Paramilitary Intolerant Islamic Groups - PIIGS

We are not at war with Islamic Terrorists. Terrorism is a tactic. You cannot be at war with a tactic. War is terrifying. Does that make all soldiers terrorists? That's the problem you run into when you alter the meaning of well defined terms to refer to something else. We should eliminate any form of the word terror when labeling groups and instead, call them what they are. We are at war with Paramilitary Intolerant Islamic Groups - PIIGS. 

Muslims who practice Islam as a religion of tolerance and peace, and who we need to help defeat this enemy, will not be offended by the acronym PIIGS. They will appreciate the distinction between themselves and those who have subverted their religion. They will be the first to stand up and condemn the PIIGS. And for those few who won't, what does that say about them? 

The FBI announced they are investigating the San Bernardino attacks as an “act of terrorism”. What does that mean? Wouldn't it make more sense if the FBI had announced they were investigating the rampage as an attack by one or more PARAMILITARY INTOLERANT ISLAMIC GROUPS.

No doubt the Progressives will find the acronym PIIGS offensive and will immediately resort to their tactic of political correctness to demonize any transgressors who dare to use terms or express ideas they don't like. That's ok. Most Americans are sick and tired of political correctness and are beginning to see PC for what it really is – Progressive Censorship.

Voter's Creed

 

The Right to Vote:
I believe that voting is both a right and a responsibility.

I believe I have the right to vote or not to vote.

I believe that when I vote, I have a responsibility to understand who, and what it is I am voting for, or against.

I believe the candidates have a responsibility to earn my vote.

I believe that I have a responsibility to give each candidate the opportunity to earn my vote.

I believe that if I always vote based on party affiliation, I cheapen the value of my vote because I have failed to force the candidates to earn my vote.

I believe that for national elections, it is my responsibility to understand our nation's most important issues.

I believe each candidate is responsible for presenting their detailed plans on how they would address our nation’s most important issues.

The “United” States:
I believe the United States is stronger when Americans are united around common goals.

I believe candidates and political parties should strive to unite all Americans around those common goals.

I believe candidates and political parties should never adopt strategies that pit one group of Americans against another group for political gain.

I believe that dividing Americans is never in our nation’s best interest.

I believe it is my responsibility to reject those candidates who try to divide Americans.

National Economic Objective:
I believe the economic policies of the United States government can, and should be, guided by a single National Economic Objective.

I believe our federal government’s National Economic Objective should be to enact polices that will:

“Continuously improve the standard of living of ALL Americans”

I believe this National Economic Objective will help:

• Unite our divided nation.
• Prevent our leaders from advancing proposals that have been designed to divide our nation for political gain.
• Force our elected leaders to focus on our major economic challenges.

I believe that today our major economic challenges include:

• A regulatory environment that impedes the growth of US based, profit funded, private sector jobs.
  
  
• A safety net system that is ill defined, poorly managed, fraught with moral hazards and wastes far too many tax payer dollars.
  
  
• A growing national debt that acts like a brake on our economy.
  
  
• Senior Entitlement programs that are unsustainable under current funding law and will accelerate the growth of our national debt.
  
  
• A tax system that impedes economic growth by forcing people and businesses to make sub optimal economic decisions.
  
  
• A federal government that is not motivated to be good stewards of our tax dollars or our nation’s fiscal health.
  
  
• An education system that has failed to provide our children with the skill sets they will need to succeed in a technically advancing global economy.

Jobs:
I believe the best way to improve a person’s standard of living as well as their sense of worth and well being is through a job.

I believe that from an economic standpoint there are two types of jobs.

1. Profit Funded Jobs and
2. Taxpayer Funded Jobs.

I believe from a national economic standpoint, profit funded jobs are better at growing the economy and in improving the standard of living for more people than are taxpayer funded jobs.

I believe that taxpayer funded jobs are better at redistributing income then they are at growing the economy.

I believe that every job is important to the person who holds that job but that US based, profit funded, private sector jobs are the most valuable for the long term health of our economy and are the most important type of job for achieving our national economic objective.

I believe therefore, that our federal government’s job policy should be to do everything within the government’s authority to entice Americans and the rest of the global private sector to create, fill and maintain permanent, full-time, US based, profit funded, private sector jobs.

I believe the U.S. Job Burden stands as the greatest obstacle preventing the  growth of the U.S. based, profit funded jobs we need.

What is the Job Burden?
I believe the Job Burden is…

The collection of government regulations and other costs that are imposed on for-profit businesses that do not add value to the goods and services those businesses produce.

I believe that a core set of regulations that protect people, nature, and our natural resources from the negligent and unscrupulous acts of some will always be needed to “properly regulate” any market based economy. But, far too often, our regulations do more to prevent good people from doing good then they do in preventing bad people from doing bad.

I believe that every nation imposes its own Job Burden on its businesses but that the US Job Burden has become the most expensive Job Burden in the world.

I believe the best way to expand the U.S. job market and improve the U.S. economy is for Congress to systematically optimize or eliminate the U.S. Job Burden.

I believe that until we substantially reduce the U.S. Job Burden, the United States will continue to lose jobs to other nations as those nations improve their product quality and production efficiency while they reduce their Job Burdens.

I believe business taxes can help explain the harm caused by the Job Burden.

I believe that economists know that a business cannot pay taxes. Only people can pay taxes. All any business can do is collect enough money from its customers when it sells them goods and services to pay its expenses, including its taxes.

I believe it is the owners and investors – through reduced returns; or employees – through reduced compensation; or customers – through increased prices who actually pay for all business taxes and the other Job Burden costs of a business.

I believe however, that through globalization, the owners’ returns are protected because they can always invest in improving markets overseas.

I believe that with the advent of two earner households and an ever more generous safety net, the U.S. labor supply has become more flexible (elastic). These demographic and policy changes have made it less likely that employees will absorb the full cost of any Job Burden increases.

I believe therefore, that it is typically the US customer - through increased prices, who actually pays for most of the U.S. Job Burden.

I believe the Job Burden is a tax that is hidden from the customer because it is buried in the price. Customers have no idea how much they pay for the Job Burden.

I believe the Job Burden is America’s most regressive tax and therefore hurts the poor more than any other tax because; rich and poor pay the same amount of Job Burden tax when they purchase the same product. The lower a person’s income, the greater is the percentage of their income that they must expend to pay for the Job Burden tax on basic necessities.

I believe that, depending on the product, the Job Burden portion of US manufactured goods will range from 15% to 40% of the purchase price.

I believe that any politician who wants to improve the standard of living of the poor should start with policies that reduce the Job Burden.

I believe I should support those candidates with the best plan to reduce the Job Burden.

Congress and the Job Burden:
I believe a “properly regulated” free-market, capitalist economy (Capitalism) has proven to be the greatest economic engine for advancing the standard of living for more people than any other economic system ever devised.

I believe that a business is simply: people agreeing to pool their talents and resources to fill a want or solve a problem that others are willing to pay more for than it costs to provide.

I believe capitalism works because, more than any other system, it aligns with human nature. We humans are social animals who learn through trial and error. We are born with a desire to continuously improve our standard of living; or as our Founding Fathers phrased it: “the pursuit of happiness”.  We achieve our goals through a delicate balance between our natural instincts of cooperation and competition. It is this self-serving and self-correcting “invisible hand” that is shared by all of us that allows capitalism to succeed with a minimum set of intervening rules and enforcement policies.

I believe that each restriction we place on capitalism makes our economy less efficient.

I believe for-profit businesses work, in part, because every business leader knows that their primary job is their fiduciary responsibility to maximize the return on investment for their owners.

I believe that business leaders know they have a responsibility to consider all options, including outsourcing, off shoring or relocating overseas in order to fulfill their obligations to their owners.

I believe that If managers fail to produce a competitive return on investment, the owners will either change the management or move their investments.

I believe it is the responsibility of our elected leaders to understand the fundamentals of Capitalism and human nature and enact those policies that convince business leaders of both foreign and domestic firms that their best business opportunities can be found in the USA.

I believe that any elected leader who labels US business leaders as un-American or un-patriotic for moving their operations abroad is a demagogue trying to hide his or her own leadership and legislative failures.

I believe that any elected leader who does not understand the critical link between jobs and the Job Burden is not qualified to legislate business taxes or business regulations.

I believe the real reason why Congress taxes businesses is because they want the additional tax revenue but they fear voter retribution. So, Congress deceives the voters by taxing US businesses, which in turn must hide the tax from the customer-voters by imbedding it in the price of the US made goods and services sold. Only people pay taxes. Business must always pass along their taxes to people.

I believe that Congress succeeds in the business tax sham because our education system fails to teach the linkage between business taxes, private sector jobs, and our economy.

I believe that if Congress passed a law that required every sales receipt to include a line item for the Job Burden cost of that product, Congress would stop taxing our businesses and would be far more judicious with the business regulations they enact because the voters would demand it.

I believe the Show the Job Burden Tax on the Receipt Act would be one government regulation that businesses would support because once the voters realized that the Job Burden of US manufactured goods could exceed 40% of the price, the people would force our elected leaders to become better stewards of our economy.

I believe I should reject those candidates who would add to the US Job Burden.

Government Labor Costs:
I believe that some of the biggest obstacles to growing U.S. based jobs are the business paid portions of the federal safety net. These include:

• Payroll Tax: (Social Security, Medicare, Unemployment).
• Health Insurance: (Premium Support and the Affordable Care Act).
• Retirement funding: (Defined Benefits and Defined Contributions).
• Minimum wage premium: (The amount above the free market wage for that job in that location).

I believe these US Job Burden costs are nothing more than government imposed labor costs that, unlike corporate income taxes, must be paid whether a business makes a profit or not.

I believe that in 2014, the U.S. Corporate Income Tax raised  $321 billion in federal taxes while the Payroll Tax alone raised $1 trillion.

I believe these government imposed labor costs increase the cost of U.S. labor by 15% to 30%.

I believe that any U.S. imposed labor premium is anti-competitive in a global economy but that 30% is unsustainable.

I believe that increasing the cost of U.S. labor decreases the demand for U.S. labor.

I believe the easiest, most effective and most obvious way for any U.S. based employer to reduce their U.S. government imposed labor costs is to reduce their U.S. based employees. Thanks Congress!

I believe the safety net programs that Congress has funded through U.S. based jobs are important for our national safety-net, but we should never expect or ever allow our businesses to ever pay for any portion of our safety net programs. The cost to our jobs and our economy is simply too great.

I believe there are much better ways to pay for our safety net then with our jobs.

I believe I should reject any candidate who is not committed to the elimination of all Government imposed labor costs.

Senior Entitlements:
I believe that Senior Entitlements is the group name given to the Social Security and Medicare programs.

I believe the escalating costs and poor fiscal management of our senior entitlements must be addressed. The longer we wait to fix the problems will only make the eventual solution that much more harsh on our seniors and expensive for ourselves and our children.

I believe our Senior Entitlement programs are underfunded by over $40 trillion. If we hope to continue paying the senior benefits that have been promised using the same pay-as-you-go funding, we will have to tax our children and their children an additional $40 trillion over the next 75 years. This will slow their economy and weaken their future.

I believe the Democrats want to fix our Senior Entitlement deficits by increasing business paid, and employee paid payroll taxes. In other words, Democrats want to add to the Job Burden. This will do more harm than good to the long term health of our economy.

I believe the Republicans want to fix our Senior Entitlement deficits by reducing senior benefits. In other words, Republicans want to penalize seniors for Congressional mismanagement of taxpayer funds.

I believe the solutions offered by either party will be so distasteful to the American voter that both parties will continue to “kick the can down the road” until our collective American can falls off the fiscal cliff.

I believe we need to convert the way we finance our senior safety net from a fiscally inefficient pay-as-you-go insurance model to a far more fiscally sound, growth oriented, perpetually funded, lifetime capital investment model.

Imagine, you're a young person with a newborn child on the way and you want to be responsible and help fund your child’s retirement and you are asked to select one of these two choices.

Pay-as-you-go:
Do nothing now. When your child start’s working at age 20, she will Contribute 6.25% of her pay for 50 years to help pay the Social Security benefits of those who are already retired. When she retires at age 70, those who are still working will pay for her retirement. Or

Lifetime Capital Investment:
You and all other current taxpayers can make a one-time deposit of $750 in your child’s account and the federal government will guarantee to pay the same benefits, with the same cost of living increases for as long as she lives and she will never have a penny deducted from her pay to pay for the retirement of someone elsein the plan.

I believe that before you make your choice, you should consider the following facts.

• The historic average return of the U.S. equity markets has been 10.4% per year.
• The worst 70 year period in U.S. equity market history still managed a very respectable 9.86% annual return. In other words, if you made a one time investment in U.S. equities at the beginning of any 70 year period, the worst you would have done would still have managed an average annual rate of return of 9.86%.
• Social Security began collecting taxes and paying benefits in 1937.

I believe that had Social Security invested $250 in the equivalent of a market index in 1937 for each US citizen born, then 70 years later, in 2007, that one time investment would be able to pay the same average benefits for the same expected lifetime with the same projected cost of living increases as today’s Social Security system. There would of course be four very important differences.

• The $20 trillion in unfunded Social Security liabilities today would not exist.
• The $2.7 trillion in Special U.S. Treasury IOU’s that U.S. taxpayers owe to future Social Security beneficiaries would not exist.
• The $800 billion per year Payroll Tax for Social Security that is used to redistribute income from workers to retirees would not exist.
• The equity investment pool would have reached the perpetual self-funding level of $8 trillion. It would be able to cover all future benefits as well as eliminate the need for additional taxes to cover new births.

I believe that a one-time investment today of about $750 for each US citizen born, that grows at 10.4% per year, would be able to pay the same projected, cost of living adjusted, average Social Security benefits when those citizens retire at age 70.

I believe that replacing Social Security and Medicare funding with lifelong investments in America would place our nation on a glide path to eliminate our unfunded liabilities in those programs.

I believe the taxpayer cost to fund an Invest-in-America program for Social Security would be about $3 billion per year. (4 million births X $750). And another $3 billion for Medicare.

I believe that $3 billion per year is less than the amount of foreign aid we have provided to Egypt and Pakistan each of the last 20 years.

I believe that converting Social Security and Medicare funding from a pay-as-you-go insurance program to a Life-Time Invest in America investment Plan would reduce program costs from over $1 trillion per year to about $6 billion per year.

I believe that with just this one change, we could, over time, reduce our federal safety net program cost from $1.4 trillion, (46% of federal spending and 8% of GDP), to $395 billion or 2.3% of GDP.

I believe Congress should develop an economically sensible tax policy to pay for our safety net programs that does not harm our jobs, our economy, our poor, or our children’s future.

I believe I should support those candidates who support Senior Entitlement reforms and the tax policy to support it.

Taxes:
I believe that when discussing tax reform, Congress should unite behind the battle cry - Start Over!

I believe the federal income tax and payroll tax systems accounted for over 90% of the federal tax revenue raised in 2014.

I believe that Congress should be held accountable for the negative economic impacts of federal tax policy.

I believe that if you want less of something, you should tax it. If you still want less, tax it more. The Payroll Tax is a $1 trillion a year tax on US based jobs. Do we really want fewer jobs?

I believe that consumption taxes would be the least economically harmful type of taxes.

I believe that because of their history of abuse and over use, we the people should grant Congress far less authority to favor and disfavor various groups and activities through the tax code.

I believe we can help guide our elected leaders to manage our economy more effectively and to fund and run our safety net programs more efficiently if we replace the economically harmful Income Tax and Payroll Tax systems with two new progressive consumption tax systems.

The Safety Net Tax - SNT:
The SNT is a retail consumption tax established to pay for all federal safety net programs. The SNT would be based on the FairTax. Progressivity would be achieved through a rebate, paid in advance, for the tax paid at the poverty level, to those U.S. citizens, living in the U.S. and earning less than 1.5 times the poverty rate for a family of 4.

The Personal Income Tax system - PITS:
The PITS is a hybrid personal income and personal consumption tax designed to pay for all federal expenditures that are not covered by the SNT. The PITS would be based on the progressive Hall-Rabushka Flat Rate Tax.

Comments:
I believe you could help improve this creed if you wanted to. I hope you want to.

American Mobacracy

http://www.commentarymagazine.com/2014/12/04/american-mobacracy/

By: Abe Greenwald. Editor  Commentary Daily

“The future belongs to crowds,” wrote Don DeLillo in his 1991 novel Mao II. Boy, was he right. Today it’s protests in response to a baffling grand jury decision, but the phenomenon has been building for years. Tea Party rallies, the Rally for Sanity, Occupy Wall Street, minimum-wage protests, hoodie rallies, anti-Israel protests, climate rallies, Ferguson “die-ins,” World AIDS Day, World This Day, World That Day. The mass-grievance spectacle has come to saturate our culture and politics, and shape our national life.

In between demonstrations mob-rule holds firm by other means. Foremost online. The armchair lynch mobs of social media drive news cycles and end careers. A vigorous digital witch-hunt can wreck a life. In China, online vigilantism by an otherwise enfeebled citizenry goes by the term “human-flesh searches.” We’re not they’re yet, but we’re close.

Television too is coming under the sway of mobacracy. During the first round of Ferguson protests, news reporters joined the ranks of the enraged so they too could rail against police. On hipper talk shows, the political applause line has replaced the joke as the fundamental unit of communication. The new definition of comedian is a demagogue who gets a pass on vulgarity and inaccuracy. His goal is no longer to leave them in stitches; it’s to affirm the pooled self-righteousness of the audience with a zinger aimed at a common enemy. The Daily Show, Real Time, Last Week Tonight—it’s the news with cheering.

Why is this happening? It’s not because worsening conditions are driving people to justified rage. Life in today’s lowest American income bracket is no picnic, but all relevant data show it’s a material paradise compared to the poverty of less turbulent eras. Prejudice exists, naturally, but on a dramatically smaller scale than at any point in our history. And (if we must), global temperatures, as even NASA now acknowledges, haven’t changed significantly for 15 years.

Perhaps, then, the righteous mob satisfies a new non-material crisis in American life—namely, the need for meaning and connection. People are now less likely to affiliate with larger entities and institutions that once gave their lives shape and value: family, community, church, nation. Sharp declines in religious belief, marriage, and childbearing are stripping us of enduring notions of virtue and purpose and we’re striving to replace them.

Some quick facts: According to Pew, the number of Americans who claim no religious affiliation has doubled since 1990 alone. Another Pew poll tells us: “After decades of declining marriage rates and changes in family structure, the share of American adults who have never been married is at an historic high.” In 1960, only 9 percent of Americans over 25 hadn’t ever married. In 2012, the number was 20 percent. And in 2013, a federal government study concluded that the U.S. birthrate had fallen to a record low of 1.86 births per woman.

Here are the questions we face as a result: For whom or what do we sacrifice? What constitutes community? And how, ultimately, do we find transcendence? The old institutions furnished answers. We sacrificed for faith and family because that’s what our shared values dictated. Out of those shared values we found community. And through connections to God and each other, we transcended ourselves.

The galvanized mob picks up the slack both for lost meaning and lost human contact. Activism was once reserved for a small segment of the mostly young and self-righteous. Today, it’s just another dimension of cosmopolitan life. You subscribe to a cause—be it anti-fracking or organic food—and stick with it. As it occupies the space of religion, you tend to preach your cause hypocritically. But your cause asks so little of you (perhaps to post a meme on your Facebook profile), that you’re not really invested. It doesn’t ultimately satisfy the need for transcendence because you sacrificed so little.

The weak in conviction seek strength in numbers. They connect online and meet up to block a bridge or lie down in a train station. As community, this ultimately fails too. Participants don’t share values; they share a need for values. When it comes down to it, they’re no more sincere about one cause than they are about another.

Without strength (which comes from sacrifice), without ideas (which come from engaging tradition, not running from it), all that’s left is emotion. So emotion becomes the content of our politics. The irony of the recent anti-police outrage is that it’s arisen from a culture of constant policing: the identity police, the Islamophobia police, the language police, the food police, the bully police, the trigger-warning squads—they’re all out to catch and punish offenders. No grand jury convened.

These mob events look like action, but they ensure stasis. Nothing fruitful comes from channeling religious and family needs into politics. It’s worth recalling that the Russian word Bolshevik literally meant one of the majority.

Sent from my yacht

How much does your Healthcare cost?

It's a simple idea, but a radical one. Let people know in advance how much health care will cost them—and whether they can find a better deal somewhere else.

Journal Report

• Insights from The Experts
• Read more at WSJ.com/HealthReport

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Join the Conversation

What's the best way to find health-care deals? Don't miss this video chat with three health-care cost experts on Monday, Feb. 24 at 3 p.m. Eastern.

•  How to Shop for Deals in Health Care

Related Story

• Searching for the True Cost of Health Care

With outrage growing over incomprehensible medical bills and patients facing a higher share of the costs, momentum is building for efforts to do just that. Price transparency, as it is known, is common in most industries but rare in health care, where "charges," "prices," "rates" and "payments" all have different meanings and bear little relation to actual costs.

Unlike other industries, prices for health care can vary dramatically depending on who's paying. The list prices for hospital stays and doctor visits are often just opening bids that insurers negotiate down. The deals insurers and providers strike are often proprietary, making comparisons difficult. Even doctors are generally clueless about what the tests, drugs and specialists they recommend will cost patients.

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Princeton economist Uwe Reinhardt likens using the U.S. health-care system to shopping in a department store blindfolded and months later being handed a statement that says, "Pay this amount."

The price-transparency movement aims to lift that veil of secrecy and empower patients and other payers to be smarter health-care consumers. Federal and state agencies are gathering reams of price information from doctors and hospitals and posting them for the public. Health plans are offering online tools that let members calculate their out-of-pocket costs. Startup companies are ferreting out and publishing the long-secret rates that providers negotiate with insurers.

When consumers can compare prices for doctor visits, hospital stays and other services, the theory goes, market competition will help keep them down.

An Incentive to Change

This is new territory for health care. Doctors and hospitals have rarely competed on cost. Third-party payers still foot the bulk of the bills, and many players in the health-care industry benefit from keeping their costs and profit margins murky.

"The time for transparency has clearly arrived—but is everybody ready to have real pricing power brought to bear in a way that could destabilize the health-care sector?" asks Susan Dentzer, a senior policy adviser at the Robert Wood Johnson Foundation. "It means upsetting a lot of apple carts."

The pressure to change is rising, however. Experts expect consumers to be much more price-sensitive as they shoulder a growing proportion of health costs themselves. Last year, 38% of Americans with employer-sponsored insurance had a deductible of $1,000 or more—up from 10% in 2006, according to the Kaiser Family Foundation.

Silver and bronze plans created by the Affordable Care Act carry average family deductibles of $6,000 and $10,386, respectively. More than half of bronze plans also require patients to pay 30% of doctors' fees, according to health-information siteHealthPocket.com. "Most of us still don't have much financial incentive to shop around for cheaper care," says Suzanne Delbanco, executive director of Catalyst for Payment Reform, a nonprofit that works on behalf of employers. "That's changing rapidly."

Efforts to raise transparency are coming from a number of corners, including the Obama administration. But some have mainly shown how confusing health-care pricing is.

Hoping to shine a light on the variations in hospital charges, the Centers for Medicare and Medicaid Services, or CMS, grabbed headlines last May when it released a list of the average prices 3,300 U.S. hospitals charged Medicare for the 100 most common inpatient services during 2011.

Huge Differences

The variations were stunning. The average charge for joint-replacement surgery, for example, ranged from $5,300 in Ada, Okla., to $223,000 in Monterey Park, Calif. Even in the same city, there were huge swings. The charge for treating an episode of heart failure was $9,000 in one hospital in Jackson, Miss., and $51,000 in another.

A month later, CMS released a second database comparing average hospital charges for 30 common outpatient procedures, and the variations were just as great. A hospital in Pennington, N.J., charged $3,036 for a diagnostic and screening ultrasound, while one in Bronx, N.Y., billed just $88.

Many hospital executives dismiss those list prices—also known as chargemaster prices—as meaningless and misleading, since few patients ever pay them. Commercial insurers often use them as a starting point for negotiating big discounts. Medicare itself pays hospitals predetermined rates based on diagnoses, regardless of what they charge.

Industry experts say list prices vary so much in part because hospitals use different accounting methods and have different patient populations. List prices also reflect all the costs of running a hospital, including keeping ERs, burn units and other costly services running 24 hours a day. What's more, many hospital executives say they have to mark up charges for privately insured patients because Medicare and Medicaid reimbursements don't cover those patients' cost—a shortfall the American Hospital Association puts at $46 billion nationwide last year.

Hospitals "are absolutely in favor of price transparency," says AHA president Rich Umbdenstock, and they support a bill in Congress that would let individual states determine price-disclosure rules. He also says hospitals would like to end the confusing chargemaster and cost-shifting practices, but they can't do it without big changes in payment practices by both the government and the insurance industry.

"If this were in our power to solve, we would have done it a long time ago," Mr. Umbdenstock says. "But it's not something we can do on our own."

Shining a Light

Jonathan Blum, deputy administrator of the CMS, counters that chargemaster prices do matter, particularly to uninsured patients who sometimes get stuck with those inflated bills. He says the administration's goal was to spark discussion about price variations, and that "a tremendous number" of visitors had downloaded the data.

"We've discovered that oftentimes, even health-care providers don't fully realize the extent of those variations," he says. "Our hypothesis is that a lot of the variations aren't warranted."

The prices insurers negotiate with hospitals and doctors are more important to consumers, experts say. Traditionally, those rates have been proprietary. Neither insurers nor providers want competitors and other business partners to know what they're willing to settle for. Some contracts include gag clauses barring disclosure.

But states are increasingly requiring payers and providers to reveal that information. A few states specifically outlaw gag clauses in health-care contracts. Sixteen states have "all-payer claims databases" designed to collect insurance claims data and use it to monitor trends and identify high- and low-price providers. And some 38 states now require hospitals to report at least some pricing information, although only two—Massachusetts and New Hampshire—rated an "A" in Catalyst for Payment Reform's annual report card for making the information accessible and usable by patients.

Meanwhile, entrepreneurs are sleuthing out negotiated rates from claims data and making them available to consumers and employers in various forms. Healthcare Bluebook aims to do for health care what the Kelley Blue Book does for used cars: It analyzes negotiated rates paid for thousands of medical services in every ZIP Code—supplied by employers and other clients—and posts what it considers a "fair" price for each so consumers can evaluate what they're being charged.

Bluebook's founder and CEO, Jeffrey Rice, says the rates insurers pay for, say, an MRI or knee surgery can vary as much as chargemaster prices do, particularly if a local hospital is dominant or prestigious.

"The difference may not be much between Nashville and Chicago—the big difference may be just down the block," he says.

Mr. Rice says the employers Healthcare Bluebook works with have saved as much as 12% on their health-care costs by making price information available to their employees, with most savings coming on imaging studies, endoscopies, cardiac testing and other outpatient procedures.

Another service, PricingHealthcare.com, asks users to anonymously supply information from their own medical bills to help it amass the list prices, cash prices and negotiated rates for common procedures. It currently shows rates for some 500 procedures in 11 states. Founder Randy Cox says some providers are furious when asked what their rates are, while others are eager to have their entire price list posted. "I get calls from hospital CEOs who know people are concerned about price and think this is an opportunity for their business," he says.

A Hand From Insurers

One of the most widespread initiatives comes from insurers themselves—who say they are eager to help plan members and employers cut their health-care bills. Some 98% of health plans now offer their members some online tool that lets them calculate their out-of-pocket costs, according to a survey by Catalyst for Payment Reform. A few let users compare different providers in the same network.

UnitedHealth Group Inc. has one of the most extensive tools. More than 21 million members can log into myHealthcare Cost Estimator and compare the negotiated rates for more than 500 individual services at in-network providers across the country, as well as their individual out-of-pocket costs for each one. Hundreds of thousands of plan members have used the tool since it launched in 2012, the company says.

Nationwide, only about 2% of health-plan members who have access to such tools have used them, according to Catalyst for Payment Reform. But Ms. Delbanco expects that number to rise as more patients become aware of the tools and see their out-of-pocket costs growing.

Proponents say it is too early to tell how much impact transparency efforts will have on costs overall. California has required hospitals to make their chargemaster prices public since 2003, with little effect on prices.

But one approach called "reference pricing" has yielded some savings. Where local prices differ substantially for a service like a colonoscopy, an insurer publishes a list of providers' rates and agrees to pay a set amount. If patients choose a provider that charges more, they must pay the difference themselves.

In one pilot project, the California Public Employees' Retirement System, found prices for hip and knee replacements ranging from $15,000 to $110,000 in the San Francisco area. It agreed to pay up to $30,000, and some 40 hospitals cut their prices to match. Such initiatives have helped Calpers save nearly $3 million in the past two years, one study found.

What Comes Next?

Experts say that as consumers increasingly compare prices, it's critical to provide them with information about quality of care as well—otherwise, they might assume high cost equates with high quality.

A growing body of research has found that there is no clear connection between price and outcomes such as mortality rates, blood clots, bed sores and hospital readmission. "Until you break that connection in peoples' minds, there is a perverse incentive for hospitals and health systems to continue to raise prices," Ms. Dentzer says.

Indeed, critics fear that some price-transparency efforts could backfire and spur higher prices: If providers see that insurers are paying competitors more, they might hold out for higher rates, and insurers might be less inclined to give some providers favorable deals.

Some skeptics think that without fundamental changes in how health care is priced and paid for, transparency may confuse consumers more than it empowers them.

But there's a growing consensus that while price transparency alone cannot transform the health-care system, it is necessary to help reveal which costs are excessive and let consumers make better-informed choices.

"At the end of the day, it's our money," Ms. Delbanco says. "We have a right to know what our health care is going to cost."

Ms. Beck covers health care and writes The Wall Street Journal's Health Journal column. She can be reached at melinda.beck@wsj.com.

Article|McKinsey Quarterly

Redefining capitalism

Despite its ability to generate prosperity, capitalism is under attack. By shaking up our long-held assumptions about how and why the system works, we can improve it.

September 2014 | byEric Beinhocker and Nick Hanauer

Capitalism is under attack. The financial crisis of 2008, the stagnation of the middle class in many developed countries, and rising income inequality are challenging some of our most deeply held beliefs about how a fair and well-functioning society should be organized.

Many business leaders are of two minds about the situation. They note that market capitalism has yielded massive increases in human prosperity, particularly in the West in the 19th and 20th centuries. More recently, it has lifted hundreds of millions from poverty in emerging economies. Yet despite these historic accomplishments, it’s also easy to worry that something is wrong with how the system is performing today.

This article will argue that while we have been correct to believe that capitalism has been the major source of historical growth and prosperity, we have been mostly incorrect in identifying how and why it worked so well. By analogy, our ancestors did know that the stars and planets moved in the sky and had various theories to explain their observations. But it wasn’t until the Copernican model replaced the Earth with the sun at the center of the solar system and Newton articulated his laws of gravitation that people understood how and why they move.

Likewise, the conventional economic theories we have relied upon for the past century have misled us about the workings of capitalism. Only by replacing our old theories with better and more modern ones will we build the deeper understanding necessary to improve our capitalist system.

Rocking-horse versus wild-horse economics

For the past century, the dominant economic paradigm—neoclassical economics—has painted a narrow and mechanistic view of how capitalism works, focusing on the role of markets and prices in the efficient allocation of society’s resources. The story is familiar: rational, self-interested firms maximize profits; rational, self-interested consumers maximize their “utility”; the decisions of these actors drive supply to equal demand; prices are set; the market clears; and resources are allocated in a socially optimal way.

Over the past several decades, though, some of the bedrock assumptions of neoclassical theory have begun to unravel. Behavioral economists have accumulated a mountain of evidence showing that real humans don’t behave as a rational homo economicus would. Experimental economists have raised awkward questions about the very existence of utility; and that is problematic because it has long been the device economists use to show that markets maximize social welfare. Empirical economists have identified anomalies suggesting that financial markets aren’t always efficient. And the macroeconomic models built on neoclassical ideas performed very poorly during the financial crisis.

Andy Haldane, the chief economist of the Bank of England, notes that the conventional theory views the economy as a rocking horse that, when perturbed by an outside force, sways for a while before predictably settling back down to a static equilibrium. But, as Haldane has pointed out, what we saw during the crisis was more like a herd of wild horses—something spooks one of them, it kicks another horse, and pretty soon the whole herd is running wildly in a pattern of complex, dynamic behavior.¹

In the years before the crisis, a new view of economics began to stir. Since the crisis, it has begun to blossom.² This view holds that the economy is a constantly evolving, interacting network of highly diverse households, firms, banks, regulators, and other agents, more like Haldane’s wild herd than a rocking horse. The economy—a complex, dynamic, open, and nonlinear system—has more in common with an ecosystem than with the mechanistic systems the neoclassicists modeled their theory on. The implications of this emerging view are only just beginning to be explored. But the two of us believe it has fundamental implications for how people think about the nature of capitalism and prosperity.

Significantly, this view shifts our perspective on how and why markets work from their allocative efficiency to their effectiveness in promoting creativity. It suggests that markets are evolutionary systems that each day carry out millions of simultaneous experiments on ways to make our lives better. In other words, the essential role of capitalism is not allocation—it is creation. Life isn’t drastically better for billions of people today than it was in 1800 because we are allocating the resources of the 19th-century economy more efficiently. Rather, it is better because we have life-saving antibiotics, indoor plumbing, motorized transport, access to vast amounts of information, and an enormous number of technical and social innovations that have become available to much (if not yet all) of the world’s population. The genius of capitalism is that it both creates incentives for solving human problems and makes those solutions widely available. And it is solutions to human problems that define prosperity, not money.

Prosperity redefined

Most of us intuitively believe that the more money people have, the more prosperous a society must be. America’s average household disposable income in 2013 was $38,001, versus $28,194 for Canada³ ; therefore, people believe, America is more prosperous than Canada.

But the idea that prosperity is simply about having money can be disproved with a simple thought experiment. Imagine you had the $38,001 income of a typical American but lived among the Yanomami people, an isolated hunter-gatherer tribe deep in the Brazilian rainforest. You’d easily be the richest of the Yanomami (they don’t use money, but anthropologists estimate their standard of living at something around $90 a year). But you’d still feel a lot poorer than the average American. Even after you’d fixed up your hut, bought the best baskets in the village, and eaten the finest Yanomami cuisine, all of your riches still wouldn’t get you antibiotics, air conditioning, or a comfy bed. Yet even the poorest Americans typically have access to these important elements of well-being.

This is why prosperity in human societies can’t be properly understood by looking just at monetary measures, such as income or wealth. Prosperity in a society is the accumulation of solutions to human problems.

These solutions run from the prosaic (crunchier potato chips) to the profound (cures for deadly diseases). Ultimately, the measure of the wealth of a society is the range of human problems it has solved and how available it has made those solutions to its people. Every item in a modern retail store can be thought of as a solution to a different kind of problem—how to eat, dress, entertain, make homes more comfortable, and so on. The more and better the solutions available to us, the more prosperity we have.

Growth redefined

We typically talk about growth in terms of GDP, though it has been much criticized recently as a measure of progress. There have been a variety of attempts to make GDP account for things such as environmental damage, unpaid work, the progress of technology, or the development of human capital.

In our view, the biggest problem with GDP is that it doesn’t necessarily reflect how growth changes the real, lived experience of most people. In the United States, for example, GDP has more than tripled over the last three decades. Although those increases have been concentrated at the top of the income spectrum, people across the board have benefited from improvements in technology (say, safer cars, new medical treatments, and smartphones). Other changes, though, have been accompanied by unintended consequences (such as the stress many knowledge workers feel from 24/7 connectivity). Is life actually better or worse for most people? How are the gains of growth shared? GDP cannot answer these questions.

If the concept of growth is to have significance, it should represent improvements in lived experience. If the real measure of a society’s prosperity is the availability of solutions to human problems, growth cannot simply be measured by changes in GDP. Rather, it must be a measure of the rate at which new solutions to human problems become available.

Going from fearing death by sinus infection one day to having access to life-saving antibiotics the next, for example, is growth. Going from sweltering in the heat one day to living with air conditioning the next is growth. Going from walking long distances to driving is growth. Going from needing to look up basic information in a library to having all the world’s information instantly available on your phone is growth.

Growth is best thought of as an increase in the quality and availability of solutions to human problems. Problems differ in importance, and a new view of growth must take this into account: finding a cure for cancer would trump many other product innovations. But in general, economic growth is the actual experience of having our lives improved.

This is different from other alternative measures of growth. For example, research shows that happiness does not necessarily correlate with GDP growth—Bhutan has even famously developed a Gross National Happiness (GNH) Index. Likewise, the United Nations created a Human Development Index (HDI) based on Amartya Sen’s theory of human capabilities and freedom. What the two of us are proposing sits somewhere between GDP and these measures. Like GDP, it is intended to be a definition of material prosperity. But it is also a more meaningful way of thinking about material standards of living than GDP.

Can the rate at which solutions appear and their availability be measured? While such a measure has not been tried yet, we believe it is possible. Inflation is measured by looking at changes in the prices of goods and services in a “basket” typically consumed by households. Similarly, it’s possible to look at how the actual contents of such a basket are changing across time or how they differ across countries or levels of income. What kind of food, housing, clothing, transport, healthcare, education, leisure, and entertainment do people have access to?

Capitalism redefined

If prosperity is created by solving human problems, a key question for society is what kind of economic system will solve the most problems for the most people most quickly. This is the genius of capitalism: it is an unmatched evolutionary system for finding solutions.

Finding new solutions to human problems is rarely easy or obvious—if it was, they would have already been found. For example, what is the optimal way to solve the problem of human-powered transportation? There are a multitude of options: bicycles, tricycles, unicycles, scooters, and so on. Human creativity develops a variety of ways to solve such problems, but some inevitably work better than others, and we need a process for sorting the wheat from the chaff. We also need a process for making good solutions widely available.

Capitalism is the mechanism by which these processes occur. It provides incentives for millions of problem-solving experiments to occur every day, provides competition to select the best solutions, and provides incentives and mechanisms for scaling up and making the best solutions available. Meanwhile, it scales down or eliminates less successful ones. The great economist Joseph Schumpeter called this evolutionary process “creative destruction.”

The orthodox economic view holds that capitalism works because it is efficient. But in reality, capitalism’s great strength is its problem-solving creativity and effectiveness. It is this creative effectiveness that by necessity makes it hugely inefficient and, like all evolutionary processes, inherently wasteful. Proof of this can be found in the large numbers of product lines, investments, and business ventures that fail every year. Successful capitalism requires what venture capitalist William Janeway calls “Schumpeterian waste.”⁴

The role of business

Every business is based on an idea about how to solve a problem. The process of converting great ideas into products and services that effectively fulfill fast-changing human needs is what defines most businesses. Thus, the crucial contribution business makes to society is transforming ideas into products and services that solve problems.

This sounds simple and obvious, and many executives would say, “Of course that is what we do.” But again, that is not what standard theory says businesses should do. In the 1970s and 1980s, academic work based on neoclassical theory argued that maximizing shareholder value should be the sole objective of business. If corporations just did this, said these professors, they would maximize overall economic efficiency and social welfare. This focus did correct some deficiencies in the previous system, most notably by empowering shareholders to push back against CEOs who maximized the size of their empires rather than economic returns.

But some argue that elevating the creation of shareholder value to the status of primary objective is based on a faulty assumption—that capital is the scarcest resource in an economy, when in reality it’s knowledge that’s the scarce, critical ingredient in solving problems.⁵ It has also led to a myopic focus on quarterly earnings and short-term share-price swings, to say nothing of a decline in long-term investment.⁶ This is in startling contrast to the attitudes of even the recent past. If you asked a CEO in the 1950s, an era of tremendous prosperity growth, what his job was, his first reply would probably have been “to make great products and services for customers.” After that, the CEO might have said something about looking after his company’s employees, making profits to invest in future growth—and then, finally, giving the shareholders a decent, competitive return.

We believe that a reorientation toward seeing businesses as society’s problem solvers rather than simply as vehicles for creating shareholder returns would provide a better description of what businesses actually do. It could help executives better balance the interests of the multiple stakeholders they need to manage. It could also help shift incentives back toward long-term investment—after all, few complex human problems can be solved in one quarter.

This is not to say that shareholders or other owners are unimportant. But providing them with a return that is competitive compared with the alternatives is a boundary condition for a successful business; it is not the purpose of a business. After all, having enough food is a boundary condition for life—but the purpose of life is more than just eating.

Some companies already think in these terms. Google, for example, defines its mission as “to organize the world’s information and make it universally accessible and useful”—a statement about solving a problem for people. And it famously refuses to provide quarterly financial forecasts.

Government redefined

Traditional economic theory holds that markets are efficient, inherently maximize welfare, and work best when managed least. But such perfect markets don’t seem to exist in the real world. Furthermore, this view fails to recognize that the great genius of capitalism—solving people’s problems—has, by necessity, a dark side: the solution to one person’s problem can create problems for someone else.

This is the age-old puzzle of political economy: how does an economic system resolve conflicts and distribute benefits? A fancy derivative product may help corporate treasurers solve their problem of managing corporate risk, and it might make bankers rich, but it might also create greater systemic risk for the financial system as a whole. Likewise, eating fatty food may solve someone’s problem of satisfying unconscious desires programmed by millennia of evolution. But it might also create new problems of clogged arteries and burden society with that person’s future health costs.

It can be challenging to distinguish between problem-solving and problem-creating economic activity. And who has the moral right to decide? Democracy is the best mechanism humans have come up with for navigating the trade-offs and weaknesses inherent in capitalism. Democracies allow its inevitable conflicts to be resolved in a way that maximizes fairness and legitimacy and that broadly reflects society’s views.

Seeing prosperity as solutions helps explain why democracy is so highly correlated with prosperity. Democracies actually help create prosperity because they do several things better than other systems of government. They tend to build economies that are more inclusive, enabling more citizens to be both creators of solutions and customers for other people’s solutions. And they offer the best way to resolve conflicts over whether economic activity is generating solutions or problems. Many (though not all) government regulations are created to do just that—to encourage economic activity that solves problems and to discourage economic activity that creates them—thus fostering trust and cooperation in society.

Businesspeople often complain about regulation—and indeed many regulations are poorly designed or unnecessary—but the reality is that solving capitalism’s problems requires the trust and cooperation that good regulation fosters. It is notable that the most prosperous economies in the world all mix regulation with free markets, while unregulated and anarchic economies are universally poor.

What problems do you solve?

Once we understand that the solutions capitalism produces are what creates real prosperity in people’s lives, and that the rate at which we create solutions is true economic growth, then it becomes obvious that entrepreneurs and business leaders bear a major part of both the credit and the responsibility for creating societal prosperity. But standard measures of business’s contribution—profits, growth rates, and shareholder value—are poor proxies. Businesses contribute to society by creating and making available products and services that improve people’s lives in tangible ways, while simultaneously providing employment that enables people to afford the products and services of other businesses. It sounds basic, and it is, but our economic theories and metrics don’t frame things this way.

Today our culture celebrates money and wealth as the benchmarks of success. This has been reinforced by the prevailing theory. Suppose that instead we celebrated innovative solutions to human problems. Imagine being at a party and rather than being asked, “What do you do?”—code for how much money do you make and what status do you have—you were asked, “What problems do you solve?” Both capitalism and our society would be the better for it.

About the authors

Eric Beinhocker, an alumnus of McKinsey’s Washington, DC, and London offices, is the executive director of the Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.Nick Hanauer is an entrepreneur, venture capitalist, and author. This article is adapted from “Capitalism Redefined,” Democracy: A Journal of Ideas, Issue 31, Winter 2014, democracyjournal.org.