Thursday, February 09, 2012

The Human Side of Enterprise: Redux

Back in the time of Dickens
Slim were the pickins
As enterprise owners
Enforced a servitude
Without benefit or bonus
For the emerging multitude
By trimming the wages
For workers in cages
While claiming piety
So that they held the wealth
And much better health
And we had anxiety

Back in 1960, there was a brash business professor at MIT who looked at the world of work and saw something fundamentally wrong with the assumptions often made by those in power as managers and owners of enterprise in the developed world. Douglas McGregor wrote The Human Side of Enterprise mostly as a cautionary tale of motivation gone wrong. He postulated that the assumptions made by those leaders in business (or politics or the military) were critical in enabling the motivation of the followers and workers. Essentially, he said that if you make “Theory X Assumptions” about workers; that they are lazy and untrustworthy and must be coerced or coopted into working, then motivation is largely extrinsic and fleeting at best. By demonstrating a lack of trust in workers, the leader risks failure and potentially increasing costs for doing business. On the other hand, if the leader adopts “Theory Y Assumptions” that work is as natural as play and that people can enjoy their work and can be trusted to complete tasks and be productive, then motivation becomes more intrinsic and less monitoring and enforcement is required. Trust is exhibited in specific ways, including how rewards are applied and how decisions are made. A manager who appears to be playing favorites erodes motivation and a manager who constantly monitors employees and demonstrates distrust destroys motivation.

Fast-forward to the 1990s and the ability of mega-firms to create and destroy organizations without input from employees and you have the perfect brew for anxiety. Romney and Bain Equity, through its equity management have repeatedly entered organizations and stripped assets including pension funds and have cut jobs or shipped jobs overseas as the employees were merely onlookers to the process. Protective unions were long gone and even management was helpless in the downsizing and seizure of assets. Clearly, the first casualty of the process was trust, but close behind that injury was the generation of anxiety in workers losing, not only their jobs, but their dignity, self worth and optimism for life. Men or women responsible for providing nourishment and shelter for their families were then subject to the whims of an arbitrary system where they were made to feel bad by applying for unemployment compensation or even food stamps. Remember that the cause of their predicament is not of their doing, but imposed by a legal form of enterprise that immediately sets up winners and losers and creates stress and pain in powerless workers.

Picture the typical layoff. “This is nothing personal. You have been a good and loyal employee, but because of circumstances beyond my control, we have to let you go.” Immediately, there is nothing more personal. Your hopes, dreams, your way of living and concept of self are smashed and your very life is threatened by a legal but destructive ploy over which you had no control. Many of us have had this experience, and frequently, it was due to mismanagement by senior executives who gambled with your security and future and lost. I recall heading the training department for a bank that suddenly decided to enter international lending. They threw out all the safeguards of domestic lending and opened an office in London that quickly lent money to international shipping. Worse, they lent money for oil tankers. Still worse, all the tankers were from one country, Greece. Soon, the oil market collapsed and my employer was stuck with a bunch of tankers sitting in the port of Athens. I got the “nothing personal” speech along with my entire department and my bank was purchased by a bigger bank that soon met the same fate for similar mismanagement. I am certain that bank conveyed the same “nothing personal” speech.

Have we changed materially since the days of Dickens? No, not really, but the methods have morphed and the stakes have become higher since people believed the rhetoric about becoming participants in this ownership society and invested in homes when prices were high and banking treachery was higher. So now, being laid off also means losing your home instead of being kicked out by your landlord. If you call that progress, you have a high threshold for pain. Bain or its counterpart just ate your lunch by confiscating your pension, but it was nothing personal, thank god. You are reduced to standing in line to get unemployment compensation and soon you are further embarrassed to show your food stamp card at the supermarket. In a few states, you also have to pee in a bottle to prove that you are not on drugs before you qualify for food stamps because you are getting “government” money (much like the conservative politicians on the government payroll except for the peeing in a bottle part). So far, only 2% of these recipients have tested positive for drugs while 9% of the general population tests positive for drugs, yet the assumption continues that people are lazy and that they WANT to get food stamps to avoid work. Could things be any worse? Of course, you could have the House of Representatives cut off your unemployment compensation. Once again, conservatives there are claiming that paying unemployment compensation will be a disincentive for you to find work. I guess that they assume that you enjoy peeing in a bottle and living on the street, losing your pension and begging for food. How could I have missed the joi di vivre?

Simply listen to the conservative candidates in debates and speeches and you will discover that “people on welfare WANT to be there.” “They DON’T want to work.” The assumptions are both incorrect and dehumanizing. How humiliating it must be to lose your job because Romney crushed your company and grabbed your pension and then you have to apply for food stamps. Gingrich follows with his invective that blacks especially should learn to be school janitors so that we can bust unions and hire kids “who don’t have good role models.” Unfortunately, many black kids live in homes or on the street where their parents have to work two and more part time jobs without healthcare simply to buy food and shelter. Rick Santorum specifically mentioned blacks receiving welfare and then denied it despite the clear video where he pronounced it for perpetuity. Their assumptions drive their heartless and brainless policies. Fundamental assumption: The poor are causing the problems in our society.

Tax policies are the most interesting. “Everybody should pay some taxes.” Now that sounds fair, doesn’t it? Except for the fact that even the poorest pay local taxes although they may not pay federal income taxes because they have no income. Sure, Mittens Romney pays taxes like a good boy, and although it is less than 15%, it is all legal, right? While true, it is also true that Bain and other equity and investment companies lobbied Congress directly and forcefully to qualify dividend income and “carried interest” income at lower rates than any worker on a paycheck. Romney helped write the law. Mittens was also able to contribute a $100 Million gift to his sons in one year without the usual tax. In fact, he paid no tax on that gift. Now this may have been some sort of special trust arrangement, but limitations exist for each of us who may not have a crew of attorneys and accountants. Recently, we were restricted to $11,000 and, since 2011, that has been raised to $1 Million annually in gifts. I guess Mittens could not wait a hundred years and surely, he could not afford the taxes. Every proposed tax scheme of conservative candidates will increase the taxes paid by lower and middle class citizens and reduce the taxes of the highest economic class. The rationale for trickledown has not changed, but neither has the reality. The “job creators” need the tax breaks to create jobs so that others can pay taxes. We have enjoyed ten years of the lowest tax rates for “job creators” in over 50 years and they have created no jobs, but continue to amass wealth so they can continue to influence tax legislation. Do you feel the trickledown? Maybe you spilled something from that bottle you had to pee in.

George Giacoppe
10 February 2012

Wednesday, February 01, 2012

Free-Market Medicine—A Personal Account

When I recently went to Alta Bates hospital for surgery, I discovered that legal procedures take precedence over medical ones. I had to sign intimidating statements about financial counseling, indemnity, patient responsibilities, consent to treatment, use of electronic technologies, and the like.

One of these documents committed me to the following: “The hospital pathologist is hereby authorized to use his/her discretion in disposing of any member, organ, or other tissue removed from my person during the procedure.” Any member? Any organ?

The next day I returned for the actual operation. While playing Frank Sinatra recordings, the surgeon went to work cutting open several layers of my abdomen in order to secure my intestines with a permanent mesh implant. Afterward I spent two hours in the recovery room. “I feel like I’ve been in a knife fight,” I told one nurse. “It’s called surgery,” she explained.

Then, while still pumped up with anesthetics and medications, I was rolled out into the street. The street? Yes, some few hours after surgery they send you home. In countries that have socialized medicine (there I said it), a van might be waiting with trained personnel to help you to your abode.

Not so in free-market America. Your presurgery agreement specifies in boldface that you must have “a responsible adult acquaintance” (as opposed to an irresponsible teenage stranger) take you home in a private vehicle. I kept thinking, what happens to those unfortunates who have no one to bundle them away? Do they languish endlessly in the hospital driveway until the nasty weather finishes them off?

You are not allowed to call a taxi. Were a taxi driver to cause you any harm, you could hold the hospital legally responsible. Again it’s a matter of liability and lawyers, not health and doctors.

One of the two friends who helped me up the steps to my house then went off to Walgreen’s to buy the powerful antibiotics I had to take every four hours for two days. I dislike how antibiotics destroy the “good bacteria” that our bodies produce, and how they help create dangerous strains of super-resistant bacteria. I kept thinking of a recent finding: excessive reliance on medical drugs kills more Americans than all illegal narcotics combined.

So why did I have to take antibiotics? Because, as everyone kept telling me, hospitals are seriously unsafe places overrun with Staph infections and other super bugs. It’s a matter of self-protection.

Two days after surgery I noticed a dark red discoloration on my lower abdomen indicating internal bleeding. I was supposed to get a follow-up call from a nurse who would check on how I was doing. But the call might never come because the staff was planning a walkout. “We have no contract,” one of them had told me when I was in the recovery room. So now the nurses are on strike---and I’m left on my own to divine what my internal bleeding is all about. What fun.

Fortunately, it didn’t turn out that way. A nurse did call me despite the walkout. Yes, she said, it was internal bleeding, but it was to be expected. My surgeon called later in the day to confirm this opinion. Death was not yet knocking.

A few days later, there were massive nurses strikes on both coasts. Among other things, the nurses were complaining about “being disrespected by a corporate hospital culture that demands sacrifices from patients and those who provide their care, but pays executives millions of dollars.” (New York Times, 16 December 2011). One cold-blooded management negotiator was quoted as saying, “We have the money. We just don’t have the will to give it to you” (ibid.).

As for the doctors, both my surgeon and my general practitioner (GP) are among the victims, not the perpetrators, of today’s corporate medical system. My GP explained that it is an endless fight to get insurance companies to pay for services they supposedly cover. Feeling less like a doctor and more like a bill collector, my GP found he could no longer engage in endless telephone struggles with insurance companies.

There are 1,500 medical insurance companies in America, all madly dedicated to maximizing profits by increasing premiums and withholding payments. The medical industry in toto is the nation’s largest and most profitable business, with an annual health bill of about $1 trillion.

Along with the giant insurance and giant pharmaceutical companies, the greatest profiteers are the Health Maintenance Organizations (HMOs), notorious for charging steep monthly payments while underpaying their staffs and requiring their doctors to spend less time with each patient, sometimes even withholding necessary treatment.

I am without private insurance. And my Medicare goes just so far. Like many other doctors, my GP no longer accepts Medicare. For a number of years now, Medicare payments to physicians have remained relatively unchanged while costs of running a practice (staff, office space, insurance) have steadily increased. So now my GP’s patients have to pay in full upon every visit—which is not always easy to do.

Our health system mirrors our class system. At the base of the pyramid are the very poor. Many of them suffer through long hours in emergency rooms only to be turned away with a useless or harmful prescription. No wonder “the United States has the worst record among industrialized nations in treating preventable deaths” (Healthcare-NOW! 1 December 2011).

Too often the very poor get no care at all. They simply die of whatever illness assails them because they cannot afford treatment. An acquaintance of mine told me how her mother died of AIDS because she could not afford the medications that might have kept her alive.

In Houston I once got talking with a limousine driver, a young African-American man, who remarked that both his parents had died of cancer without ever receiving any treatment. “They just died,” he said with a pain in his voice that I can still hear.

Living just above the poor in the class pyramid are the embattled middle class. They watch medical coverage disappear while paying out costly amounts to the profit-driven insurance companies. I was able to get surgery at Alta Bates only because I am old enough to have Medicare and have enough disposable income to meet the co-payment.

For my out-patient operation, the hospital charged Medicare $19,466. Of this, Medicare paid $2,527. And I was billed $644. The hospital then writes off the unpaid balance thus saving considerable sums in taxes (amounting to an indirect subsidy from the rest of us taxpayers). Had I no Medicare coverage, I would have had to pay the entire $19,466.

I was informed by the hospital that the $19,466 charge covers only hospital costs for equipment, technicians, supplies, and room. So besides the $644, I will have to pay for any pathologists, surgical assistants, and anesthesiologists who performed additional services. I am waiting for the other shoe to drop.

How much does my surgeon earn? Not much at all. He gets about $400 to $500 for everything, including my pre-op and post-op visits and the surgery itself, an exacting undertaking that requires skills of the highest sort. He also has to maintain insurance, an office, an assistant, and an increasing load of paperwork.

My surgeon pointed out to me, “If you ask people how much I make on an operation like yours, they will say $4000 to $5000, and be wrong by a factor of ten.” He noted that in a recent speech President Obama criticized a surgeon for charging $30,000 to replace a knee cap. “The surgeon gets a minute fraction of that amount,” my doctor pointed out.

To make matters worse, there is talk about cutting Medicare payments to physicians by 27 percent. If this happens, it is going to be increasingly difficult to find a surgeon who will take Medicare. Still worse, the private insurance companies will join in squeezing the physicians for still more profits.

I was able to meet my payment ($644) not only because my operation was heavily subsidized by Medicare but because it was a one-day “ambulatory surgery.” I don’t know how I would fare if I had to undergo prolonged and extremely costly treatment.

So much for life in the middle class. At the very top of the class pyramid are the 1%, those who don’t have to worry about any of this, the superrich who have money enough for all kinds of state-of-the-art treatments at the very finest therapeutic centers around the world, complete with luxury suites with gourmet menus.

Among the medically privileged are members of Congress and the U.S. president. They pay nothing. They are treated at top-grade facilities. They enjoy, how shall we put it, socialized medicine. No conservative lawmakers have held fast to their free-market principles by refusing to accept this publicly funded, medical treatment.

John Mackey, CEO of Whole Foods, cheerfully announced that medical care is not a human right; it should be “market determined just like food and shelter.” Nobody has a higher opinion of John Mackey than I, and I think he is a greed-driven, union-busting bloodsucker. Nevertheless I will give him credit for candidly admitting his dedication to a dehumanized profit pathology.

The U.S. medical system costs many times more than what is spent in socialized systems, but it delivers much less in the way of quality care and cure. That’s the way it is intended to be. The goal of any free-market service---be it utilities, housing, transportation, education, or health care---is not to maximize performance but to maximize profits often at the expense of performance.

If profits are high, then the system is working just fine---for the 1%. But for us 99%, the profit lust is itself the heart of the problem.

Michael Parenti

© Michael Parenti, 2011
Michael Parenti’s recent books include: The Face of Imperialism (2011); God and His Demons ( 2010); Contrary Notions: The Michael Parenti Reader (2007); The Assassination of Julius Caesar (2004). For further information, visit: .