So Where Are We?

Florida could as well be located on the North Pole.  I say that in relation to the rhetoric we are hearing from the candidates in Florida versus their words spoken in South Carolina the week before.  The only thing that has remained constant is that all the woes of America are the fault of President Obama.  Liars figure, but figures don’t lie.

Mitt Romney has had a very positive week.  His campaign momentum appears to be on the rise largely on the strength of two good debate performances.  Yet the big question not being addressed is where does Romney stand on tax reform?

Mitt’s tax return speaks volumes about how the system is tilted.  For sure, all Americans are eligible to buy stocks, bonds, or other complex financial instruments.  All Americans also qualify for a low rate on income obtain from these investments.  The facts, however, are that these low rates benefit the rich disproportionately more than the rest of Americans.

This is not a case of “class warfare”.  Rather, it is a case of common sense.  The tax code, we are told, is suppose to be progressive.  Today almost half of those filing returns pay zero.  The rich like Romney pay a tax rate far less that those caught in between.  Tax reform is necessary for fairness but it should be viewed as mandatory for the financial health of the country.

The present tax code is not President Obama’s fault but it sure demands fixing.  Since Romney has a dog in this fight, I wonder why Wolf Blitzer does not press this question and find out how Mitt really feels?

Getting Out In Front

Defense Secretary Leon Panetta has laid out his plan for reducing the $700 billion annual defense budget by about $50 billion.  Free lunch aficionados should rave over his plan.  Panetta says fifty billion out and no change in our defense capability.  I wonder whether other Cabinet members can do the same?

The route to this reduction rests upon reducing Army headcount.  With Iraq over and Afghanistan on the downward slope, common sense could lead anyone there.  Never the less, national security is a hot political button and the last thing Democrats want is to be doing something responsible and get blamed by the GOP for weakening America’s defense.  It doesn’t matter that the GOP will be exhibiting gross hypocrisy since their charge won’t be true and reducing the deficit is a main part of their campaign platform.  But can the American public see this?

If Americans thought about defense spending, they would conclude something quite different.  First they would slash far more and second, they would demand foreign countries support financial our defense expenditures because are designed to help assure world peaceful order.  Foreign contribution have a snow balls change of taking place.

Had Secretary Panetta proposed deeper cuts, however, there would have been a huge Congressional backlash.  Forget about Newt and Mitt, just about every Congress member would have been up in arms.  And national security would not have been the reason.  Defense means money.

The annual $700 billion stimulus “defense” authorization funnels to each State and almost every district a lot of money.  This spending means jobs and profits for industry, and generous campaign donations for the Congress members.  Do you get the picture?

Secretary Panetta has made the first move.  This will allow Congress members to question (gently) the wisdom of his cuts, hmmm in such a dangerous world.  Congress can then agree that Defense has given enough (maybe too much) and move onto other spending sources.

The Washington rhetoric often is heated but when it comes to government corporate welfare, that is a line Congress members do not cross.  Money that ultimately greases their campaigns is fundamental.

With a defense budget about equal to all other countries combined, and 10 times greater than the next largest, logic does not enter this equation.

Outrages But Fully Expected

The first Amendment assures a separation of church and State, many say.  It actually says:

“Congress shall make no law repecting an establishment of religion, or prohibiting the free practice thereof…”

The Catholic Church and soon to be elevate Cardinal Timothy Dolan think other wise.

Dolan introduced the notion that the Obama Administration was “at war” with religion.  He contended that there was a coordinated effort to take away protections accorded by the first Amendment.  Serious charges to be sure, but what exactly is the evidence?

I recall cases where family members of certain sects refused to seek medical attention (including transfusions) for a sick children on religious grounds.  They maintained god would heal.  Sadly in too many cases, god must have been tending to more pressing matters.   In some situation local medical officials stepped in with court orders and saved the child.  In others, help arrived too late and the child died.   In those cases, the parents were brought before civilian courts on the basis of child endangerment.

Consider also this modern day divisive issue; pro-choice versus pro-life.  Supporter of choice strongly hold that a woman has a inalienable right to choose paths concerning her reproductive health.  Opponents offer a range in opposing rationale, but in one way or another, all base their opposition on the belief that the unborn has an inalienable right to life.  I will not try to critique each side’s case at this time.

Rather the point worth making is that those seeking an abortion do so because for some reason their pregnancy is unwanted.  There are many reasons given.  Too young, unprepared to be a mother, not willing to marry, victim of incest, and unable to raise the child alone, fetus indicates child will be a special needs baby and unable to handle the situation, and mother’s medical condition puts her at risk if she goes through child birth.  There are many reasons offered.

One way to avoid unneeded pregnancies is through sex education and planned parenthood training including the use of birth control and contraceptive methods.  If there is no conception, there can be no pregnancy.  (Abstinence from sexual intercourse, of course, will also work.  The “do without” route is a fully personal choice but worldwide is rarely successful in practice over time.)

So back to Cardinal Dolan.

The Obama Administration has made it a requirement for employers who offer health care coverage which includes free birth control and contraceptive methods.  Common sense would scream out that this is such a logical method to aid families with family planning and to reduce significantly the occurrences of unwanted pregnancies.

That is not how the Catholic Church and Cardinal Dolan see it.  This requirements is an assault on the first Amendment says Dolan.  Say again?

The requirements to make birth control and contraceptive methods part of health care plans in no way requires anyone to use them.  People are free still to not use contraception, get pregnant, and then be forced to agonizingly decide whether to seek a early termination to the pregnancy.  Is that what the good Cardinal seeks?

Catholic doctrine unfortunately also shuns the use of any birth control technique other than abstinence.  So the Cardinal’s perfect world would remove birth control and contraceptives from drug store shelves.  I wonder whether he would consider that an assault on non-catholics?

The “outrages” part of Cardinal Dolan’s objections is that there are no requirements for anyone to use birth control or contraceptives.  This is a secular choice.  It is also wrong headed because birth control and contraceptives clearly can play an important role in reducing the number of unwanted pregnancies.  But for a church that still holds that sex should be performed only for the purpose of procreating, this type of position should be “fully expected”.

I guess I am really glad the Constitution does say

“Congress shall make no law repecting an establishment of religion, or prohibiting the free practice thereof…”

It tells me that Catholics are fully free to not use birth control or contraceptives even though these methods are part of their health care plans.  It also tells me that non-catholic employees of Catholic organizations can receive these benefits and elect to use them if their religious belief allow.

Believe what you want, do as you believe, but don’t force your beliefs on others.

The Lonely Messenger

In last nights GOP debate, Ron Paul appeared like the lonely messenger standing to the left of Mitt Romney, Newt Gingrich, and Rick Santorum.  His message was not to the left, however.

Mitt and Newt occupied most of the oxygen while Rick Santorum flailed about trying mightily to distinguish himself from the Mitt and Newt show.  It is anyone’s guess which candidate was the most effective debater last night, but following the debate Ron Paul was clearly the winner in the eyes of his backers.

Paul’s message is simple and easy to remember.  Reduce the size of government, keep the government out of our personal affairs, and end our involvements overseas.  Not surprisingly this plays very well with the younger voter.  Do you wonder why?

My guess is “spending money overseas” translates into a smaller military and less chance of people getting killed.  I would also think “keeping government out of personal affairs” suggests the end of social conservatives trying to dictate personal choices on others.  “Less government”, like “less filling” might mean anything or nothing to the younger generation.

For example, if you visit the Ron Paul for President web site you can read one of his proposals.

REGULATION:

Repeals ObamaCare, Dodd-Frank, and Sarbanes-Oxley. Mandates REINS-style requirements for thorough congressional review and authorization before implementing any new regulations issued by bureaucrats. President Paul will also cancel all onerous regulations previously issued by Executive Order.

Here is where a sense of history or perspective might help.  As with all the other candidates, the repeal of these three laws and their resulting regulations is proposed in a vacuum.

The Affordable Health Care Act (ObamaCare) may be in serious need of improvements (from a cost perspective) but to repeal it and return to a system where health care can be denied for arbitrary reasons like pre-existing conditions, or put beyond reach by out of sight premiums, is scandalous.  Dodd-Frank also may need changes but to say we have not learned anything from the 2007 experience where the country’s financial sector collapsed is not a very encouraging sign.  And for anyone who can remember MCI, Adelphia, and Enron, repeal of Sarbanes-Oxley makes only sense in the context of other regulations that would hold CEOs accountable for misrepresentations their corporations may purposely make?

I am fairly certain Ron Paul supporters do not think about these three regulations this way.  I also do not think Paul supporters think through his other proposals and figure out how the Country can cut taxes and still deliver services they currently depend upon.  Instead, to them, Paul represents a repudiation of a poorly functioning system.

Never the less, Ron Paul appears genuine and like a good wine, provides hints of honesty and American virtues.  His supporters will enjoy him while he lasts.

What Will They Say Next?

The economy is improving in spite of President Obama’s policies.  So goes the standard election year GOP line.  I wonder if it is true?

The most recent poll of business leaders, however, has said they are optimistic about continued improvement in 2012.

On the other hand, with 8.5% unemployment, there are certainly a lot of people who would argue about the economy is not improving.  The Wall Street crowd is looking at poor 2011 profits and therefore much lower bonuses.  I doubt they see a rosy year ahead.  And with both the recent and upcoming college graduation classes, their prospects for finding any job much less one that will help pay back their loans is not very bright.  It’s doubtful they see sunshine about to burst through.

So which policies exactly has President Obama put in place that have caused this malaise?

The vote hungry GOP is all about lowering taxes and eliminating regulations.  There in lies the answer, they pronounce.  Seriously?

During the deficit reduction rounds we saw the true GOP colors.  They had a chance to endorse the Simpson-Bowles Commission findings (and force a vote on legislation) but chose instead to withhold affirming votes.  This allowed them to hold up the country 10 months later with a threatened government shut down.  This drama was all for a deficit reduction sometime in the future of about $100 million per year.  How can a party be for tax reduction when there is such an institutionalize deficit?

The GOP quickly says it is about cutting government spending.  That is their answer and mathematically is would seem to work.  Cut a trillion and the budget should be balanced.  Well, maybe not.

Cutting $1 trillion in government spending means (most likely) large transfers of government spending to US citizens, most of whom are on fixed incomes.  The second group impacted would be government workers such as regulators and workers in Agencies the GOP would eliminate.

To be clear, reduction in government employees as well as transfer of Medicare costs to recipients are probably going to be necessary.  What is just as clear is that these steps which are intended to fix the deficit, if enacted as promised, would increase the unemployment rate, not reduce it, in the short run of say the next 5 years.

President Obama has followed a fairly tentative path in trying to deal with the economy.  He rejected advisors who wanted the government stimulus to be really big (like $2 trillion) and instead settled for about $700 billion of which a third was tax reductions.  But who cares about what has really taken place.  This is an election year.

The Keystone pipeline is an illustrative example.  The plan which was rejected this week runs the pipeline through lands key to water supplies essential to farmers and residents living in Nebraska.  For sure there are partisans on both sides of the argument and some who argue against any pipeline simply because they want the country to pursue alternate forms of energy.  But doesn’t anyone remember what happened not so long ago in the Gulf of Mexico?  Why take chances when there are other routes to build the pipeline?

House Leader John Boehner has said the President should not be surprised if any extension of the payroll tax reductions (which must be settled in the next month) will contain a requirement to approve the Keystone pipeline.  This is strange talk from someone who still has signs of the bloody nose he got fighting the illogical December House payroll tax reduction extension fight.

Forget for a moment this child’s play.  The GOP may be already screwed if they are depending upon the economy as the issue to beat President Obama.

Not doing stupid things, if done long enough, wins most games.  The President, despite advise to the contrary, has followed this path.

Tell Them What They Want To Hear

The message most salesmen learn early and practice often is to “tell them what they want to hear”.  Newt Gingrich proved that point yesterday in the South Carolina GOP Presidential primary.  He won convincingly over Mitt Romney.

Appealing to 40% of the voters successfully, Gingrich overcame all sorts of personal baggage and negative campaign charges against him.  He seems to have done this by playing into the wheel house of disenchanted Republican voters.  He told them he would fix the Port of Charleston and begin drilling for oil off the shores of South Carolina.  All this to create jobs immediately in a State with 10% unemployment.

He rebuked the media for even asking the question about his former wife’s allegation that Newt asked for an open marriage.  Voters bought this because they also do not believe the media.  While I also believe CNN’s moderator John King was out of place asking this question, it speaks much louder about exactly how religious these South Carolinians really are.  They like their religion when it works for them.

Gingrich was impressive in the debates leading up to the Saturday vote.  He was prepared with great sound bites and delivered them with confidence.  The Romney campaign had better sober up and take this week’s lesson seriously.

There is one problem, however, with the “tell them what they want to hear” strategy.  In the next State and the one after that, the residents of those States may want to hear something different.  Sooner or later someone will compare each of Newt’s stories, and then how will Newt explain this?

Making A Party Look Bad

Long time believers in the GOP must be scratching their heads.  Who should be their Presidential candidate? Loosey, goosey, Newt?  Or, tight pants Mitt?  Or, sanctimonious Rick Santorum, Or, I just forgot Rick Perry, Or the only honest broker Ron Paul?

Paul is a life long libertarian.  He consistently voices these principles which excite some and scare others.  Lower taxes brings cheers from social conservatives but keeping government out of the private lives of citizens does not meet their needs.  Paul’s foreign policy views simply are not compressible into a 15 second sound bite.  Avoiding foreign entanglements, however, is not a brand new philosophy.

Rick Perry is simply a sad case.  He is like a deer caught in the head lights.  His candidacy in hind sight should never have happened.  He had power in the sense that others thought he had great ability.  Once however, he entered the race, his real capabilities became clear.  His power melted. (On Thursday, Perry finally mustered the strength and withdrew from the race.)

Sanctimonious Rick has done much better than most would have predicted.  However, even with this performance, Santorum is a one issue candidate and that one issue will not solve any of the problems facing America.

For most of this campaign, Romney maintained the image of a steady, sound, and right of center candidate.  Mitt maintained he was wide right of center but others disagreed.  As with the other candidates (except Ron Paul), Mitt’s problem is when he goes off script.  All the memorable sound bites we hear from the candidates (except Paul) are well crafted by some alter ego.  Mitt now has stumbled into how much tax he pays and possibly more revealing, how much (like as in any) has he paid in past years?

Like always, as long as Romney has met the tax code requirements, even if that is a very low number, it should be ok.  What should, however, occur to people is “one more time, tell me why job creators should not pay higher taxes”?  His electability disease is called hypocrisy.

Loosey. goosey, Newt Gingrich has created a lot of fun and excitement.  He also has made it crystal clear what a risk he represents if he were somehow to become President.  His decision to use “code words” to energize certain voter segments in poorly vailed  hateful rhetoric, is not what Presidents are made of.  “Food stamp President” seeks to overlook our weak economy impact upon minorities, and blame the increase in food stamps to mainly lazy African Americans.  In fact current law can account for the increase in food stamp recipients due to the current recession.  Oh, and African Americans represent much less than half.  For Gingrich, provocative sounding words are better than accuracy.

In his last debate, however, a new card was played against Gingrich.  His former wife told reporters that Newt asked her to accept him remaining married to her and for him to keep a mistress.  He said, she said?  Maybe, but this type of behavior might fly in France, but I doubt it will in the bible belt.

Who’s the best of this litter?  It still looks like the tight pants kid.   But, he will emerge damaged even if the primary process ends today.

The center and the left are not very happy with President Obama, and were their a viable alternative might cast their votes there.  With these choices, what a dilemma!

Words Mean A Lot, Actions Speak Even Louder

Philadelphia is a large city with a famous past.  America’s first large city, home of the Declaration of Independence and the Constitution, and the site of America’s first zoo, among other firsts.  Today it is a typical large city with a split personality.

In today’s Philadelphia Inquirer, a story recounted the city’s 2011 homicides.  Philadelphia is a “one a day” city where the only question on January 1 is whether the city will register less than 365 killings or more.  In 2011, the number was 318.

The newspaper also published a map of Philadelphia and plotted where the killings to place.  It almost exactly conformed to the economic demographics.  If the area was one where people had average to above income, there were few if any homicides.  If the area was where high unemployment and poverty existed, there were dead people to count.

In the same Inquirer edition, there was a report on New Jersey Governor Chris Christie’s state of the State.  Christie like any good politician was buoyant over the State’s condition and attributed the State’s recovery to his efforts.  As a consequent he was recommending a tax cut for everyone, including job creators.

We can overlook the Christie’s personal attribution of the State’s recovery since all politicians take credit for the sun rising.  What can’t be overlooked is that New Jersey has the highest property taxes in the country.  Why not apply any State largess to reducing them?

But even more glaring is the situation in Camden, New Jersey.  This poor “suburb of Philadelphia” has a 2011 death rate about the same as Philadelphia.  Due to financial difficulties, the city had dismissed half their police force.  Why doesn’t Governor Christie use the proposed tax reduction money to put more police in Camden?

So when the GOP candidates speak of “jobs not food stamps”, what exactly do they mean?  Does Newt mean he will cut food stamps and let those people now using food stamps find jobs?  Does he mean he will cut food stamps, and give that money back to other Americans?  Does he think the people now on food stamps prefer stamps to working?

I am sure Newt doesn’t care whether his words are clear.  What he wants is for them to resonate in voters, most of whom do not see the poverty of large cities.

These are complex social problems where there are no silver bullets.  Solutions that might work in Iowa’s corn fields or the rural areas of South Carolina are unlikely work in North Philadelphia.

Gingrich’s rhetoric is shameful and he knows that.  He may claim these are desperate times (for him to get the nomination) as justification.  Unfortunately too many other politicians may try to emulate this rhetoric if it works politically.

Lost in the mess will be a serious social situation, which like a cancer, is spreading within America.

The Message We Are Not Hearing

What should be the number 1 issue for the 2012 Presidential race?  Should it be the size of government?  Should it be excessive regulations?  Should it be the deficit and the debt?  Or maybe it should be a plan to get people back to work?

How about none of these.

It is not that these issues are unimportant.  Rather, there is another issue which affects everyone, every business with employees, and every tax payer.  It is the US health care delivery system.

Briefly, while health care in certain US institutions and medical practices may be the best in the world, not all Americans have access to that care due to availability or cost. Worse, many Americans do not even have access to any health care except when they are really sick and throw themselves on the mercy of hospital emergency rooms.

In addition to access, there is a cost issue.  The current US health care delivery system is most costly in the world and offers health care costs that rise yearly at 2-3 times the rate of inflation.  The total US health care spend is close to $3 trillion, or about $9000 per American citizen.

Some questions that would be illuminating are:

1. Why is the US health cost the highest (by 30-40%) over the next most expensive other country?

2. Why is the average health care recipient not receiving the best out comes in the world if the US system costs the most?

3. Why are employers now the main conduit of health care insurance coverage?

4. How is it possible for Drug companies to charge lower prices for sales in other countries than what they charge in the US?

5. Why is there so little apparent effort to eliminate waste and theft from the current system when this figure conservatively could be in excess of $300 billion annually?

6. Why is it satisfactory for insurance companies to take 20 cents of every dollar of benefits for administrative costs and profit?  What work do they actually do to justify this type of profit model?

These may be important questions, byt  is health care the most important and urgent 2012 issue?

I would submit there are two main reasons.

First, common sense will teach us that it is a finite resource.  At 20% of our annual GDP there is a natural limit to how big it can get.  This presents the question “how should health care be made available to Americans”?  Should it be rationed by who can afford it?  Or, should it be rationed by who comes first?

Second, regardless of how the country decides to ration health care, its cost and how Americans pay for it are critical questions.  With middle class wages relatively flat for the past 40 years, health care costs are eating more and more into discretionary spending.   With less discretionary money, the middle class becomes less a factor in our country’s economic growth.

Dealing with how to ration health care, should prepare the country to discuss how to reduce government spending and sensible regulations.  Dealing with the deficit and debt become more likely if the middle class sees a stop to their personal budget’s hemorrhage due to health care costs.  And employers who were free from being the middle man in health care financing, should be more ready to hire workers.

Both access and cost are relatively easy to describe as problems but are both difficult to change.  There are, to be sure, valid world models where outcomes are better and costs are far less.  These models are drawn form geographically smaller and ethnically narrower countries so direct scale up may not be straight forward.  There are, however, many good starting points.

Never the less the US system is on an unsustainable path.  There could not be a better year than 2012 to tackle this problem.

His Allowance Has Been Spent

John Huntsman will withdraw (or suspend his campaign) from the GOP 2012 Presidential primary system.  This will end his hopeful run for the nomination.  Hopeful because Huntsman presented a saner and more trustable face to the Republican Party.  The GOP loss is also a loss to the Country.

To be sure there is no evidence that Abraham Lincoln is withdrawing from the race.  Jon Huntsman has had a successful career in the sense that no scandal or huge mistake can be assigned to his watch.  No one really knows how he would act if he actually were the President.  There are no easy calls in the Oval office.

If Huntsman had won the nomination, he would have inherited the luke warm support of the Republican base.  Even his Mandarin words would have had limited value.  Winning the general elections was no sure thing.  And worst of all, if elected, his GOP legislative support would still be badly fractured, so making sweeping change would be extremely problematic.

None the less, I held the hope that in the really big matters, the ones that count, Huntsman would have steered a different course than I expect Romney, Gingrich, Paul, or Perry to follow.  What ever changes to Medicare that might have emerged in a Huntsman Administration, I don’t believe he would have allowed Americans to be denied coverage or priced out of the market due to pre-existing conditions.  I don’t believe Huntsman would accept the counsel of draft dodgers like Dick Chaney, Richard Perle, or Paul Wolfowitz.  For Huntsman, going to war is a really big decision and requires an imminent threat.  And I also don’t believe Huntsman would nominate to the Supreme Court anyone as far to the right as Alito, Scalia, or Thomas.  Even Huntsman knows corporations aren’t people.

But what could have been will not be this time.  And, we should not expect Mitt Romney to select Huntsman as running mate.  Two Mormons, I think not.

Reports will say Jon Huntsman just couldn’t “get traction”.  Probably more to the truth is that Huntsman’s message was too new to the good citizens of Iowa, New Hampshire, and South Carolina.  Speaking without referencing god every other word or warning of socialism or relying upon negative messages about his opponents is not the normal way in these States.

And, let’s not overlook that while Huntsman is a wealthy person (and son of a very wealthy man), he had an advance from his father to finance his campaign.  He spent it all and did not generate enough positive signs.  Good businessmen know how to cut their losses.

This time Huntsman’s allowance has been spent.  Maybe in four years he can save enough to make a big league run.  I just hope he doesn’t change his message.