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"Write out of love, write out of instinct, write out of reason. But always for money."
Louis Untermeyer


The AARP: America's Most Powerful Lobby and the Clash of Generations

By Charles R. Morris
Random House, 286 pp, 1996

I checked this book out of the library because I wanted to learn how the American Association of Retired Persons grew to arguably the most powerful lobby in Washington, DC. 

Unfortunately, I didn't get much of an answer to that question, other than the obvious: old folks vote, and AARP reaches and communicates with nearly every old folk in the country. 

AARP's principal founder, Leonard Davis, established the organization in 1958 with Ethel Percy Andrus mainly as a marketing tool to sell health insurance to seniors. This was before Medicare, so there was a huge demand for insurance among the aged. By 1963, AARP boasted a membership of 750,000 oldsters and reaped huge profits for Davis, who not so coincidentally owned the health insurance he marketed. Davis created a series of companies and operated them under the Colonial Penn Group umbrella. That cozy relationship between AARP and Colonial, supposedly two separate entities, withered and fell apart as the media and other groups discovered how bad a deal Colonial offered. 

For example, by 1974, new competitor Blue Cross's insurance policy that cost a little over six bucks a month paid $92 per day for the first sixty days of hospitalization and $32 per day after that, in addition to skilled nursing home care after twenty days in the hospital. In contrast, the AARP policy that cost six bucks a month "paid no benefits for the first week of hospitalization, only $20 per day from the eighth through the sixtieth day, and $30 per day thereafter, with no skilled nursing home coverage." It was worse, though. Blue Cross paid out 93 cents in benefits for every dollar it took in, while AARP paid out only 62 cents in benefits for every dollar it took in. 

Davis and Colonial Penn loved this, of course. In 1976, Colonial Penn's revenues were a staggering $445 million, with nearly all of that coming from AARP members. And AARP was supposed to be a non-profit organization!

Well, AARP members finally had enough of this nonsense, lawsuits were filed, and in 1981 AARP opened its health insurance business to bidders. Prudential won it. Davis' money-making "relationship" with AARP and Colonial Penn was now history.

To its credit, AARP has learned from this, and now offers its members competitive policies. In fact, AARP offers its members a dizzying array of services and benefits, from the well-known travel and hotel discounts to health, auto, and life insurance and even sponsored mutual funds. 

I don't have much of a problem with this. My beef with AARP is political. They're basically a statist organization, lobbying for more and more subsidies to the elderly. AARP loves regulations and centralized government. I believe in neither. I believe in low to non-existent taxation. If AARP got its way, the working class would be earning peanuts because all of its money would go to someone else. I do not believe in such redistribution. AARP lobbies for it.

Morris devotes the rest of his book to the intricacies of the health care system, if it can afford to get bigger, if medical costs will continue to skyrocket, how Social Security and Medicare can be preserved forever (never once bringing up whether they should be around forever). He also humbly offers his prescriptions for reform, which, of course, will work if only the benighted politicians would listen, and nearly all of which are badly out of date and no longer apply.

Only the AARP part of the book interested me. I don't think government should run a retirement system or health care system. Social Security is essentially a pyramid scheme that would be illegal for a private person or entity to run. Morris doesn't even suggest this option, nor question where the federal government gets the authority to operate such enterprises (it's not in the Constitution).

Furthermore, he barely touches on the supposed "clash of generations." He implies that we should all be happy paying payroll taxes, and it's a good thing that money that we work for and stolen from our paychecks goes to someone else merely because they've aged. 

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