roots campaign to organize seniors in need of help with rising costs culminated in the million members National Council of Senior Citizens for Health Care. This group became a spokesman for seniors across the nation as well as maintaining strong efforts to stimulate local political action through its various member organizations. The “Physicians’ Committee for Health Care through Social Security” was also formed in opposition to the AMA. The commission included Dr. Caldwell Esselstyn who had been the personal physician to Eleanor Roosevelt. Esselstyn later formed a private clinic for treatment of heart problems that has achieved phenomenal results by controlling diet and eating habits as opposed to invasive surgery. You can read about Esselstyn and his work in “The China Study” or by watching the popular film “Forks Over Knives”. Esselstyn was joined on this committee by several other prominent physicians including two Nobel Prize winners; Dr. Arthur Kornberg and Dr. Dickinson Richards. This group lobbied for what they saw as a desperate need for health care subsidies for a growing population of seniors unable to afford needed health care.

As the 1962 elections approached both sides worked hard to slant the field in their favor. Medicare supporters worked to lobby senior voters away from the Republican party while the AMA and Insurance Companies used the same scare tactics that they had used so effectively in the fifties to defeat government reform of the system. Socialism and communism fears were stoked mightily while business interests beat the drum about runaway costs.

By this time runaway costs were hurting everyone involved. Even insurance carriers, especially the smaller ones, began to feel the pinch as increased costs led them to increase premiums dramatically. Senior on fixed income couldn’t afford the increase and often dropped out of the program completely leading to even more downward spirals for health care providers saddled with more and more non-paying customers unable to afford needed healthcare. These costs were then passed on to other customers in the form of even higher premiums as the pool narrowed. Health care providers’ attempts to pass these costs on to paying customers raised the cost of health care for everyone and the vicious cycle continued. A study that year by a Senate committee determined that only one half of senior had sufficient insurance coverage to cover 75% of their health care bills. Only 25% of seniors had adequate hospital coverage.

What actually swung the election in the Democrats favor was the Cuban Missile Crisis in October of 1962. President Kennedy gained much support for his actions in staring down Krushchev and the Democrats held their own in the House. They gained extra support in the Senate but probably the most important outcome of the election was two Democratic vacancies opened up on the powerful Ways and Means Committee which had been holding the bill hostage.

Even though Kennedy had pledged to push Medicare through the next session it took a back seat after the election to the unfolding Civil Rights issues and a nuclear test ban treaty with the Soviet Union. By this time, the Democrats had once again lost steam in their push to pass Medicare and their opponents within the AMA and Insurance Companies had been busy lobbying extensively within Congress.

The House Ways and Means Committee was still deadlocked on the issue but Mills, as head of the committee had earlier announced, "I want to make it clear that I have always thought there was great appeal in the argument that wage earners, during their working lifetime, should make payments into a fund to guard against the risk of financial disaster due to heavy medical costs. . . . I am acutely aware of the fact that there is a problem here which must be met." While this led many to believe that the hurdle in the house was cleared it was by no means a certainty and the Senate was also showing signs of changing its support in favor of more assurances for private insurers.

It was against this backdrop that another unforeseen incident changed the balance for Kennedy’s legislative programs. On November 22, 1963 Kennedy was fatally shot in Dallas, Texas. Lyndon Johnson, the vice president was sworn in and vowed to carry out Kennedy’s programs. Effective public support for opposition to the Medicare bill died with Kennedy that day in Dallas or at least with Johnson’s speech in support of his programs. This did not keep the AMA and Insurance companies from continuing the fight but their continued intransigent opposition did little to derail the bill after the overwhelming landslide election of Johnson the next year.

In July of that year, amidst growing public concern with Viet Nam, the Medicare bill passed through Congress. President Johnson signed Medicare into law after agreements had been reached with the AMA that guaranteed their continued control of prices which was all they were really interested in to start with. In the first four years that Medicare was in operation it paid for $17.9 billion of medical care for seniors. This money paid some $24.6 million in hospital bills and some 96.8 million doctor’s bills for covered seniors. It is hard to quantify the amount of suffering that went on in the four years that Reagan and the AMA managed to delay the passage of the bill, especially considering that 50% of seniors at the time both had no medical coverage and had less than $1000 in savings to pay for medical expenses.

The AMA pretended that the problem didn’t exist as long as they perceived it to be a threat to the income of the doctors that made up its membership. Reagan, for his part, not only pretended the problem didn’t exist at the time he later pretended that he didn’t campaign against Medicaid at all. In a televised debate with President Carter during the 1980 campaign, Carter accused him of campaigning against Medicare. Reagan denied he had done so by claiming he was simply in favor of the passage of another bill instead even though the record and Reagan’s LP speak plainly to the fact that Reagan was very much against Medicaid. In fact Reagan, as a paid shill of the AME, was in the forefront of the political battle to defeat it by working for the AMA in producing the LP.

There used to be a prominent commercial on TV that featured a spokesman proclaiming that he was not a doctor but he played one on TV. Much to our detriment as a nation Reagan later carried this charade to monumental proportions. He was not an economic expert but he played one in the White House. He was not a leader but he played one in the White House. He was really never much of anything beyond what he was when he worked for General Electric, a shill for big business who told stories that made people feel good while the corporate interests took over our economy.

The AMA and its part in the debate, Part 2

Throughout the 1950’s there were efforts to deal with rising health care costs but all were unsuccessful. As modern medicine began to be more exacting and successful the costs associated with such care escalated as well. By the early 1950’s this began to be a national problem. The country was seeing an increase in life expectancy along with a corresponding increase in the numbers of senior citizens. As more and more seniors retired onto fixed incomes and required more and more care the existing system began to buckle under the strain. Almost all health insurance at the time was tied to employment. Most plans worked through the entity of the employer for several different reasons. First, it was an a way in which insurers could control the risks associated with health care because most of the members of the plans were healthy and working age people who needed smaller amounts of health care and were thereby an acceptable risk. The pyramid scheme which is inherent in all forms of insurance requires that a wide base at the bottom supports the upper layers; in this case the wide base was the relatively healthy and stable working class. As people become older they require more medical care. This has long been understood by insurance companies and as long as there is a wide tier of healthy customers at the bottom it is acceptable that there can be another tier at the top that is a little riskier to insure.

This upper tier which was actually drawing money out of the system, mostly the elderly, has never been a good bet for insurance companies and coverage providers have always been notoriously reticent to provide insurance for these people; they are simply not a good risk. As the number of retired workers grew two things happened that were to be the root causes of the failures of the system in the fifties. Many of these people had insurance plans through their workplace and when they retired they lost the coverage of these plans. On top of this growing problem, the costs of health care as it became more specialized and ultimately more successful rose at a much faster rate than anyone had expected so many seniors found that they simply could not afford these costs after retiring. In effect, people were living longer on retirement but the cost of this increase was directly reflected in the medical sector as these people were simultaneously in need of more care and lacking the funds to pay for this care.

This flaw in the system was obvious to all concerned and the calls for government intervention by the public once again set off a chain of events wherein the government began to investigate ways to solve the issue. One would think that an organization of individuals who profess to have the Hippocratic Oath as one of the core principles of their profession would be amongst the first to try to resolve such issues but history has shown again and again that the AMA is much more interested in the financial interests of its members than the health care concerns of patients. Despite repeated reports both public and private that pointed to the need for some sort of changes in the system so that the growing class of elderly citizens could afford health care there was little gain on this front in the early years of the 1950’s due to steady pressure from the AMA and other lobbying concerns to keep the government in any sort of involvement in health care. The new president, Eisenhower, was opposed to the extension of social security to help cover these costs but he promised efforts to rectify the situation for the elderly who could not afford adequate health care. The Health, Education, and Welfare office of the government made several aborted attempts at providing privately subsidized plans to handle this problem but no results were achieved in these efforts and by the late 1950’s the inability or unwillingness of private concerns to deal with the issue led to a renewal of cries for government intervention.

In 1956 the debate over public health care again took center stage in Congress. Welfare costs for medical patients who simply could not afford to pay the rising costs were rising at an astronomical rate and Congress was being pushed to resolve the issue. As a first step Congress formed a Special Committee on Aging to study the problem. The first proposal from this committee proposed that some form of cash payments to disabled citizen’s over 50 be implemented through the existing social security program. This proposal immediately drew heated opposition from the AMA and its allies because it foreshadowed the possibility of government intervention even though the proposal also included the provision that the decision on disability would be left up to physicians. For much of the remainder of the year a behind the scenes battle between the AMA and proponents of the change fought over this addition in subcommittee but it finally passed through this committee in favor of this change.

In late 1957 this plan was formally submitted to Congress in the form of the Forland Bill which would basically allow social security services to also provide for health care for the aged. There were several reasons to believe this bill would be more successful, not the least of which was that it had the support of significant powerful lobbying groups this time around and would not be a case of a strong lobbying group like the AMA being unopposed in their views. The Forland Bill had the active support of the AFL-CIO which gave it some impetus as well as financial backing to form an advertising campaign. It also had the support of the American Hospital Association. The AHA was increasingly concerned by the growing burden on private hospitals that provided care for patients who often could not afford to pay. The growing gap between this care and the government welfare dollars set aside to pay for it was causing considerable hardship for hospital owners at the time.

The AMA immediately rallied in efforts to defeat the Forland Bill, just as it always had in defeating any sort of governmental assistance programs that might affect profit margins for doctors. The standard battle cry had been the same for many years, starting with the AMA President Dr. Morris Fishbein. Dr. Fishbein’s views on the subject were spelled out in the following statement; “All forms of security, compulsory security, even against old age and unemployment, represent a beginning invasion by the state into the personal life of the individual, represent a taking away of individual responsibility, a weakening of national caliber, a definite step toward either communism or totalitarianism”. Dr. Fishbein was also fond of calling such efforts “peasant medicine” and calling those who supported it “medical soviets.”

With the support of the incoming Kennedy administration a compromise bill was pushed through Congress in 1960. The Kerr-Mills bill was a compromise of sorts in that it provided for financial assistance to the aged who could not afford medical services but it was a welfare program based upon a participant first proving that they did not have the means to provide for their own medical expenses. It was also a program that was administered by the states on a voluntary basis with the federal government matching funds after the state volunteered to participate. There were numerous reasons why the program was a failure, primarily because it was not large enough in scope to cover the growing divergence between the elderly’s ability to pay and the rising cost of senior health care. Senator McNamara of Michigan pointed out at its inception that since the program was voluntary for the states it was not likely to provide widespread relief of the situation and he was correct.

At the time, there were some 10 million medically indigent seniors in the country and only some 2.4 million seniors listed on the states rolls for old age assistance. Even if all of the states had participated this program would never have solved the issues we were facing as a country. There were also some 14 million social security beneficiaries already on the rolls so it was easy to see that the Kerr-Mills plan was simply not large enough to address the issue even if the states had all participated. As might be predicted, the states were extremely wary of participating. Three years later, some 18 states had never implemented plans to participate and some 32% of those in need were actually receiving 90% of the assistance from the bill.

The AMA for its part fought the passage of Kerr-Mills but eventually acquiesced when it became obvious that public opinion was widely in favor of government assistance. The AMA considered a smaller program to be a lesser evil as it would necessarily affect their profit margins on a smaller scale. The AMA widely lambasted the idea as the “foot in the door” of communism and socialism and stuck to its mantra that government intervention of any kind was the beginning of the end of American freedom. Not surprisingly, the Kerr-Mills bill was a resounding failure and was eventually repealed after five years but much to the dismay of the AMA there was still widespread support for government health care for the elderly.

Kennedy’s administration pushed for further reforms in the face of the failure of Kerr-Mills to eradicate the problem and another bill was soon introduced to deal with the issue. Surveys at the time estimated that the elderly used medical services twice as often as everyone else. It was estimated that 60% of seniors had less than $1000 dollars in assets and that nearly 55% of the aged lacked any form of health insurance. Obviously, the problem was not going to go away as the cost of health care services these seniors required were rising at a much higher rate than the cost of living.

Even the AMA had to admit there were problems on the horizon that needed solutions. The AMA now suddenly reversed course and suggested that the Kerr-Mills bill they had fought against was a good idea. They also came out with their own plan called Eldercare which would basically extend the coverage of Kerr-Mills to cover more procedures but was still predicated on the states voluntary participation and promised to help only the most indigent amongst the elderly. The AMA either completely missed the fact that most seniors were concerned with losing their whole life savings on just a couple of medical emergencies and the understanding that such incidents would be the inevitable result of such a system or they simply didn’t care. One wonders how an organization that was at the fulcrum of the problem in that it was medical doctors who were doing the treatment could miss the realities of the situation. It is hard to believe that the same doctors who saw these patients every day were so far removed from reality that they couldn’t see the problem but the AMA was still much more concerned with protecting profit margins than any other consideration.

A bill which had the support of the Kennedy administration soon was introduced on the floor of Congress. This bill, King-Anderson, was basically half of what we now know as Medicare. The King-Anderson bill proposed to cover hospital and nursing home care, but not surgical costs or out-patient physician’s services. I suppose these exemptions were an attempt to placate the AMA but it was unsuccessful as the AMA immediately responded with organized campaigns to defeat the King-Anderson bill. It is worth noting that such an exclusion would not have solved the problem in the first place because surgical costs were also skyrocketing at the time but in any case, the AMA was having none of the King-Anderson bill and it began to bring all the powers of persuasion that large budgets, well placed political insiders, and organized wealth can bring to bear on such campaigns.

more to come....

Free Markets and Corn

More on Adam Smith and the Wealth of Nations....

Chapter 5- The Price of Commodities

Smith’s attempt at explaining how commodities are actually priced is well thought out and rather ingenious. His basic premise that real value is tied to labor is continued in this chapter. In Smith’s view the real price or value of anything is ultimately the amount of labor that goes into either its production or the amount of labor that it can be traded for. In other words, the best estimate of real value is the amount of labor it may ultimately claim in exchange.

However, in reality most exchanges are not direct barters for labor but rather involve exchanges of goods or money instead. These exchanges in Smith’s view still have their ultimate value in labor even though it is an indirect comparison. Since all goods and services are necessarily susceptible to market fluctuations this can sometimes become a hard equation to work all the way out as each exchange has to take into account the actual real price or value of the goods or services being exchanged.

Being a keen observer of the economy he saw all around him Smith hit upon the idea of finding one good or service that was more stable than others to use as a base value to judge all others against. As he explains in the book he hit upon corn as being a rather stable commodity over a long period of time as in his view it was largely analogous with the amount of labor used in its production. Smith recognized and postulated that although corn prices regularly rose and fell in rather large cycles based upon atmospheric conditions, political stability, and the lack of war; over longer periods of time corn prices were fairly stable. He surmised this was because the amount of labor involved in its production was fairly steady which gave him a ready method of computing value back to what he considered its true core.

There are numerous examples in the book where Smith used corn, at least on a time averaged basis, as the best reflection of the relative value of labor. Smith recognized that advances in methods necessarily increased corn yields but over long periods of time that he studied, he considered these advances to be relatively small and unimportant in comparison with fluctuations in other goods tied to labor. It is really a remarkable methodology that forms one of the core measurements of the true value of labor. This is in Smith’s view the most important factor to be tracked as we must remember that he considered the value of labor to be the true basis of all economic value.

It is a little ironic that the very staple Smith recognized as the best commodity to peg the true value of labor to has in modern times in this country become a powerful lobby; so powerful that there is little or no resemblance to the free market concepts Smith found to be immutable in the corn industry today. It is also ironic that some of the staunchest conservatives of free markets installed the government subsidies that forever removed corn from the influence of free markets while simultaneously allowing the creation of market monopolies by large farm corporations.

The first efforts at corn subsidies came from within the Roosevelt administration during the Great Depression. As the economy collapsed and real wages and crop prices fell to record lows there was a real danger of the collapse of agriculture as an industry. Farmers who had long relied upon credit to plant their crops found that it simply did not exist. The government, recognizing the necessity of maintaining agricultural expansion set about making efforts to stop the collapse by a two pronged approach. The first prong was to provide needed farm loans for planting crops as this was the immediate necessity to forestall collapse and wide scale starvation in the country. The second prong was an effort to modulate prices by government assisted control of supply. Farming in the US had always been a free market enterprise before this effort with years of profit followed by loss in a cycle that often led to widespread epidemics of foreclosure and boom. Farmers themselves had several times attempted to organize themselves into cooperatives to better regulate the cyclical nature of the industry but had never had the financial ability to make good on such ventures. It must be remembered that such efforts were despised by the moneyed interests in the US as encroaching socialist and communist tendencies and bankers were not slow to react to such perceived threats by tightening credit in those days.

Roosevelt’s efforts at price control consisted of encouraging farmers to hold down production in years of plenty to avoid gluts of the market which would cause prices to collapse. This amounted to stockpiling produce by government warehouses as well as paying farmers not to plant crops in some years. These methods were fairly effective as farmers began for the first time to see these damaging cyclical movements modulated so that the business became more predictable. Along with government sponsored low interest loans this stability led to farmers being able to invest in their own future by making capital outlays in the form of better equipment and more efficient planting and harvesting techniques.

Following World War II the industry took another quantum leap forward in terms of production capability when ammonium nitrates began to see widespread usage as a fertilizer. While usage of chemical fertilizers had been being experimented with for the previous century it was the confluence of an abundance of this chemical due to the large scale buildup of its production during the war for explosives and the end of the war which caused a divergence between supply and demand that led to its widespread increase as a fertilizer. Farmers soon realized that production could be vastly increased by application of this fertilizer and the government owned a large supply of it that they quickly began discounting to farmers for this usage.

This was largely the methodology of controlling agricultural markets up until the early 1970’s in this country. While it was not in fact a free market, it was closer to a free market than what we have in this country today as it was dominated by small farmers who were largely free to compete with each other and other farmers in the world in the market. This all changed in 1972 while Richard Nixon was in office.

In 1972 a large sale of grain to Russia that was brokered by the US government led to a rapid increase in grain prices across the country. Americans were incensed as food prices at the grocery store suddenly took sharp rises and demanded that the government respond. After all, the government had largely precipitated the crisis by the grain sale and it resultant clog of the agricultural national transfer system and Americans understood this. Nixon, desperate to quell this unrest as he had other problems linked to a little matter called Watergate to deal with, turned to his secretary of agriculture for an answer.

Earl Butz was raised on a depression era farm. He had been appointed Secretary of Agriculture based upon his accomplishments as a well respected professor at Purdue University and was an avid proponent of larger, more efficient farming operations. With the grain shortage and resultant outcry he saw his chance to change the system. Butz was an outspoken critic of the system Roosevelt had put in place. Having been raised on a depression era farm and seeing both the widespread hunger of the depression and the simultaneous price control efforts whereby the government paid farmers not to produce food; he could not see how such a system made sense logically. Butz believed that a more efficient system was needed and he thought he knew how to put one in place.

Butz’s ideas were as simple and straightforward as the man he was. Butz proposed that the government should control prices by simply guaranteeing a price on crops. In other words, Butz encouraged farmers to grow as much corn as possible and simply guaranteed a price that would be paid for the corn. In his words farmers should plant “from fence row to fence row” and the government would guarantee the price when it came harvest time. When critics of this plan pointed out that it would necessarily lead to monopolies of the industry by large farm corporations, Butz responded with the instruction that farmers should “get big or get out.”

In other words, Butz proposed to remove the free market completely from the picture by interposing the government between supply and demand. When supply rose and demand fell, the government would make up the difference. By producing as much corn as possibly Butz believed that the price of food would necessarily come down. He was right of course but it is remarkable that a country based upon free market capitalism could swallow such a pill but we did.

Any sort of regulation that tends to remove an industry from the free market inevitably leads to excesses and this one was no exception. At first, the government offset the ability of larger corporate entities to drive small farmers out of business by increasing the availability of low interest farm loans. While this necessitated that small farmers go deeper and deeper into debt to maintain their competitive edge with larger producers it did allow them to remain in business for a short while. Since the main goal was maximum yield it also necessarily increased fertilizer usage and narrowed crop choices until American farmers were largely producing only two crops, corn and soy beans. This wasn’t a choice of American farmers, it was a necessity as these were the crops that were subsidized and they were the maximum yield crops that became a necessity to keep up with the debt loads.

As in all cycles where debt increases there is eventually a reckoning and this particular cycle ended with a grain embargo that the US imposed against the USSR after this country invaded Afghanistan. With falling prices and a US economy under strain as well the government began backing off of subsidies and low interest farm loans at the same time. This put the squeeze on small farmers to the point that they have largely disappeared in this country. Unable to service their debt they began defaulting in record numbers in the late 1970’s and early 1980’s. Large corporate farms began snatching up farmlands at record low prices. As they had larger cash reserves, better tax rates, and greater ability to acquire financing it didn’t take long for them to monopolize the industry. It was the “perfect storm” of economics for small farmers and a time of great profits for large corporate farm entities.

It is without doubt that these policies have decreased the real cost of food in the average American household. Most studies indicate that the percentage of a family’s income spent on food every month is now down around 10% while in post WWII years it was around 23%. This has also tended to increase the amount of food that most Americans spend on eating out every month which has accordingly seen a marked rise in the restaurant industry. American farmers now produce more food with greater efficiency than has ever been seen on this planet up to this time. Based strictly on efficiency, Butz’s ideas were a tremendous success even though he basically removed agriculture from the free market to do so. Lest anyone start polishing up the medal for Butz too quickly it is worthwhile to remember how he lost his job.

Butz had all the diplomacy of a rusty bulldozer and the temerity around reporters to match. In 1974 at a World Food Conference in Rome, Italy Butz made a remark to reporters that got him into trouble for the first time. Making fun of the Pope’s recent comments about birth control Butz commented in falsetto pidgeon Italian, “He no playa the game, he no maka the rules.” In response to widespread indignation to his comedic attempts he half heartedly apologized by stating he had not, “intended to impugn the motives or the integrity of any religious group, ethnic group, or religious leader.” This managed to save his jobs for a while but he was soon to show his lack of understanding of the effect of public statements again.

On a commercial flight to California in 1976 after the Republican National Convention Butz was entertaining former White House Counsel John Dean and Republican advocate Pat Boone with a story about intercourse between a dog and a skunk in full hearing of reporters. Boone, in an effort to change the subject, asked why the party of Lincoln seemed to be having troubles attracting black voters. Butz responded, “All the colored are looking for in life are loose shoes, tight pussy, and a warm place to shit,” in hearing of several reporters on the flight. The first defense for this remark was Butz assertion that the remark was off the record and should not have been reported. When that failed to calm the storm, he offered his resignation which President Ford seemed glad to accept before he made some other statement of equal or greater crudity.

As in most defections from free market thinking, these policies have had unforeseen results that are definitely not on the good side of the ledger. The mono-crop technology of corn has changed the agriculture of the US in all other areas as well. By holding the market price of corn to unrealistically low prices it has changed the beef, pork, and chicken industries completely. Large scale CAFO’s or Concentrated Animal Feeding Operations dominate these industries to a degree that would not have been thought possible even 20 years ago. Cattle, hogs, and chickens are fed corn and corn by-products exclusively on these CAFO’s without any vegetation needed. This necessarily decreases the need for space for these animals while simultaneously increasing the area available for corn production. Such large scale CAFO’s are terribly efficient and at the same time terribly effective at producing some nasty side effects that are currently causing problems all over the world. Cattle through millions of years of evolution evolved as grass eaters. Their whole metabolism is geared towards converting grass to meat. They were not designed as corn eaters and CAFO operators have learned that they will not survive long under such conditions without large doses of antibiotics. These antibiotics inevitably find their way into the meat and into our stomachs as consumers. Studies are currently underway linking these changes to new and potent micro-organisms that we ingest on a daily basis. The same can be said of chickens and hogs. While large corporations that run CAFO’s understand these problems and are trying to combat them their efforts are largely geared towards adding more chemical concentrations to kill these new germs.

For example, most hamburger meat bought in grocery stores today is treated with ammonia before being packaged. The ammonia necessarily removes the natural color of the meat so dyes are added after the treatment to give the meat back its natural color so the consumer is not put off by the raw pink color of the meat after the treatment. Animals raised in CAFO’s typically live in a sort of nasty squalor that is hard for most Americans to imagine. Closely confined pens knee deep in their own manure, the animals are so dirty that CAFO operators find it easier to chemically treat the meat after their slaughter than to try to establish sanitary conditions in the actual slaughter operations.

Animal husbandry is not the only industry that has changed due to corn subsidies. The very abundance of corn has led to a proliferation of chemical treatment processes whereby corn is converted into other foodstuffs, carefully packaged to be something besides corn. High fructrose corn syrup is the basic sweetener that is used in almost all mass produced products instead of sugar. It is cheaper, easier to transport, and readily available but it would not be so without the subsidies holding corn prices unrealistically low. As a matter of fact most estimates put some 75% of the products in grocery stores today as corn products that have been refined chemically in one way or another. Studies linking the nationwide epidemic of obesity to the increase of corn based sweets in the American diet are hard to ignore as well. It is without question that CAFO’s and the massive doses of antibiotics they require have also affected Americans health.

Last but not least, there are the international implications. One would think that a huge increase in our ability to produce a basic food such as corn would also result in eradication of hunger around the world. Unfortunately, this does not seem to be the case and I will give a couple of examples why.

In 1994 the United States, Mexico, and Canada instigated the North American Free Trade Agreement or NAFTA. This agreement basically removed trade barriers between the three countries with some exceptions. Interestingly, Canada instantly recognized that American corn subsidies would necessarily harm Canadian farmers and insisted upon protection in the form of tariffs on corn in the agreement. Mexico, however, had no such reservations or understanding and has suffered the consequences since.

It is estimated that some 75% of farmers in Mexico grew corn as their main crop in 1994 when NAFTA came into being. They soon found out the same thing that American independent farmers had found out 15 years earlier, they could not compete with large corporate American farms that enjoyed corn subsidies. The cheap price of American corn soon resulted in massive drops in price in Mexico which forces a large emigration of rural small farmers into industrial areas looking for work. Whatever employment gains for production industrial work that were gained in Mexico were more than offset by the loss in small farmer’s abilities to subsist. Most studies suggest this was one of the main catalysts for the recent rise in illegal immigration into this country from Mexico. The same can be said for cattle and hogs in Mexico as cheaper American animals raised on subsidized corn drove prices down to the point that Mexican farmers could no longer compete in the market.

Mexico has since started instituting corn subsidies of their own to protect the agriculture they have left but the government can’t hope to sustain these subsidies when it is constantly on the verge of bankruptcy itself. It is only a matter of time before the whole structure collapses. Most studies show that the government there is unsustainable without continued financial assistance from the US government that will have to increase steadily in the years ahead.

In the late 1990’s the US government began increasing subsidies for alternative fuel technologies in an effort to lower our dependence on foreign oil. Naturally, the huge corn lobby in this country already unimaginably wealthy and powerful garnered the largest share of this money as well. Never mind that corn is very likely the worst crop we could possibly pick to convert to fuel. Most scientists agree that corn is a net loss in the conversion rate as ethanol is extremely inefficient as a fuel and our current process of growing corn involves pouring fertilizers largely garnered from oil onto the field plowed by tractors burning oil in the form of diesel or gasoline. The long term results are largely out on the efficacy of bio-fuels of any kind but there is almost universal agreement that corn is amongst the worst candidates as a bio-fuel of any crop. Still…. there is a strong lobbyist group from corn producers in Washington so that is the path we are taking as far as bio-fuels are concerned.

While this is ridiculous enough it has managed to impact food supplies around the world. Suddenly, third world countries dependent on corn for basic sustenance find their interests in conflict and competition with corn being used as animal food and bio-fuels in the US. This has led to a marked increase in the real price of basic food commodities in many third world countries; to the point where some studies show the basic percentage of family income spent on food in these countries rising significantly.

It is interesting to suppose what Adam Smith would have thought of our “free economy” in the United States today. Undoubtedly, he would find it unrecognizable as a free economy and instantly recognize that it is basically an industrially owned and operated autocracy with decidedly monopolistic tendencies supported by an industrial hierarchy that owns and manages the government in its own best interests. He would undoubtedly be puzzled how a representative government could get to this situation but then again…. I am too.

Maybe he would understand if he could just watch “American Idol” on TV for a little while. After all, it seems to be the modern day equivalent to the hypnotist’s watch… dangling slowly back and forth, back and forth while commercials periodically interrupt to tell us how lucky we are and sell us everything from pill form mental health to instant erections that last up to four hours. Religion may be the opiate of the masses but American television is the crack cocaine of the electorate.

Wealth of nations, Chapter 1

In a continuing effort to educate myself and better understand the economic collapse we seem to be witnessing all around us I have been concentrating on economics in my studies as of late. Probably the first book on economics to gain wide acceptance as a scientific study was Adam Smith’s Enquiry into the Wealth of Nations. Smith’s book is still studied today and many believe it to be one of the cornerstones of capitalism even though it was written over a ten year period from 1766 to 1776. It was instantly widely read and acclaimed and is still studied in universities around the world today. Most conservatives even today consider it the final word on free markets and laissez faire theory.

It is a brilliant attempt at organizing and formulating economic theory from the observations Smith made about life all around him. However, to suggest that it is applicable to modern economics as anything other than a study of the beginnings of the field of scientific economic theory is to ignore reality. I will build on this theory a little more in posts coming in the future.

Book 1 Chapter 1- The division of labor

Smith’s idea, probably rather novel at the time, concerning the division of labor is one of the cornerstones of his economic system. The basic premise is that by the intelligent division of labor productivity is vastly improved. While I won’t attempt to argue with this idea it is worth noting that modern mechanized methods have turned this concept into an infinitely more powerful one than Smith ever dreamed. In his example whereby pins are manufactured he compares the productivity of one rather unskilled laborer with the productivity of ten specialized workers.

In his example the one unskilled laborer would be lucky to produce one or two pins in a day while the skilled laborers, by dividing the labor amongst wire straighteners, cutters, sharpeners for the point, men who make the heads, men who install the heads, and even those who package and sort the pins the production is vastly improved. In Smith’s example a group of ten such men could make about twelve pounds of pins in a day. This twelve pounds would equate to around 48,000 pins in a day. If this productivity is divided by the ten workers who produced it some 4,800 pins per worker per day are produced. Smith compares this with the 1-20 that an unskilled worker working alone might possibly produce.

All of this is very well taken and tends to support his ideas about labor being the real basis for the cost of products. In other words, according to Smith’s reasoning since the division of labor equals greater productivity then it tends lower the real cost of goods. This is a reasonable assertion, even an ingenious one in Smith’s day considering he spells out this common sense calculation in terms easily understood and clearly defined. One of the other basic tenets of Smith’s economic theory is that the market tends to balance wages and reward aquired skills, either directly to the worker or indirectly to the employer who hires and trains the worker.

We can hardly blame Smith for failing to predict or understand the mechanization of production that would come about in the next two centuries. However, let’s take Smith’s analogy of the pins and move it forward to this century. In the early 80’s I worked in a factory that produced straight pins and sewing notions of all kinds. I worked on a line that produced straight pins. Each machine made different types of pins from wire so I will have to generalize but on average each machine ran some 100 pounds of pins in an eight hour shift. There was one operator/jobsetter that maintained and repaired the machines for each row of machines. Each row of machines contained 14-16 pin making machines so this conservatively equates to some 1400 pounds of pins produced by one man’s labor in an eight hour shift. Since the plant itself ran three shifts this equates to 4200 pounds of pins in one day split amongst three workers, or 1400 pounds of pins per worker. If we use Smith’s numbers of 4000 pins per pound we come to some 5,600,000 pins per worker. This is a 1166% improvement in pin production per worker.

What is the net result of this massive increase in productivity? Beyond the drop in relative “dearness” as Smith would put it of pins, the theory that labor is the true basis for real costs is clearly debunked and outdated. Smith had no way of knowing that such massive increases in productivity would be possible, much less begin to understand what they would do to his theories about the value of labor but it is clear that labor is no longer the true source of value in costs; the mathematical realities of mechanized production have forever changed this ratio. I would further surmise that robotics, PLC controls, and computerized production systems have probably increased this ratio even more dramatically; to the point that one man’s maintenance for automated pin producing machines probably has increased this ratio by another factor of ten since the 80’s. Today we are probably looking at a 10,000% increase in productivity per worker in manufacturing pins since Smith’s day.

The basic premise of this chapter in Smith’s book is aligned towards showing that each improvement in production filters down to the bottom layers of society. His argument that the lowliest laborers in industrialized nations of his day lived opulently compared with the kings of savage lands might have been feasible in Smith’s day but in our times it seems to fall somewhat short of his predictions of trickle down opulence. Can anyone actually suggest that this 10,000% increase in productivity of pins has trickled down to the people who actually make the pins? Are people who do the maintenance on today’s modern manufacturing equipment 10,000 times better of financially than they were in Smith’s day? Obviously, a 10,000% increase in productivity has to benefit someone, so I wonder who this particular one has benefited. Maybe some of our modern CEO’s could take a stab at answering this one…..