Category Archives: Politics

Drill Baby Drill?

(What ever happened to that war cry?)

Note: I am back blogging by popular demand…. Actually one person suggested I climb back on the horse. Seemed sufficient. A lot of stuff going on right now so there are plenty of subjects to write about. Here’s a start.

Oil prices hit $104 per barrel today up from the 80s a few weeks ago. Speculators are nervous about all the protests in the Middle East. A weakening US dollar isn’t helping either. A popular uprising that started in Egypt and Tunisia and has now spread to Libya, Yemen and a number of other ME countries has folks worried that oil supplies may be disrupted. Even Saudi Arabia, Bahrain and Algeria, all major oil producers, are potentially lined up for conflict with the same poisonous formula of a Sunni elite historically dominating a Shi’ite majority. A disruption of supply from Saudi Arabia could easily push oil prices beyond $200 per barrel. Naturally, Iran wants to stick its long nose into these conflicts and stir up as much trouble as possible.

Gas prices escalate quickly as oil futures rise and gas is now at around $3.60 nationally and creeping upward. Before the blow up in the ME, analysts were already predicting that gas prices would rise to $4.00 pg this year and hit $5.00 next year as the world-wide recovery gained momentum and demand grew, especially in China and India.

The rule of thumb on gas prices relative to oil prices is, if you divide the oil price per barrel by 30 you get an approximation of what the gas price will be. Steven Chu, Energy Secretary, once opined that he would like to see US gas prices as high as European gas prices. At the time gas in Europe cost $8.00 a gallon. At $250 pb ol’ Stevie would get his wish. His opinion on how US voters would feel about $8 gas has not been reported.

The Obama Administration has done everything they can to make conventional carbon based energy more expensive. They claim they want to “reduce dependence on foreign oil” which to them does not mean drilling for oil on US soil or waters, but expanding use of corn, wind, solar and electric cars. Speaking of the Chevy Volt…. GM quietly released sales figures on the Volt for February. They sold 281 vs. 321 in January. Not to worry, Nissan sold 87 of their electric “Leaf” models. In other words, this electric car thing is really catching on. Yeah, right.

If a $40,000 compact that gets 30 miles on a charge is not enough to move you to buy one to save the planet, how about this? The state of Washington is considering an extra tax on electric cars because (drum roll please)… the electric cars are not paying their “fair share” of the gasoline tax that maintains the highways. That should do the trick.

According to Nick Loris and John Ligon of the Heritage Foundation, Obama’s energy policy cannot possibly succeed. Wind and solar only generate 1% of the electrical need in the US and the ethanol initiatives costs taxpayers $4 billion to produce 2% of the gasoline requirements. Furthermore, turning corn into gas drives up food prices worldwide. Part of the unrest in the Middle East results from rising and painful food price increases. On top of all that, it may even be worse for the environment than regular gasoline.

Since Obama took over he and his Interior Secretary, Ken Salazar, have been doing everything possible to cut domestic energy supplies. (Stats courtesy of Heritage)

· Salazar cancelled 77 leases for drilling in Utah in his first month in office. It is estimated that 800 billion barrels of recoverable oil exists in this oil shale deposit called the Green River Basin. That’s three times greater than the reserves in Saudi Arabia.

· In April Obama exploited the blow out of the Deepwater Horizon well in the Gulf to shut down all drilling there. They modified a report by a commission of experts from the National Academy of Engineers to make it sound like the commission supported the Administration’s moratorium on drilling. The engineers did not support such a ban and were more than a little pissed that Czar Browner had rewritten their report.

· In June LA Federal Judge Martin Feldman overturned the Obama Admin moratorium on drilling. So the Interior Department simply cancelled that one and issued another essentially identical ban. An annoyed Judge Feldman in February ruled the Obama Administration in contempt of court for ignoring his ruling. Last week the Administration issued the first drilling permit for the Gulf since April. Experts predict that the offshore moratorium will reduce domestic output by 13% this year.

· Secretary Salazar also placed the eastern Gulf and the coasts of the Atlantic and Pacific, including Alaska, off limits for any drilling for oil. That puts an estimated 19 billion barrels out of reach.

· Of course, ANWAR can never be exploited under this Administration. That’s another 10 billion barrels.

· Interior also stopped the development of the Keystone XL pipeline. The first two phases of this 4 phase project are complete and pump oil from the rich Alberta oil sands to refineries in Cushing, OK. The next two phases were to pump 500,000 barrels per day to the refineries located on the Texas Gulf coast. Together these two pipelines would reduce dependence on Venezuelan and Middle Eastern oil by 40%. Gee, that seems way too sensible… get a reliable delivery of oil over land instead of by tanker and from a friendly neighbor?

I guess what surprises me is that as we rapidly approach $4/ gallon gas nationally (already achieved in some places), where’s the outcry? Where are the chants of “Drill Baby Drill”? Four dollar gas is supposed to be the tipping point but we seem on a path to blow right through that and hit $5.00 soon. At the moment no one seems to be raising much of a fuss, even as the cost of fuel will soon put a big damper on a slow economic recovery. It may also trigger a dreaded round of inflation. Obama does not seem worried. They are still talking about increasing taxes on oil companies. They must figure the voters don’t give a damn. Do you?


Filed under Obama, Oil, Politics

Jobs, Jobs, Jobs

“Jobs, jobs, jobs.” That was the mantra of every politician from both parties in the recent election. With real unemployment in the US at around 16% (at least) and a subject very much on the mind of every rational voter, that was unsurprising. When you think about it though, nearly all of these politicians have never created a job. And, in many cases, never actually had a real one, having spent their whole career in politics or entombed in the vacuum of academia. What do these guys know about creating a job?

Then too, for all the talk about a “wave election”, when you get right down to the numbers, 86% of the incumbents got re-elected. In other words, 86% of the idiots who got us into this mess are still there. True, that’s down from the usual 98% but still insufficient to effect real change in policy. I mean, why should the incumbents who got re-elected suddenly change policy? There’s no upside. For them, what they’re doing now is working fine.

To get an idea on how to create jobs it might be useful to look at why and how we lose them. I gave that a try in the recent piece “The Buffaloization of America”. Buffalo and all the other “rust belt” cities lost their manufacturing industries by a series of policies that made it difficult or impossible for companies to compete and make a profit. Aggressive and demanding unions, stifling regulations, predatory lawyers and excessive taxation drove companies to either move to more favorable climates (literally and figuratively) in the south or over seas … or die.

Corporations are not charitable organizations. They have to show a reasonable profit for their activities or their stockholders, many of whom are union retirement funds or the IRAs or 401Ks of average citizens, will demand the head of the CEO. If they can’t make a profit in Buffalo or California on their production of widgets they will simply move to where they can.

Then there is the matter of competition. If your company that manufactures in the US or Canada and is competing with a company making a competitive product manufactured in say, China you are going to be at a serious disadvantage in your cost of goods. The cost of any product is a function of the materials, labor, overhead and profit. The usual suspect in any discussion of “jobs going overseas” is labor. And it’s true as far as it goes. In the past much lower labor costs in Third World manufacturing was mitigated by improved productivity i.e. automation of the process. Of course, the foreign manufacturers eventually got the same sophisticated machinery and caught up.

Union work rules represent a bigger problem than the wage differential. These often conflict and cause work stoppages and productivity declines. Strikes are even more destructive.

Then there are labor laws and the employees and lawyers who game the system. In one of my businesses we had an employee who made a career out of getting fired. She would make everyone around her miserable until she finally got fired. She then sued for “unfair termination” or some such and won a big settlement every time. To my knowledge she has done this at least three times. We were the second company to hire this bit… er, pro. The company that got stung before us could not warn us because they would get sued again for saying something negative about her. Nor could we warn the next company in line. We were instructed by our lawyers to answer when asked for a reference on this crook to only say, “She worked here from X date to X date” and nothing more.

We had another employee at a different company who we fired for stealing from the company. She filed a sexual harassment complaint with the EEOC… not against me, thank God, but against some of our other employees. Of course, the charges were totally bogus. One of them was that she was out drinking one night after work with a bunch of her young fellow employees and someone said something offensive. Imagine that. The leap here is that my company is responsible for the speech of my employees when they are on their own time drinking in a bar? Yep, apparently so. It cost us a lot of money.

And let’s not forget product liability. I once dropped in on a friend that was baby-sitting her grand daughter who was a year old or so. It was a hot day and they had a “swimming pool” set up for the tyke. It had to be less than 4 feet in diameter and maybe 3 or 4 inches deep. Emblazoned on the tube was the following warning: “No Diving!!” Ya think?

If you make something some idiot will figure out a way to injure himself with it and sue you. The annual cost of torts on businesses in the US is something like $300 to $400 billion, depending on which study you prefer to believe. Clearly, that direct cost does not even consider the cost of defensive measures and both add to the cost of producing that widget making it less competitive with the foreign produced product. Congress has been passing these laws for years giving lawyers hunting licenses to sue companies. These lawsuits drive up costs and drive business owners absolutely nuts.

The loss of manufacturing jobs has been going on for years and is not going to be reversed overnight, if ever, in the US and other “developed” countries. However, there are some things that the new US Congress could do immediately that would help the situation in the near term.

1). Ratify the free trade agreements with Columbia, S. Korea and Malaysia that were negotiated during the Bush Administration. The Democrats have been sitting on these agreements for two years as payback to the labor unions that object because… well, they object and the environmentalists object because that’s what they do. The US Chamber of Commerce estimates that the S. Korea agreement alone is second only in importance to NAFTA and could create 345,000 jobs.

2). Extend the tax rates due to expire on January 1st for everyone. Keep the rates where they are for everyone and forget the class warfare shit. Not increasing capital gains and dividend taxes alone will be beneficial, not to mention eliminating uncertainty.

3). US international corporations are sitting on some $400 billion in cash in their foreign subsidiaries. If they bring it back to the US they get whacked for 35%, so in the past they have been reinvesting that in further foreign expansion. The Democrats want to tax that cash whether they bring it back or not. Instead, I suggest that they offer a limited time window for them to repatriate that money at a very low rate… say 5%. That would encourage a flood of new capital back into the US.

4). They should immediately lift the defacto moratorium on deep water drilling imposed by the Obama Administration. The have ostensibly lifted the ban but in fact have issued no new permits. If they would start issuing permits again they could put a lot of people back to work immediately on the Gulf Coast.

None of the above addresses the long-term reforms that need to be accomplished to really restore an economic boom and create the eight million jobs that have been lost. That would include: serious tort reform; deep sixing Obamacare; reducing the corporate tax rate to 25%; taking a brutally sharp knife to spending and letting oil and coal start again on US soil. None of the long-term reforms can possibly happen until after 2012 and unless a conservative President gets elected along with more, many more, conservatives to Congress.


Filed under Jobs, Obama, Politics, Predictions

Major Ebb

After the tsunami sweeps ashore all that water has to eventually go back where it came from, taking with it all manner of flotsam and the carcasses of critters drowned in the flood. The election tsunami on Tuesday swept away a lot of Democrats with some 60 House seats swinging over to the GOP and with a half dozen or so races still counting chads. (Hennepin County where Minneapolis is located was trying to figure out how they had 880,000 votes to count and only 708,000 registered voters. I wonder if that’s how Al Franken made it to the Senate?) The Republicans also picked up five governorships and five Senate seats with Alaska and Washington as yet undecided.

The wave washed away three Democrat committee chairmen, seven Dems with more than 20 years of experience and most of the freshman representatives that came in two years ago on Obama’s coattails. James Oberstar, MN (18 terms), John Spratt, SC (14 terms) and Ike Skelton, MO (17 terms) were among the notables who now need to go find a real job. Actually, I suppose if you have spent 34 or 36 years in the House of Representatives you likely stole enough that working is no longer a necessity.

In one of the more satisfying purges, Alan Grayson of Florida, perhaps the most obnoxious politician in the US, got his ass handed to him. Good riddance.

Of course, this being US politics where incumbency means almost certain re-election, many Democrats more than worthy of being sent off to new careers, survived. Barney Frank, MA and 30 year veteran of the House prevailed over his first opponent even given a fleeting chance at beating him. Barney, who’s only real job was pumping gas at age 18 and the individual most responsible for the housing crisis, showed that in some liberal enclaves you can get away with almost anything and get re-elected. Pete Stark of CA is another example. He’s a very cranky 78 years old and 18 termer. Viral videos of him insulting his constituents at town hall meetings didn’t hurt him any. He got 72% of the vote. Yes, it is California.

Harry Reid survived. Although most polls showed him tied with Angle or slightly behind, he won easily. Pundits said he “had a good ground game” which means that the labor unions hired a fleet of buses, catered lunches and dragged people to the polls. Boxer thumped Forina and Brown showed Whitman what the California Democrat machine could do when threatened. McMahon in CT also got whacked.

To me the three highly successful businesswomen that entered politics for the first time in this election; Forina, Whitman and McMahon represent the biggest surprise.

All were enormously successful CEOs and rose to the top of male dominated industries. All three are smart, articulate and honest and all dumped millions of their own money into the effort. Yet they all got their asses handed to them. Why?

OK, they chose to run in notoriously liberal states but it’s got to be more than that. Is it possible that powerful women threaten men or is it that women are turned off by these assertive gals? Both? One would think that the feminist groups would be pounding the pavement for these accomplished women. But no, these are conservative, capitalist women not enthusiastic about abortion. The feminists wouldn’t go near them.

Whitman dumped $140 million of her own money in the campaign to try to get the job of Governor of California that, to me, is one of the least desirable jobs on the planet. Maybe she did want to save CA, but I can think of other things to do with $140 million. The “fruits and nuts” elected Jerry Brown. Good luck. If you’ve got any California bonds, this would be a good time to unload them.

So what can we learn from this and what can we expect for the next couple of years? A lot of the political wags say that Obama will now try to pull a Clinton and govern more from the center and find practical solutions with the new Republican majority in the House and new balance of power in the Senate. I’m not so sure about that. He is buggering off on an absurdly expensive trip to India and Indonesia tomorrow without meeting with the new leaders in the House. Not sure if that’s symbolic. Compromise and finding middle ground has never been his style and doesn’t fit his Chicago politics/ Saul Alinsky philosophy. He once said he didn’t mind if he’s a one-term president. Maybe he means it. If he and Harry Reid obstruct GOP efforts to preserve the Bush tax cuts and refuse to cut spending, then he will certainly get his wish. Maybe the Dems will even nominate someone else.

Another interesting thing to watch will be what happens to the Tea Party movement. Will the grass roots movement fade away? Will the enthusiasm die or will it persist? The Tea Party enjoyed some successes in this Tuesday with the election of Marco Rubio and Rand Paul. They also experienced some failures, most notably the selection of Christine O’Donnell and Sharon Angle. Both were elected in the primaries by the Tea Party folks based on their ideological purity and both got hammered in the general election. In both instances there were other Republicans in those states that would have had a better chance. Will the Tea Party folks be a little more pragmatic next time around?

Then there is the Sarah Palin question. What’s she gonna do for the next couple of years? Personally I think that her ego is going to get the best of her better judgment and she will run for President. Mistake. While I personally like her, I don’t think she’s right for the Oval Office. Most polls I’ve seen agree with me on that one.

Well, as the Chinese say, “May you live in interesting times.” No problem there.

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Filed under Election, Obama, Politics, Tea Party

Paradigm Shifts and Flying Mud

Thomas Kuhn defined a paradigm shift in his 1962 book, “The Structure of Scientific Revolutions” as “… when one conceptual world view is replaced by another.” Swiss Watch International Men's Limited Edition Automatic Chronograph Stainless SteelOne of the classic examples is the Swiss watch industry. Until the mid ‘70s the Swiss dominated the world market for watches. The Japanese approached the Swiss with a new concept in watches, digital vs. analog devices, in plastic cases and with few moving parts. They were extremely low cost, unrepairable and basically throw away watches. The Swiss demurred. The Japanese returned to Japan and introduced the “Swatch” and many follow on digital models. The Swiss watch industry was nearly wiped out.

Of course, there are countless examples that have occurred throughout history. Makers of buggy whips and manure shovels never thought much of the future of the new noisy, gasoline burning vehicles, much to their surprise and dismay. And, no one can deny that the PC and the Internet have changed the world forever.

With the elections in the US less than two weeks away we are left to ponder whether a paradigm shift in American politics is about to take place. For decades now the US has drifted toward a more socialist/statist government, culminating in the election of Obama and the dominance of the left wing of the Democrat Party in Congress. As the Democrats rushed forward with their agenda of pushing the US further toward a socialist economy with the pork laden stimulus bill, the take over of the auto industry, the unpopular health care law, take over of the student loan business and cap and trade legislation, voters reacted with alarm and anger.

Rick Santelli, CNBC business commentator, is widely given credit for striking the match that ignited the Tea Party Movement. As thousands of Tea Party groups sprang up around the country, many professional politicians of both parties ignored the movement and the liberal mainstream media sneered. Later, as the movement gained momentum, some Democrats, fearing disaster, retired and some complacent, “moderate” Republicans got booted by the Tea Party candidate in the primaries. Entrenched lifetime GOP politicians Lisa Murkowsk of Alaska and Charlie Crist of Florida refused to go quietly and are running against the Tea Party candidates that won the Republican primaries.

Many of these TP candidates are new to politics and come with military experience and business backgrounds and are, thankfully, not lawyers. Some are weak candidates and easy targets. In another surprise, boatloads of money flowed into these campaigns from motivated citizens around the country.

As the polls started to suggest a rout for the Republicans on November 2nd, the alarmed Democrats and their left wing allies have swung into action. Incumbent Democrats found themselves unable to tout their votes for wildly unpopular legislation and instead have resorted to personal mud slinging attacks on their GOP opponents. Of course, American politics has always been a brutal blood sport but I suspect, that this election will be remembered as one of the nastiest. That’s saying a mouthful.

Those of my vintage may remember the “Daisy” commercial run by Lyndon Johnson’s campaign against Goldwater. It featured a little girl in the foreground picking daisies while an atomic blast occurred behind her. The implication being that Goldwater was such a right wing nut job that he would use the bomb if elected. He was not. More recently, you might recall the James Bryd ad run by the NAACP against G. W. Bush suggesting that Bush condoned dragging blacks to death.

The list for this election cycle so far is long and if you are curious you can consult the blog site, The Daily Beast, and their “Hall of Shame”. Two stand out for me:

Meg Whitman California is an economic basket case with a $19 billion dollar deficit (probably more since they have pushed some debt into the next fiscal year) and some $50 to $100 billion in unfunded pension liabilities. The state is hemorrhaging jobs as businesses flee anti-business taxes and regulations. A company in a similar situation would call in a “turnaround CEO” to straighten things out. Enter Meg Whitman, the highly successful former CEO, who grew eBay from startup to mega company. She’s running against Democrat Jerry Brown, a 40-year career politician and former governor, who was dubbed “Governor Moonbeam” (for obvious reasons) by Mike Royko, Chicago’s famous columnist. (RIP)

Whitman, a Republican in a notoriously “blue” state, was doing pretty well against Brown so the Democrats trot out her former maid in the company of Gloria Allred, a publicity hound liberal lawyer. Allred’s claim? Whitman had knowingly hired an illegal alien and worse, mistreated her. It turns out the maid, Nicky Diaz, had been hired through an agency and Diaz had used a phony social security card and drivers license. The poor girl had “only” been paid $23/ hour for cleaning Whitman’s house… pretty good pay for menial labor. The whole thing was a sham to drum up sympathy in the large CA Hispanic community. Of course, there is much more in the way of negative ads against Whitman and now she looks like a long shot. California will likely get Brown II and continue its decline into the toilet.

Without question the prize for the most offensive and despicable ad came from Florida Democrat Congressman Allen Grayson. His ad against his opponent, Dan Webster, called him “Taliban Dan” and selectively edited his statements to make it look like he was saying something he never said. Should we be surprised? Not. Grayson is the same guy who stood up in front of the House and declared that the Republican plan for health care was to let old people die. If there is any justice in this world the liberal bomb thrower Grayson will be sent packing.

Once the voting starts and the counting begins the mud slinging will end and the corruption will begin. If history is any guide, we can expect lots of “irregularities” in this phase of the struggle. Remember the governor’s election in Washington State between Rossi and Gregoire? (The first one.) Rossi won on the original count and the recount but the King County (Seattle) election officials kept digging for votes, finding some in a closet and some in a car trunk and voila, Gregoire, the Democrat, finally won [in a hand-recount, no less]. Whew! The Democrat lawyers pulled the same stunt recently in Minnesota putting clown Al Franken in the Senate. And, let us not forget the vote counting fiasco in Florida in the Bush/Gore Presidential election of 2000. The Democrats have lawyers standing by to fly to any close election to contest every vote. They do. You could look this up. The dirty tricks have already started. In Illinois some counties failed to send out their military ballots on time as required by law. They say these votes may now not arrive on time to be counted. The military votes traditionally favor the Republicans. Coincidence? Hardly.

While I still have doubts that the GOP will win enough senate seats to take control there, it seems more than likely that the personal attacks will not sway enough voters to prevent the take over of the House by the Republicans. However, they will be on a short leash. If they betray the Tea Party they will incur their wrath in two years. A paradigm shift is coming and those that fail to recognize it are going to be swept away.

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Filed under Election, Obama, Politics, Tea Party, Whitman

The Buffaloisation of America

Note: Sometime back I decided to stop writing this blog. I figured only a handful of people were reading it and I was unlikely to change any minds. I figured that I would be able to devote writing time to finishing my languishing novel and a couple of short stories that needed some work. Fact is I did not work on the novel or short stories. I did a lot of reading and little writing. Then I chanced to hear from friend I have not communicated with much in recent years. He reported that he enjoyed several of my blog pieces, a surprise because I did not think he even knew the blog existed. Long story short: I decided to give it a couple more tries. If you actually read this, let me know so I can be assured that I am not talking to myself.

The news out the other day: The US census reported that the poverty rate in the US hit the highest level in history. 3.7 million Americans joined the ranks of the poor in 2009. Unsurprisingly, single parents head 70% of poor families. Marriage, it turns out, is the number one weapon against poverty. If fathers married the mothers of their children, 2/3 would be lifted out of poverty. However, welfare discourages this solution by virtue of the welfare rules. In 1964 when LBJ launched his “War on Poverty” 6.8% of births were to single moms. Now it’s 40%. For Hispanics it’s 50% and for blacks it is now 70%. BTW, the US spends one trillion dollars annually fighting a losing battle against poverty.

Of course, with a nasty recession going on and some 15 million Americans out of work, you should expect poverty to be on the increase. But, this has been going on for a long, long time.

You may well ask what has this got to do with Buffalo. Patience. I’m getting there. I returned to my hometown of Buffalo after many years of absence and was amazed that it had not changed all that much. The biggest difference was that all the major factories were shuttered, stores boarded up and the place reminded me of Warsaw right after the Soviet Union fell apart… run down and desolate. I later learned that 50% of Buffalo’s population had fled since I left high school in 1959. I stayed downtown in the Hyatt situated in a four square block of renovated buildings filled with shops and restaurants. As I ventured out after dinner for a little cigar stroll, one of the several private security guys I ran into to warned me not to venture out past the “green zone”. On the same trip I drove by the waterfront where the once mighty Bethlehem Steel plant still stands, although now silent and empty, like a neutron bomb had gone off. All along the waterfront other industrial buildings all stood empty, silent monuments to failure.

I guess Detroit is worse but all across the “rust belt” of the NE and Midwest the story is pretty much the same. Industry has fled to more welcome climates, some to the south and many to overseas. “Greed” say my liberal friends. Really? I think not. Corporations have an obligation to their stockholders to make a profit and if high taxes, stifling regulations and intransigent unions prevent a business from making a profit, they will relocate and move to a more favorable environment. California is experiencing this outward migration of industry now as the granite headed Democrats that control things in Sacramento pile on taxes and regulations.

Now comes the Obama Administration with its collection of egghead academics with zero business experience and anti-business Marxists to finish the job on American industry. The policies already inflicted on business so far are breathtaking. From the auto bailout/takeover, financial regulation, increased taxes to the drilling moratorium and the new health care mess, businesses in the US are pulling in their horns and trying to ride out the storm. Obama and the Democrats seem determined to turn all of the US into Buffalo.

Americans are scared and rightly so. The rise of the Tea Party movement reflects this fear and represents a grass roots ground swell that has caught entrenched Democrats and complacent Republicans by surprise. Many are still in denial.

Reality for many will set in on November 2nd. Most pundits believe that the Republicans will take over the House and some believe the Senate too. I suspect that the Senate will wind up evenly divided insuring gridlock and an inability to overcome an Obama veto. It will be a long time before Obama is voted out of office and he replaces Carter as the most clueless president in history. He can still do a lot of damage even with a Republican Congress.

The US was once the industrial giant of the World. No more. Go into any store and look for something made in the US. Good luck. The good paying jobs for middle class Americans in factories across the US are gone as a result of decades of stifling government actions. And, they are not coming back unless some serious changes are made. Here are a few recommendations, made with the understanding that few, if any, will be adopted.

  • First, the brakes must be put on the trial lawyers and the rules that give hunting licenses to them. Every corporation has hundreds of frivolous lawsuits going at any one time costing them millions to fight.
  • Second, the US levies the highest corporate tax in the industrialized world. Capital gains taxes should be cut to zero.
  • Unions are way too powerful, especially under this administration that curries political favor from them.
  • Regulations need to be cut at all levels of government.
  • And, the death grip that the teacher’s unions have on education needs to be broken. For all the money that’s thrown at education the end product only gets worse. It’s time to try something different.

The above is just a partial list but you get the idea. The loss of good paying industrial middle class jobs falls hardest on the poor and poorly educated. From there many social problems arise from the poverty inflicted on the lower classes. When people see no way out of poverty, crime, drugs, unwanted births and chronic welfare dependency result. If we do not reindustrialize America the whole country will be like Buffalo… or Detroit. Heaven forbid.

Don’t forget to vote.


Filed under Buffaloisation, Election, Politics

Tax Suicide

After spending money like Michael Jackson, (deficit this year at $1.5 trillion) Obama and his Democrat pals are suddenly concerned about the “cost” to the government if they do not raise taxes at the end of the year. The so called “Bush tax cuts” enacted in 2001 and 2003 got past the Democrats at the time by having an expiration date and that time runs out on December 31st of this year. If Congress does nothing, taxes on everyone will go up… a bunch. The taxpayers in the bottom groups and the elderly will take a huge hit. You can figure out how much you will get nailed by going to the American Tax Foundation website and entering your numbers into their “tax calculator”.

First of all, I have a real problem with this “cost to the government” characterization of NOT RAISING TAXES. Chris Wallace raised this Democrat talking point last week on “Fox News Sunday”. I came out of my chair and slopped my coffee on myself. “What?!” I shouted at the TV. It’s absurd. If the government allows you to keep more of your hard earned money by NOT raising taxes, it’s a gift or a “cost” to the government? This assumes that all your money belongs to the government.

Second, this Administration has already raised taxes this year on corporations, tobacco and small businesses. And, let’s not forget the $500 billion in tax increases contained in ObamaCare. Despite Obama’s repeated promise not to raise taxes on anyone making less than $200,000, the above taxes already hit the lower and middle classes. If Congress does not act, these folks will be stunned by how much their taxes increase next year. The American Tax Foundation estimates that a married couple with two children earning $45,000 per year will pay $3000 more in taxes in 2011.

Other little changes that will whack the middle class and retirees include:

  • The child credit will drop to $500 from $1000 per child.
  • “Marriage Penalty” will return (CBO est. in ’96=$1400).
  • Small business will no longer be able to expense equipment purchases.
  • Retirees who rely on dividends and capital gains will see the rates go from 15% to a max of 39.5% on the former and from 15% to 20% on the latter.
  • The Alternative Minimum Tax will hit about 20 million more taxpayers.
  • Death taxes will go from 0% this year to 55% next with a reduced limit of $1 million for an estate. One million is not a lot these days for a farm or small business and the heirs will have to sell the farm at fire sale prices to pay the taxman.
My concern is that Congress has a lot on its plate right now (the SALT treaty with Russia and the Kagen confirmation among others) and not many weeks before they all head home to try and get re-elected. They just may not get an agreement to keep the taxes where they are and, BING, like the time running out on your parking meter, everyone gets a whopping tax increase on Jan 1st.

The White House has floated the idea of keeping rates where they are for all but the “rich”, those making $200,000 as individuals or $250,000 as a couple. This plays to Obama’s pledge and the Democrat demonization of the rich. Ample historical evidence exists to prove that raising taxes on this group is a lousy idea, especially as the US tries to struggle out of a deep recession.

Art Laffer’s excellent article in the WSJ (“Soak-The-Rich-Catch-22”, Aug 2, 2010) cites some interesting statistics. Since 1978 across the board rate cuts have resulted in the top 1% of taxpayers increasing their share of taxes from 1.5% of GDP in ’78 to 3.3% of GDP in 2007 (last available figures). Receipts from the bottom 95% fell over the same period from 5.4% to 3.2%. IOW, the rich paid a larger share with tax reductions. Conversely, increases in rates on the top 1% of taxpayers under Johnson, Nixon, Ford and Carter resulted in a reduced share of taxes for top earners from 1.9% to 1.5%.

The CBO estimates on how much money will be raised by increased taxes are consistently wrong. That’s because they use a “static” analysis that excludes any consideration of people’s behavior. Nice recent example: Sen. John Kerry’s $7 million yacht. He had it built in NZ rather than one of the many great shipyards on the East Coast. Then he docked it in RI to avoid the $500,000 tax and $70,000 annual registration in his home state of MA. The wealthy are much more able to manage their affairs to reduce their taxes. Like Charlie Rangle, for instance.

High rates on the wealthy results in less employment, output, sales, profits and capital gains and all that means lower tax receipts. This has been demonstrated time and again with the capital gains tax. When the rate is reduced, receipts go up, and down when rates are raised. Charles Gibson posed this historical observation to Obama in an enlightening interview on ABC during the campaign. BHO was stumped by the question of why he would raise rates if receipts would clearly go down. After stumbling around he finally came up with “It’s a question of fairness.” Fair to whom? The 80% of Americans who own stock?

A number of Democrats realize a tax increase on anybody at this time is a dumb idea. Even Christina Romer, White House Economic Advisor to Obama has broken ranks from the party line and wrote in the June issue of The American Economic Review, “Our estimates suggest that a tax increase of 1% of GDP reduces output by nearly 3%. The effect is highly significant.”

Obama, Pelosi and Reid would be well advised to listen to her and one of their former Democrat Presidents who said:

“Tax reduction thus sets off a process that can bring gains for everyone, gains won by marshalling resources that would otherwise stand idle- workers without jobs and farm and factory capacity without markets. Yet many taxpayers seemed prepared to deny the nation the fruits of tax reduction because they question the financial soundness of reducing taxes when the federal budget is already in deficit. Let me make clear why in today’s economy, fiscal prudence and responsibility call for tax reduction even if it temporarily enlarged the federal deficit- why reducing taxes is the best way open to us to increase revenues.”

John F. Kennedy

Economic Report of the President


President Hoover raised the top tax rate to 63%. Roosevelt raised it again to 79% plus increasing corporate and other taxes.

The economy went into a double dip depression. Why, if taxes are raised now, do we think that this time it will be different?

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Filed under Obama, Politics, Taxes

Come On A My House

Come on a my house, I’m gonna give you candy.

Come on a my house, my house, I’m gonna give you a plum and apricot-a too, eh.

Come on a my house, my house a come on.

Come on a my house, my house. I’m gone give a you

Figs and dates and grapes and cakes eh.

Come on a my house, my house a come on.

Come on a my house, my house. I’m gonna give you


Come on a my house, my house. I’m gonna give you


This was Rosemary Clooney’s big hit in 1951. Now I recognize that people who did not grow up in the wonderful ‘50s would not know Rosemary Clooney from George. And, of course, no one is going to recall this as high art a hundred years from now any more than the tortured, off key whining of Justin Bieber will be remembered as great moments in musical history.

Rosie’s song crawled to the surface of my swampy brain the other day like a fetid methane bubble as I listed to Obama’s speech on immigration. Obie called for “comprehensive immigration reform” to be passed this year to stop the flood of illegals flowing across the southern border. “Comprehensive”, of course, is the code word for amnesty and comes right off the talking points memo that all Democrats and liberals use whenever the subject gets mentioned.

Obama knows there is not a farts chance in a hurricane of passing an immigration bill this year but he hopes bringing it up will curry favor with Hispanic voters and help stem the tide running against the Democrats in the fall elections.

You don’t have to be a congenital cynic like me to see through the lack of serious effort to contain the flow of illegals. (They halted construction of the fence and are going to sic the Justice Department on Arizona for trying to enforce the law.) Like the half-hearted attempts to clean up the oil in the Gulf, the Obama Team plans to use the “crisis” to further their own anti-fossil fuel and amnesty agendas.

Rosemary’s song popped into my head in the midst of a thought experiment. Suppose you owned a large tract of farmland with orchards, fields, gardens and a huge house. To your immediate south lived a large community of exceedingly poor and uneducated people. Word gets around that if they manage to get across the simple fence surrounding your property that you will make only token efforts to kick them out and will give them free food, medical care and educate their children. They hear that if they have a baby on your side of the fence that the child will immediately become a member of your family and that the parents will be permitted to remain on your farm forever. They discover that they will be paid for working in your orchards and fields and allowed to send money back to their relatives to the south. How long would it take before your farm is over run with your destitute neighbors? And, how long before you went broke trying to pay for it all?

This is precisely what the US is doing with the Mexican and South American neighbors and as long as these financial and social incentives exist, they will keep coming…. Fence or no fence.

You don’t have to be an American citizen to receive food stamps, Medicaid or welfare or even SSI (Supplemental Security Income). And, if you are deemed to be a PRUCOL alien, someone the INS decides not to remove because “it might cause undue hardship”, you are entitled to social assistance without going through the not altogether difficult process of acquiring a fraudulent Social Security Card.

The National Research Council estimates the cost of supporting illegal immigrants at $345 billion per year. Border states are already going broke supporting illegals. In 2004 California spent $10.5 billion on providing health care, education, incarceration and welfare to illegals. An estimated 15% of the school population is comprised of children of illegal aliens who are not only accommodated with free education but also, free meals and special teachers to teach in their language.

In case you missed it, California is seriously broke.

Obama, in his speech, and everyone else who pontificates on this subject, admits there are some 11 to 12 million illegals living in the US. All agree that it is impossible to send them back. Too costly, they say. Really? Why not let them go back of their own accord? During our current recession many illegals have chosen to go home because of the lack of jobs. Many politicians say that cracking down on employers who hire illegal aliens is the answer. Sure, that would help but, what about this? No more free lunch. No more welfare, free medical care or education. No more “anchor babies”. If you sneak across the border to give birth, little Jose is NOT a US citizen and entitled to all the benefits thereof. Without all the free stuff a lot of illegals would be heading home and the financial pressure on the Border States relieved. Natch, the chances of this happening are about the same as me beating Tiger. IOW, less than nil.

A lot of people display the thinking of Speaker Pelosi who said, “We have an estimated 12 million illegal aliens in our country who need our help along with unemployed minorities. Stock market profits taxes could go a long way to guarantee these people the standard of living they would like to have as Americans.” It’s hard to know where to begin with this insane statement. Let’s try. First of all, illegals are not Americans and, while I do not doubt they would enjoy a better standard of living (who wouldn’t) it remains unclear why real working and tax paying Americans should fund the improvement in life style of illegal aliens.

In addition to the bleeding heart liberals who want open borders and obligate the American taxpayer to support anyone who wants to come to the US, you have the cynical politicians who love illegal immigration. Obama and his leftist cohorts believe that their path to continued power lies with getting more and more voters on the government dole. They regard these people as reliable Democrat voters by convincing them that only the Democrats will insure continued largess from the public coffers.

If they can grant amnesty to 12 million illegals….. Well, I guess you can figure that out.

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Filed under Immigration, Obama, Politics

Flunking Out

I have often puzzled over the gulf that exists between liberals and conservatives on how they look at the issues of the day. This is never more evident than when I visit my liberal friends and in-laws who frequently treat me with the bemused tolerance one would expect for a dimwitted and slightly addled child. To maintain peace and harmony I chew on my tongue and try not to let any political comments pass my lips.

One of my theories on how liberals and conservatives can arrive at such divergent conclusions from the same set of facts supposes that we are not, in fact, using the same facts. This theory surmises that liberals read the NYT, the Daily Kos and The Huffington Post and listen to NPR, MSNBC and CBS News. Conservatives, on the other hand, read the WSJ, Bloomberg, and listen to Fox News. In other words, we libs and cons may NOT be operating from the same set of facts or, at least, the emphasis or interpretation of those facts.

An older theory of mine postulated that people adopted a stance early in life… either left or right and simply stuck with it. This firmly held conviction thereafter colored whatever information they received. This tied in with another theory of mine that I call “tribalism”. I postulated that people in their early years decide to which “tribe” they belong: Hippy, punk rocker, preppie, biker, geek, etc. From there onward they adopt the dress, speech, mannerisms, life style and attitudes of that tribe. Therefore, if you decide that you are an educated, hip, urbane person concerned with the environment and socially conscious, you join the liberal tribe and accept anything “liberal” and reject as downright stupid, if not corrupt, anything labeled as “conservative”. (Note to my liberal friends: Don’t get hostile here. I am just trying to figure this shit out.)

I was never all that convinced that either of those two theories sufficiently answered my questions.

Now comes a new theory to further confuse me. Daniel Klein recently published a piece in the WSJ entitled “Are You Smarter Than a Fifth Grader”. Mr. Klein is a professor of economics at George Mason and together with Zeljka Burturovic, a Zogby researcher, conducted a December 2008 survey of 4,835 American adults. The survey asked them eight questions about basic economics. They also asked them about their political leanings: progressive/very liberal; liberal; moderate; conservative; very conservative and libertarian. The researchers here were looking for incorrect answers, and only, as Professor Klein said, “A response was counted as incorrect only if it was flatly unenlightened.” The possible responses to the questions were: 1. strongly agree 2. somewhat agree 3. somewhat disagree 4. strongly disagree and 5. not sure. “Not sures” were not counted as incorrect. I will list the questions below and the correct answers at the end of this piece so you can, like, figure out if you are, like, a liberal or like, a conservative. No, like, cheating by going to, like, the end of the article.

Pick one of the above highlighted answers to the following questions:

1. Restrictions on housing development make housing less affordable.

2. Mandatory licensing of professional services increases the prices of those services.

3. Overall, the standard of living is higher today than it was 30 years ago.

4. Rent control leads to housing shortages.

5. A company with the largest market share is a monopoly.

6. Third World workers working for American companies overseas are being exploited.

7. Free trade leads to unemployment.

8. Minimum wage laws raise unemployment.

So, how did the self-identified ideological groups fare in this simple economics test? Remember, we are scoring incorrect answers here.

Very conservative: 1.30 wrong

Conservative: 1.67 wrong

Libertarian: 1.38 wrong

Moderate: 3.67 wrong

Liberal: 4.69 wrong

Progressive/very liberal: 5.26 wrong

When asked about party affiliation, those responding as Democrats averaged 4.59 incorrect answers. Those responding as Republicans got 1.61 incorrect.

You can read Klein’s original article (link) to get the specific scores on the individual questions and his explanations of the correct answers.

A lot of brain cells can be destroyed trying to figure out why the most liberal among us did so poorly on a simple economics test compared to the most conservative citizens. I won’t attempt that here. Suffice it to say that the “progressive/very liberal” wing of the Democrat Party has been in charge of things for some time now and this simple test helps explain the unenlightened economic policies now coming out of Washington.

Wrong answers to questions: 1. Somewhat disagree, strongly disagree. 2. Disagree. 3. Disagree. 4. Disagree. 5. Agree. 6. Agree. 7. Agree. 8. Disagree.


Filed under Econ Quiz, Politics

Score Card

In February of 2009 I posted a piece entitled “Prognostications” in which I made a number of predictions about what Obama and the Democrat controlled Congress would do now that they had complete control. As I was driving back from our annual fly fishing expedition to central BC the other day I thought about that list and concluded it was time to see how I faired in my predictions. Hereafter, the list and the score thus far into the “Hopie-Changie” era.

· The Stimulus Package: Originally at some $870 billion, winding up with some add-ons at around $1 trillion, has failed miserably to prod the US out of recession. The “neo-Keynesians” that populate the Obama economic brain trust assured us that if this thing were not rammed through Congress immediately that unemployment would go above 8%. Well, it’s been hovering around 10% for many months and only that low because the millions of workers who are no longer even bothering to look for work are no longer counted in that calculation. 325,000 people dropped out of the “lookers” category last month. Congress recently passed an extension of unemployment compensation to 99 weeks, assuring that the unenthusiastic and disinterested will remain on the sidelines. The recession continues. The deficit? Greece here we come. According to the Heritage Foundation the US is poised to have the deficit exceed the GDP in the near future. Score: YES.

· Card Check Legislation: They made some feeble attempts at this but backed off to concentrate on the health care bill. Obama did reward the unions big time by giving them big chunks of GM and Chrysler stock when the two auto giants went tits up. Score one NO.

· Give More Money to the Auto Companies: The US government now own most of GM and the bondholders at Chrysler (these are the secured creditors in a bankruptcy) got stiffed. GM paid back part of the money, but that money came from previously borrowed government funds. So, you can’t really say they paid off the loan. They still owe some $40 billion. Score: YES

· Pass the Fairness Doctrine: They did not really have the courage to tackle this one and totally piss off the millions of listeners of conservative talk radio. Instead they dispatched Mark Lloyd, the Diversity Czar for the FCC to see if he can “back door” the thing through regulations. Score: NO.

· Restrict drilling for oil and gas: At the time of posting “Prognostications” Salazar had already cancelled leases and set aside huge swathes of the west where no drilling was allowed. Now, with the oil disaster in the Gulf every-thing is shut down. The irony is that if the regs had not forced the oil companies to drill in such deep water (a mile down) and instead were allowed to drill on land or in shallow water, this thing would have been fixed already. Score: YES

· Not allow the construction of nuclear power plants: Obama says they want to build them but they shut down the Yucca Mountain repository where they were to store the waste signaling their real intentions. Score: YES

· Enact cap and trade: It has already passed the House and is currently introduced in the Senate. Debate has been stalled with the intrusion of other matters like voting themselves a raise and fine-tuning their special medical program. Some GOP Senators will vote aye. Score: YES

· Toss money at solar and wind power: Money for these industries was included in the stimulus bill and much more to come with the cap and trade legislation. Score: YES

· Abandon missile defense and reduce US nuclear arms: Obama cut funding for missile defense programs, refused to provide funding to upgrade the US’s aging nuclear arsenal, cancelled the missile defense shield for Europe and made a lopsided deal with Russia to reduce the number of nuclear weapons. Score: Big YES

· Enact restrictions on gun ownership: Hillary is trying to work something through a UN agreement. Score: NO

· Appoint “living constitution” fans to Supreme Court: Sonia Sotomayor has been confirmed and Elana Kagan has been nominated and awaiting confirmation in the Senate. She’s sure to be approved. Score: YES

· Squelch school choice: The Congress withdrew funding for the charter school program in Washington, DC, thus ending a successful program and signaling the Adminis-tration’s aversion to charter schools. Of course, the Dems are much beholding to the teacher’s unions and they hate charter schools. Obama has created a program called “Race to the top” providing certain states with substantial funding. Some states are refusing to participate as the money comes with the Feds getting too involved in local schools. BTW, the June 5th edition of the WSJ has a great piece about Madeleine Sacker, an independent filmmaker, who has created a documentary called “The Lottery”. It’s about the thousands of Harlem kids and their parents who show up for a lottery to try and secure the few slots open at Harlem Success Academy. Surprise! The teacher’s union paid Acorn $500,000 to pretend to be parental protesters. Score: YES

· Abandon tort reform: Of course. Don’t be silly. Score: YES

· Attempt to make illegals citizens: They are trying to push “comprehensive” immigration reform, but not yet. Score: NO

· Put the government in charge of health care: You know all about that one. Score YES

Somehow I neglected to put tax increases in the Feb ’09 post. It did, however, appear in previous posts. Here’s a list of the tax increases the Democrats have enacted so far.

· $500 billion included in the Health Care bill.

· Double taxation on corporations doing business overseas.

· When the Bush tax cuts expire taxes on upper incomes will increase from 35% to 39.6%. Dividends will be taxed at 39.6% instead of 15%. The capital gains tax will increase from 15% to 20%. The inheritance tax will increase from 0% this year to 55%.

Congress is currently working on a bill to raise taxes by $43 billion on corporations and another bill to tax S-Corps (small businesses taxed as individuals). While the details of this one are as yet unclear, it appears to apply to independent operators like architects, accountants and the service industries. It sounds like it will hit them at about 15%. So much for the talk about helping small business and not taxing the little guy.

Another thing I did not anticipate is Obama’s muddled and wrong-headed foreign policy. He has offended and insulted the US’s allies, especially Israel, Poland and the UK while trying to suck up to the Muslim world. This has only confused our allies and emboldened our enemies. The combination of an isolated Israel and an aggressive Iran and Syria only make the likelihood of war in the Middle East more certain than not. He’s pushing Israel into a corner. Watch the price of oil when that one tees up.

As a new prediction (at least to blog readers) I feel the sum of Obama’s economic policies insure a double dip and protracted recession. You cannot crowd out capital with an annual deficit of $1.5 trillion dollars, raise taxes on individuals and corporations, driving jobs and businesses offshore, raise the price of energy with cap and trade taxes and expect a growing economy. They’ve got a lot of Harvard folks in the Administration, but they will need to get glass eyes installed in their navels if they expect to see where they are going.

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Filed under Politics, Predictions

Done Deal

So, the Democrats, after 14 months of contentious internal wrangling, finally managed to pass their mammoth overhaul of the US health care system. Since the Republicans in the prohibitive minority, could never do anything to stop it, the problem always was to convince enough Democrats to vote for this socialist wet dream.

Making laws has often been compared to making sausage… a messy business. But, the ugly process of cramming this unpopular law through congress makes the production of links and patties positively clean and efficient by comparison.Sleazy’ is a word that comes immediately to mind.Arrogant’ is another.

To get it through the Senate where Democrats held a veto proof majority before the historic election of Republican Scott Brown to occupy the “Kennedy Seat”, special deals were struck with Senators to secure their votes. Mary Landrieu of LA sold her vote for the $300 million “Louisiana Purchase”, and Ben Nelson sold out for the “Cornhusker Kickback” for a similar amount. Much less discussed were: “carve outs” for Mutual of Omaha and other insurers in Nebraska; $100 million for Chris Dodd (a hospital in CT) and Tom Harkin got a hospital in Iowa. Democrats in Florida, North Dakota, Montana, Vermont and Michigan all got exemptions for their states from the substantial cuts to Medicare Advantage, a popular program with seniors.

Perhaps the most predictable of the breaks was that for the UAW. They got an exemption from the new tax on “Cadillac” health insurance plans. And why not? In the 2006 and 2008 election cycles the UAW gave $1.5 billion of their members dues to Democrat candidates. After giving them 50% of GM, the Democrats continue to pay them back.

To force the Senate bill through the House, Nancy Pelosi and the White House had to pull out all the stops. We don’t know all the strong-arm tactics employed to convince wavering Democrats to vote for the Senate bill that many members admitted they hated. Their constituents were telling them in no uncertain terms that a “yes” vote would insure their defeat this fall. Kim Strassel (WSJ, 3/19) wrote about the plight of Jason Altmire of PA. His story may be similar to other reluctant Dems. She likened his situation to a man being forced to walk the plank with his choice being facing the cutlasses of angry pirates behind him or sharks circling below. The sharks, of course, were the voters and the pirates organizations like and SEIU who were already running negative ads against him in his district and promising to sabotage his election campaign in the fall by withholding money and running primary challengers against him. On the other hand, a “yes” vote pretty much assured he’d get his ass handed to him in the fall and have to go find a real job.

Dennis Kucinich (D-OH), a no vote last time, got a nice ride on Air Force One, some face time with Obama, and Denny’s wife got a job working for Michelle. Jim Matheson was convinced to vote yes when his brother suddenly got appointed to a lifetime position as a Federal judge.

Surely the most cynical of the purchased “yeses” were that of Reps. Cardoza and Costa of CA. Their districts have been devastated by the decision to shut off the water to the San Joaquin Valley to protect the two inch Delta Smelt. Environmental groups had sued and a Federal judge decreed that the endangered minnow required shutting off irrigation to 1,000,000 acres of farm land, throwing 40,000 farmers and their workers into bankruptcy or onto the streets. Turning the “bread basket of America” into a dust bowl and ruining the economy of the region was not enough to sway the Obama Administration from their love of the Delta smelt. But, getting two more votes for ObamaCare? Screw the minnow! The water has been turned on.

To get the health care bill passed into law the Democrat controlled House had to pass the Senate version without changes. With any changes it would have to go back to the Senate where the election of Scott Brown had eliminated the veto proof majority. But, many Dem House members hated a number of provisions in the Senate bill, particularly language that provided for public funding of abortions. Bart Stupak (D, MI) led a group of Democrats strongly opposed this provision and threatened to provide enough votes to defeat the bill. After serious arm twisting failed to sway him, President Obama stepped in and offered Bart political cover by promising an Executive Order prohibiting public dollars for abortion. While everyone agreed that it was “not worth the paper it’s printed on”, Stupak and his small group figured it a sufficient fig leaf to vote yes for the bill.

The House decided to use “reconciliation”, a parliamentary gimmick that would require only 51 votes in the Senate, to “fix” the objectionable bits of the original Senate bill.

At the same time the Congressional Budget Office released the analysis of the bill’s impact based on a bogus collection of assumptions, double counting, Medicare cuts and tax increases. The CBO came back with the wildly implausible projection that the deficit would be slightly reduced by the bill. This flimsy piece of political cover, coupled with the Stupak cave produced sufficient Democrats to pass the bill with zero Republican votes.

Done Deal!! Pop the corks on the champagne, let the party begin! Obama gloated and continued his speechifying touting the bill even after he signed it. As the Congress packed their bags and their hangovers to head home and face their constituents, the details of what’s in this 2600 page monster started to get analyzed and its impacts calculated. Dozens of major corporations now estimate that the bill will cost them hundreds of millions of dollars. (AT&T says it will be a cool $1 billion). This is only the beginning of the reality check. Those disparaged prognosticators who pegged the cost of the bill at close to $2.5 trillion will certainly be vindicated. There is no doubt that this take over of the health care system will be a killer of jobs and a massive increase to the deficit at a time when the US economy can afford neither.

As I have said before, this legislation has never been about improving health care or containing costs. On 3/20 the WSJ reprinted a 1996 piece by the late Milton Friedman. In it, the brilliant economist explains that the rapid rise in the cost of medical care has been the result of policies that separate the receiver of care from the entity that pays for it. Most people receive medical insurance from their employer (either management or union) or from Medicare and Medicaid. Since someone else is paying, there is little incentive for the users to concern themselves with cost and that encourages the overuse of services. With users unconcerned about cost, providers face no competitive pressures to reduce them. And, since the employer provided insurance is tax deductible to the company and tax free to the employee, this distortion of the market has grown over the years.

Medical Savings Accounts were created to let market forces do their magic in a small segment of the health care universe. People could set aside some tax-free savings in a HSAs to pay for routine medical expenses and purchase high deductible insurance in case of something really serious. When spending their own money, people become much more judicious. ObamaCare will eliminate this common sense approach using the gentle persuasion of the IRS.

The unchecked predations of the trial lawyers who attack health care providers for crimes real or imagined has also added greatly the rapid inflation in health care costs. This not only drives up costs directly but also results in a tremendous amount of “defensive medicine” where doctors and hospitals add tests and procedures in anticipation of lawsuits.

ObamaCare does nothing to address these factors that increase costs. In fact, it makes them worse. Provisions in the bill actually make it easier for tort lawyers to sue doctors and hospitals. Pushing more people into Medicaid will not reduce costs and it certainly won’t improve quality. Besides, debt heavy states can ill afford to have these costs fobbed off on them.

So it’s a done deal…. Against the wishes of a vast majority of the American public. The new taxes start immediately but the “benefits” won’t show up until 2014. In the meantime, we will get to find out what it really means and hire the 16,000 new IRS agents to track down and jail the scofflaws who refuse to buy health insurance. (String them up!) It is difficult not to believe that the whole purpose here is to drive private insurance and health care delivery out of business. Perhaps the Left believes that health care nirvana arrives when the US has a government run system like Canada or Great Britain. I can assure you after living in Canada for the last 15 years, that Americans are going to hate it.

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