As I write this on election night, the major news services have already projected that the Republicans will win control of the House of Representatives and make gains in the Senate. Based on opinion polls leading up to the election, neither of these developments is a surprise. But these results, especially in the House where Republicans put extra effort, send a message to the current administration that the way things are done needs to change.
The Republicans made it perfectly clear that this election was a referendum on the presidency of Barack Obama. No doubt this message resonated with the voters who obviously agreed with the Republicans. President Obama must change his approach to save his presidency, but can he or will he do it? It is clear in hindsight that President Obama misinterpreted his mandate in 2008. The voters wanted a President who would fix the economy. Mr. Obama interpreted his election as a mandate to be a transformational president. The people did not want healthcare or cap-and-trade, or the heavy hand of regulation. The people wanted jobs and a greater degree of job security.
Can Mr. Obama save his presidency? Sure he can. What needs to change? Everything. For a man who campaigned so brilliantly in 2008, he has been the most tone deaf president I have ever seen. When he was inaugurated, the president's top three priorities should have read like this: 1. the economy, 2. the economy, 3. the economy. He signed a poorly conceived stimulus bill into law then promptly forgot about the economy. As a result, the economy has made a weak recovery, with just 2% GDP growth in the third quarter (it was 1.6% in the 2nd qtr), and 15 consecutive months of unemployment at 9.5% or higher. Given the depths of the 2007-2009 recession, producing 3 or 4 consecutive quarters of 6% plus GDP growth should be a lay-up. He pushed healthcare when the people wanted jobs. He pushed cap-and-trade when the people wanted jobs. The people clearly saw both these legislative priorities as job killers.
There are historical precedents here, Ronald Reagan and Bill Clinton. Reagan dealt with a large Democratic majority in the house his entire 8 years in office, but in 1982 his Republicans lost 26 seats in the House. Unemployment was at 10.8% on election day in 1982. Yet, he stuck to his agenda of limited government growth, dereguation and unleashing the private sector. It worked. In 1983, the economy recovered by creating 4 million new jobs (3.8 million private sector jobs), and grew at a 7% rate. Unemployment dropped to 8.3% by the end of 1983. In fact, the economy sustained 4 consecutive quarters of 8% plus GDP growth over the final 3 quarters of 1983 and the first quarter of 1984. So far in the current recovery, the economy has produced only 1 quarter of 4% plus GDP growth (4.9% in 4Q09), a sorry economic performance given the depth of the recent recession.
Bill Clinton encountered a different set of circumstances. On election day 1994, the economy was actually posting healthy results. The economy grew at a very healthy 4.2% in 1994 and the unemployment rate was 5.4% on election day. So what went wrong with Mr. Clinton? His ambitious agenda, largely based on his desire to pass a healthcare bill. People were clearly not on board with the bill. He appointed his wife who was not confirmed by the Senate, who held meetings in secret, hired a panel of experts who were never named, and producted a bill that would greatly expand the role of government in healthcare. In addition, Mr. Clinton always had a character deficit with the American people that sapped his political capital. After the election, Mr. Clinton embraced a more limited government in conjunction with the Republicans in Congress, and the economy enjoyed another 5 years of uninterupted prosperity.
The lesson for Mr. Obama is simple. Embrace a more limited government and unleash the private sector. His rhetoric towards various portions of the private sector has been downright hostile. There is a good reason he has been labeled as an anti-business president by former General Electric CEO Jack Welch. Jobs are not being created because business has been saddled with higher costs and a higher regulatory burden. Companies are hesitant to invest because they do not know how costly these new burdens will be. The president has created a world of uncertainty. He has taken steps to make investment money available, but has also created an environment that is hostile to risk taking and investment that will ultimately be needed to grow the economy.
In the end, it all rests on the economy. If the economy makes a stronger recovery and creates jobs, Mr. Obama will be re-elected in 2012. Simple as that. He still enjoys the personal approval of over 50% of the electorate, although his job performance barely rates 40%. This says people still like the man and want him to succeed. Mr. Reagan and Mr. Clinton both enjoyed high personal approval ratings, and each easily won re-election after horrendous mid-term elections. Don't count Mr. Obama out yet. But, the current path he's on will guarantee Mr. Obama an election defeat in 2012.
Tuesday, November 2, 2010
Friday, September 24, 2010
With Charity For All
I read Arianna Huffington's latest column today with a great deal of interest, perhaps for reasons other than what she actually wrote. The column was well written and inspired thoughts of my own. Overall, I agree with what she wrote, and I hope the actions of Mark Zuckerberg will inspire others to act as well. The column can be found at the following link: http://www.huffingtonpost.com/arianna-huffington/troubled-times-when-mark-_b_737159.html.
In this particular case, I do not think Mr. Zuckerberg's gift will solve the problems within the Newark school system. Mr. Zuckerberg's $100 million gift is certainly generous. The main question that popped into my mind as I read this dealt with the "why" behind the Newark school system's low graduation rate. I do not question the motivation behind Mr. Zuckerberg's generous gift. I would imagine that the low graduation rate has more to do with unmotivated students and uninvolved parents than the spending per student by the government. The state currently spends $22,000 per student per year, according to the article. Yet Newark's graduation rate is only around 50 percent. Approximately 1 in 5 Newark graduates go to a 4-year college, and 85 percent of the students that go to a community college need remedial help in math and English. However, my perception may be wrong on this, but the student's motivation and parental involvement are the first needs to be addressed.
The gift also made me wonder how governments and/or private citizens can meet the needs of this country's neediest citizens and institutions. With the country in a mood to cut government spending, private citizens need to step up. Just because a government entity cuts spending, the demand for the services cut does not disappear. Instead of saying that at some point, a rich person has "made enough money", why not issue a call for those so richly blessed financially to step up more? Let those blessed with the gift of making money continue to make more money. However, those with that ability should use their wealth to help those in the most dire need, and not just simply to pad an already extravagent lifestyle. To whom much has been given, much is expected. Seems this is consistent with Warren Buffet's and Bill Gates's call for the wealthiest citizens to give more of their financial wealth to charity. An added benefit is that more money would go directly to those in need, and the money would likely be spent more efficiently.
Americans have always been generous with their time and money, one of the facets that make this country so unique. Parents need to remain involved in their children's lives to every extent possible. Of course, limitations to this include long hours at work, especially when it involves out of town travel. However, millions of parents do remain involved, and these are the children that usually succeed in school and go on to lead successful, happy, prosperous lives of their own.
When the Mark Zuckerberg's of the world step up and give more, let's not be so cynical of the motives. Sure, he has his motives. Actions like Mr. Zuckerberg's gift used to inspire others to act in a similar fashion. Today's leaders can show true leadership by exhorting others in a similar position to act in a similar manner. Instead, these days, such large gifts inspire cynicism, and we villify someone else's generosity. But, as Ms. Huffington stated in her column, it is more about the gift than the motivation.
In this particular case, I do not think Mr. Zuckerberg's gift will solve the problems within the Newark school system. Mr. Zuckerberg's $100 million gift is certainly generous. The main question that popped into my mind as I read this dealt with the "why" behind the Newark school system's low graduation rate. I do not question the motivation behind Mr. Zuckerberg's generous gift. I would imagine that the low graduation rate has more to do with unmotivated students and uninvolved parents than the spending per student by the government. The state currently spends $22,000 per student per year, according to the article. Yet Newark's graduation rate is only around 50 percent. Approximately 1 in 5 Newark graduates go to a 4-year college, and 85 percent of the students that go to a community college need remedial help in math and English. However, my perception may be wrong on this, but the student's motivation and parental involvement are the first needs to be addressed.
The gift also made me wonder how governments and/or private citizens can meet the needs of this country's neediest citizens and institutions. With the country in a mood to cut government spending, private citizens need to step up. Just because a government entity cuts spending, the demand for the services cut does not disappear. Instead of saying that at some point, a rich person has "made enough money", why not issue a call for those so richly blessed financially to step up more? Let those blessed with the gift of making money continue to make more money. However, those with that ability should use their wealth to help those in the most dire need, and not just simply to pad an already extravagent lifestyle. To whom much has been given, much is expected. Seems this is consistent with Warren Buffet's and Bill Gates's call for the wealthiest citizens to give more of their financial wealth to charity. An added benefit is that more money would go directly to those in need, and the money would likely be spent more efficiently.
Americans have always been generous with their time and money, one of the facets that make this country so unique. Parents need to remain involved in their children's lives to every extent possible. Of course, limitations to this include long hours at work, especially when it involves out of town travel. However, millions of parents do remain involved, and these are the children that usually succeed in school and go on to lead successful, happy, prosperous lives of their own.
When the Mark Zuckerberg's of the world step up and give more, let's not be so cynical of the motives. Sure, he has his motives. Actions like Mr. Zuckerberg's gift used to inspire others to act in a similar fashion. Today's leaders can show true leadership by exhorting others in a similar position to act in a similar manner. Instead, these days, such large gifts inspire cynicism, and we villify someone else's generosity. But, as Ms. Huffington stated in her column, it is more about the gift than the motivation.
Sunday, August 22, 2010
A Sad Day For The Plaza
"It was first in Kansas City
It was first in the USA
America's original shopping city
The Plaza"
The above was a radio jingle for the Plaza from the early 1980's, and I can still remember hearing this commercial on the radio dozens of times. The words of this song stick in my mind as I contemplate with sadness the proposed new headquarters of the Polsinelli Shugart law firm right on the Country Club Plaza.
For those not familiar, Polsinelli Shugart is one of Kansas City's largest law firms, employing over 250 attorneys in the Kansas City area alone, and 500 attorneys overall. The firm also has attorneys in St. Louis, Washington, New York and Phoenix.
Meanwhile, the Country Club Plaza in Kansas City dates back to the 1920's when it was designed and built by Kansas City real estate developer, J.C. Nichols. The area was designed strictly as a shopping area, one of the first in the world. The Plaza would accomodate the needs of those who lived in the new mansions just to the south, and those that were over on the Kansas side, in Mission Hills. The architecture was modeled on Kansas City's sister city, Seville, Spain. The Plaza has had its ups and downs, but the core of the center remained the same, the architecture remained the same. Sometime in either the late 1970's or early 1980's, the Plaza's managers made a decision to attract upscale stores to the Plaza and turn it into a tourist destination. It worked and the Plaza has largely thrived since.
Last week, the law firm of Polsinelli Shugart proposed a new headquarters on the corner of the 47th Street and Broadway, right on the Plaza. The headquarters building would be 8 stories tall, and would require the demolition of one of the Balcony Building, one of the Plaza's historic buildings, plus the parking garage behind the building and an apartment complex, all of which are on the same block. The new building would have 192,000 square feet of office space and ultimately be able to acommodate 300 attorneys.
My take on this new proposed headquarter building for the Polsinelli Shugart law firm: I hate it. Period. This is one instance where progression is actually regression, or worse. The original character of the Plaza is that of a retail center. It was built as a retail center, with some upstairs offices in a series of two-story buildings. This new office building will have no retail space, will dominate the skyline, thereby ruining the park-like setting of the Plaza, and will be architectually inconsistent with the Plaza. What I can see happening is that the Plaza will become another generic office park, the retail and restaurant presence will be greatly diminshed, and the Plaza will lose its unique standing among the nation's shopping areas. Should the Polsinelli headquarters be allowed to proceed, this will be the first domino, in a long line of dominoes, to fall.
I am as close to a lassiez-faire capitalist as you will find, but I am also a traditionalist, and a purist when it comes to maintaining an historic place like the Plaza. The radio jingle mentioned at the beginning of this article notes the truly unique nature of the Plaza as America's original shopping city. Yet that is now being lost, and conformity will rule the day on the Country Club Plaza. The Plaza is truly a crown jewel of Kansas City, and yet projects like these will cause it to lose a lot of luster, and lots of tourist dollars. J.C. Nichols built a truly unique shopping community here, and to see it lose all that to a bunch of non-descript office buildings would a tragedy in Kansas City.
Monday, August 9, 2010
Paul Krugman Is the Real Flimflam Artist
One of my pet peeves is stupidity in all its forms, and today I received a particularly large dose of it in Dr. Paul Krugman's column entitled "America Goes Dark." Dr. Krugman, for those unaware, masquerades as an expert economist/economic commentator, writing for the New York Times. If Dr. Krugman were my doctor, I would have died long ago. He would have correctly diagnosed my problem, but given me the wrong prescription. When that inevitably failed, he would have prescribed more of the same, in ever increasing doses, until I finally died. He is usually correct in identifying a problem, but his prescriptions are often so preposterous that his solutions are often worse than the original problem.
In his column today, Dr Krugman correctly identifies a problem that state and local goverments are having providing some basic services. Streetlights being turned off, teachers being laid off, all a result of the recession that have depressed tax revenues and left local governments strapped for cash. Dr. Krugman's answer to this is the same as his answer to every problem: we need more and more government. Eventually, he would prescribe so much government spending, in ever increasing amounts, that the republic would eventually go bankrupt and die. So of course, he is proposing a tax increase, which he claims will leave local governments less cash strapped. As if this isn't silly enough, he claims that the politicians in Washington have only grudgingly provided a trickle of help. Huh? Let's break this down a bit.
First, Dr. Krugman assumes this is strictly a revenue problem. In part, it is. The recession of the past couple of years has clearly depressed tax receipts. But this is also a spending problem. However, in Dr. Krugman's world, the government cannot spend enough money. He also believes that the stories of vast armies of useless, paper pushing bureaucrats working for the federal government are a myth. Huh? He seriously does not believe that the federal government has a spending problem. He truly believes that the United States and should shoulder more and more debt (which will be a burden to our children and grandchildren) so that the federal government can continue living well beyond its means. Meanwhile, the national debt, at $13 trillion is approaching levels that forced the debt rating of Greece to fall to junk, and is pushing Spain and Portugal quickly in that direction.
He says you hardly see any stimulus at all because state and local governments are cutting back. Most state and local governments are also bound by balanced budget laws that force them to cut back, due to lower tax receipts. But last year, the federal government passed an $862 billion stimulus bill, by far the largest stimulus ever passed, and about 6.5% of GDP. This is hardly any stimulus? Approximately one-third of the stimulus went to state and local governments to help them preserve the status quo. That is not stimulus in any way, shape or form. Only 10% of the stimulus went to projects designed to stimulate economic growth. Isn't stimulus, by definition, suppose to increase economic growth? And yet, the economy has still lost about 3 million jobs since the passage of the stimulus. Dr. Krugman keeps telling us that the government should be spending more and more? Five quarters after the stimulus passed, and the economy is only growing 2.4%? Yes, we are finally seeing some employment gains, but we are also seeing large numbers of discouraged workers leaving the workforce. Hardly any stimulus? Or a poorly designed stimulus that had no chance to succeed?
In addition to more spending, Dr. Krugman also proposes that we should increase taxes. Name for me one legitimate economic theory that says you raise taxes during an economic recession? Lord Keynes advocated raising taxes only at times when aggregate demand was growing at an unsustainably high rate, with the excess proceeds used to pay down government debt. Keynes believed that lower taxes and increased government spending during economic recessions would increase aggregate demand. The competing economic theory, supply side, believes that by lowering taxes, particularly on producers, you would incentivize producers to produce at lower costs, and that consumers would benefit from lower costs and therefore, increase aggregate demand. But, Dr. Krugman, in all his infinite wisdom, proposes a tax increase in the face of a very weak economic recovery, which would practically guarantee a double-dip recession, depress tax receipts further due to lower demand, and spur Dr. Krugman to write further columns about the need for further, and larger, tax increases.
Another laughable point in Dr. Krugman's article is when says, "...when we give millionaires more money (through tax cuts) instead, there's a good chance that most of that money will just sit idle." Huh? Millionaires that I know did not become that way by letting their money sit idle. These people are extremely active in looking for investment opportunities that will yield high returns. In fact, many are obsessed with investment opportunities. Millionaires only let their money sit idle if they if there are no opportunities to earn a rate of return on their investment that is appropriate given the risk of the investment involved. Sit idle? Not with millionaires. Millionaires, or "the rich", have excess capital, or risk capital that they can invest in high risk investments. These are the investments in our future, such as new technologies, and new companies. If the money is sitting idle today (and I believe it is), it is because of a regulatory environment that is hostile to risk taking. Give these millionaires the regulatory environment of the Reagan years, and they would not be able to invest the risk capital fast enough.
Finally, Dr. Krugman concludes by asking how we got to this point, and what about the future. I will answer the former first. We got to this point, not so much because of anti-government rhetoric over the past 30 years (as Dr. Krugman claims in the article), but by example after example of government incompetence. What do the Post Office, Fannie Mae, Freddie Mac, Medicare and Medicaid all have in common? They are all government sponsored enterprises and all are a financial disaster. Freddie and Fannie were Ground Zero of the financial crisis that led us into our current economic environment (and were completely left out of the financial reform bill!). Medicare and Medicaid are insolvent, and Social Security is headed that way. The Post Office bleeds money every year, and last year lost nearly $4 billion. Yet Dr. Krugman would have us believe that only the Federal Government is qualified to get us out of our current mess.
Finally, what of the future? He says that well-educated populations and high-quality infrastructure are crucial elements of a growing economy. He is indeed correct. However, we also need abundant natural resources, price stability, incentives to invest, and a government that does not burden its people. He says emerging nations "are making huge efforts to upgrade their roads, their ports, their schools. Yet in America we're going backward." Emerging nations also have very low taxes, very little regulation and I am sure a host of other prickly little details that would appall Dr. Krugman and somehow escape his so-called expert economic analysis.
In a recent column, Dr. Krugman called Rep. Paul Ryan's Road Map For America "flimflam". I would say that Dr. Krugman is the real flimflam artist. He proposes solutions that are not supported by any legitimate academic theory. He blames the rich for sitting on their money, when the federal government is giving them every incentive to remain idle. He says that the federal government did not spend enough money when in fact the government had the largest stimulus package ever last year, and the package gave us far less than proper bang for our buck due to poor conception. Dr. Krugman's solutions are no solutions, but instead a prescription for disaster.
In his column today, Dr Krugman correctly identifies a problem that state and local goverments are having providing some basic services. Streetlights being turned off, teachers being laid off, all a result of the recession that have depressed tax revenues and left local governments strapped for cash. Dr. Krugman's answer to this is the same as his answer to every problem: we need more and more government. Eventually, he would prescribe so much government spending, in ever increasing amounts, that the republic would eventually go bankrupt and die. So of course, he is proposing a tax increase, which he claims will leave local governments less cash strapped. As if this isn't silly enough, he claims that the politicians in Washington have only grudgingly provided a trickle of help. Huh? Let's break this down a bit.
First, Dr. Krugman assumes this is strictly a revenue problem. In part, it is. The recession of the past couple of years has clearly depressed tax receipts. But this is also a spending problem. However, in Dr. Krugman's world, the government cannot spend enough money. He also believes that the stories of vast armies of useless, paper pushing bureaucrats working for the federal government are a myth. Huh? He seriously does not believe that the federal government has a spending problem. He truly believes that the United States and should shoulder more and more debt (which will be a burden to our children and grandchildren) so that the federal government can continue living well beyond its means. Meanwhile, the national debt, at $13 trillion is approaching levels that forced the debt rating of Greece to fall to junk, and is pushing Spain and Portugal quickly in that direction.
He says you hardly see any stimulus at all because state and local governments are cutting back. Most state and local governments are also bound by balanced budget laws that force them to cut back, due to lower tax receipts. But last year, the federal government passed an $862 billion stimulus bill, by far the largest stimulus ever passed, and about 6.5% of GDP. This is hardly any stimulus? Approximately one-third of the stimulus went to state and local governments to help them preserve the status quo. That is not stimulus in any way, shape or form. Only 10% of the stimulus went to projects designed to stimulate economic growth. Isn't stimulus, by definition, suppose to increase economic growth? And yet, the economy has still lost about 3 million jobs since the passage of the stimulus. Dr. Krugman keeps telling us that the government should be spending more and more? Five quarters after the stimulus passed, and the economy is only growing 2.4%? Yes, we are finally seeing some employment gains, but we are also seeing large numbers of discouraged workers leaving the workforce. Hardly any stimulus? Or a poorly designed stimulus that had no chance to succeed?
In addition to more spending, Dr. Krugman also proposes that we should increase taxes. Name for me one legitimate economic theory that says you raise taxes during an economic recession? Lord Keynes advocated raising taxes only at times when aggregate demand was growing at an unsustainably high rate, with the excess proceeds used to pay down government debt. Keynes believed that lower taxes and increased government spending during economic recessions would increase aggregate demand. The competing economic theory, supply side, believes that by lowering taxes, particularly on producers, you would incentivize producers to produce at lower costs, and that consumers would benefit from lower costs and therefore, increase aggregate demand. But, Dr. Krugman, in all his infinite wisdom, proposes a tax increase in the face of a very weak economic recovery, which would practically guarantee a double-dip recession, depress tax receipts further due to lower demand, and spur Dr. Krugman to write further columns about the need for further, and larger, tax increases.
Another laughable point in Dr. Krugman's article is when says, "...when we give millionaires more money (through tax cuts) instead, there's a good chance that most of that money will just sit idle." Huh? Millionaires that I know did not become that way by letting their money sit idle. These people are extremely active in looking for investment opportunities that will yield high returns. In fact, many are obsessed with investment opportunities. Millionaires only let their money sit idle if they if there are no opportunities to earn a rate of return on their investment that is appropriate given the risk of the investment involved. Sit idle? Not with millionaires. Millionaires, or "the rich", have excess capital, or risk capital that they can invest in high risk investments. These are the investments in our future, such as new technologies, and new companies. If the money is sitting idle today (and I believe it is), it is because of a regulatory environment that is hostile to risk taking. Give these millionaires the regulatory environment of the Reagan years, and they would not be able to invest the risk capital fast enough.
Finally, Dr. Krugman concludes by asking how we got to this point, and what about the future. I will answer the former first. We got to this point, not so much because of anti-government rhetoric over the past 30 years (as Dr. Krugman claims in the article), but by example after example of government incompetence. What do the Post Office, Fannie Mae, Freddie Mac, Medicare and Medicaid all have in common? They are all government sponsored enterprises and all are a financial disaster. Freddie and Fannie were Ground Zero of the financial crisis that led us into our current economic environment (and were completely left out of the financial reform bill!). Medicare and Medicaid are insolvent, and Social Security is headed that way. The Post Office bleeds money every year, and last year lost nearly $4 billion. Yet Dr. Krugman would have us believe that only the Federal Government is qualified to get us out of our current mess.
Finally, what of the future? He says that well-educated populations and high-quality infrastructure are crucial elements of a growing economy. He is indeed correct. However, we also need abundant natural resources, price stability, incentives to invest, and a government that does not burden its people. He says emerging nations "are making huge efforts to upgrade their roads, their ports, their schools. Yet in America we're going backward." Emerging nations also have very low taxes, very little regulation and I am sure a host of other prickly little details that would appall Dr. Krugman and somehow escape his so-called expert economic analysis.
In a recent column, Dr. Krugman called Rep. Paul Ryan's Road Map For America "flimflam". I would say that Dr. Krugman is the real flimflam artist. He proposes solutions that are not supported by any legitimate academic theory. He blames the rich for sitting on their money, when the federal government is giving them every incentive to remain idle. He says that the federal government did not spend enough money when in fact the government had the largest stimulus package ever last year, and the package gave us far less than proper bang for our buck due to poor conception. Dr. Krugman's solutions are no solutions, but instead a prescription for disaster.
Wednesday, July 14, 2010
Thoughts On Immigration
One of my favorite places to vacation in the U.S. is Arizona, particularly at Spring Break. The boys and I can escape the cold March weather, and head out to sunny Phoenix (or Scottsdale!), and expect a week of 75 degree temps, no humidity, sunshine everyday, spring training baseball, and a heated pool at the resort. Plus lots of March Madness to fill the dead space. There are other attractions, namely the Grand Canyon, about 4 1/2 hours north, which is simply the most amazing thing I have ever seen. I do want to stop in Sedona sometime, as I have heard so many good things about it, as well as see the desert and perhaps some sidewinder rattlesnakes (from a safe distance!).
So it is with a degree of sadness that I see Arizona embroiled in controversy over the recently passed immigration bill. While I am not convinced that the law is the right answer, I am so disappointed by the reaction to this bill, both by those for the bill and those against it. The fact is that the state has seen a dramatic rise in violent crime being perpetrated by those who are in the country illegally. The vast majority of the crime is done by those associated with drug cartels who find Arizona's porous border an easy entry into the U.S. In passing the law, what Arizona hoped to accomplish was to reduce and cut out this violent crime. While I do not think this bill does the trick, what I also strongly believe is that Arizona sent out a cry for help.
Clearly, Arizona feels overwhelmed by the illegal immigration going on within the state. Yet the people within the state also clearly believe that the federal government in Washington did not care to help. So the Arizona legislature took matters into its own hands, basically copied the federal immigration law and signed it into state law as well. This is an issue which both Republicans and Democrats in Washington let down the state of Arizona.
The reaction to this bill on all fronts is hugely disappointing. The Obama Administration basically bitch-slapped the people of Arizona. Arizona is asking for help and the federal government is suing the state. The Republican response is equally puzzling, painting all illegal immigrants as sub-human, and boy America is no place for immigrants! Of course, since Hispanics are the fastest growing minority in the U.S. it is puzzling why the Republicans are doing all they can to ensure that none of them ever votes their way.
There has to be a different path. First, I tend to divide immigrants into two different classes. First, you have the migrants. These are the people who come to this country to escape the oppression in their own country (primarily Mexico). They come to this country seeking a better life, seeking opportunity. These people are hard working, generally they are socially conservative, they do not come looking for government handouts, and they are not generally criminals. They have nothing in Mexico, so they have nothing to lose by coming to this country. They are also dirty, they are uneducated, they generally have a darker skin complexion and they do not speak English, so we look down on them. The second class of illegal immigrant is the drug cartel associate. They do the bidding of the drug lords in Mexico. They are violent, they are ruthless and they are criminals. While their crime is generally against other Hispanics in Arizona, their actions have scared the entire state population.
I keep looking to the first group, the migrants. These are the very people that the American dream is all about. They come seeking opportunity and seeking work. They are seeking a better life for themselves and their families. They generally work jobs that most Americans would not touch. Quite frankly, the economy needs them. Yet, all forms of legal immigration are closed off to these people. Should we allow their children in our schools? I would want their children to learn about this nation, its history, its boundless love of freedom. I would also want these children to learn to speak English. This will be important for them as they grow older. I would love to see these children grow to be productive American citizens. As for the drug cartel associates, I have no sympathy for them. Give them the harsh, swift hand of justice. But how do you separate the two?
Should we allow these people in? I look at it from a secular perspective and a spiritual perspective. The secular perspective I mentioned in the previous paragraph. Looking at this spiritually, I take my cue from Jesus Christ in the New Testament. The Jesus of the New Testament spoke often of the need to minister to the poor, to feed the hungry, and most of all, to give hope to the downtrodden. He took compassion on those that society forgot, or those that society wished to cast away. He welcomed those who came to him. Jesus never once spoke of the need to secure borders.
This issue is far more complex than today's leaders make this out to be. A presidential administration has turned its back on its own citizens. Yet the opposition's action remind me of the Pharisees in Jesus's day. In the end, I have no answers. Just the rambling musings of someone looking for answers and not finding them. This issue is far more complex than I have even presented here. Answers are not easy to come by.
So it is with a degree of sadness that I see Arizona embroiled in controversy over the recently passed immigration bill. While I am not convinced that the law is the right answer, I am so disappointed by the reaction to this bill, both by those for the bill and those against it. The fact is that the state has seen a dramatic rise in violent crime being perpetrated by those who are in the country illegally. The vast majority of the crime is done by those associated with drug cartels who find Arizona's porous border an easy entry into the U.S. In passing the law, what Arizona hoped to accomplish was to reduce and cut out this violent crime. While I do not think this bill does the trick, what I also strongly believe is that Arizona sent out a cry for help.
Clearly, Arizona feels overwhelmed by the illegal immigration going on within the state. Yet the people within the state also clearly believe that the federal government in Washington did not care to help. So the Arizona legislature took matters into its own hands, basically copied the federal immigration law and signed it into state law as well. This is an issue which both Republicans and Democrats in Washington let down the state of Arizona.
The reaction to this bill on all fronts is hugely disappointing. The Obama Administration basically bitch-slapped the people of Arizona. Arizona is asking for help and the federal government is suing the state. The Republican response is equally puzzling, painting all illegal immigrants as sub-human, and boy America is no place for immigrants! Of course, since Hispanics are the fastest growing minority in the U.S. it is puzzling why the Republicans are doing all they can to ensure that none of them ever votes their way.
There has to be a different path. First, I tend to divide immigrants into two different classes. First, you have the migrants. These are the people who come to this country to escape the oppression in their own country (primarily Mexico). They come to this country seeking a better life, seeking opportunity. These people are hard working, generally they are socially conservative, they do not come looking for government handouts, and they are not generally criminals. They have nothing in Mexico, so they have nothing to lose by coming to this country. They are also dirty, they are uneducated, they generally have a darker skin complexion and they do not speak English, so we look down on them. The second class of illegal immigrant is the drug cartel associate. They do the bidding of the drug lords in Mexico. They are violent, they are ruthless and they are criminals. While their crime is generally against other Hispanics in Arizona, their actions have scared the entire state population.
I keep looking to the first group, the migrants. These are the very people that the American dream is all about. They come seeking opportunity and seeking work. They are seeking a better life for themselves and their families. They generally work jobs that most Americans would not touch. Quite frankly, the economy needs them. Yet, all forms of legal immigration are closed off to these people. Should we allow their children in our schools? I would want their children to learn about this nation, its history, its boundless love of freedom. I would also want these children to learn to speak English. This will be important for them as they grow older. I would love to see these children grow to be productive American citizens. As for the drug cartel associates, I have no sympathy for them. Give them the harsh, swift hand of justice. But how do you separate the two?
Should we allow these people in? I look at it from a secular perspective and a spiritual perspective. The secular perspective I mentioned in the previous paragraph. Looking at this spiritually, I take my cue from Jesus Christ in the New Testament. The Jesus of the New Testament spoke often of the need to minister to the poor, to feed the hungry, and most of all, to give hope to the downtrodden. He took compassion on those that society forgot, or those that society wished to cast away. He welcomed those who came to him. Jesus never once spoke of the need to secure borders.
This issue is far more complex than today's leaders make this out to be. A presidential administration has turned its back on its own citizens. Yet the opposition's action remind me of the Pharisees in Jesus's day. In the end, I have no answers. Just the rambling musings of someone looking for answers and not finding them. This issue is far more complex than I have even presented here. Answers are not easy to come by.
Saturday, April 24, 2010
It Is Well
When peace like a river attendeth my way
When sorrows like sea billows roll
Whatever my lot, thou has taught me to say
It is well, it is well with my soul.
Horatio Spafford, 1873
Horatio Spafford became a fairly prominent attorney in Chicago in the 1860's, but starting in 1870, tragedy enveloped this man's life in spades. In 1870, he lost one of his children to disease, then in 1871 he lost all his real estate investments in the great Chicago fire. But it all climaxed for him in 1873, as he and his family were set to sail across the Atlantic for a European vacation. Last minute business kept him from going with his family, but he promised to catch up in a couple of days. The ship his wife and chilren were on sunk just off the coast of France, and each of his remaining children perished. He received a telegram from his wife that simply said "saved alone." A few days later, when he passed near the spot where his children went down, he felt inspired by the Holy Spirit and it was at the time that Mr. Spafford wrote this classic hymn.
Which brings me to today. Tuesday, April 27 is my nineteenth wedding anniversary, only I won't be celebrating with my wife, who passed away nearly 11 years ago. For me, it is a day of reflection as I look back on a marriage so strong that was cut so woefully short. Yet in spite of the tragedy, I find hope in the words penned by Horatio Spafford some 137 years ago. Each of us endures tragedy, yet where is our strength and our hope to survive such awful tragedies? I remember a loving woman, a beautiful wife and a terrific mother who is still needed by her sons today. Even so, it is well with my soul.
It was never a part of my life's plan to be widowed at 32. There was so much more to do. Raising our two sons together, our dreams for travel, all the laughs along the way as well as all the aggravations. Instead of living those dreams, I spent several years afterwards looking into the darkness. My life simply wasn't supposed to be like this. I didn't ask for this. In my own way, I screamed out, "My God, my God why have you forsaken me?" Where did I find hope among the hopelessness I felt? Ultimately I found it in my faith, but a faith that was shaken, torn and left to be reconstructed. I learned to accept Angie's death. More importantly, I learned to accept myself again, albeit one that was different than before. While I would never wish single parenthood on anyone, I am blessed by my sons each day. And I got some great advice along the way. Mostly that God is still listening. And that hope still exists. And I learned that it is well with my soul.
This, too, shall never pass, but life will go on. Today, I look to a future more full of hope than ever before. I have two wonderful boys who are going into (sometimes) fine young men. I take great joy in watching them grow. I also look to my own life, one that is renewed, one that sees faith grow everyday. I have hit bottom in my life and it was not pretty. I realize what a monster depression can be, and how hard it is to climb out of that hole. Perhaps more, I have come to faith that is truly my own, shaky as it still may be. I don't know how else to explain, except to say that I've come by it honestly, through trial and tribulation. This doesn't make me a hero, just a guy who is trying to make his way in this world, and needs help from a God who will love and protect me. And like Job in the Old Testament, I put my faith and hope in a God that will restore life.
During my darkest days, I was fortunate to have many people praying for me. Your prayers sustained me. Thank you one and all for your prayers and all the kindness that I was shown during those dark days. There were people who did many kind things for me, yet I was so emotionally numb and detached that I could not muster the strength to say "Thank you." But know this: I could not have made it without you. And today, it is well with my soul.
Monday, March 22, 2010
Thoughts on Health Care
With the passage of the historic health care bill, and with all the rhetoric, both for and against, I have taken some time to see the good and the bad in this bill. There is a lot to like and there is a lot to dislike. Some of the provisions that govern insurance industry are good, and needed to be done. However, the vast government oversight, and the resulting costs could prove to be quite disasterous.
Insurance Industry Governance
The main thrusts of this bill concern regulation of health insurance and some of these provisions are good. First, insurance companies cannot cancel health insurance of someone simply because they get sick. This is simply unconscionable and needed to be corrected. In addition, lifetime caps will eliminated. As an aside, life insurance companies need the same thing imposed on them. Life insurance policies should not be canceled for people who are terminally ill. Children will not be denied insurance due to pre-existing conditions. While this is good, it comes at a price. Uninsured children will be able to stay on their parents plan until they are 26. Uninsured adults with pre-existing conditions will be able to purchase insurance. Ultimately, insurance companies will not be able to deny health insurance to those with pre-existing conditions. There are many other provisions as well. However, one must be aware that many of these provisions do add to an insurance industry's cost, and these costs will be passed on to the consumer.
Cost Containment
Supporters of the health care bill point out that the bill will reduce the deficit by $138 billion over the next 10 years. Let me say upfront that I utterly reject this figure and the methodology that produced it. I do not blame the Congressional Budget Office (CBO) that put out this figure. The people at the CBO do good work, but their output is only as good as their input. And the input was simply awful. This is a classic case of garbage in, garbage out. What are touted by supporters as "savings" are in fact, taking excess monies from one program (such as Social Security which has $52 billion in higher tax revenues counted as offsets on the health care bill) to count as "savings" for this bill. When you strip out the total cost of these offsets and gimmicks, the bill is actually projected to increase the deficit by $460 billion in the first 10 years and by $1.4 trillion in the second 10 years. And this figure does not include the "doc fix" (the restoration of Medicare cuts), which costs $371 billion. This made the "score" look bad, so it was removed from the health care bill and added to a different piece of legislation.
This bill also assumes approximately $500 billion in Medicare cuts over the next 10 years. What is going to be cut? Over the next 10 years, the population of those 65 and over will soar as the Baby Boomer generation ages, and the demand for health care services will soar along with it. How can you cut so much money from a program that will demand so much more in services? How can you cut so much money from a program that is already running a $38 trillion (yes, trillion!) unfunded liability deficit? This makes no sense and I do not expect these cuts to materialize.
What about this bill's ability to provide affordable health care? Throughout his 2008 presidential campaign, Barack Obama promised to put forth a plan that would save the average American family $2,500/year in health insurance costs? Where in this bill are those savings? Provisions such as the elimination of pre-existing conditions and lifetime caps are costly to insurance companies and they will not absorb the costs. These costs will be passed to policyholders. Businesses with 50 or more employees that do not offer health insurance will incur stiff fines. There are many restaurants that fall into this category that will face fines of up to $2,000 per employee. Either way, this is costly. Starting in 2014, insurance companies will have to pay a fee (actually, a tax) to the government, based on market share. The same thing will be applied to major pharmaceutical companies. This will add to the cost of insurance premiums and add to the cost of prescription drugs. There are no provisions in this bill that aim to rein in insurance costs, no provisions in this bill for tort reform. In short, I see no cost containment of any kind in this bill.
Overall Cost Effect
If you add back the $600 billion in gimmicks described above, the $500 billion in Medicare cuts that I do not see materializing and the $371 billion "doc fix", this bill will actually add closer to $1.3 trillion to the deficit. When you add this to the $1 trillion/year budget deficits the government is already projected to run, it becomes easy to see a black hole. So do I trust the government's numbers? Well, when Medicare was originally passed in 1965, the program was projected to spend $9 billion in 1990 for hospital reimbursements. How much did the government actually spend that year on hospital reimbursements? Sixty-six billion dollars! The government's actuaries were a little off. So, why should I trust the government's numbers this time? As we are entering a time when demand for health care will explode, it is hard to believe that costs will be well contained. Especially from an organization that runs a bankrupt Social Security program, bankrupt Medicare and Medicaid programs, a money bleeding post office, and whose Freddie Mac and Fannie Mae programs were Ground Zero for the financial crisis we just endured and are still paying for.
All this extra cost has a price. Yields on some high grade corporate debt is now lower than yields on Treasury securities. This may indicate that investors no longer look at Treasury securities as AAA rated securities, no matter what Moody's and S&P say. As an aside, Moody's and S&P are whores to the companies and governments they rate anyway, so if the US government loses its AAA rating, the government will simply buy it. Savvy investors will know better. What this means is that the cost of borrowing will ratchet up higher just through poor credit quality. This will likely lead to a weaker dollar and even higher interest rates. And our leaders think we need to spend lots and lots of money on a new entitlement program? I do not get it. God help us if short-term interest rates go to 5%.
Supply of Healthcare Providers
This bill supporters claim this new bill will add 32 million people to the health insurance rolls in this country. That is great that we can make the healthcare system more accessible to all these people. But, what about the supply of healthcare workers to meet all this new demand? Medicare's actuary projects that approximately 20 percent of all Medicare beneficiaries will either go out of business or stop seeing new Medicare patients. Of course, we have all heard anecdotal stories of doctors who will quit practicing medicine if this bill passes. Meanwhile, will medical schools crank out enough doctors to meet the increased demand? Maybe. Not a reassuring answer, but that's the best answer available right now. Will they crank out enough quality doctors to increase the quality of overall care in the system? Not likely. I do not blame the doctors for this. Many doctors are already working long days, seeing patients in a cattle call type of fashion. It is the best they can do. This situation will not be relieved by the new bill. It will be made worse. Doctors will need to be more highly compensated for their extra time. Once again, this will add to the overall cost of healthcare.
Summary
Healthcare reform (or more accurately, health insurance reform) is something most Americans desire. Freedom to choose their own doctors (which this plan provides), freedom to choose your own plans (which this bill does not provide). But one with massive government involvement is something we as a people do not want. Opinion polls about this healthcare bill consistently showed that about 70% of the population was against it. This bill will provide layers of bureaucracy, permanently higher taxes, astronomical debts that our children, grandchildren and generations of our families will inherit just from this bill alone. Simply put, this was a bad bill, and health insurance reform could have been accomplished much more simply and inexpensively.
Insurance Industry Governance
The main thrusts of this bill concern regulation of health insurance and some of these provisions are good. First, insurance companies cannot cancel health insurance of someone simply because they get sick. This is simply unconscionable and needed to be corrected. In addition, lifetime caps will eliminated. As an aside, life insurance companies need the same thing imposed on them. Life insurance policies should not be canceled for people who are terminally ill. Children will not be denied insurance due to pre-existing conditions. While this is good, it comes at a price. Uninsured children will be able to stay on their parents plan until they are 26. Uninsured adults with pre-existing conditions will be able to purchase insurance. Ultimately, insurance companies will not be able to deny health insurance to those with pre-existing conditions. There are many other provisions as well. However, one must be aware that many of these provisions do add to an insurance industry's cost, and these costs will be passed on to the consumer.
Cost Containment
Supporters of the health care bill point out that the bill will reduce the deficit by $138 billion over the next 10 years. Let me say upfront that I utterly reject this figure and the methodology that produced it. I do not blame the Congressional Budget Office (CBO) that put out this figure. The people at the CBO do good work, but their output is only as good as their input. And the input was simply awful. This is a classic case of garbage in, garbage out. What are touted by supporters as "savings" are in fact, taking excess monies from one program (such as Social Security which has $52 billion in higher tax revenues counted as offsets on the health care bill) to count as "savings" for this bill. When you strip out the total cost of these offsets and gimmicks, the bill is actually projected to increase the deficit by $460 billion in the first 10 years and by $1.4 trillion in the second 10 years. And this figure does not include the "doc fix" (the restoration of Medicare cuts), which costs $371 billion. This made the "score" look bad, so it was removed from the health care bill and added to a different piece of legislation.
This bill also assumes approximately $500 billion in Medicare cuts over the next 10 years. What is going to be cut? Over the next 10 years, the population of those 65 and over will soar as the Baby Boomer generation ages, and the demand for health care services will soar along with it. How can you cut so much money from a program that will demand so much more in services? How can you cut so much money from a program that is already running a $38 trillion (yes, trillion!) unfunded liability deficit? This makes no sense and I do not expect these cuts to materialize.
What about this bill's ability to provide affordable health care? Throughout his 2008 presidential campaign, Barack Obama promised to put forth a plan that would save the average American family $2,500/year in health insurance costs? Where in this bill are those savings? Provisions such as the elimination of pre-existing conditions and lifetime caps are costly to insurance companies and they will not absorb the costs. These costs will be passed to policyholders. Businesses with 50 or more employees that do not offer health insurance will incur stiff fines. There are many restaurants that fall into this category that will face fines of up to $2,000 per employee. Either way, this is costly. Starting in 2014, insurance companies will have to pay a fee (actually, a tax) to the government, based on market share. The same thing will be applied to major pharmaceutical companies. This will add to the cost of insurance premiums and add to the cost of prescription drugs. There are no provisions in this bill that aim to rein in insurance costs, no provisions in this bill for tort reform. In short, I see no cost containment of any kind in this bill.
Overall Cost Effect
If you add back the $600 billion in gimmicks described above, the $500 billion in Medicare cuts that I do not see materializing and the $371 billion "doc fix", this bill will actually add closer to $1.3 trillion to the deficit. When you add this to the $1 trillion/year budget deficits the government is already projected to run, it becomes easy to see a black hole. So do I trust the government's numbers? Well, when Medicare was originally passed in 1965, the program was projected to spend $9 billion in 1990 for hospital reimbursements. How much did the government actually spend that year on hospital reimbursements? Sixty-six billion dollars! The government's actuaries were a little off. So, why should I trust the government's numbers this time? As we are entering a time when demand for health care will explode, it is hard to believe that costs will be well contained. Especially from an organization that runs a bankrupt Social Security program, bankrupt Medicare and Medicaid programs, a money bleeding post office, and whose Freddie Mac and Fannie Mae programs were Ground Zero for the financial crisis we just endured and are still paying for.
All this extra cost has a price. Yields on some high grade corporate debt is now lower than yields on Treasury securities. This may indicate that investors no longer look at Treasury securities as AAA rated securities, no matter what Moody's and S&P say. As an aside, Moody's and S&P are whores to the companies and governments they rate anyway, so if the US government loses its AAA rating, the government will simply buy it. Savvy investors will know better. What this means is that the cost of borrowing will ratchet up higher just through poor credit quality. This will likely lead to a weaker dollar and even higher interest rates. And our leaders think we need to spend lots and lots of money on a new entitlement program? I do not get it. God help us if short-term interest rates go to 5%.
Supply of Healthcare Providers
This bill supporters claim this new bill will add 32 million people to the health insurance rolls in this country. That is great that we can make the healthcare system more accessible to all these people. But, what about the supply of healthcare workers to meet all this new demand? Medicare's actuary projects that approximately 20 percent of all Medicare beneficiaries will either go out of business or stop seeing new Medicare patients. Of course, we have all heard anecdotal stories of doctors who will quit practicing medicine if this bill passes. Meanwhile, will medical schools crank out enough doctors to meet the increased demand? Maybe. Not a reassuring answer, but that's the best answer available right now. Will they crank out enough quality doctors to increase the quality of overall care in the system? Not likely. I do not blame the doctors for this. Many doctors are already working long days, seeing patients in a cattle call type of fashion. It is the best they can do. This situation will not be relieved by the new bill. It will be made worse. Doctors will need to be more highly compensated for their extra time. Once again, this will add to the overall cost of healthcare.
Summary
Healthcare reform (or more accurately, health insurance reform) is something most Americans desire. Freedom to choose their own doctors (which this plan provides), freedom to choose your own plans (which this bill does not provide). But one with massive government involvement is something we as a people do not want. Opinion polls about this healthcare bill consistently showed that about 70% of the population was against it. This bill will provide layers of bureaucracy, permanently higher taxes, astronomical debts that our children, grandchildren and generations of our families will inherit just from this bill alone. Simply put, this was a bad bill, and health insurance reform could have been accomplished much more simply and inexpensively.
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