Internet Scams: Thank God for the internet!

You just gotta love the people who sit around and think these things up! Over the past two days, I received two e-mails, the first (copied as sent below as Letter 1), was a very official looking letter from Mr. Edward Meyers who was polite enough to inform me that no less than the Government Accountability Office (GAO) of United States Government and also the International Monetary Fund (IMF) had instructed he, Mr. Edward Meyers, working on their behalf, to immediately within 72 banking hours – wow this must have been very important – to transfer to me the sum of US$45 Million. Nice!

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LETTER 1

From The Desk Of Mr Edward Meyers
Phone: +1 530 540 5419
Dear valued Customer,

My Name is Mr Edward Meyers, A citizen of the United States,52 years Old. I reside in Hobbs, New Mexico,My residential address is as follows;1320 Linam Street, Hobbs, NM 88242, USA,i work in the remittance department with Bank Of America in collaboration with Gulf General Investment here in New Mexico, United States Of America.

Am contacting you concerning your overdue payment of US$45 Million which have been endorsed for onward transfer to your destination depending on your choice to receive your full payment,you have the legal rite to indicate by return email, the preferable method to receive your payment within 72 Banking hours.

Bank Of America will be willing to receive your full  contact details in your next email,so as to furnish you with the necessary steps to deliver your funds within 72 Banking hours.

Considering the latest payment instruction we received few days ago from THE UNITED STATES GOVERNMENT ACCOUNTABILITY OFFICE(GAO) AND ALSO FROM INTERNATIONAL MONETARY FUND(IMF),You will not be required to pay for any money transfer charges until your funds are delivered to your bank account,but you must present valid and verifiable details of your payment to my office prior to the final release of your payment so as to indicate and assure that you are the rightful beneficiary to the funds in our custody.

Do not hesitate to call me on  my contact phone numbers given below for more details or send an email.

I will be expecting to hear from you urgently

Sincerely yours,

Mr Edward Meyers
For Bank Of America,
NM, USA.
Direct phone: +1 530 540 5419

(I have highlighted the errors in the letters in red)

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Of course I thought, finally, the government is going to reimburse me my share of the profits from the car companies for those bail out loans Continue reading

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4 Straight Years of Slowing Health Care Costs: Really?

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U.S. Marks 4 Straight Years of Slowing Health Costs(click to read the article) so blasts the headline from ABC News today, January 7, 2013. Like so much of the debate over Healthcare reform, many that read the article will walk away believing that things relating to healthcare costs are really improving—along with the economy. After all the article proudly says that the percentage that healthcare costs make upon of the Gross Domestic Product (GDP) has declined for the fourth straight year. This must be a good thing—one would think! But, like so much of the reporting Continue reading

Obamacare Insurance Cancellation: Welcome to the #ObamaNation

Welcome to the ObamaNation where we know better than you!

Welcome to the ObamaNation where we know better than you!

The cancellation letters people are now receiving for their earlier choice based plans– you know the ones that President Obama said they could keep, PERIOD–out of courtesy and perfect declaration should open with this line,

“Welcome to the #ObamaNation where we know better than you!”

Those of us who have warned of these effects under the law, and a number of other predictable negative outcomes that are only beginning to show up, have been called fear mongers, and haters. The shouted counter argument becomes a diatribe of how this law is going to be so great. How it will provide insurance for so much less cost. How it will lower the cost to the nation and the individuals. How you will get whatever you want and have to pay almost nothing for it! Continue reading

Random Thoughts: More or Less!

A few random, and not so random, thoughts that have been circling in my brain for the past week.  Here are a few issues worth thinking about a bit.

Microsoft’s little-screen, big-screen interactive future

Big and little screens interacting. That’s Microsoft’s vision of a collaborative future nirvana.

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A new world revealed!

20 years ago, when most of us were still dumb kids despite our relative ages, I was at a meeting with Bill Gates of Microsoft. He gave a presentation on the future of computing as he saw it. He predicted how we would interact with the things around us. He spoke of three devices; a personal interactive device, a portable interactive device and a social interactive device.  He explained how all three of these devices would deliver the same content in roughly the same manner from any point on the globe. He predicted that the underlying system would be ubiquitous and the information could come via wire, or through the air in a variety of forms.  The most Continue reading

Phillips $10 million dollar $60 light bulb: just your average government project part 4

Phillips $10 million - $60.00 light bulb

Each morning I look forward to reading the morning paper.  Since she got an iPad, a little over a year ago, my wife keeps saying why don’t you cancel the paper and just read the paper on-line.  It is a routine, I know, but this habit helps me start the day and get my mind in gear—usually.  And maybe now I am ooooollllllddddd fashioned.  Or perhaps just old, but I really appreciate the ritual—ritual sounds much more mature than routine and lends an air of distinction to this anachronistic practice don’t you think?

Well, as I was reading once again I am presented with yet one more justification on why we need to have a serious discussion about the national economy, the role of government in the economy, and why we need to move much of the ‘new found’ federal responsibility back to the states, and the private sector; as if any more justification was needed on top of, Cartagena Hooker-gate, GSA let’s all meet and have a party at the taxpayer’s expense-gate, and Solyndra-gate.

The point of today’s reflection is an article, in the Boston Globe by Peter Svensson, “Rebates to ease shock of a $60.00 light bulb.”  I think everyone needs to read this article, if you have not done so already.

Having been in the technology sector for many years, and having a few friends who have either invested in or started, “green” energy companies, I have a passing familiarity with the basis for the creation of this bulb.  There was a $10 million contest, sponsored by our federal government to stimulate the production of more energy efficient light bulbs, driven by political pandering to the let’s save the environment from the evils of incandescent light bulbs crowd.

The justification was that incandescent bulbs convert a large amount of energy to heat, therefore it is wasted.  This is a valid point.  Another point is that from these group’s figures, the average life span of a 60 watt incandescent bulb is 1,500 hours and therefore the contest was for not only a green bulb but one that lasts longer so the cost could be justified.

The contest rules were for a bulb that lasted much longer and it had to cost $22.00, or less, in the first year, with the assumption that the price would go down as adoption and production increased.  Oh yea, it was an American program, and you would think it was also to stimulate American jobs and American business? Nope!  Only one company, Phillips, and if you don’t know Phillips is based in the Netherlands, entered the contest.  Of course they won.  But there is a catch!

The bulb will cost $60.00 not $22.00 or less.  Of course the argument from the groups is they are forcing electric companies to provide rebates for the purchase of the bulb so the price will be offset by $20 or $30 dollars, but if my math is correct $60 – $30 is still $30 which is more than $22.00, last I checked.  And now, as this is coming to light (so to speak), Phillips says they will offer an initial discounted price of $50.00 so the price will be in the $20 to $30 range… Great deal isn’t it?  They got $10 million so you can bet the discount will last until they sell the first million bulbs (that’s $10 million divided by the $10 dollar discount). And let’s not even ask the question if the chemistry in these bulbs might be more hazardous to the environment once they are disposed of.

The thing that gets me about this whole program is that all of this “savings” are coming from us in the first place, so we are not saving anything.  The rebates are charged back to us in the form of higher cost per kilowatt, and the $10 million came from us in taxes.  Most importantly, we are increasing the cost of light bulbs from about $1.10 per bulb to over $50.00. And this is predicated on saving the planet, lowering our energy costs, and stimulating the American Job market . . .  Well forget the American Job market part I guess . . .

Last point I have on this subject is, if the statistics I hear quoted about incandescent bulbs are accurate, then I am the luckiest S.O.B. in the whole world because . . .

The earth killing $1.11 incandescent light bulb

They claim that an incandescent bulb only lasts for 1,500 hours.  I have by a quick count at least twenty-eight, 40 – 60 watt incandescent bulbs in my house now.  I have been in this house for over ten years. I replace on average two bulbs a year. Most of the lights in my house burn five hours a day, some more, some less, but this is my best guess on the average.  So, my lights are lit about 1,825 hours per year.  Given the 1500 hour average life, according to these green groups, I should be buying and replacing about thirty bulbs a year.  But you know what, I don’t . . .  I never have.  In fact, the reason that incandescent bulbs burn out as quickly as they do, albeit much more slowly for lucky me, is because the vacuum in the bulb at manufacture is not as complete as it could be.  And it only costs me $1.11 cents to buy these evil, world destroying, 60 watt bulbs, or $2.20 per year.  This means, I theoretically change them all once every fourteen years.

Now, if I buy twenty-eight of these new bulbs that are supposed to last twenty years, even with the discount, it will cost me $840.00.  I can buy 756 of my old bulbs for that price, which would have lasted fifty-four years at my current replacement rate.

Light bulb manufacturers, all the way back to old Tom Edison, knew they could make bulbs that lasted for a long, long, time—10 to 30 years. In fact, they have, by accident and random chance.  My grandfather’s house had some of the original Edison bulbs with a base the size of a ping pong ball and a filament that looked as thick as a pencil lead.  If they were not broken over time, they would all probable be burning today. Good for homeowners, but bad for GE, Sylvania, etc.  These guys new that bulbs could be cheap because you bought a lot of them every year, and if you only buy a few every twenty years then they will cost a whole lot more.  And guess what, they were correct back then and they are correct now!

Since I am now living in California, and I can’t buy many incandescent bulbs because they have been outlawed, I have a few CFL bulbs, and so far I have had to replace these bulbs at least once a year and in one case, in the globe ceiling fixture in my closet that has two 40 watt bulbs, much more frequently.  In fact, if one of these suckers blows out in the fixture, the other one dies, seemly out of sympathy, in just a few days.

Due primarily to labor and benefits costs, and secondarily because we have a dwindling lower wage labor pool because everyone must go to college, we are already non-competitive in manufacturing.  Now, we will begin increasing the cost of lighting by almost fifty times as we move to these “save the planet” bulbs.  Many supporters of these bulbs argue that in the long run we are going to save so much more in costs of energy because of their efficiencies.  Well, due to past experience I am both skeptical of the claim, and dubious that the short term increase of costs on an already non-competitive economic structure will ever be offset.  And even if it theoretically will lower costs in the long run, I am starting to doubt we will be around as a vibrant economy for it to matter anyway; which means we won’t be buying a lot of $60 light bulbs because we won’t be able to afford them.

While I am all for limiting the impact we have on the environment, like everything else in life we need to also maintain some viability.  In this case, the viability is tied to our cumulative cost and its impact on our economic i.e. national and cultural viability. Perhaps If we really want to save the planet then we should likely all agree to commit suicide now.  Then we will no longer have an impact.  I guess, that is, after the ecosystem once again returns to stasis after the population blooms of bacteria, predators, carrion feeders, etc. — all go through their own population explosion-die off cycles as the excess food sources from the rotting polluting corpses we leave behind are finally consumed and absorbed into the ecosystem.  On second thought, this will likely be a bigger polluting source that all the incandescent bulbs so maybe we should just keep the incandescent bulb and balance it by what we save by not committing suicide in the first place—Cap n’ Trade at its finest.

Oh yea, can’t use cap n’ trade, cause the state is going to use that to pay for the High-Speed Rail to nowhere!

Medicare-Medicaid: A Chicken in Every Pot

“. . . I think we’ve got you something that we won’t only run on in ’66, but we’ll run on from hereafter!” - Wilbur Mills to President Johnson on Medicare in 1965.

As Congressman Wilbur Mills commented to President Lyndon Johnson, in a taped private conversation in 1965, he was encapsulating the primary benefit that the democrats of the day felt they would gain from the Medicaid and Medicare extension to the Social Security Act of 1935, and the primary reason that President Johnson and his team pushed so hard for the reform to include new entitlement programs for the elderly, the disaffected, and disillusioned.

The Historical Perspective

Wilbur Daigh Mills, democratic member of the U.S. House of Representatives, and the chairman of the powerful Ways and Means Committee, was considered, by many, to be the only person in Congress who truly understood the actuarial basis of Social Security, and was recognized as the Congress’s primary tax expert.  At the start of the war on poverty in 1964, Mills had serious concerns as to the affordability of the existing Social Security Act of 1935 for the nation, let alone any extension of the current benefits to include what was then viewed as a health care “safety-net” for the underserved and the elderly.

Mills did not believe that the nation’s tax system could fund the liability of Medicare.  In his paper, “The Origins of Medicare,” published in 1999, Robert B. Helms writes,

Even in the face of strong political pressure from other Democrats, Mills had been so consistent in his opposition to adding a medical benefit to Social Security that many suspected him of being sympathetic to the AMA’s socialized medicine arguments. He used his detailed knowledge of Social Security to question both the Kennedy and Johnson administrations’ cost estimates and to point out that estimating future medical costs was a much more difficult task than estimating the future costs of a cash benefit.

In a 1964 speech, Mills said: “In practical terms, this meant that if the hospital insurance system which would be created by the bill was to remain sound, the taxable wage base would have to be increased by $150 each year. Clearly, this would be a case of the tail wagging the dog.” (The taxable wage base increased an average of $46 per year from 1959 to 1964)

In that same speech, he pointed out that hospital costs were increasing at a rate of 6.7 percent, while average earnings were increasing at only 4 percent (1955 – 1963), and that he saw no reason to assume that the situation would change. His support for the final version of Medicare in 1965 was apparently due to the effects of Democratic gains in the House in the elections of 1964, President Johnson’s personal appeals for support, and the many technical changes that he was personally able to insert into the bill during its various stages of development.

We now know that Chairman Mills’ skepticism was justified: In 1964, the administration projected that Medicare, in 1990, would cost about $12 billion in 26 years (which included an allowance for inflation); the actual cost was $110 billion. We may not know until the year 2025 if today’s actuaries are any more accurate than those in 1964 in making twenty-six-year projections, but at least the current crew is leaving no stone unturned to tell everyone who will listen that the Medicare Part A trust fund does not meet their standards for short-term or long-term actuarial soundness.

Despite Mills’ dire warnings, and his correct calculation that the wage base would have to increase by 300% each year over the existing rate to afford this new entitlement, Johnson felt he was swept in with a clear mandate from the people due to his landslide victory in the 1964 election. So, to help drive increases in the Democratic Party majority in congress, he made the push for Medicare one of his primary platform goals. Johnson was so focused on getting Medicare pushed through congress, he was willing to leverage anyone, and everyone, with every tool he had at his disposal to get this divisive legislation approved. The following transcript, of a taped meeting with his Vice President, Hubert Humphrey, in the first days after the election, is quite telling.

Johnson: “They are bogged down. The House had nothing this week-all god-damn week. You and Moyers and Larry O’Brien have got to get something for them. And the Senate had nothing . . .  So we just wasted three weeks . . .  Now we are here in the first week in March, and we have just got to get these things passed . . .  The ones that I’m really interested in . . .  one of them is education, one of them is Medicare, and one of them is Appalachia . . .  I think the medical care will go through like a dose of salt through a widow-woman . . .  You’ve got to look each week and say, what is the Senate doing in Committee this week and when will they be through, what is the House doing . . .  You’ve got to be running into these guys in the halls, and going over and having a drink with them in the evenings . . .  I want that program carried. I’ll put every Cabinet officer behind you, I’ll put every banker behind you, I’ll put every organization that I can deliver behind you . . .  I’ll put the labor unions behind you.

Johnson’s election didn’t just change the Democratic Congress’s advantage over Republicans; it also changed Mills’ political view. Seeing the writing on the wall, Mills made another speech where he announced, “I can support a payroll tax for financing health benefits just as I have supported a payroll tax for cash benefits (meaning social security).”
Thus, began what has been termed by many as the greatest Ponzi scheme to ever be foisted on the American people. With Mills’ support, the measure passed. There were still several hurdles to overcome, but in the end, Johnson got the legislation he wanted, regardless of the consequences. On March 23, 1965, Johnson’s Oval Office taping system records the call he has been waiting for from Wilbur Cohen (architect of much of Social Security and Medicare), Wilbur Mills (Chairman of the Ways and Means Committee), Carl Albert (Democratic Majority Leader) and John McCormack (Speaker of the House) telling him the bill has just passed out of the Ways and Means Committee. It is the first time Johnson finds out what Cohen has just actually agreed to in Johnson’s name: (Listen to the Johnson Tapes on-Line)

Mills: We wound up, and I got instructions, we’ll introduce the bill at noon tomorrow, and will report it at 12:15 . . .  I think, we’ve got you something that we won’t only run on in ‘66 but we’ll run on from here after.
Johnson: Wonderful. Thank you, Wilbur.
Mills: Now here is Wilbur Cohen.
Johnson: When you going to take it up?
Mills: We could have it on late next week, if not, early the following week.
Johnson: For God sakes, let’s get it before Easter.
Mills: Oh, there’s no doubt about that.
Johnson: . . . I sure do congratulate you on getting this one out . . .  I congratulate you and thank you.
Cohen: I think it’s a great bill Mr. President.
Johnson: Is that right?
Cohen: Yes sir. I think you got not only everything that you wanted, but we got a lot more . . .  It’s a real comprehensive bill.
Johnson: How much does it cost our budget over what we estimated?
Cohen: Well, it would be, I would say, around $450 million more than what you estimated for the net cost of this supplementary program.
Johnson: What do they do under that? How is that handled? Explain that to me again, over and above the King-Anderson, this supplementary that you stole from Byrnes.
Cohen: Well, generally speaking, it’s physician’s services.
Johnson: Physicians. All right, now my doctor that I go out and he pumps my stomach out to see if I’ve got any ulcers, is that physicians?
Cohen: That’s right.
Johnson: Any medical services that are M.D. services?
Cohen: Any M.D. services.
Johnson: Does he charge what he wants to?
Cohen: No, he can’t quite charge what he wants to because this has been put in a separate fund and what the Secretary of HEW would have to do is make some kind of agreement with somebody like Blue Shield, let’s say, and it would be their responsibility . . .  that they would regulate the fees paid to the doctor. What he tried to do was make sure the government wasn’t regulating the fees directly . . .  the bill provides that the doctor can only charge the reasonable charges, but this intermediary, the Blue Shield, would have to do all the policing so that the government wouldn’t have its long hand . . .
Johnson: That’s good. Now what does it do for you the patient, on doctors. It says you can have doctor’s bills paid up to what extent or how much? Is there any limit?
Cohen: The individual patient has to pay the first $50 deductible, then he’s got to pay 20 percent . . .  of everything after that . . .
Johnson: That keeps your hypochondriacs out?
Cohen: That will keep the hypochondriacs out. At the same time, for most of the people it will provide the overwhelming portion of their physician’s costs.
Johnson: Yes sir, and that’s something nearly everyone could endure. They could borrow that much, or their folks could get them that much to pay their part . . .  I think that’s wonderful. Now remember this, nine out of ten things I get in trouble on is because they lay around. Tell the Speaker, and Wilbur, to please, get a rule just the moment they can . . .  That damn near killed my education bill, letting it lay around. It stinks. It’s just like a dead cat on the door. When a Committee reports it, you better either bury that cat or get it some life.

In the end, Medicare and Medicaid became the law of the land. And, as can now know, Mills was correct to have his doubts about the actuarial basis of Medicare, Medicaid, and Social Security when the bill was passed in 1965. But, like the Social Security Act of 1935, the 1965 Act was not an ending, but a beginning of a perpetual series of expansions of the benefits provided by these programs.

It is now painfully clear that Wilbur Mills was correct in his initial assumptions about both the solvency of the original Social Security Act of 1935 and its unprecedented expansion in the 1965 amendment that pushed through for significantly political reasons by President Johnson.  Mills estimates of what would be required in real taxable earnings gains in order to fund this “safety net” were eerily prescient. By 1974, the failure of the GDP to support the nation’s expenses for these entitlements, and the accumulating trade deficit, had placed the country in a significant cash shortage with few means of escape.

President Richard Nixon took us off the gold-standard, and by the late 1980s the significant, arbitrary increases in the currency had elevated almost everyone’s wage base to where they began to feel prosperous once again.  But, the costs were just being temporarily outpaced by the injection of this new currency, the day of reckoning was still coming and finally hit with a vengeance in 2009. It is now starting to become clear that the feeling of prosperity we all experienced was not the reality of our economy just the benefit of more baseless cash.

The Modern Perspective

Enter a few days ago our current President, Barack Obama. In the past few days, it is clear to me that the president still believes what Wilbur Mills told President Johnson in 1965.  He clearly believes that he should be able to run on the entitlements of Medicare and Medicaid to secure the votes for this free stuff, just like President Johnson.  The concept of “a chicken in every pot,” i.e. votes for free stuff, was not as much the hallmark of the Democratic Party prior to President Johnson.

Although President Franklin D. Roosevelt leveraged these ideals to help the country rise out of the Great Depression and prepare for WWII, and Herbert Hoover is often credited with the phrase; “A Chicken in Every Pot” is a quotation that is perhaps one of the most mis-attributed in American political history. Variously assigned to each of four presidents serving in the years between 1920 and 1936, it is most often associated with Herbert Hoover. In fact, the phrase has its origins in seventeenth century France; Henry IV reputedly wished that each of his peasants would enjoy “a chicken in his pot every Sunday.” Although Hoover never uttered the phrase, the Republican Party did use it in a 1928 campaign advertisement touting a period of “Republican prosperity” that had provided a “chicken in every pot—and a car in every backyard, to boot.” You see, we need to understand that political duplicity is not a democratic or republican affectation; it is a politician’s con.

But here we are once again, and even though President Obama is not uttering this phrase, it is clear that this is what he sees as his ticket to re-election.  Perhaps I am too cynical, but reading transcripts of committee hearings on what became the Affordable Care Act, listening to our congressional leadership saying things about the legislation like, “this is the path to a federal single payer system,” or “we need to pass it so we can see what’s in it,” and other equally ludicrous statements, and listening to the political agendas so blatantly expressed in the Johnson, or Nixon, tapes can do that to a person!

Based on my own experience, and backed up by the historical record all the way back to Mr. Mills, it is clear that the current system simply cannot work.  Frankly, and I don’t think I am telling anything out of school, none of our elected officials think it can work either.  They are currently almost evenly split between the “we know it can’t work and we need to fix it crowd,” and the “We know it can’t work but we can run on it again, and again, and again… crowd.” Regardless, to everyone it should now be clear that it can’t work.

So, it is astounding to me that the President of the United States, Barack Obama, now stands before the American people and making a reverse Robin Hood argument declares that the other party, Republicans, in this case, those evil people, want to take everything you have away and give it to the rich!  And what is more astounding is he says this is not class warfare!  People seriously can’t believe that such a bald faced lie can be true, can they? I have met many of our congressional leaders; republican and democrat.  I have not met one that was not concerned about all Americans.

To make a statement that one political party is dedicated to the destruction of poor and helpless people is beyond unconscionable it is simply irresponsible.  And it would be equally irresponsible for similar invectives to come from the other side as well.  We are in a significant national, social and economic crisis.  If our leaders do not get serious about solving the problems then we need to get new leadership.  If all we have left when someone talks of hard choices is to damn them as a pawn for the rich, then I do not see how we will survive.

As we move beyond this primary election cycle toward the presidential election, we need to elect a leader that will realize that he can’t promise America that there will not be a chicken in every pot.  You see Mr. Obama; the chickens have finally come home to roost!

(for those of you who may be interested in more on this issue, it is discussed in more detail in my upcoming book, “The History and Evolution of Healthcare in America,” go to my website at www.loker.com and sign up to receive notice of its release.)

The wheels of justice not only turn slowly they often confuse the common man

If you want to listen to the lengths modern law and its practitioners, lawyers, go to spin reality and obscure common sense to convince courts that which otherwise normal people would deem ludicrous, just go to and listen to yesterday’s oral arguments on the Tax Anti-Injunction Act part of the Affordable Care Act (Obamacare) Supreme Court review of its constitutionality.

It is interesting to note that the Solicitor General, representing the government, seems to be schizophrenic as he attempts to argue for the Obama administration’s position that the court cant here the case because of the act—as the President does not want the decision to come till after the election—and on the other hand in representing the position of the government (the people in general) he tells the court that he thinks the court should hear the case.

Another point to note as it has very particular relevance is that in his argument yesterday, he describes the assessed fee for not purchasing insurance, under the mandate clause of the act, is a tax.  Tomorrow he will be arguing that it is in fact a tax.  This schizophrenic position has been confounding the government’s position since they debated the law and passed it in the first place.  In arguing why the case can be heard, Solicitor General, Donald Verrilli, argues that the penalty is not a tax for the purpose of the Tax Anti-Injunction Act.  Tomorrow he will argue that the “penalty” is in fact a tax to justify the federal government’s position that it can levee it and therefore it is not violating state’s rights.

It is very important to note that like congress and the president, the power of the judicial branch, including the Supreme Court is granted, loaned if you will, from We, the people of the United States.  As such, if the decisions rendered make no sense to We, the people, then it is either because they are wrong or not crafted to reflect well on our intentions as a people.

We need to begin to exercise our responsibility as the grantors of these very important and solemn powers and demand that all decisions and arguments be rendered with a standard of language that we can all understand and does not obscure whether or not our constitutional rights are being upheld.

I encourage everyone to take the time to listen to the arguments in the first person, not as reported by others.  Yes they will take a combined six to nine hours but to allow others to police our rights is to grant them the power to help obscure the elimination, or neutering, of our rights.

To quote and old friends mother, “Pay attention, you can learn something from a fool!”  I worry that in the end the fool will be us!

God’s ambassador of peaceful dignity: Khalil Shaheed (1949-2012)

Aside

Khalil Shaheed (1949-2012)

To say I knew Khalil is a rare privilege! I first met this remarkable man when I served as president of the board of directors for Jerry Brown’s Oakland School for the Arts.  He was a man of peaceful strength and dignity.  Beloved of his students, admired by his musical peers, and respected by his friends, his life was a guidebook for dedication, passion and commitment.

For those of you who do not know him I would encourage you to click the link in his name and find out about the career of this dedicated musician, teacher and humanist.  He has played with the greats, like Jimmy Hendrix, the students and the jammers. And always he elevated each and every one to new levels of expression and humanity.

I would also encourage you to read the article in the San Jose Mercury News if you wish to learn more.

I did not know him as well or for as long as I would have liked, but I knew him well enough to know the world of music, faith and peaceful humanity has lost one of our major guiding lights!

Khalil Shaheed, will remain forever one of God’s ambassadors of peaceful dignity!

What is wrong with politics?

Constitutional Republic

People that know me well know that I read.  I read a lot.  I read incessantly, I read everything and anything. I read everywhere, written by anyone, left, right or middle—it does not matter.

I long ago came to the conclusion that whether or not I agree with the points made by an author, this should not be the guiding principal of what I choose to read.  I find that, in fact, I learn the most when I read things I do not innately agree with.  In reading the contrasting opinions of others, and for the most part with the intent of maintain an open mind, I can try to compare their journey of understanding, expressed in their logic, if it exists, and either validate, or repudiate, parts of my own logic. Hopefully, coming to a better understanding and opinion myself.

Whats the problem?

I am not so sure that this is what people really do anymore!  It seems to me more and more people are only interested in letting someone else tell them what to think!

Recently, I have seen a series of articles, from both sides, trying to answer the question of what is wrong with our political system.   Each side is spending lots of effort, and ink (or electronic bits), explaining how the system is not working because the other side is conspiring to subvert the system to harm something or someone, or to benefit something or someone at our expense.  They often formulate the basic justification as this is clear because we are not getting what we want from the system.

Wrong Premise

The problem for me, as I see it, is the entire premise is wrong!  By starting with the logic that something is wrong because we (pick either side in the argument) are not getting what we want, may be logical but it is not accurate on two levels.  First, the assumption that the system is designed to give us something that we want in the first place, is not a correct assumption.  Second, the idea that the system is designed so that whatever the majority wants is to be provided to us by the government, is also not true.

System is working fine

The reality is that our political system is still, for the most part, working as it was designed despite the slow erosion of some of the original checks and balances over the past seventy-five years.  If you doubt this premise, read any of the biographies of Washington, Adams, Jefferson, Monroe, or Franklin and it will quickly become quite obvious that this was the design.

No, the system is still working just as it was intended.  The problem is not the system. Although, if we do not begin to understand the impact of the gradual changes we have made, soon this may not be the case.  The problem with the system is we are now starting to get what we want, and compounding this problem we have been for the last fifty or sixty years.  We are, in every corner, probably right or wrong, getting too much.  No, it is not the system that is the problem it is:

  1. The changes we have allowed to be made to the original system have weakened the checks and balances on our own greed and avarice
  2. What we expect that we are due from the system has grown exponentially as we have gained more from the system

The system is being changed

Our system was designed to be based on part-time citizen politicians directly subject to the impact of the laws and policies they create, not a ruling elite political class exempt for their communities day to day trials and tribulations.  At the very beginning of the implementation of our new form of government, in April of 1789, the grand design of our form of government showed the promise of its innate slow and difficult process to sort out where power and responsibility resides and to make difficult the ability of the federal government to pass laws that affect us.  Rapidly, the two competing philosophies, which I believe are inherent in mankind, congealed into two political parties.  The federalists, who advocated a strong federal government authority to foment consistency, rapid growth, and strength, became one pole, and the republicans, who were concerned about the rise of a tyrannical aristocracy or hereditary monarchy developing a predatory system reducing the rights and prosperity of citizens through taxes and needless, unwanted, regulations who advocated for government controls closer to the people at the state level.

While for over sixty years our education system has taught more, and more, that we are a democracy, and that we are by nature a nation where it is the majority that rules, this was specifically and unequivocally not the government that the founders created.  We were, and to some extent remain, a constitutional republic.  The difference is; in a democracy people have a direct control through their vote, and in a constitutional republic the control is indirect through the election of officials who are supposed to weigh the will of the people against what is best for the country and consistent with the constitutional republican principals of our government as they make law and policy.

System is still fine—For Now!

Today we are clearly migrating away from some of these fundamental principals in two areas:

  1. We now, as a people, no longer understand the benefits of the constitutional republic and many, if not most, simply believe we are a democracy, and
  2. We have inadvertently allowed the creation of a stronger federal control by stimulating the creation of a full-time professional political class—potentially, just the kind of tyrannical aristocracy that Jefferson and Madison were so worried about at the beginning of America.

The question we all need to answer is, “Is this what we agree we truly need?”  If so, then we will have to accept the consequences of a pandering democratic machine continually taking prosperity from the individuals and granting it to the majority in exchange for the continuation of their livelihood as a full-time professional politician, and the continual erosion of the original system of government and its checks and balances on them and us.

If this is not what we agree we need, then there are some very hard choices and changes we will need to consider to recover the checks and balances.  Only then can we once again return to the constitutional republican form of government we had. If this is still what we want!  You see that is the question!

Still up to us to define our system for a while longer

The good thing is it is still up to us for a bit longer.  The more we continue the erosion of the checks and balances inherent in our original constitutional republic, the more we become a democracy.  At some point we will slip over the edge and soon, perhaps, there will be no going back short of another costly and divisive civil war.  If our leaders can develop a true process to decide this fundamental issue we may avoid a destructive conflict.

And the answer is?

So the answer to the question that headlines this article, “What is wrong with Politics?” is nothing at the moment, but stay tuned!

$25 billion in foreclosure relief: Will Americans really benefit?

(this article originally  ran in California Political Review it is re-posted here with permission.)

Median Housing Price compared to CinC 1960 to 2009

While the news today is full of various articles touting the $25 billion government settlement between the nation’s biggest banks and homeowners there is one big question for the nation’s citizens, and in my local case Californians—will this really be a benefit? While I am looking at this from a California perspective, this really is the same for the country as a whole.

In examining this question, there are at least three things to consider:

  1. Will the initial settlement amount become a meaningful amount for homeowners and truly affect their current financial situation?
  2. What are the long term implications of this settlement for mortgage holders?
  3. Will this settlement resolve the underlying problem in housing prices and declining values?

Before I get into this topic, first let us commend California’s Attorney General, Camilla Harris, for her efforts at getting a better deal for Californians.

Meaningful Amount

Question number 1 is perhaps the most current.  Clearly, this is the question on anyone’s mind who owns a home in California.  Will the $25 billion really have a material effect on my mortgage problems?  California has the most homes underwater of any state, according to Santa Ana-based data firm CoreLogic.  There were as of September 2011, more than two-million homeowners that owe more on their homes than they are worth.  By percentage, California ranks fifth with 30.2% of all homes upside down in value.  Compare this with the national average of 22.5% and you will see there is a big problem here.

If you take the national total of 10.9 million home owners spread across the $25 billion, and you apply a “historical fairness” standard where everyone gets treated equally, you get an average payment to each homeowner of $2,293.58—not very meaningful is it? Now, some believe that the “rich” do not need, or deserve, the extra money, so using a “revised fairness” standard, and the fact that some significant number of people will not apply for the funds, the settlement group estimates that the average amount granted to those participating will be more like $20,000.00.  This number sounds better but, there is a big but attached. The combined negative equity of all US homes is over $700 billion meaning that the average homeowner is underwater by at least $50,000.00.  And higher priced homes, like those owned by the rich, often are underwater by a significantly higher percentage.  Adding in the fees and other charges that will get levied by the banks for the processing of these claims and the effective gain drops even more.  So on a national basis, some could take the cynical view that this is not a meaningful amount—but, what about for Californians?

California, by the CoreLogic study has about 2.06 million homes underwater.  The state is targeted to get about $430 million. Using the same comparison above, the “historical fairness” allocation would be $208.74 cents per homeowner and the “revised fairness,” amount, where the rich don’t get any help, will equate to about $3,779.82.  Since California’s market has been hit harder than many other states and its average home price is much higher, the proportional amount negative equity is also likely higher.  So, one could argue that Californians may not only feel the amount is meaningless, they may also feel it is not fair overall!

Long Term Implications

Like most things revolving around government driven programs and settlements, we need to think about the long term consequences.  Where does the money come from that makes up the settlement?  Well it comes from the banks—right?  As the last stop before it gets paid into the settlement that is correct.  But, while this may be the end of the story, as usual, it is not the whole story.  The money comes from us via two primary routes; one visible and understandable and the other confusing and relatively insidious.  First, it comes from the bank’s profits, if any.  And of course their profits, if they have them, come from the fees they charge us, and if the bank’s costs go up they charge more fees to us and we pay them.  So in this route the money comes from us.  The second main route, the more insidious one, is from loans made to the bank by the Federal Reserve to help the banks maintain liquidity or inject more cash into circulation, sometimes called “quantitative easing.” In this case, the money is created out of thin air by the Federal Reserve increasing the total amount of money in circulation—with no increase in value of the underlying assets—passed down to the banks to pay out to us to reset our loans and it reduces the real value of our money.  The result is; goods increase in price, the money we earn goes less far, and we in effect are even poorer.

The cynics among us, who have concluded long ago that there is no free lunch, realize that no matter what the money we get is really coming from us. They may argue that the long term implications from this program are not very good.  The reality is, there really is no free lunch and we can expect that this particular settlement will not work out well for any of us in the long run.  Since many of the people who have the worst upside down mortgages would appear to many other to have been rich, it is not clear that this program would even be a model for the execution of “income redistribution” that some proffer as a solution to all of our ills.

The Underlying Problem

If you look at the graph at the top of this article you will see that the route of our underlying problem goes much deeper than it first appears.  While some argue the cause is the profiteering of the rich and corporations, and others charge it is the irresponsibility of people borrowing to buy houses they could not afford, the real root of the issue is the underlying basis of our economy.  Prior to 1972, the total amount of currency in circulation, referred to as the CinC, was about $500 billion dollars.  The amount of actual currency was restricted by a mandate that each dollar had to be backed up by a set amount of gold.  By 1972, this had become a huge problem as we could not increase the amount of currency and the government, therefore we,  did not have enough cash to pay for all the expenses the country was racking up like War, Social Security, Medicare, Medicaid and myriad other subsidy programs.  Also we were accumulating an increasingly large trade deficit.

But in 1972, then President Nixon, removed the country from this check and balance. By today we have increased the amount of money in circulation to about $16 trillion.  This is a thirty-five times increase in the total amount of the money supply.  No one will argue that the total value of the US assets has also increased thirty-five times—hence the problem.  If you look at the chart, you will see that the median home price in 1972 was about $24,224.  At the peak of the housing bubble in 2005-2006 the median price had risen almost point for point with the increase in the money supply to $298,500.  If you now look at what the median home price would have been if we had not done this, the median price projects to be more like $115,734. The point is that if it is true that the amount of money in circulation is not representative of the real value of American assets, then our total economy, is overvalued.  Even with the tech gains from our NASA investment in the 1960’s and 1970s, the economy would project to be about a $5 to 6 trillion economy not $16 trillion.  Housing, under this calculation, would have to decline another 46% in order for all to match up.

Even if these calculations are off and the relative value of our assets has increased at a rate higher than the pre 1972 rate, there is likely still a large correction coming to our economy in general and housing in particular.  California will be the eye of this perfect storm.  I submit that this mortgage fix neither addresses the underlying problem nor ameliorates Californian’s personal and current dilemmas.  I think it may really do the exact opposite and compound our problems with false hopes, false senses of security and increasing debt based on inflated values that are doomed to correct.

Regardless, this is an unbalanced fix in that it is trying to fix the debt side for a few and ignoring the unbalanced asset value side for everyone else.  Even if pumping more arbitrarily printed money into the economy buoys the market in the short term, the continued unrealistically inflated values will again decline and once again we will be faced with the same problem. This will promulgate more borrowing against what likely will continue to be declining values in an overvalued economy—potentially spelling disaster. The only fix that will work is to address both sides of the problem across the board resetting both the Debt and Equity Value side at the same time.  Perhaps it is time for either the Federal Government, or California, to consider a “Land Bank” system of mortgage financing.  We need to address the balance sheet of the bank and homeowners at the same time we address the asset value side of the equation. Only then can we truly, fairly, and equitably address the fundamental problem.

So in the end is this deal a good deal for Americans?  For Californians? And the more important question we all need to start asking is this!

Regardless of the impact to me personally, is this the right thing for America?

I keep wondering why this is so hard!

The State of Whose Union?

The President Reads the State of the Union Address

I have tried to resist responding to the State of the Union Address last night.  I really have tried!  But, you guessed it, I can’t.  I was so astounded by much of the rhetoric that passed through the President’s lips as unassailable facts I still can’t believe much of it.

As I am want to do, let’s review some real facts for a few minutes….

The President said the State of the Union was getting stronger

Well this really depends on what you choose as your measures and of course how hard you decide to spin them.  Here are some key statistics that were not highlighted in the speech.

Some of the pundits, immediately after the president’s speech, were very quick to remind everyone that President Obama inherited this bad situation.  That’s true, and so have every president since President Lyndon Johnson. in 1964.  The fact that they all have inherited it is not the relevant fact.  It is the fact that every one of them neither fixed it, nor improved it one iota.  In fact here is another little fact.  Everyone of them in some way or another actually contributed to making the situation worse-Republican and Democrat.  All they did was find ways to patch it, give more to those they thought deserved it (meaning would give votes to get it),  printed more money to pay for it, and hoped it didn’t all come apart before they got their golden parachute.  Well it has come apart now, hasn’t it.

“Fairness for all, Responsibility from all”
– President Obama 1/24/2012

Part of the problem I have with last night’s speech is the President stating he is going to make sure there is “fairness” for all.  It is not his wanting for people to have a fair shot that bothers me.  Everyone I know, if asked, would say they want fairness.  But fairness like many other things in life is a frangible and perspective driven concept.  It means different things to different people, and sometimes different things to the same people on different days depending on where they are and whether they are the beneficiary of the supposed fair treatment or not.

I just do not think anyone can give another fairness.  Often, the act of a group, or government, attempting to make something fair takes the form of redistribution or reallocation of something from one group or individual to another.  Look at the controversy surrounding Affirmative Action in Education and the implementation of quotas to make it fair. I am not challenging whether this was a good idea or not,  I am pointing out that in creating a quota to make it “fair” for one person or group, you simply are redirecting the opportunity from another person to this person.  If the person your took it from had nothing to do with the disparity in the first place then they now are being placed in disparity. Even in California, one of the strongholds of humanistic belief and liberal thought, some of our most liberal politicians have recently stated that we all need to get used to disparity.  That after 40 years of public life she now understands disparity must exist ; no mater the cost it cant be eliminated. It seldom works to try to make something fair by treating others unfairly—ask any six year old!

Frankly, if you look at other countries and other systems of government, America is just about as fair as anything could be given human nature in the first place.  I mean really, you think most of Africa is fair?  How about China?  Russia? Saudi Arabia?  Most other places are decidedly less fair than America.  So when people say we have some very deeply built-in unfairness, they usually are speaking in narrow terms.

Historically, if you look at our specific history in a vacuum, we’ve had periods where specific classes, specific races, and specific genders were treated unfairly.  This is very true and not something to be proud of in our newest age of enlightenment.  But once again, the facts are, that while we had these uncomfortable periods of our history, contemporaneously America was still head and shoulders above the rest of the world at the time.  We can always strive to do better , to be better people, to be better to each other, but no government can impose fairness nor can it replace the personal responsibility and character we should all instill in ourselves and our families.

Responsibilities from all

He used the term, “Responsibilities from all”.  The phraseology struck me oddly.  While I suppose it is grammatically correct to say that responsibility comes from somewhere or someone, I am not comfortable with this statement.  After thinking about it this morning, I realize this is because I believe responsibility should be innate in each of us.  That responsibility does not come “from” anywhere.  I feel that responsibility is part of our character and while it may flow from us it does not flow to us.  To try to illustrate this point, let me say that part of my responsibility, as I see it, is to help others.  In fact if I do help others I am being responsible.  I also feel that if I throw a baseball and it bounces and breaks your window, I should be responsible to fix the window. Fault in actions are in some way offset (not excused) by the exercise of responsibility for the fault by, or within, the individual.

I do not feel, however, that if you robbed a liquor store that it becomes my responsibility to pay for it. I assume most feel the same way.  But, I also feel that I am not responsible for any of the third party circumstances that you may have encountered in your life that led you to rob the liquor store.  I worry that the president believes that we are responsible for what others choose to do.  That somehow it is our responsibility to make sure they do not do something harmful or at least find themselves in circumstances that lead them to do something wrong.

In my life,  I have listened to many people justify their bad actions based on some set of circumstances that led them to do what they did.  I have heard things like; I was abused by my parents, my mother was an alcoholic, my tire blew out and because of my crack addiction I did not have enough money to get a cab so I could not get to work. Often, somewhere in each of these excuses became an attempt to transfer the responsibility to me or others because we somehow allowed the parental abuse, the mothers alcoholism, or the existence of crack cocaine– all of which if eliminated from this persons past would have somehow supposedly stopped the bad action in the first place so therefore–ipso facto– it is my fault, or your fault,  they did whatever they did.

I think these are some of the fundamental differences that divide us today.  I think the concept is attractive to take the position that everything that affects me is someone else’s fault or greed. Words like compassion and fair-share sound so good against the backdrop of greed, oppression, poverty and sacrifice.  But frankly, this is not what the fundamental issues we face are about.  It is now about our viability–national and economic.  We have destroyed our economy, and our viability, because we have systematically, over the past 100 years, made decisions for self gratification and personal appeasement of abstract goals that have affected our production, our cost effectiveness and our competitiveness in this new one-world economy.

We used to be the world leader in fisheries, agriculture, clothing, steel, oil, coal, automobiles, aircraft, raw production, basic manufacturing and many others.  But we have made decisions that have altered our ability to be in these industries at all or to be competitive in them.  Child labor laws killed the textile industry in New England, increasing labor costs and environmental laws killed coal, steel, oil and fisheries. Increasing labor costs, over production and now subsidies have effectively killed agriculture.  And overall for the rest the increasing costs in general, including labor costs, taxes, mandated benefits and shrinking labor pool (skilled and unskilled) have killed much of the rest.  Along the way, we have become a nation or middlemen, service providers, who purchase most of what we consume from other countries than we make ourselves.  Each year we bleed cash from our treasury to other nations workers.  Since 1972 this has exceeded $12 trillion.  That 12 trillion dollars more spent in buying stuff from other countries than we have sold to other countries.  This is one huge reason, but by no means the only reason, that we are circling the drain the way we are.

We have abandoned many industries because we felt there was just cause to do so.  Again, I am not saying any of these decisions were good or bad.  You need to make that call for yourself.  But, we have willingly walked away from most of the industries that led us to our short lived prosperity.  As we have embraced the “one-world economy,” we have killed our own production, rapidly and drastically increased our costs, and decided that we no longer can try to influence who goes to college (destined for middle management) and who works in the fields, the factories, and the plants.  In order to feel good, everyone has to go to college.  When we need labor, we relay with a wink, wink — nod-nod on immigration.  Since legal immigration is expensive and takes a long time we have a large illegal immigration problem–and we sit and wonder why!

As we have been indiscriminately printing money since 1974 we have lived in a fantasy land.  It is a wonderful place to be, don’t you see:

  • Everyone goes to college
  • Everyone can own a house
  • Everyone gets a car
  • Everything is fair
  • Everyone is a millionaire
  • Everyone has everything they want
  • No one needs to worry about getting sick
  • No one needs to save – in fact we need to borrow and spend more
  • Someone else will build it
  • Someone else will maintain it and clean it
  • Someone else will pay for it

In this fantasy land, the government will see to it that all the above just happens.  We don’t need to worry or pretty little heads just pay the taxes it will all be fair.

Shrinking Middle Class

The president has brought this up over and over recently.  Our president is a master at using language to infer that the middle class is suffering because of individual greed, because of Wall Street, because of corporations, because of millionaires and billionaires…. The truth of this is that the middle class are suffering because they have lost the value of what they earn disproportionately to everyone else–poor and rich. They are not poor enough to get in on the gravy train that is now the myriad government subsidies that over one-half of the population receive, nor are they rich enough to use investments to hedge the loss of value by playing the inflated earnings game that has been the finance,  investment, and real estate (FIRE) economy game for the past 40 years.  They have been screwed!  One reason the number of the middle class in the population is declining is we are raising the level of eligibility of programs for the poor. And along with that the cost of the additional program subsidies is coming from the middle-class and the rich in the form of taxes and higher costs, the rich just don;t feel it as much because they can invest enough of their money to offset the loss of value. Like the subsidies for industries and the poor, some portion of the new money ends up as liquidity in the stock market because the banks put it there! Can you say Quantitative Easing?

What was not mentioned by the president is equally telling

The Affordable Protection Act, his singularly biggest achievement — if you count it that way, was only mentioned in passing.  His own administration has had to admit that there are many things in the legislation that are either unfordable like CLASS, unworkable like the Medicare M.D. fix and the plan to have the IRS as the reporting agency, or potentially unconstitutional like the insurance mandate.

Medicaid, Medicare, and Social Security, like many other things are items that this president inherited.  Unlike most they are the biggest, and most insidious, causes of the loss of value to the middle-class and the destruction of our economy.  Once again, I am not making a value judgement on these programs or whether or not they should exist.  They simply have become what many feared at the time of their creation, much larger drains on our economy then was planned for.  Also, since most of the money that was created since 1974 has been needed to pay for these entitlements, along with the accumulating trade deficit, they are collectively the main reason that the money came into being and as such the main reason that the real value of the middle class has declined so drastically.

In the end, you have to ask yourself why the president spent so my time decrying the state of our economy, our industry and our people but then offered as a solution a panacea, of no pain, more money, more taxes, more subsidies, more for the poor, more from the rich, more subsidies for non-profitable industries no plan for increasing domestic primary production, and nothing about solutions for the real problems we face?  Well I guess it really is about re-elections not solutions.

In Closing

While the president may have appeared to be the brunt of my ire in this piece, it really is extended to all members of the full-time-professional-political class.  DNC or GOP the rhetoric and practice of opponent vilification and liberal application of what amounts to noting but wall paper paste needs to stop. Real solutions need to be proposed and vetted in this election process.  As a Mugwump, if a candidate does not start to tell me how they are going to fix the real issue and elucidate exactly what the pain points will be for everyone, then I am not voting for them regardless of the party.

If there ends up being no one; then I may not vote for anyone.  If that happens then it probably won’t matter because it will be too late.

Delusional Ravings of a Lunatic Mind receives good reviews!

Praise for the Delusional Ravings of a Lunatic Mind

“Outstanding reasoning. I was surprised to find out you weren’t a lawyer in the middle of the text. It is chock full of interesting insights and observations.”
–Kyle Becker, Author and Publisher of Rogue Government Blog

“Wow, You have too much common sense!.”
–James P. Finn, Author and Publisher of Thought Continue reading

The Global Leaders 2nd annual healthcare forum: January 10, 2012

Aside

Tom Loker will be facilitating the discussion at the Health Policy table at The Global Leaders 2nd Annual Healthcare Forum. January 10, 2011 at the historic Marines’ Memorial Club in San Francisco, California. To get more information about the conference go to http://tinyurl.com/6nppmu5 .  To Register Now go to http://tglhealthcaresymposium.eventbrite.com/.

The Global Leaders is proud to host its 2nd annual healthcare forum on Tuesday, January  10th in San Francisco at the historic Marines’ Memorial Club. The theme for the 2012 event is “Eliminating the Gap Between Innovation & Resources.” The conference will focus
on connecting CEOs and other senior executives with institutional investors and business development executives who can help bring the pieces together in a rapidly changing landscape.

  • Matching innovation with capital
  • How to mitigate risks; both financial and regulatory
  • The future of healthcare in a changing global market

WHO SHOULD ATTEND

• Biotech & Pharma
• Investors
• Business Development
• Research Analysts
• Key Opinion Leaders
• Journalists & Press
• Philanthropists
• Government Leaders

Be sure to check out Tom’s latest book, “Delusional Ravings of a Lunatic Mind.” available at Barnes & Nobel and Amazon.

Of you can find out more about Tom’s upcoming book, “The History and Evolution of Healthcare in America: The untold backstory of where we’ve been, where we are, and why healthcare needs more reform.

David Brook’s Take on the Progressive Era is Right On

Teddy Roosevelt(R) the Progressive Candidate

David Brooks wrote a great article comparing today’s America with that of the progressive era called, “Midlife Crisis Economics“.  In it, Mr. Brooks provides a very cogent analysis of the fallacy in comparing initiatives from the progressive era with those of today.  He notes that the current administration, long enamored with comparisons to the New Deal era, has now realized that this period comparison has led to many false paths and much political baggage and is now promulgating  comparison to the Progressive Era.  Mr. Brooks very capably points out why these analogies are also in error.  I will not rewrite Mr. Brooks article as I encourage you to click the title above and read his more than capable work. However, I would like to discuss this seemingly current trend in a much broader context. While the current administration may have taken the historical analogy as justification for current actions to a new and perhaps much more dangerous level; this is more likely the culmination of a long term trend in seeking justification for a continually failing set of policies.  While it is very easy to bash democrats for this at this point in time because they are the party of the current occupant of the White House, this is in no way just a one party problem.  Both sides of our professional political class have tried to capture the glory days of their bygone eras as rhetoric to stir the masses to their cause in this current period. The main problem, as Mr. Brooks points out so well in his article, is the times have changed and along with the times; the character of our country, underlying economy, and issues that we are solving for have also changed.  Further, the entirety of our government has morphed into that of a professional political class.

I don’t know about you but I am sick to death of the phrase, “the greatest financial crisis since the great depression!”

At the height of the progressive era, a republican, Teddy Roosevelt, was the spur in the rump of the American Horse.  The ideals of progressive-ism were targeting specific sets of problems and solutions using a specific and timely set of tools and actions. If you look forward to the period of “the Great Depression” you find the same thing. The methods that were chosen to try to solve the problems under F. D. Roosevelt’s reign were also specific and timely.  One of the biggest laughs I get out of discussions about the current economic or health care crisis is when modernists begin to espouse what F.D.R.’s position would be.  Since I have spent quite a bit of time on the issues of healthcare I will point to one example. Over the past couple of years, as the debate for “universal healthcare” centered on a national governmental healthcare system, so called “single-payer” system, one pundit after another, and in some cases supposedly well respected congressmen and women, have said this is what F.D.R wanted.  Well that is just so much–what was it the ‘Stormin’ Norman Schwarzkopf called it?  Oh Yeah, Bovine Scatology!  Franklin D. Roosevelt was fully and distinctly anti socialist and anti communist.  While he proposed many programs that historically we now see in some kind of socialist light, in almost every case what he was advocating for and what we have now are not comparable.  Some of the recognizable  stalwarts, like Social Security, he advocated for but as  temporary solutions. In the area of healthcare, the distinctions are even more stark.  Roosevelt was not solving for the problems we have today.  In fact, it is likely that from his historical perspective he would marvel at how well our current system has improved over the problems he faced in the provision of healthcare to the country.  During this period, the big problems were access to care, and the quality of the care being provided.  While cities could economically support hospitals and therefore provided good places for doctors to congregate, conduct research and solve the needs of the populace, rural areas could not. The profession of physician and doctor had merged into one, hospitals had become vitally necessary for most of them to practice comprehensive quality care and they were expensive to build and maintain. During Teddy Roosevelt’s era physicians could finally charge for services rendered at hospitals. Rural hospitals were few and far between and the few that did exist were often staffed with the substandard physicians who could not get hired in the cities or in other more egregious cases–outright charlatans.    Compounding the problem was that cash and money payment in rural communities was still not a wide spread practice. Both as a result of custom, and the depression, cash was not a favored form of transaction in rural communities. Many people simply did not have cash or ready access to it. Many still bartered for goods and services.  It was nearly impossible to construct a hospital, fund its expenses, and attract good physicians to an economy where cash played an often secondary role. F.D.R. was solving for access to quality healthcare in rural communities. He failed to get his proposed solutions through congress in his second New Deal legislation before his death.  It was Harry Trueman who finally got the Hill Burton Act passed that stimulated the construction of rural hospitals and helped increase the quality and availability of care in these under-served areas.  It is very easy to say, as Michael Jackson did in his song, “They Don’t Really Care About Us” ‘that if Roosevelt was livin’ he wouldn’t let this be, No No No….’ But it is probably just not true.  In the song, Jackson is referring to racism, but even in this area, historians point out that Roosevelt was not quite the staunch humanist we now perceive him to be; and in fact contemporaneously was repeatedly accused of being racist. In the end, it is never a good idea to believe that historical figures would immediately support any of the solutions we propose today. Often, they would marvel at what we have achieved and find ridiculous some of the ideas our politicians now choose to rail about. From racism to healthcare, from the economy to poverty, historical figures would probably strongly suggest we appreciate a bit more of what we have.  They would be lost in a world where political correctness gets parsed to which words are used to reference a problem.  They would be horrified at the areas we are allocating so much of our money–spending huge amounts to support politically correct causes while allowing many other real problems to get under-funded or unfunded. None of these historical progressives believed in debt, nor in the deference to those who lack personal responsibility.  While our historical figures were long on helping the downtrodden and the helpless, they had no patience for the avaricious nor the clueless.

“Don’t pee on my leg and tell me its raining!”

We should look to history to review the things that were tried and whether or not they succeeded. But the blanket application of those historical fixes and the dishonest misrepresentation of the issues and the solutions from then to today are dangerous and duplicitous.  We need more than this kind of behavior from all of our politicians today.  Perhaps, we need to get rid of the professional political class we know have and go back to the very same type of citizen politician who they now wish us to say they emulate. We need leaders that can propose solutions!  We need leaders that have learned the lessons from history and can apply those lessons to the problems we face today and help us come to the hard realizations we need to make in order to pull ourselves back to a viable path.  We need those who can both tell us the truth and apply the learning not just rehash the historical solution because as both Mr. Brooks and Bob Dylan said,

“The times they are a changin”

What we all need to focus our attention on is eliminating (please pardon the crude analogy–but I think it applies) any political party or professional politician, who simply “pees on our leg and tell us its raining!”

Latest Book: Delusional Ravings of A Lunatic Mind by Tom Loker

new book by Tom Loker

As I wait for the eventual completion of my book on health care, currently in rewrite, I have put together a book of my best articles from this past year on this blog. The book is now available as an e-pub on Kindle and Amazon and others in the growing list below. (check back here as the list grows) The paperback version will be available in the next few weeks so stay tuned. I will put up the various links as they become available.

We put this book together for those of you how like the blog and Tom’s articles to share with your friends and relatives. And if you don’t like Tom’s writings we would like to point out this book will also make a great gift for those people you don’t like as well! Inside the pages you will find articles about healthcare, history, politics, the economy and a few creative pieces centered on St. Mary’s County Maryland, where Tom grew up. We do hope you enjoy the the stories!

e-Book Links:

Amazon – Kindle http://www.amazon.com/dp/B006G2Q9OC

Barns & Noble – Nook http://tinyurl.com/7cg9mew

Powell’s Books http://tinyurl.com/83ven8p

Diesel Bookstore http://tinyurl.com/74agmps

eBookMall http://tinyurl.com/7jbhl9s

Printed Book Links

Just released to print… Dec 15, 2011

NOW available at Amazon B&N and other booksellers.

FIX THE ECONOMY NOW, but don’t touch mine: Too late its already gone!

Shrinking Dollar

A Sorry State

We, America, are in a sorry state. This appears, on the surface, to be something with which most people agree. But the surface can be quite deceiving. Pierce the flesh of America’s electoral body and you start to see massive disagreement as to what is needed. Most importantly, and currently very concerning, is that everyone feels the solution involves steps to be taken by the other guys – you know, those who are not in OUR group! You know – The O T H E R guys; the non-white, non-black, non-Hispanic, non-immigrant, non-migrant, non-middle class, non-union, non-civil servant, non-farmer, non-medical professional, non-patient, non-majority, non-minority, non-lawyer, non-judiciary, non-legislative, non-administrative, non-professional, non-politician, non-unemployed, non-under-employed, non-employed, non-disabled, non-enabled, non-educated, non-uneducated, non-tolerant, non-intolerant, non-poor, non-rich, non-government, non-private sector… you know the Other Guys! – The ones whose fault all this is!!!

You know – everyone other than us! All those (whispered) other people, who have (caused the problem) (profited at our expense) (stolen our money) (spent too much) (worked too little) (think they are smarter than us) (are uneducated and lazy) (expect too much) (do too little) Circle the correct answer(s).

Also disturbing is that we are allowing our professional political class to drive, not only our debate, but out thinking as well. All you need to do is read the news and you will be fed the continuous supply of sound bite, talking points so you yourself can help frame what needs to be done to make the OTHER guys do their fair share. And of course, these talking points – these would be mantras for us to recite each day ad infinitum until they become ingrained in our psyche and we think nothing else – are not just in conflict with each other, they are diabolically and diametrically opposed. They are crafted to foment the most discontent and the most innate conflict. This is what our political process has become. Led my our professional political class; stirring up a minority to a feverish pitch so the bulk of the country will become afraid, or simply exhausted and in the end capitulate with what ever patch, or band-aid, the politicians decide to apply.

Community activists know that the way you get big gains for minority positions is to frighten or exhaust the bulk of the population. You see activists understand that most people don’t really care about much beyond their own day to day lives and basic existence. They know that when the average person feels threatened, or if the story gets annoying and tiresome – in the end they will just want their leaders to make it go away. They just don’t want to hear it anymore! This process is not about the right solution – it is about any solution that delivers me peacefully back to my mythical happy life. And you know what? It has worked every single time! It is all predicated on the right rhetoric -the right mantras.

The Current Mantras

  • We need to cut pensions costs We need better retirement benefits
  • We need higher wages We need lower manufacturing costs
  • We need more high paying jobs We need more labor jobs
  • We need universal health care We need low cost health care We need more free health care
  • We need to help people keep their homes We need to have the market sort itself out
  • We need to lower health insurance cost We need better insurance benefits
  • We need to stimulate the housing market We need the banks to lend more
  • We need to raise housing prices We need more affordable housing
  • We need more money We need less federal debt
  • We need more social assistance programs We need to lower government debt
  • We need a higher minimum wage We need competitive prices
  • We need to eliminate illegal immigration We need more cheap labor
  • We need to get the top 1% to pay more We need the top 1% to spend more
  • We need to lower government spending We need more government spending
  • We need more charitable giving we need to raise taxes and eliminate charitable deductions
  • The poor are getting poorer The rich are getting richer
  • The middle class is suffering We all need to sacrifice

Debunking the Myths

Most of the mantras in the list imply that fixing or making a change in one of these areas will repair what is wrong and remand us once again to the peaceful day-to-day happiness (even if it is just an illusion) that we all desire. While, depending on your personal political profile of course, all of these mantras appear reasonable, there is one underlying problem with each and every one of them. There is a set of fundamental myths that needs to be debunked. In debunking these myths, we give rise to the lies that are inherent in these supposed solutions.

To understand these fundamental myths we need to take a look at some assumptions.

Assumption 1

The poor are getting poorer! Who are the poor? We often use the term under-served, interchangeably with the term poor. Historically, we really have not wanted to clearly define the poor for a whole host of reasons. Defining a problem, or a segment of a problem, is not politically attractive. Well defined problems either yield impossible solutions, or easy solutions, and make it difficult for redefinition on the fly without political consequence. For a family to be described as poor and eligible for social programs the must fall within the Federal Poverty Level (FPL) or some multiple of the FPL.

The FPL for a family of four for the year 2011 ranges from $22,350 in the 48 contiguous states, to $25,710 in Hawaii and $27,940 in Alaska. Seems simple enough doesn’t it? well like most things governmental, its really not. So if the poor are those who earn less than, lets say $25,000 to keep it simple, than all aid for the poor would be for this group of people. About 18.79% of the U.S. population earned less than the FPL in 2010. This equates to about 58,332,000 people. But the provision of social programs is not targeted just at the poor. They are in fact often predicate on 200%, 300% even 350% of FPL for eligibility for some state and federal program eligibility. So most programs eligibility starts at $50,000.00 in income to as much as $85,000 in some cases. This in turn equates to almost 79.8% of the population according to the latest census data.

Now in reality, not all of the population draw programs support at 350% of the FPL. Only a smaller amount of programs offer eligibility at that level. The number today falls at about 50% of the population of the U.S. is eligible for federal and state program subsidies and currently takes advantage of these programs. Either alarming, or relieving, depending on your point of view, this 50% is getting slightly more than 1/2 of their annual income from programs and/or subsidies provided by the federal government. 84.1 million people (27.1% of the population) earned under $50,000 per year (200% of FPL). Together they earned in aggregate $1,591,640,000 of the U.S. total personal income economy of $4.915 trillion in 2009 – about 32%. So 32% of the money earned went to the lower 27% of the population and about 1/2 of their earnings came from money paid directly or indirectly by the federal government that came from taxes paid by the rest of the tax payers.

The biggest assumption of all with this segment of the population is that they are suffering more than they have in the past. While it is true the poor in America earn significantly less than much of the rest of the population, they also have the largest amount of eligibility for programs to offset what they don’t or won’t earn. In realty, while they earn less in real income, they have at least as much if not more in discretionary spending income because few if any of their needs go unmet. They receive a wide availability of care options, both Medicare, Medicaid and state based, as well as other federal and state programs for housing, mental health, addiction, job counseling and training, as well as numerous faith based and institutional charity programs as well as philanthropic programs. This is not to say it is pleasant to be poor. Simply to point out that the “poor” have a large array of services that are making up for what they actually do or do not earn. It is better to be poor in America than in much of the rest of the world.

Assumption 2

The Poor are the Under-served, is the core of assumption number 2. Anyone who has spent time working or volunteering in the areas of public health will quickly tell you that the under-served are not the poor we classically think of. The poor in America, as we discussed in the last assumption, are neither under-served, nor are they un-served. The bulk of the under-served are people earning between $50,000 and $110,000 per year. They have jobs, pay some taxes, send their kids to school, pay their rent sometimes late, or have a home, likely upside down in equity, and perhaps bordering on, or in default. Historically, they are two person family earners, and one of them has recently lost their job, increasingly one of their adult children is still living at home and has earnings insufficient to support independence, are still on their parents insurance, and one of the family members has a chronic illness.

The under-served are “working poor.” They don’t make enough to pay for all that they need and want. They make, or have made short term decisions regarding purchases, vacations, and or investments, that have come back to haunt them. If they have a chronic illness, they are making weekly, sometimes daily decisions between the proper treatment, or medication, and food, education, housing or clothing for their family. Often, health related costs are playing second priority, as a result their illness is getting worse, or in the worst case scenario, the untreated disease, bacteriological or virus infection is not becoming more resistant to the medication due to improper treatment levels – a potential public health hazard.

The under-served in America are squarely in the middle class. There is typically only one small incidental difference between basic prosperity and tragedy. A loss of one income, a chronic illness, a catastrophic accident, an unplanned pregnancy in inopportune bit of extravagance. Even without one of these incidental differences, the middle class are finding they have less and less discretionary income. More and more, even with raises, company healthcare, bonuses and perks, they just have not been getting ahead. They are earning more but are also more and more at risk.

The 29.6 million (about 9.55% of the population) under-served (a majority of the middle class) earned a total of $2.282 trillion (46.4%) of the personal income in the U.S. They earn on average $76,650.00 per year.

Assumption 2 is one of the main tell-tails to one of the major fundamental problems that if we do not come to grips with, will be the undoing of our economy, society, and ourselves.

Assumption 3

The rich are getting richer on the back of the middle class and the poor. Said another way the 1% are taking, through inappropriate or ill-gotten means, what is rightfully the 99%’s. Clearly the rich have taken in much more cash in the past 40 years. But when you look at the percentages they have gained it is not really a significant difference, as a percentage, than in previous years. But first let’s take a look at the top 1% and find out how they stack up against the rest of the population. The top 1% (about 3.9 million people) earn on average 275,000 per year. The total combined earnings for the top 1% equals $850 billion per year or about 16.5% of the combined total. Conversely the 99% earned a total of $4.103 trillion or about 83.5% of the combined earnings.

Clearly there is disparity, but I was surprised to see that the disparity was not quite as large as I expected it to be given the rhetoric. As Dianna Dooley, the Secretary of the Department of Health and Human Services for the State of California, said in one of her first public meetings after assuming office in 2011, “We all need to understand that disparity will exist.” Ms. Dooley was making the point that we cannot legislate away disparity. Disparity does not exist simply because of ill treatment or lack of opportunity. Sometimes disparity exists because people have made choices to not do certain things, not work, not get an education, not apply for available services. What percentage of the U.S. population does this characteristic apply to? It is had to say statistically because the census data does not measure motivations. We can use some numbers from a Thompson Reuters report in 2009 on the national health cares spend and we will find that about 20% of the monies spent go to people that have made such choices. I can’t say whether or not this is a valid measure for the economy as a whole. If I had to hazard a guess based on my life’s observations, I would think this is a reasonable estimate.

It does not seem to hold true that the rich are statistically getting richer, nor are the poor getting poorer. Both segments are getting more and more currency each year. The problem is not the amount of money they are receiving it is in the real value of the money they have. This is another clue as to the major fundamental problem, we will discuss shortly.

Assumption 4

We have had up until recently a vibrant economy, America has been very prosperous, and if not for the actions of this political party or their policy (depending on your political affiliations it is always the other party and their policies), all would be just fine. Said another way, when so-and-so was the President (again, depending on your political affiliations it is always the other party and their policies) everything was just fine!

In my last article Republicans & Democrats: Division destroys WE, I outlined a series of events since 1935 that have had major impacts on the current state of our economy. It was not meant to be all inclusive. In fact, I have heard from a number of readers who have suggested numerous other events, legislation, decisions, policies and actions that they also feel should be included. I prepared this article to point out that it was not one parties policies that have brought us to the precipice. It has been both parties. In effect it has been us, our decisions, our demands for more of this and that, and it has been our willingness to accept a gradual migration from the citizen politician, envisioned by or founding fathers to a professional political class whose rule we embrace today.

Those of us who learned American history after 1937 have been indoctrinated with the belief of “American Exceptional-ism.” As President Franklin Roosevelt prepared America to enter the war he needed to break the back of the isolationist tendencies we have developed after WWI. Part of the method to do this was building pride, patriotism and the belief that America was innately exceptional. As a result the history that was taught after 1937 was quite different from the history we would have learned before. I have advocated in earlier articles using Google Books, and searching for history tomes written before 1900. There as I was writing, “The History and Evolution of Health Care in America” I found a very different recollection of America than the one I carried in my head.

America has had a long history of economic trials and tribulations. Almost immediately upon the signing of the armistice at the end of the American revolution, the United States went from waging physical war to suffering under an economic war waged by England, France, Germany and other European nations and banking interests. By 1800 the American dollar had dropped to worth about 48 cents. It was the War of 1812 and our decisions to temporarily drop the international gold standard that allowed us at the end of the war to reset the dollars value when we went back on this standard. We dropped out of the gold standard a number of times based on the excuse of War all the way through World War I.

The first time we did not drop off the gold standard as a result of war was World War II when the Federal Reserve refused Presidents Roosevelt request to do so. FDR’s first request came at the beginning of the depression and also was refused. Some economists believe this single action is what caused the great depression, others simply believe it increased the severity. As a quick note, it was not the the Stock Market Crash of 1929 that caused the depression but the great dust bowl and drought. The stock market had recovered much of its losses within 4 months. Once again our history, post 1937 often seems to not reflect the realities of the past.

If we go back and take a good look at our real history, with the exception of the benefit we gained from the massive amount of gold reserves we accumulated during World War II, the real source of our prosperity into the mid 1960’s, America’s economy has not been as stellar a performer as we have been lead to believe.

The Dirty Truth

There is a fundamental problem with our economy. It is truly fundamental in every sense of the word. And although is not “Fun” you are guaranteed to feel both brain dead “Duh” and “Mental” if you try to understand it.

We believe that we have had a robust and growing economy though most of our lives. Even at the current limits of human life span most of Americans were born after 1928. Most of us have come of age after World War II. And almost all of us working today were born after 1950. We have for the most part lived through what we believe is the hay-day of America’s economic history. And our perception is false!

While we had significant prosperity after World War II, it was largely the result of the cash and carry policies that FDR put in place with western Europe for the sale of war materials by America. FDR enacted two major policies; lend-lease, and cash and carry. Under Cash and Carry, much of what we sold to the allies was paid for in gold. By the end of the war America held in Fort Knox a majority of the gold in the world. I have seen estimates of as high as 82% of the world’s gold. After the war and as we moved into the 1950s America was booming and we had a large amount of room to expand the amount of currency in circulation since we had most of the gold. But by the 1960s, our policy of allowing other countries to redeem U.S. Dollars in gold had seen our reserves significantly depleted as most of our Allies, England, France and Germany had systematically redeemed their dollars for our gold. By the mid 60s we again were having problems maintaining enough currency to support the perception of our growing economy.

By 1972 President Nixon had a cash problem. We did not have enough currency in circulation for the government to continue to pay its bills, including Social Security, Medicare and Medicaid, as well as pay for the war in Vietnam, and the ongoing cost of the cold war with the soviets. As a result, the Federal Reserve advised the President to remove the American Dollar from the gold standard. In doing so we gained the ability to create more currency to fund the cash needs of the government and the nation. But, there was still a problem.

While the elimination of the gold standard, did free the economy from the physical limits of the gold standard, it did not free the banks, where new currency, actually is created, from the limitations of the fractional reserve banking system. Banks under our form of banking can create ten dollars of currency for every dollar of assets (or debt) they have of record. While this was far better than the practical physical limit we had on the gold standard, the growth of debt by the government and obligations under federal programs, defense, logistics and entitlements were growing much faster than the asset base. Debt, the other method to grow the amount of currency became the main method.

Money Supply vs Trade Imbalance and Federal Spending

In 1972, America had, according to the St. Louis Federal Reserve Banks, about $500 billion of currency in circulation. Currency, prior to this period had grown on a fairly steady low growth rate from the $73.7 billion in circulation in 1940. While the rate of new money in circulation increased from 1940 to 1972 increased over the prior years the growth was still predicated on the tie back to the gold standard and as such most of the growth was real in relation to the bulk of the world currency and tied directly to the asset base of the U.S. In other words it was mostly real economic growth.

From right after 1972 to about 1986 the growth in currency supply was driven by increases in credit card debt and the ability of the Federal Reserve and banks to leverage that debt growth with new money at the rate of ten to one. You will also see from the above chart that we were steadily increasing both federal spending and accumulating losses due to the ongoing trade imbalance. The main restriction on the growth of new money was the fact that the bulk of the main debt in the U.S. (mortgage debt) was in the hands of S&Ls and other non-banks. You can see from the chart as the S&L’s failed as a result of the changes in rules for realizing asset values, like the mark to market rules, and the banks gained control of these mortgages – and the underlying ability to leverage them at ten to one, much more currency came into existence. Of course as the currency materializes the federal spending increases as well. By the time we get to 2010 we have increased the amount of currency from the meager $500 billion in circulation in 1927 to over $15 trillion in 2009, a thirty times increase. One simply needs to ask themselves did we really increase the values of all the assets of the U.S. thirty times since 1972? I don’t see how!

And of course by 2009 we have also accumulated a combined debt based on federal spending and the steadily accumulating trade deficit of over $11 trillion. Even harder to imagine a thirty-fold gain in relative net worth of America isn’t it?

So where did this new money go?

As I discussed in a previous article entitled, President Obama’s Speech: Critical Question Continued, this new money was disproportionately spent in the areas of federal program spending and housing costs. The effect this has had on our economy has been catastrophic. If you look at the chart in the prior section, the amount of spending has almost equaled the new money created. An interesting statistical note is if you look at a simple projection of what our economy would be today if we had stayed on the Gold Standard it would be about a $5 1/2 trillion economy instead of $15 trillion or more as we currently see it. This could just be a statistical coincidence, I will leave it to the professional economists to explain this – although when they do I seldom trust them.

So one of the fundamental problems is that our economy is simply not worth the paper we have printed to count it. We have significantly overvalued our economy, alnong with much of the rest of western Europe. If everyone in the world did this the same way it would be irrelevant. But China and Russia, among a few smaller others, have not banked this way. While we like to complain that China is “manipulating their currency” the truth is they simply are allowing their currency to stand at its value and are not increasing the amount of their currency and thereby artificially inflating salaries or benefits in the country. As a result, China, and many others cost significantly less to make stuff for the rest of the world.

You see what we have been lead to believe about our prosperity over the past 30 years has been an artifice, a mere contrivance. While we have all felt like we were getting richer, and our elected officials have been telling us to spend more, and borrow more on credit, and how we should all buy houses. The reality is what they were doing is getting us to go further and further into debt to provide fuel to the fire of our own economic destruction. So while our borrowing, spending and mortgage debt allowed them to increase the amount of money in circulation, the new money had no more value. It was all a facade.

This brings me to the current argument of the 99% against the 1%. The reality is, it is not the 1% who have done anything to take the value from the 99%. I think we effectively debunked most of that myth in the prior sections. The real issues effect the middle class the most. The poor and the rich have been effected exactly the same but they have not felt the effect the same as the middle class – the under-served.

The reason the middle-class have been so devastated is a result of the following two points. First, the rich have larger amounts of discretionary monies. These are monies that are not consumed by the cost of basic day to day living. The rich also have more savings and a larger portion of their earnings come from investment. Therefore when the purchasing power of their dollars falls they have a lot more drop to go before the true value falls below this basic day to day cost level, even at their higher costs as a result of more lavish life styles. In other words, they are not taking more they just don’t show the effects because they are not yet felt.

Second, the poor, as we discussed before, get at least half of their income from the federal government, so as the value of the dollar drops, the government is just printing more money and providing more benefits to the poor in America. The source for the spending is only in part taxes. So while it is clear that even if you took 100% of the earnings from the top 1% it would not even put a small dent in the economic issues we face, and taxing the rich politically sounds really good, in the end it is not solving the problem.

Taxes are neither the problem nor the solution. The problem is we have simply created at least twenty times more currency that we have real value in the economy. And as such the middle class, equaling 19.2% of the population, 59.8 million people, are feeling the crunch. Our professional political class, with the best of intentions at every singe step, have gotten them to take on debt they could not afford, buy homes they could not afford, hire employees companies could not afford, pay salaries we cant afford, provide free stuff, that we can afford, and purchase products and services that we can’t afford. They have built a national economic system that is predicated on federal subsidies – through the creation of more valueless dollars – to lull us into a false sense of security.

Americans today, cost too much, spend too much, borrow too much, expect too much and often work and produce too little per capita relative to the rest of the world economy. We speak of creating more jobs, but then we focus them in areas that do not bring our nations strategic value. Yes paying people to fix decaying infrastructure is necessary, but it is not the same creation of new value as when FDR created the WPA in the 1930s. Having an entire nation of college graduates makes us all warm and fuzzy and makes us feel really superior to countries like Mexico, and Singapore, but they have cheap labor and less per capita expense for laborers. As a result their goods cost less and we buy much more than we sell as a nation from these nations.

We make all our companies provide tremendous benefits for being an American employee but these also increase the cost of the development of goods and services and price our products out of the world economic market. We tout our abilities as the innovators of the world, yet the profits from innovation are dwarfed by the profits from the manufacturing of the products we have innovated. And now other countries are surpassing us as innovators. Their education systems are producing superior students because not everyone goes to college. Some are tracked for labor, some skilled labor, and only a few go to college – often American colleges. We have no labor pool to speak of and we have invested way too much in many of those that end up in labor related jobs because we sent them to college only to find there were no jobs for their level of education. Further, there is an argument that we have weakened the quality of an American college education because so much of our dollars are spread across so many.

Yes, overall we are in a very sad state. I am not an economist – just an individual who has asked some questions and tried to find my own answers. Are my answers the right ones? – the only ones? Perhaps not! But for me they have begun a path – so I can draw my own conclusions. I do know this! Until we address some of these fundamental questions, most particularly the big one of our highly inflated economic values, we will continue our decline, and likely will continue to seek solace by letting our professional political class print more money and lull us back to sleep.

It is time to wake up from our 40 year dream of profligate prosperity and face reality. The concept that the other guys need to sacrifice but not me is a false one. The sad part is we already have sacrificed. Our prosperity is already gone. The only thing left is the counting! Oh yea, and class warfare, revolution and destruction if that is what we really want?

What do you want?

Republicans & Democrats: Division destroys WE

This article is in response to a recent letter to the editor in my local paper.  In this letter entitled, ” GOP debt”, the writer makes his point that the U.S. debt is the Republican’s fault – that most of the debt incurred has happened under their watch, as a result of their programs.  He blames the current problems of America and its economy on thirty years of their dominance over Washington DC.  This article is not intended to challenge any of his assertions, or to attack the credibility of any of his arguments.  Fundamentally, it will not make any difference whether or not, he is correct as to who was actually controlling our government during the past 30 years.  The end point would have been the same.

Instead, I think it is time for all of us to take a hard look at a timeline for the past 76 years.  I have assembled a brief one here.  This is not meant to be inclusive of every single event, nor could it, as many would debate the events themselves.  I also have not intended this to try, by the volume or magnitude of events for either side, to lead anyone to the conclusion that one side is more at fault than the other – although I am sure some who read this will still complain of bias and that intent.

WE is us – We the People.  Not Republican, Not Democrat – neither liberal nor conservative.  It is simply WE.  Unless, or until, WE again congregate as one in purpose, we all will lose!

I have simply taken my own personal stroll through history and picked the particular events I felt were important, pivotal, in our long and involved – often entangled process – to arrive at the door of what may be America’s economic collapse.  We are at this doorway as a result of numerous decisions and actions.  We have made many many decisions in this period.  Most of the decisions were originally contemplated to fix contemporaneous problems of the day.  In this time we have developed a nasty habit of enacting short term programs with an intention to replace the programs with other solutions later, only to have the replacement step get lost along the way as we allowed the growth of a professional political class and the virtual elimination of the citizen politician on which the country was founded.

I don’t know if a professional politician is better for us in the long run than a citizen politician.  I can see advantages on either side.  History and the electorate soon will make that determination.  I do believe that at each step, for the most part, the politicians were attempting to fix the problem in a way they thought was best both for the country as a whole, their constituency, and their own re-electability.  While I can idealize a desire for so much more in the decisions of my representative, I must concede and accept the nature of humanity after all in this process.  It becomes my responsibility to elect the best person in support of the best solution. In effect to be a Mugwump.

In the end, it makes little difference.  Until we truly understand the mechanisms and fundamentals of our current situation – and correct them, we will continue to glide through the open door of disaster – slipping at some point into the empty maw of the economic abyss.

A Time-Line of Key Events

  • 1935: Social Security Act – Franklin Roosevelt (D)
  • 1965: Extension to Social Security Act (Medicare & Medicaid) – Lyndon Johnson (D)
  • 1972: Elimination of the Gold Standard – Richard Nixon (R)
  • 1974: Equal Credit Opportunity Act – Stimulates credit purchases – Gerald Ford (R)
  • 1977: Community Reinvestment Act – Jimmy Carter (D)
  • 1980: Depository Institutions Deregulation and Monetary Control Act – Jimmy Carter (D)
  • 1981: Initial Application of the Mark to Market Rule – Ronald Regan (R)
  • 1985: Home State Savings Bank begins to fail – Ronald Regan (R)
  • 1986: Tax Reform Act – Ronald Regan (R)
  • 1995: End of S&L Collapse – Assets sold to Banks – RTC cost $87.9 Billion – Bill Clinton (D)
  • 1995: National Homeownership Strategy Announced – Bill Clinton (D)
  • 1999: Fannie Mae eases the credit requirements to encourage banks to extend home mortgages to individuals whose credit is not good enough to qualify for conventional loans.
    The Gramm-Leach-Bliley Act repeals the Glass-Steagall Act of 1933 – Bill Clinton (D)
  • 2000: Lenders originating $160 billion worth of subprime, up from $40 billion in 1994. Fannie Mae buys $600 million of subprime mortgages, primarily on a flow basis. Freddie Mac, in that same year, purchases $18.6 billion worth of subprime loans, mostly Alt A and A- mortgages. Freddie Mac guarantees another $7.7 billion worth of subprime mortgages in structured transactions.
    Credit Suisse develops the first mortgage-backed Derivative (CDO).
    Commodity Futures Modernization Act of 2000 declares credit default swaps (and other derivatives) to be unregulated, banning the SEC, Fed, CTFC, state insurance companies, and others from meaningful oversight. – Bill Clinton (D)
  • 2003: Federal Reserve Chair Alan Greenspan lowers Federal Reserve’s key interest rate to 1%, the lowest in 45 years – George W. Bush (R)
  • 2008: Global Financial Crisis Begins – Feds Take over Fannie Mae Freddie Mac and guarantee $6trillion of mortgages, Fed Reserve Lends $85 Billion to AIG, $700 Billion TARP Program goes into effect, Fed lends $1.3 Trillion to companies outside financial sector – $900 Billion loans to banks and buys $540 billion in short term mutual find debt – Fed Loans 133 Billion to foreign banks, Fed pledges $800 Billion more to buy mortgage bonds from Fannie and Freddie – George W. Bush (R)
  • 2009: Fed increases support of AIG by $182.5 Billion, U.S. Government supports various Auto Manufacturers with $34 billion bailout package, Fed Injects approximately $2 trillion into the economy in new currency under term Quantitative Easing. – Barack Obama (D)
  • 2010: Federal Reserve continues injecting money into market under quantitative easing of $1.5 trillion, Banks begin to repay Govt. Loans, Patient Protection and Affordable Care Act is passed – Barack Obama (D)

Whats The Point

When I was contemplating writing this article, I had thought I would explain the relevance of each of the events I have listed.  In the end, I decided it is not up to me to tell you what to think.  It is your right, your privilege, and your obligation to find that out for yourself.  Should any of you wish to ask my opinion, or to tell me what you think, you may feel free to post in the comment section.  I will tell you my thoughts and conclusions and of course listen to your point of view.  Perhaps along with the others who read here we can continue to refine and get closer to a solution – get closer to WE.

The aforementioned timeline is by no means each and every issue that has drawn us into the potential collapse of our economy that we face today.  What is evident from even this brief review, is that the bad decisions were all short term fixes to solve contemporaneous imminent problems of the day – they span all parties and administrations.

My Conclusion

Our economic problems are neither Republican nor Democrat, they are only American.  We have done this to ourselves.  Only if we are united in this purpose, can truly fix them!

My Request of You

I ask each of you, who are kind enough to read my writings, to please circulate this to others if you feel it is valuable.  I believe we can all make a difference if we come together.  I know I can’t do it alone.  I ask you, my readers, to help at least get others to consider that there is something here bigger than ourselves and our politics.

“Pass My Job’s Bill NOW!”: Unions and Immigration – two sides of the same coin

Unions and Immigration dominate news along side of jobs

Reader Warning, this may be a long one! Please be patient.  No sound bites here!

The Argument

In his speech today, President Obama, once again called for congress to pass his jobs bill – NOW!.  The President stated that if they do not pass his jobs bill, which he views as perfect – without any flaw – and will, in his opinion, inevitably return us to prosperity, then the American people, who he states are overwhelmingly on his side, will harshly judge the republicans who are simply resisting for idealistic reasons.  He implied that the American people are tired of the republicans looking out for millionaires and billionaires.  He chose his words very carefully to imply that the Solyndra loan was the result of the prior administration’s programs – that he doesn’t own this one.  In doing so, once again he uses language to obscure this administration’s role in this specific loan. A loan that was denied by the prior administration and recommended by his own administration as not ready to be funded – but yet was funded anyway!

If one were to challenge the Presidents statement based on the inference inherent in the phrasing and timing of the language he used, his administration will seek the cover that was carefully crafted into this statement.  Jay Carney likely will respond, “that is not what he said…”  “What he said is that the “loan program” was begun under the prior administration…”  Continuing with the obfuscation, the President then presents “his” argument that this program is designed to make America competitive again.  As he makes this statement it is phrased so that he now owns this ideal of making America competitive. He would like us to believe that now “He” is making America competitive again. But is he?

He also repeated his mantra that, we need to make education more accessible and affordable and make sure every American goes to college.  His Education tzar, Arnie Duncan, in a recent radio interview, stated, that it is the U.S. governments responsibility to “provide a cradle to career assurance!” Is it?

In his speech he goes on to state that they are funding these loans to subsidize industries in order to get us “competitive” in a world where we no longer can compete.  He continues to state that we can’t compete against China who “subsidizes” their industries.  But if you talk to the manufacturers in China, as I have, – who the President claims the Chinese communist government is subsidizing – they will laugh at this assertion.  Again if you dig below the Presidents rhetoric, or if you challenge him on this statement, you find again that his words have been chosen most carefully.  The President’s administration will tell you that what he means is that China, through its Central Bank, is unfairly manipulating its currency.  Why, because they refuse to artificially inflate their currency, and overpay or over-benefit  their workers to become uncompetitive in the one world economy?

The Truth

In a whitepaper published by McKinsey & Company – September 14, 2011, written by Lowell Bryan, Sven Smit, and John Horn; They state that the current economic fundamentals remain unfixed.  Some of their main points include:

  1. Even if the developed governments, including the U.S. government, had been able to pass greater stimulus measures earlier – including isolating toxic assets – this would not have fixed the longer term fundamentals.
  2. The recent focus on debt ceilings in the U.S. and the sovereign debt crisis in southern Europe has also overwhelmed the public debate and shifted away from the failing economic fundamentals.
  3. In the U.S., the downward trend in labor participation has become pronounced.
  4. Structural economic fixes are needed such as;
    1. Stimulating private investment and savings
    2. Undertake an orderly de-leveraging of households (i.e. get Americans to stop borrowing and start saving – the exact opposite of what we are doing)
    3. Increase participation of labor (production level jobs) in the economy (as opposed to middle-level management and non-producing jobs)
    4. Reform long-term entitlement programs and tax policies to reduce the uncompetitive economic cost structure of American Businesses
    5. Reform education to produce more skilled labor
    6. Reform legislation to simplify and speed commercialization of innovation
    7. Rebuild failing infrastructure.

Like the Affordable Care Act, the President wants us to force congress to pass this legislation quickly before, as former speaker of the House, Nancy Pelosi, said we can read what is in it.  More importantly, it is not the reading – but the understanding of whether or not this will work.  The President is becoming very long on his implied -“trust me” plans.  He seems to either not recognize, or not care, that the majority of Americans no longer trust him or his advisers as their track record is putrid at this point.

While the focused effort at fomenting insurrection based on converting class envy into class warfare is getting quite a bit of play in the main stream media, it is not really playing in Peoria, or Winnemucca.  How will Americans feel if this concerted effort to stir up hate and discontent in the willingly disenfranchised boils over into a true insurrection?

The Presidents Jobs Bill, is being resisted, not because of republicans love for millionaires and billionaires or a reliance on them for campaign funding.  All of our professional political class (republicans AND democrats) loves, courts, and whores themselves to the so called millionaires and billionaires.  The bill is being resisted because most economists – outside of the presidents supporters – and good common sense find serious flaw with much of the underlying logic of his plan.  Further, history, including very recent history, shows that many of these approaches are not addressing the fundamentals and do not work.

The Kaiser Excuse

The Solyndra loan is one that this administration, the President, and the Vice President, own  lock-stock-and-barrel!  The prior administration had clearly and distinctly passed on this “so-called” investment.  Upon arrival in DC, and after some very in-judicious meetings with the lead investor – and big Obama bundler – George Kaiser; the administration decided not to simply revive this investment opportunity, but to expedite it and use it as a major public relations asset for both the Vice President and the President.

Now that this issue has blown up in the face of the President, his press secretary has characterized the meetings between George Kaiser and the President as discussions on his “non-profit ‘family foundation'” gifts program.  Once again they use carefully constructed phraseology to obscure the issue.  In this seemingly simple statement, most Americans will draw the connection to the Kaiser Family Foundation.  The Kaiser Family Foundation is a venerated non-profit known for its tremendous philanthropy and commitment to health care and the primary legacy of Henry J. Kaiser.

Houston we have a problem!  George Kaiser is no relation to Henry J. Kaiser nor is he connected in any way to the Kaiser Family Foundation.  He does have a family foundation, and he is a big contributor to charities including his Tulsa Community Foundation.  It is perhaps simply convenience that the administration chose this term to refer to his meetings and our own bad judgement to draw the conclusion that it was not “the” Kaiser Family Foundation – our bad!

All Jobs Are Not Created Equal in Fixing the Economy!

As the President is pushing his Jobs Bill he is really pushing Union jobs.  He is speaking about infrastructure, make work jobs.  Yes, it is true the infrastructure in America is in disrepair and needs to be rehabbed but this does not translate into making America competitive.

In his lecture to America this morning, he stressed the need to make us competitive again in the new world economy which he strongly supports.  We clearly need to become competitive again. And it is also very clear, that we are not competitive with China, Singapore, Taiwan, India, Hong Kong, Malaysia, Mexico, and many other nations around the world.  But will Union jobs and government subsidies really bring us back to being competitive?  The short answer is, no!  Looking at the U.S. Economy on the whole, taking tax money from the U.S., in any form, and passing some of that money back to companies to lower their specific costs or to provide incentives to people in America to buy their products does not make America any more competitive to the rest of the world.  It is just a zero sum game.

Think of this as your own piggy bank.  You have ten pennies in the bank.  If you pull 5 of them out of the bank to give to your friend to buy a stick of gum from you (that you paid three cents for) and you put them back in your piggy bank.  You still have only ten pennies in that bank.  Yet, you not only did not make a profit on the gum, you lost three cents overall.  This is the same shell game.  Lets take a look at some more realistic numbers.

The cost per man-hour to build a car varies widely in the world and even here in the U.S.  No matter whether you are building a luxury car or an inexpensive bare bones vehicle, the cost per man-hour is relatively the same.  It is the number of man-hours, and the price of the basic materials that changes the total cost of the car.  If you look to Detroit, the estimated costs for labor are approximately $85.00 per man-hour to make a car in this shining star of American manufacturing (at least according to the current administration).  If you look to Japan the per man-hour cost averages about $46.00.  If you look to Alabama, where some Japanese car manufacturers have moved their manufacturing the cost is about $28.00.  And some estimate the cost in India, at $18.00.  Is it any wonder that Detroit cars are not competitive in the world market?  And why the difference between Alabama factories and Detroit?  Can you say Unions?

Now I am not against unions – nor am I against union workers.  Unions have done some very good things historically for America’s labor pool – particularly related to dangerous employment conditions and mistreatment.  But Unions have also done some very bad things, perhaps knowingly, to America’s ability to compete in a one world market.

To coin a phrase, this is something we are “fundamentally” ignoring!  Our problem with being labor competitive comes in two basic areas:

  1. We have almost no natural labor pool left
  2. The labor pool we have costs way too much compared to the rest of the world.

There are other things that impact our competitive position in the world like, we no longer produce much in the way of raw materials, much of our business is based on middle-man transactions. And most of what we produce at the higher costs are sold at home doing little to reduce the steadily increasing trade deficit.  While these things are also very important, let us hold them for a later article.  The intent of this article is to focus on jobs and labor and the Presidents increasingly unfathomable position.

Why no labor pool?

Along with the focused drive, since 1972, by the banks and government to get us to stop saving and start spending, and the modification of the push to foster credit based purchasing, we have also been purposely closing trade schools and tech centers and redirecting those who would have gone into the skilled labor category to go to college. We are now a nation that does not value  the base laborer.  The person who creates valuable goods and services with their own hands has been left in the dust and become a second class citizen in a nation of college educated plumbers, welders, carpenters, cabinet makers, taxi drivers, and fast food managers.  I have repeatedly seen companies requiring a college degree for many professions like basic sales that should be more reliant on people skills simply to reduce the number of applications.  Most of the top sales people I have know in my career were without a college degree.  They learned their skills at the school of hard knocks.  I saw at least one such individual rise to one of the top sales positions in one of the top tech companies.  He almost single handedly took this company from a start up spin out to one of the premier producers in its class. In the end he was displaced by a policy decision that now required all executives to have a college degree.  It is no coincidence that within a few years they fell from favor in the market.  In some cases “book learnin'” does not compensate for real in the market experience.

While it is emotionally fulfilling to know these people have gone to college and perhaps studied the teachings of Confucius, or the writings of Chaucer; but has this made them better plumbers of has it just added to the expense of training them and increased their expectations and lifestyle and driven up their cost structures?  Is there value to them from this education?  Of course there is, but is there really value economically to America in their labor role?  No, it is in fact an unnecessary expense economically. Please remember I am not making a moral judgement here and I am not saying people who choose to, or end up forced to, practice a trade should not be allowed to go to college.  I am simply pointing out that this may not be the best economic solution for our world competitiveness problems.

While America has fostered the “everyone goes to college” mantra, closed its labor and trade schools and become dependent on immigration, legal and otherwise, to provide the required base level workers; places like Singapore still track a large percentage of their youth into labor and trade related programs.  Only a select few get stimulated to go to college.  Is this better morally?  Who knows, let the philosophers sort that out.  But economically, they are one of the countries kicking our asses, and we can’t blame that on the “subsidies of communism.”  By the way, kids that really want to go to college can choose to do that in Singapore, they are simply encouraged to go into trades and they venerate their trade workers and laborers.

So why is the President fostering class warfare, cradle to career assurance, union based infrastructure jobs and subsidizing industries to be competitive in the one world market?  Come to think of it why is the President such a supporter of this one world view?

The Reason

To start with,  who is this guy we elected?  Was he a prominent businessman?  No!  Was he a skilled civic executive?  No!  Was he a well  know economic theorist? No!  Was he a person who was well schooled in international relations?  No!  Was he an accomplished leader of any sort?  No! Well Maybe, if you consider he was elected as a state senator and then as a U.S. senator – in both capacities he quickly focused on the next step of his career but he had few accomplishments other than electability.

Look, I am not saying President Obama is incompetent!  I am pointing out that in the related experience he has little to qualify his views on this subject or to make some of the decisions that he appears to be making.  He is in fact relying on others to tell him what to do and these others, like most of our professional political class are corrupted by hidden agenda.

The President was trained as a community activist.  He apparently was very good at that.  What is the primary tool of a community activist?  It is to disrupt the status quo by using class envy as the pivot to foment unrest.  By convincing those that have less, that the ones that have more have attained it to their detriment.  In propagating this issue they gain the leverage, the power, to force changes.  These forced changes do not come about because they have been derived based on reason, due diligence and careful consideration.  They are forced into the stream based solely on the emotion of the moment.  Good community activists can get the minority so agitated that even the mere mention of due diligence or careful consideration becomes more evidence of the supposed evil intent of those who have more.

So why are we surprised to see this now?  And more importantly, why are we so blind to the real implications and the lack of focus on the economic fundamentals?  Could it be that another fundamental issue that is failing us is our education system?  McKinsey seems to think so, but I am not sure their reason coincides with mine or perhaps yours.

Additionally, our President has aspired, in fact worked hard, to become part of our professional political class.  He has in fact obtained the pinnacle of this class.  By doing so, he has assured that his future is taken care of by, and on the backs of, the same people that elected him to this office.  He is beholding to all that got him elected in the first place and is further constrained in his actions by those he will need to get himself reelected.  As I have said before in a prior article “Our Professional Political Class: An Island Cannot Rule a Continent!“, his currency is votes, and he appears willing to pay all of our collective equity in order to continue to gain these votes.

The Reality

I started this essay with the supposition that Unions and Immigration are two sides of the same coin.  While it has taken me much longer than normal to come back to this point, I feel in this case the preamble was both necessary and poignant.  Further, I think that the preamble is where we will find solutions – if we really want to solve this.

Since we have all but eliminated our labor class through the closure of trade schools, technical schools, and primary production industries (like farming, fishing, mining, oil and steel) and attrition through the aging of our population.  We have created a false expectation that everyone should go to college and our economy can not only absorb the expense but also have appropriate jobs available for these college graduates who all expect to be doctors, lawyers, Indian chiefs etc. – anything but “common laborers.”

We are left with no where to go but immigration to find those willing to work in the jobs we don’t want and at wages we can afford to pay, and still find you college educated plumbers willing to buy America’s goods and services.  We have unions who are, by their own claims – their own mantras, only looking out for the workers not American competitiveness.  But many of the workers they increasingly represent are not laborers but middle managers and low level executives.  The Unions, it appears, are dead set against immigration to solve the labor dilemma and they are dead set against relying on one world competitive wages as it would decimate the wages of the working class and the resulting stream of dues the leadership survive on.

Caught in the middle is the President. If our hypothetical coin is a quarter, then the President represents the low grade copper core.  On one side he has the silver representing the unions, the silver on the other side – immigration.  He can actually solve neither and have the solution be in the best interest of Americans.  He is left with obfuscation, and diversion.  He is in crisis mode as his pole numbers collapse.  And in crises he is falling back to the tried and true tool-set of community activists world wide – class warfare. We cannot count on this President, nor this congress, to solve this one.

In the end if we don’t solve it – we will all suffer!  At least he has acknowledged, that we are not competitive in the one world economy.  That is a step.  Not a step for the President, who can’t see or refuses to see the real implications of what he is advocating.  It is a step in that it take one more vague disingenuous argument off the table.  It takes the recently repeated ad nauseaum statement that “we are the most competitive nation in the world” – off the table.

We, now recognize that we need to become competitive again or we lose to those throughout the rest of the world who are willing to do the menial, tough, hard, exhausting jobs that we wont.  We also recognize that most of the rest of the world will do the jobs that we are actually willing to do for far less than we will! .  Until we begin to again rebuild primary production and manufacturing in America, and are able to staff the jobs with workers that are willing to not only do the job efficiently, but also at a pay rate that allows the American production to be cost competitive in the one world economy, we will fail.  No amount of robbing Peter to pay Paul, to build it, or buy it in America, will bring us back to successfully compete with those that will do what it takes for less.

America has an inordinately long row to hoe to get back to where we were.  We need to discontinue myth building, and begin to focus on the pragmatic.  We need to reject the community activist play book of class envy – come – class warfare and focus on resetting expectations.  We need to retrain many workers in production level jobs.  We need to review our educational policies and reopen trade schools.  We need to change the mind-set that everyone should go to college.  Not everyone should go to college.  Sending everyone to college lowers the standards of a college education and in the end lowers the value of education in general.  It is not necessary to get a good base education through the end of high school if everyone is also going to go to college. Also, after we send these kids to college they expect to be pad at rate commensurate with their education and its expense/investment. We need guidance counselors to again guide students into the most appropriate occupations.

Finally, we need to venerate the workers in America – the laborers in America.  We need to reduce the occupation of these required labor jobs by those expensive, excessively educated and overly trained persons with people appropriately costed and trained.  We need to once again elevate the community value of the individuals that convert the raw materials to valuable products, who convert their raw talent and effort to desired commodities. We need to have the unions and all groups, cartels, associations and members to recognize that unless we begin to put our nations ability to compete ahead of entitlements, grants, gifts, gimmes, and subsidies, we will become yet another backwater on the road of history.

I will leave you with this final thought.

It has been estimate that over 1/2 of all Americans receive at least 50% of their compensation directly or indirectly from the federal government or government sponsored programs.  By 2016, it is also estimated that this number will grow to a whopping 65% of the population receiving over 70%.  Our combined trade deficit since 1972 is almost $12 trillion.  In other words, we have purchased from the rest of the world $12 trillion more than we have sold to them.  How long can the business, that is the United States of America, continue to take in so much less than we sell.  This has been the case since prior to 1972, and in order to survive we simply increased the $500 billion in total currency then to over $16 trillion today.  But our piggy bank is empty, since most of this newly created currency has just gone to pay, by today’s numbers, 50% of the population 50% of their wages so they didn’t really notice there was a problem and the professional political class could continue to get their votes.

As Hot-Rod Swales said to me one day in 1965, “It do make you think – don’t it?”

Opinion – Image – NYTimes.com: Understanding in Three Steps?

Opinion – Image – NYTimes.com.

Understanding Step 1

This chart from the New York Times, is very interesting.  The data presented is very telling but perhaps not in the way the author intended.

When you look at these charts what do you see?  After you look and answer the question for yourself go to the next step.

Understanding Step 2

See this article for more information: President Obama’s Speech: Critical Question Continued.

What I see when I look at the data is very different from what I think the author’s point is.  We are all tainted by our biases.  We look at data, compose charts and in the end we see what we want and often construct the defense of the reality we want to see.

What I see when I look given the discussion in my prior article is first that Productivity tracks point for point with the increases in currency from 1972 on.  This should not be any surprise.  The way we measure Productivity is directly related to currency.  The question is in this case the old one, “which came first the chicken of the egg?”  In this debate one side will say chicken and the other will say the egg.  One side will be firmly of the mind that the productivity drove the increase in currency according to economic theory,  the other side will say the increases in currency inflated the productivity numbers.  Either may be correct and both are at this point irrelevant.  Which drove what now pales in comparison to the question of is the current net value of the U.S. supportive of the amount of currency (value) we have applied to it.  This is 1/2 of the most important questions.  The other 1/2 is – if not, how do we fix it?

The next thing I see in the charts, is that Wages did not track to the rise in currency nor did the gains of the wealthy.  While you see some trending with the increases in either prosperity or currency, you should expect to see that.  Wealthy people have the ability to derive more of their worth from long-term gains and theoretically should capture more of the currency in the economy.  Again the argument of fair or not fair, while a fun and spirited debate does not change the fact that the trend-line of the data does not correlate to the Currency in circulation chart in the prior article anywhere nearly as closely as Health Care Costs or Housing Costs.  It is these subtle differences that suggest an alternate cause for the increases of prosperity.  Further it is the timing of the trends.

Finally, I see that the debt line that is shown in the chart is not indicative of the true debt but in fact the result of the application of the increased capital to pay off part of the debt that accumulated from 1972 due to the trade imbalances.  We have accumulated over $12 trillion in trade deficits to the world since 1972 when we dropped the gold standard.  If you plot that curve against the Currency in Circulation curve again they are almost a point for point match.  The debt curve reported is not a point for point match.  It is the result of result of the combination of the two.

Understanding Step 3

Remember Mark Twain said, “there are lies, damn lies and statistics!”  All of these numbers need to be suspect – mine included.  But in the end this is not a republican issue nor democrat issue – it is an American issue and it will take all of us to address it.

President Obama’s Speech: Critical Question Continued

In his speech last night president Obama asked a key question.

President Obama asked, “Where would America be if we had not passed Medicare and Medicaid?”

As I said in my post last night, “President Obama’s Critical Question,”  the president’s question should not have been be a feel-good throw-away line, as it is the underpinning of the base argument, that Medicare and Medicaid have been good for us as a people and for the country. Clearly, the president believes that the answer to these questions is in the affirmative. But, what if the answer is not?  These are areas that I think many need to analyze.

Those who have been reading my articles know that I have a strong concern that the underlying issues in our health care system and our economy are systemic and the areas we are focusing on are, in effect, addressing the symptoms of the problems – not the root causes.  In my upcoming book, “The History and Evolution of Health Care in America: The untold back-story of where we’ve been, where we are, and why health care needs more reform!” I look at the relationship between the rising costs of health care and trace in part one cause to the large expansion of government programs like Medicaid and Medicare.  I also found correlations between the rapid increase in the amount of currency we created, after we jettisoned the gold standard in 1972, and the disproportionate allocations of these new monies to health care and other government subsidized programs like housing.

The relationship of the Total Money Supply (M3) to our current economic issues I will cover in a later article, but for now look at the direct, almost point for point, correlation of the rise in the total health care spend in the U.S. and the increase in the money supply.  I think there is no doubt that the significant increase in the amount of currency in circulation and the rapid rise of health care costs run hand in hand.  It is very clear, as Sancho said to his master, Don Quixote de la Mancha,

“Whether the stone hit the pitcher or the pitcher hit the stone – it was going to be bad for the pitcher!”

In this case, we can argue later whether the increase in currency drove the increase in costs or the increase in costs drove the need to increase the currency, it was the expansion of Government programs like Medicaid and Medicare that drove the increase in costs.

Housing also rose in a point for point correlation as well.  Unlike with health care, you can see it was an advance indicator.  This make sense, according to economic theory and the basic premise of fractional reserve banking because our the engine of economic expansion (the creation of new money) is debt.  Most preferably mortgage debt.  If housing prices did not rise and new homes and the resultant mortgages did not happen then the banks would have become rapidly out of covenant if the new money existed before the new mortgages were there to leverage against.

Lastly in this article, I include a chart of a few other cost histories, lest we think that all parts of the economy had the same correlation to the increase in the money supply.  Clearly, wheat corn and eggs did not experience the same effect from the increase in the money supply – nor does it appear they led the need to increase the supply.  I believe that most peoples practical experience is that not all things have risen in value twenty times in the past forty years.  Herein is the potential rub!

I will continue the discussion related to the presidents key question in my next article.  In that I will focus on how the creation of Medicaid and Medicare changed our personal character related to our view of our personal responsibility for our health care and how this change has affected our fiscal habits and our purchasing patterns and trends.

Please feel free to comment on this article or send it to others.  As I have said many times this is not a republican nor democrat issue.  I think this is an American issue.  I am not an economist just someone trying to understand why these things are happening now.  We need pragmatic solutions not demagoguery so lets find out what is the truth and then how we can fix it!

President Obama’s Critical Question

Tonight president Obama asked a very key question. This is one of those great moments where one question that really is one of the key questions was used as a throw-away, feel-good line.

President Obama asked, “Where would America be if we had not passed Medicare and Medicaid?”

This is really a key question, is it not? This question should not be a throw-away line, as it is the underpinning of the base argument, that Medicare and Medicaid have been good for us as a people and for the country. My opinion is this is, in fact, one of the major differences in the grander debate. Clearly, the president believes that the answer to these questions is in the affirmative. But, what if the answer is no? What if the truth is, that Medicare and Medicaid, have driven up our health care costs, disproportionately? What if these programs have fostered an era of unprecedented lack of responsibility? What if these programs have been one of the significant contributors to the base cost of business in America, and are one of the key underlying reasons that America is no longer able to manufacture goods cost-competitively for the rest of the world to purchase from us? What if these programs have so changed the nature of our economy that we now have accumulated a trade deficit in excess of $12 trillion since 1972 and we can’t become a net exporter because our goods are too expensive?

I think these are the key questions that need to be discussed. I submit the president will not like the answer. I also submit neither Presidents Obama nor Bush, nor republicans nor democrats are to blame for the problem. I further submit it is this issue that is the key problem we need to pragmatically solve.

President Obama should get some credit for asking this key question. He should also get some critique for using it as a throw-away feel-good line to rally his base – particularly if the answer is not as he is assuming!

I hope others will help tackle this question in the next few days. I know I will be continuing this dialog in the next few days specifically on this topic. It has been key to my research and understanding on the crisis we have in our health care system, if is one of the core issues discussed in my book and something that I feel we must address.

The Blame Game: A Recent Letter to the Editor

“…it is thus compromise on the basis of tolerance for others’ opinions that lead us to good solutions….” – Benjamin Franklin

In a recent letter to the editor, yet another writer wants to make the point that the current economic problem is President Bush’ fault. He uses all of his 200 words to carefully craft a picture of why it was Bush’ fault.

Yesterday, I saw the same thing as to why it was President Obama’s fault. Again, all two hundred words carefully selected to make this seemingly very important point.

Having written a few letters to the editor, I can tell you from first hand experience it is not usually for me a five-minute thing. Two hundred words is a very narrow field to present a counterpoint to some point you are debating. Usually it takes almost half of the space to frame the issue in the first place.

These two writers are not alone. I see tens, if not hundreds, of these dialogs each day. Each side spending an inordinate amount of time to present the case why this person, or this party was wrong, wrong, wrong…

Clearly, the sheer volume of people, and the amount of time, bandwidth and ink devoted to this subject would indicate it is of the most extreme importance. Well it’s not!

The big issue at the moment is solving the problem. And solving this in a pragmatic way – not partisan way. unfortunately, it is not just the new mayor of Chicago who thinks no crisis should go to waste. It seems to be the philosophy of many of us if not most of us.

Each issue appears not to be an issue we need to solve – more it seems they are issues we should exploit for some other benefit. This has been the pattern since the early 1960s. The Great Society was not just to find solutions to help the poor, it was as stated by Lyndon Johnson on a phone call with Wilber Mills and Carl Albert,

“something that we (democrats) can run on for the rest of the century.” (listen to the President Johnson Tapes online, search on medicare)

And we can’t leave republicans out of this either. They have played the same games over the years.

Since everyone seems to think we need to assign blame before we solve the problem, let’s do this. Lets agree to start at the beginning of the root causes…

  • It is Franklin Roosevelt’s fault for describing Social Security in 1935 without recognizing that the transition to a private annuity system as he described would be lost to the winds of entitlement fever.
  • It is Truman’s fault for both extending the coverage and not addressing the concerns of the legislators at the time that argued about future insolvency.
  • It is Eisenhower’s fault for also increasing benefits and coverage while again not addressing the growing concerns over solvency
  • It is Kennedy’s fault for again extending the coverage and entitlements and getting assassinated before he could begin to affect some of the changes he saw needed to be done.
  • It is Johnson’s fault for extending the original act to include Medicare and Medicaid, ignoring the advice of the experts in congress including Wilbur Mills who repeatedly warned this scheme would not work, and then codifying the grants and gifts to the poor as the method to ensure democratic election and instituting the class warfare approach that is now the norm.
  • It is Nixon’s fault for removing the country from the gold standard instead of extending the standard to all precious metals.
  • It is Carter, Regan, Bush and Clinton that further reduced the restrictions on the banks, changed the regulations like the Mark to Market Rule and eliminated the Glass Steagle Act that multiplied the fiscal problem and continued the course of expanding entitlements.
  • And it was both Bush and Obama that again compounded the problem by consenting to the short-term solutions and compounding debt based fixes.
  • Further, it is all the congresses, bankers and federal reserve leaders that are also at fault for not addressing the issues, using them to fulfill other agenda and promulgating their self interests ahead of strategic solutions.
  • And finally, it is us for not paying attention and reveling in the constant, and unrealistic, expansion of our wages, home values, benefits, and desire for more without looking for or listening to concerned opinions.

Did all of these actors in this damnable play behave badly for their own self-interest? Not really. Where there certain hooks that were included at each phase to get our consent that were in their best interest? Of course! In every case there was justifications for why, and many times good arguments on why in the short-term this solution, or that solution, made sense. The problem was, they also knew in the long-term there would be a problem and did, or could do, nothing at the time to fix it. Of course, once the issue was temporarily solved – no one else chose to address it so it was pushed to the future to deal with it. And now it is ours. And it is, in fact ours. It is not our children’s as we like to think. We have run out of time and circumstance. That is why the symptoms of the disease are again raising their ugly heads with a vengeance.

Now that we have discussed blame, let us all tolerate the blame assigned to our favorite figures as we relish the blame in those we don’t like. If we simply agree the blame is inclusive and historically almost all-encompassing, then perhaps we can stop the blame debate, at least for some of us, and focus on solving the current dilemma.

This problem is a collective problem. One – many years, many parties and many administrations in the making. It is at our doorstep and will either define the next stage of our prosperity as a nation or our inevitable decline. We must all stop trying to focus on who it was that is at fault and how we can use it to foist our “pure” ideology on the other side. We simply must find a good pragmatic solution.

As Ben Franklin said, ” it is thus compromise, based on tolerance of others opinions that leads us to the best solution!”

ACA, Politics, Mandates and the Commerce Clause

Focusing on the insurance mandate in the Affordable Care Act, (Obamacare) a few months ago I wrote a series of four articles for a publication, reproduced here as, “Health Care Mandate and the Commerce Clause Articles.”  In these four articles, I explored why I found the base argument that the government could regulate activities like these in a state difficult to fathom by reading the commerce clause in the constitution.

[The Congress shall have Power] To regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes;

In my original look at this issue, I examined  the precedent cases cited by many as the basis for the idea of why the Federal government had, in this case, a superior right to the sovereign rights of the states, something that all agree was expressly limited by the framers of the constitution.   Reading these historical rulings made this concept that this is a Federal right even more difficult to swallow because I found that these earlier rulings often were even less convincing and often more startling in the extent that the arguments became even more extracted and remote in their nature.

In reading  the arguments and the rulings of the 11th Circuit U.S. Court of Appeals, I found an additional reason why I find the base idea that the Federal government has the right in instances like this to regulate the action of individuals in a state even more specious.  This is actually the simplest argument against such a right, and likely it would even hold the same effect at a state level.  It is part of the many arguments that have been made in the numerous constitutional challenges over these past few months.  But like much of these debates, the nature of the arguments has become complicated by excess verbiage and legal flanking obscuring for most of us the basic concept.

This additional argument comes in to points.  First, let us look at the definition of the word commerce.  In reviewing the many variations of the definitions available there are some basic common elements throughout.  They combine into the following.

com·merce
(komerse)
NOUN:

  1. The buying and selling of goods, especially on a large-scale, as between cities or nations.
  2. Intellectual exchange or social interaction.

Second, we simply need to ask a very obvious question, and one that while it has been raised by the legal scholars in the various debates in one form or another, it has been lost in the myriad levels of complexity provided more, it seem, to delight the ears than to illustrate the point. 

If commerce is either the act of buying or selling something, and depending on whether or not the activity was international, with the indian tribes or among the several states it could either be regulated by either the Federal government or the states.  How is NOT buying anything then an act of commerce in the first place?  And, if it is in fact NOT commerce then the argument on who regulates the action under the commerce clause is moot.

Of course legal scholars will use tangents of the “Wickard vs. Filburn” case to argue that not buying is an action that reduces the commerce among the states and therefore in reducing the revenue is itself something that impacts commerce and therefore can be regulated.  I guess this is the kind of argument our parents made for us to eat lima beans.

As a child my parents, who were good and nurturing parents, used to make me eat lima beans.  Every time I took a mouthful of lima beans, I had to rush to the bathroom to vomit.  And of course when I came back to the dinner table, I had to have yet another mouthful of lima beans, promulgating the same response.  Their justification was they were good for you.  Of course, the loss of the rest of the contents in my stomach and the various fluids and electrolytes that went along for the ride, did not enter into the equation – lima beans are good for you, we have lima beans, ergo  you need to eat the lima beans because they are good for you!

My father, a lawyer and son of a prominent judge, I suppose was simply adapting some of the arguments from the prior court rulings justifying the extension of the federal powers under the commerce clause, when he said, “There are people in other lands who are starving and it would be a sin for you not to eat those lima beans while they starve.”  He must have chosen this argument because it is so similar in the base points made in the historic extensions of federal power under the commerce clause.

In “Wickard vs Filburn,” the court ruled that poor old Roscoe Filburn’s wheat had to be destroyed because he grew more than the law, at the time allowed, even though he was using it on his own farm to feed his animals.  In the case against Roscoe, it was deemed against the law because his flagrant activities of wanting to feed his animals this ill grown wheat, reduced the grain he would have had to purchase from other states if he had not committed the heinous act of growing it himself.  Of course the fact that he likely would have bartered with the farmer down the road in his same state and that Roscoe, during the depression, likely did not have any cash to pay for the wheat in the first place was not relevant.  Roscoe, was not buying wheat from other states and as a result he was affecting interstate commerce and therefore the Federal government had the right under the commerce clause to regulate him so his wheat had to go.  Now Roscoe, eat those lima beans because they are good for you!

We have a strong habit in this country to stretch quite far to make the points we want to make.  We will obscure, misdirect, abstract and extend, often by many more than the “Six Degrees of Kevin Bacon,” in order to get the result that we want.  In doing this, either in the desire to accomplish an end we know people otherwise would not support or to appear brilliant by the use of flowery language and abstract argument, we often forget the simple and common sense argument.  The one we can all understand.  The one that actually stands up to quick and continued scrutiny.

Throughout these articles I have not wanted to argue whether or not we as a nation should require all to purchase insurance.  There are very good arguments both for and against this practice.  I simply am saying making these further and further abstract arguments, whether by legislative action, or judicial injection is not the way to achieve it.  In the end we spend billions of dollars arguing points that any person working in the fields or factories would screw up their faces and say, “What?”    If you related the “Wickard vs Filburn” issues to anyone working for a living they would have a simple answer.

In the end it is not hard to subvert intentions.  In the case of our current political motivations regarding the Affordable Care Act , so called Obamacare, we see exactly the extent that politicians and governments will go to get the outcome they want.  It takes years of very expensive education and hundreds of millions, if not billions of dollars, to arrive at the decisions that have been rendered based on the various political governmental and abstract interpretations of the commerce clause!  Only we can ultimately stop this and force those we elect to find the simple and most pragmatic answers.

Yosemite: Just your average government project

Aside

20110727-055307.jpg
Just your average government project.

2800 Solar panels
Producing 12% of Yosemite’s electricity
Saving $50,000.00 per year
Cost $5.8 million in stimulus

And you wonder why the federal government is out of money and needs more debt! It will only take 116 years to recover the expense in savings. What is the life of a solar panel?

Could this kind of genius calculation explain the debt crisis?

What is the best, is our government, issue the EPA, are promoting this project on the local news!

Of Volks-latures:Our future – Sold – to us, by us.

Volks-lature vs Maybach-lature

These early citizen statesmen, tended to relate the effects of everything they did to the impact on themselves, their family and the community.

The collective display that was put on last night by our elected officials shows that we have allowed political privilege to supersede the role of elected legislator. Historically, our elected officials were for the most part volunteers. Up until the mid-1930’s congress operate largely on an alternating 3 month then 6 month period in order to allow the legislators to go back home and tend to their farms, and businesses. As such, they stayed quite engaged in community and reality.

These early citizen statesmen, tended to relate the effects of everything they did to the impact on themselves, their family and the community. Their ideals appeared larger and more discrete. Likely to our mind they also had more character and commitment since they served, often and significant cost, not benefit, to family and business. Of course there was corruption, but that form of corruption was more visible, as the delta between those partaking in graft, stood out like beacons from those who did not.

A citizen statesman returning home to a significant increase in prosperity as a result of his short time in Washington tended to send tongues ‘a-waggin’ if you know what I mean. Today our professional class politician is tacitly expected to find his fortune in the words and ideals he may sell to the most or the richest. Like comparing a Maybach to a Volkswagen Beetle, we have politicians who are the ‘Volks-Vagon’ the people’s car; and those who are the Maybach Laundolet the car where “the customers’ wishes come first.”

In the case of the ‘Volks-lature’, they focus their message and sales pitch more towards the masses. They chose the low-cost high volume strategy and offer to convey as many as possible to the nirvana they seek. On the other hand, we have the ‘Maybach-lature’ who have selected to sell to a very few with much higher margins. Unlike the Volks-lature who feed in the troughs with the rest of the masses, the Maybach-lature have chosen to feed in the food chain of the rarefied air, at the table with the best linen and the finest wine. And in realty they are no different, just existing in a different part of the econ-system.

In the end it is we who are providing their existence and much of the things they do are in fact self-fulfilling activities, calculated to continue their reign and enhance their equity.

You see, for the most part, they both exist to do one thing. Sell us our dreams in return for their livelihood and existence. Sure, some still have ideals and the drive to make a difference, but it is more the sirens song of wealth and power that has captured most of their hearts minds and more importantly – practice. Even the most ideological fall rapidly under the spell of the professional political class in Washington, who control their moments, provide their thoughts and calculate their longevity with a keenness that would have made Mr. Gillette very proud.  The tools of each, are one as with the other, as their weapons are all class focused. For one it is envy – for the other – fear.  In either case, it is the other classes that are the fault, and only theirs can save those that matter!

Overall, it ends up the same for us all regardless of whether we eat at the trough or at the fine table. In the end, it is we who are providing their existence and much of the things they do are in fact self-fulfilling activities, calculated to continue their reign and enhance their equity. It is we who pay for it and it is we who are now suffering for it.

This is one reason I have declared: I am a Mugwump. Further frustrating is the fact that the overall debate continues to be focused on who should get what from whom as opposed to what we need to do for ourselves and our neighbors. There are those that argue anyone that has more should be forced to give it up to all of those that have less. Then there are those who also argue that there are some who need a safety net and that we should provide systems and some government intervention for those who can’t – not those that won’t. See Was Shakespeare Correct.

Looking sharply at the debate you see similar ideals in the grand area but in the graphite at the point of the pencil the line is obscure – not so fine. The real debate is in the definition of who should get the benefits of government intervention and at what point personal responsibility ends and public responsibility begins. Further debate centers on the dividing point between personal philanthropic charity and government mandate over personal property redistribution.

In the end, the biggest problem is that we have allowed our political system to degenerate to the point where the body politic, once a largely part-time and voluntary collection of average citizens – making laws and regulations for themselves as well as their neighbors – and in whom little direct benefit of the laws they passed held influence, has been replaced by a full-time professional class legislature with little influence from the laws they pass and maximum influence, in fact their livelihood, comes from the direct (in the form of compensation), and indirect (in the form of votes and campaign contributions).  It is this that is their lifeblood driving the legislation they make – specific to any and all vested interest.

So whether you are a conscript of the Volks-lature or an acolyte of the Maybach-lature, we have all ended here at the same point. We have been sold a significant bill of goods by those we trusted to protect us and it will, regardless of what they do or don’t do in the next few days, be on our shoulders to again pay the bills. All of our shoulders! Because never in the history of mankind has a political system been able to provide a way for everyone to get everything – with no one doing nothing.

It is a damnable shame!

Was Shakespeare correct: is the fault within ourselves?

Cassius:
“Why, man, he doth bestride the narrow world.  Like a Colossus; and we petty men walk under his huge legs, and peep about to find ourselves dishonorable graves.  Men at some time are masters of their fates:  The fault, dear Brutus, is not in our stars, but in ourselves.”

Julius Caesar (I, ii, 140-141)

Historically, the interpretation of this dialog has been, Cassius, a nobleman, is speaking with his friend, Brutus, and trying to persuade him that, in the best interests of the public, Julius Caesar must be stopped from becoming monarch of Rome. Brutus is aware of Caesar’s intentions,  and is torn between his love of his friend Caesar and his duty to the republic.  Cassius continues by reminding Brutus that Caesar is just a man, not a god, and that they are equal men to Caesar. They were all born equally free, and so why would they suddenly have to bow to another man? On another level this phrase has been interpreted to mean that fate is not what drives men to their decisions and actions, but rather the human condition.

In this case, Cassius was arguing that the problems of Rome’s people were a result of the human condition.  And that if the avarice of Caesar, and his cohort, could be eliminated then the condition would itself improve.   This historical diatribe is truly the argument of the ages.  If frames the argument of many, if not all, of the issues of our time.

Whose responsibility is _________?
(fill in the blank with almost any word or phrase)

Is our health care – our responsibility or that of the collective society?  Is our survival in terms of food, housing, clothing, creature comforts of heat and air conditioning that of ourselves, or the responsibility of those that have more than we?  On whose shoulders does the success of our society reside – to each according to their need from each according to their ability/initiative – or – to each according to our ability/initiative and from each to those in need according to our humanity and generosity?

Looking across our political landscape, today, we clearly are a nation divided by our ideologies and views of how the world should work.  We seldom exercise compromise either, outside our ideological castle (see my article On Tolerance) or, it seems, even within it (see my recent article, Consider a Mugwump).  For quite a while, I have felt we were a nation of thirds:  one-third hard left, one-third hard right, and a third in the middle, the middle drifting either way based on the issues and ideologies at hand.  But is that really the case?

For those that confidently inhabit the edges of the bell curve, they have the utmost convictions that their ideological purity is what is important for solutions to be correct and just.  RINO and DINO labels tarnish anyone foolish enough to consider a position with even the slightest hint of grey.   To argue such a grey area can often lead to more than chastisement, but often to banishment. How have we arrived at this locus?  Is it that the middle is growing, and the tea-party despite the attempts at marginalization or reinforcement from both sides is representing a new and still defining set of values and frustrations?

Macbeth:
To-morrow, and to-morrow, and to-morrow,
creeps in this petty pace from day-to-day,
to the last syllable of recorded time; and all our yesterdays have lighted fools the way to dusty death.  Out, out, brief candle!  Life’s but a walking shadow, a poor player, that struts and frets his hour upon the stage,
and then is heard no more. It is a tale told by an idiot, full of sound and fury, signifying nothing.

Is it possible that the root cause of our problems is in fact ourselves?  That our economic and ideological problems are an extension of our innate nature?  Are we now so enamored with our own Colossus, that we believe we are due all?  That we should all have anything we want, whenever we want, and the consideration that achievement of these things rests firmly in the divine rights passed from the stars and our own demands and that all others who have should – no,  must – grant part of their ‘haves’ to the rest of us who don’t and remain wanting?  Clearly, for some, this is not the case – I do not intend to damn any segment of mankind in this discussion.

Is this who we are today?  If so, when did we change?  Did we ever change, or have we really been like this all along?  Interestingly, the discussion has been alive and in debate throughout recorded history.  From Socrates to Aristotle, from Shakespeare to Twain, all have debated the relative merits and shortcomings of man.  Are we improving, degrading or simply continuing our journey with lots of sound and fury – signifying nothing?

While for the most part, I do not know much – in the end, I do feel I know this!  With all the talk of the crushing federal debt, and for many states like California crushing state debt as well, and the debate over tax cuts for the rich, or the role of unions in our demise – or their role in our success, or entitlements vs. safety nets, or our trade deficit or competitiveness in the world – whatever the topic; we are doomed to the creeping and the sound and the fury if we don’t change our own dynamic.  If we continue to pay, as an example, $68 dollars per man hour to produce a widget in the U.S. that others in the world are willing to produce for $28.00 per man hour, we will remain an acquiring not supplying nation.  If we continue to demand ideological purity, then the best men, or women, for the jobs will never come into office.  If we abdicate our own responsibilities to ourselves and each other in favor of some small group, who will for the most part be corrupted like all who gain power and control are corrupted, we will end up as we are today and as it appears we have been for all time.

We can continue to allow our elected officials to flummox us with the same pandering, platitudinous, piffled phraseology like;

  • the deepest recession since the great depression; or
  • this will provide business the certainty they need to...; or
  • we will continue quantitative easing and strengthen the economy… (Fed-Res speak for inflating the currency)

Each of these phrases, and many, many more just like it, are geared to obscure, conflate and confound the public into continuing to creep in our petty pace from day-to-day and not upset the status quo.  But it is the status quo we must upset or we come once again to the sound and fury part.  Like a big circle, or perhaps a loop by Dr. Moebius, we always seem to be ending right back at the same point.

At the beginning I asked a question.  It is clear to me that I cannot answer the question for anyone other than myself.  I ask you to find your own answer to this question.  And if you find the same answer as I, then let us all change ourselves.  In doing so we may change others and perhaps cut through the creeping, the sounds and the fury and signify something after all!

Afforable Care Act and Disease State Programs: What is the future?

As the Patient Protection and Affordable Care Act (ACA) continues the trek down the long tortuous hallway to become implemented law, a misquoted line, from Hunter S. Thompson, comes to mind. (I am using one of the misquotes)

“Hollywood, a long tortured hallway where thieves and pimps run free and good men die like dogs, for no good reason. There is also a bad side” – mis-quote of Hunter Thompson

We have all become complacent as to the unintended consequence of government deeds.  In researching my book, “The History and Evolution of Health Care in America: The Untold Backstory of Where We’ve Been, Where We Are, And Why Health Care Needs More Reform,” In a small way, I have become some kind of dubious expert on the historical record of the unintended consequences of the actions taken by our government, and many others, related to healthcare in America.  For some time now, I have been concerned that there may be very significant unintended consequences of the Affordable Care Act, particularly relating to special disease state programs offered by both states, and the federal government like; HIV/AIDS, hepatitis, heart disease, COPD, diabetes, etc.

ADAP as an Example

(While mandated rebates sounds like a great thing for consumers – it is not.  Federally mandated rebates are one of the drivers increasing the cost of medications to all of us and a major cause of the lack of transparency in drug pricing. I discuss this extensively in my upcoming book.)

An example of the kind of program I am referring to in California, would be the AIDS Drug Assistance Program (ADAP).  The California AIDS Drugs Assistance Program is a prescription drug coverage program funded, in part, by Title II of the Ryan White CARE Act created in 1990 by the US Congress and reauthorized in 1996, 2000, 2006 and 2009.

The ADAP program, provides medication purchase assistance to people suffering with AIDS, based on specific eligibility criteria.  The program sets limits on income, viral load, CD4 count, etc.  Depending on the criteria, eligible participants receive assistance ranging from; payment of insurance co-pay – up to and including full coverage of the medications proscribed, as long as the drugs are covered under the state’s extensive ADAP medication formulary (the approved list of medications).

You may be eligible for California ADAP services if:

  • You are a resident of the State of California
  • You are at least 18 years of age
  • You have a HIV/AIDS diagnosis (Requires Physician’s Letter and recent CD4 Count and Viral Load)
  • ADAP will only process prescriptions written by a licensed California physician/prescriber
  • You have limited or no prescription drug benefit from another source
  • You have a Federal Adjusted Gross Income of not more than $50,000.

ADAP is not all that California provides under the Ryan White Care Act to Californians suffering from AIDS, but it makes up the largest of the Office of AIDS’ (OA) expenditures – roughly $434 million of $1.3 trillion in total budget.  Of the $434 million number about 30%, approximately $126 million, comes from the California State General Fund, approximately 23%, $100 million, comes from the Ryan White Care Act funds, and 48%, $210 million, comes from mandated rebates from drug manufacturers

The Ryan White Care Act ¹

The Ryan White Care Act is the United States largest federally funded program for people living with HIV/AIDS. The act sought funding to improve availability of care for low-income, uninsured and under-insured victims of AIDS and their families.

Unlike Medicare or Medicaid, Ryan White programs are “payer of last resort”, which fund treatment when no other resources are available. As AIDS has spread, the funding of the program has increased. In 1991, the first year funds were appropriated, around US$220 million were spent; by the early 2000s, this number had almost increased 10-fold. The Ryan White Care Act was reauthorized in 1996, 2000 and 2006. The program provides some level of care for around 500,000 people a year and, in 2004, provided funds to 2,567 organizations. The Ryan White programs also fund local and State primary medical care providers, support services, healthcare provider training programs, and provide technical assistance to such organizations.

In fiscal year 2005, federal funding for the Ryan White Care Act was $2.1 billion. As of 2005, roughly one-third of this money went to the AIDS Drug Assistance Programs (ADAP) which provides drugs for 30 percent of HIV-infected patients. The primary activity of ADAP is providing FDA approved prescription medication.

 So,  why should we be concerned?

One of the major reasons for the enactment of The Ryan White Care Act, and the subsequent creation of ADAP programs in the first place, was the inability of those with this tragic disease to get adequate coverage from their insurers.  A diagnosis of HIV/AIDS became a red flag to insurers that either precluded coverage, if it was a pre-existing condition, or HIV/AIDS patients found their policies dropped for a myriad of other reasons mostly due to lifetime limits and trumped-up problems.  As a result, people with a diagnosis of HIV/AIDS could not get insurance.  The Ryan White Care Act and the various ADAP programs offered under this federal program through the 58 states and territories have done a wonderful job of helping treat, help to arrest the spread, and improve the quality of life of those with this horrible disease.  I think, this is undisputed.  The Ryan White Care Act and ADAP have been unqualified successes.  One of those rare occurrences within governmental programs.

President Obama’s 2012 HIV/AIDS budget requests $21.4 billion in funding for  Domestic HIV/AIDS activities. – Kaiser Family Foundation Report on HIV/AIDS Policy 

Having spent a good deal of time, for the past few years, in Washington, DC traveling the same long tortured hallway Hunter was claimed to have spoken about, I have developed a pretty good understanding of what is making things work there now-a-days.  The main issue on everyone’s lips, not just Republicans, is reducing spending.  The last re-authorization of Ryan White, in 2009, was a heated, and anger riddled, argument.  There were those then (including many leading democrats like Senator Kennedy) that did not want to reauthorize the existing legislation.  They were advocating creating new legislation that better dealt with the realities of the disease as it stood today.  But like most entitlements, the constituents, and their very vocal advocates, did not trust the government to bring them the program that they wanted.  While, they all agreed that the Ryan White Care Act was not great, they felt it was better than what they might get.  In the end, the political pressure drove the legislation to be reauthorized and extended four more years.  Determined to not see this, in their view, unwieldy and ineffective Act reauthorized one more time, Kennedy’s staff made sure that the 2009 re-authorization legislative language included a sunset provision that prohibited another re-authorization down the road.

 Well Things Have Changed – Haven’t They?

The biggest problem with AIDS today is that people no longer feel guilty nor afraid of the disease!
– Britt Weinstock, Senior Health Policy Advisor – Congressional Black Caucus

Well they have and have not.  Illustrated in the statement made by Britt Weinstock (one of the brightest and dedicated individuals I have met in Washington DC) in a meeting with me in 2007, the overall nature of the nations focus and funding for HIV/AIDS had changed.  It was then getting increasingly difficult to get attention in congress and squeeze out the necessary funding.  When the Ryan White Care Act was originally conceived the nature and treatment of HIV/AIDS was that of a terminal illness on the rise to a national epidemic.  Today it can be a treatable, if chronic, condition.  Then people diagnosed with AIDS had an expected lifetime of a few months to 8 years.  Today, with treatment, they can live mostly full and productive lives.  Like most other chronic diseases we face today, as the prognosis for HIV/AIDS has improved the lifetime cost of treatment has increased many fold.

As far as the Affordable Care Act goes, if this legislation continues to be enacted, it will prohibit insurers from barring HIV/AIDS patients from getting insurance to cover their needs – a seemingly good thing.  In fact, many states have already set up special funds for patients with pre-existing conditions and temporary high-risk insurance pools as an interim solution till the ACA takes full effect.  In the May revision of California Governor Brown’s 2011-12 Budget, the Office of AIDS are projecting saving some money by changing ADAP eligibility so that some of the covered patients shift into the states Pre-Existing Condition Insurance Plan (PCIP).  This program is a federally funded program and does not, at this point, receive any funding from the California State General Fund.  With cuts to Medicare, Medicaid, and Social Security now in open discussion, will such programs be deemed as necessary?  With Ms. Weinstock’s statement in mind will American citizens agree with the priority of additional funding?

As a result of the historical empathy and generosity of Californians, HIV/AIDS patients in California currently receive some of the best program benefits in the US today, and as a result, the public health crisis from HIV/AIDS has been contained and almost all patients in California have access to quality care and the required medications.  The question is – for how long?

As was seen in the 2009 re-authorization of Ryan White, many politicians did not want to be on the wrong side of the HIV/AIDS or GLBT activist communities and as such even the lion of the senate yielded and agreed to their demands for re-authorization.  But the game has definitely changed!  Before the choice for politicians was either, I agree to fund these programs or, since there was no insurance or other option for HIV/AIDS patients – they would die.

Today, the question politicians have to answer from the general public is; “Why do we need these types of programs? We just passed ObamaCare and everyone now gets insurance, or subsidies to buy insurance!”  The question for HIV/AIDS and other special disease state patients is, will politicians, having many fiscal-crisis related issues now the focus before them – without the ability to just print money to pay for them as we have in the past – have the strength to stand up to the rest of the fiscally troubled middle-class and say…

“Well you see…  Ahhh…  Well…  the Affordable Care Act…  aaaa, really didn’t cover everyone they way we thought…  And you see…”

Or will they just not re-authorize Ryan White and other special disease state programs like it and push it all off to MediCare, Medicaid and the ACA or the states.

How long can politicians in Washington, DC and Sacramento, continue to fund these needed programs?  How long will the politicians have the courage to stand up and continue in light of the looming fiscal crisis and its impact on seniors, disabled, children and under-served middle class and lower class Americans?  The question to the politicians really will be,

“Why do we need these programs if we just passed ObamaCare and spent trillions on it?”

“Politicians could use the answer, “Well….  Ahhh…  You see – aaaaa…..  Well it’s like this, you see, the Affordable Care Act really didn’t protect everyone!”  Some politicians may see it as a safer action – a more re-electable action – to not reauthorize these programs because; unlike before, when the choice was either we authorize these programs or people die because they can’t get insurance; now, to the vast majority of Americans, it seems no longer necessary because we just spent trillions to ensure that everyone has health care –  didn’t we?  Can a politician stand there and tell Mr. and Mrs. Middle Class America that the health needs for this increasing but still minority population of Americans is greater than their own fiscal needs?  And more importantly will these middle class Americans have the willingness to accept it.  Do we truly think, that we can fund everything we want by just taxing the richest 1%, 5%, or 10% of Americans?  If you look at the numbers, despite the rhetoric, we probably can’t.

This is a tough one!  Regardless of how anyone feels about the ACA – and almost no one actually likes it on either side – just like most other government programs, it is designed for somewhat near the lower-middle of the bell curve.  The people on the extreme edges of the bell curve get either poor or no benefit from these programs.  This is a fiscal reality.  The cost of the benefits for the people in the covered range of the bell curve where the programs are offered, has to be born by all the rest of the population.  The fringes never really get completely covered, even though the center of the bell is not in the middle-point of these curves.  So, we will always likely need specialty programs if we are going to commit to have the government take care of the most fragile among us!

It remains to be seen if this will be the case.  As I said, I am very concerned at this point that the Givernment of the People, By the People, and For the People is still able to do this, unless we rethink what this commitment means and more importantly, how to accomplish it.  We need to fundamentally restructure healthcare and rework, from scratch, the supply chain.  Perhaps we need to look not just at the government, but beyond government as well, to our individual relationships with, and responsibilities to, each other if we hope to find some answers.

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¹ Wikipedia contributors. “Ryan White Care Act.” Wikipedia, The Free Encyclopedia. Wikipedia, The Free Encyclopedia, 19 May. 2011. Web. 8 Jul. 2011.

Joblessness: So which is it?

Perhaps I am old fashioned!  Perhaps I am an anachronism!  Maybe I need to move more rapidly into the modern era!  During my morning routine – “Oh, God, I got a routine…  When the heck did that happen?”  

Anyway, my angst over finding I have a routine aside; when I was reading my morning paper, the headline of the business section this morning shouts,

June jobs outlook turns around”.

– San Ramon Valley Times Business and Technology Section July 8, 2011

Immediately, I felt pretty good.  We have all been looking for some good news – Right?  With the general irritation over the Casey Anthony trail, the wall street ups and downs, the problems with California’s fiscal health, the concerns over the rising cost of health care, the debt ceiling debacle, Japan’s nuclear crisis, Arnold and Maria, comets, global warming, the effect of sunspots –  a little good news is certainly a welcome relief – isn’t it?  Well, at least that was what I was thinking as I went into my office to login to my computer.

As I was basking in the glow of good news and logging in…

Almost immediately when I login to my PC, my glow is harshly doused. First I see,

“A dismal report showing the U.S. added the fewest jobs since September soured Wall Street’s optimism over the strength of the economic recovery, sending the Dow sliding more than 100 points on Friday morning.”

then almost immediately following,

“President Obama to deliver statement on the June employment report at 10:35 a.m. ET”

So which is it?

Is it just me, or, have we seen a constant, reversible pattern over the past few months?  Sometime we see, glowing economic statements telling us how everything is just hunky dory, only to have them followed in a day, or so, later with dismal news based on the exact same indicators.  Other times, we get the dismal news first, and a few days later, great articles about how the economy is improving so much.

All this prompts me to have a few questions:

  • It this just bad reporting?
  • Is this propaganda and good reporting?
  • Or do most just think we are all stupid?

if we all work together to help each other then, most of the big problems can get solved much easier and much, much cheaper

I am not sure myself which of the above, if not all of the above, is the right answer.  But for me this – along with a myriad of other things I now see day-to-day, from reporting (both print and broadcast), to business matters, to personal interatcions, to governmental actions (at all levels) – makes me feel like nobody really gives a darn about each other, or themselves, anymore.  If we really did care, how in the world would we allow these kinds of things to keep happening?

So now on top of the problem that I now realize I have become my father, not that he was a bad guy at all – in fact he was a great guy – and I have a routine –  mostly meaning I am getting old – I now have to worry about what the deeper cause of this growing phenomenon is.

Let’s make a deal!

I will make you all a deal!  If you agree with me and try to help me cope with the growing angst and stress, I will help you find an answer to fix what is wrong.

If we have a deal, post a comment and tell me what it is you think is the problem.  Who knows maybe someone else might have an answer along the way and they might be good enough to respond.  See, I believe if we all work together to help each other then, most of the big problems can get solved much easier and much, much cheaper.

Do you want to try?

Health Care Mandate and the Commerce Clause (Part 4)

The patient protection and affordable care act purchase mandate –
A four-part series on the relation and effects of the Commerce
Clause to Health Care

By: Thomas W. Loker

The following is the last segment of a four-part series where author, Tom Loker, explores the impact of the Commerce Clause on Obama-Care.

Image by Author

PART FOUR: A Time for a Fresh Look

In the last article, Sliding Down the Slope, we discussed how continuing court decisions and additional legislations have continued to push us further and further down the slope of federal oversight and control of increasingly larger parts of our daily lives. We also looked at how our historical interpretation of the commerce clause has muddied the water as to where the responsibility of the states to regulate our actions ends and responsibility federal government begins. Now, let’s look at this, from an everyday person’s perspective, as to what this may mean related to the current debate over the constitutionality of the PPACA mandate for all to purchase insurance.

 Who’s Right?

However, going back to the issues the framers were attempting to protect against, is it consistent with the framers view that the expansion of liability, as it is promulgated under this act, should so far abrogate personal responsibility as to the outcome of bad choice and bad behavior? Merely arguing that there is some benefit to a consumer does not make the clause relevant. The original expansion argument under Filbern that any commerce can be derived to be interstate commerce no longer seems to be a reasonable inference. Intrastate commerce itself is not innately subject to federal jurisdiction. The principle motivation to protect the consumer is not, in-and-of-itself, sufficient justification to regulate intrastate commerce, nor does it immediately give rise to the notion that all commerce is interstate.

The issue of the application of the Commerce Clause related to PPACA is even more muddled in that one of the principled arguments against this legislation is that it does not open the state-centered administration of health insurance nor does it provide an open and competitive interstate market. Most, if not all states, specifically regulate insurance provided within their borders. The inability of consumers to purchase insurance plans across state lines itself should stave off the argument that this is in some way per se interstate commerce and subject to the clause. The historical Filbern argument is even more difficult to rationalize in the absence of a transportable open state policy mandate.

Intrastate Regulation and Fairness

A reach to enforce the mandate for purchase of insurance under the auspices of the Commerce Clause is a hard one, indeed, in that the benefits to consumers that could be argued in the justification to impinge individual freedoms and economic liberties for the greater good are lost when the purchase itself is confined within intrastate regulation. Effective argument can only be made based on interstate availability of insurance whereby the policies available across the state line are comparable in standard of fees and services provided and transportable from state to state after purchase. An item, good, or service that is purchased in, and only is consumable, within one state and is subject only to the regulations of the state where the service was purchased and consumed in no way logically rises to become interstate. Further, any argument that attempts to provide nexus for an interstate affect, as in the case of Filburn, should be deemed to interpretation in the same manner as was done in Lopez.

A Voice Speaks Out

Specifically in relation to the Commerce Clause; let us agree with Justice Kennedy and walk a slow and careful path. In every case possible, let us demur to the authority of the state and the preservation of individual rights and liberties.

Finally, most recently in hearings of the Judiciary Committee relating to the debate for the need of tort reform legislation pursuant to the PPACA debate, one congressman, who shall remain nameless, while arguing why Tort reform was not necessary for the federal government to consider, made the following argument: He stated that in his long history as a strong states’ rights advocate, he had never seen an instance where health care was provided in a clinical setting and where the clinic existed simultaneously in two states, or between the borders of two states. As such, the provision of care was always done within the border of one state and therefore could not be interstate. The congressman further stated that if the person received care in one state, while a resident of another state, and that the care was provided under the licensure, regulations and authority of the state where the service was provided, that this was still no more interstate commerce than any other commercial action as prosecuted within a state on a daily basis.

Clearly, the evolution of the argument of the Commerce Clause, as providing a basis for regulations governing protection to consumers, can from time to time provide a broad and expedient method to justify such federal powers; these powers are innately the proverbial slippery slope. The framers carefully crafted the Constitution to preserve individual liberties and freedoms above all others. To allow expansion of federal powers under the aegis of the Commerce Clause, which has happened over the past few hundred years, is one of the more dangerous areas of law we have today. As such, full and unfettered caution must ensue.

The Judge Steps Up

Justice Kennedy wrote,

“[T]he Court as an institution, and the legal system as a whole, have an immense stake in the stability of our Commerce Clause jurisprudence as it has evolved to this point. Stare decisis operates with great force in counseling us not to call into question the essential principles now in place respecting the congressional power to regulate transactions of a commercial nature. That fundamental restraint on our power forecloses us from reverting to an understanding of commerce that would serve only an 18th century economy, dependent then upon production and trading practices that had changed but little over the preceding centuries; it also mandates against returning to the time when congressional authority to regulate undoubted commercial activities was limited by a judicial determination that those matters had an insufficient connection to an interstate system.”

Let us agree with Justice Kennedy and walk a slow and careful path. In every case possible, let us demur to the authority of the state and the preservation of individual rights and liberties. I also suggest we only allow federal regulation when such regulation is meant to provide a mechanism by which it can normalize controls on behalf of consumers among states; where interstate commerce requires only federal control for solution or provision of benefit; or where it is necessary to regulate the actions among the states, not among or between the citizens of the states. Let us be mindful that the actions of the states themselves will not harm the public good or unfairly impost taxes, duties or levies between the states or with other nations or Indian tribes.

This treatise, outlied in these four articles, is just one lay person’s read of this issue. If we cannot explain it to every man and woman. Perhaps the reach is simply too far!

Please remember to post a comment below.  If you like the article please let others know about it!

Consider a Mugwump

To those that know me, I am clearly a conservative, also seemingly staunchly Republican.  But I harbor an inner secret – a secret that I share with a number or Americans that have gone before – perhaps well before.  Americans like:
Image from Wikipedia

I am a Mugwump!  What is a mugwump?  Well you need to let historical records be your guide, not modern interpretation.  If you use Wikipedia, where I got the image I use in this piece, you would come to the conclusion it was a bunch of Republicans who betrayed their party to vote for a democratic candidate.  In much of the modern literature, you will see a similar characterization.  You need to go back and read contemporaneous descriptions.

While it is true the name was applied to those Republications like Mark Twain (Samuel Clemmons) who felt the corruption of then Republican presidential candidate James G. Blaine in 1884, was beyond their limits and instead they campaigned and voted for Grover Cleveland.  Soon, this movement rapidly began to encompass members of both political parties deciding to vote the best man as opposed to the party line.  The most notable Democratic rise of “mugwumpery” was during the election of Teddy Roosevelt in 1901.

Why do I think we need more mugwumps today?  Perhaps, it is the constant cry for political purity I am reacting to.  I find myself, more and more, irritated by those seeking their political solace in the wrapping of party purity.  Party purity is always a much easier choice – isn’t it?  Simply swallow the syrup and be content with your choice.  If you do that little thing, we will assure you that you will get exactly what we, I mean you want.  No worries!  We will take care of it all.  Don’t pay any attention to the man behind the curtain.

This has worked so well for both parties throughout my lifetime, most people can’t contemplate any other way.  The divisions in ideology have gotten progressively further and further apart!  There is one problem – it’s never worked for me!

Mugwump Revelation #1

I voted for Jerry Brown…  There I said it, although I have said it before as well.  I voted for Jerry, because I have come to know him personally and professionally and his actions undermined the convenient image I allowed to be crafted by the media of “Governor Moonbeam” many years before.  I found him refreshingly pragmatic, dedicated, committed to concepts much larger than himself and highly principled.  Most importantly, I learned I could trust that he would do as I expected – not always as I want.  That is for me, and should be for all of us, highly prized in a politician.

Mugwump Revelation #2

I consider Don Perata (the President Pro Tempore emeritus of the California Senate) a good friend.  If I had been a resident of Oakland, I would have voted for him as well – for the same reasons.  I have found him to be highly dedicated, pragmatic and committed to issues bigger than himself as well.  Like Jerry, he is – from my viewpoint- predictable and willing to listen and assimilate contra-posing viewpoints.

So, I have been damned and ridiculed by some for these positions, but I feel I am a stronger man for it and more importantly I feel we are a stronger California and country as well.  I am fortunate that I was raised to have good self esteem, and a strong personality so I don’t have a problem saying scr– them to those who have attacked me on this front.  Like Twain, I will pick who I feel is the best person to fulfill the task in  front of them, regardless of party and opposing ideology.

Sure there are some ideological positions that are selection points but they are not all inclusive.  Now, I simply have become able to look deeper at the candidate and find out where we agree and focus there as opposed to vilifying where we disagree.

I shout – I am a mugwump – and I am proud!

More should be mugwumps, in my opinion.  If we had more mugwumps we may have less, and more effective government because ideological pandering would no longer be profitable.

So, in the end I ask you: Consider a mugwump!  Perhaps you have an inner mugwump yearning to be free!