Archive for November, 2009
Obamacare–This States The Problem, Succinctly!
Posted by Tom in Nationalized Health Care, Welfare on November 18, 2009
An email from my son, Matt, this morning: ”Great one paragraph summary:”
He was referring to today’s WSJ op-ed by Jeffrey S.Flier, Dean of the Harvard School of Medicine who has had to contend with Romney’s Massachusetts health care system and now faces Obamacare. Here’s the paragraph:
Our health-care system suffers from problems of cost, access and quality, and needs major reform. Tax policy drives employment-based insurance; this begets overinsurance and drives costs upward while creating inequities for the unemployed and self-employed. A regulatory morass limits innovation. And deep flaws in Medicare and Medicaid drive spending without optimizing care.
The full article is worth reading.
Tom Motherway
Exported Inflation Will Come Back to Wreck Us
Posted by Tom in Centrally Managed Economy, Deficit, Economics, Financial Policy on November 18, 2009
Jerry O’Driscoll’s discussion at yesterday’s Reno Hayek dinner on our future economic environment was excellent. The subject was designed to forecast deflationary or inflationary forces in place now that must of necessity influence financial management of our assets and liabilities. Jerry handled that expertly and at the same time previewed his Cato Institute podcast published today, November 18th.
With the blowup of the government-fostered real estate bubble we began a period of domestic deflation mainly in real estate but also in other products especially those not heavily dependent on foreign content. The extended resultant recession fostered business cost cutting, high unemployment, and consumer retrenchment and de-leveraging. As Mark Gongloff pointed out in yesterday’s WSJ the difference between the producer price index and the core consumer price index shows that the producers have borne the world inflationary brunt. But our current economic malaise is keeping domestic inflation in check.
So, in essence, we are experiencing deflation relative to the rest of the world! How can that be? Jerry’s simple answer is that we are exporting inflation. Our profligate fiscal and monetary policies are creating asset bubbles in other countries, particularly those with currencies linked to the US dollar. Investors borrow dollars at near-zero interest rates and invest in foreign assets paying higher returns. This is the “carry trade,” a near-perfect arbitrage. This is why Chinese financial authorities are screaming at Geithner and Obama to get America’s fiscal house in order.
Why then are we worried about inflation? We are living beyond our means now and Obama’s policies are bent on making it worse. The 2009 deficit will exceed 12% of our GDP and deficits for the next ten years are projected at 7% of GDP resulting in national debt approaching 100% of GDP.
When will this reverse? When will inflation raise its monstrous head? When China and the rest of the world will no longer buy the worthless debt America is selling at ridiculously low interest rates. Jerry “guesstimates” 2011 or 2012. So forecast high interest rates and high inflation in the intermediate term.
Participation of the attendees was fun and informative. Den Jilot told the upbeat saga of his recent IPO, proof that capitalism is still very much alive. He has business in over 100 countries and is keenly aware of favorable jurisdictions; he is comfortable with the Asian countries close to China.
We welcomed two new members Manny Martinez and George Caras. George in fact has just been to an offshore investment seminar where they discussed opportunities in Australia and New Zealand. I speak for the group in thanking Jerry O’Driscoll for a great discussion.
Tom Motherway
Rights of US Citizens Cheapened
Posted by Tom in Defense, Military Policy, National Character on November 16, 2009
Obama’s DOJ minion Eric Holder has demeaned and cheapened the rights of US citizens. These are hard fought rights gained by our forefathers with risk, blood, life and intellect. Constitutional rights including, confrontation by accuser, trial by jury, representation by counsel, strict evidentiary standards. These are rights unavailable to the majority of the world population and envied by those who don’t have them.
So why you may reasonably ask, would we give them to people who seek to destroy them and everything they stand for? Why would we take the risk that our intelligence sources would be exposed by the rules of discovery and evidence granted by these rights? Why, in fact, would we allow the exercise of these rights by the 911 terrorists-confessed terrorists–to use them to escape punishment?
The dynamic Obama-Holder duo makes a mockery of our heritage and of the sacrifices made to secure it. They do it intentionally because they put no value in it. Ever-bowing Obama travels the world apologizing for America. This elitist president has never served, never contributed; but he has sucked at the public trough for his short meteoric career. His trashing of America sadly is in many ways a self-fulfilling prophesy.
I subscribe to and recommend Stratfor Global Intelligence (www.stratfor.com) which today has an excellent article on wartime trials. Republication is permitted so I insert a portion here:
It is important to consider how wars are conducted. Enemy soldiers are not shot or captured because of what they have done; they are shot and captured because of who they are — members of an enemy military force. War, once launched, is pre-emptive. Soldiers are killed or captured in the course of fighting enemy forces, or even before they have carried out hostile acts. Soldiers are not held responsible for their actions, but neither are they immune to attack just because they have not done anything. Guilt and innocence do not enter into the equation. Certainly, if war crimes are in question, charges may be brought; the UCMJ determines how they will be tried by U.S. forces. Soldiers are tried by courts-martial, not by civilian courts, because of their status as soldiers. Soldiers are tried by a jury of their peers, and their peers are held to be other soldiers.
International law is actually not particularly ambiguous about the status of the members of al Qaeda. The Geneva Conventions do not apply to them because they have not adhered to a fundamental requirement of the Geneva Conventions, namely, identifying themselves as soldiers of an army. Doing so does not mean they must wear a uniform. The postwar Geneva Conventions make room for partisans, something older versions of the conventions did not. A partisan is not a uniformed fighter, but he must wear some form of insignia identifying himself as a soldier to enjoy the conventions’ protections. As Article 4.1.6 puts it, prisoners of war include “Inhabitants of a non-occupied territory, who on the approach of the enemy spontaneously take up arms to resist the invading forces, without having had time to form themselves into regular armed units, provided they carry arms openly and respect the laws and customs of war.” The Geneva Conventions of 1949 does not mention, nor provide protection to, civilians attacking foreign countries without openly carrying arms.
How much damage can Obama do before his term expires?
Tom Motherway
Is a US VAT Inevitable?
Posted by Tom in Congress, Economics, Financial Policy, National Character on November 15, 2009
Bruce Bartlett in his November 13th Forbes post thinks so basically because the gaping budgetary holes and debt peaks will be impassable without one. He admits that with a VAT we will be on Friedrich Hayek’s comfortable Road to Serfdom. And he suggests that once on that road we like the Europeans will be hard pressed to turn off.
It is hard to fault his argument. Our problems–to a large extent caused and certainly exacerbated by the Obama agenda–are so large that they cannot be overcome under our traditional structure. Obama and his clueless Democratic minions Reid and Pelosi believe that money grows on trees and that China and our trading partners will keep buying our increasingly worthless paper even while we continue to wage a trade war with them.
Could significant enough cuts be made in our budget? Undoubtedly, the could; very few things are beyond the realm of possibility. Will significant enough cuts ever be made? Undoubtedly, they never will be made, as this is one of the few things that is definitely beyond the realm of possibility.
The sad truth is that while a VAT could help, it will assuredly also hurt. Like bailouts it would be a cure which also causes the disease. Giving the politicians a new source of funds will only hasten our path on that Road to Serfdom. I don’t know about you, but my money is on a VAT as Obama hastens our Europeanization.
Tom Motherway
Highly Recommended: Nevada News & Views
For the past couple of weeks I have given Chuck Muth’s Nevada News & Views a fair test. I say fair because the publisher bills himself as “unfair, unbalanced, (and) always right!” As far as I’m concerned Chuck is doing a great job with the publication and I highly recommend it.
While Chuck may be a bit overly candid as to his opinions he publishes posts from writers of both parties. For example, Mike Zahara a Democrat penned a good post on Obamacare starting with the question: “If your house caught fire, would you call the Fire Department , or build a new subdivision next door?” You can read the piece here.
Nevada News & Views is a free daily that comes with an email article summary and web publication link. For subscription information Chuck’s email is chuck@chuckmuth.com. Or, you can subscribe by simply inserting your email in the subscription section on this link.
Tom Motherway
Ft. Hood Massacre-What Have the PC Liberals Wrought!
Posted by Tom in Military Policy, National Character, Press on November 10, 2009
Poor Major Nidal Malik Hasan the “victim” who gunned down 42 Americans killing 13 and wounding 29! He must have flipped but we don’t really know his motives proclaimed the MSM; and Dr. Phil, popular psycobabalists, suggested that he must have been “far out of touch with reality.”
No one in the MSM would call him a terrorist. Few wanted to admit he was Islamic. Diane Sawyer said someone was wishing that his name was “Smith.”
Nidal Malik Hasan associated with radical Islamic mosques and shouted anti-American tirades, all of which was ignored by his superiors. He yelled “Allah Akbar” as he gunned down unarmed innocent Americans.
The FBI averred that the killing was not terrorism, nor was it Islamic terrorism! This was merely mass murder. And Barack Hussein Obama said “we shouldn’t jump to conclusions.”
What has our liberal political class wrought with its political correctness, moral relativism and multiculturalism? Other than to pervert our language and abandon common sense! As Dorothy Rabinowitz suggests, “how far out of touch with reality” is Dr. Phil and the rest the PC commentators? Andy McCarthy adds, “Dare to Call I Terrorism.”
Today’s 20th Anniversary-Russian Perspective
Posted by Tom in Foreign Policy, National Character on November 9, 2009
In our instant satisfaction world, a fat-dumb-happy world, we tend to forget the fall of the Berlin Wall, its causes and dramatic consequences. The consequences are well treated by Yevgeny Kiselyov in his Moscow Times post today. This is quite a refreshing take from what was then the Soviet Union. The causes are summarized in the November 9th WSJ opinion editorial.
Unlike our president, we should celebrate the Fall of the Wall as the most significant event in modern history for freedom and democracy. God bless America!
Tom Motherway
Obama AWOL-From Celebration of 20th Century’s Victory
Posted by Tom in Defense, Foreign Policy, National Character on November 9, 2009
Nile Gardiner calls it correctly as, “shameful when the US president can’t even be bothered to show up at a ceremony marking one of the most momentous events of modern times.” He attributes it to: 1. Obama’s discomfort with American greatness, 2. His attachment of little importance to the advancement of human rights on the world stage, 3. His disregard of the transatlantic alliance, and 4. His desire to appease Russia. See Daily Telegraph post here.
I as well as others have previously treated Obama’s apologies for American greatness, his embrace of dictators, his gravitation to statism, and his penchant to curry favor with the old Soviet economic model. Obama is indeed the antithesis of American greatness, in fact the anthesis of America. He wants to remake it as a socialist welfare state. He wants it to be totalitarian with him in control. Thus understood, his domestic and foreign policies are logical. Thus understood, his absence from what should have been an American “victory lap” in Berlin should indeed have been expected!
Tom Motherway
A “Hair of the Dog” That’ll Kill ‘Ya!
Posted by Tom in Centrally Managed Economy, Congress, Financial Policy on November 8, 2009
Surprise, surprise, Freddie is requesting more federal bailout money. Yep, Freddie wants $6.3 Billion and Fannie wants another $15 Billion. That will bring to total bailout for these two parasites to $112 Billion. That’s $112 Billion of your, your children’s, your grand children’s, and your great-grandchildren’s money. I suspect it will bankrupt more than a few of our descendants.
What’s the role of government here? A brief factual review is in order: Both Freddie and Fannie are GSEs, Government Supported Entities; these are corporations where the shareholders get the dividends and stock appreciation when they make money, and the US taxpayers absorb the losses at times like these. A proper role of government?
Freddie and Fannie are designed to encourage home ownership for everyone, yes that’s correct, even for those who cannot afford to own a home. Fannie is a 1938 Roosevelt New Deal giveaway designed to make mortgages affordable for low income families. Freddie was created in 1970 to compete with Fannie! Yep, that’s right one taxpayer guaranteed entity was created to compete with another. Both essentially directed economic investment. A proper role for government?
Then Carter’s administration and Congress enacted the Community Reinvestment Act in 1977 to force banks and S&Ls to open branches in inner city areas of extreme blight and grant mortgages to the residents living in those areas, low income folks who had been unable to get home mortgages. A proper role for government?
Add to this happy environment Alan Greenspan’s flood of dollars at low interest rates at the start of this century and Barney Frank’s promotion of the Fannie-Freddie plunge into sub-prime mortgages and you have the perfect financial storm. In fact recent economic research mentioned earlier on this blog demonstrates there was more investor demand for mortgages than there were houses and sub-prime borrowers! The perfect storm indeed!
According to Nick Timiraos’ news item in the November 7th WSJ, last month Obama “directed both companies to provide aid to state and local housing finance agencies in an effort to help jumpstart lending activities for low- and moderate- income families.” (emphasis added)
What’s the proper role of government? Is it to redirect or repeal the laws of economics? No doubt Obama, Pelosi and Reid have enough confidence such that government can repeal the laws of physics! But neither are proper purposes of government.
We now have another perfect storm on the horizon, a Fed flood of money at interest rates near zero and a statist Obama administration striving to jumpstart lending activities for low income families. And Barney Frank, Maxine Waters and Chris Dodd are still there to push these lenders into more “liar-loans.” In essence, Obama is saying that the cure for our current economic problems is a good strong dose of the cause of those problems! What kind of logic is this?
It’s not a hair of the dog that bit ‘ya. This is truly a hair of the dog that will kill us, our children, grandchildren, etc. It needs to be stopped. The economy should be free of government interference, the painful results of which we know only too well.
Tom Motherway
Unintended Consequences, or Very Intended Consequences?
Posted by Tom in Centrally Managed Economy, Nationalized Health Care, Statism on November 7, 2009
Obama and his leftist minions, Pelosi and Reid want to take 16% of the freely functioning American economy and shrink it. Their mantra is we are spending too much on healthcare. Their solution is to enact a law that mandates less spending.
One way they aim to do this is by shifting our private system slowly, inexorably and by slight of hand to a public system. Once that occurs they will simply eliminate medical services, drugs, devices, hospitals and yes, doctors. Proof of that intent is the refusal by Democratic leaders to include Democratic proposals for training new doctors that will be required by the addition of 45 million heretofore uninsured to the ranks of the public system. Think about it, they profess to shrink 16% of the economy while adding 36 million new consumers of medical services! A bit disingenuous to say the least! Herbert Pardes, MD sets out the coming doctor shortage math in his WSJ November 5th oped.
More telling of the true intent of these disingenuous demagogs that control the White House and Congress is the well understood experience of our neighbors to the North with the Canadian public healthcare system. A country that once ranked among the leaders in the ratio of doctors to the population, has now fallen to 26th out of 28 developed nations in that same ratio. That has resulted in long waits and rationed services. In fact, the wait to see a specialist has gone from 9 weeks to 17 weeks in the last 15 years. Add to that the unionization of medical professionals which naturally followed from the public takeover and in Manitoba you have to wait 8 months to get a simple colonoscopy! Dick Morris makes the case succinctly in his November 7th Real Clear Politics post. Recall the old joke, “if the US passes public healthcare, where will the Canadians get their medical treatment?” It certainly takes on greater significance now.
In all of this Chicago style political effort there lies a greater truth, a greater reality, the unalterable belief that the leftist government will control every aspect of civil and economic life. If it is healthcare now that needs shrinkage, what will be next….. food, shelter, entertainment, or just plain thinking? Welcome to the Orwellian world of 1984! The Obama, Pelosi, Reid hubris is absolute!
Tom Motherway