Wednesday, December 16, 2009

Its not the Profit Motive, its greed

I have watched with growing dismay the whole health care debate.

Single Payer wasn't even on the table. It was impossible to think about taking the profit motive out of health care.

The public option was opposed, frequently by people who had taken huge sums in campaign contributions from medical insurance or pharma companies, because it would be unfair to expect private companies to compete with a government chartered non-profit.

Why is it that some seem soo determined to protect the profits of the insurance companies?

Is it because they are motivated by profit to become more responsive and efficient to their customers? Not even close. Motivated by profit they now spend more than 25% of their income on overhead, including huge salaries for top executives and huge staffs who are devoted, not to providing better care, but to denying care, to canceling insurance, to ensure that they only insure those who are very healthy.

Is it because the Insurance industry is doing ANYTHING to constrain costs?? Not even close. Health Insurance rates continue to go up 10% a year when inflation in the rest of the economy is less than 3%.

I have no objection to the profit margin. I have always worked for companies that wanted to make a profit. I have profited my self because they were able to hire me.

But is that what we have here?

Not really

Most insurance markets in this country are dominated by no more than 2 huge companies. And without competition they don't really have to compete. And they don't. So overhead costs to up and executive salaries go up and stock prices go up and the amount of money they actually spends on patient care goes down.

This isn't the profit margin

Its greed, pure and simple.

Its the same level of greed that led major banks to take ridiculous risks with our money. And when they failed horribly and brought the entire country to the brink of disaster, many of them still insisted that they deserved million dollar bonuses.

40 years ago, the average CEO made 40 times as much as their average worker. Now they make 400 times as much.

Wealth and income are now as concentrated in fewer hands than any time since the great depression. Thats not profit motive, thats just greed. When the top 1% of wage earners make more collectively than the bottom 50%, we have left the simple profit motive behind and moved into naked avarice.

The health care reform debate has been an argument between people who want to bring this great country into the company of every other industrialized nation in offering health care to EVERY CITIZEN and those who seem determined to protect the greed, pure naked greed, of the health care and pharmaceutical industries.

Its not about profit, its about greed.

And greed is winning.


professor cz said...

It’s not about Greed

There are between 7 and 14 articles and blogs a day all identifying the crisis of 2008, CEO behavior and bankers bonuses as all about greed. We are quickly moving towards an accusatory cultural position that if one gets too much (a relative term) then one is filled with greed. It is similar to the diagnosis of narcissism that has been grossly misused and misapplied. Misused to the degree, where if one is selfish or lacks empathy or takes more, one is called a narcissist. This places the accuser in the position of blaming those who have more and fails to understand what motivates them to engage in this behavior.
What brought about the banking crisis in America was not about greed, it was about the pathological need to increase one’s status. Studies have demonstrated that high levels of testosterone do not necessarily lead to a macho man hell bent on being aggressively consumptive but a man excessively focused on status, filled with envy, and an overwhelming desire to have what the other guy has. Consider this: At a “gin and tonic” party at a mansion of a successful banker an attendee reported the following. “After I got my drink our host led us to his greenhouse and showed his magnificent collection of valuable and delicate orchids. It was his hobby and he would travel the world collecting rare and exotic plants. Upon return to the house I could not help but notice two sets of women; an old or original group of wives at one end of the large room and a group of trophy wives at the other end, nervously eyeing each other.” What drives these men to engage in one-upmanship is not greed — but one-up-man ship status. They see their colleagues with a more expensive car, they start thinking about getting a one, they see a colleague with a jet and they have to have one too, they see a colleague with a beauty and they want one. Houses, cars, wives, art, orchids, watches, office, etc.; these are status symbols and for these men they are exceedingly important. They become a measure of their self worth. The parties, the country club, the university club, the yacht club, and the workplace are all places where executives parade their stuff. Many suggest this is nothing more than narcissistic characters impressing others to obtain love. But this may not be the case. They live and work within a culture that is status driven and issues of exclusion and inclusion are associated with the attainment of status. In this culture those who have more create envy and they aggressively engage in the struggle for ever higher status. The “my d--k is bigger than yours,” is ever present. The truth of the matter is underneath they believe they will always an inadequate d--k.

Uncle Walt said...


I am not going to argue the underlying psychological needs of the various CEO's. Not sure I care.

What I care about are the effects of their actions. And the effects of their actions was a culture of greed. The mindless pursuit of bigger and bigger profits with no regard for either the long term impact on their companies or on the economy at large.

Its all about greed. They might have been greedy trying to compensate for some percieved physical shortcoming or they might have been simply hyper competitive and determined to outdo the CEO next door. Why they are greedy might make for an interesting book that nobody would ready.

But they were greedy.

And that greed almost destroyed our economy. And that greed continues with the insane bonuses the big financial firms are still paying out to their people to continue doing the same things that got us into this mess in the first place.

And that greed continues to fund (mostly conservative) politicians who reflexivly oppose any attempt at regulation because they still insanely believe that the market could or would regulate itself.

A major element of the health care debate came down to a debate over protecting the profits of the health insurance companies, despite that the health insurance companies have not even tried to use their profits to make their customers lives better or to hold down costs or to improve service. They pursue profit for its own sake and are content to allow our helath care system to contiue to be a national embarassment.

Its not about profit

Its about greed

What ever the inner motivation in their heads, its still about greed.

The Coach said...

Professor CZ: I fail to see the difference between "greed" (the accumulation of more money) and "one-upmanship" (the accumulation of more than that other guy).

It seems to me that both are different manifestations of the same root problem: selfishness -- ipso facto - a lack of servanthood.

I agree with Uncle Walt, there's nothing wrong with profit - CEO's ought to get paid 40x the regular worker's salary - but at what expense?

Nice post Walt. I don't really know where I fall on the details of whatever health-care bill ends up being foisted on us, but I hope the motivations behind developing such health care legislation are serving, not just self-serving.

Uncle Walt said...

Thanks Coach

Julia said...

Well, I'm one of the constituents of Representative Dr. Parker Griffith. He pulled a Dick Shelby this week, but only with a more greedy flair: He's anti-health care reform.

Accepted connections made, voluntarism, and funding from the Dems. Then swapped to the other side of the aisle. Just like U.S. Senator Richard Shelby in 1988, who HAD been a useful Veterans advocate in the terms where both Chambers were still blue controlled, pre "Nit" Gingrich, even though Papa Bush just took the spoils.

GREED. Dr. Parker Gecko, the Merger and Acquisitions raider to the non-health-insured.