A week or so ago, I highlighted a story about the possibility that Democrats were going to tax your employee health care benefits (after all, those among the 95% who are getting a tax cut have to have something to spend it on) and I was assured this particular plan comes up all the time and never gets out of committee. Well it appears those assurances of nothing to worry about were premature. The idea may not only get out of committee this time, but be signed into law as well:
The Obama administration is signaling to Congress that the president could support taxing some employee health benefits, as several influential lawmakers and many economists favor, to help pay for overhauling the health care system.
So you’ll pay taxes on your private health benefits to pay for health benefits for others, while government tells you how expensive your private coverage is and how they can run it much more cheaply and efficiently if only you’ll pitch in and pay for it.
Question: If taxes on your health care benefits are going to pay for a governmental health care system overhaul, and one assumes the purpose of the overhaul is to bring more and more of the health care system under governmental control, how will government “pay” for all of this in the future when you no longer have private health care benefits to tax?
Read the whole article. It doesn’t even take a double digit IQ to spot the law of unintended consequences laying in the weeds just salivating over this one.
From an email.
Why? Because I think it is funny. And yes, I understand that we are still capable of and do teach math well.
But as I chuckled about it, this bit of humor is more about our priorities and some cultural issues than math.
1959-2009 (in the USA )
Last week I purchased a burger at Burger King for $1.58. The counter girl took my $ 2 and I was digging for my change when I pulled 8 cents from my pocket and gave it to her. She stood there, holding the nickel and 3 pennies, while looking at the screen on her register. I sensed her discomfort and tried to tell her to just give me two quarters , but she hailed the manager for help. While he tried to explain the transaction to her, she stood there and cried. Why do I tell you this? Because of the evolution in teaching math since the 1950s:
1. Teaching Math In 1950s
A logger sells a truckload of lumber for $100. His cost of production is 4/5 of the price. What is his profit ?
2. Teaching Math In 1960s
A logger sells a truckload of lumber for $100. His cost of production is 4/5 of the price, or $80. What is his profit?
3. Teaching Math In 1970s
A logger sells a truckload of lumber for $100. His cost of production is $80. Did he make a profit?
4. Teaching Math In 1980s
A logger sells a truckload of lumber for $100. His cost of production is $80 and his profit is $20. Your assignment: Underline the number 20.
5. Teaching Math In 1990s
A logger cuts down a beautiful forest because he is selfish and inconsiderate and cares nothing for the habitat of animals or the preservation of our woodlands. He does this so he can make a profit of $20. What do you think of this way of making a living? Topic for class participation after answering the question: How did the birds and squirrels feel as the logger cut down their homes? (There are no wrong answers, and if you feel like crying, it’s ok.)
6. Teaching Math In 2009
Un hachero vende una carretada de maderapara $100. El costo de la producciones es $80. Cuanto dinero ha hecho?
President Obama and VP Biden are going to be watching you:
Obama and Biden both gave stern warnings yesterday about misuse of stimulus funds. “If we see money being misspent, we’re going to put a stop to it,” Obama told a gathering of state officials at the White House. How? Obama says “we will call it out and we will publicize it.” Biden, meanwhile, scolded: “If we don’t get this right, folks, this is the end of the opportunity to convince Congress that anything should go to the states.”
Of course, these were words spoken to representatives of states getting “stimulus” money.
Lost in the shuffle is the fact that there is no one to shout “BS” to the whole scheme and declare it all “misspent” money. A $787 billion dollar social spending scheme isn’t money “misspent?” Hah!
But other than that, I think Earl Devaney provides us with the ground truth about this upcoming spending debacle:
The chief watchdog for spending from the $787 billion stimulus package says it’s guaranteed there will be waste and fraud.
Earl Devaney, tapped by President Obama to track the giant spending plan, also said it will be at least a year before the government gets recovery.gov, the Web site the administration has touted as a key part of its transparency, up and running properly.
“I’m afraid that there may be a naive impression that given the amount of transparency and accountability called for by this act, no or little fraud will occur.
A “naive impression?”
Heh … nah, you don’t say?
The word “naive” seems to describe a lot of what is going on right now with the Obama administration.
Is homegrown terrorism the next problem? That’s the question being asked by some:
There is an increasing threat of homegrown terror stemming from segments of a deeply isolated and alienated Somali-American community, a U.S. Senate committee hearing concluded Wednesday.
The hearing, conducted by the Senate Homeland and Governmental Affairs Committee, focused on the attempted recruitment of young Somali-American men by al-Shabaab, “a violent and brutal extremist (Somali) group” with significant ties to al Qaeda, according to the U.S. State Department.
“Over the last two years, individuals from the Somali community in the United States, including American citizens, have left for Somalia to support and in some cases fight on behalf of al-Shabaab,” noted the committee’s chairman, Sen. Joseph Lieberman, I-Connecticut.
Al-Shabaab — also known as the Mujahedeen Youth Movement — was officially designated as a terrorist organization by the U.S. government in March 2008.
If you’ve been following this, Somali youths from all over the US have been “disappearing” to end up half-way around the world engaged in war in Afghanistan. This is pretty much the same model as has affected the UK (although their particular group consists mostly of Pakistanis). The obvious next step is, instead of radicalizing them and exporting them to far off places, to do what was done with the 7/7 bombers in the UK and do it here.
The recruitment is made easier by the apparent isolation of the Somali community. The extremists pick off clusters of dissatisfied youth and radicalize them. The apparent distance between the Somali culture and the American culture are so vast that some simply cannot overcome that – or so the theory goes.
This is a situation which bears very close watching (and, hopefully some remedial effects brought on by positive intervention) – this is where AQ could put together a group that could travel thorough America with little difficulty and help foment an attack or attacks.
On another terrorist front, we already have home-grown terrorists (besides William Ayers) operating here:
The recent fire-bombing of a university professor’s car here appears to be part of a trend of animal-rights activists targeting the personal lives of researchers, rather than just the labs or companies where they work. The idea is to scare the scientists into reconsidering using animals in their research work.
Despite tightening laws, California saw an uptick in attacks last year with 21 reported incidents – of 36 nationwide – ranging from vandalism to firebombs, mostly targeting University of California researchers, according to data compiled by the Foundation for Biomedical Research. By contrast, the state saw just four or five such incidents the previous two years.
“The tactics [of animal-rights activists] have changed. They’ve gotten very personal,” says Frankie Trull of the National Association for Biomedical Research, an organization that advocates for the responsible use of animals in research.
The latest incident occurred early last Saturday outside the Westwood residence of Dr. David Jentsch, a neuroscientist at University of California, Los Angeles (UCLA). The professor’s vehicle was engulfed in flames and destroyed, though no one was hurt.
If terrorism is “the calculated use of violence (or the threat of violence) against civilians in order to attain goals that are political or religious or ideological in nature; this is done through intimidation or coercion or instilling fear”, these acts fit.
So while we may have an international brand of terrorism on the rise, we already have our own domestic terrorists at work on the West Coast. My guess is, though, they’re considered a “law enforcement” problem, not one of terrorism.
Mark Sanford, the governor of South Carolina, said this the other day about the possible effects of all of the spending the Obama administration was doing and planning:
“What you’re doing is buying into the notion that if we just print some more money that we don’t have, send it to different states — we’ll create jobs,” Sanford said. “If that’s the case, why isn’t Zimbabwe a rich place?… Why isn’t Zimbabwe just an incredibly prosperous place. ‘Cause they’re printing money they don’t have and sending it around to their different — I don’t know the towns in Zimbabwe but that same logic is being applied there with little effect.”
A little oversimplistic, but this is “sound bite nation” so you have to condense. In effect his point is true to the extent it goes, and the example is a good and valid one, since Zimbabwe is printing money as fast as it can add zeroes to its demonimations. By now, the hyper-inflation it is undergoing from doing so should be well known to people versed in current affairs.
Unless, of course, you want to make a racial thing out of it. Rep. James Clyburn, Democratic Majority Whip, reacts to Sanford’s lesson and example of Zimbabwe:
“For him to compare the president of this country to Mugabe. … It’s just beyond the pale,” said Clyburn, who has sparred with Sanford over the Republican’s refusal to accept all the state’s stimulus funding.
“I’m sure he would not say that, but how did he get to Zimbabwe? What took the man to Zimbabwe? Someone should ask him if that’s really the best comparison. … How can he compare this country’s situation to Zimbabwe?”
Of course the “how” is fairly simple – if what is being touted as a solution here and was touted as a solution there, then Zimbabwe should be in great economic shape right now. But Clyburn would rather make a racial thing out of it. Obviously Sanford could have used Wiemar Germany of the ’30s, but it isn’t as relevant today as the case of Zimbabwe. And, he could have also used Venezuela. But Venezuela isn’t quite the basket case Zimbabwe is. Nope, in terms of a current example of what might happen, in terms of hyper-inflation from artificially pumping up he money supply, Zimbabwe is as good as it gets.
“Rep. Clyburn always plays the race card,” shot back Sanford spokesman Joel Sawyer, who said his boss has also compared the stimulus to failed government policies in Germany and Argentina. “This policy will result in hyper-infaltion. … [Clyburn] is ripping off the people he purports to represent.”
Round 2 to follow.
Or perhaps a better way to say that is this is a typical reason Democrats aren’t well thought of, for the most part, by the military community:
Several veterans groups “are lashing out” at the Obama administration over a policy proposal they say would “dramatically alter” how the Department of Veterans Affairs handles health insurance claims for veterans, The Hill reports. Under the policy, which is included in President Obama’s fiscal year 2010 budget proposal, VA would bill health insurers for treatment of injuries and conditions sustained as a result of veterans’ military service. Currently, VA covers those costs and bills health insurers only for treatment for conditions unrelated to veterans’ military service.
The “you got it, you pay for it” method of saving money on the back of wounded vets. This after all the rhetoric and promises about taking better care of our veterans than ever before because they’ve “earned it”?
Of course, as soon as this trial balloon is discovered, the mealy mouth nonsense begins:
According to OMB spokesperson Tom Gavin, although concerns about policy changes in coverage are understandable, no official proposal is on the table. He said, “The details of the VA budget are being worked out right now and the details won’t be available until April,” adding, “The administration is committed to providing the VA with substantial resources to provide for our veterans” (Tiron, The Hill, 3/9).
And, of course, with the federal government spending money on social issues disguised as “stimulus”, followed by a porked up spending bill and now an almost 4 trillion dollar budget, where is the one place that they decide they should try and save money?
On the backs of wounded vets.
Sorry, but that cost was prepaid by the terms of their service and wounds. But obviously, more interested in social issues within the military than keeping promises, the administration begins the ground work for backing out on another of its promises (to their credit, some Democrats, such as Sen. Patty Murray (D-WA), have declared such a proposal would be “dead on arrival” should it make it into the budget – a tip of the hat to her).
A group of economists asked to assess the efforts of both Obama and Geithner were none too impressed:
U.S. President Barack Obama and Treasury Secretary Timothy Geithner received failing grades for their efforts to revive the economy from participants in the latest Wall Street Journal forecasting survey.
The economists’ assessment stands in stark contrast with Mr. Obama’s popularity with the public, with a recent Wall Street Journal/NBC poll giving him a 60% approval rating. A majority of the 49 economists polled said they were dissatisfied with the administration’s economic policies.
On average, they gave the president a grade of 59 out of 100, and although there was a broad range of marks, 42% of respondents rated Mr. Obama below 60. Mr. Geithner received an average grade of 51. Federal Reserve Chairman Ben Bernanke scored better, with an average 71.
The big criticism has to do with “overpromising and underdelivering”:
[E]conomists’ main criticism of the Obama team centered on delays in enacting key parts of plans to rescue banks. “They overpromised and underdelivered,” said Stephen Stanley of RBS Greenwich Capital. “Secretary Geithner scheduled a big speech and came out with just a vague blueprint. The uncertainty is hanging over everyone’s head.”
The Hill reports that lack of progress is starting to really concern some Democrats in Congress:
Members of Congress and old political hands say [Obama] needs to show substantial progress reviving the economy soon.
Some Democrats have started to worry that voters don’t and won’t understand the link between economic revival and Obama’s huge agenda, which includes saving the banking industry, ending home foreclosures, reforming healthcare and developing a national energy policy, among much else.
While lawmakers debate controversial proposals contained in the new president’s debut budget — cutting farm subsidies, raising taxes on charitable contributions, etc. — there is a growing sense that time is running out faster than expected.
Democrats from states racked by recession say Obama needs to produce an uptick by August or face unpleasant consequences. Others say that there is more time, but that voters need to see improvement by the middle of next year.
The most optimistic say Obama and Democrats in Congress will face a political backlash unless the economy improves by Election Day 2010.
Of course, as mentioned previously, it becomes increasingly clear that he, Geithner and others really don’t know what to do about all of this. And careful and objective analysis of the money promised in both the bailout and stimulus see the former not accomplishing the bailout hoped for and the latter not being at all properly targeted to stimulate the job creating, wealth producing private sector.
And Democrats are right – the sausage making legislative process is of little interest to most Americans, especially those in trouble. They want results and they want them now. He promised to fix it and now they are going to expect results. There was no reality in his promises so it is rather difficult to understand why the American public which elected him should suddenly understand the reality of the situation. He promised, they took him up on it, now he has to deliver.
That’s the downside of actually winning after making a raft of promises that reality won’t let you keep.
This is just pathetic:
President Barack Obama signed a $410 billion spending bill Wednesday that includes thousands of pet projects inserted by lawmakers, even as he unveiled new rules to restrict such so-called earmarks.
At the same time, after Democrats criticized former President George W. Bush’s signing statements, Mr. Obama issued one of his own, declaring five provisions in the spending bill to be unconstitutional and nonbinding, including one aimed at preventing punishment of whistleblowers.
Presidents have employed signing statements to reject provisions of a bill without vetoing the entire legislation. Democrats and some Republicans have complained that Mr. Bush abused such statements by declaring that he would ignore congressional intent on more than 1,200 sections of bills, easily a record. Mr. Obama has ordered a review of his predecessor’s signing statements and said he would rein in the practice.
“We’re having a repeat of what Democrats bitterly complained about under President Bush,” said Sen. Arlen Specter (R., Pa.), who drafted legislation to nullify Mr. Bush’s signing statements.
The president said the spending measure should “mark an end to the old way of doing business.” His proposals, seconded by the House Democratic leadership, followed days of attacks by Republicans — and some Democrats — over the spending for local projects tucked into the bill.
This is an example of what I was talking about yesterday when I said Obama’s first 50 days was marked by a total lack of leadership.
Here was a chance to lead. After railing on the campaign trail against earmarks and wasteful spending, he signs a bill full of earmarks and wasteful spending and then, like a mom who yells, “boys, quit it” but never moves to enforce her words, Obama says “this should end the old way of doing business”. Really?
What’s the penalty? Another lecture after the signature? Had Obama vetoed the bill, he’d have sent the strong message necessary that his assumption of the presidency marked the end of “business as usual”. Instead he caved and created a fiction that this was the “old administration’s” business and therefore exempt from his pledge.
Talk about BS on a stick. If a president signs something into law his watch, it is his and not anyone else’s. To pretend anyone would actually believe that glib nonsense is incredible. But much of the MSM dutifully reported it as such.
He also pushed the fiction that if this bill wasn’t signed, the government would shut down. No it wouldn’t. Congress simply passes a continuing resolution which funds government at last year’s levels. But that’s not what he or Congress wanted. They wanted the 9,000 earmarks and the 8% increase in spending as well – thus the fiction about it being both necessary and last year’s business.
Then to put the proverbial cherry on the dissembling rhetorical sundae, Obama issues his own signing statement after making a press event about dissing Bush’s use of them.
The Drug War along the Mexican-US border is getting some high level consideration:
President Obama weighed in Wednesday on the escalating drug war on the U.S.-Mexico border, saying that he was looking at possibly deploying National Guard troops to contain the violence but ruled out any immediate military move.
“We’re going to examine whether and if National Guard deployments would make sense and under what circumstances they would make sense,” Obama said during an interview with journalists for regional papers, including a McClatchy reporter.
“I don’t have a particular tipping point in mind,” he said. “I think it’s unacceptable if you’ve got drug gangs crossing our borders and killing U.S. citizens.”
Already this year there have been 1,000 people killed in Mexico along the border, following 2008′s death toll of 5,800, according to federal officials who credit Mexican President Felipe Calderon for a crackdown on drug cartels.
But the spillover on the border — for example, to El Paso from neighboring Ciudad Juarez — has created a political reaction.
In a recent visit to El Paso, Texas Gov. Rick Perry called for 1,000 troops to protect the border.
Obama was cautious, however. “We’ve got a very big border with Mexico,” he said. “I’m not interested in militarizing the border.”
I agree with his point about not “militarizing the border”. And I certainly understand the desire to send in help to quell and control the violence that spills over the border. But my question is, how will the troops be mobilized? The only way Obama can send in National Guard troops as I understand it is by federalizing them. Then it becomes a matter of their role. The Posse Comitatus act prevents federal troops from being used in a law enforcement role except on federal property (like Washington DC). So he’s limited in the role to which he can commit any troops even if he wanted too.
It would seem instead, that perhaps the best way to proceed in this case, if the desire is to send NG troops to the border to help in law enforcement, is for the Governors to mobilize and send them while letting active military lend logistical, intel and perhaps advisory support. But unless they’re sent in a war-fighting mode, there isn’t much of a role for federal troops in this case.
UPDATE: Commenter Jay Evans notes a recent change in the law which may effect this (the John Warner National Defense Authorization Act for Fiscal Year 2007 (H.R. 5122)):
SEC. 1076. USE OF THE ARMED FORCES IN MAJOR PUBLIC EMERGENCIES. (a) USE OF THE ARMED FORCES AUTHORIZED.— (1) IN GENERAL.—Section 333 of title 10, United States Code, is amended to read as follows: ‘‘§ 333. Major public emergencies; interference with State and Federal law ‘‘(a) USE OF ARMED FORCES IN MAJOR PUBLIC EMERGENCIES.— (1) The President may employ the armed forces, including the National Guard in Federal service, to— ‘‘(A) restore public order and enforce the laws of the United States when, as a result of a natural disaster, epidemic, or other serious public health emergency, terrorist attack or incident, or other condition in any State or possession of the United States, the President determines that— ‘‘(i) domestic violence has occurred to such an extent that the constituted authorities of the State or possession are incapable of maintaining public order; and ‘‘(ii) such violence results in a condition described in paragraph (2); or ‘‘(B) suppress, in a State, any insurrection, domestic violence, unlawful combination, or conspiracy if such insurrection, violation, combination, or conspiracy results in a condition described in paragraph (2). ‘‘(2) A condition described in this paragraph is a condition that— ‘‘(A) so hinders the execution of the laws of a State or possession, as applicable, and of the United States within that State or possession, that any part or class of its people is deprived of a right, privilege, immunity, or protection named in the Constitution and secured by law, and the constituted authorities of that State or possession are unable, fail, or refuse to protect that right, privilege, or immunity, or to give that protection; or
‘‘(B) opposes or obstructs the execution of the laws of the United States or impedes the course of justice under those laws.
‘‘(3) In any situation covered by paragraph (1)(B), the State shall be considered to have denied the equal protection of the laws secured by the Constitution.
‘‘(b) NOTICE TO CONGRESS.—The President shall notify Congress of the determination to exercise the authority in subsection (a)(1)(A) as soon as practicable after the determination and every 14 days thereafter during the duration of the exercise of that authority.’’.
(2) PROCLAMATION TO DISPERSE.—Section 334 of such title is amended by inserting ‘‘or those obstructing the enforcement of the laws’’ after ‘‘insurgents’’.
It looks like it now depends on the classification of the problem.
Alan Greenspan has a piece in the Wall Street Journal today which essentially casts him as the Pontius Pilate of the financial crisis. Or, to sum it up rather sucinctly, “it wasn’t my fault”. You’re welcome to read through it and agree or disagree. However, the imporant point I think that should be taken from the Greenspan piece are the last two paragraphs:
Any new regulations should improve the ability of financial institutions to effectively direct a nation’s savings into the most productive capital investments. Much regulation fails that test, and is often costly and counterproductive. Adequate capital and collateral requirements can address the weaknesses that the crisis has unearthed. Such requirements will not be overly intrusive, and thus will not interfere unduly in private-sector business decisions.
If we are to retain a dynamic world economy capable of producing prosperity and future sustainable growth, we cannot rely on governments to intermediate saving and investment flows. Our challenge in the months ahead will be to install a regulatory regime that will ensure responsible risk management on the part of financial institutions, while encouraging them to continue taking the risks necessary and inherent in any successful market economy.
Those words reminded me of the quote I saw in business columnist Tom Oliver’s piece today in the Atlanta Journal Constitution:
“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” — F.A. Hayek
Any columnist who starts with a Hayek quote is guaranteed to get my attention. And I’ve come to enjoy Oliver’s columns. However, reviewing Greenspan’s advice and admonitions in those two paragraphs, juxtaposed against the simple and elegant truth of Hayek’s statement you find yourself back in the outback watching that big red kangaroo headed for a collision with the car. It is inevitable, there’s nothing you can do about it, they can’t or won’t hear your warnings and all you can do is watch – and cringe.
Frankly, as we watch the machinations of government and listen to their declarations, we have begun to understand that for the most part, those in charge of all of this haven’t a clue. As Oliver states:
Far from demonstrating the demise of free enterprise, this long-running, deepening recession is revealing the limitations of government.
Government, in its various yet powerful incarnations, has been offering one fix after another since August 2007.
The more the Fed and Treasury have tried, the less sure they seem and the more nervous the money makers have become.
It’s understandable that folks would look to the new administration for new ideas. So it’s harder than usual to acknowledge that the ideas are in fact pretty old and, having been tried, found wanting.
Whatever one may think about the so-called stimulus, it’s too easily deconstructed as pork and policy initiatives.
And if it’s still debatable whether to nationalize the financial industry, the move to nationalize health care, education and energy can hardly be disguised as economic recovery programs.
It is understandable that those who derive their power from government would use this recession as an excuse to further government’s reach. But they act as if government has been absent — as if they’ve been absent — from the role of regulator and legislator.
He’s precisely right – it wasn’t a problem with lack of regulation or lack of legislation. It was a lack of proper regulatory oversight and a willful decision by legislators to ignore the building crisis coupled with government distorting the market and actually incentivizing risk taking far beyond that which is prudent that led us here. And now that they have us in this position, all of them, Greenspan included, are engaged in a flurry of finger-pointing and name calling at every one but the right ones. This wasn’t a crisis which happened in just the last 6 months or 8 years. This one has been building for a while.
“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” — F.A. Hayek
We had Democrats in charge and then we had Republicans. Again and again.
Both endorsed and encouraged the subprime sleight-of-hand. Both appointed heads of the regulatory agencies that could’ve stopped the poison seeping through our banks’ balance sheets. Both allowed gamblers to hedge and swap derivatives on top of derivatives that no one can explain and that are proving far more debilitating than the debacle they were insuring against.
Freddie Mac and Fannie Mae became toxic assets of the government while doing the bidding of congressmen who now act like the piano players in a brothel.
The Federal Reserve proved to be anything but reserved, instead stoking a fire that burned us all.
These were not the result of idle hands of government, but rather deliberate deeds that created false markets with inflated credit while turning a blind eye to those who finance election results.
Oliver’s characterizations are dead on – and he’s nailed both the fed and the Congress. The most irritating thing to me about this whole mess, other than the obvious huge loss of wealth, is the success those who were responsible for writing the rules, laying out the playing field and calling the game are escaping both blame and punishment for what they’ve brought about. That toad Barney Frank having the chutzpa to talk about prosecuting those who were guilty of getting us in this mess still astounds me. If anyone should be undergoing such prosecution right now, it is he and numerous other congressmen and women, both past and present.
Oliver concludes as follows and I can’t help but say a hearty “amen” to what he has to say:
We periodically recoil in horror at government’s failure to protect foster children or care for veterans or the mentally ill. But then we turn around and assume government will perform better in areas more complicated.
Why does the failure of government so often lead so many to believe we need more government?
Like the hair of the dog for the alcoholic, it may calm the trembling hands for a moment but it inevitably leads to another spree and another hangover.
We’re headed into a “or worse” moment. No one in government is going to listen to Alan Greenspan’s admonitions or believe Tom Oliver’s brief accounting of the history of this crisis. Instead we’re going to see precisely the opposite happen – more regulation, more strings, more intrusion, more control. And, as Hayek said, we’ll again see “how little [men] really know about what they imagine they can design.”