Questions and Observations

Free Markets, Free People

Analyzing Last Night’s Vote

Michael is of the opinion that last night’s results tell us fiscal conservatism is back in vogue. I think there’s certainly a hint of that in the VA win. What is certainly true is voters in VA rejected the Democratic message. And more remarkable was the fact that they rejected it down ticket as well – a sweep for the Reps. Not only that, they picked up majorities in heavily Democratic suburbs.  The size of the victory was stunning, to say the least.

But was it a rejection of the Democrat’s principles, an embrace of fiscal conservatism, a repudiation of the Obama administration or simply a reflection of the unease people feel with the economy and a belief Republicans handle that better? Or was it a little of all of those things?

What I’m driving at is both sides have a tendency to read too much into electoral wins, take off on a tear and find themselves on the losing side the next time around. The VA win, of all of the votes last night, was the biggest win for the GOP. But they need to temper their assessment so they, like the Democrats have, don’t overreach.

NJ, on the other hand, was a horse of a different color – or should I say donkey. Corzine had abysmal poll numbers well in front of the election. One of the biggest concerns among voters there was the corruption in government – it was rampant. And interestingly, the Republican candidate for governor, Chris Christie, had lead the fight against corruption, quite successfully I might add. So I’m not so sure that NJ, while still a huge win for the R’s, was so much a repudiation of Democrats and their principles as it was a repudiation of a specific incumbent. Again, the GOP should tread carefully to avoid reading too much into the NJ win.

That, of course, brings us to NY-23. The lesson in NY-23 can be summed up in one sentence, uttered last night by Brit Hume: “That’s why you have primaries”. The story here isn’t necessarily that the Democrat won. Given the disarray on the Republican side, I’m surprised it was as close as it was. Instead, it is about how badly the establishment GOP screwed up their selection process. Someone needs to tell them that the days of backroom selections which don’t reflect the desire or mood of the constituency were over a century ago. Had they had their primary and Hoffman won then it is hard to believe that the same level of support from the NRCC with no Scozzafava on the ballot siphoning off 5% of the vote (or campaigning for the Democrat) wouldn’t have yielded a much different outcome. In other words, establishment Republicans blew the election, not the activists. The good news for Republicans is they get to do this again in NY-23 in 2010. Let’s see if they can do a better job this next time.

All in all, a pretty decent night for the party that was in the wilderness not 6 months ago. But caution in interpreting the results should indeed be their watchword. In my opinion, establishment GOP types have not yet quite figured out the conservative insurgency which is now going on among them (and reflected in the Tea Parties, etc). Look for other challenges to Scozzafava-type candidates to continue in the future. They need to understand that much of their base has already rejected the usual approach to identifying candidates for office and that part of the base is willing to buck the establishment picks as they did in NY-23. In fact, NY-23, although a loss, will only encourage them.

The last observation I’ll make has to do with so-called independents. Indies went heavily for the GOP in the two governor’s races last night. That, if anything, should worry Democrats. Independents were the swing vote that decided the last presidential election. In a single year, they’ve found at least some Republicans worth their vote.

Additionally, this time it was the Republican base which was motivated. Democratic turnout was much lower in almost all areas of NJ and VA. And, unlike 2008, the young reverted to form and stayed home. Those are trends for the GOP to build on. However, as noted, they need to avoid over reaching as they do so.



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Fiscal Conservatism Big Winner Tonight

Landslide victories up and down the ticket in Virginia, a somewhat surprising upset in the Democratic stronghold of New Jersey, and a fine showing (and potential victory?) in upstate New York tonight, all make one thing clear: fiscal conservatism is back. The Republican Party will try to seize the moment as their call to ascendance, but that’s wishful thinking. The real victor tonight is fiscal conservatism. If the GOP doesn’t get on board, then they should expect to be wandering in the wilderness for a little while longer.

With that in mind, let’s think about the NY-23 race for a moment. As I’m writing this, it looks like the results won’t be known for some time. The conservative upstart and darling the grassroots Tea Party movement, Doug Hoffman, is trailing with a majority of the precincts reporting. However, as I understand it the exit polls give him the edge, there are several conservative-leaning precincts that haven’t been counted, and the number of absentee ballots (which won’t be tallied for some time) far outpaces the difference between Hoffman and the Democrat Bill Owens. In short, we probably won’t know the result of this race anytime soon. So be it.

Let’s assume that Hoffman loses. What does that mean? Liberals will point to the fact that, in races where someone was actually sent to Washington and thus could have a direct effect on Obama’s agenda, the Democrats made a clean sweep. GOP old-timers like Newt Gingrich will be quick to chide the base for supporting a third-party candidate thus handing a formerly Republican seat to Pelosi and her crew. Both will be completely wrong.

The idea that Democrats got a clean sweep of DC seats is an interesting spin, but it doesn’t make much sense in the long run. The way that House elections are districted virtually ensures party control of those seats, pretty much by design. That a Democrat wins an election as a Representative of a Democratic district is hardly indicative of anyone’s agenda, much less as a referendum on the latest national policy being rammed down our throats debated in Washington. Moreover, any knowledgeable Governor-elect knows that the health care bills proposed by Congress will be making their lives much more difficlut if passed, simply by virtue of the fact that they all try to pass a good deal of the costs onto the states in order to meet that magical, Obama-approved number of $900 billion. And let’s not forget that the liberal media and the White House itself [Yeah, big dif — ed.] has been distancing itself from the results all this past week. You can’t have it both ways, but don’t think that will stop the libs from trying anyway.

On the GOP side, you can expect the establishment types to aggressively tut-tut the conservative cranks who put the wind in Hoffman’s sails. “Better to have a RINO who supports Boehner for Speaker than a Dem who’s a sure Pelosi vote,” will be the admonishment. “Poppycock!” should be the response. If smaller government and lower taxes are truly the desired goal, then electing someone whom nominally carries the Republican standard but walks and talks like a Democratic duck does not further that aim. Instead, it makes it harder to obtain because, by Newt Gingrich’s logic, the base would have to continue to vote for her regardless of how she actually votes while in office, just to maintain the Republican caucus. In reality, it’s much easier for a conservative base to be energized into voting to unseat a Democrat tax-and-spender than a Republican one. Having Scozzafava in that seat would impede that opportunity.

If, on the other hand, Hoffman pulls out the win against all odds (e.g. running as a third-party candidate, only getting one slot on the ballot to two each for the other candidates), that would be a remarkable and unmistakable victory for fiscal conservatives. To be sure, in my mind, the fact that Hoffman is the candidate whom the Democrat has to beat is already a victory for fiscal conservatism. But an actual electoral victory would be huge. It sends the clear message that Congress’ profligate ways are no longer acceptable, and it almost ensures that ObamaCare, PelosiCare or WhateverCare will never become a reality. That’s because, regardless of what liberal pundits and Democrat mouthpieces say, the politicians who depend on reading the Tea leaves correctly will quickly surmise that voting for the health care monstrosities coming out of Congress is a suicide mission. Self preservation dictates that these savvy solons legislate these monstrosities to a slow, painful death. The same could be said of Cap-and-Trade or any other erstwhile tax bill considered for passage. In the very least, therefor, a Hoffman win means that fiscal insanity is held in low regard for the next election cycle.

So hold your heads up high, pioneers, for the returns tonight strike a harmonious tune. Fiscal conservatism sets the beat, and that symphony sounds sublimely sweet.

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Healthcare bill due in May August November uh, maybe next year

Democrats in the Senate have given some backdoor acknowledgement that the healthcare bill probably won’t be voted on this year.

Despite President Obama’s goal of signing healthcare reform legislation this year — one backed by assurances from congressional Democrats — Senate Democratic leaders Tuesday subtly acknowledged that’s not likely to happen as they started the delicate dance of walking back expectations.

Putting the legislation together has proved exceedingly difficult, and most aides now say there is virtually no way a bill can get to Obama’s desk this year.

This zombie refuses to die, but I suspect tonight’s election results will put a shotgun blast in it. Certainly the closer the 2010 elections loom, the more those healthcare disapproval ratings will matter.

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Corporatists v. Capitalists

This guy is sooooo close to getting it exactly right, and at HuffPo of all places.

When I heard the word “corporatist” a couple of years ago, I laughed. I thought what a funny, made up, liberal word. I fancy myself a die-hard capitalist, so it seemed vaguely anti-business, so I was put off by it.

Well, as it turns out, it’s a great word. It perfectly describes a great majority of our politicians and the infrastructure set up to support the current corporations in the country. It is not just inaccurate to call these people and these corporations capitalists; it is in fact the exact opposite of what they are.

Capitalists believe in choice, free markets and competition. Corporatists believe in the opposite. They don’t want any competition at all. They want to eliminate the competition using their power, their entrenched position and usually the politicians they’ve purchased. They want to capture the system and use it only for their benefit.

The sensible approach would be to recognize the problem and figure out a way to avoid it the best we can. Money always finds a way in, but we can at least be cognizant of the issue and try to combat it as much as possible. We must do this as citizens who care about our democracy, but we must also do it as capitalists.

If he just realized that the answer isn’t “that we watch politicians with a very wary eye”, but instead to make sure that the politicians have as little and diffused power as possible. Without concentrated power, politicians have nothing to sell, including the power to protect big corporations. If there’s nothing to sell, the corporations have nothing to buy for their protectionist schemes and are left to sink or swim in the market just like the rest of us. The end result? More freedom and more free markets.

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Buyer’s Remorse In Iowa

This is the day, one year ago today, that the world was supposed to change with the election of Barack Obama to the presidency of the United States.  Yet, as the New York Times tells us, in Iowa – a heartland state that went for Obama – the reviews of his presidency to this point get decidely mixed reviews.

Take the time to read the article, but what stood out for me were the following:

1. The “blame Bush” response to the problems he’s facing is wearing very thin. If you were wondering what it’s shelf life was, I’d safely guess it expired a couple of months ago.

2. Democrats there are still trying to keep the faith. But it is difficult even though they still think he’s doing a good job. Unfortunately the NYT didn’t bother to ask “with what”. Some do seem to believe he’s changed our image in the world for the better. I’m not sure that’s actually true given some of the situations developing (see Clinton’s latest fiasco in the Middle East, Russia nuking Poland in a simulation after our withdrawal of a defensive missile shield and Iran continuing to manipulate the process while NoKo announces “we have more nukes” – we may be “better liked”, but there isn’t much respect being shown).

3. Those independents and moderate Republicans that supported him seem to have jumped ship. His approval rating in Iowa has dropped from 63% to 54%. And there’s no telling how soft that number is.  There’s also a very big question of whether or not they can be wooed back.

4.  Obama is suffering from the economic woes as would any president.  However, there’s a nagging feeling developing among a number of supporters that he may not be up to the job.   The NYT noted that in several interviews he was described as being “cautious, tentative and prone to blame his troubles on others.” Or as one interviewee noted, he seemed more presidential when he was running than he does now.

I think Iowa reflects what many of his supporters feel – at least those who went “all in” on the “transitional political figure” myth. Instead they’re seeing a product of Chicago politics and a continuation of “politics as usual”. As mentioned there’s an underlying current of deep disappointment, manifested in the remarks about the depth of government’s intrusion, his seeming timidity and his penchant to blame others. And the unsaid criticism that is lurking behind every remark is he doesn’t seem to know how to lead and he may be in over his head.

Ironically, Afghanistan may end up being the make or break moment for his political future. Many Democrats said, in the article, that they don’t want to see an escalation in the war there. With moderate Republicans and independents walking away from him now, he might lose further support – this time among Democrats – with a decision that boosts the number of troops committed there.

It is kind of interesting to those who saw through this fellow and had the temerity to point out that his resume was paper thin and his leadership resume was non-existent that those who willingly blinded themselves to that are ruefully discovering that reality has consequences.  You can ignore it, but it won’t change it.  Unfortunately there’s another reality that isn’t going to change – we’re going to have to live with the consequences of buying into a myth for at least another 3 years.


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The AGW Payoff For Al Gore

His supporters call him a visionary. His detractors call him a con artist.  One thing is certain though, the hype of AGW is making Al Gore a very rich man. And that alone should make people very skeptical of his “cause”.

Few people have been as vocal about the urgency of global warming and the need to reinvent the way the world produces and consumes energy. And few have put as much money behind their advocacy as Mr. Gore and are as well positioned to profit from this green transformation, if and when it comes.

Critics, mostly on the political right and among global warming skeptics, say Mr. Gore is poised to become the world’s first “carbon billionaire,” profiteering from government policies he supports that would direct billions of dollars to the business ventures he has invested in.

And, in fact, the NYT describes just such a venture that will now pay off for Gore and his partners. You remember those “smart grid” grants handed out a week or so ago?

The company, Silver Spring Networks, produces hardware and software to make the electricity grid more efficient. It came to Mr. Gore’s firm, Kleiner Perkins Caufield & Byers, one of Silicon Valley’s top venture capital providers, looking for $75 million to expand its partnerships with utilities seeking to install millions of so-called smart meters in homes and businesses.

Mr. Gore and his partners decided to back the company, and in gratitude Silver Spring retained him and John Doerr, another Kleiner Perkins partner, as unpaid corporate advisers.

The deal appeared to pay off in a big way last week, when the Energy Department announced $3.4 billion in smart grid grants. Of the total, more than $560 million went to utilities with which Silver Spring has contracts. Kleiner Perkins and its partners, including Mr. Gore, could recoup their investment many times over in coming years.

How very, uh, convenient. Anyone who doesn’t believe Gore’s connections inside government at very high levels isn’t paying off just isn’t paying attention. Gore has pushed AGW vigorously for years and until recently when the science he based his pitch on has been found seriously wanting, he’s pretty much had it his way. Governments around the globe swallowed it whole and the movement has grown into a veritable religion.

Gore’s reaction to the skepticism about his profiting off what many, myself included, consider a gigantic scam?

Mr. Gore says that he is simply putting his money where his mouth is.

“Do you think there is something wrong with being active in business in this country?” Mr. Gore said. “I am proud of it. I am proud of it.”

There’s absolutely nothing wrong with being active in business in this country, Mr. Gore – unless of course it’s the coal business or the lumber business or the nuclear energy business, or the oil business. Or for that matter the pharmaceutical business, health insurance business or financial sector. Then there’s the car business …

Well you get the idea. What Mr. Gore is actually proud of is creating a business that’s a politically popular one and stands to suck in untold piles of money based on a scam that would make Bernie Madoff green with envy. Because Al Gore has created and is engaged in a “legal” ripoff the size of which the world has never seen. Of course he’s “proud of it”.



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111 New Bureaucracies In House Health Care Bill

Hidden within the murky depths of the 1990 page health care insurance reform bill is a bonanza of new government bureaucracies among the numerous agencies, programs, funds and “corps”.

Among some off the new agencies, the list cites a Health Insurance Exchange; the Center for Medicare and Medicaid Innovation; the Public Health Investment Fund; the Public Health Workforce Corps; an Assistant Secretary for Health Information; the Food and Drug Administration Office of Women’s Health; grant programs for alternative medical liability laws, infant mortality programs and other issues; and about 100 other government-sponsored creations.

If smaller and less intrusive government is one of the GOP’s guiding principles, then being the party of “no” on this particular monstrosity is the most principled stand they can make.



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A quiz from Bill Quick

Bill Quick has been pondering why the GOP establishment can look so lost:

I’ve been wondering why the suicidal wing of the GOP – the elites and others who want to turn the party into an echo of the Democrats – think that way. I finally believe I may have a glimmer.

He then summarizes the state of the disconnect between the establishment GOP and the wider world, and finished with:

It’s easy to say they don’t get it because they’re stupid, but the truth is much worse: They don’t get it because they don’t want to get it.

Your quiz for today, then, is to answer the question: Why don’t they want to get it?

The quiz answer has got to be some variation of “They’re getting what they want right now, so why change?” If it were not in their self-interest to try and perpetuate the status quo, then they wouldn’t do it, at least not again and again the way they have.

Here’s my own mental model: they are members of a separate society from the rest of America. That society consists of politicians, lobbyists, top-tier media people, A-list celebrities, and top-level bureaucrats. The GOP establishment politicians are far more loyal to the society they belong to (including the most liberal members of it) than they are the wider American society.

So they regularly and consistently do what their own tribe expects and demands, rather than what the rest of us want. They grow to see us as simplistic rubes who don’t know any better, and they talk themselves into believing that the ways of their tribe are the right ways. Anyone who thinks otherwise is just ignorant or confused.

Being chauferred around in limos and having 95% of the people you run into pay obeisance to you smooths their assimilation into the tribe and and serves to remind them every hour of ever day of their special status and the vast gulf separating them from the rest of us. They also get security in the form of big pensions, various perks from those who want to get their attention, and respect far beyond what their abilities would otherwise command.

When someone comes in who was not formerly a member of the tribe, they take special effort to initiate that person into the tribe and ensure that they know the unwritten rules of membership. This is how a Bill Frist goes from being a campaigner for limited government in his first campaign in 1994 to being a senator who helped pass a bunch of Bush welfare state programs – in only about six or eight years.

The tribe ostracizes anyone who does not take to the assimilation process, but that’s seldom necessary. The immense craving for acceptance that is a part of the typical politician’s personality profile is almost always enough to eventually suck them in.

This is perhaps an inevitable result of having a professional political class and ever-growing government.

Spending all their time in the tribe, and accustomed to being buffered and covered by the media wing of the tribe, it’s hard for them to assess when a level of dissatisfaction is reached that will seriously threaten very many members of the tribe. The tribe was caught flat-footed in 1994 and they saw several members forced into new roles or even retirement. As a whole, though, they recovered quite well. In two or three years things were back to normal. They assimilated the new members, ramped up the media control, and prepared to ride out the next such wave.

They passed a bunch of new rules to keep the outsiders in line: Campaign Finance Reform, Sarbanes-Oxley, and others. Since the nominal process they thought they controlled got a little beyond their control, they simply passed rules to give themselves more control.

That gave them the confidence that they can ride out any such episodes in the future; nothing the barbarians outside the tribe have attempted has worked to cause any real change in decades. So they’re paying lip service to the principles of the Tea Parties, but they don’t really think those barbaric outsiders can do anything that really threatens them.

Maybe they’re right. It’s up to us to prove them wrong.

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Ezra Klein’s Astonishing New Charts

Or at least they seem to have astonished Klein. Here’s one as an example:

My goodness. As Klein says:

There is a simple explanation for why American health care costs so much more than health care in any other country: because we pay so much more for each unit of care.

Anyone – what’s missing from this rather simplistic explanation?


What is the real cost of delivering the expected/desired/demanded health care during a doctor’s visit?  What is the cost per “unit delivered”.  And if it is higher, why is it higher?  Is it higher simply because we’re being gouged as is implied by Klein?  Or is more being delivered per unit and thus justifying the higher cost?  The chart tells us none of that.

What will these various countries pay for during a visit?  And given that, which country’s patients get the most (and best) care for the money?  Again, the chart tells us none of that.

As has been pointed out any number of times, when you remove non-health care related deaths from this country’s life expectancy statistics, we are in better shape than anyone.  In fact, when you get into the later years, survival rates among our elderly are unsurpassed by any system.  That to me would say that we must be delivering something during those visits that the mere “price” doesn’t reflect.

But all folks like Klein ever seem to want to talk about is “price”. This may comes as a surprise to some, but price is determined by cost and competition. It’s not an arbitrary number.  In fact, competition keeps both cost and price (and thus profit) at a reasonable level. That’s how a market works, even one as distorted by government intrusion as our health care system.

There’s also another 800 pound gorilla in the room. Actually the gorilla is the bar on the graph disguised as a $72 fee from Medicare. How  do you think the difference between those paltry fees and the real cost of the visit are recovered? Look left, young man, look left. That big bar of private insurance subsidizes Medicare by absorbing the cost shifting which goes on from Medicare payments which don’t cover cost. Without the ability to do that fewer and fewer doctors would accept or treat Medicare patients. In fact, why do you think they limit them now?  That reality, of course,  isn’t reflected at all in the chart.

Additionally, there is the quality of care – what does a $30 doctor’s visit buy in Canada or the UK in comparison with a $72 Medicare visit in the US? We really have no idea. So how then is such a comparison relevant to anything? I can buy a KIA or I can buy a BMW. Few would argue they have the same cost and certainly not the same value. The quality is entirely different. Yet they’re both cars.  The chart assumes all care is equal. But we know that isn’t true.

In fact, these sorts of apples and road apples comparisons aren’t useful for much more than gulling the masses when pushing an agenda.  Surely, common sense tells us, we can get more for less, right? Of course not.  Most people discover during their lifetime that you do indeed get what you pay for.  And in the field of health care, the differences can be vast.

In terms of a serious argument for government run health care in a free country, the astonishing charts leave a lot more unsaid than said.  Or put another way, they and the argument Klein tries to make with them aren’t worth the powder to blow them to hell.



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What Would It Take In Taxes To Erase The Deficit?

If you were wondering what it would take in terms of tax rates, to “erase the deficit”, the Tax Foundation [pdf] provides a couple of handy, dandy charts for you:



Note – this only “erases the deficit” – it does not even make a small dent in the debt which stands somewhere in the 11 trillion dollar area.

So when you hear that all this new spending, which will indeed raise the deficit, won’t raise your taxes by a single “dime”, you can believe it if you wish. But that doesn’t mean it is true.  And it certainly doesn’t mean Democrats can keep that promise.  Because if they do, they’re simply kicking the same can down the road that Republicans have for years (and no, I’m not advocating massive tax increases, I’m just providing a little reality check to counter the nonsense the politicians continue to spout).   The alternative to the tax rates above is to cut spending – drastically.  If you see that on the horizon you’re the only one because Congress just raised the debt ceiling – again.

[HT: Tax Prof]



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