- Indian Authorities Seize Half A Billion Dollars Of Heroin
The Indian coast guard seized 1,500 kilograms of heroin, the largest bust ever uncovered by authorities in any county, after commandeering a shady Panama-flagged vessel sailing in the Indian Ocean.
The vessel, which was operating under the name MV Henry, was intercepted off the Gujarat coast near the city of Porbandar, according to Reuters. Crewmembers said the ship was sailing from Dubai to Alang, a town in Gujarat known for shipbreaking.
The Indian Times published a description of the encounter between authorities and the ship’s crew, as well as a video taken by the Coast Guard.
“When quizzed, the master of the ship said that the vessel had no documents as it was headed to the Alang ship-breaking yard in Bhavnagar to be broken.
The vessel was subsequently detained and was tugged to the Porbandar port on Sunday where the authorities during inspection found the vessel to be carrying 1500 kgs of heroin.”
Eight Indian nationals were also found aboard the ship. They have been brought in for questioning by authorities and are currently under investigation.
According to the BBC, citing a UN report on the international drug trade, India is part of a transit route, due to its proximity to Afghanistan. Smugglers take the heroin across the Indian Ocean to eastern and southern Africa. India also has a severe heroin problem in the state of Punjab, which is in the border with Pakistan.
In an earlier story about Punjab’s drug epidemic, which is similar in many ways to the crisis in the US, the BBC reported that 53% of the state’s drug users prefer heroin.
- Iceland Could Be About To Experience A Major Volcanic Eruption
Authored by Mac Slavo via SHTFplan.com,
Iceland’s largest volcano, Katla, was just moved to yellow status.
But that isn’t all that’s concerning. There have also been over 500 earthquakes in Iceland in the last four days.
Experts now believe that a volcanic eruption that could be quite large, may soon occur in Iceland. A series of 40 small earthquakes occurred just North East of Mount Fagradalsfjall two days ago, with the final one felt in Reykjavik, measuring at almost 4 on the Richter scale. Following tremors at Katla in South Iceland and a glacial river flood in Múlakvísl, the Icelandic Met Office has raised the status of the famous volcano on its “Aviation Colour Code Map for Icelandic Volcanic Systems” from green to yellow. People have even been warned to stay away from the Múlakvísl River because of the odor of sulfur.
An earthquake of the magnitude of 3 occurred in the Katla caldera at 00:48 last night followed by a series of smaller tremors. The seismic unrest could be connected to the glacial river flood and not connected to a possible eruption at all but the Iceland Met Office cannot be certain at this point.
Alert code yellow means that the volcano is active but that nothing points to an immenent eruption. If the colour code moves up to orange it means that the volcano is increasing its activity and an eruption is becoming likely. –Iceland Monitor
“It’s quite normal for Reykjanes, there have been a series of quakes there in the past few years,” the Met Office commented. And according to a post on volcano enthusiast site Volcanocafé, eruptions occur in Iceland every three to seven years.
“We have never seen a large powerful intrusion at a Mid Oceanic Ridge at such a well-instrumented place,” Carl Rehnberg wrote on Volcanocafé. “We now know that the initial swarm rapidly transformed from tectonic earthquakes, via volcano-tectonic, to earthquakes consistent with moving magma in a surprisingly short timeframe. As such this is turning into a potential eruption or a state of volcanic unrest.” Rehnberg believes that a major eruption could be just hours away. If, however, the “current unrest” stops, there will be no eruption.
But, he explains, “At the intensity and force of the current seismic unrest, it is likely that an eruption will occur if the seismic crisis is prolonged.”
Rehnberg speculates that there is a 50 percent chance of an eruption, and that chance is increasing by the hour. But the Icelandic Met Office, who are currently not concerned about a major volcanic eruption, citing the recent seismic activity as “normal for an active region”.
As a reminder, in response to concerns that volcanic ash ejected during the 2010 eruptions of Eyjafjallajökull in Iceland would damage aircraft engines, the controlled airspace of many European countries was closed to instrument flight rules traffic, resulting in the largest air-traffic shut-down since World War II.
- PCR: "The New Russian Sanctions Bill Is Washington's Monument To Its Criminality"
Authored by Paul Craig Roberts,
The Congress of the United States by almost unanimous votes in both House and Senate has made it clear that Congress would rather destroy the President of the United States and to increase the risk of nuclear war than to avoid conflict with Russia by normalizing relations.
The vote on the new sanctions makes it pointless for President Trump to veto the bill, because it passed both houses by far more than the two-thirds vote required to over-ride the president’s veto. The only thing Trump can achieve with a veto is to prove the false charge that he is in league with Vladimir Putin
The new sanctions bill forecloses the possibility of reducing the rising tensions between the two major nuclear powers. It also shows that whatever interest Congress has, if any, in reducing the threat of war and in avoiding a break with Europe over the sanctions, Congress has a much greater interest in continuing to collect campaign contributions from the powerful and rich military/security complex and in playing to the growing hatred of Russia that is encouraged by the US media.
This reckless and irresponsible action by the US Congress makes completely clear that Washington has intentionally chosen conflict with Russia as the main element of US foreign policy. Perhaps now the Russian government will abandon its cherished illusion that an accommodition with Washington can be reached.
As I have written on many occasions, the only way Russia can achieve accommodation with Washington is to surrender and accept American hegemony. Any further resistance of the Russian government to this obvious fact would indicate dangerous delusion on the part of the Russian leadership.
The fig leaf Congress chose for its violation of diplomatic protocols and international law is the disproven allegation of Russian interference in behalf of Trump in the US presidential election. An organization of former US intelligence officers recently announced that forensic investigation has been made of the alleged Russian computer hacking, and the conclusion is that there was no hack; there was an internal leak, and the leak was copied onto a device and Russian “fingerprints” were added. There is no forensic evidence whatsoever that shows any indication of Russian hacking.
It is all made up, and everyone alleging Russian hacking knows it. There is no difference between the allegation of Russian hacking and Hitler’s allegation in 1939 that “last night Polish forces crossed our frontier,” Hitler’s fig leaf for his invasion of Poland.
That Congress uses a blatantly transparent lie to justify its violation of international law and intentionally worsens US relations with both Russia and the EU proves how determined Washington is to intensify conflict with Russia.
Expect more false allegations, more demonization, more threats.
War is in the cards.
- Overworked, Underpaid, & Overweight
It's a triple-whammy – Americans are overworked, Americans are underpaid, and, now, potentially as a result of these, Statista's Isabel von Kessler writs that Americans are overweight – over 2 in 5 American workers have put on pounds at their present job.
A survey by Harris Poll on behalf of CareerBuilder, asked workers what they thought contributed most to weight gain at their current workplace.
At least 51 percent thought sitting at a desk most of the day was the main reason.
You will find more statistics at Statista
While sports could counterbalance the desk jobs, 45 percent stated they were too tired to exercise after returning home. 38 percent blamed stress-related eating for increasing pounds.
Accordingly, 25 percent of all workers say they've gained more than 10 pounds at their present job, while 1 in 10 gained more than 20 pounds.
Houston is the city with the highest share of weight gaining workers (57 percent), Washington D.C. follows suit (50 percent) and Dallas comes third (47 percent).
- As Saudi King's Health Wanes, War Architect Bin Salman Set To Become King
Authored by Whitney Webb via TheAntiMedia.org,
While his health and even sanity have been in doubt for years, fresh rumors are spreading that King Salman of Saudi Arabia’s physical condition has further deteriorated. According to Saudi sources cited by Oil Price, Salman’s health will likely forced him to abdicate the throne in the next few months.
Though it was long believed that Mohammed bin Nayef, the king’s nephew and the country’s Minister of the Interior, would assume the throne, bin Nayef’s sudden ouster as Saudi Crown Prince during Ramadan definitively changed that, with King Salman’s son and the current Crown Prince, Mohammed bin Salman, now positioned to take control.
Bin Nayef’s ouster was initially reported by international media as having gone “smoothly.” However, it soon emerged that bin Salman had planned the entire affair and that the former Crown Prince, following his acquiescence of the title, was essentially under house arrest. Since then, rumblings have emerged that many in the Saudi royal family, which has long been guided by deference to elders and group consensus, are none too happy with the sudden turn of events in the normally stable kingdom.
Now, with King Salman on vacation in Morocco for an entire month, the ambitious Crown Prince has been left in charge, promising a taste of things to come for the oil-rich kingdom. Already, speculators are stating that the kingdom’s balance of power is “on a knife-edge.”
One such indication that there is trouble brewing within the royal family is the King’s recent string of drastic policy changes that stripped the Interior Ministry, formerly headed by bin Nayef, of many of its key mandates, including counter-terrorism.
These functions have now been transferred to a new entity called the Presidency of State Security, which is under the direct command of the King, who also serves as Prime Minister. A royal decree further stated that “whatever concerns the security of the state, including civil and military personnel, budgets, documents, and information will also be transferred to the new authority.” According to experts, the overhaul of security services indicated there still exists opposition to bin Salman’s position as Crown Prince.
It is highly probable that this mass concentration of authority under the king and the essential gutting of the Interior Ministry was orchestrated by bin Salman himself, much like bin Nayef’s ouster. Given that King Salman’s suspected dementia has led the Crown Prince to “practically” administer the entire kingdom, bin Salman’s now-elevated position makes it highly likely that such efforts were intended to reduce opposition to his forthcoming rule and consolidate his power.
A warhawk ascends to the throne
While speculation is rife over how bin Salman is set to manage domestic affairs, there seems to be little disagreement over bin Salman’s likely handling of key foreign policy issues, considering his tenure as Defense Minister has shown his penchant for war, as well as his hotheadedness.
It was bin Salman, after all, who began the Saudi’s atrocious war in Yemen and oversaw its military’s use of force against civilian infrastructure and gatherings. Since it began in 2015, the war has claimed the lives of over 10,000 civilians and has brought Yemen to the brink of collapse. In addition, the Saudi’s repeated bombings of hospitals and its blockade of aid and medicine have caused the worst cholera outbreak in recorded history to spread through Yemen.
Despite the increasingly dire situation in Yemen, bin Salman stated in May that he was in no hurry to end the conflict, saying “time is in our favor,” later adding that Saudi troops were planning to wait for the rebels “to tire out.”
In addition, bin Salman has caused great discomfort with the Saudis’ foreign allies by orchestrating a diplomatic crisis with Qatar. The diplomatic row put the United States, a major foreign ally of the Saudis, in an uncomfortable situation as it sought to repair the rift between the two influential Gulf state monarchies. The United States has been tepid in its embrace of bin Salman, largely due to the fact that his predecessor as Crown Prince, bin Nayef, was highly regarded by U.S. counterterrorism officials and was seen as a close ally of the U.S. in the region.
The move was likely orchestrated to pressure Qatar to end support for the Muslim Brotherhood, which bin Salman despises, as well as its support of Hezbollah, a consolation from bin Salman to Israel. Indeed, bin Salman has been hailed as a “dream come true” for Israel and has pushed to normalize relations between the Saudi kingdom and the apartheid state in recent months.
In addition, the Saudis have also demanded that Qatar end all contact with Iran, speaking to bin Salman’s aggressive brinkmanship with the Islamic Republic. Prior to becoming Crown Prince, bin Salman had said that dialogue with Iran, i.e. a diplomatic solution to disagreements, was “impossible” and has hinted at a Saudi pre-emptive strike against Iran, stating that “We won’t wait for the battle to be in Saudi Arabia. Instead, we’ll work so that the battle is for them in Iran.”
While bin Salman has publicly stated that he will not push for war with Iran since he became Crown Prince, Iran doesn’t seem so sure. After bin Salman’s hawkish comments on Iran, the Iranian Defense Minister Hossein Dehghan stated that “If the Saudis do anything ignorant, we will leave no area untouched except Mecca and Medina.” Then, after terror attacks targeted the heart of Tehran a month later in early June, Iran’s intelligence community accused Saudi Arabia of involvement, vowing revenge. The Islamic State, a terrorist organization known to be directly funded by the Saudi kingdom, took credit for the attack in Tehran.
Some experts agree with Iran’s concern that bin Salman’s growing power will lead to more war, not less. For instance, Shirleen Hunter, professor of political science at Georgetown University, believes that bin Salman’s appointment and forthcoming ascension to the throne “means that Saudi Arabia’s hardline approach towards the war in Yemen as well towards Iran will continue.” In an interview with the Tehran Times, she added that “relations with Iran, in particular, could seriously deteriorate as Bin Salman might increase destabilizing efforts inside Iran.”
Coupled with rising domestic dissent and economic damage resulting from the artificial manipulation of oil prices and the high cost of the war in Yemen, bin Salman – though eager to gain power – will likely find himself in a perfect storm. Though many young Saudis see bin Salman as a potential reformer, his history of warmongering and making rash decisions suggests that he is set to unravel the power balance that has allowed the Saudi kingdom to maintain its influence in the Middle East for so long.
- The Amazon Effect: Retail Bankruptcies Surge 110% In First Half Of The Year
As Amazon flirts with a $500 billion market cap, letting Jeff Bezos try on the title of world’s richest man on for size if only for a few hours, for Amazon’s competitors it’s “everything must go” day everyday, as the bad news in the retail sector continue to pile up with the latest Fitch report that the default rate for distressed retailers spiked again in July.
According to the rating agency, the trailing 12-month high-yield default rate among U.S. retailers rose to 2.9% in mid-July from 1.8% at the end of June, after J. Crew completed a $566 million distressed-debt exchange. Meanwhile, with the shale sector flooded with Wall Street’s easy money, the overall high-yield default rate tumbled to 1.9% in the same period from 2.2% at the end of June as $4.7 billion of defaulted debt – mostly in the energy sector – rolled out of the default universe.
In a note, Fitch levfin sr. director Eric Rosenthal, said that “even with energy prices languishing in the mid $40s, a likely iHeart bankruptcy and retail remaining the sector of concern, the broader default environment remains benign.”
He’s right: after the energy sector dominated bankruptcies in the first half of 2016, accounting for 21% of Chapter 11 cases, in H1 2017 the worst two sectors for bankruptcies are financials and consumer discretionary.
And if recent trends are an indication, the latter will only get worse as Fitch expects Claire’s, Sears Holdings and Nine West all to default by the end of the year, pushing the default rate to 9%. “The timing on Sears and Claire’s is more uncertain, and our retail forecast would end the year at 5% absent these filings,” Rosenthal wrote.
Putting the retail sector woes in context, Reorg First Day has calculated that retail bankruptcies soared 110% in the first half from the year-earlier period, accounting for $6 billion in debt.
The list includes name brands such as Gymboree, Payless, rue 21 and the Limited, all of which cited the Amazon affect as a contributor to their downfall.
“Many retailers have echoed the familiar cries of those that filed before them—the proliferation of online shopping, rapidly deteriorating brick-and-mortar retail, the rise of fast fashion, hefty lease obligations and shifting consumer preferences,” Reorg First Day said in a midyear review.
While it is far from empirically, and certainly scientifically established, every incremental retail bankruptcy should add approximately $5-10 billion to AMZN’s market cap, further cementing Jeff Bezos as the world’s richest monopolist man.
- 4 Financial Components To Improved Russian Relations
Authored by James Rickards via The Daily Reckoning,
With the U.S. preparing to confront China and go to war with North Korea, Russia is an indispensable ally for the U.S.
There are huge implications on capital markets as these hegemonic powers continue to edge toward war.
Here’s an overview of some of the financial implications of improved relations with Russia…
1: The End of OPEC and the Rise of the Tripartite Alliance
On energy, a new producer alliance is being created to replace the old OPEC model. This new alliance will be far more powerful than OPEC ever was because it involves the three largest energy producers in the world — the U.S., Russia, and Saudi Arabia. This Tripartite Alliance is being engineered by former CEO of Exxon and Secretary of State Rex Tillerson, with support from Trump, Putin and the new Crown Prince of Saudi Arabia, Mohammad bin Salman.
This alliance is perfectly positioned to enforce both a price cap ($60 per barrel to discourage fracking) and a price floor ($40 per barrel to mitigate the revenue impact on producers). Supply cheating by outsiders, including Iran and Nigeria, can be discouraged by directing order flow to the alliance members, which denies the cheaters of any revenue.
As a result, energy will trade in the range described. Traders can profit by buying energy plays when prices are in the low 40s and selling when prices hit the mid-to-high 50s.
2: Improved U.S. Relations with Russia and Sanctions Relief
Following Russia’s annexation of Crimea and intervention in eastern Ukraine, President Obama imposed stringent economic sanctions on Russia, its major banks and corporations, and certain political figures and oligarchs. The EU joined these sanctions at the behest of the U.S. Russia responded by imposing its own sanctions on Europe and the U.S. in the form of banning certain imports.
The sanctions have been a failure. They have had no impact on Russian behavior at all. Russia still acts freely in Crimea, eastern Ukraine, and in other spheres of influence such as Syria.
This failure was predictable. Russian culture thrives on adversity. Russians understand that their culture is distinctly non-western and has its roots in Slavic ethnicity and the Eastern Orthodox religion.
The benefits to Europe from sanctions relief would amplify what is already solid growth and monetary policy normalization there. This paints a bullish picture for the euro and the ruble as trade and financial ties expand beginning in 2018.
A review of Russia’s place in the world and its prospects would not be complete without an analysis of its monetary policies and positions.
Russia’s hard currency and gold foreign exchange reserves have been on a roller coaster ride since mid-2008, just before the panic of 2008 hit full force. Reserves were $600 billion in mid-2008 before falling to $380 billion by early 2009 at the bottom of the global contraction.
Reserves then expanded to over $500 billion by mid-2011, and remained in a range between $500 billion and $545 billion until early 2014.
Russia’s reserves nosedived beginning in mid-2014 due to the global collapse of oil prices, which fell from $100 per barrel to $24 per barrel by 2016. The Russian reserve position fell to a low of $350 billion by mid-2015, about where they were at the depths of the 2008 crisis.
Reserves then began a second recovery in late 2015 and today stand at around $420 billion. This recovery is a tribute to the skill of the head of the Central Bank of Russia, Elvira Nabiuillina, who has twice been honored as the “Central Banker of the Year.”
When U.S.-led sanctions prohibited Russian multinationals, such as Gazprom and Rosneft, from refinancing dollar- and euro-denominated debt in western capital markets in 2015, those giant companies turned to Nabiullina. They requested access to Russia’s remaining hard currency reserves to pay off maturing corporate debt.
Nabiullina mostly refused their requests and insisted that the reserves were for the benefit of the Russian people and the Russian economy and were not a slush fund for corporations partially controlled by Russian oligarchs.
Nabiullina’s hard line forced the Russian energy companies to make alternative arrangements including equity sales, joint ventures, and yuan loans from China (which could be swapped for hard currency) to pay their bills. As a result, Russia’s credit was not impaired and its reserve position gradually recovered.
3: Watch Russia’s “Gold-to-GDP” Ratio
Another critical aspect of Russia’s reserve management under Nabiullina is that, even at the height of the oil-related drawdown in mid-2015, the Central Bank of Russia never sold its gold. In fact, it continued expanding its gold reserves. This meant that gold reserves as a percentage of total reserves continued to grow.
The Russian reserve position today consists of approximately 17% gold compared to only about 2.5% for China. (The U.S. has about 70% of its foreign exchange reserves in gold; a surprisingly high percentage to most observers who never hear any positive remarks about gold from U.S. Treasury or Federal Reserve officials).
More important as a measure of Russia’s gold power are gold reserves as a percentage of GDP. If we take GDP as a metric for the economy, and gold as a metric for real money, then the gold-to-GDP ratio tells us how much real money is supporting the real economy. It is the inverse of leverage through government debt.
For the United States, that ratio is 1.8%. For China the ratio is estimated at 1.5% (China’s ratio is an estimate because China is non-transparent about the amount of gold in its reserves. The actual ratio is likely in a range of 1% to 3%).
For Russia, the gold-to-GDP ratio is a whopping 5.6%, or three times the U.S. ratio. The only other economic power that comes close to Russia is the Eurozone. It consists of the 19 nations that use the euro and they collectively have just over 10,000 metric tonnes of gold.
The gold-to-GDP ratio for the Eurozone is 3.6%; not as high as Russia, but double the U.S. ratio. On the whole, Russia is the strongest gold power in the world.
Russia is one of the five largest gold producers in the world. Currently Russian gold mining output is sold on the open market and the Russia central bank buys gold for its reserves on the open market. This stands in contrast to the situation in China, the world’s largest gold producer, where gold exports are banned, and are partly diverted to government reserves at below market prices.
However, Russia could easily flip to the China model in a financial crisis. This would rapidly increase Russian gold reserves at low cost, while drastically reducing global physical supply.
Russia and China are well-positioned to execute the greatest gold short squeeze in history. Of course, they have no interest is doing so right now because both are still buyers who favor low prices. At some point, they will flip to hoarders who favor high prices, but not yet.
Russia’s strong gold position combined with a very low amount of external debt leaves Russia in the best position to withstand economic distress without default or a funding crisis in the future. This is one reason U.S. economic sanctions have been relatively ineffective at hurting the Russian economy despite a slowdown and recent recession.
This trend in gold as a percentage of total reserves is highly revealing. It is part of a long-term effort by Russia and China (among others) to abandon the dollar-based international monetary system. They’d prefer a system less congenial to the United States and more accommodating to rising gold powers such as Russia, and rising geopolitical powers such as China.
Gold is not the only factor in the Russian plan to abandon the dollar-based system. Russia has actively promoted the ruble (RUB) as a regional reserve currency. The ruble has no prospect of becoming an international reserve currency for decades, if ever. Yet it is in wider use in bilateral trading payments in eastern Europe and central Asia where Russia is trying to reestablish local economic hegemony along the lines of the former Soviet empire.
4: Russian Relations and Blockchain Technology Will Challenge U.S. Dollar Dominance
Russia is also exploring the use of blockchain technology and crypto-currencies as a medium of exchange and as a payments platform. Recently, Putin met with Vitalik Buterin, the inventor of crypto-currency ethereum.
Buterin was born in Kolomna, Russia and was able to converse casually with Putin in their native Russian language. Here’s how Bloomberg reported the meeting on June 6, 2017:
Ethereum, the world’s largest cryptocurrency after bitcoin, has caught the attention of Vladimir Putin as a potential tool to help Russia diversity its economy beyond oil and gas…
‘The digital economy isn’t a separate industry, it’s essentially the foundation for creating brand new business models,’ Putin said at the event, discussing means to boost growth long-term after Russia ended its worst recession in two decades…
Russia’s central bank has already deployed an Ethereum-based blockchain as a pilot project to process online payments and verify customer data with lenders including Sberbank PJSC, Deputy Governor Olga Skorobogatova said at the St. Petersburg event. She didn’t rule out using Ethereum technologies for the development of a national virtual currency for Russia down the road.
Last week, Russia’s state development bank VEB agreed to start using Ethereum for some administrative functions. Steelmaker Severstal PJSC tested Ethereum’s blockchain for secure transfer of international credit letters. (Emphasis added).
Left unsaid in this report is the fact that the blockchain technology on which ethereum is based has unbreakable encryption. Its message traffic is routed through an infinite number of internet pathways that the U.S. cannot interdict. Any blockchain-based payment system offers a way to run a global payments system independent of existing systems controlled by the U.S. such as FedWire and SWIFT.
Bitcoin and ether boosters were quick to shout about the Putin-Buterin meeting as evidence of Russian support for bitcoin or ether. That’s not exactly right.
Putin’s interest is in the blockchain technology, not any particular crypto-currency. With the right technology platform, Russia could launch its own crypto-currency. This could be a digital-RUB or a jointly issued currency with China and other members of the Shanghai Cooperation Organization.
Whichever platform or direction Russia chooses, they all point in the same direction — the displacement of the dollar as a dominant transaction and reserve currency, and the creation of payments systems that the U.S. cannot sanction.
This project will continue on a gradual basis in the years ahead and then suddenly be unleashed in the equivalent a gold and digital Pearl Harbor sneak attack on the dollar.
What Does This All Add Up To?
Absent the phony scandals that have impeded the Russian–U.S. relationship for the past eight months, a substantial improvement in that relationship would have occurred already. As it is, the relationship will improve either because the scandals abate or because Trump pushes the relationship forward despite the scandals.
This is a simple matter of balance-of-power politics. With the U.S. preparing to confront China and go to war with North Korea, Russia is an indispensable ally-of-convenience for the U.S. This emerging U.S.–Russia condominium has implications far beyond China, including common interests in Syria, energy markets, and toward sanctions relief.
Notwithstanding the prospect of improved relations, Putin remains the geopolitical chess master he has always been. His long game involves the accumulation of gold, development of alternative payments systems, and ultimate demise of the dollar as the dominant global reserve currency.
It is up to the United States to defend that monetary ground. However, the likelihood of that is low because the U.S. does not even perceive the problem it’s facing, let alone the solution.
This evolving state of affairs creates enormous opportunities in the months and years ahead.
- Sanders: "I Am Absolutely Introducing Single-Payer Healthcare Bill"
Now that Obamacare repeal is dead for the foreseeable future thanks to John McCain, the full court press to expand on the existing system has begun with Bernie Sanders saying Sunday that he will “absolutely” introduce legislation on single-payer healthcare.
“Of course we are, we’re tweaking the final points of the bill and we’re figuring out how we can mount a national campaign to bring people together,” Sanders said on CNN’s State of the Union.
Sanders. who if it weren’t for the DNC’s collusion with Hillary Clinton would likely have been the Democratic party’s presidential candidate and perhaps current president of the US – a truth which the public must urgently forget and thus the daily barrage of “Russian collusion” headlines – promised to introduce a “Medicare for All” proposal once the debate over repealing ObamaCare ended. He is one of several progressive lawmakers who back the healthcare model that has divided Democratic lawmakers.
On #CNNSOTU @SenSanders says that he will “absolutely” introduce a single payer bill after Obamacare repeal fails https://t.co/zvTfMlyCkW
— State of the Union (@CNNSotu) July 30, 2017
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It’s unclear exactly when he will introduce the legislation, or who will support it. The Senate has two weeks remaining in sessions.
According to The Hill, Sen. Steve Daines, a Montana Republican, attached an amendment to one version of the ObamaCare repeal bill Wednesday that would have created a single-payer healthcare system. Daines, unlike Sanders, does not support a single-payer system but used the model as a political maneuver. Sanders’s spokesman slammed the amendment as a “sham” at the time and said Sanders and other Democrats would refuse to vote on the measure.
- In Fiscal Dire Straits, Connecticut Showers State Disability Workers With Overtime Pay
Judging by muni spreads, Illinois is widely considered the most financially troubled state in the country. However, preppy Connecticut, which has the highest per-capita income in the country and whose capital Hartford has been on the verge of bankruptcy for months, isn’t far behind.
As lame-duck Democratic Gov. Daniel Malloy battles with the legislature – including members of his own party – over passing the state’s budget with a $2.5 billion deficit, the state’s largest newspaper, the Hartford Courant, is highlighting an issue that is emblematic of a nettlesome fiscal problem facing the nutmeg state: its overly generous treatment of state employees through overtime pay, particularly the Department of Developmental Services which operates a string of hospitals serving the intellectually disabled and group homes, that is putting a heavy strain on the state’s already teetering budget.
State payroll data analyzed by the Courant revealed that, through the first half of the year, 37 DDS employees have already earned more than $50,000 in overtime alone, putting a handful of these workers on track to collect $250,000 in pay this year. By comparison, workers with similar jobs in the private sector with state contracts – a group that serves 90% of the state’s intellectually disabled patients – haven’t had a pay raise in 12 years.
This excessive reliance on overtime is the result of a quirk in the regulatory framework that governs how the aging state institutions are run. Some nurses are on track to earn more this year than DDS Commissioner Jordan Scheff.
“With half the year to go, one direct-care worker in a facility in DDS's west region, with an annual base salary of $44,000, had already earned $119,000, including $91,170 in overtime alone, payroll records show. She's on pace to earn $238,000 this year.”
“…in the north region, with a base salary of $57,000, had earned $122,500 by mid-year, including $94,000 in overtime since Jan. 1, the records show. At this pace, he'll earn over $245,000, well more than the $138,000 annual salary of the commissioner of DDS, Jordan Scheff.
More than 250 DDS employees, most of them direct-care workers, had earned at least $25,000 in overtime through June, records show.”
According to the Courant, the state’s excessive regulations governing how state-run health-care enterprises should be staffed, have transformed the Department of Development Services into a massive drain on the state already devastated budget. As a result, the state is hesitant to hire much needed new workers because it’s slowly working to close the state-institutions.
“For many advocates…overtime illustrates the inequities between the public and private sectors. There have been calls for several years for more funding for the private agencies serving most of the state's 16,000 intellectually disabled clients. Advocates say the disability community has never been in greater jeopardy, and they have ratcheted up their public protests. Several hundred parents, advocates, and clients attended twin rallies at the Capitol on July 18.”
DDS Head Scheff explains how the state’s powerful public employee are working to preserve the system despite its obvious inefficiencies, adding that the costs of running these hospitals are “not sustainable.”
"No, it's not sustainable, and it's not cost effective, and it's not in the best interest of the people we support to have out folks working this way," Scheff, in an interview last week, said of the overtime situation.
He said the budget impasse, funding cuts to the agency, and certain state concessions to the union, such as stopping the privatization of state-run group homes, have hampered the department's ability to reduce costs and shift money to serve clients who have been waiting years for housing support, in-home aides, or other assistance from DDS.”
Furthermore, wasteful regulations that require a ratio of 2.7 on-duty staff for each psychiatric patient at a state-run hospital has also been blamed for ballooning the DDS budget to $1 billion.
“Advocates who have studied the public and private systems extensively say that a higher staff-to-client ratio in the public sector, about 2.7:1, compared with about 2:1 in the private sector, is a major reason why the public costs are significantly higher. A study by the legislature's program review and investigations staff concluded that the quality of care provided by state and private workers was the same.”
To be sure, solving the overtime problem at CT’s psychiatric institutions wouldn’t go anywhere near to resolving the state's budget woes which extend far beyond this one sector. But the problem is emblematic of the most intractable financial and political problems facing the state: powerfully entrenched state employee unions, wasteful regulation and programs that commit vast resources to serving a handful of needy individuals.
But the need to close – or at least minimizing – the massive budget deficit is growing inexorably more pressing with each passing day. Back in May, yields on CT’s general obligation bonds surged as plummeting income-tax revenues and a series of downgrades by the major credit-rating houses raised serious questions about the state’s fiscal health. And with the state capital, Hartford, downgraded to junk on June 11, underscoring the threat of an imminent bankruptcy, worries that the state might need to orchestrate a bailout of its once-proud capital have intensified.
And just when the situation was showing signs of stabilizing, a series of corporate defections, including health insurance giant Aetna’s June decision to move its headquarters to NYC – are shrinking the state’s already narrow tax base. Now that Gov. Malloy’s strategy of enticing companies to stay with a mix of tax cuts and the promise of state aid has failed, the state is in desperate need of a new leader to find a way to lure businesses back into the state. The question is who would even want that job?
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