Paying Our Way

By Montecito Journal   |   September 27, 2018

What is Steve King getting at (“Paying Your Way,” MJ #24/38)? No human pulls himself up by her own bootstraps. We start out as helpless infants. We die unless an older human feeds, shelters, and cleans us. 

To become a productive adult, one needs a certain degree of intelligence, creativity, physical and mental health, and education. Without education, every human would have to invent how to survive until he and she procreated and “learned” to care for the next generation and then “taught” him or her how to survive. For some, “self-sufficiency” is never possible. They will be dependent or die. Is that what Mr. King is getting at? If you are unable to care for yourself, you should die and decrease the surplus population a la Scrooge in A Christmas Carol?

The world’s earliest humans created social order. Certain people took the responsibility of providing for those who could not provide adequately for themselves. This is called civilization.

What is the purpose of insurance in our society? It provides funds that the human buying the insurance cannot or does not want to spend on repairs of whatever is broken, be it a car, a home, or one’s own or a family member’s health. How are those funds acquired? Many people buy the insurance that creates a pool of money, a “risk” pool. The unlucky person who has something broken dips into this pool of mostly other people’s money to pay to fix their break. You are permitted access to the “risk pool” funds as long as you pay a bit of your own money into it on a steady basis. These are called “premiums.” If too many people in the “risk pool” need this “free” money, then the pool goes broke or everyone has to pay more in premiums the next year to keep the pool flush with funds.

Many private health insurance plans require that the person buying and using the plan first pay a certain amount extra of her own money every year, the “deductible,” before the “risk pool” money gets used. Sometimes, the insurance plan does not pay for what the person buying the insurance thought was covered. Both can bankrupt the patient.

What happens with health insurance if you do not pay the premiums because you become ill, injured, cannot work, et cetera? The private company throws you out. You no longer have insurance. You have lost the money you have already put into the “risk pool.” Somebody else gets to use your money. You die if the philosophy is that each of us takes care of ourself and no one else. 

When it comes to health care, in a humane society that believes we are our brother’s keeper, that everyone is created equal, and where our Constitution stipulates government to provide for the general welfare, then everyone needs access to equal health care for the good of the whole (spreadable disease epidemics, natural disasters, et cetera) as well as the individual (remain a productive person in society). 

A financially sustainable health system provides all needed care, is simple to understand, has low administrative cost, is paid for by all, accessible and affordable to all, is planned and budgeted, prevents disease and injury, educates, manages chronic diseases, and pays care providers fairly.

The “risk pool” needed has to be very large because health care is very expensive. The “benefits,” what insurance will pay to keep a person as healthy as possible, has to be large and varied because nobody knows what kind of health care they might need. Care must be there when you cannot pay the premium. It has to be prepaid.

In a society that values freedom of choice and equality as much as ours does, the cheapest, most sustainable, best, and fairest way to pay for health care that provides the most stable income for private doctors, hospitals, and other health care professionals, the most freedom of choice of care and doctor for patients is to have a single, large “risk pool” into which everyone must pay. That way, we all pay for the health care we need and nobody can call us a “free-loader.” Some will use “your” money for their care. You are likely to use “their “ money for your care too. 

 “Free market” health care financing does not work and is morally wrong. 1) Patients do not know up-front costs, so health care, by definition, is not “free market.” 2) “Free markets” are unstable. To make money, a private insurance company will want only healthy people in its “risk pool.” If the “risk pool” has insufficient funds for whatever reasons, the company will not pay the insured person’s medical bills, the health care providers are left without payment, and the company goes out of business. 3) Premiums for only sick and injured people in a health insurance “risk pool” will be unaffordable. What “free market” model would take the risk? These “clients” would be given to government or would die. 4) “Free market” does not want regulations such as making them take both healthy and not-so-healthy people, making them have a large emergency fund, prohibiting shareholder dividends, et cetera. 5) “Free market” health insurance does not protect the patient against catastrophic financial loss. It protects itself.

Voluntary health care does not work because funding is unequal and unstable. 

Viewing history from earliest times, mankind has created societies with rules and regulations. When the good of the whole is at stake, a democratically elected, transparent government is likely the best and cheapest health insurance provider. Clean water, sanitation, policing, education, fire fighting, and health care for all are government-style insurance plans paid by all of us in the form of progressive or other taxes instead of premiums.

I wish I understood Steve King. To be a libertarian seems to be to live alone and be a non-cooperator. Freedom comes with responsibility, empathy, and a willingness to help pay for a sustainable society for all. 

Paulina Conn
Santa Barbara

(Editor’s note: No need to get into the weeds on this, but it should be noted that many people who oppose “single payer” and other forms of healthcare welfare simply object to paying for either birth control or erection dysfunction pills and much more of the “coverage” required by giant government programs. Such mandates are not “insurance” as most know it, but are simply “welfare,” just as paying for checking tire pressure or an oil change would hardly be auto “insurance.” If both sides could stick to the issue of actual insurance, i.e., medical care when warranted, a serious argument pro and con on the healthcare issue is sorely needed. – J.B.)

Already Paid For

In the last edition of MJ, Woody Barrett proposed that the Montecito Sanitary District prioritize recycled water over a planned office building. Because he is a candidate for the Sanitary Board of Directors, he should know that the Montecito Water District (MWD) has the responsibility to pay for any recycle water project. The kind discussed by the water district consultants will cost them (us) millions and millions of dollars. The office building, well in the works, is a paid-for project that will complete the master plan. Everything that concerns Woody seems to fall within the MWD sphere. Perhaps he should have run for director of the water board.

Judith Ishkanian
President, Montecito Sanitary District

J. Abe’s the Man

It’s the political season and TV ads are showing up. I don’t like what I see from either candidate for Congress. Justin Fareed has an ad that says Salud Carbajal is responsible for an 80-year-old woman being beaten to death with a hammer. Really? And as the ad says, “I am Justin Fareed and I approve this message.”

Well, that is nonsense.

But then watch one of Salud’s ads and he uses the Bucket Brigade as a background, featuring Abe Powell. Salud is projecting an image as if he were the savior of Montecito.

So here’s my thought: forget both of them; write in J. Abe Powell for Congress. He has done more for the community than Justin or Salud.

Dan Seibert
Santa Barbara

The Disaster Process

I wanted to share with our Montecito community a wonderful resource that I recently had the pleasure of being introduced to by the CA Hope 805 team located at the Montecito Center. Shown below is a graph of the Phases of Disaster. It shows where we might be in the recovery process from the Thomas Fire and January 9 debris flow. It gave me great insight to see where I was as an individual on the chart. This is a process that will take time, and we need to remember to be understanding of ourselves and others.”

Jean Von Wittenburg

Cure it All

I am no Thomas Edison or Alexander Graham Bell or even Elon Musk. Even with my community college background, I have a sense of curiosity. Trillions of gallons of water just dropped onto the East Coast, thanks to Florence. We can be there in less than five hours. The New Horizons spacecraft went past the moon on its way to Pluto in less than nine hours.

With so many wonders, why can’t we take some of the water off the hands of the people of North Carolina who would be more than happy to part with it? And while we’re at, why not cure cancer?

Steven Marko
Santa Barbara

(Editor’s note: We like your thinking on this, Mr. Marko. Although it’s probably out of reach to draw water from the East Coast, whenever it rains on the West Coast, there should and could be plans and methods of capturing that water using current technology. – J.B.)

Impartiality Required

It is so very sad when a decent upstanding judge is almost destroyed on flimsy evidence just because today’s radical Left have nothing else with which to destroy him. The Democrat Party used to be a place that had much honor and integrity; it was always wonderful to have a party that stood up for the underprivileged, but it’s not the same party today anymore.

What a world we now live in: you accuse someone and they are as such automatically disqualified.

The Bible says, “In the end times, what was good will be evil and what was evil will be good.” Stormy Daniels is looked upon with almost reverence, as if she were a Nobel Prize winner of much authority, and Judge Kavanaugh trying to be nominated to the Supreme Court today is looked upon as trash.

This without judge, jury, or any judgment.

Please finally ponder this: If indeed Judge Kavanaugh did sexually assault Professor Ford, should every great person on this earth who went through alcoholism, drug addiction, gambling, and so on, but then turned their lives around and did great things now permanently be disqualified because of that difficult past?

We are on really thin ice here, ladies and gentlemen… 

A judge should interpret the law and never make the law. He or she should be neither Left nor Right, but above such considerations; the laws must be permanent.

Morten Wengler

Man of Integrity

As happens far too often in a political campaign, it is easy to lose sight of the core issues and values of a candidate amidst the political rhetoric. Thus we are writing to share our insights and support for our friend and Water District Board candidate, Ken Coates.

It is gratifying to find people of Ken’s caliber willing to commit their time and energy to managing the complex issues of our water and wastewater. Competition for the seats on these boards hopefully creates a healthy dialog, giving Montecito residents an informed choice and an opportunity to employ new ideas and approaches to solving critical and complicated issues.

In Ken, we have a man of integrity who will seek solutions that are in the best interest of the community, as he has done during years of volunteer service to other local organizations such as Direct Relief and Sansum Clinic. He will pursue paths of cooperation and invention, looking beyond the territorial approach that appears to have been employed in the past by both the Water and Sanitary District boards. Having attended many water board meetings, he is intimately aware of the issues, and his extensive experience as an executive in the auto industry gives him a unique ability to consider diverse views and seek creative solutions to complex issues.

Apart from all of that, on a personal level, he is a truly good guy: thoughtful, considerate, and loyal; a devoted husband and father; and a wonderful friend and neighbor. 

Kaye Willette
David Willette

Montecito Water Board Elections

I am calling for significant disclosure of who, what, and how, in view of the serious nature of current and upcoming issues that have great impact on residents of Montecito.

I’m writing this letter as a concerned citizen of Montecito and as a member of the Montecito Association.

In the interest of full disclosure, I should also mention that I am a long-term friend of Dick Shaikewitz, who hopes to be re-elected to his current seat after serving for the last 12 years in various capacities on the Montecito Water Board. I have been made aware of the formation of a “Committee for Montecito Water Security” herein called “the group” that has raised a lot of money (reported to be in excess of $70,000) to elect members of that organization to the Water Board and replace Dick Shaikewitz as a board member.

The “group” has suggested that the current board has not handled some key issues in a manner consistent with the needs of the community and has made specific suggestions as to how certain key issues should be handled. As such, I believe it is extremely important that all parties to these issues and specifically the candidates for these important seats on the water board be aired in some kind of public forum, and at the earliest possible opportunity. Also, in the interest of public transparency, it should be known that the “group” employs the services of the current executive director of the Montecito Association. I believe that is problematic and must be considered as the Association gets involved in the situation.

So the stage has been set for a vigorous debate over the qualifications of all the various named candidates and the important issues on the table. The problem is that at this moment, no date or format has been set for such “outreach,” and the clock is ticking.

As I understand the situation, there’s a lot of money at stake in terms of proposed programs such as desalinization, use of gray water, et cetera, and all of it could come out of the pockets of the folks who know the least about the issues: namely, Montecito residents.

Therefore, one would hope that the Montecito Association will move this idea forward in the most expeditious manner.

Rick Feldman

For Woody Too

Candidate Woody Barrett summed up in his article On Sanitation why he has earned the votes of those of us following for decades our local and regional water-sewer challenges. Way too much time and money has been wasted by management staff comfortable with their status quo versus commitment to improving ours. Past expenditures without adequate accountability trouble me. Plus, it’s time for improved communication and cooperation between special districts to be better prepared.

Woody has the professional qualifications as a geologist and proven leadership skills we need. Moreover, Woody is known for his personal integrity, commitment to results, pursuit of facts, likeability, responsiveness, and business expertise.

Vote Woody!

Denice S. Adams

In Response to Ken Coates

It is frightening how little the three candidates sponsored by the Committee for Montecito Water Security (Committee) know about the Montecito Water District (MWD); or how much bigger your water bills are going to be if I’m not a member of the MWD Board to try to point out to them the problems with what they are trying to do.

There are five members on the MWD Board. It takes only three votes to pass any measure. The Committee was successful in 2016 in placing two candidates they backed on the board. They only need one more to pass anything. Why raise some $93,000 in campaign money to try to get me and two incumbents on the Montecito Sanitary District (MSD) off their boards?

Since 1972, the MWD has had outside consultants do 10 studies to determine if it made economic sense to use recycled wastewater. Many of these involved the MSD. The 10th was done three years ago. All these studies determined that it made no economic sense.

Last Thursday [September 20], the MWD Strategic Planning Committee (I am one of the two District members on it) held a meeting with the consultant engineer who is working on the 11th recycled wastewater $130,00 study. For the first time ever, all three Committee candidates came. The study looked at 30 different possibilities to use wastewater. As in the past none were good, but three might be looked at further. The one that might work best involved treating the wastewater at the MSD facility with new equipment, and then running purple pipes to the cemetery and Birnam Wood golf course. During the rainy season, pumping the treated wastewater to the golf club and storing it underground for use in the summer.

Sounds just like what the Committee candidates would like to do. But the cost could run to $26 million. When asked how much the golf club members would pay, the past golf club president indicated only a small amount. So this great scheme championed by the three candidates is for the MWD rate payers to pay a big chunk of the golf club’s water bill. Even worse, if in 10 years the state declares technology is to the point that wastewater can be used for potable drinking water, then the golf club may stop using this treated wastewater and pay nothing. Guess who will get stuck with having to pay it off? Would it surprise you that many of the committee members who raised the big campaign war chest are golf club members?

In the early 1990s, the MWD had a similar study done. It showed there is very little room to store water under the golf course. In normal or rainy times, little water would percolate into the ground. It would run into creeks. The engineer said that maybe things had changed since then, but he will let us know how much more it will cost to find out.

The committee and its candidates frequently refer to how terrible it is that daily 500,000 gallons of treated waste water go into the ocean. One acre foot of water (AFW) is about the size of a football field with a foot of water on it. It’s 325,851 gallons. So, about 1.5 AFW go into the ocean daily. Is that worth $26,000,000?

Even scarier, the committee candidates want to immediately close a deal with the City for desal. For four years we’ve been negotiating with them. Originally, if we were to get 1/3 of their desal water, they wanted us to pay 1/3 of all past, present, and future costs. But the contract would end in 20 years so that after we help them pay off their 20 years bonds, they can say, “Montecito, goodbye.”

Further, while only about 3/10 of the desal capacity would be used, if we wanted the ability to increase the amount of water, the City wanted us to pay thousands of dollars a year for an option. The City wants us to pay as though we’re a partner, but we have no ownership or control. Their last offer contains a 50-year contract. Our staff and theirs are still negotiating. Over 50 years, this contract will cost the District about 1/4 of a billion dollars. These uniformed candidates criticize our board for not hurrying and signing a City contract. They claim they would.

The committee and its candidates criticize the MWD Board for rationing, raising rates, having penalties, and an appeal process during the worst drought in California’s history. We did what almost every other district in the state had to do. We were criticized for not having more water stored. The uninformed candidates have no idea as to the cost of storing water in lakes or underground. The law is that if water is stored in lakes, and a heavy rain causes the lake water to spill over its dam, as frequently happened at Cachuma and San Luis, the first water lost is the stored water. If it’s stored underground, we must first buy the water, pay to move it to storage, pay a yearly storage fee, leave a percentage of the stored water at the storage facility as an extra fee, and then pay to move it back. It isn’t cheap.

Please, when you vote, consider putting the incumbents back in office. Someone needs to talk sense to the nice candidates who, unfortunately, have little knowledge about the complexities of what they are dealing with. If left to their own devices, they will cause your water bills to skyrocket.

Dick Shaikewitz

(Editor’s note: Well, maybe Montecito residents are simply fed up with a board of directors that casually and arbitrarily levied “fines” against its customers for accidental spills on top of the heavy cost of that lost water. I, for one, saw my water bill “skyrocket” because of an accident while I was out of the country, thanks to your policies. The heavy fine was particularly irritating because I’d removed my lawn and – working with a MWD engineer – replaced it with native foliage at considerable cost. It probably really is time for a change at MWD, but we’ll see how the voters feel come November. – J.B.)

Socialism is the Way

Jeffrey Harding suggested in his letter to the editor (“Best of Both Won’t Work,” MJ #24/36), that he only believes in his own economics data and fake history. And all “Liberals and Progressives completely ignore the laws of economics and historical record.”

However, an analysis of economic performance since World War II under Democratic versus Republican presidents shows that claims that Republicans are better at managing the economy are simply not true. Data show that the economy has performed much better during Democratic administrations. Economic growth, job creation, and industrial production have all been stronger.

In fact, a 2016 paper by economists Alan Blinder and Mark Watson states: “The superiority of economic performance under Democrats rather than Republicans is nearly ubiquitous; it holds almost regardless of how you define success.” Fact-checking groups have investigated similar statements and have found time and time again that they are true. Moreover, past research shows that stock market returns are also higher under Democrats.

The findings for private-sector job growth are even more striking: businesses have added jobs at a nearly 2.5 times faster rate under Democrats than under Republicans, on average. In fact, the private-sector job grown gap between Democrats and Republicans is even greater than the gap when including government jobs.

Economists generally tend to support policies at least as Liberals as the policies the Democratic Party supports.

Some examples:

71% of economists favor using government to redistribute wealth. In fact, the concept of the diminishing marginal utility of wealth is a very well-established and non-controversial economic principle. Even Adam Smith expressed the view that the government should redistribute wealth.

Only 12% of economists take the views that the costs of the stimulus outweighed the benefits, a view passionately held by nearly all Republicans.

75% of economists favor government tuning the economy with monetary policy, an idea often vehemently rejected by the Republican Party.

Zero percent – not a single economist in the entire sample – of economists agree with the central tenet of Republican fiscal policy that cutting tax rates would boost the economy enough to cause revenues to increase.

94% of economists support taking action to address climate change.

In terms of specific policies, economists consistently and overwhelmingly either support the Democrats’ policies or to be to the left of the Democrats. This stance on policy issues unsurprisingly translates into which party economists support.

So, a fairer characterization of this new global economic age isn’t one of relentless decline; it is one that acknowledges workers have been able to prosper and make gains, but that two recessions – one the second-worst in the past century – wiped out many of those gains. Or to put it another way, when the right policies and team were in place. Americans have been able to prosper in this new age. And the opposite has been true as well. Perhaps it isn’t globalization or bad trade deals that have caused the struggle of far too many of late, but policies and leaders not capable of navigating a vastly changed economic, demographic, technological, and geopolitical landscape.

The last two presidents who argued for aggressive military action abroad and regressive economic policies at home brought us recession, income losses, and larger annual deficits. Those who argued for investment at home, an embrace of this new global age and its opportunities, and a restrained multilateralism abroad saw long, sustained periods of growth, lower annual deficits, and rising incomes.

No matter how one looks at the data – by relying on the findings of economists, by looking at states level, or looking at federal data – and no matter which economic measure one looks at, the answer is the same: Democratic policies are performing better. And not just better, drastically better.

We have real data to guide us going forward. Americans have prospered and succeeded in this new age, and can do so again, but only if we follow policies that look far more like the Democratic than the Republican Party policies.

So when it comes to talking about the American economy in this new age of globalization, less pessimism, please, and far more attention to learning from and doing more of what has worked. Facts are facts and history is history, Mr. Harding.

Leoncio Martins
Santa Barbara

(Jeff Harding responds: Hi, Leoncio. It has been quite a while since I‘ve heard from you. You have been a long-time critic of my pro-free market articles. This time, you challenge my response to a letter from Robert Bernstein, who in turn was challenging my original article in the Santa Barbara Sentinel criticizing Bernie Sanders’s democratic socialism (“Bernienomics”). Robert thought we could blend socialism and capitalism, and I made the case of why that wouldn’t work (see MJ #24/36).

Your argument for why I am wrong is that the economy has done better under Democratic administrations than under the Republicans. You get this from a study done by Alan Blinder, a Princeton economist, former adviser to Bill Clinton, and a former Fed official. You also cite data that “most economists” favor government intervention in the economy. Your information was obtained from the leftist-oriented Politics That Work website.

I will address Professor Blinder in a moment. But first, my answer to your “most economists” argument is: so what? I concede that “most economists” are neo-Keynesian econometricians who favor government intervention. 

I say they are wrong. And, I believe they have been proven wrong on both theoretical and empirical (data) levels. I believe that government intervention has been the cause of most of our economic woes. I believe that capitalism has been a boon to mankind. And, it’s not just me: most free market economists agree. 

Because “most experts” say something doesn’t make them right. A few years back, “most scientists” attacked Darwin on his ideas about evolution. Most “experts” persecuted Galileo, Copernicus, and brethren. In Eastern Europe and much of Western Europe and Asia, “most intellectuals” thought Karl Marx, socialism, and communism were the inevitable waves of the future. We know how that turned out.

So, instead of making an argument that “most economists” think I’m wrong, it would be better if you argued specific facts, theories, and policies to support your belief that government intervention rather than capitalism has been the motivating force behind America’s prosperity. Then we could have a proper discussion.

Getting back to Professor Blinder and his study, “Presidents and the U.S. Economy: An Econometric Exploration” (an NBER Working Paper, July 2014) – I actually read it; you didn’t. If you had read it, you would have discovered that it doesn’t say what you think it says. 

Yes, he found a statistical correlation that “better” economic outputs occurred during Democratic presidential administrations. He then looked at these data and tried to explain the outcomes by examining certain events that may or may not have caused the differences. He concluded that the causes of the differences between Republican and Democratic administrations are mostly a mystery (page 36). He admits that luck may have the most to do with the outcomes (page 17), and that while “Democrats would no doubt like to attribute the large D-R growth gap to macroeconomic policy choices, but the data do not support such a claim” (page 35). In other words, there is no correlation between Democratic economic policies and the “better” outcomes. Thus, you are misinterpreting this study.

Leoncio, I believe what you are really trying to say, using the Blinder study, is that Progressive policies are superior to free-market policies. You can’t prove that, as Blinder admits. So, it gets back to specific policies and economic theories.

I will stand by my statement to Mr. Bernstein that socialism doesn’t work and it would be a mistake to adopt such policies. For example, wealth redistribution through various welfare policies hasn’t reduced poverty in America.

Without arguing the definition of “poverty,” despite Lyndon Johnson’s Great Society “War on Poverty” welfarism, and the trillions spent on those programs, poverty levels have not changed since 1965. According to the U.S. Census Bureau, the poverty rate has remained at 12% to 15% for more than 50 years. 

Please don’t tell me that we need to spend more or have better programs. Why don’t you admit that these programs don’t work, and that the only force that has raised the standard of living of all Americans is capitalism? – J.H.)


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