Corruption abroad and at home

Corruption abroad and at home.
Corruption is a central topic in discussions of Afghanistan. From the American side the matter looks very simple: the Afghanis are corrupt; we are not. There is some support for that view. In the index of 180 countries compiled by Transparency International, Afghanistan is second from the bottom. The only country more corrupt is Sudan. The United States ranks 19 from the top just above Barbados and Qatar.
But recent reports from Afghanistan show that corruption in that country is much more complex.
The American and NATO troops in Afghanistan need to be supplied with everything from armored vehicles, to weapons, to toilet paper. These supplies come into the country in large convoys of trucks that often move through hostile territory where the convoys are liable to come under attack. To meet that problem a number of Afghani security companies have come into existence to protect these convoys. Some of the most important of these security companies are owned and run by, for instance,the son of the defense minister, or by cousins of the president of Afghanistan, Hamid Karzai. You need to be well-connected in order to get ahead in Afghanistan. We regard that as a form of corruption.
In the United States, in the meantime, a small uproar concerns the taxes to be paid by private equity companies and hedge funds. Private equity companies buy up existing enterprises. Sometimes they manage to improve the enterprise's efficiency and thus to enhance the viability of the firm. In many other cases, the companies bought up by private equity firms are overloaded with debt and end up going out of business while the private equity firm walks away with profits in the millions of dollars. ( This is how Mitt Romney got to be rich.) How should those profits be taxed? The current tax rate on these profits is 15%. Private equity firms are lobbying furiously against proposals to raise that tax rate. They may well succeed in this because they too are well connected. Being well-connected in Afghanistan means that you have family relations to the powerful; being well-connected in the United States means that you give money to the right legislators and bureaucrats. Getting advantages from family connections is corrupt; getting advantages from handing out campaign funds... is what?
Is it really true that the Afghanis are corrupt and we are not?
But there is more. Let us go back to the Afghani security companies that protect supply convoys for US and NATO troops. They are not well armed. They protect their convoys by bribing the Taliban not to attack. The money for these bribes comes from the US government. It is our government that pays its enemies – the Taliban – not to attack us. If Afghanistan is corrupt to the point of buying off their enemies, our government is involved in this corruption because it hires the security companies and supplies the pay-off money.
There are several lessons to be drawn from the stories. The first goes back to the New Testament: if you see a mote in the eye of the other, do not overlook the beam in your own.It is easy for a nation to be self-righteous; it is better to be as critical of oneself as one is of others. The second lesson is this: as long as we remain involved in Afghanistan we will be involved in maintaining its corrupt practices. If we want a clean government in Afghanistan, the first thing we need to do is to leave the country. If we want to have a clean government at home, the same it true: we need to leave Afghanistan.

Widespread Desperation and what to do about it

Widespread Desperation--what can we do?
There are many desperate people in our world. Some act out their desperation. They shoot and kill perfect strangers, they invade a former workplace and kill one-time colleagues. Husbands kill their wives and children and then themselves. Men kill former girl friends. Abused wives kill their husbands. Other direct their desperate violence against themselves and cut their arms or numb their unhappiness with pills, or alcohol, or drugs, or commit suicide.
Explanations of this flood of desperation are endless. There are those who blame it on the decay of family values, or on people turning their backs on God. Others blame rampant materialism. Others again blame our restless movement back and forth across the country that destroys established communities.
A recent, particularly pathetic story raises other questions about desperation and what we might be able to do about it.
Bobby Yurkanin, an only child grew up to set up his own business. In the late 1990s his mother was diagnosed with cancer and he returned home to nurse her until she died in 2001. By that time is father was showing clear signs of Alzheimer's and Bobby took the challenge gamely and nursed his father as he became more and more demented and, with that, more and more difficult. He moved to Florida with his father and was constantly at his side. A short while ago, at the beach with his father who had taken his trunks off, when Bobby tried to put those trunks back on, the father fell in the water and drowned. Accused of contributing to his father's death, Bobby's lawyer negotiated a deal for 15 years of probation.
Bobby, the newspapers report, was the only caretaker for his father, as he had been for his mother before. For the last ten years this man had dedicated himself to caring for his sick and, in the case of his father, very difficult parents. Was his father's drowning an accident or did Bobby finally snap?
The central fact is that no one helped Bobby. In Florida he and his father lived in a large condominium. Many neighbors had seen them for years, had witnessed Bobby's struggles and heard his occasional outbursts of rage against his father. Did anyone help? No, Bobby was the sole caretaker of his father. The neighbors watched, they complained about the old man running down the hall clad only in a diaper. But if anyone tried to help Bobby, it is not recorded.
The newspapers do not even ask whether anyone helped Bobby; they assume that no one would. The neighbors did not talk it over and go to Bobby to offer him a night off every now and then; they did not hold a bake-sale to raise money to hire someone to help. No, they all just looked out for themselves.
This represents one American tradition: everyone is out for him or herself. If neighbors or even strangers have problems looking after their own lives, we surmise that they must have done something wrong. At any rate it is not our problem. This individualism goes back to the early days of capitalism. Adam Smith the 18th century prophet of the free market said it in these words: “It is not from the benevolence of the butcher, or brewer, or the baker that we expect our dinner but from their regard to their own interest.” As long as all look out for themselves, we will all be better off.
That may be true in some aspects of the economy, but even an economic system requires mutual trust; all participants must be mindful of the requirements for a functioning economic system. Much more obviously, just looking out for number one produces dysfunctional families. Schools work well if they create a caring community where everyone counts and every one considers everyone else; they fail if all only benefit themselves. In neighborhoods where no one knows or cares about their neighbors, crime is liable to be rampant. Health care, care for children and the elderly will be defective if selfishness is the rule.
While, on the one hand, we believe that all should take care of themselves and we have few responsibilities to our neighbors, we have, on the other hand, always known that. Americans worshiping different gods have all been taught to love their neighbor like themselves. We have always practiced this--some of the time-- in a variety of ways. Many people who grew up in smaller towns, talk about how everyone took responsibility for all the children. If you did something you were not supposed to do, someone would notice and call your mother before you even got home. In later years when you came home you would visit all of these, now old, ladies who had watched over you and cheered you on. In many communities neighbors used to with casseroles when there was a death in the family. After 9/11, the bumpers stickers. “United we stand” testified to the same theme: in times of trouble we need to look out for each other.
We live in a particularly hard times – many people have lost their jobs and/or their houses. We confront a clear choice between the different sides of our traditions: acting as separate individuals, and treating others as the same, denying that we are our brothers' and sisters' keepers. If we choose that, we will see more mass shootings, more killings, more suicides. On the other hand, we can also keep alive those aspects of our traditions that involve looking out for our neighbors and expecting them to do the same for us. In desperate times, we can reduce desperate acts by taking some responsibility for the suffering we witness. We can make it our business to be good neighbors and reduce the extent of desperation and desperate acts.
The choice is ours.

Socialism for the poor

Socialism for the poor.
At a recent meeting at Columbia University School of Business, Bill Gates and Warren Buffet--between the two of them worth roughly $100 billion--reaffirmed their faith in our economic system--capitalism. They praised the free market, the equality of opportunity of the system, and the ability of everyone to enjoy the fruits of the private initiative of people like themselves.
At the same time the papers report that one in 7 households struggles for food. Almost 15% of US households or about 49 million people, including 17 million children do not have enough food for an active, healthy life style. 49 million people, 17 million children go hungry some of the time, in the United States, the richest country of the world.
We all know the effects of hunger on children. They have trouble paying attention in school, they have trouble learning, they drop out of school early. They have no chance to participate in the “equal opportunity” Gates and Buffet bragged about. They will not share in the fruits of the initiative of successful capitalist entrepreneurs.
Capitalism is a great system for the rich. It is a disaster for the poor. It is not so great for the people in between, who are prone to job insecurity, have troubles paying their bills, may lose their homes to foreclosures, and be unable to pay for decent medical care.
“So, are you advocating socialism”? An appalled reader asks.
No, I am advocating socialism for the poor. The rich already have socialism. When they lose money, when their firms face bankruptcy, the govern steps in to support them. Ask General Motors, AIG, or Bank of America what they think of the sort of socialism that saved their skin last year and is continuing to do so.
While the big financial firms received astronomical amounts of money to save them, so much so that today their directors again get million dollar bonuses--more in bonus money for one year (when they almost went bankrupt) than many working Americans make in a life time-- 1 in seven families goes hungry.
How about a little bit of socialism for them?

Public War for Private profit

Public war for Private Profit

The eight-year war in Afghanistan has had diffuse goals. It has not been clear what we were actually doing there. President Obama wants to clarify our objectives and then deploy the means necessary to reach them. No doubt that it is a laudable goal. But looking at the actual goings-on – the barefaced profiteering on the part of US firms in this war, it is clear that the objectives will always be split between making lots of money for private American consultancies, for private security firms, for private firms providing food and other necessities for our troops, on one hand, and the strategic goals of our country, on the other. These strategic goals will always be hard to reach as long as there is this second agenda of putting money into the pockets of well-connected American entrepreneurs.

At the present moment there are more private employees of private contractors in Afghanistan than US troops. According to a report from the Congressional Research Service, the Department of Defense provides inadequate oversight over private contractors, money is often wasted--such a building a $30 million dining hall in Iraq a year before the troops are slated to leave. But that is a very polite way of talking about a situation described by The American Conservative in these words:
“There is such a lack of outrage for the way that private military contractors have pillaged and profiteered from our nearly-decade occupation of Iraq and Afghanistan that it leaves one speechless. Almost. Thanks to whistle-blowers — at the threat of their own security, professionally or otherwise — we have been informed of some of the basest, grossest behavior coming out of the contracting world on the taxpayers’ dime today. Whether it be soldiers electrocuted by cheap, poorly installed showers by KBR and Triple Canopy, the vodka-drug- fueled pimping frat boys from the Armor Group, or the gang rape of a female American contractor by her fellow KBR employees, there is seemingly no end to evidence that the proliferation of privatization has created a runaway Frankenstein of venality,”

The heavy fighting on the ground, is accompanied by an undignified scramble for public money by for-profit private American and foreign companies supported and encouraged by our government. American conservatives ordinarily are all for capitalism, pursuit of private profit, and the free market. But in Iraq and Afghanistan the pursuit of private profit apparently has gone so completely haywire that even conservatives are shocked and dismayed. The war now has two objectives: enrich private companies and fight terrorism. But we cannot do those two things at the same time. The war in Afghanistan will never weaken terrorists as long as less than half the personnel is under command of the military, the Secretary of Defense and the President, with advice of Congress, while slightly more than half all the personnel, representing the United States, are under the command of private companies, trying to make gigantic profits. We will not win the hearts and minds of the Afghan people as long as we are represented by the thugs of Blackwater and other private contractors.

Postscript: Do you think I am exaggerating? This morning's paper reports a federal indictment for a firm called “Agility” that has supplied billions of dollars worth of food to US troops in Kuwait and Iraq for “providing false invoices, . . . knowingly inflating prices. Manipulating packages to enable double billing . . .” The firm holds more than $ 8.5 billion in US government contracts.

Corruption is in the Eye of the Beholder

Corruption is in the Eye of the Beholder
Newspapers recently reported that $20 billion of American aid to Afghanistan was spent on consultants, advisers, technical experts sent by the US government to Afghanistan to advise different ministers and others in the government of Pres. Karzai. Now, as Pres. Obama is looking at options for US involvement in Afghanistan, one of the possibilities under consideration is increasing the numbers of American advisers to the Afghani government.
The Afghan government has not been happy with these advisors. One gets the sense that, in many cases, they did not ask for them and often ignore them. For another thing, all of the advisers are Americans. They are also terribly expensive – the cost for one adviser per year may run up to half a million dollars. That high cost is due to the fact that the advice is provided by a for-profit businesses. They may pay the adviser $500 a day and charge the government $2000 per day for that adviser's services. The consulting business in Afghanistan is very profitable.
The Afghan government points out that that, for a lot less money, they could get advisers from India who are much better acquainted with the problems of Afghanistan and who speak the local language. The American aid dollars would go a lot further if the Afghan government were not forced to deal with American for-profit companies whose main interest is their short run profits.
According to this report from a British group, studying the behavior of corporations, CorpWatch:
“BILLIONS of pounds earmarked for rebuilding Afghanistan have been wasted on overpaid consultants and corporate profits, a damning report claims.
It says [that] . . . £3 billion of the £7.5 billion actually spent has found its way back to wealthy donor countries rather than helping the Afghan economy.
This has happened through a mix of "high levels of corruption", bumper company profits of up to 50 per cent and the vast earnings potential of foreign consultants, who can take home up to £250,000 a year as a result of hardship payments and 'danger money'.
Five American companies are named as having scooped the lion's share of their country's cash - with huge sums eaten up by an opaque web of sub-contractors.”
The Americans keep criticizing the Afghan government for being very corrupt. But as the Afghanis see it, the high price of American advisers is an American form of corruption. American observers have described the practice of hiring advisers and consultants from private, for-profit firms as “wasteful.” Is that just a euphemism for “corrupt”? If the central goal is to help the Afghan government to improve, would it not be better to allow them to get the best advice at the lowest price? If we insist that they hire high-priced consultants from price gouging private firms in the United States whose advisers are often neither acquainted with Afghanistan nor speak the language, is it not appropriate to call that “corrupt”?
Corruption is in the eye of the beholder.

Perils of Democracy

Perils of democracy
We are proud of our democracy and with good reason. Our government, with all its imperfections, is vastly preferable to the crude despotism the government of Burma or Zimbabwe.
At the same time, democracy is always precarious. We must be extraordinarily vigilant and speak out about abuses, if we want to save what democracy we have. Here are two examples of the major threat to our democracy: the role money plays in our electoral system.
A person who is very well informed told me recently that representatives in Congress must contribute large amounts of money—on the order of half $1 million or so --to their respective parties to, in essence, pay for their committee assignments in Congress. I had never heard that it; I tried to check it by googling a number of different related topics. Only with considerable effort did I find some articles in a reputable social science journal confirming the story. The major parties raise funds from elected officials by tithing them in proportion to the importance of their committee assignments.
Surely, you may say, the major parties should be free to raise money as they please as long as the methods are not illegal. True, but consider this: members of the House and Senate spend more time fund-raising than doing anything else. Instead of writing bills or reading the bills they are about to vote on, elected representatives are on the phone asking people for money or conferring with their fund raisers. Hence many bills remain unread when they are voted up or down. The members of Congress are too busy raising money to do the job we elected them for. Members who are running unopposed do not need as much money and would therefore be free to attend to their proper business of legislating and running the country. But since they have to pay large sums of money to their party for their committee assignments, they are still forced to fund-raise first and legislate second.
My second example is quite amazing: Pres. Obama asked for and Congress voted for stimulus funds for improving transportation. The state of New Hampshire, through its elected officials, planned to ask for stimulus funds to build a high-speed train between Nashua, NH and Boston, MA. This train would have to run on a track owned by a private railroad company. The CEO of that company does not believe that this is the time to think about high-speed public transportation. He has therefore refused to negotiate with the State of New Hampshire about the use of the right of way. One man is blocking a project considered important by a whole slew of elected officials. What gives him this power to interfere with the plans emerging from the democratic process? You know the answer: money. Private ownership of the railroad right-of-way trumps democracy.
These are two example of a pervasive evil. At the ballot box we may each have only one vote regardless of how much money we have. But between elections money talks much too loudly in our democracy.

Why is there unemployment?

The Right to Life belongs to everyone of us, according to the Declaration of Independence. That means that all of us can live a secure a life without fear of physical attack. But it also means that we are assured sufficient food not to go hungry, shelter that keeps us from being homeless, access to a doctor when we are ill, and to schools when we want to learn. When most Americans lived on farms, food security required that every person had enough land to feed the family. Today food security means access to work that will support a family.
But our government does not make sure that every person can find a decent job. Instead it gives people money when they cannot find work. Why are we doing that? There are plenty of jobs that need doing but do not get filled because no one wants to pay for them. We need more preschools, we need more teachers' aides in our schools, we need more people to help out the elderly and we need more people to take care of parks and playgrounds. Your average appointment with your doctor is scheduled for 10 minutes. If you have a question it either does not get answered or the next patients have to wait a long time for their turn because the doctor is way behind. We could use a lot more general practitioners. More and more people spend long hours on hold or talking to computers because there is no live person to talk to when they have a question for the insurance company, the bank, the credit card company, the IRS, or the Internet store where they bought a product. Customer service could use a lot more attention.
There are plenty of jobs that need doing. It would be easy to fill those jobs if the government were to pay for them. They would not be paying the people out of work, they would not be handing out food stamps, housing subsidies, etc. The money is already there to enable every person to work at a decent job which supports them and their families. Why do not we do that?
The answer is that unemployment is good for business. During the present economic crisis, many businesses need to tighten their belts and that usually means they lower wages or benefits. If everybody has a job, some employees might quit their job to find a different one when wages and benefits are reduced. If we have, as we do at the moment,10% unemployment, the employer who reduces wages and benefits does not have to worry that his employees will quit; they know that they would not find any other work. Unemployment serves to “discipline” the work force as the economists say. In plain English, unemployment makes it possible for employers to treat their employees shabbily.
Since the 1970s real wages – what your money wages will actually buy – have not gone up; in the last 10 years or so they actually went down. How is that possible? Why did people who are in low wage jobs not go out to find better work? We know the answer. We have had significant unemployment during all this time; the good jobs have been flying out of the country, helped by our income tax laws. Finding that better job was not easy; quitting the job you had was always taking a big risk.
This is why we pay people to be idle instead of finding work for them and paying them for it. We could be filling all the jobs that go begging, that would make life in our society better for many people. This is why the right to life is violated for many people who are unable to support themselves by their work. Unemployment is good for business and, as Calvin Coolidge said, “the business of America is business.” Those of us who work for wages, who are not in business are second-class citizens. The interests of business come first; ours second.

Who is the Enemy in Afghanistan?

Who is the enemy in Afghanistan?

Matthew Hoh fought in Iraq in 2004- 2005 and again in 2006 - 2007 both as a commissioned officer in the Marine Corps and as a civilian employee of the US government. He is a hero and a patriot. During the last six months he worked in Afghanistan as a foreign service officer. When he resigned his job last week, he stated that the war in Afghanistan, in his view, served no purpose. Human lives, by no means only American, and huge amounts of money were being wasted on a misguided undertaking.

From where we are in the US, it is difficult to say whether Hoh's doubts about the Afghan war are correct. But the questions he raises are critical. Whatever President Obama and his advisors decide about that war, Hoh's questions must be answered if our government chooses to continue that war in any form.

We attacked Afghanistan in 2001 because Obama Bin Laden, the mastermind behind the 9/11 attacks, was said to be hiding out in Afghanistan. The Taliban, then in power in Afghanistan, refused to surrender him to us. US and NATO troops destroyed their government. While no one knows where bin Laden is, the most common opinion is that he is now living in Pakistan. Fighting in Afghanistan will not bring us any closer to capturing him.

Hoh insists that, moreover, Al Quaeda has training camps in Sudan, in Yemen, in the former Yugoslavia, and in Europe. The 9/11 attack was hatched in Hamburg, Germany. The war in Afghanistan will only marginally weaken Al Quaeda. Afghanistan plays a minor role in the continued existence of Al Quaeda.

Who is the enemy in Afghanistan? It is often said to be the Taliban--religious fanatics whose political outlook is the opposite of ours: they despise democracy and seek to establish a theocratic state. (They regard the separation of Church and State, practiced by us, as evil). They do not believe in equality for women, or in individual liberty (the freedom to run one's life as one chooses--as long as others are not harmed by one's choices). Our ways are abhorrent to the Taliban; their ways are anathema to us.

But says Hoh, is that a reason for continuing that war? Surely an excellent question.

What is more, Hoh thinks, the insurgency we are fighting is not primarily led by the Taliban, by the Islamist movement that wants to establish a theocratic state in Afghanistan. The energy for the bloody fighting against US and NATO troops comes from sheer nationalism. When George Washington and the American Patriots fought the British, they fought a nationalist war. Their goal was to have Americans govern themselves and to force the British out of any positions of power in the colonies. The enemy in Afghanistan, according to Hoh, are similar nationalist movements. But they differ from the Patriots in the US in that they are not defending the independence of the entire country, but often of a small area, one particular valley, the home of a particular tribe.

Afghanistan, in the opinion of Hoh and of many other observers, is not one country, but a collection of very local populations focused on their locality, their own language and traditions. All of this is held together by a corrupt and ineffective government in the largest city Kabul. But Afghanis think of themselves not as citizens of the country, Afghanistan, but as citizens of the specific place where they were born that their families inhabit, and where they have been for generations. No common language, tradition, and family connections link all Afghanis to each other. Their identity is connected to their locality, not to the country as a whole.

These very local groups want to be left alone to run their collective lives as they have for a long time. The longer US troops remain in the area, the more we will inflame this nationalist resistance. The Russian invasion faltered for the same reasons--all the tanks and guns of a superior army were powerless in the face of the local loyalties of Afghan tribesmen.

These local Afghan tribes are no threat to the safety of the US. They want to be left alone. If we do that, that will be the end of their interest in us.

Does Hoh assess the Afghani situation correctly? Has he understood some fundamental truths about Afghanistan? Most likely there will be sharp differences of opinion among people who know Afghanistan at first hand. These questions have no answers that all the experts accept.

But Hoh does raise the key question in Afghanistan: who is the enemy? It seems extremely plausible that in Afghanistan Al Quaeda is not the enemy. Are the Taliban the enemy? Why are we fighting them in 2009? Are the enemies very local tribesmen defending their desire to be left alone? Who is the enemy?

President Obama and his advisors must give us a clear and persuasive answer to the question of who the enemy is. Once the enemy is identified, we must be told why that enemy is worth fighting. Unless there are answers to those two questions, we should should tell all Americans in Afghanistan--military and civilian--to get on the next plane home.

It is pointless to fight a war if you do not know whom you are fighting.

Public Option anyone?
In the debate about the health reform in the works in Congress, the “public option” is frequently mentioned as a particularly controversial item in the health reform plan. What is it?
The public option refers to government health insurance to be offered to some small businesses and private citizens who cannot afford to buy health insurance from commercial insurance companies.
The simplest form of insurance is money prudent persons put aside, if they can, to cover unexpected bills. No one spends their weekly earnings to the last cent--if they can possibly help it--because next week they might need a new pair of shoes or, with the coming of winter, a new hat or overcoat.
Another humble form of insurance takes the form of saving for large expenses that you cannot pay for out of current income--your kids' college education, a down payment on a house, your retirement. But if the anticipated expenses are too large for anyone person or family to cover, people get together and pool their resources. Different members of the group withdraw significant amounts and then pay them back while others draw on the same fund.
The cooperative bank is the most obvious example of that where we all put in money that we don't spend immediately. If one of us has a big expense, she borrows from all of us. While she is paying back her loan, all of continue to pay in and then someone else borrows money to cover a large expense.
In the early 20th century, immigrant communities in the US had such cooperative savings schemes. Everyone paid a few pennies a week into a burial society that would take care of funeral expenses when members died. Similarly people can pool their resources to be ready to rebuild a member's house in case of fire, or flood, wind damage and other perils.
These cooperative schemes are different from commercial insurance. Here the goal is not protection against expensive misfortunes--death, fire, illness, violent weather damage--bu profit. The commercial health insurance company is organized to make as much money as possible. The well-being of its subscribers is definitely a secondary interest. In order to make money as an insurance company you need to reduce risk as far as possible and reduce pay-outs. You want to take in as much as you can and pay out as little as possible. From the point of view of the consumer, commercial health insurance is a rational choice only if there is no better alternative.
As a first strategy for enriching themselves maximally, the commercial insurance companies do not insure persons with “pre-existing conditions.” Here is an example of that. A woman has a drink with a stranger in a bar “The next thing she knew, she said, she was lying on a roadside with cuts and bruises that indicated she had been raped. She never developed an HIV infection. But months later, when she lost her health insurance and sought new coverage, she ran into a problem. The insurance companies examined her health records. Even after she explained the assault, the insurers would not sell her a policy because the HIV medication raised too many health questions.” After she took some anti-HIV drugs, just to be safe, after she had been raped, the insurance company now feared that she might be HIV positive and that was enough to deny her health insurance. The Huffington Post that reported this case also had accounts of other rape victims being denied health insurance on the grounds that they might be suffering from PTSD and need help for that. Since that might cost money, the insurance company refused to insure rape victims. Paul Krugman, the Princeton economics professor and New York Times columnist observed that "The most successful companies are those that do the best job of denying coverage to those who need it most."
The commercial insurance company has a second strategy for making huge profits: not paying out when insured persons put in a claim. An example is the couple who, in middle age, lost their health insurance when the companies they work for went broke. They were forced to sell their house, but still could not get insurance because the husband had a mild heart condition; the wife had a gynecological problem that disappeared after menopause. One kind-hearted insurance agent explained to them that even if they did manage to buy insurance, their insurance companies would try hard not pay any claims on the grounds that their illness was the result of “pre-existing conditions.”
Here is where the public option comes in. The government is not going to enter the health insurance field in order to make money. It will be a scheme like the immigrants burial society or a co-op bank. People pay their premiums; they get their health care paid when they need it. No one is aiming to profit from the sickness of the subscribers as does the commercial insurer. Since profit is not the goal, the government insurance is going to be cheaper than the private insurance.
A few weeks after the government bailed out the AIG insurance company, AIG spent $400,000 at a fancy resort for a retreat for its executives. $20,000.00 was reputedly spent on manicures for the execs alones. When you pay private insurance, you pay for that--and, more importantly, for the big paychecks of the top managers and the income of the investors. In public, that is non-profit, insurance you do not need to pay for all that. So you pay less.
The private insurance will be cheaper. It will serve to keep commercial companies a little bit honest.
You can see why those commercial insurers putting up such a big fight against the public option. They don't like competition from a non-profit insurance company. They don't want to be kept a little bit honest. They want to be sure that they can get their retreats complete with manicures (and, of course, their profits).