Legislative Agenda Priorities

In another 'staged for TV event', President Obama stood in front of the cameras yesterday at the White House and clearly stated for the record, that the "time has come to fix once and for all" the broken system, according to an article in the UK Guardian.  Now many of you might have suspected that the leader of the free world was finally accepting his responsibility for failing to deliver a budget to Congress on time, as mandated by law, in five out of the last six years in which he has served; and to finally broker a budget passed by both Houses of Congress during his tenure in office.  The President's budget proposals have became rather famous (some would say instead notorious), not only for their consistent tardiness; but for being so out of line with political thought in this country that he has been unable to get even one of these proposals passed.  More telling though, is that he has yet to receive a supporting vote from even one of the legislative members of his own party, let alone that of his political opposition, during this same period.  If this was your assumption of his message however, like me, you would have been wrong.

Oh sure, you might have instead been looking at the President's statement as a goad to the United States Senate, a legislative house which his Democratic party has been in control of prior to and during his entire tenure in office.  The Senate, for those of you who might have missed it, is the only group in Washington that's done worse on the subject of the national budget than the President.  In violation of federal law themselves, Senators have consistently failed to pass a budget in each of the last four years, a record which they may finally be prepared to break.  This failure, aside from allowing next to no control over the national spending process, has lived on a consistent diet of 'Continuing Resolutions' in the last few years, which does little other than continue the business as usual of automatic increases to 'Baseline Budgeting'; with annual increases and no effective limits.  Budgets passed by the Republican (once known as the party of no) in the House of Representatives have been completely ignored and refused a vote by the very party that once so named them.  Sorry again folks if that's what you thought though, for this laudible goal likewise had nothing to do with the President's statement.

Perhaps the President was speaking to a broader financial situation in the nation.  It is once again after all, approaching another fiscal crisis as the National Debt Limit is about to be exceeded.  Now the Senate budget proposal is one that seems to ignore this situation, and instead looks to increase taxes another $1 trillion dollars over increases that have already occurred either at the expiration of the Bush tax rates and the imposition of the taxes that are beginning to take effect as part of the "Affordable Health Care Act"; while never once addressing the amount of the budget that's in the red.  The Congressional Budget proposal proposes no new taxes and seeks over ten years to instead balance the budget through the reduction of spending.  Strangely there are actual points of agreement between the two offerings that the legislative branch is working to make larger. 

Despite the claims by candidates on both sides of the aisle for both the executive and legislative branches in the last election that 'jobs are going to number one', nothing has yet been done or appears to be imminent in the budget plans in Washington DC to stimulate any other part of the economy than 'green energy'; and most of that has turned out to be throwing good money after bad to companies that only manage to provide a few temporary jobs before going bankrupt.  The government has yet to come up with anything that addresses that it's spending 30% more than it's taking in, that it's paying for the debt incurred by printing money at a furious pace, selling the debt that foreign countries don't want to The Fed, and lending money to big backs at what is effectively 0% interest.  Of course all of this will eventually lead to Inflation, but in the meantime the current batch of politicians is able to fiddle while the nation begins to burn; and continue to beat the dead horse of 'Sequestration' as the nag to blame for no better reason than it provides political cover for all the things that they're either too dense to recognize or too cowardly to address.

Oh, by the way.  I may have forgotten to tell you what the President was talking about during his recent public event instead of what he wasn't.  At a time when the President is late producing his own budget and doesn't expect to produce one until long after both the House and Senate have voted on their own proposals.  At a time when fiscal cliffs pop up more often than three-day holiday weekends.  At a time when the national debt has reached a level higher during his administration than at any time in its 237 year history, a debt that this President's Administration is responsible for accumulating faster than any other in its history; the President was instead looking at something entirely different than what should be the most important subject of his second term.  

This President was once again changing the priorities of his legislative agenda (and that of Congress), and castigating that legislative branch for not addressing a completely different subject to his satisfaction; in spite of the fact that both Houses are working to come with a compromise for it that will pass both Houses.  Instead of finally addressing an economy that the President has often called the worst since the Great Depression, the chief resident of the White House was instead attending a ceremony held instead to address something completely unrelated to the nation's economic malaise ... Immigration Policy.  

Bravo Mr. President, for keeping your eye on the ball ...

 

        

TFP Column: I'm Going To Hell For This

They say that you should never speak of politics and religion in public places, but I decided to defy conventional wisdom with this week's effort for the TFP. (And why not, I've defied pretty much everything else.)  "I'm Going To Hell For This" is probably a fairly apt description of the future that lies in store for me after calling out a number of the Catholic prelates who are suing the federal government to prevent at least one part of Obamacare from becoming a burden on businesses owned by the Church.

It's not that I want going concerns owned by the Catholic Church to have to pay for things that violate their doctrines (though quite frankly, their doctrines have no place in creating or enforcing the law), it's that I don't want any of us to have to pay for government dictate that's a violation of the limits placed on it by the Constitution.

But listen, while my doom is undoubtedly written large in the Great Book, there's probably some much more cheerful reading to be had in the mid-week Free Press 'Star' edition.  If that's not enough to brighten your spirits and save you from sharing my eternal damnation, there's only a few days to wait before Toledo's largest Sunday circulation and Ohio's best weekly newspaper for the last three years, the Toledo Free Press.

SCOTUS v Patients Affordable Healthcare Act

The Supreme Court has now heard testimony and has probably even reached a judgment regrading the “Patients Affordable Healthcare Act”; though we're going to have to wait to know what it is until they finish writing their learned opinions on the subject. We're told by our President that it would be wrong because of the current crisis in healthcare in this country (a statement he later performed the Olympic backpedal on), for SCOTUS to even consider striking down the law.

There are a great many things wrong with this statement however, and that makes it hard to know where to begin responding to it. But let me try this simple one … Bullshit! I've spoken before about the responsibilities of the highest court in the land to address Constitutional issues, but let's at least get the facts straight.  The law currently under review by the court is not one designed to provide universal health care to citizens in this country and by its authors admissions, it does not. It was instead one passed in order to provide universal access to health care 'insurance' in this country. We could even say in this law's case, provide is far too tame a word; and that it's design is to mandate that everyone in this country be covered by some form of health insurance. (If not by private insurers, then by the government.) This law has far less to do with whether health care will be accessible than with who will pay for it.

Oh sure comes the response, but stop nitpicking and confess that there is in fact a crisis in healthcare in this country that must be dealt with. In fact, I do not concede this. If health care in this nation were so bad, then why does every national leader in world come to this country to receive treatments for serious illness, rather than stay in their own? Why are most medical breakthroughs made in this country rather than in others? There is no crisis of care in this country.  

There are however inequities as to access to treatments in this country based on their cost. (There are similar inequities to home ownership, automobile ownership, and luxury items.)   Where healthcare is concerned, we know that not everyone can get access to treatments that their doctors deem necessary to their continued health and perhaps even survival. Part of this has to do with health insurance industry, as issues of pre-existing conditions, approval of the treatments for general use, or cost vs efficacy continue to remain in a field filled with miracles and patent medicine. As often happens where such weighty issues where constant change is involved, there are invariably stories (some true) of seeming injustice and personal tragedy that go along with them. The question we should be asking ourselves however, is whether those in government are best suited to provide the answers to any of the questions. It's government after all, that got us into this mess in the first place.

During WWII, progressive saint President Franklin Delano Roosevelt imposed wage and price controls on the nation, in the misguided thinking that any one man or government could actually control a national economy. It and he couldn't of course, and clever employers who wanted better workers and could no longer offer them more in the way of wages, instead began to circumvent the spirit if not the letter of the law by offering benefit packages that included health care insurance to attract them. Forced by a competitive employment market, their competitors soon followed suit and another well-intentioned law was effectively bypassed, while reaping a full harvest of long-term, unintended consequences.

Skip forward some 20 years and we find ourselves in 1965 and see government enter into another well-intentioned effort, this time to provide health care insurance to seniors who were now unlikely to have it after leaving the employer who had provided it during their working career (because of the previously mentioned govt intervention). Congress therefore passed Title XVIII of the Social Security Act, better known these days as Medicare to address the issue. Not content with the scope and scale of the program however, it sought further redress and addition through program expansions in 1972, 2001.

Since providing medical insurance for our aged only (regardless of income), would be unfair to those younger who couldn't afford it, and whose employers didn't provide it, we at the same time added Title XIX to that same Social Security Act in order to provide even more potential government protection to yet another group. Of course the program known as Medicaid would be managed by the States, but with the Federal government monitoring.

These programs have existed now for some forty-seven years, and in typical government fashion their often obvious ineffectiveness is met with bureaucratic cries that the only way to fix the problem is to expand the programs. Having become the medical insurance provider for our elderly and impoverished, we must double down and make government the primary health insurance carrier for the nation. We must likewise turn control of the type and level of health coverage to what Congress believes is best for us; in spite of the fact that they will not be participating in the program.  Legislators it seems, have once more exempted themselves in favor of their own program of health care (much like they did with Social Security).

Having been told that it's wrong that we should have to deal with faceless insurance company employees and program managers, we're told that we'd be better off dealing with faceless bureaucrats instead. Having been convinced that evil insurance companies have and will provide little competence in serving our medical needs, we should instead turn our health care over to those whose efficiencies in the DMV and Post Office are legendary. Seeking to save us from being abandoned by the evil and unfeeling capitalists in the insurance industry, we should instead turn the quality of our very lives to the same government that has provided the kindness and compassion shown by those of the IRS.

Can anyone, with a straight face and a clear conscience point to something in its past or present that the government does better than the private sector in a truly free market environment? (And don’t point to national defense on me, as the limited efforts to sub-contract minor bits of even this have proven just as successful and often more cost-efficient than the government version; even with the normal graft and corruption of such contracts involved.)

No the Supreme Court should not rule against the “Patients Affordable Healthcare Act” because it extends the power of the Federal Government far beyond the limits placed on it by the Constitution.  Neither should it rule against the Act because of the current so-called health care crisis, because of the slim majorities and lack of bi-partisan support for the issue in the legislature, or because the President doesn't want them to rule his signature bit of legislation Unconstitutional (especially in an election year). Beyond all of these reasons, some more Constitutionally valid than others, they should rule against in order to save us from a government that's long proved itself incompetent under either party's rule to run such programs, and especially one that will forever place our health in its hands.

Presidential Rewrite

You know, I really had a couple of other things that I wanted to write about this week (and maybe I'll get to them as it progresses), but this one simply won't go by without comment ....

The president gave a speech in the Rose Garden of the White House today that could and should best be described as nothing more or less than a 'rewrite'. No other term can adequately describe something that in so many ways attempts to rewrite parts of the past.

To begin with, it appears that the President would like to rewrite the definition of 'Judicial Activism', which normally defined as a judge or court using their ruling to make new law based on personal bias or political considerations rather than interpreting that law.  In fact, the Supreme Court duly waited for the "Patients Affordable Health Care Act" to properly work its way through the judicial system.  During their extended three days of testimony, their questions seemed exactly on point with regards to issues of law, whether eliciting interpretation of the 'Commerce Clause' or considering points of this law relating to the taxation powers of Congress.  They did not ask how much it would cost or what good it might do.  So in fact, it could instead be said that the Justices used Judicial 'restraint' rather than activism.

Second, it certainly appears to be a rewrite of his own past for a former 'community organizer' to decry the process of "judicial activism" when describing whatever the result of the Supreme Court's decision is. Was it not these very community organizers (along with progressive political counterparts) that were crying out for such activism in the name of 'fairness' and 'justice'?  Haven't they for years sought such judicial activism in order to redress the inequities of this country (real or imagined) as they saw it.  Why then should they fear that which they demanded, unless of course they felt that they had failed to make their case to the Justices (much as they have to the American people). 

Third, having redefined terms and his own early days of 'public service', the Editor in Chief was far from complete in rewriting history; this time where the law in question was concerned.  As quoted in the UK Guardian article, the President has said "it would be wrong for the "unelected" supreme court to take the "unprecedented and extraordinary" decision to strike down his signature health care legislation when it was passed by an elected Congress."  (Though he did get the part about the Supreme Court being 'unelected'.)  He was in fact quoted in the article as saying, "I am confident that the Supreme Court will not take what would be an unprecedented, extraordinary step of overturning a law that was passed by a strong majority of a democratically elected Congress".  By what editing tool does the president call the passage of this law a "strong majority."    

Oh it's true enough that it passed by a majority of both Houses of Congress, and while (at least according to our friends at Wikipedia) the Senate passed the bill that became this law by a 60-39 majority.  In this decisive majority, note was taken however that vote was strictly along party lines and barely escaped a no-vote from filibuster.  Every Democrat and two Independents voted for it and every Republican against it.  It's in the House however, that this alternate rendition of history becomes farcical.  The vote there was 219-212, with all 178 Republicans and even 34 Democrats voting against it.  Certainly neither of these votes could be called by the magic word we've heard so often lately ... "bi-partisan"  (unless we note bi-partisan rejection of it in the House).  As for 'strong majority', a margin of 7 can only be called one if we not only rewrite history, but redefine the term itself. 

(And we won't even bring up that no one in either House of Congress actually read the entire 1990 pages of the bill before voting on it, or the procedural gymnastics that were involved with bringing it to a vote.  Oops, I just did ... sorry.)

Perhaps most interesting in all of this however, is the attempted rewrite of the Constitution that the President would like to make, which as ratified says in part:

Article III, Section 1 - "The judicial Power of the United States shall be vested in one Supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish."

Article III, Section 2 - The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made ..."  

Evidently now according to this President however, who's a former Constitutional Law professor by the way, it's no longer the responsibility of the Supreme Court to pass on whether laws passed by Congress fall within the limitations placed on government by that document; even when they're legitimately challenged.  It's also apparently now acceptable for a majority to rule without respects to the rights of either the minority or the Constitution in the passage of laws.  Further, it appears that it's no longer acceptable for that minority to challenge what our Constitution was designed to avoid, a tyranny of the majority which many think this particular piece of history reeks of.  Constitutionally, the Supreme Court is not obligated (nor should it in any way) consider how a law passed by Congress; even it's done so by unanimous acclimation.  It's only liable to consider whether such a law fits within the limits defined by the Constitution for the federal government and which created their positions to do so.

You will note here that I have not spoken about whether I think that the law should or will be overturned by those in the Court, since the decision has no place in this discussion; only that it's the Supreme Court's obligation to make the very considerations that they are currently taking on, and that the President should allow them to do so without political interference.  It is likewise the duty of a President who swore to uphold and defend the Constitution to recognize (as any true Constitutional scholar would) that the 'Separation of Powers' is a defining principle in that document, and not one to be cast aside lightly, even in the name of retaining an office through blatant pandering and electioneering.

Oh I know that it's an election year, and as such Presidential podium pontificating is to be expected as an incumbent President seeks not only to defend his Administration's signature piece of legislation, but to unofficially poll for issues that can be used in the coming days for stump speeches.  I know that his opponents will likely attempt to use the Court's decision (not due for release until July) in the campaign as well.  This is the second time in three years however, that this President has publicly castigated or taunted the Justices of the Supreme Court in their attempts to fulfill their Constitutional obligation however.  He has likewise recently remarked in public statements that if Congress would not do that which was necessary, he would do it without them.  

With all due respect to the President, he might well wish to consider that if he wants to have his own authority respected that he needs to likewise respect the power and authority of those co-equal branches of government. He might also want to recognize that in his current Constitutionally limited position, he is not granted the power of Presidential Rewrite.

Silly Bits II

I've been trying to follow the results of the "Super Tuesday" voting with some degree of interest beyond a lingering yawn, but find my fervor for the process, and with it my attention span for endless coverage of the minutiae around them are flagging.  As a consequence of this general feeling of listlessness, I find myself without a desire to go into the pontifical rage on any particular subject required for a mid-week effort.  This does not mean that I haven't got a few things on my mind however, or that I'm willing to share them.  I am therefore going to attempt another 'Silly Bits' effort instead.

Rush Limbaugh, the self-appointed savior of talk radio, has stepped in it once again; though I at least give him credit for an apology that was not entirely self-serving.  Unfortunately in spite of a valiant attempt at 20-20 hindsight, the damage has already been done.  Ms Fluke has managed to do exactly what she set out to do, draw attention to herself and change the discussion on the Obamacare mandate which tells the Catholic Church that its health insurance must provide treatments that violate its own doctrine on birth control.  

We're not asking any longer why such treatments must now be provided by any employer for free (and with no co-pay) when they're not that expensive to start with. We're not asking any longer how the government is able to tread over the fine line on the First Amendment or why disaffection with such care should be restricted to only the Church and not to any employer who feels that such mandates violate their personal beliefs. (Though perhaps it would be easier to get waivers if such organizations were simply to unionize.) We're not even asking where the president's executive order (the Stupak promise) that abortions would not be provided under the Obamacare compromise went to.  

Instead we're talking about Limbaugh impugning the character of a woman who's obviously a political activist, and who made her college choice by her own admission, in order to make a policy change at that university.  We're talking about access to women's health care that already exists as if it didn't, because Rush couldn't stop banging an out-of-tune drum that he thought would resonate with his audience.  Maybe his hearing is worse that he thinks, and he suffers from occasional bouts of being politically tone deaf.

(I won't even begin to talk about the disingenuous behavior of the progressive voices in the media, who want Rush's dismissal and an advertiser boycott for using some of the same language that they have in equally public venues when talking about their ideological opponents.)

Gas prices continue to go up, and the president goes out on the campaign trail to tell us that the problem can't be solved by drilling.  Really!  I can't and won't assign any particular blame to this chief executive; like most politicians running for office, he manages to pick and choose the stats he likes to back up his rhetoric, but the 'facts' are often contradictory.

Our president tells us that more oil is being produced in the US now than ever before ... and that this is to his credit.  Really!  What happened to the days not so long ago when he and other politicians told us that it takes 5-7 years for drilling to result in production; and if this is the case, how should he expect credit for drilling that began before he took office?  Meanwhile drilling permits remain at an all-time low, the pipeline from Canada can only be begun by going around presidential approval in an election year, and no new refinery has been built in over 30 years.

Hybrids must certainly be contributing to our ability to stretch the existing production, but the Middle East is becoming a scarier place week-by-week; so counting on them for our future oil seems like a worse plan than usual.  Increasing debt and Fed policies continue to make the dollar diminish in value against a barrel of oil (oil is currently only traded in dollars, though how long that will last is anybody's guess), which likewise contributes to its increased costs in the long term.  

As for electric cars, I am once again forced to point out what seems to escape those inside the Beltway in DC.  Even if we start buying fully electric cars, the electricity has to come from somewhere.  Coal burning power plants are closing, since they can't meet new EPA regulations.  Only one nuclear plant has been approved for construction since the Carter Administration, and it hasn't begun construction.  Solar and wind power generation can help but little (especially when solar panel manufacturers in this country are going down faster than the Titanic), and will never be able to fill the gap created by the impending loss of these coal plants, let alone provide us with the cheap energy which most economists agree is required to stimulate economic growth.  I guess that leaves us with further demands on oil and natural gas, which brings us back to where we started.  

(Then again, maybe the plan is to get us all into Chevy Volts that we can't afford, and with batteries catching fire for no apparent reason, keep us too scared to get into our cars in the first place and thereby reduce consumption.)
 
Super Tuesday winds to a close, and the winners (kind of) and losers (sort of) are both congratulating themselves on the job that they did (even if they didn't really do it).  And while they're patting themselves on the back, and thanking their staffs, their fundraisers, and their supporters; not one of them thinks to thank the American taxpayer; not for their vote, but for picking up the tab.  It is they after all, who are footing the bill for this state-by-state beauty contest; with many educated estimates holding the cost of these candidate benedictions  at $3,000,000 per state. 

Like the broken promises of most of candidates leave behind after an election, this bit of taxpayer largess goes largely unrecognized; something I find especially troubling when so many state budgets are being slashed left and right (pun intended) to at least attempt to meet the mandated responsibilities of a balanced budget.  When are we going to make these political parties pay for their own political parties?

It's a sad commentary on the political process indeed when 'hard working Americans' have to foot the bill so that the self-appointed political elite in this country can decide who's turn it is move up the political food chain.  Regardless of who gets the delegates, once again the American taxpayer has lost.

 

Health Care Buys Medicare Solvency?

The trustees of Medicare and Social Security released a report yesterday asserting that Medicare is in better shape than previously stated in the reports of 2009. In a story released by the Associated Press, this latest release states in fact that the financial solvency of Medicare will be extended from last year's estimate by another twelve years as a result of the recent passage of health care reform legislation. Not all in government however, agree with the assessment given in this report however.

According to the story in fact, "top Medicare actuary Richard Foster warned that the report’s projections “do not represent a reasonable expectation”. His skepticism comes from as a result the new reports' assumptions that call for a reduction of Medicare payments by 23% at the end of the year and 30% over the following three years, which he called “an implausible result”. Regardless of which government expert you agree with however, Medicare will run short of funding by 2029, and Social Security (which is paying out more money than it is taking in) will do likewise by 2037.

Many would suspect that a Conservative thinker would agree with Mr. Foster on the implausibility of any government program reducing costs and would be skeptical of numbers extending the financial solvency of a program that most of like minds consider little more than a sink hole of funding. While this is in fact normally the case, in this particular situation however you would be wrong. Of course, I have no hope that Congress will in fact reduce payments to Medicare either at the end of this year or in the years ahead. In fact, I suspect that legislators seeking to retain their incumbent status will do nothing to anger a senior citizen voting block that traditionally goes to the polls in high numbers.

Far too concerned with retaining their jobs in a tough economy instead, I doubt that even a return to a Republican majority in both houses of Congress will see any curb in such payments, even as deficits in this country mount. (In point of fact, I am not sure that Medicare payments to doctors is the actual culprit in this situation.) I do believe however, that a savings will come as a direct result of implementation of the Patient Protection and Affordable Care Act and that this savings will contribute to Medicare solvency, though perhaps not in a way that the Administration would like to tout as much as they seem to be.

As both the costs and the number of recipients continue to increase during the implementation of health care reform, government will likely find itself in an increasingly untenable position in trying to sustain the unsustainable. As the Canadian and British systems have shown in the past, this is likely to lead to both treatment delay and some form of health care rationing over time. Rationing of course, leads inevitably to necessary or sometimes even vital procedures not being performed in the timely fashion required by the patients condition. Since those traditionally requiring the greatest amount of health care are our aging population, it is likely that such rationing is likely to have the largest negative impact on this population segment. The conclusion to be drawn from this simple chain of logical assumption is that the growing number of senior citizens (a group to which I am far too close to becoming a part of) is likely to face a legislative or regulatory "thinning of the herd".  

And though it may sound like little more than cruelty to say so (something many would say Conservatives are particularly good at), it's hard to argue that reducing the numbers of this aging population is likely to have a positive financial impact on the funding requirements for the programs covering the medical care and retirement benefits that these programs represent, and forestall their financial demise as a consequence.

So will health care reform buy us some additional solvency in Medicare? I believe that there's little doubt that it will. The question that we should be asking ourselves however, is not whether the numbers that government is tossing around today are viable or not; but whether the price of health care reform as it's enacted is one that we are willing to pay. 

 

The Greater Threat

Though there appears to be some confusion regarding the priority of the legislative agenda right now, it is apparent that sooner rather than later Congress will be looking to take up the subject of Financial Reform in this country. 


There is little doubt that miscalculation in the the relative values of real estate and the stock market in this country contributed significantly to the financial dilemma of unprecedented proportions beginning in 2008. There is little doubt as well that the public was duped by the system of banks and brokers, screwed by the regulatory processes that we counted on to protect us, and clueless of the rather arcane rules involved with the banking industry in general, and those curious things known as financial derivatives in particular. 


I will not attempt to provide specific definitions on these particular items, as even Wikipedia admits that its explanation may involve too much jargon and be too complicated to understand without further clarification. Neither will I attempt to apologize in any way for the actions of bank managers and stock brokers who appeared to have proved little more than thieves and prostitutes while selling us out. They took our trust in the system as well as our money; and if it can be in any way proved that any broke the law, they should be jailed. 


None of this appears to matter anyway, as Congress (which is becoming well-practiced in attempting to repair things that it doesn't understand either), has decided that only now can we bring all of this to the attention of the American people. Now many might question why it is that if the issue of this abuse (real or imagined) is such a critical one, it has taken so long to bring it to the public eye.  


Some might even be cynical enough (like me) to see that we are well into an election year, and the timing is all about the fact that there is now enough potential political advantage to both sides to finally bring up the issue. Some might even ask if the attention being drawn to one evil group might draw attention away from some other. For as we join in the charge to castigate the moneylenders, we might want to notice that the crisis is also far enough in the past that many will forget that there was already government oversight in the banking industry and the stock market ... oversight that failed rather miserably. 


The Security and Exchange Commission (SEC) was apparently incapable of oversight of its own employees, let alone the markets which they were tasked to watch. Forget that some of those employees were too busy surfing the Internet for porn to perform the tasks assigned to them, the truth of the matter is that they didn't appear to understand the house of cards being built as stock brokers and banks became interchangeable, or make any attempt to limit risks with other people's money which increased exponentially as a consequence of such inaction. 


Meanwhile, the House Oversight Committee on Banking not only allowed banks to become further embroiled in the risky nature of certain parts of the stock market, but encouraged (threatened) the banking industry to make riskier investments in the mortgage industry in order to provide home ownership to all. At the same time, they stood idly by as these companies loaned money in excess of inflated housing values to those who could not afford it. When the lack of regulatory oversight responsibility on the government's part met the fiscal irresponsibility of banks gambling on drawing an inside straight in the derivative market, a perfect storm of economic unsustainability was created and we have all been forced to live wit the results in the days since. 


We must now deal with the future rather than the past however, and our concern might better be to look at the continued political philosophy that if improperly handled regulatory practices have failed, more regulation is the best and only answer to fix it. If the existing regulators fail to fulfill their responsibilities, then the only answer is to add even more regulators to fix it. This seems to be philosophy of Congress when dealing with anything from Income Tax to Social Security, and while the while the complexity of the regulations continues to grow (the Tax Code is over 13,000 pages currently) and the number of regulators continues to grow as well; the problems of understanding these complex regulations and proper oversight of such programs yet remain. 


In other words, both groups have taken billions of dollars of our money over the years to keep for us. Both groups appear to be untrustworthy with this money, having squandered it for their own gain while ostensibly holding it in trust for our future use. Both seem incapable of following the often conflicting, confusing, and often contradictory rules either by monitoring themselves or under the oversight of outside groups set up specifically for this purpose. 


One cannot help but wonder therefore, whether the greater threat to Main Street (as politicians love to call us) is Wall Street or Congress?

Timing Is Everything

It's tin foil hat time again here at Just Blowing Smoke ladies and gentlemen, so bear with me as I set aside my tam, seat its metal counterpart firmly in place, and once again speculate on something that occurred to me in the wake of the now almost week-long celebration that the political left is having since the passage of health care reform ... 


While few of those on the right would like to give President Obama credit for much of anything, most would agree that over his relatively short career in public life he has been a pretty savvy political strategist. Who can argue this when watching a relatively obscure Illinois state senator in 1996 rise to win election to the highest office in the land by 2008? 


How then do we explain the ugly, lengthy, and often painful to watch strategy used to see health care reform legislation passed? Was it a failure to properly utilize crushing majorities in both houses of Congress? Was is poor planning on the President's part to let Congress fumble about the task for months before stepping in himself to lead the parade? Was it a failure of purpose on the part of the House and Senate leadership to see this drag through Congressional recesses in 2009, knowing that some would face difficult meetings with constituents during those breaks? Could it instead have been yet another bit of brilliant political maneuvering on the part of a President and his team to get this legislation passed and provide just enough political cover for legislators who are running for re-election? 


Consider that while it seemed to take forever to get this supposed #1 presidential priority signed into law, it is now in fact the law of the land. Consider that while a super-majority was squandered in the Senate, enough votes were found in the end to achieve passage. Consider that though enough backroom deals were brought to light in the process to make the abuses and maneuverings of Tammany Hall seem tame by comparison, that they had no effect in the end on passage of this bill. Consider that once again, Congress voted on legislation that it had not properly read, did not understand, and passed anyway. Consider as well that though many Conservatives have vowed to wrest public office from those who supported this legislation, those considered most responsible have only now been identified. 


And though opponents of health care reform have targeted those they consider the culprits in this apparent comedy of errors for political challenge, they do so now with the clock quickly ticking away. This is, as most will note, after the date for petitions to run against them under the auspices of the two major parties had to be turned in. It is barely more than one month before primary elections for nomination of these two parties are held. It is barely more than seven months before the general elections for those seats will be held. 


One can hardly help but notice that this provides little time for opponents to raise money to battle against those with already large political war chests, little time to attempt to run an effective campaign against what in many cases are firmly entrenched incumbent legislators. 


Could it be that while Conservatives and Republicans (there is some overlap, but not as much as one would like) are celebrating the minor victory of at least fighting the good fight before losing this long-fought battle, that those in the Obama camp are likewise celebrating a strategy that has drug out the process long enough to pick the time and place of the next one? Could it be that while political right is vowing to carry the fight to the coming election, confident that the health care vote will be their key to victory, that the left recognizes that their strategy has in turn made that battle more difficult to win? Could it be that what was considered by many to be a flawed legislative strategy by the left was in fact a master stroke, in that it lured the political right into a strategically weak position (in time) through these apparent minor defeats? 


Whether you approve or disapprove of the health care reform legislation or approve or disapprove of the president, I fear that we may all need to tip out hats (even the tin foil ones) to what perhaps might have been an absolutely brilliant bit of political strategy. For in warfare and in politics, as in much else in life ... timing is everything.

The Health Care Recipe

On this weekend of what will apparently be the deciding vote on the future of health care reform in this country, it's interesting to understand some of the history and human nature involved with the recipe for health care that we are cooking. What we are trying to prepare here is a dish from the tax exclusion of employer provided health benefits. 


This all began under a rather famous progressive President, Franklin Delano Roosevelt, whose administration during WWII instituted wage and price controls to keep corporations from profiteering from the war ("excess" profits were taxed at an extremely high rate) and to keep them using such profits in a bidding war for employees. Employer provided health benefits were exempt from these laws however, so companies plowed profits into such plans to retain their best and brightest. 


Hence today, if you try and buy private health insurance, you do it with money that you are taxed on. If you receive it from an employer, the money is untaxed ... clearly a better bargain. Human behavior then makes its way into the recipe, by following the golden rule that anything provided to a person for free will be considered of little or no value. In the days of low-deductible, low co-pay insurance, there can therefore be no harm in abusing the use of something that costs you nothing. 


As a consequence, people and doctors took full advantage of this "free" service provided by employers. The government re-entered the process with Medicare and Medicaid. Well intentioned as the programs might have been, they provided further "free" medical care to those already not covered under employer programs and encouraged further abuse of the system. Not only did they cater to the potential abuse of a program which the patient didn't seem to directly pay for, but they contributed additionally by setting fixed benefit payments structures for certain procedures. This had the doubly negative consequences of readmitting government price controls to a part of the process and allowing (or forcing) doctors to recover lost revenue by charging higher prices to those not covered by these government programs. 


Added then to the ingredients of this were the efforts of trial lawyers, who sought to maintain the confusion between honest human error and criminal behavior for the purposes of personal financial gain. Capitalizing on a combination of greed (personal and professional), carefully bought and paid for tort law, and the natural sympathy of juries for those they feel have been wronged; they turned medical malpractice into a winning lottery ticket. Pain and suffering were turned into potential free rides for those unlucky enough to have been injured, but lucky enough to have a good case and better lawyer. This liability lottery in turn led to malpractice insurance rates that further drove up the cost of medicine and a massive increase in testing procedures (and their billable costs) in a vain attempt to cover the posteriors of doctors against future lawsuits. 


The final ingredient of course is the creativity of the human mind. Given time, opportunity, and the opportunity to make a profit by doing so; Man (and Woman) will seek ways to extend their own existence and that of their fellows through and increase of medical science. New technology, new drugs, and new treatment procedures will inevitably drive up the cost of medicine and the length of time that a given human being has access to it. 


Stir such mixture together and bake in a Congress that has no concept of fiscal responsibility and you get the spiraling increases in the cost of medical care in this country today. 


 There is a further truth here however and since I know of no other way to do so, I will just say it: "Government has never been able to control the cost of any good or service, only the payment given for it." Thus the recipe for health care reform currently on the table seeks to change the nature of the result without changing any of the ingredients used. It does not take into account the nature of the cooks or the way that the dish has been prepared for over 60 years. In a argument far too typical of government policy, they tell us however that this recipe will undoubtedly achieve a better and more palatable result if we just make it in a much larger batch.