Tax, Regulate, and Subsidize

"The government's view of the economy could be summed up in a few short phrases:  If it moves, tax it.  If it keeps moving, regulate it.  And if it stops moving, subsidize it."

- Ronald Reagan

It certainly seems that this former President was at the top of his game in saying this, and that what was true over thirty years ago remains equally true today.

 
What brought these comparisons about was the recent revelation by JP Morgan Chase, that poor monitoring of a worse strategy of investment cost the bank some $2 billion of its own money in the last six weeks.  Now there was a day when $2 billion was real money, but those days are almost as far behind us as the Presidency of Ronald Reagan.  After all, JP Morgan Chase is a bank worth almost $2.3 trillion; which is a bit more formidable sum to consider, unless of course, you're a national government.

There are those now calling for the bank's CEO Jamie Dimion to resign from the Federal Reserve Board (if not from the bank), including a former Obama adviser and now Senatorial candidate in Massachusetts Elizabeth Warren.  Of course you all remember Ms. Warren's latest claim to fame, that of being 1/32 Cherokee Indian.  Now that claim has come into serious question, if not disrepute (in a distraction that radio personality Mark Steyn cleverly calls Fauxcahontas).  My math skills may be a little rusty, but Warren's potential error on her pedigree seems to be something on the order of 3% and JP Morgan's on the order of .01%.  But let's set that, along with her campaign pontifications aside.

We could take up instead those made by White House press secretary Jay Carney, using his pressroom podium as a bully pulpit to speak on why this situation is justification for the 'Dodd-Frank Wall Street Reform and Consumer Protection Act', and to make the case that its perhaps additional federal regulations of the banking industry should be taken up at the federal level.  Of course Mr Carney fails to point out that the type of trading being done by the bank was not covered under Dodd-Frank and that it was the bank and not federal regulators that caught the problem, but it's seldom that the a political candidate's spokesperson will let the facts get in the way of a bit of campaign rhetoric. So maybe we should set aside the statements of Mr Carney as well in the spirit of fairness (to what I don't know).

Since some are setting the federal government up as a fiscal watchdog, let's look instead at the numbers of a couple instances of recent money loss under federal oversight.  In it's most recent quarter of operation (admittedly 12 weeks and not 6), the US Post Office lost $3.2 billion.  What's more, it lost $3.3 billion in the fourth quarter of 2011, and $3.1 billion in the third quarter last year.  In fact, according to Business Insider, it has lost some $20 billion since 2007. Billions of dollars lost through the execution of a lousy strategy and poor monitoring that sound vaguely familiar, if considerably more egregious; and all of this oversight was performed by Congress.

But let's face it people even $20 billion is chump change in the great scheme of things (pun intended).  After all, isn't Congress responsible for oversight of the national budget?  Now, of course the Senate hasn't seen fit to exercise its responsibility of passing a budget in over 1100 days (3 years for those of you not using the Mayan calendar).  Even though the Senate has a clear Democratic majority however, I'm sure that the fault must lie with the Republicans. The House, to its credit, has passed a couple of budgets since evil Republicans, with their nefarious ringleader Congressman Paul Ryan, started proposing draconian cuts; but nothing has seemingly come of these efforts as in a spirit of bi-partisan compromise that does little more than allow the madness to continue.

So in the first fiscal quarter of 2012, the national debt has gone up not $2 billion, $3 billion, or even $20 billion; but a staggering $320 billion (at least according to the Congressional Budget Office).  In fact, at the time that this was posted, the National Debt stood in excess of $15.7 trillion dollars.  So let me get this straight.  The government that loses millions in green energy projects, billions each quarter on the Post Office, and hundreds of billions each quarter in the deficit increase of the federal budget would like greater control on how private businesses spend or invest their own money and show no outrage (or interest for that matter) over their own apparent fiscal irresponsibility. 

OK, then.  Well it certainly seems (based on these facts) as though the government has made its case, and earned that right to impose further controls using Sec of State Hilary Clinton's 'suspension of disbelief' view of the world.  (Sorry, the sarcasm key got stuck and this just typed itself.)

We are after all, certainly taxing the profits made by banks like JP Morgan Chase already, and have increasingly sought to regulate them.  There are those in Congress and the White House who would like even more regulation on 'too big to fail' banks. You know, perhaps with enough government regulation, we might just be able to move beyond stage two of former President Reagan's quote and the bailouts that have already occurred and truly begin to permanently subsidize banks with taxpayer dollars.   


     

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.