Quote of the Day
There are always a lot of people so afraid of rocking the boat that they stop rowing.
We can never get ahead that way.
Harry S. Truman
Obama Quote of the Day:
Tell Me He Didn't Just Say That
Now, my administration has a job to do, as well, and that job is to get this economy back on its feet. That’s my job. And it’s a job I gladly accept. I love these folks who helped get us in this mess and then suddenly say, ‘Well, this is Obama’s economy.’ That’s fine. Give it to me.—President Barack Obama, Warren, Michigan, July 14, 2009Mitt Romney's 59-Step Jobs Plan: Thumbs UP!
I have been very impressed with Mitt Romney lately; probably the best thing ever for his campaign was Rick Perry's entrance into the race. When Perry during the recent debate went after Romney on job growth, Romney's response was spot on: Rick Perry, Texas is a great state with a business-friendly legislature and policies (e.g., right to work) and significant amounts of natural resources; but what did you do to build upon what George W. Bush handed over to you in late 2000? [I would argue that Perry has been involved in legal reform efforts to limit frivolous lawsuits and much needed medical malpractice reform.] Romney can point to numerous vetoes, trying to keep Democratic super-spenders or regulators in check, taking on the "Big Dig" bureaucracy. The test of leadership is not just whether a GOP President can FINALLY rightsize business/job-killing government spending and regulation with a conservative legislature; it's how you are able to deal with a mixed or opposition legislature--something that Obama has proven himself utterly incapable of doing. In fact, he proved himself incapable of handling a super-majority he was voted into office with.
The Romney document is, in my judgment, highly readable and comprehensive, in stark contrast to Obama's convoluted, incoherent policy which really reflects the influence of his special interest groups, like unions (anytime you have unions negotiating various rules that tie the hands of managers, you artificially raise the labor cost of doing business in government). Public sector unions and the people's government have opposing interests; government has an implicit vested interests in minimizing costs. I wrote a recent commentary which pointed out that 80% of USPS' costs are labor. Almost any business strategy one can think of to lower costs--subcontract the work out, allow more use of part-time workers, layoffs, etc.--is ruled out. One of Romney's first actions described in the document is effectively repealing Obama's crony stipulations, like requiring the use of union labor on certain projects.
Romney is talking about things like decentralizing certain responsibilities from the feds to states, e.g., retraining reform and reinstatement of state health care regulatory primacy. He's talking about breaking down barriers to domestic energy production, lowering globally uncompetitive business tax rates, expediting free trade agreements, and cutting domestic discretionary spending.
Do I disagree with Romney on some things? Yes. I find the Chinese currency manipulation issue counterproductive; this is one of those populist red meat things that I absolutely despise Donald Trump for. And I have to wonder if Trump is behind this. I still think Trump has implicitly been targeting Romney ("if they nominate a stiff"--it's fairly clear and has been since Trump made a big deal about how rich he is compared to Romney) as a reason he might reenter the race. Yeah, Trump, a real estate developer, knows more about manufacturing widgets than Romney? Really, Donald, really?
We need to be very careful here, because a trade war with China is a lose-lose proposition. China currently has a vested interest to buy US debt (i.e., Obama/Democratic super-spending). This keeps our interest rates artificially low which facilitates US consumer purchases of cheap Chinese goods like shoes and clothes. A rising yuan would get passed along to US consumers and businesses, tightening margins; we could also see US interest rates rise, which could trigger an economic slump worse than we already have. Also note that the Chinese currency peg is a double-edged sword, because it aggravates inflation for material imports (e.g., oil); inflation particularly hits lower-income people whom don't own more resilient assets like stocks. Raw material cost increases to Chinese-manufactured goods also erodes already paper-thin factory margins.
Daniel Griswold has a good post explaining how American exports (including farm) have more than doubled over the past decade and Chinese tariffs have come down dramatically; moreover, the yuan has appreciated on a slow but sure basis since 2005. Finally, American exports to China have outstripped in percentage export growth to the rest of the world.
Furthermore, any criticism of currency manipulation must also fairly confront Fed Reserve quantitative easing policies, widely viewed internationally as an attempt by the US to debase its own currency to make its exports more competitive.
Mitt Romney's Health Care Problem: Some Comments
I haven't seen a decently written summary of a basic motivation behind so-called RomneyCare: it seems that certain vaguely-referenced Medicaid rules threatened to cut off $385M in funding because there were too many uninsured people receiving uncompensated hospital care and Medicaid funding was being distributed to help cover uncompensated hospital care. The inference seems clear: the federal government felt that Medicaid funds were being used to subsidize care for people whom did not qualify for Medicaid, i.e., higher income/asset individuals, people with resources to cover their medical service cost risks through private resources or mitigating catastrophic health care losses through insurance.
There are a few points which I haven't seen succinctly addressed: (1) how is it possible higher-income/asset people were allowed to freeload off uncompensated hospital care? Is it a deficiency in collection efforts of more financially able patients? Why not simply reform Massachusetts' policies to be tougher on freeloaders? (2) why did this rule violation affect Massachusetts in contrast to other states? For example, we have less insurance coverage in Texas than Massachusetts; I would have expected that the freeloaders in Texas would be a worse problem than in Massachusetts. (3) Why not simply penalize freeloaders at the time of service? Let me make this point clear: if I'm Warren Buffett with $40B, I can probably write a check for the full amount of medical services without ever having insurance. Why should I be penalized because I pay my health care expenses directly instead of through a third party which is going to incur expenses, make some profit, etc.? If you can get a cash discount for paying gas in cash versus a credit card, why not the same with insurance? In fact, Romney was sympathetic with this point of view and vetoed 8 provisions in the health care law (but was overridden all 8 times by the Democratic-controlled legislature). I mean, remember all the IRS health care policy police ObamaCare is hiring to ensure you have bought insurance and are continuing to make your payments?
Romney should do a lot better job explaining that he never ran on RomneyCare; there were more Draconian options on the tables including efforts to bypass the legislature and/or to institute payroll taxes. What Romney achieved through his policy innovation was a defensive political masterstroke co-opting your run of the mill anti-business, economic-illiterate progressives; yes, businesses absorbed additional taxes--but the other policies were much worse. Furthermore, Romney gained control to means test government subsidies versus enable financially able citizens to divert funding, which is intrinsically morally hazardous.
Now I still have issues with the Massachusetts health care initiative: did Romney deal with the cost driver policy mistakes (e.g., mandated gold-plated benefits) or with lack of medical malpractice tort reform? I suspect that Romney will say those necessary reforms are all but impossible so long as Democrats are bought and paid for by their crony special interests like trial lawyers and unions. (Say, for example, unions are allowed to keep $20K-plus health insurance policies tax-free, i.e., Uncle Sam and the state of Massachusetts are subsidizing the costs of these policies, which contributes to the health care sector cost bubble.)
My Favorite Track from August Rush
The Final Scene from August Rush
When Louis Connelly, forcibly separated by Lyla's disapproving father, finally reunites with his one true love Lyla Novacek, for whom he has tirelessly searched for years; when Lyla, who only learned their allegedly stillborn son Evan (August Rush) was alive from her father's deathbed confession over 11 years later, finally reunites, after a long, difficult, fruitless search, with seeing her son in person for the first time; when Lyla signals to Louis that they have a son; when Evan turns around and sees his reunited, acknowledging parents and realizes his dream of family reunion through the music has been realized: this is movie making at its best. I don't care what disapproving critics say about it being overly sentimental; only a heart of stone is unmoved. I sometimes summarize the plot with an analogy to a famous baseball movie: "If you play the music (your truth), they will come."
I own a DVD copy of this movie; if you don't already own a copy, buy one. Highly recommended!
Musical Interlude: My Favorite Groups
Air Supply, "Just As I Am"
