Last week I was in China. coincidentally so was President O. We had very different experiences. Iwas there on business and had no meetings with High government officials. Instead I met with our colleagues working in our Chinese business, approximately 50 people in Beijing and another 50 in Shanghai. In each case, i made a presentation about the economy and our business. But I also answer questions, and asked questions about Obama.
I found that they were remarkably well informed. I have noticed a big change over the years that I have been travelling to China on a regular basis. Our employees have a good understanding of the stock market, including our stock price, and the global economy. They also understand their government and the trade off between economic welfare and political freedom. They were very sanguine, but very proud of what the country of china had accomplished.
Some of their observations
1. Obama talks a lot but hasn't done anything.
2. They were shocked about the peace prize.
3. They thought that the townhall with the students was completely stage managed by the government. They thought Obama was naive for not understanding that this was all for show with selected participants and planted questions. They were unable to log in and listen.
4. They are worried about the US budget deficit, and the weakness of the US economy and don't understand what Obama is doing about it.
Sunday, November 22, 2009
Tuesday, November 10, 2009
Triangulation
Bill Clinton popularized the notion of triangulation. This is President O's version of something for nothing. As in "nobody earning less than $250,000 per year will pay more in taxes". This has been the key to Dem success for nearly 20 years. Basically, the Democratic party figured out that the middle class was not going to pay for welfare for others--for themselves, yes, but not for others. so they came up with the idea of making sure that new welfare plan was paid for by someone else. However, in health care, they met their Waterloo. Now, they need to tax the young to pay for health care. Obama famously won the election with a large percentage of the youth vote; how will they feel when they get their first bill for health care? not very Democratic.....
Pelosi care
Nancy Pelosi is riding high at the moment, but her coalition is fragile. The tone deaf Dems barely managed to pass the health care bill, but really it demonstrates the old adage that there are two things that you dont want to see in process: sausage and legislation. This bill, all 1900 pages, is going to exacerbate the inefficiencies, distortions and cross-incentives that already exist.
Instead of actually studying the issue, we have a president that want to RUSH to JUDGMENT. Why? Is it good policy or good politics? We all know the answer to that question. We hear half-baked arguments like "the US is the only country in the G20 that does not have universal health care", but nobody examines the actual facts of the countries with universal care. What about waiting times for procedures? what about availability of procedures? Having lived in Europe for 10 years, I can tell you that it is a different world. Waiting times can be quite long, and availability is more limited. Finally, all of the countries are running massive budget deficits in their health care programs. This has been financed through general tax dollars, but with the aging population, they are all nervous about the creaking system.
The academics want to make health care a cost/benefit calculation. What world do these guys live in. Aside from Michael Moore, nobody is going to say "that cancer operation is too expensive, so I'll take a cheaper but less effective treatment." or "that cancer test is too expensive so I'll skip it". This is not about cost but about care. I am a trained economist and wrote my law review article about applying economic principles to medical tort cases, but it is a rough approximation for decision making. It is simply not a precise science.
Finally, what about those "cadillac plans". Whooa, the Democratic party is really off the wall on this one. Lets see, an employer wants to pay its employees more..... a novel concept......by giving them a better health care plan, but now the government wants to prohibit it. What a concept!! Only in Washington would anyone think that an employer will expose his employees to a 40% tax. At 10% people would pay, but at 40% they will simply reduce the cost to avoid the tax. No tax revenues and lower care. And dont think that the poor employee will get more money!!! if you think that, send me an email because i have some desert land to sell you. Congratulations Nancy, even your district will find someone else.
Instead of actually studying the issue, we have a president that want to RUSH to JUDGMENT. Why? Is it good policy or good politics? We all know the answer to that question. We hear half-baked arguments like "the US is the only country in the G20 that does not have universal health care", but nobody examines the actual facts of the countries with universal care. What about waiting times for procedures? what about availability of procedures? Having lived in Europe for 10 years, I can tell you that it is a different world. Waiting times can be quite long, and availability is more limited. Finally, all of the countries are running massive budget deficits in their health care programs. This has been financed through general tax dollars, but with the aging population, they are all nervous about the creaking system.
The academics want to make health care a cost/benefit calculation. What world do these guys live in. Aside from Michael Moore, nobody is going to say "that cancer operation is too expensive, so I'll take a cheaper but less effective treatment." or "that cancer test is too expensive so I'll skip it". This is not about cost but about care. I am a trained economist and wrote my law review article about applying economic principles to medical tort cases, but it is a rough approximation for decision making. It is simply not a precise science.
Finally, what about those "cadillac plans". Whooa, the Democratic party is really off the wall on this one. Lets see, an employer wants to pay its employees more..... a novel concept......by giving them a better health care plan, but now the government wants to prohibit it. What a concept!! Only in Washington would anyone think that an employer will expose his employees to a 40% tax. At 10% people would pay, but at 40% they will simply reduce the cost to avoid the tax. No tax revenues and lower care. And dont think that the poor employee will get more money!!! if you think that, send me an email because i have some desert land to sell you. Congratulations Nancy, even your district will find someone else.
Thursday, August 27, 2009
Dominick Dunne's life and times
It was sad to see that Dominick Dunne passed away yesterday. His death was completely overshadowed in the media by the Memorial plans for Ted Kennedy.
How Ironic. DD stood carved a unique niche for himself as the voice of victims of the rich and powerful. The American culture is dominated by the cult of celebrity, but DD stood firmly with the forgotten victims; the ordinary people that gained attention only in their death at the hands of their famous killers, abusers, or miscreants.
Ted Kennedy was the opposite; a man who used his wealth and privileged upbringing to evade the penalties for the crimes that he committed. Mr. Kennedy was a man whose values were set at an early age when he was expelled from Harvard for a scheme to pay someone to take an exam in his name. Of course, he was excused later and returned to the school to get his degree. It set a pattern for his life, which included the callous murder of a young assistant; leaving her to die while he slept, showered and then consulted lawyers. Once again, his money and power enabled him to evade the penalties demanded for such conduct.
DD's life was shaped by a different incident. His cherished daughter was murdered at 22 by her ex-boyfriend who was given 3 years in jail for his crime. DD devoted his remaining life to insuring that someone remembered the victims of crimes, not just the famous perpetrators.
Maybe the worst you could say about DD was that he was celebrity obsessed. But his heart was on the right side of the ledger.
How Ironic. DD stood carved a unique niche for himself as the voice of victims of the rich and powerful. The American culture is dominated by the cult of celebrity, but DD stood firmly with the forgotten victims; the ordinary people that gained attention only in their death at the hands of their famous killers, abusers, or miscreants.
Ted Kennedy was the opposite; a man who used his wealth and privileged upbringing to evade the penalties for the crimes that he committed. Mr. Kennedy was a man whose values were set at an early age when he was expelled from Harvard for a scheme to pay someone to take an exam in his name. Of course, he was excused later and returned to the school to get his degree. It set a pattern for his life, which included the callous murder of a young assistant; leaving her to die while he slept, showered and then consulted lawyers. Once again, his money and power enabled him to evade the penalties demanded for such conduct.
DD's life was shaped by a different incident. His cherished daughter was murdered at 22 by her ex-boyfriend who was given 3 years in jail for his crime. DD devoted his remaining life to insuring that someone remembered the victims of crimes, not just the famous perpetrators.
Maybe the worst you could say about DD was that he was celebrity obsessed. But his heart was on the right side of the ledger.
Wednesday, August 26, 2009
Ted Kennedy and Michael Jackson
Wow two funerals this week for CNN to fawn over. Lets see how we add this up.
One was an alleged child molester that avoided conviction by paying off several young boys.
The other one escaped jail for murder, or at best (from his perspective) manslaughter, a compulsive womanizer and heavy drinker.
I am sorry but I am not apologizing for my values. Just think how the Ted Kennedy biography would read if he had gone to jail for the crime that he committed. While the outpouring of grief for Kennedy will be huge, who is speaking for his victim? I have been to the bridge at Chappaquiddick and his explanation of how he got lost and then drove off the bridge is incomprehensible to anyone familiar with the island.
Now our President is vacationing on the same island. You couldn't make this up!!! Well, at least the President will be at home with his wife.
Oh well, I can go back to the real American culture, whats up with Jon & Kate this week?
One was an alleged child molester that avoided conviction by paying off several young boys.
The other one escaped jail for murder, or at best (from his perspective) manslaughter, a compulsive womanizer and heavy drinker.
I am sorry but I am not apologizing for my values. Just think how the Ted Kennedy biography would read if he had gone to jail for the crime that he committed. While the outpouring of grief for Kennedy will be huge, who is speaking for his victim? I have been to the bridge at Chappaquiddick and his explanation of how he got lost and then drove off the bridge is incomprehensible to anyone familiar with the island.
Now our President is vacationing on the same island. You couldn't make this up!!! Well, at least the President will be at home with his wife.
Oh well, I can go back to the real American culture, whats up with Jon & Kate this week?
Bernanke's reappointment
Forgive me for being a cynic. But the reappointment of Chairman Bernanke, whose term doesn't expire until early 2010 was so urgent that the President had to interrupt his family holiday to announce it!!!
This from a President that jealously guards his family time (in this case, I am sympathetic). What gives?
This couldn't wait for a week? Especially since the announcement came in the dog days of August rather than after Labor Day?
Hmmmm. The President does not do anything that is not carefully calculated from a political standpoint--and I mean his own political standpoint.
First, the substance of the appointment. This is a President that clearly would prefer Lawrence Summers or another liberal. Could it be that this appointment gives him some political cover for actions of the Fed that are likely to be coming down the road. Or am I just too cynical? But it is pretty convenient that the ongoing public anger about the bank bailout can be directed to the Fed with a few words about the importance of the Fed's independence.
Second, the timing. Many observers have noted that the appointment pushed the news of the accelerting deficit off the front pages. This seems pretty trivial. But really this timing looks suspicious. Wasn't Bernanke just in Wyoming for the confab of the bankers.
By the way, am I the only one that thinks that the President is showing his celeb status by running off to the "vineyard" for a week. I guess it is a recession so the Obama family opted for a stay-cation at $20,000 per week. I suppose it is an accident that Oprah has a house on Martha's vineyard. Community organizers get paid really well. Can I apply for a job like that?. Well this is a bargain for the American people compared to the $2 mil for the date night. Wow, what a life!!! I noticed the children managed to join O on his Health Care reform rally in Montana as well. How do you get a job like this????? My employer doesn't even allow my spouse to travel with me at my expense. It seems there is a suspicion that if my spouse is there, I must not be really working.
What is Brittany doing this week?
This from a President that jealously guards his family time (in this case, I am sympathetic). What gives?
This couldn't wait for a week? Especially since the announcement came in the dog days of August rather than after Labor Day?
Hmmmm. The President does not do anything that is not carefully calculated from a political standpoint--and I mean his own political standpoint.
First, the substance of the appointment. This is a President that clearly would prefer Lawrence Summers or another liberal. Could it be that this appointment gives him some political cover for actions of the Fed that are likely to be coming down the road. Or am I just too cynical? But it is pretty convenient that the ongoing public anger about the bank bailout can be directed to the Fed with a few words about the importance of the Fed's independence.
Second, the timing. Many observers have noted that the appointment pushed the news of the accelerting deficit off the front pages. This seems pretty trivial. But really this timing looks suspicious. Wasn't Bernanke just in Wyoming for the confab of the bankers.
By the way, am I the only one that thinks that the President is showing his celeb status by running off to the "vineyard" for a week. I guess it is a recession so the Obama family opted for a stay-cation at $20,000 per week. I suppose it is an accident that Oprah has a house on Martha's vineyard. Community organizers get paid really well. Can I apply for a job like that?. Well this is a bargain for the American people compared to the $2 mil for the date night. Wow, what a life!!! I noticed the children managed to join O on his Health Care reform rally in Montana as well. How do you get a job like this????? My employer doesn't even allow my spouse to travel with me at my expense. It seems there is a suspicion that if my spouse is there, I must not be really working.
What is Brittany doing this week?
Tuesday, August 25, 2009
The Republican Alternative for Health Care
This is the first draft of my memo to the Republican party on Health Care reform.
It is not enough to be against the President's plan, or the Pelosi plan. The Republicans need an alternative. The system needs reform, but not the non-reform of Obamacare. The country does not need a government solution that is designed "to keep the insurance companies honest". It reminds me of an old joke, the punch line of which is "I'm from the Government and I am here to help you." The country does not suffer from a lack of government agencies. There ARE issues with health insurance, and there are alternatives to address those issues through an open discussion and debate.
The Republicans should lay out their basic principles, just as the President did. But unlike the President, the Republicans should insist on bipartisan debate. Process is important.
The principles:
1. Individual Choice. A fundamental element of the American system is that individuals are free to make their own choices without government interference. Some may choose to go without insurance. If there is to be an individual mandate it should be solely for catastrophic insurance at a limited cost.
2. Insurance should be available to all Americans at a reasonable cost. But we must recognize that insurance is an individual choice and some individuals may prefer to purchase less insurance and use the funds on discretionary items.
3. Insurance should be portable. Someone who has insurance should not be at risk of losing it due to loss of employment. Perhaps this should be an expansion of cobra.
4. Personal Responsibility should be fundamental. There is no rationale that justifies for health care that results from irresponsible conduct such as drugs, smoking, alcoholism or unprotected sex. Also grossly overweight people should not be subsidized by others.
Process
We have the best government in the world. But there is one fundamental weakness. In a system in which congress serves 2 year terms, it is difficult to make long term decisions. the next congress can simply undo what the last has done. Why should a 50-100 year plan be dominated by a party line vote resulting from the unpopularity of the preceding president. To create a system that will stand the test of time, the President should convene a bi-partisan commission including academics and practicing physicians to develop a plan. The social security commission in 1977 is a useful benchmark.
It is not enough to be against the President's plan, or the Pelosi plan. The Republicans need an alternative. The system needs reform, but not the non-reform of Obamacare. The country does not need a government solution that is designed "to keep the insurance companies honest". It reminds me of an old joke, the punch line of which is "I'm from the Government and I am here to help you." The country does not suffer from a lack of government agencies. There ARE issues with health insurance, and there are alternatives to address those issues through an open discussion and debate.
The Republicans should lay out their basic principles, just as the President did. But unlike the President, the Republicans should insist on bipartisan debate. Process is important.
The principles:
1. Individual Choice. A fundamental element of the American system is that individuals are free to make their own choices without government interference. Some may choose to go without insurance. If there is to be an individual mandate it should be solely for catastrophic insurance at a limited cost.
2. Insurance should be available to all Americans at a reasonable cost. But we must recognize that insurance is an individual choice and some individuals may prefer to purchase less insurance and use the funds on discretionary items.
3. Insurance should be portable. Someone who has insurance should not be at risk of losing it due to loss of employment. Perhaps this should be an expansion of cobra.
4. Personal Responsibility should be fundamental. There is no rationale that justifies for health care that results from irresponsible conduct such as drugs, smoking, alcoholism or unprotected sex. Also grossly overweight people should not be subsidized by others.
Process
We have the best government in the world. But there is one fundamental weakness. In a system in which congress serves 2 year terms, it is difficult to make long term decisions. the next congress can simply undo what the last has done. Why should a 50-100 year plan be dominated by a party line vote resulting from the unpopularity of the preceding president. To create a system that will stand the test of time, the President should convene a bi-partisan commission including academics and practicing physicians to develop a plan. The social security commission in 1977 is a useful benchmark.
Monday, August 24, 2009
The Democaratic culture--strong arm Chicago politics
Over the weekend the administration floated the trial balloon that they were ready to pass health care "reform" on a party line vote using the reconciliation (no debate) procedures. The President himself accused Republicans of being solely focused on defeating Him personally, and simply using health care as an excuse. Hello America, welcome to Chicago.
One thing the President didn't learn on the schoolyards. If you want to be a bully, you better be prepared to fight, and to win. The President might want to blame Republicans, but actually the Republicans have really been on the sidelines in this fight. This is a grass roots rebellion of the people. And the rebellion will go to the polls in November of 2010 and turn the Democrats out. The best news for the Democrats is that the Republicans have not been able to find a voice to capitalize on the public's anger. As many observers have noted, this anger is about health care, but it is also about bailouts--and not just the banks (rich bankers are always a good target) but also mortgages, cars, unions, and many other programs. As the middle class watches the deficit balloon, they know that they are not getting any bailouts. And they are smart enough to know that there will be a bill for all of this and it is going to become due in the future. So the President can keep promising no taxes for anyone earning less than $250,000 per year (ignoring the individual mandate and employer mandate for health care), but the public simply doesn't believe him.
The Democrats seem to think that the public ire will blow over by November 2010, and that something else will be on the top of the public's mind. Well a week is a long time in politics so a year is difficult to judge. However, on this issue, the Dems have miscalculated. There will be constant reminders of the implications for health care reform. These reminders will simply fuel renewed public outrage at Washington.
One thing the President didn't learn on the schoolyards. If you want to be a bully, you better be prepared to fight, and to win. The President might want to blame Republicans, but actually the Republicans have really been on the sidelines in this fight. This is a grass roots rebellion of the people. And the rebellion will go to the polls in November of 2010 and turn the Democrats out. The best news for the Democrats is that the Republicans have not been able to find a voice to capitalize on the public's anger. As many observers have noted, this anger is about health care, but it is also about bailouts--and not just the banks (rich bankers are always a good target) but also mortgages, cars, unions, and many other programs. As the middle class watches the deficit balloon, they know that they are not getting any bailouts. And they are smart enough to know that there will be a bill for all of this and it is going to become due in the future. So the President can keep promising no taxes for anyone earning less than $250,000 per year (ignoring the individual mandate and employer mandate for health care), but the public simply doesn't believe him.
The Democrats seem to think that the public ire will blow over by November 2010, and that something else will be on the top of the public's mind. Well a week is a long time in politics so a year is difficult to judge. However, on this issue, the Dems have miscalculated. There will be constant reminders of the implications for health care reform. These reminders will simply fuel renewed public outrage at Washington.
Friday, August 21, 2009
The BIG lie...
Yesterday, the New York Times quoted President Obama as saying " Nobody is talking about cutting Medicare benefits." The President has a penchant for absolute statements that borders on being disingenuous. He also says, according to the New York Times, that "he can cut bloated Medicare payments to inefficient health care providers without adversely affecting any beneficiaries." Huh?
LIke the $50,000 reimbursement to doctors for amputations, this just flunks the reality test. The Medicare reimbursement rates have nothing to do with efficiency. Medicare sets rates for reimbursement for procedures, and services. If the provider is inefficient, he/she simply doesn't make any money. But it has nothing to do with the "bloated" Medicare payments. In fact, Medicare payments are well under the reimbursement rate provided by private insurance companies. So it is hard to see what is bloated about them.
You can test this yourself. Ask your Doctor how he/she feels about Medicare's reimbursement rates. Or...did you ever wonder why waiting rooms are so crowded? Why do you have to wait all day to see the doctor? Did you wonder why you only spend 15 minutes with your doctor? Contrary to the President's bald assertion, Medicare reimbursement rates are creating incentives for doctors to see as many patients as possible in each hour. You can do your own market research, just ask your doctor if his/her income has increased or decreased in the last 10 years.
Except for the AARP, every senior is or should be nervous about the future of Medicare. The President talks about cutting the cost of Medicare but not the benefits. The President says he is going to cut waste, but then says that Medicare is far more efficient than private insurers citing its 4% cost of administration. Of course, one solution dearly loved by every President is the old fraud, waste and inefficiency. If you believe that one, please send me your email address so that I can forward the mail I get from Nigerian banks that want to send me money.
LIke the $50,000 reimbursement to doctors for amputations, this just flunks the reality test. The Medicare reimbursement rates have nothing to do with efficiency. Medicare sets rates for reimbursement for procedures, and services. If the provider is inefficient, he/she simply doesn't make any money. But it has nothing to do with the "bloated" Medicare payments. In fact, Medicare payments are well under the reimbursement rate provided by private insurance companies. So it is hard to see what is bloated about them.
You can test this yourself. Ask your Doctor how he/she feels about Medicare's reimbursement rates. Or...did you ever wonder why waiting rooms are so crowded? Why do you have to wait all day to see the doctor? Did you wonder why you only spend 15 minutes with your doctor? Contrary to the President's bald assertion, Medicare reimbursement rates are creating incentives for doctors to see as many patients as possible in each hour. You can do your own market research, just ask your doctor if his/her income has increased or decreased in the last 10 years.
Except for the AARP, every senior is or should be nervous about the future of Medicare. The President talks about cutting the cost of Medicare but not the benefits. The President says he is going to cut waste, but then says that Medicare is far more efficient than private insurers citing its 4% cost of administration. Of course, one solution dearly loved by every President is the old fraud, waste and inefficiency. If you believe that one, please send me your email address so that I can forward the mail I get from Nigerian banks that want to send me money.
Wednesday, August 19, 2009
The death of Health Care Reform--over reaching
The focus of the health care debate has been very general--although very passionate. We have seen cries of "socialism, death panels, rationing" and many others. There is nothing wrong with these issues, but the real devil is in the detail.
Fundamentally, Americans do not trust the government about much of anything. The era of mistrust stems from Watergate, and extends all the way to WMD under Bush. It includes Democrats and Republicans. This is first major psychological hurdle for the President. Circumstance threw the President a major assist. We are living through an era in which the public is looking to its government for help as the country struggles through the financial crisis that has rocked confidence in the free markets. But as that panic cools, the mistrust will rise again.
But the real devil in the details is the individual mandate, combined with the vast subsidies for people over medicaid wage limits. This is going to create a firestorm like we have never seen. This is a major miscalculation by the Democrats. While it is good economics, it is terrible politics and perpetuates one of the worst aspects of the current crazy quilt of health care. The healthy subsidize the sick, even where the sickness is the result of lifestyle choices.
Let me unravel that a little. The individual mandates will smell like a tax and will fall on many people, particularly the young, that simply have decided that they don't want to buy health insurance. This is not like auto insurance, which offers discounts for good drivers. People can still chose not to drive (as I do). This will be a mandate across the board. It will smell like a redistribution of wealth from the middle class to the entitled classes when the massive subsidies are added into the equation. Little attention has been focused on the subsidies that are proposed for individuals above the medicaid wage limits. This is supposed to make health insurance more affordable. These are massive amounts of money; and who is going to pay. Of course, the rich are going to pay (the voiceless), but the American public is not that stupid. The "wealth dividend" form reversing the Bush tax cuts and returning to the Reagan tax levels, is being spent in multiple places and that still leaves a trillion dollar deficit to reduce. (and by the way, the fix on the "broken Medicare system"). The American public just smells one thing ---- higher taxes for all.
Fundamentally, Americans do not trust the government about much of anything. The era of mistrust stems from Watergate, and extends all the way to WMD under Bush. It includes Democrats and Republicans. This is first major psychological hurdle for the President. Circumstance threw the President a major assist. We are living through an era in which the public is looking to its government for help as the country struggles through the financial crisis that has rocked confidence in the free markets. But as that panic cools, the mistrust will rise again.
But the real devil in the details is the individual mandate, combined with the vast subsidies for people over medicaid wage limits. This is going to create a firestorm like we have never seen. This is a major miscalculation by the Democrats. While it is good economics, it is terrible politics and perpetuates one of the worst aspects of the current crazy quilt of health care. The healthy subsidize the sick, even where the sickness is the result of lifestyle choices.
Let me unravel that a little. The individual mandates will smell like a tax and will fall on many people, particularly the young, that simply have decided that they don't want to buy health insurance. This is not like auto insurance, which offers discounts for good drivers. People can still chose not to drive (as I do). This will be a mandate across the board. It will smell like a redistribution of wealth from the middle class to the entitled classes when the massive subsidies are added into the equation. Little attention has been focused on the subsidies that are proposed for individuals above the medicaid wage limits. This is supposed to make health insurance more affordable. These are massive amounts of money; and who is going to pay. Of course, the rich are going to pay (the voiceless), but the American public is not that stupid. The "wealth dividend" form reversing the Bush tax cuts and returning to the Reagan tax levels, is being spent in multiple places and that still leaves a trillion dollar deficit to reduce. (and by the way, the fix on the "broken Medicare system"). The American public just smells one thing ---- higher taxes for all.
Tuesday, August 18, 2009
The liberal talking heads don't get it
The liberal talking heads on CNBC, CNN etc simply don't get the furor over health care. They are blaming the vast right wing conspiracy--the insurance companies and, of course, the right wing media--meaning Fox News.
But the reality is that this is grass roots outrage at a half-baked plan presented in the most arrogant fashion ever. The problem for the Democrats is that this is NOT a Republican sneak attack. This is really the voters speaking, and ultimately behind closed doors the Democrats know it. With all of their daily tracking polls (how else do you decide government policy if you don't check the wind direction first?), they know that this is real.
Unfortunately, the Republicans have not found a voice to really capture this resentment of all things Washington, entitlements and elitist. It is really time for a "man from Dixon" that did not attend Harvard or Yale to arrive on the scene.
As Independent voters swing away from the Dems, they have got to be worried. Of course, maybe they think that 2010 is a long way off, but again they are miscalculating. There is plenty of agony looming along the way. Lets close our eyes and imagine, yes only imagine, that the Obama plan passes. What happens next? Well not much for some time, and during that time there will be a constant drumbeat of "where is the change?". Much like the non-stimulus, it will be a long time in arriving. And when it does, watch out. Every disgruntled citizen, and in any plan of this size there will be thousands, will rush to the media to complain about something. So.....if the Republicans were REALLY smart, they would let the Dems pass this dog on a party line vote and just sit back. The howling is going to be awful. Of course, O won't care, it won't be fully implemented until 2013 which by lucky coincidence is when he will have fought his last election.
Advice to the Republican party (without the benefit of any poll), run against:
1. Nancy Pelosi
2. UAW bailout/payoff
3. the entitlement culture--this has got to stop
These are sure winners!!!
But the reality is that this is grass roots outrage at a half-baked plan presented in the most arrogant fashion ever. The problem for the Democrats is that this is NOT a Republican sneak attack. This is really the voters speaking, and ultimately behind closed doors the Democrats know it. With all of their daily tracking polls (how else do you decide government policy if you don't check the wind direction first?), they know that this is real.
Unfortunately, the Republicans have not found a voice to really capture this resentment of all things Washington, entitlements and elitist. It is really time for a "man from Dixon" that did not attend Harvard or Yale to arrive on the scene.
As Independent voters swing away from the Dems, they have got to be worried. Of course, maybe they think that 2010 is a long way off, but again they are miscalculating. There is plenty of agony looming along the way. Lets close our eyes and imagine, yes only imagine, that the Obama plan passes. What happens next? Well not much for some time, and during that time there will be a constant drumbeat of "where is the change?". Much like the non-stimulus, it will be a long time in arriving. And when it does, watch out. Every disgruntled citizen, and in any plan of this size there will be thousands, will rush to the media to complain about something. So.....if the Republicans were REALLY smart, they would let the Dems pass this dog on a party line vote and just sit back. The howling is going to be awful. Of course, O won't care, it won't be fully implemented until 2013 which by lucky coincidence is when he will have fought his last election.
Advice to the Republican party (without the benefit of any poll), run against:
1. Nancy Pelosi
2. UAW bailout/payoff
3. the entitlement culture--this has got to stop
These are sure winners!!!
The Wrong War
President O announced/leaked that America's commitment to the War in Afghanistan is going to require a long term commitment of up to 10 years and more troops. This is feeling more and more like the last Democrat war: Vietnam. Once again, we are fighting a guerrilla war in a large country in which it is difficult to identify the enemy from the friendlies with no strategic importance.
We can argue about the "lesson from Vietnam". There are military lessons about fighting guerrilla wars etc. But there are political lessons as well, and this is where the Obama decisions are highly questionable. Vietnam had no strategic importance, and neither does Afghanistan. Militarily we are fighting to defend what? A bunch of drug dealers and warlords. This is nation building at its absolute worse. We should have defined our military goals as "Prevent Al Queda from using Afghanistan as a safe haven." That aim has been accomplished. With minimal diplomatic effort, we could get the right to continue to monitor Al Queda activity in Afghanistan for the foreseeable future. If we see evidence of one training camp, we can send in the drones.
How did President Obama get into this mess. As with anything involving the President, the answer is "Politics". For electoral purposes, Obama wanted to advocate a speedy withdrawal from Iraq. but that would leave him subject to the charge that he was "soft" on defense. So he had to find a war to support and latched on to Afghanistan. But this is precisely the opposite result if we were to apply elementary logic to the analysis.
For all its problems, Iraq is of strategic importance. We can all question the logic of attacking Iraq. One problem that has not been discussed is that Saddam was the bulwark against the Shia tide in the Middle East, especially against Iran. Yes, American foreign policy is replete with bad bedfellows (e.g., Vietnam) and that is an uncomfortable position to be in. But clearly Saddam was aligned with our goal of checking the drift of the Middle East to the tide of Shia-ism. Now we are handing that job to a weak Shiite dominated Iraqi government. this is a recipe for disaster. Of course, the Iraqi government and their Iranian allies are anxious for the US to withdraw!!
But Afghanistan has no strategic importance. It is the crossroads to nowhere. Its only importance was the sheltering of Al Queda and it will be a long time before they come into the open again. Unfortunately, thanks to Bill Clinton and his foreign policy of weakness, we missed our chance to take them out in the Sudan and in Afghanistan. But at this point, the mission in Afghanistan is accomplished.
We can argue about the "lesson from Vietnam". There are military lessons about fighting guerrilla wars etc. But there are political lessons as well, and this is where the Obama decisions are highly questionable. Vietnam had no strategic importance, and neither does Afghanistan. Militarily we are fighting to defend what? A bunch of drug dealers and warlords. This is nation building at its absolute worse. We should have defined our military goals as "Prevent Al Queda from using Afghanistan as a safe haven." That aim has been accomplished. With minimal diplomatic effort, we could get the right to continue to monitor Al Queda activity in Afghanistan for the foreseeable future. If we see evidence of one training camp, we can send in the drones.
How did President Obama get into this mess. As with anything involving the President, the answer is "Politics". For electoral purposes, Obama wanted to advocate a speedy withdrawal from Iraq. but that would leave him subject to the charge that he was "soft" on defense. So he had to find a war to support and latched on to Afghanistan. But this is precisely the opposite result if we were to apply elementary logic to the analysis.
For all its problems, Iraq is of strategic importance. We can all question the logic of attacking Iraq. One problem that has not been discussed is that Saddam was the bulwark against the Shia tide in the Middle East, especially against Iran. Yes, American foreign policy is replete with bad bedfellows (e.g., Vietnam) and that is an uncomfortable position to be in. But clearly Saddam was aligned with our goal of checking the drift of the Middle East to the tide of Shia-ism. Now we are handing that job to a weak Shiite dominated Iraqi government. this is a recipe for disaster. Of course, the Iraqi government and their Iranian allies are anxious for the US to withdraw!!
But Afghanistan has no strategic importance. It is the crossroads to nowhere. Its only importance was the sheltering of Al Queda and it will be a long time before they come into the open again. Unfortunately, thanks to Bill Clinton and his foreign policy of weakness, we missed our chance to take them out in the Sudan and in Afghanistan. But at this point, the mission in Afghanistan is accomplished.
Sunday, August 16, 2009
If the President wanted to reform health care....
If the President was serious about reform of the health care system, he would propose tort reform.
Frivolous law suits and defensive medicine impose real costs on the health care system. The judicial system is the wrong place to resolve questions of responsibility and damages. The alternative is a system modeled on the workers compensation system. This would establish a "schedule" of damages for different kinds of injuries and a low cost administrative law process to resolve cases. In addition, standards should be tighten for penalizing doctors charged with multiple injuries.
The current system forces doctors to practice defensive medicine which increases health care costs. This includes the infamous tests that Obama decries. But it also includes referrals to other doctors to evidence "due care" in ruling out possible causes. Defensive medicine and malpractice imposes an enormous cost on the system. Isn't it time to actually have a national discussion on this topic.
Frivolous law suits and defensive medicine impose real costs on the health care system. The judicial system is the wrong place to resolve questions of responsibility and damages. The alternative is a system modeled on the workers compensation system. This would establish a "schedule" of damages for different kinds of injuries and a low cost administrative law process to resolve cases. In addition, standards should be tighten for penalizing doctors charged with multiple injuries.
The current system forces doctors to practice defensive medicine which increases health care costs. This includes the infamous tests that Obama decries. But it also includes referrals to other doctors to evidence "due care" in ruling out possible causes. Defensive medicine and malpractice imposes an enormous cost on the system. Isn't it time to actually have a national discussion on this topic.
Saturday, August 15, 2009
The Economy is Recovering,.....But.....
The latest jobs report showing a loss of 247,000 jobs in July was an important indication that the economic recovery is underway. Of course, the loss of 247,000 jobs is still a national tragedy. But the recovery MUST start with a slowing in the rate of decline (ie, in the rate of job losses).
Virtually every economist has been forecasting a long slow recovery. This makes sense because there are serious head winds for the US economy, including a Trillion dollar deficit, a loss of consumer confidence that is driving a high savings rate, the fall in value of homes, high mortgage foreclosures, and many others. Moreover, as the recovery sets in, the government is going to have to take restrictive actions in the form of higher taxes, interest rates and other measures to control inflation and gradually bring the economy to equilibrium.
But this sharp decline in the rate of job losses raises the question, could they all be wrong? Could this be a V-shaped recovery? We can only hope so. This movement is at least 3-6 months ahead of expectations. Undoubtedly, there are some anomalies in the data, but this is still a big improvement from June.
Of course, now a new game will begin. Who gets credit for this? The President will shift from being responsible for nothing ("I inherited this mess") to taking credit for everything. But the truth is that the government, contrary to popular mythology, has little impact on the economy. Thank god for the miracle of capitalism that has created the wealthiest country in the world.
Virtually every economist has been forecasting a long slow recovery. This makes sense because there are serious head winds for the US economy, including a Trillion dollar deficit, a loss of consumer confidence that is driving a high savings rate, the fall in value of homes, high mortgage foreclosures, and many others. Moreover, as the recovery sets in, the government is going to have to take restrictive actions in the form of higher taxes, interest rates and other measures to control inflation and gradually bring the economy to equilibrium.
But this sharp decline in the rate of job losses raises the question, could they all be wrong? Could this be a V-shaped recovery? We can only hope so. This movement is at least 3-6 months ahead of expectations. Undoubtedly, there are some anomalies in the data, but this is still a big improvement from June.
Of course, now a new game will begin. Who gets credit for this? The President will shift from being responsible for nothing ("I inherited this mess") to taking credit for everything. But the truth is that the government, contrary to popular mythology, has little impact on the economy. Thank god for the miracle of capitalism that has created the wealthiest country in the world.
Town Halls--the Dems miscalculate
The Town Halls were set up some time ago. Nobody will admit it now, but these were designed to be a Democratic tool to display support for the President and the Health care reform plan. As you might recall, this was a very effective tactic of the Obama campaign in the last election. The Democrats expected small turnouts and very controlled "shows" for their friends in the media. After all, President Obama is the king of "grass roots" organizing.
Ironically this strategy has blown up in their faces. They are facing a grassroots firestorm. What is doubly ironic is that this is really from the grass roots. No Republican is associated with it. Remember the "contract with America"? Of course, and instantly you say "Newt Gingrich". In this case, Republicans have been on the sidelines. Perhaps secretly cheering the crowds, but really unable to latch onto the train that is already out of the station.
What this all mean? The President started as an "outsider" but is rapidly finding that life is difficult as an "insider" when any decision will alienate someone. The grassroots revolution is an anti-Washington, anti-government, and anti-tax movement. All we need is the next version of Ronald Reagan.
Ironically this strategy has blown up in their faces. They are facing a grassroots firestorm. What is doubly ironic is that this is really from the grass roots. No Republican is associated with it. Remember the "contract with America"? Of course, and instantly you say "Newt Gingrich". In this case, Republicans have been on the sidelines. Perhaps secretly cheering the crowds, but really unable to latch onto the train that is already out of the station.
What this all mean? The President started as an "outsider" but is rapidly finding that life is difficult as an "insider" when any decision will alienate someone. The grassroots revolution is an anti-Washington, anti-government, and anti-tax movement. All we need is the next version of Ronald Reagan.
The Obama campaign redux
We all know that President Obama is a very smart guy and a shrewd politician, so I am inclined to think that anything he does is very carefully calculated. From a political standpoint, this is a peculiar campaign. He spends most of his time vilifying the opposition rather than discussing the actual features of health care reform. In fact, the entire process has been designed to conceal rather than illuminate the debate on the actual features of a reform plan. So far most of the debate is very simplistic (socialism v. government).
But the President has created his own problems. He says that the cost of health care must go down. He says this will be achieved through savings from "efficiencies" but the few that he has mentioned such as unnecessary tests and procedures (tonsils) don't really add up. The American public is worried that a reduction in cost will translate into (1) a reduction of services ("rationing"); or (2) a reduction in provider payments which will translate into a reduction in services. This concern is compounded by the fact that the House Bill simply sets up a commission to decide future payments and services for medicare, which seems like a political move to take the hard decisions outside of public scrutiny. Maybe the President is right, but why not put this into an open discussion? Why the "rush to judgment" in trying to ram a bill through congress in two weeks?
The President says that the government option will keep insurance companies "honest" and not necessarily drive them out of business. But many Americans worry that a government option will become a magnet for small business and individuals and that its prices will become the "market". This is what has happened with Medicare. Its reimbursement schedule (with all of its quirks) has become the market setting mechanism with private insurance companies pricing off the Medicare rates. Again, maybe the President is right, but calling this "stupid" is not really fair. As a small business man, I can tell you that the government option would be very attractive to me. Frankly, with health care costs increasing uncontrollably, a flat tax would be very attractive, and the government "endorsement" would make this a very acceptable alternative for my employees.
But the President has created his own problems. He says that the cost of health care must go down. He says this will be achieved through savings from "efficiencies" but the few that he has mentioned such as unnecessary tests and procedures (tonsils) don't really add up. The American public is worried that a reduction in cost will translate into (1) a reduction of services ("rationing"); or (2) a reduction in provider payments which will translate into a reduction in services. This concern is compounded by the fact that the House Bill simply sets up a commission to decide future payments and services for medicare, which seems like a political move to take the hard decisions outside of public scrutiny. Maybe the President is right, but why not put this into an open discussion? Why the "rush to judgment" in trying to ram a bill through congress in two weeks?
The President says that the government option will keep insurance companies "honest" and not necessarily drive them out of business. But many Americans worry that a government option will become a magnet for small business and individuals and that its prices will become the "market". This is what has happened with Medicare. Its reimbursement schedule (with all of its quirks) has become the market setting mechanism with private insurance companies pricing off the Medicare rates. Again, maybe the President is right, but calling this "stupid" is not really fair. As a small business man, I can tell you that the government option would be very attractive to me. Frankly, with health care costs increasing uncontrollably, a flat tax would be very attractive, and the government "endorsement" would make this a very acceptable alternative for my employees.
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