Miscellany: 9/29/09

Government-Run Health Care Plan Goes Down to Defeat in Senate Finance Committee


Two versions went down to defeat. The Rockefeller government-option plan, which would have consisted of Medicare-like unilateral prices, went down defeat to 15-8. All GOP Senators voted against it, as well as Democrats Lincoln (AR), Nelson (FL), Carper (DE), Conrad (ND), and Baucus (MT). The Schumer version would have involved negotiated fee structures. This vote was closer, with Nelson and Carper switching their votes.

As much as we conservatives are somewhat amused by a food fight among Democrats, the question of the federal government expanding its footprint in the health care arena is very troubling. Rockefeller's bashing of the private-sector health insurance industry is sheer demagoguery and politically unwise, given the fact that most private-sector policyholders like their plans; where you run into some issues is in dealing with catastrophic health costs, e.g., where a household with a $12,000 annual policy has a member whom is running up against a $2M limit. There may be ways of dealing with that, e.g., with some fee mechanism for government-guaranteed reinsurance. In terms of dealing with guaranteed issue, there are a variety of approaches, but one way is to build on state/regional assigned risk pools, where hard-to-insure people (with preexisting conditions and the like) are able to obtain to coverage for above-average (but more feasible) prices, in part subsidized by taxes on insurance premiums, a fairer way of sharing the cost burden of high-risk policyholders.

The last thing we classical economic liberals need from progressives is a lecture on the value of market competition. Who better than the government to judge costs and run an insurance exchange? Remember when, back in 1985, Lockheed billed the government $640 per each of 54 toilet covers for Navy planes, insisting they were making only nominal profits at that price? (The Lockheed CEO later revised the Pentagon invoiced price to $100 each, worried that this revelation would undermine more lucrative government contract proposals.) Even monopolies run up against the supply/demand curve; even OPEC realizes if oil prices get ahead of themselves--which is to their benefit--the result can be a severe global recession, which in turn means much lower oil prices. The point is, who is going to regulate the government regulators? I recently discussed the issue of regulatory capture, i.e., the very type of thing Thomas Jefferson was worried about with respect to a collusion between moneyed interests and the government.

Al Sharpton Makes an Appearance on WWE Raw: The Education Equality Project

There was method in his madness. Al Sharpton made a guest host appearance on the highly rated cable show, World Wrestling Entertainment's flagship show WWE Raw. The largely scripted show seems like an odd show for the long-term civil rights activist and former Presidential candidate to headline, but it draws a very high young adult audience. Al Sharpton promoted his website and his ongoing tour with conservative Newt Gingrich and Education Secretary Arne Duncan. As a conservative and as a former professor, I am passionate about education. And I know that young blacks and Latinos fall behind by the end of elementary school and barely half graduate high school. One thing is certain: the status quo doesn't deliver real change. Incompetent teachers and administrators give up on their students, refusing to challenge them to their real potential. Progressives have a number of "solutions" to resolve the problem--e.g., fight meaningful educational choices for parents and their children, reduce the failing local monopoly class sizes and raise the pay of tenured teachers and administrators whom aren't change, but more of the same status quo.

I know what it means to the Latinos with whom I went to college, many whom were the first in their families to go to college. I know what it means to African Americans; one of the interesting aspects of my campus visit to Grambling State, a historic black university, in 1994 was the fact that the college scheduled a session for me to converse with a group of students (this was unique in my academic job experience). But for each young man and woman who made it to college, there is at least another whom never made it and faces a bleak future, where he or she faces a future where a smaller number of factory jobs require functional literacy, higher-order cognitive and technical skills; it might involving changing jobs and careers in response to more rigorous global competition. We cannot afford another generation of teachers and administrators whom are simply at school to punch a ticket.

Why should a conservative care? A variety of reasons: domestic economic growth, global competitiveness, moral imperative, and social stability, to mention a few. We can't afford the luxury of another generation of students lost to progressive ideological groupthink. I admire Al Sharpton for being a progressive whom realizes meaningful reforms that work in the private sector, e.g., merit-based pay and managerial flexibility in personnel decisions and resource scheduling and promoting quality teachers, may be relevant, as well as meaningful educational choice, including independently run charter schools. I heartily recommend that the reader learn more about the Education Equality Project.

Pay No Attention to the Man (and Data) Behind the (Global Warming) Curtain

It seems that the fog clouding the global warming "hockey stick" hypothesis is finally burning off under scientific scrutiny. For a long time, skeptics have been trying to get access on study data behind the "hockey stick" hypothesis; it turns out that the research collaborators published in a prestigious journal that requires access to study data. The recent Watts Up With That blog post is a fascinating summary of scientific sleuth work (I recommend that the reader read the entire post at the link below the reproduced image, which is the original work of cited scientists, not myself). The familiar 12-tree sample red-line "hockey stick" below, presented as evidence of unprecedented "global warming", seems to diverge significantly from a related, larger pool of sampling data (black line below). What this seems to suggest is that the 12 trees were cherry-picked specifically (not randomly selected) to support the "hockey stick" hypothesis; under merger of the sample sets, we see a modestly higher result, but even Wayne "The Great One" Gretzky couldn't score a goal using that stick...

Image Courtesy of Watts Up With That, 9/27/2009

BOMC2 in the Tank for Obama

A few years back I was intrigued by a distinctive new spin on the concept of monthly book clubs, a variation on the business model from the Internet DVD rental market leader Netflix Netflix provides a vast library of movies and other DVD's products for a low fixed-price (including postage-paid delivery and return). Netflix works by shipping in chronological sequence available items in your preestablished, modifiable selection list up to your plan's quota (e.g., three DVD's at a time). Zooba applied a similar concept, with an all-inclusive flat price of $10/month for one selection shipped monthly from your preestablished book list. Several months ago, Zooba went through a name change, being rebranded BOMC2.

My personal tastes primarily run towards nonfiction books (especially history and health topics), but every once in a way I would check out their selections in politics and current affairs. I don't recall them carrying pop conservative titles (e.g., Ann Coulter, Glenn Beck, Mark Levin, Dick Morris, et al.) [There are other book clubs willing to accommodate your tastes for these titles.] But I do recall their once carrying a more ideologically balanced book selection, including Ronald Kessler's sympathetic first-term biography of George W. Bush, A Matter of Character. However, even I was surprised by BOMC2's decidedly ideological bent. If you go through their section of current event titles, you'll find Bernard Goldberg's observation of the media's slobbering love affair with all things Barack Obama in full force, along with the usual progressive critics of the Bush Administration, including the progressive's favorite economist, New York Times columnist Paul "Enron Consultant" Krugman. [Well, if you try, you can find CHRISTMAS BOOKS by Mike Huckabee and Glenn Beck and an economics textbook by black conservative economist Thomas Sowell. But nothing remotely critical of President Empty Suit Barack Obama.]

Musical Interlude

My favorite new single is the extraordinarily gifted pop vocalist Mariah Carey's remarkable cover and interpretation of the best song from the 1980's: Foreigner's "I Want to Know What Love Is":

Miscellany: 9/28/09 Post #300

300 Posts and Counting

I haven't done any formal comparisons with other blogs, but 300 posts over 14 months seems to be rather prolific. I had a very small number of personal posts (e.g., a nephew's wedding, a retrospective on my academic career, and a list of the songs on my Ipod Shuffle). To be honest, when I started this blog, I wasn't sure that there was going to be enough material to post an analysis or commentary 2 of every 3 days. Just a reminder that I have a second blog about diet and nutrition, which is experiencing its one-month anniversary; I'm not quite as prolific there (but one should never underestimate how passionate people are about what they eat...)

Discouraged Older Workers Filing for Early Retirement or Disability

An AP report notes that starting next fiscal year, social security will be in deficit  (i.e., next year's payroll contributions won't be enough to cover expected beneficiary checks) and start to draw down on the $2.5T reserve. Technically, so long as there are employees making payroll contributions, retirees/beneficiaries are guaranteed some payment. The problem is that with about 10% unemployment, and several others underemployed or discouraged workers not showing up in statistics, the trust fund is getting whipsawed by a fall in payroll tax revenues and an unexpectedly higher number of new applicants, as those, despairing of finding work anytime soon and at or near qualification dates, file earlier than intended, in order to get some cash flow.

I am not indifferent to financial hardship and the difficulty in finding work, particularly for older Americans, in the middle of the worst recession in decades. Plus, given the rules of a system that promised early retirement for people whom paid into the system into the system, I can't blame them for choosing what they have a right to do. (That really doesn't help people just a few years from retirement.) [I would be open to the concept of a  federally-guaranteed hardship loan, collateralized by cumulative social security contributions.]

However, the bigger issue is solving social security funding, and I'll never forget that Bush, flush off his reelection victory, wanted to resolve social security in 2005--and the Congressional Democrats actually booed him. What makes Obama's criticisms of Congressional Republicans for having no "constructive" alternative to his fuzzily-defined "health care reform" (translation: Obama's idea of  "constructive solution" is GOP capitulation to a Democratic plan) particularly hypocritical is the fact that when Bush put his political capital on the line to push social security reform, a sacred cow of American politics and the real use of "fear politics" of Democrats to bash Republicans for decades, the Democrats shot down the attempt, basically because Bush wanted young workers to have the option to control part of their contributions. (The paternalistic Democrats, fearing that young workers might not choose to invest in IOU's to cover the past bills of Big Government overspending versus real assets, assert that investing in American companies and workers is "gambling".)

So where did Obama put as his legislative top priority after the Democrats kicked the can down the road for four years on social security and Medicare? Well, solving the problem of 46 million people without health insurance, whether or not they choose to handle their own health care costs a la carte versus purchase a policy. [Well, you know, health insurance is an "entitlement"; Hippocrates needed to get approval from his patients' HMO's, and George Washington was excluded because of his preexisting war injuries. How did earlier doctors ever cope without all that paperwork? My guess: they spent more time with their patients...]  But Obama tells us under the current system, unpaid uninsured medical costs are already passed on the private sector--so the problem is the private sector needs to cover costs they're already covering? Why then isn't one of Obama's reform priorities dealing with hospital cost recovery from freeloaders?

Obama has said that he would like to approach social security reform next year. Well, I'm glad to realize it's on his to-do list. (But do you think he might first want to consider over $30T in unfunded Medicare mandates?) The only "solutions" I've heard from Obama have to deal with robbing Peter to pay Paul, i.e., punishing success. (There are various Democratic schemes to do this, from means-testing benefits [that's fair: arbitrarily taking away benefits from the people whom pay the most into a theoretically self-financing program]  to eliminating the ceiling altogether, effectively raising the tax rate on upper brackets to before the Reagan tax cuts. No discussion of modifying the nature of increases (e.g., to reflect costs of living), adjusting eligibility to reflect actuarial projections of lifespan, or diversifying/improving the internal rate of return on the reserve itself. Liberals haven't come to terms with the fact that even if you confiscate all the income and assets of the rich, you don't have the money necessary to cover progressive Democratic blank checks.

Health Care, Immigration, Wilson and Marte

I have a nuanced opinion on RI Hispanic Assembly Chair Ivan Marte whom resigned from his position (and the party) over the recent outburst from Congressman Joe Wilson (R-SC) directed at Barack Obama, whom said that Democratic proposals would not be funding health care benefits for guest workers (in particular, undocumented Latino foreigners). First of all, I do not like the health care reform debate becoming a proxy war over immigration reform. In fact, the law doesn't distinguish over national origin in a hospital providing emergency care. (I mean, if I experienced a critical health care issue while visiting a foreign country, I would hope I received due professional care under that country's health care system, no questions asked.) This is not only a question of individual dignity, but a matter of public health safety given a contagious disease. If a person is paying his fair share of insurance cost burden, he deserves to be covered with what his premium covers.)

I do not like the way the Republican Party (are you listening, Chairman Steele?) is handling these issues (of immigration and health care for foreign workers). It's important that the Party of Lincoln reflects those moral values of equal opportunity. I went to high school in a border city (Laredo, TX) and to a San Antonio college where most students were Latino. Years later, I was a state university professor in a different border city (El Paso, TX); in my Christmas Eve post, I mentioned one of my UTEP students, whom was Mexican--the only student in 8 years of university teaching whom ever invited me to a family celebration in honor of his graduation. My best friend at OLLU was a Latino, and I asked out a couple of Latinas while at UH. My personal experience has been very positive--very friendly, respectful, dependable, hard-working, church-going people, not asking for handouts but for an opportunity to pull their own weight. What many Angry Right and media conservatives have done is to implicitly paint a particular ethic group with a broad stroke, and the message is coming across as judgmental and harsh. My motivation is not one of pandering for Latino votes; it's one of doing the right thing. I believe that if you treat people with respect, the votes will work out on their own. I feel that Latinos whom have struggled to create their own business opportunity or whom hold traditional moral values will decide if a philosophy of victimization, a patronizing retread of slow-growth, bureaucratic European socialism, and progressive politicians (whom, by the way, do visit you every two years--around election day) whom have been throwing money at inner cities for decades without much effect, are more consistent with their own core principles.

That being said, Ivan Marte's disproportionate response to Congressman Joe Wilson's outburst (resigning various high-profile party posts and, in fact, the party) is a red herring. Wilson was referring to political games that Democratic Congressmen were playing on the issue--paying lip service as Obama did regarding benefits for undocumented workers in his Congressional address but refusing to put any enforcement dollars behind it--classic progressive doublespeak. Whereas I agree that Joe Wilson's outburst was unacceptable, so were the Democratic responses booing President Bush when he outlined social security reform a few years back (the basic difference was that Joe Wilson personally apologized for his bad behavior, but the Democrats, as usual, didn't).

Ivan Marte is really responding to Rhode Island Republican Governor Carcieri's 2008 executive order cracking down on illegal immigration, which was not well-received in the Latino community. Marte, who had also been appointed by the governor to the Republican Central Committee, was angry that Carcieri had not responded to his public relations suggestions to defuse the issue.

I do not think that Marte's position is reasonable. A governor's order to comply with national immigration laws, regardless of a foreign worker's home country, is legitimate, perhaps necessary. If Marte disagrees with national policy, he should run for Congress or the US Senate. The fact is that Marte assumed his assembly leader position AFTER the executive order. Either Marte has political principles relevant to GOP principles or he doesn't. That he would resign prominent leadership positions and his party over what any one person would say reflects questionable judgment; we expect elected officials to have a thick skin and to cope with difficult people. Carcieri suggests that Marte has not burned bridges with him, and Marte should reconsider his impetuous decisions.

The Chinese-US Tire Kerfuffle

Every once in a while, around the turn of the 1990's, I would catch the Arsenio Hall Show, and he would have this recurring bit called "things that make you go hmmm". Some recent comparative national-scale statistics recently caught my eye.

The fact that China, with over 4 times the population of the US, leads in exports is perhaps not that surprising; however, what does intrigue me is the fact that they have made huge strides from where they were, say 20 years ago, they did so despite a Communist government and expected issues with inefficient government meddling and still a significantly smaller GDP . What is more disturbing to me is that Germany, with just over a quarter of our population, also exports more.

The recent tariff war shows, once again, the ineptness of the Obama Administration when it comes to economic issues. Bowing to special-interest union pressure, the administration slapped a surcharge on Chinese-made tires. There is some basis for concern, given the way that Chinese tire exports to the US have quadrupled over the last 5 years, perhaps resulting in the loss of about 5000 US jobs; the ITC, responding to the US complaint, had a split verdict on the issue, with some members arguing an even higher tariff that Obama proposed. The Chinese are facing domestic pressure on their own end, with demands from citizens to respond by dumping US Treasury bond and its own tariffs on American imports; since then, China has recently announced tariffs against two American export categories, chickens and auto parts.

As a classical economic liberal (i.e., free trader), I dislike trade wars, because they are inherently anti-consumer and economically inefficient. I have not researched the US tire industry, so I can't comment on the specifics of why Chinese tires have grabbed more market share; presumably it is based on price. It would be difficult to analyze without a more specific understanding of the industry and the business model, e.g., it's possible that the Chinese managers are simply executing more efficiently and effectively, or it could be the market share is occurring at the lower end of the market which the major companies are ceding due to low margins, just like Detroit ceded the small car market to Asian producers. One thing is for sure: if the business model isn't viable, all we're doing, with a tariff, is postponing the inevitable--the American consumer isn't better served by paying an artificially high price for a set of tires. That takes away from customer purchases or savings and investment. When the Chinese retaliate against two of the sectors where we do have success in exporting to their market, it doesn't help the American workers in those industries.

Another interesting statistic is per capita income. What's particularly notable is fact that the US and Germany amounts are roughly equivalent (and several times that of China). That means that labor costs alone cannot explain our lagging competitive export performance. Germany is facing the same type of economic challenge from Chinese factories--in fact, by some measures, the US arguably has freer economy than either competitor.

Comments

What is the answer? How do we improve our manufacturing base? To a large extent, that question is beyond the scope of this post. I think in part we need to look at conditions making it possible for companies to succeed in the US--including a more favorable business tax and regulatory environment and a serious attempt to upgrade our infrastructure. Obama's attempts to increase American jobs by closing tax "loopholes" for companies that produce abroad is little more than an additional, counterproductive federal revenue grab. One has to understand the fact that there are a number of cost factors that go into a business decision to invest abroad (local tax policy being a major one). Transportation costs can be expensive; the costs of an American product sold overseas include this cost, which is a competitive disadvantage. Most companies are looking to establish a presence in China as a long-term play for a market of up to 1.3 billion consumers--not, as some labor unions allege, as an arbitrage to exploit wage differences and import their goods back to America (2006 statistics showed only about 10% of sales came back to the US). [There are other factors as well; Chinese can be more receptive, for the same reason as Americans, to purchasing goods and services employing Chinese nationals, and goods and services must often be tailored for local preferences, something even a fast food company like McDonald's recognizes.] Keep in mind that Chinese exporters also face the same cost disadvantage selling in the United States. You might think that an enlightened President might want to encourage nations, particularly those with lopsided trade surpluses, to invest in the United States, including her able, motivated American workers.

An enlightened President needs to insist government fiscal discipline, ensuring that businesses have sufficient access to investment capital and businesses don't have to worry about inflationary pressures. It means free trade agreements to open up more markets to American goods and services. It means reining in the anti-competitive nature of regulatory capture.

Obama does address the issue of corrupt, ineffectual government regulators, in his incessant complaints about "lobbyists". [He basically begs the question of whether there OUGHT to be government regulation, which comes at a hefty price tag,  whether (for example) the Fed Reserve and SEC worked effectively given their existing mandate before any increasing the scope of their responsibilities, and he conveniently sidesteps that the issue of lobbyists cuts both ways; why, for instance, were the two GSE's (Fannie Mae and Freddie Mac] contributing so heavily for Obama versus other senators? Why wasn't Obama more proactive about reforming the GSE's prior to last year's collapse?] But what Posner and other conservatives point to is that government regulation tends to be ineffectual regardless of the party in charge; what we should do is limit the scope of government regulation to what it can do effectively. Obama is putting the cart before the horse by expanding government regulation without addressing the fundamental criteria of effectiveness. Things like waiting periods before a government regulator can work for an industry company is only one tactic in addressing conflict of interest. One way we addressed a similar issue (with the justice system) was to consider lifetime tenure.

Another thing I think we need to discuss is immigration policy reform. According to 2009 estimates, the United States ranks 16th in rank of migrants per 1000 population. We need to look at immigration beyond the obsession on low-skill jobs; we need to attract more highly intelligent, motivated professionals, many of them attracted by the freedom in America--including an America that provides the economic liberty they crave to create their own business opportunity without a meddlesome government punishing their economic success.

I do share some concerns over the thinning out of our industrial base and a disproportionate reliance on any one external trading partner (e.g., China) or category of exports or imports (e.g., oil and gas).  At the same time, we have to understand we may be unable to compete as effectively where low-skilled labor is a commodity and is a significant cost factor in goods or services. We have to become super-aggressive in pushing for creative destruction technologies. I recall visiting a Baby Bell facility as a college professor in the mid-80's, and one thing pointed out was the shrinking number of operators. I'm sure for operators at the time, this was a traumatic experience; some twenty years later, customers were giving up their landline phones to do all their communication on cellphones, not to mention widespread access to Internet services: new businesses, new employment opportunities.

This is not to say government and unions are the only problems. We had a mortgage industry playing a game of musical chairs, writing gimmick loans to people without suitable collateral or even verified employment, gambling that they would pass on their risk to the secondary market before any foreclosure.  We have an auto industry which has been uncompetitive in terms of critical path in getting a new model to market, has a "not-invented-here" attitude towards alternative technologies (e.g., fuel hybrids),  and failed to address the predictable customer response to predictable high gasoline prices.

Finally, in terms of the trade imbalance and in particular the question of oil and gas imports: we need a President to be realistic in the short and long term. In some cases, the government can serve as a market-maker, by demanding fuel-efficient vehicles or deploying solar paneling on government buildings. But instead of focusing on punitive measures (e.g., implicit taxes via cap-and-trade), Obama could provide quick, decisive leadership on known domestic energy supplies and proven technologies--like oil shale development and offshore energy exploration, and rapid approval of nuclear power plants, hydroelectric dams, or geothermal facilities.

Beck, Coulter and McCain Derangement Syndrome

If the followers of Rush Limbaugh are called "dittoheads", then the fans of Glenn Beck or Ann Coulter must be called "doo-doo heads". I certainly consider Beck's latest book title ("Arguing with Idiots") rather oxymoronic. [Nevertheless, I give them credit for having resisted the siren calls of that Pied Piper of Failed Liberalism, Barack Obama, whom mesmerizes gullible childlike followers with motivational gimmicks, seductive promises of "not-out-of-your-pocket" painless reforms, relentless rallying cries against phantom scapegoats, and moderately-toned political doublespeak. As George Bernard Shaw adroitly observed, "A government that robs Peter to pay Paul can always depend on the support of Paul." [How did he foresee the rise and politics of the Obama Administration?]

Libertarian Glenn Beck had a recent headline-making interview with CBS' Katie Couric, where he admits that he preferred [my words] "Bosnia bullet-dodger" Hillary Clinton over "3AM goes to voice mail" Barack Obama, might have voted for Clinton over McCain (following Coulter's previous lead), and then, in an unforced, stupefying blunder, says that Obama would have made a better President than John McCain. [What is it about Katie Couric interviews, where she unwittingly makes high-profile conservatives like Sarah Palin and Glenn Beck come across like blithering idiots?] That's all we need: another sound bite for the media-savvy White House Propaganda New Media office. (I'm sure that Glenn Beck will now get solicitations from the fundraising group "Conservatives for the Reelection of Obama". No doubt they'll have a quorum call in a phone booth near the White House.) I haven't made the rounds of  the Angry Left websites like Daily Kos or the Huffington Post, but I'm sure that they'll gloss over what Beck really intended to get across and reduce it all to an "I-told-you-so" sound bite out of context.

In a manner of speaking, this is similar to Rush Limbaugh's earlier poorly explained faux pas about wanting Obama to fail; you know, when Limbaugh or Beck have to explain themselves (like Beck tried to do in his television show earlier this week), it's like a comedian trying to explain a joke (e.g.,Letterman's bad taste Alex Rodriguez joke several weeks back involving Palin's eldest daughter, unwed mother Bristol). We are talking about media professionals, many of whom have been on the air for years; they should know the risks of off-the-cuff remarks.

McCain Derangement Syndrome

Before getting to what Beck and Coulter really meant to say, let's first establish McCain's politics and why the media conservatives despise him.

As Beck pointed out in yesterday's broadcast, he agrees with John McCain on most issues. In fact, according to American Conservative Union lifetime ratings, Clinton or Obama voted against conservative positions over 90% of the time, while McCain votes the "right way" 4 out of every 5 votes. Why would any sane conservative prefer a progressive President, especially given a tax-and-spend Democratic-controlled Congress? The answer is, you don't; even Beck and Coulter recognize that, but they are trying to draw attention to themselves by making a larger point at McCain's expense. It's not politics--it's personal. Progressives, of course, are eager to "divide-and-conquer" their conservative opponents and aren't particularly interested in Beck or Coulter's larger point.

This has more to do with  McCain's bipartisan and populist streak--which, of course, Beck misleadingly distorts out of context. McCain, for instance, talks about being inspired by 3 former Republican Presidents--Lincoln, Teddy Roosevelt, and Ronald Reagan. With Teddy Roosevelt, McCain is primarily identifying with Teddy's military experience (note Roosevelt's attack on Wilson's foreign policy as weak--sound familiar?), his reformist streak and hatred of corruption (wherever it might be found--city party bosses, Big Business, Big Labor, etc.), his view of the government as modulating between extremes (e.g., McCain's bipartisan streak), and his emphasis on conservation.  There is no doubt that Beck is particularly aiming at Roosevelt's progressive politics (particularly towards the end of his Presidency), including a significant federal government footprint in the economy. However, in historical context, Roosevelt was responding to a number of scandals at the time-- not unlike the situation following the rash of corporate scandals earlier in this decade resulted in Sarbanes-Oxley.

It is true there are certain strong parallels between the two, including Roosevelt and McCain's support of campaign reform, their position on a fair tax burden for the middle class, their disdain for government waste and relevant cronyism, and McCain's attempt to rein in Fannie Mae and Freddie Mac after their accounting scandals. I personally believe that Roosevelt would have been shocked by the lack of transparency in the so-called "stimulus bill" and the omnibudget spending bill (along with several hundred earmarks), the lack of balance of power between the branches of government, an attempt by the Democrats to grab market share for the government in health care insurance reform at the expense of the private sector,  the hint of penalizing small business if they don't cover health care insurance (where large businesses have an unfair cost advantage) and/or tax bracket hikes affecting small business owners, the unprecedented federal deficits, and Obama's weak, vacillating foreign policy.

The ironic point of all this is that the Democrats last year attempted to portray McCain as a hardcore deregulator and scapegoated an alleged lack of regulation for the economic tsunami. McCain never really satisfactorily addressed these incompetent charges (and Palin seemed totally blindsided by the obvious question in a national interview and took a pass). Any reformer by nature is trying to regulate or modify regulations. Sometimes regulations have been economically inefficient--for example, in the past, we've had trucks or airplanes sometimes running empty one way because of arcane regulations; we had minimum commissions for stock transactions, far above brokerage costs. The problem is--regulations often outlive their usefulness, due to new competition, technological advances, etc., and aren't "intelligent enough" to adapt to the changing economy. McCain was justifiably proud of his part in helping deregulate obsolete restrictions that, in fact, cost ordinary Americans money in the form of higher shipping, airline ticket, stock transaction, and other costs.

As for Democrats focusing on Wall Street "greed", inadequate regulations on things like credit default swaps and the like: we need to point out that the New York Democrats, eager to promote a crown jewel of their economy, the financial services industry, were anxious not to fetter the industry from introducing and selling new products to compete in the global market, and President Bill Clinton had a hand in promoting and signing some long-overdue reforms into law. Congressional Democrats also participated in overview of the financial markets, Fannie Mac, Freddie Mac, and the like, and heavily pressured banks to make mortgage loans available to riskier lower-income people, including those without a traditional down payment. The point is, we had a collective partisan failure to address whether new products were comparably regulated to protect consumers, whether the use of derivatives for bank reserves was acceptable, whether mortgage-backed securities were properly diversified, whether GSE's Fannie Mae and Freddie Mac were buying too many risky mortgage notes, etc.

Going back to Beck and other media conservative critics: putting McCain in the same category as former GOP Senator Arlen Specter and the Maine senators (whom have ACU score in the 50% neighborhood) is intellectually dishonest. So is trying to identify McCain "progressive politics" with that of Obama and Clinton. If Beck believes that McCain is operating from the same principles as his Democratic rivals, or that McCain, with at least three times the Senate experience, a history of bipartisanship and much more extensive military and foreign policy expertise and experience, would be a "worse" President, he's in sore need of a reality check.

If Glenn Beck and Ann Coulter truly believe electing the most liberal President in the history of the United States presiding over Democratic-controlled Congress with huge majorities in either House is in the best interests of the United States, they are not true conservatives or patriots. Are they saying that they could not anticipate a spending spree by Democrats which may take decades to liquidate? Are they saying it's going to be easy for a Republican Congress to undo all the growth in the federal bureaucracy and burdensome regulations?


McCain Derangement Syndrome

The antipathy of media conservatives (e.g., Limbaugh, Coulter, Hannity, Beck and others) against McCain is due to his "sins"--his two floor votes against the Bush tax cuts, his advocacy of campaign reform, his compromise version of cap-and-trade, his support of embryonic stem cell research, his leadership in the Gang of 14, and especially his pursuit of immigration reform.

I want to discuss the latter point in particular, because as a pro-business conservative, I believe in immigration reform.  While the media conservatives focused on border entry issues and "rewarding" illegal entry, they've completely missed the big picture; There had been a functioning system for migrant workers until the early 60's, when labor unions forced a program closure. In addition, there is a phenomenon called chained immigration, whereby an immigrant is naturalized, relatives from their home country are given preferential treatment, at the expense of other, more qualified candidates (e.g., professionals, English-speaking, etc.) The grand bargain in 2007 between Kennedy, McCain and others was to limit chained immigration (to the immediate family) and increase the weight of merit-based factors (and also to reform an antiquated immigration quota system)--and a viable, legal visiting worker program. Obama and most Democrats opposed most of the concessions granted by Democratic negotiators, including limits on chained immigration, changes in merit-based factors, and (because of their union special interest group) any temporary worker program. Instead, the focus by the media conservatives has been on Republican concessions, which they have   provocatively termed as amnesty for illegal entry. One of the key motives for illegal entry is the lack of a viable, legal visiting worker program.

The effective nature of media conservative attacks on illegal immigration have given the Democrats a no-lose situation. The labor unions win from any crackdown on foreign-born workers, and the Democrats benefit from resentment of target ethnic group voters. In fact, since Pete Wilson used the immigration issue to win his last race as California governor, the GOP has routinely been shut out of statewide elections (with the exception of Governor Schwarzenegger), in large part because of overwhelming Latino support for the Democrats. How much did the media conservatives hurt McCain last fall? Unlike Obama, who undermined the compromise by trying to strike Democratic concessions from the bill, McCain made a valiant attempt to get immigration reform passed, and his reward, due to resentment from media conservative rejections of reform, was losing a significant market share loss of Latino votes from Bush's 2004 numbers.

If you are going to pick a fight over McCain, at least pick the right fight. The 2007 immigration reform bill, even if you opposed it, never passed. The 2001 and 2003 tax cuts were passed, despite McCain's votes against them. McCain/Lieberman cap-and-trade bill never became law.

The Real Motive/Strategy Behind the Beck/Coulter Critiques

Ann Coulter sees the problems that the Republicans faced while in power resulted from the sins of ideologically suspect Republicans, like John McCain; Ann thinks the proper strategy is giving the Democrats all the rope they need to hang themselves, preparing the way for a new generation of ideologically pure Reaganite Republicans. I do not know if Glenn Beck espouses a similar vision, but it's very clear they both question the authenticity of McCain's conservatism.

It's not surprising to see challengers motivated by ideological differences--for example, incumbent Presidents Truman (1952) and Johnson (1968) bowed out, while Carter (1980),  Ford (1976) and Bush (1992) received surprisingly strong primary challengers and eventually were defeated for reelection. More recently, Senator Joe Lieberman, former 2000 VP nominee, was defeated by Ned Lamont for the 2006 Democratic nomination of the Senate seat from Connecticut, largely due to Lieberman's hawkish views. (Lieberman subsequently ran as an independent and won.)

I don't think it's in the best interests of the American people to elect leaders whom are not flexible. And, in fact, I think most popular leaders have been flexible. For example, Ronald Reagan agreed, after he took office as California governor, to a state tax hike to balance the budget. As President, he agreed to an increase in payroll taxes to "fix social security", signed immigration reform legislation, and presided over huge federal deficits. Similarly, George W. Bush,  who scores highly among most media conservatives, presided over budget deficits and a huge increase in government operations and regulations, even when he had GOP control of Congress in 2003-2006, expanded Medicare with prescription drug coverage, advocated the ill-fated immigration reform--and then pushed one of the most massive federal interventions ever during last year's economic tsunami.

Yes, I know Glenn Beck will argue that he also criticized the Bush Administration. But the media conservatives are applying a double standard. I don't recall Beck arguing that Gore or Kerry would have been a better President.

Obama Foreign Policy: Four Years of Wandering in a Conceptual Desert?

Obama, that Pied Piper of Failed Liberalism, continues to flounder in a foreign "policy" that seems to focus more on appeasing American opponents, mollifying European socialist critics, and responding based more on political spin and short-term tactics than strategy and principle.

I started watching Obama's address to the UN yesterday morning and got so turned off by the rhetoric (been there, done that), than I switched it off. I am tired of his political manipulation and doublespeak; you know, what ever happened to leaving a little mystery and picking one's moments, less is more, etc.? We just came off one of the longest Presidential campaigns, and since January, it's like 24 x 7 all-Obama, all-of-the-time. He's giving speeches and  issuing remarks on virtually a daily basis. Now if he was actually out there, pitching specific solutions and taking the heat for unpopular ideas as a matter of principle, versus unrealistic goals, vacuous promises, condescending rhetoric, scapegoating his predecessor, and vacillating back and forth (e.g., whether to investigate the CIA, what to do about Afghanistan, etc.), I would respect him more.

[Note when I'm speaking of Obama not "taking the heat" for unpopular ideas, I am not discounting the fact that Obama's approval rating has taken a 20-point hit since the inauguration, in large part due to voter concerns about the unsustainable federal budget deficit, a dragging economic recession/recovery, and Obama's mishandling of health care reform. But to a large extent, Obama has been able to contain the political damage by playing good cop to Pelosi and Reid's bad cop, being misleadingly squishy on specifics (for example, hinting he might accept health care reform legislation without an unpopular public option, knowing that Speaker Pelosi vows that the House won't pass the reform without it), and maintaining  a pretense on a gullible public that he is open to bipartisanship and alternative ideas (e.g., medical malpractice reform). This is the same guy whom vowed at a Presidential debate not to sign a bill without earmarks (remember the omnibudget bill?), whom said that he wasn't interested in looking in the past (but whose Attorney General is investigating waterboarding incidents that occurred over 3 years ago), whom talked transparency during the campaign but pushed for quick passage of bills without an adequate review period, and whom has expressed a willingness to use a budget reconciliation process requiring only a simple majority vote to push through health care "reform" which would be an unprecedented abuse of power on major policy matters, rendering the compromise-empowering filibuster meaningless.]

[Take, for instance, the way he approached the so-called stimulus bill. He had really delegated details to the Congressional Democratic leadership, but was pushing the plan even before it was hammered out. His manufactured "crisis" resulted in less than 10% being spent in the first 6 months, and the final bill turned out to be, in large part, not the much-vaunted overhaul of a crumbling infrastructure (never mind the wildly exaggerated Keynesian multiple justification), but Democratic spending priorities, not directly related to the slumping economy, and a bailout out of a number of fiscally irresponsible states, like California, which had expanded spending and gold-plated employee benefits and pensions, with no rainy-day fund and now were looking to Uncle Sam for handouts. How about state Democrats accepting political responsibility for their reckless, unsustainable spending sprees? But getting back to Obama: what he was doing was NOT leadership; it was evading the tough questions, cheerleading (not coaching) from the sidelines and taking full credit for whatever resulted.]

The Obama UN Address

Obama went before the UN Assembly and (of course) started saying the same old, same old. The usual political doublespeak he's repeated time and again, denying exactly what he's saying: he claimed he was not there to apologize for America, a reference to his recognition that his "apology tours" are not playing well with the mainstream center-right nation. But then he pompously takes credit for banning "torture" on his first day of office and for his decision to close Guantanamo Bay. First of all, he's tacitly accusing the Bush Administration of carrying out torture. That's simply not true. Whereas waterboarding by any definition is an unpleasant experience, it does not meet the general criteria for torture under our international obligations.

We know what real torture is; progressives, like Obama, are implicitly trying to equate waterboarding with these examples during the Saddam Hussein regime:

Hussein's regime has also invented unique and horrific methods of torture including electric shocks to a male's genitals, pulling out fingernails, suspending individuals from rotating ceiling fans, dripping acid on a victim's skin, gouging out eyes, and burning victims with a hot iron or blowtorch."

The following, according to the State Department report, were routine in Iraq during Saddam Hussein's rule: medical experimentation; beatings; crucifixion; hammering nails into the fingers and hands; amputating sex organs or breasts with an electric carving knife; spraying insecticides into a victim's eyes; branding with a hot iron; committing rape while the victim's spouse is forced to watch; pouring boiling water into the victim's rectum; mailing the tongue to a wooden board; extracting teeth with pliers; using bees and scorpions to sting naked children in front of their parents.

And let us remember, when it came for the liberation of Iraq, Barack Obama didn't want regime change; he preferred "more of the same" from Saddam Hussein.

But even disregarding this, let us recall that we are talking of a procedure that was applied to just 3 of several hundred prisoners, all highly-placed Al Qaeda operatives--the procedure was targeted just at people in the know, and it was done solely to obtain actionable intelligence, not to punish the prisoners. Other methods of interrogation had been attempted in good faith; some usable information was obtained through this procedure; and the CIA director already had discontinued the procedure YEARS before Obama took office. So what exactly did Obama do that, other than, like the late Senator Ted Kennedy, smear the reputations of intelligence officers by implying a moral equivalence between the nature and extent of what the Hussein regime did to innocent civilians and what happened to select terror suspects under the Bush Administration.

But, moving on, Obama seemed to confuse a UN address with one of his own political rallies, complete with red meat for the Angry Left. There was another Big Lie that America "acted alone" in its foreign policy; other countries, especially Great Britain (which experienced post-9/11 attacks itself), were involved with operations in Afghanistan and Iraq. The Bush Administration did attempt to work through the UN before taking action on Iraq; it was involved with other parties in dealing with Iran and North Korea and sought a Middle East peace between Israel and the Palestinians. At least Bush made it clear where he stood on political principle; Obama seems to be obsessed with image and inconsequential issues.

Take, for instance, Guantanamo Bay. That was another one of Obama's proud "accomplishments" (in announcing the intent to close it down; never mind the fact that he was closing a perfectly usable, state-of-the-art secure facility  (after, why should you care about cost when you're already running a $1.8T deficit?), simply for symbolic, not substantive purpose, without even checking to see if other countries would take the prisoners and/or our own homeland secure facilities had available capacity of handle them. Of course, many of the prisoners' own home countries don't want them back--or Obama doesn't want to give them back to home countries, like China (is it possible that Obama thinks the Chinese government is cut from the same cloth as the CIA "torturers"?)

Obama makes it clear just what he prioritizes in terms of what, how and when he says it. On what other country's set of high priorities is the criticism of the treatment of 3 high-value terrorists shortly after the worst terrorist attack in the history of this country? What about the worst global recession in almost 20 years? What about trade protectionism, the war on terror, the vulnerability of the global economy to limited supplies of oil and gas exports, growing threats of piracy on the open seas, or rogue regimes threatening to ignite nuclear arms races in the Middle East and eastern Asia? I'm not saying Obama didn't eventually touch on some of these substantive issues, but why is it necessary to first implicitly throw his predecessor under the bus, not to mention essentially apologizing for his nation's economic, military and international leadership and a foreign policy based on its own interests (just like every other nation does)? [He SAYS that he is not apologizing, but that is EXACTLY what he is doing. Lip service for purposes of political cover is little more than a state of denial.] Why is a President of the United States  treating diplomacy as merely an extension of interpersonal dynamics on a national scale and condescendingly lecturing the rest of the world on how big nations shouldn't bully smaller nations and other gratuitous "insights"? Enough already of all these apologies for being the leader of the most powerful, influential nation in the free world...

Are we really going to have to endure another 3 years of this meandering, convoluted, unfocused pretense of foreign policy?

Miscellany: 9/21/09

WWJD?

Obama seems to want to know what JC would have done. No, not Jesus Christ, but Jimmy Carter. Their energy policy seems to consist of asking Americans to lower the thermostat and wear sweaters, their foreign policy seems to revolve around Iran and Afghanistan, their Democratic-led Congresses seem to be acting independently of them, and their economic policies seemed to be based on a core belief in Big Government, large federal deficits, and stagflation. Question: how long do you think it will take for the 2012 GOP Presidential contenders to reprise Reagan's effective campaign use of the "misery index"?

Serena Williams' Outburst

Defending US Women's Singles Champion Serena William foot-faulted to bring her semi-final opponent Kim Clijsters to match point. (From the television replay I saw of the disputed serve, I agree with the line judge's call.) There does appear to be an informal code of sorts in hard-fault professional sports contests (in particular, basketball) not to let the outcome be decided on a technicality. (We often see a similar concept in criminal cases where highly relevant, damning evidence is artificially excluded because of some legal technicality over how the evidence was obtained, that the policeman or detective didn't mind his p's and q's. I personally don't agree that the interests of justice are served by putting society at risk because of a training issue or an error in judgment. The law officer and/or his supervisor should be admonished or sanctioned, not society.)

Serena Williams did not react well and at least twice started moving towards the diminutive line judge, pointing at her both times, yelling at her in a threatening and abusive manner. This is simply unacceptable behavior. What she shouted at the judge was not audible in the clips I've seen of the incident, but according to news reports, she said, "If I could, I would take this ... ball and shove it down your ... throat and kill you." The match at that point ended, with a match point penalty on the code violation for unsportsmanlike contact. Correct, but not far enough, in my opinion, because her subsequent fine was mere pocket change. Incredibly, she was allowed to compete later in the women's doubles finals with her sister, splitting the $400+K first prize. Personally, I would bar her from participating in next year's tournament.

I'm annoyed by some of the other reactions, including predictable knee-jerk feminist reactions of double standards pointing at prominent examples of male unsportsmanlike conduct. (Most men deplore unsportsmanlike behavior by anyone, and we do not look kindly at muscular athletes, nearly a foot taller, bullying a physically mismatched, defenseless referee over a professional decision.)

As for tennis bad boy turned commentator John McEnroe, and his defense of Serena Williams ("say it ain't so, Joe John"), I have been waiting 20 years to say this: "You cannot be serious!"

Lost in the controversy is the accomplishment of Ms. Kim Clijsters, whom came off a 2-year leave of absence during which she had her first baby to win a major Grand Slam event in one of her first tournaments: congratulations! What a magnificent example to set for her beautiful little daughter and an inspiration to mothers and young women everywhere!

Prosecution of CIA Over Interrogations

Here's an opinion on which I may disagree with other conservatives, and where I seem to agree with former US Attorney General Alberto Gonzales: on having an open mind in terms of Eric Holder's consideration of prosecution of certain CIA personnel over the enhancement interrogation techniques applied to 3 high-value Al Qaeda suspects.

It all depends on what current Attorney General Eric Holder is doing and how he's doing it. It's one thing to prosecute misconduct one comes across during the normal course of events. It's another thing to prosecute based on a politically-motivated agenda resembling a Banana Republic-style post-election witch hunt. There were some disturbing suggestions that Bush Administration lawyers might be targeted because they issued good faith opinions saying that a limited, supervised version of waterboarding would not have violated more general criteria of torture under our international treaties; differences of legal or political opinion are not criminal acts. You couldn't fault policymakers acting on the professional judgment of Administration lawyers. You couldn't blame CIA management for carrying out policy, or CIA personnel whom carried out authorized interrogation techniques.

On the other hand, I'm concerned about allegations the technique was used on a recurring basis, up to several dozen times. Without knowing details, e.g., the timing and significance of actionable intelligence relative to number of interrogations, it seems difficult to believe an effective interrogation technique would require an indefinite number of failed applications. But that's more of a question of the effective management of interrogations, not a matter of legality, provided interrogations followed established procedures. What would be a question of misconduct or criminal behavior would be behavior contrary to policy (e.g., if interrogations took place without any required witnesses or the procedure was applied longer than allowed during any particular event), if CIA personnel obstructed justice or violated other relevant US laws.

I'm willing to give US Attorney General Eric Holder the benefit of a doubt, because I was not a witness to any relevant events and I do not what is motivating the inquiry. If, however, he is engaging in a witch hunt, if he is applying some sort of white glove test, trying to find some legal technicalities on which to prosecute people involved in politically incorrect interrogation techniques, it would be an unconscionable abuse of power. Obama and Holder are walking a very thin line here; some 7 former CIA directors have written to the Obama Administration, opposing this inquiry, and the inquiry could result in morale issues with CIA personnel. This had better be motivated by more than Obama Administration window-dressing to appease the Angry Left.

Health Care Miscellany: 9/19/09

Santayana: "Those who cannot remember the past are condemned to repeat it"

Dr. Russell Blaylock, a neurosurgeon and nutritionist, publishes a monthly wellness newsletter. His September issue addresses some salient issues relevant to the current health care reform debate. One of the things he discusses, in response to current Democratic proposals for health care "reform", is the "same old same old", "been there, done that" arguments and justifications that were used to sell Medicare and Medicaid, including the idea that the programs would be self-financing from all purported cost savings from efficient public sector management, improved accessibility and quality of health care, etc. The costs quickly spiraled beyond control and the best Democratic projections, and the "trust me" cost savings never materialized, with trillions more in unfunded mandates.

[Yes, that's right: we have $36T in unfunded Medicare costs, but Obama and the Democrats have decided that the "real" cost issue that needs to be resolved is the 46M uninsured, many of whom have above-average income and can afford household coverage but elect not to do so. Of course, the Democrats prefer to lecture the GOP on the billions spent in the War on Terror. Some estimate the costs of 9/11 at $2T; I would argue that the money managed by the Bush Administration in keeping the homeland safe from a follow-up attack was a proactive, preventive investment.]

Blaylock notes that before the historic government expansion into health care, doctors typically had not shut their doors to elderly or poor patients based on a limited ability to pay for services. Today we see the same thing; perhaps the programs are better in terms of improving coverage of doctor and hospital costs by elder patients, but typically the costs are subsidized by other patients (with private-sector health care insurance or whom pay directly for services). Am I the only skeptic when the Democrats suddenly "discover", after decades of "managing" Medicare and Medicaid, significant "cost savings", just in time to "pay" for their next expansion of government-run health care?

"We Need to Solve Health Care Now..."

Democrats are trying to manufacture a sense of crisis and emergency; they point out that health care costs account for about 16% of GDP. That hardly seems to be a compelling argument. From a cost perspective, one can argue tax and regulatory burden and an unprecedented federal deficit and national debt are a far more compelling crisis, one more directly controlled by politicians. A failure to control debt will inevitably result in higher interest rates and inflation, which will not only aggravate health care costs, but costs across the economy and destroy jobs in the process (and the tax revenues that income brings).

When the average American voter hears that we can get something for nothing--add 46 million people to government-run insurance at no net cost to the American taxpayer in the middle of a recession--he or she instinctively remembers the adage "there ain't no such thing as a free lunch".

The only real crisis is the Democrats' recognition that their legislative majorities may shrink in upcoming elections and they may need to resort to real compromise.

Does that mean that real reform is not possible? Of course not; a number of tweaks are possible. The Democrats could follow the conservatives' lead in addressing things like the 18% cost disadvantage of small businesses, providing mechanisms for small businesses to band together and self-insure across states, like big companies currently do. The Democrats could follow the conservatives' lead in strengthening state/regional assigned risk pools, which try to spread high-risk/cost policyholders in a fair way among insurance writers. The Democrats could follow the conservatives' lead to increase the number of doctors by streamlining the government footprint in medicine and ending abusive lawsuits through medical malpractice tort reform. The Democrats could follow the conservatives' lead to increase competition by deregulating the marketing of health insurance across states and/or allowing insurers to write barebones basic health insurance coverage in any state. The Democrats could follow the conservatives' lead in achieving equal protection of tax-advantaged health care by allowing individuals to pay for their own selected insurance option through their place of work or providing individual households tax credit vouchers applicable to federal or state-approved policy premiums.

My concern, though, is that Democrats will try to handle things by fiat, e.g., price controls or payment schedules (regardless of underlying costs), bureaucratizing medical care under euphemistically termed "best practices" (an inherently corrupt process whereby Big Government attempts to micromanage medical decisions under the pretext of cost control), etc.

The 80/20 Rule: Why a Government-Run System Means Rationing

Almost any beginning MBA student comes across what is called the 80/20 Rule (sometimes known as the "Pareto Principle" or Juran's "vital few and trivial many"). This manifests itself in a number of ways; for instance, a relatively small percentage of individuals and businesses accounts for the most tax revenues.

As Dr. Blaylock notes, about 5% of patients account for about 50% of the health care costs (and, of course, a lot of these expenses occur near end of life). One of the reasons that Sarah Palin's pithy assertion of "death panels" seems to connect with a lot of people is because of the inevitable attempt to control related cost-intensive treatments (e.g., life support systems). Does anyone doubt that a government bureaucrat, given one spot for hip replacement surgery and two candidates, a 20-year-old and a 60-year-old, might figure that a 20-year-old, with maybe another 45 years of tax-yielding income, should be given the spot? That's why a number of senior citizens are concerned over things like the proposed slashes in Medicare reimbursements to doctors. Do you honestly believe that progressive doublespeak bureaucrats won't lobby elderly patients to consider "quality of life" issues in making personal health decisions?

Personal Accountability?

One of the things Democrats routinely overlook is the importance of the individual when it comes to health care spending decisions... Dr. Blaylock notes it in terms of how many hospitals and doctors today see patients over minor issues that many households in earlier generations handled on their own or a questionable proliferation of vaccines and other preventive measures. John Stossel of 20/20 did a critical expose of an exclusive senior citizen community in Florida, noting frequent doctor visits (and goodie bags), questionable prescription drugs like Viagra, etc. One of the nurses working in a similar facility posted on the related page, saying a certain procedure, normally requiring authorization from private-sector carriers, did not require Medicare approval and was all but a license to print money.

When you start seeing certain insurance companies on TV promising diabetics that they'll handle all the paperwork for medical supplies, provide free delivery, and not a dime will come out of their pockets, or some wheelchair company promises no out-of-pocket costs and guarantees qualified customers with mobility problems to cover the costs of their wheelchair if the government or their insurance company denies their claim, there is reason to be concerned: the rest of society has to put up with bureaucratic nonsense or to pay modest shipping costs for things we want to buy. [I'm not making a judgment about these companies' products or customer service; I'm more concerned about the concept of "no-cost" medical products and services in the status quo, whereby the customer has no  incentive to shop for better wheelchairs or diabetics are not encouraged to consider less costly alternatives.]

The point is, we need insurance to be insurance--to handle the big, unexpected costs, e.g., an auto accident involving damage to property and/or severe medical injuries. I don't need to see a doctor over a common cold or if I scrape my knee; I don't need insurance to dispense vitamins and supplements, condoms, etc. I take a thyroid generic medicine that costs less than $10/month, even without prescription coverage. Many effective generic medicines can be handled out of pocket.

The Republicans have provided one policy mechanism to provide a natural incentive for insurance policyholders to be more frugal in their use of medical products and services: the tax-advantaged health savings account used in conjunction with a high-deductible health insurance plan. The health savings account can be used to cover basic out-of-pocket incidental medical expenses.

The Democrats can speak all they want over these phantom savings, but they need to look at the situation in terms of individual responsibility and incentives. Take, for instance, the question of obesity. Instead of paternalistic progressives trying to regulate food products and preparation methods or penalize obesity, it is time to provide things like tax incentives (e.g., tax credits for fitness center membership and utilization or staged tax credits for sustained weight loss), insurance premium "good health" discounts, and improved information on health care services and products, weight loss scams, etc.

Lack of Transparency of Health Care Costs

One of the problems that the informed health care consumer faces is an unusable flood of paperwork (say, an outpatient procedure), invoices with discounts ranging up to 90% off posted list prices (e.g., for blood tests), etc. It's almost impossible for the consumer to cross-validate costs; when you ask for bottom-line estimate, you might get an  evasive response like "can you put a price on your health?", "why should you care? the insurance company is handling it" or  "the world is complex".  In the business world, and health care is like any other business in terms of having revenues and costs, we don't give an auto repair shop or a construction contractor a blank check.

Hospitals and doctors are correct to point out that price is only one factor to consider (experience, medical school attended,  board certifications, reputation, etc., should also be taken into account), but let me give an example. About 8 years ago, one of my younger sisters, a registered nurse, and I (living in different cities) decided to have Lasik eye surgery. I think she paid over $3000 for the procedure, opting to have it done under a surgeon with thousands of relevant procedures. I did it for maybe half the price by a surgeon with 800 procedures under his belt in a practice headed by a more senior surgeon and have been very pleased with the results. The point is, if someone is going to have a procedure, potentially causing thousands of dollars, and there is a good quality hospital a couple of hours away by car can perform it for 40% less money, the health care customer should have access to that knowledge.

The Slippery Slope Argument: Where Does the Nanny State End?

I generally take a dim view of people using a sophistic comparison between auto insurance and health care insurance in terms of mandates. For one thing, driving a vehicle is a privilege, not a right. A person should be responsible for what happens when he or she is driving a car--which has the capability of causing severe injury or death to pedestrians or occupants in other vehicles and/or property damage. Health care, on the other hand, is a necessity of life, just like food and shelter. We have the need for a variety of goods and services without requiring proof of insurance. 

Why should we care if billionaire Bill Gates has a health insurance policy to cover his costs or if he puts his hospital charges on a credit card or pays cash?

I'm more nuanced in my approach to the consideration of mandates. I do think there should be a way of spreading catastrophic costs (e.g., the 9/11 tragedy, birth defects and catastrophic illnesses, etc.), and I'm empathetic to the concept of requiring some form of financial responsibility or user fee to cover emergency services (which would satisfied by proof of insurance). However, I don't think we should be forcing people to subsidize, say, Massachusetts' gold-plated mandates or any state regulations effectively allowing uninsured ill people to transfer their health care costs to those buying insurance in good faith. I'm also very concerned about the tyranny of government bureaucrats, unaccountable to voters, raising costs by fiat.

What we need from the public sector is more respect for the individual taxpayer, including improved information for health care transactions, and less regulatory granularity/more flexibility for doctors and businesses to achieve policy objectives. What we do not need is bureaucratic inertia standing in the way of early adoption of creative destructive information or health technologies or innovative therapies with the promise of radical cost savings.

Miscellany: 9/18/09

Obama is RIGHT About Kanye West....


Talented teenage country singer Taylor Swift won a coveted award for Best Female Video at the recent VMA event and was delivering her acceptance address, when singer Kanye West took the mike from her to make it clear that in his pompous judgment, one of Swift's competitors, R&B singer Beyonce Knowles, deserved the award instead. (I don't think I've ever seen an award presentation hijacked before.) It is painful to watch the heartbroken reaction of the tall, beautiful blonde; you just want to reach through the television screen, wrap your arms around her, and comfort her, reassuring her of her worthiness as a recording artist and the quality of her work. But later in the evening Beyonce Knowles, in an extraordinary spontaneous display of sportsmanship and character, took time during her own unrelated acceptance speech to invite Taylor Swift back onto the stage. [I was not surprised by Ms. Knowles' grace and generosity. My favorite music video is the late Luther Vandross' "Dance With My Father"; one of the most charming vignettes during the video features Beyonce dancing with her dad.]

Barack Obama, in an off-the-record comment, when asked about Kanye West's rude interruption, called him a "jackass". I have a number of disagreements with the President, but I think in this case he was spot on. Most young people start out like Taylor Swift, admiring veteran professionals as role models. To win a major award for the first time--and then hear someone you respect professionally trash your efforts in front of you and millions of other people is a real-life nightmare. Of all people, Kanye West should know that; he was once in Taylor Swift's position of receiving an initial external validation of his professional efforts. [Kanye West, perhaps mindful of the negative live audience reaction, has appeared on Leno's new talk show to apologize for his reaction, but there are no do-overs in life; Taylor Swift will never again have her initial moment in the sun. I do give Leno credit for asking exactly the right question everyone in America wanted Kanye to answer: What would his beloved late mother have thought of his behavior?]

Does that mean I agree with music award winners? Certainly not. I have no problem for Kanye West having a different preference for the category in question, but there's a time and place for expressing it without raining on another person's parade. I still can't believe the 1975 Oscar for Best Original Song went to "I'm Easy" versus Diana Ross' lustrous "Theme from Mahogany", and I once got into a heated argument with my favorite cousin over the 1977 Grammy for Best New Artist (How on earth could they choose Starland Vocal Band, a one-hit wonder, over one of the best rock bands ever, Boston?) [Of course, probably the very same geniuses followed up the next year putting one-hit wonder Debby Boone up over another of the best rock bands ever, Foreigner.] While talking about awards, I still think that Steven Spielberg was robbed at the 1982 Academy Awards: "E.T. the Extra-Terrestrial " should have won Best Picture.

ACORN Doesn't Fall Far From the Tree

Vote fraud under investigation in several states involving the community organizer group ACORN doesn't phase the Democratic Party (primary beneficiaries of ACORN's efforts). After all, paying someone to supply voter names, regardless of their validity, is rather like certain unethical doctors or businesses exploiting anti-fraud deficiencies in the Medicare/Medicaid payment system. "No harm done", insist the shameless apologists. "After all, they got caught, didn't they?" [The next thing you know, they'll be handing out gold stars to plagiarizing high school and college students for doing a public service in keeping teachers on their toes!] For a party largely priding itself for protecting workers and attacking business management for greed and corruption, the Democrats see no consistency problem in throwing flagged ACORN employees under the bus and in refusing to hold organizer management responsible for inadequate quality controls and supervision and dysfunctional compensation policies. In fact, the Democrats have continued to insist on rewarding ACORN management with millions in taxpayer money, growing that ACORN into an oak tree. But if you examine the tree closely, the bark crumbles to the touch and small branches break off--the tree is dead, rotten to the core.

It looks like ACORN has finally had its day of reckoning, done in, as Jon Stewart humorously puts it, by the underground investigation of a couple of cast members of "High School Musical 3" (i.e., not by The New York Times or 60 Minutes); I guess voter fraud in several states isn't a big enough story; no doubt the liberal mass media journalists felt that the same management that allows voter fraud to flourish was, no doubt, more competent and vigilant in other domains as well...

Both Houses of Congress this week, in a rare bipartisan moment, stripped ACORN funding, no doubt prodded into action by the incident Jon Stewart references above, whereby a couple of young adults in the posed as a pimp and a prostitute and went to ACORN Housing in the metro DC area, looking for facilities to set up a brothel. In essence, they were advised on how to window-dress their operations to work around the law. Hearing stories of ACORN personnel helping enterprises deploy underage Latin American prostitutes is nauseating.

The Fed Reserve Implementing the Politics of Envy

The Fed Reserve, aided by new Obama crony Daniel Tarullo, is looking at expanding its reach into compensation practices, potentially affecting thousands of bank employee pay, something I regard as an abusive violation of equal protection and which involves the same type of stealth abusive executive power grab, without Congressional advise and consent under our Constitutional balance of power, as Obama's unconscionable proliferation of unaccountable czars. Picking winners and losers allows other companies (maybe even foreign-owned) to poach the best and brightest, the Fed unfairly depriving them of the fruits of their labor. If the Fed is legitimately concerned with issues of risk, it should focus on more relevant issues, including the proper securitization of loans and the nature and extent of reserves; it should not be in the business of sanctioning success.

The Obama Missile Defense Decision: A Critique

The Obama Administration once again acts in mysterious ways. It's not clear why Obama would unilaterally deal away away a bargaining chip like the missile shield bases in Poland and the Czech Republic without winning any material concessions from Russia or Iran. I can only speculate how our allies' leaders, whom had take political risks in supporting the politically unpopular relevant missile sites on their territories, must have felt swerved.

Obama speaks with no credibility on national defense issues. We already know how he fought tooth-and-nail against the highly successful General Petraeus' anti-insurgency policy and waited until after he secured the nomination last year to make his first appearance in the area. We know how Obama during the Democratic campaign promised to deeply cut military research-and-development. We know that when the administration went looking for a lip service of $17B in cuts to Democrats' super-sized trillion dollar spending, the military budget took a disproportionate hit.

The new staged approach initially focuses on  mobile, sea-based systems aimed at containing lower and intermediate-range Iranian missiles; second-phase long-range missile land-based systems are deferred to a future date. The justification for a staged approach is based on a revised intelligence assessment that the Iranian long-range missile threat is not imminent.

Perhaps Obama trusts the intelligence he has been given on Iraq and other rogue nations' (e.g., North Korea) development of nuclear weapons and relevant delivery systems and feels confident that he can punt the question of land-based systems down the line for some other President to deal with. [That's leadership for you; isn't that what he's doing in dealing with the humongous federal deficit? But surely we can understand Obama's willingness to scrub the results of Bush Administration negotiations with our east European allies based on intelligence agency assessments; after all, the Western intelligence agencies did such a great job analyzing Hussein's WMD programs.] I'm more risk-averse than Obama apparently seems to be, i.e., if I'm wrong about the time frame for risks posed by rogue nations or terrorist groups, we are being proactive; if Obama is wrong about the time frame, the people and cities of the United States and her allies may pay a horrific price.

The New Conservative Political Archetype: Smart, Articulate Businesswomen

One of my favorite diversions from the stress of college studies was sports entertainment, i.e., pro wrestling. Everyone realizes that pro wrestling isn't "real" (although its participants often do suffer very real injuries). It's the morality plays, with variations of good-versus-evil themes like David versus Goliath, patriot versus anti-American, the girl next door versus the mean girl, the rebellious youth versus the authority figure, the turncoat partner, etc. I remember while in college, I went to visit my maternal grandfather in New England for Christmas and was stunned to discover he watched wrestling, too. His favorite wrestler was the babyface (good guy) André "the Giant" Roussimoff, whom quickly squashed nefarious "heels". (To non-wrestling fans, André is perhaps better known for playing the character Fezzik in the movie "The Princess Bride".)

Vince McMahon Sr. was one of 2 promoters whom formed the Northeast region based World Wide Wrestling Federation in 1963. Some 20 years later, he sold the promotion to his son (Vince Jr.), whom recognized the potential of new media (including cable television and pay-per-view events), transformed the company into a national (and international) promotion, and eventually turned the company public, currently listed on the NYSE. Vince McMahon is the chairman of the WWE board, and his wife Linda has served (until the past week) as the company's CEO.

Linda McMahon resigned in the process of announcing her candidacy for the Connecticut US Senate seat currently held by the scandal-plagued senior senator and failed Presidential candidate, Democrat Chris Dodd. Linda is not new to GOP politics, having made a minor appearance at the 2000 GOP convention. I have watched her campaign Youtube video and seen a relevant interview she had on Fox Business Channel. She comes across as highly articulate and smart, targeting unsustainable Democratic overspending and noting that cap-and-trade really means taxing people and businesses in the middle of a recession. She did a very good job of staying on message, noting the tough times she and her husband have gone through in building up the business and the need of the government to incentivize small businesses and entrepreneurship. She's also positioning herself smartly against Dodd, by refusing PAC money and limiting individual contributions to $100 (even less than Obama's much-touted $200 limit). Dodd's political vulnerability will also attract other GOP candidates, including state legislators; I would expect her to distinguish herself as a fresh voice, not a career politician, with  the distinct know-how of building a business and creating jobs.

I'm encouraged not only by the GOP's ability to attract quality female business executives like Linda McMahon, but also high-profile former CEO's in California, former eBay CEO Meg Whitman, whom is running to succeed Governor Schwarzenegger, and former HP CEO Carly Fiorina, whom likely will run against incumbent dingbat progressive US Senator Barbara Boxer. After the disastrous performance of former Alaska Governor Sarah Palin on the national Presidential ticket last fall, the GOP needed to recruit highly competent, articulate, fresh new faces to speak out against career progressives intent on tax-and-spending their way towards a sticky high unemployment, low business growth European-like economic model. Linda McMahon, Meg Whitman, and Carly Fiorina are a good start.

George F. Will is RIGHT on Afghanistan

This post highlights a surprising split among conservatives. If there is any conservative whom has inherited the mantle of intellectual leadership since William F. Buckley's passing, it is George F. Will. His Sept. 1 column calls for the US to exit ground forces from Afghanistan. I'm inclined to agree. This does not mean that I'm naive about the intentions of a Taliban resurgence or the possible implications on the War on Terror. However, the question is feasible options given the status quo. In my judgment, we do not have sufficient ground forces to stabilize Afghanistan, and Obama is finding that his apology tour did not result in foreign volunteers for fighting the "right war". We must find an alternative, more feasible approach to the War on Terror.

At least since the 2004 Kerry Presidential campaign, the generic progressive Democratic story has been to allege that the 2003 liberation of Iraq was an unnecessary war and diverted sufficient forces away from Afghanistan, in a zero-sum fashion, to forestall completion of the "real" war against the Taliban and Al Qaeda. Hence, to be consistent, as forces draw down in Iraq, Obama must redeploy additional troops to Afghanistan to finish the job.

I fundamentally disagree with this rationalization. I am not going to renew a debate of Iraq in this post, but the fact is that Saddam Hussein was a destabilizing influence in the historically volatile Middle East, he had materially violated original Gulf War ceasefire terms and ignored some 17 UN resolutions, we had a preexisting bipartisan policy of regime change, and multiple Western intelligence agencies provided, in hindsight, questionable intelligence for policy makers and legislators. Saddam Hussein had the know-how, materials and/or production capacity for weapons of mass destruction. There was little doubt that Saddam Hussein had means (including lucrative oil revenues) and motive to operate against America, which he blamed for destroying his dreams of a Greater Iraq; he had tried to assassinate former President G.H.W. Bush while in Kuwait, and there is evidence of some Iraqi operatives in the US around the time of 9/11 and its aftermath (regardless of any speculative alliance or ties to Al Qaeda). The Taliban and radical allies like Al Qaeda certainly were/are dangerous, but there was no comparable natural resource wealth in Afghanistan or expansionist agenda. This is not to say the alliance among radical Islamic factions was innocuous, as neighboring Indians can attest.

There are other relevant contrasts between the countries as well, in particular, their national geographies and their political histories. Iraq has a relatively flat terrain, ideally suitable for the kind of large-footprint military operations characteristic of the Gulf Wars. In addition, the country had been under a strong centralized dictatorship for decades under Saddam Hussein. On the other hand, more recent history of Afghanistian has been dominated by disputes among tribes or warlords and other religious and ideological differences, with considerable conservative Islamic resistance to modernization and secularization of society (e.g., by Ataturk and Communist reforms). Of particular note was the ultimately unsuccessful Soviet occupation over the decade ending with troop withdrawals in 1989. Unlike Iraq, Afghanistan has mountain ranges which are particularly suitable for hit-and-run fundamentalist guerrilla operations.

There are widespread reports of corruption in the Afghan government, and there is serious doubt that the government leaders are making the tough power-sharing compromises necessary for national reconciliation. It is fundamentally unfair for the US military and the American people to sacrifice even more our finest sons and daughters continuing to enable a corrupt government, never mind supplying a disproportionate contribution of troops when in fact multiple NATO members have experienced the War on Terror.

There are obvious historical lessons from the failures in Vietnam and the Soviet occupation of Afghanistan, including the common distinctive characteristics of unpopular local governments and guerrilla-friendly terrains. The application of classic counter-insurgency strategies like those utilized by General Petraeus in Iraq is much more difficult in the context of Afghanistan.

It is time for Obama to stop trying to score political points on winning the "right" war. The War on Terror goes beyond just Al Qaeda. We cannot tie up our military indefinitely, disproportionately and exclusively in one country which is no longer a safe harbor for terrorists. This does not mean unilaterally surrendering Afghanistan to the inevitable reprise of a rogue government that promotes global instability. What it does mean is developing a smarter, more focused, realistic, flexible, and streamlined strategy of leveraging American manpower and treasure, not just in Iraq and Afghanistan, but around the world.

With an escalating federal deficit, we must remember that a more cost-effective, limited government also has implications for our military. We can no longer afford to underwrite the costs of being the world's policeman and need to delegate more responsibility to regional alliances. Finally, we need to recall the wisdom of our American forefathers, whom warned us against unnecessary foreign entanglements.

Miscellany: 9/16/09

We're Not #1 in Economic Freedom

The Heritage Foundation notes that in 2009, the United States has slipped from #3 to #6 along an index of 10 economic freedoms; we now trail Hong Kong, Singapore, Australia, Ireland, and New Zealand. The index, under Obama and the Congressional Democrats' "leadership", shows 5 downticks and just 1 uptick (low inflation)--with BELOW-AVERAGE scores in fiscal freedom (uncompetitive high individual and business tax bracket rates and a 28.2% tax burden relative to GDP) and government size (government spending at 36.7% of GDP). The one uptick, based largely on inflation under control, I attribute mostly to slumping global demand (and global demand for the dollar in periods of uncertainty) versus the Federal Reserve pursuing a sound monetary policy. Increasing gold prices and reluctance of foreign investors and governments (especially China) to finance chronic Democratic-controlled government overspending will inevitably ignite job-killing inflation. The conservative prescription? Put the government on a rigorous fiscal diet, eliminating government pork, lowering uncompetitive business taxes and obtrusive regulations, and exercising fiscal restraint and budgetary discipline.

Dems Playing the Race Card

The Democrats are currently walking a very thin line. Equating any and all criticisms of Obama (who, incidentally, is mixed-race, having a white mother and been raised in his teens by his white grandparents) as racist-motivated is not only inexcusably provocative but is intellectually lazy; as usual, progressives, lacking a substantive basis for arguing their and Obama's positions and agenda, feel compelled to resort to desperate ad hominem arguments and smears of their conservative opponents. The fact that a pedestrian comedienne and actress like Janeane Garofolo refers to independent conservatives as "teabagging rednecks" is not that surprising, given her unimaginative Hollywood groupthink liberal views; the fact that that the most mediocre one-term President of the past half-century, namely Jimmy Carter, would attempt to smear a Congressman from a neighboring Southern state, given the sensitivity of such reckless allegations in the region, with such an inflammatory accusation, is inexcusable and unworthy of a former President. I personally believe that the fact that white progressives resort to such desperate tactics reflects an ultimate lack of confidence in Obama's capacity to meet the challenge of his conservative critics.

Obama DoubleSpeak

Did anyone really understand what exactly Obama's health care reform plan consists of, i.e., his line-in-the-sand details or how it's going to be paid for? It is true that he signaled a degree of openness about certain Republican ideas, e.g., medical malpractice tort reform, dealing with catastrophic expenses, state/region risk pools, etc. But we've seen this before with Obama: been there, done that. Remember what happened when, with oil over $140/barrel, Obama showed signs of flexibility on revitalizing oil and gas exploration? And then, just as soon as the global economic crisis caused a substantial correction in oil prices, Obama backed away. Or when Obama vowed, at a Presidential debate, not to sign to sign another Congressional earmark--but then signed an omnibus spending bill containing hundreds of them?

The proof is in the pudding. How many of these concepts are in any current piece of legislation in the House or Senate? When Speaker Pelosi or other House Democratic leaders vow that either there is a "public option" or there's no reform bill at all, how does that reflect Obama's purported flexibility in saying he's more concerned with increasing competition than the nature of the competition? (I didn't exactly hear Obama talk about deregulation of the health care insurance market or allowing small businesses to band together and self-insure like big businesses can...) Obama can TALK all he wants about spending all his political capital on the line to pass "health care reform": talk is cheap. Instead of giving yet another speech or campaign rally, when is he going to actually get into a room with key Congressional Democrats and Republicans and try to hammer out a compromise? Instead, you still hear the Senate Democrats hinting that they might use the "nuclear option", budget reconciliation procedures as an unconventional tactic to force through a major policy initiative and essentially do away with the power of the filibuster to force political compromise.

I think in reality what Obama is really doing is little more than a political game of good cop/bad cop. By avoiding specificity, he avoids taking a political hit for unpopular positions, letting Congressional Democratic leaders from safe seats take the heat. His positional ambiguity allows him to declare a political victory, no matter the final provisions in the bill. Self-serving political gamesmanship is NOT leadership.