Archive for March 2017

Brexit Implications

March 30, 2017

Yesterday British Prime Minister Theresa May signed the official document triggering the European Union’s exit provision, Article 50. With that move Britain has begun its retreat from Europe opening the doors to an uncertain future.

From the British perspective, Brexit is about sovereignty and the ability to more effectively deal with non-British labor, (read to exclude those Britain decides it does not want). The measure passed narrowly but in a Democracy, an inch is as good as a mile.

From the EU perspective, Britain’s departure is unwelcome but not for a want for Briton in particular. The EU worries that Brexit is just the first shoe to drop and more are around the corner. Question, if the EU is so good why would countries want to get out?

In forming the EU, member countries traded some sovereignty for a large common market where trading rules were fixed and not subject to populous tariffs or other whims. Regrettably, the EU also formed a parliament and a wide range of bureaucratic branches fully committed to establishing regulation on all facets of commerce and life in general. Critics see the EU and its Directorates as needless expense supporting a gigantic jobs program.

One of the more troublesome outcomes has been how the EU deals with immigrants. Any immigrant who gains access to a EU member State, for example refugees fleeing war in central Africa, once these immigrants set foot in a member State, they are free to travel to any other State seeking work. And of course, while seeking work, the immigrants are qualified to receive welfare support. IMO, the EU’s inability to deal with this one issue, more than any other, tipped the British vote to leave the EU.

Reports indicate that France may want to follow Briton. France’s reasons center on right wing politics. Life will be better if France calls the shots, the right claims.

The danger embedded in Brexit requires one to check history and see what happened when there was less dependance among European Countries. World War I and II, and all the other wars leading up to world wars should be a sobering reflection. Remember, European Countries have both a long history and a sharp memory.

In addition, these countries are, in comparison to the US, relatively ethnically pure (not much diversity).  Germany tend to be german, France tends to be french, etc. (Ironically, this homogeneity is want makes Italy or Spain or France etc so nice to visit.)

Following World War II the western world was fortunate to have leaders who knew the old world order had to be changed. Within Europe, a series of government agreements, for example the EU (European Government and flag), the Euro (European wide common currency), and NATO (European wide military alliance which include the US). These agreements provided enough grit that the nationalistic urges to settle differences between members would give way to more rational solutions.

The EU common market represent one of the top three markets in the world. Within world currencies, the Euro is often viewed as second only to the US dollar. And visiting Europe with its advanced transportation network (and trouble free border crossing) is a preferred vacation destination. Brexit is a short sighted and most likely unwise move by Britain.

With the rise of China (wealth and military strength), the implosion of the Middle East, the economic stagnation of Japan, and nuclear uncertainty of Pakistan, India, and North Korea, world order is under pressure. Britain by itself provides no reassurance that the British can wield diplomatic or economic strength useful in hammering out a functioning world order better than Britain being an EU member in good standing. The odds are that Briton is on a slide to obscurity (nice place to visit, but….).

Brexit could not have come at a worse time given the naivety of the incoming Trump Administration. Can a “one off deal making” mentality summon up the strategic vision necessary to guide other countries towards a peaceful world order?

Give Me A Home (Sanctuary) Where The Buffalo Roam

March 29, 2017

Attorney General Jeff Sessions said at a White House press briefing that his department would crack down on those municipalities known as “Sanctuary Cities” by withholding Government grant money. Observers thought this familiar threat was made mainly to change the media subjects from the rejection of the Republicans healthcare bill and the controversy surrounding potential Russian collusion with Trump campaign staff members. Good try but probably too little to late.

The sanctuary city theme is both provocative and Constitutionally important. Both points seem to be missed with AG Sessions in favor of partisan political ground fire.

Sanctuary Cities are municipalities which have said they will not actively help Immigration Agents unless the agents have a warrant (so as to not violate the 4th Amendment). At first blush, this refusal of Federal Immigration officers request seems unjustified. But in most cases, Immigration Officers want local officers to notify them whenever they take into custody any undocumented alien.

In practice, the Immigration agent must then get a warrant (taking up to several days) during which time the local municipality must house and feed someone for whom they have dropped charges. Again, this is a violation of the 4th Amendment, not to mention a costly decision.

Most Sanctuary Cities claim that in addition to the 4th Amendment, a policy of turning over all undocumenteds would drive that community underground. The fear is that both petty and serious crimes which took place in neighborhoods where undocumented lived would go unreported resulting in increased violence and make a larger area unsafe. This argument has fallen on deaf ears with the arrival of the Trump Administration.

Of course, Sessions threats could be simply a “shot across the bow” and intended to bully local municipalities into a more cooperative role. Sessions and the Trump Administration, however, will be in for a surprise should they actually withhold funds from a major city or county. This bully practice will be met with a counter suit, plenty of undesirable publicity, and a predictable losing court fight. Another black eye for the Administration.

The undocumented situation is a complex problem and Sessions’ promised actions won’t make a dent in the estimated 11 million currently living throughout the US. Comprehensive immigration reform, where immigrants from Mexico (and maybe central America) are documented, taxed, and required to have a known address, and are treated as guest workers with a defined path to citizenship, is the only path to solving this situation.

Comprehensive reform is politically difficult but Session rhetoric is unhelpful and potentially an action to make the situation even more difficult to improve.

Government As A Business Concern

March 27, 2017

Over the weekend reports emerged that President Trump’s son-in-law, Jared Kushner had been tapped to lead a “government efficiency” commission. Kushner’s task was said to be about bringing business efficiency to government operations. Get the message, government is inefficient and businesses are efficient. Hmmm.

Governmental agencies are organizations which can be prone to bureaucracy and become tone deaf to the voice of the customer. Some business efficiency experts claim this tendency is part of the human condition and all organization must guard against inward focus. So what is so special about Kushner’s new assignment?

First, one must recognize that his assignment presumes two suppositions, (1) government agencies are inherently inefficient, and (2) business operations are inherently efficient.

One must remember, however, that government agencies are not “pop-up” operations which establish themselves around a perceived opportunity (customer demand). Government agencies are instead consequences of laws passed by Congress. Often Congress passes other laws which consequently set up other agencies creating confusion or conflict. And frequently, Congress does not pass new legislation when the original need has passed. In other words, some agencies simply outlive their original purpose and take on a new raison d’etre. So, in addition to efficiency, a useful question asks “do we need the agency at all”.

Choosing any particular business to model a government agency against has some key factors to consider.  Businesses mostly are about making a profit, the more the better. Businesses exist normally in a world of competition, both locally and globally. Businesses can hire and fire (for just cause). And, if a business fails, it can declare bankruptcy and simply go out of business. Hmmm.

So would one pick a Wall Street hedge fund as the model for improving the efficiency of air traffic controllers? Or select Google as the model for the Treasury Department? Or, Exxon for the State Department?

For sure there are business practices, like salary administration, performance measurement, and quality practices which have direct application to government agencies and should be considered.

Kushner’s task will be better understood when there is word on which Government agencies or work processes he is interested in improving.

Second, we must also recognize that many conservatives are primarily intent upon reducing the size of government. One way that could be imagined is to “bid” out government operations to the private sector. Compare, for example, Internal Revenue Service tax collection with offerings from outside vendors. Then, suggest that some company like “Turbo Tax” or “PwC” could do it less expensively (that is more efficiently). Eliminate the IRS and elevate a private sector, for profit company as the replacement. Hmmm.

There are huge obstacles awaiting Kushner. Government agencies represent employment and those jobs are often located in one party’s political district. This could be circumvented by requiring the new operating company to hire existing employees. Civil Service would most likely end for those impacted workers and hire/fire could begin with the oldest employees out the door first. You can complete the what could go wrong description.

Insidiously, one could speculate that new, private sector management could take over operations seamlessly and actually improved operations. What pressure do you think might fall upon the new operators top management from political operatives who sought further efficiency improvements or in lieu, political donations. Hmmm.

No doubt, there exists government agencies which could improve efficiency and others which do not need to exist. Kushner’s work could be beneficial or a Don Quixote like dream with consequences detrimental to current government employees and the US citizens who are the intended customers.

Let’s watch carefully.

A Week Of Eye Opening

March 26, 2017

This past week has been an eye opener for what a new Republican Congress stands for. How about “for everything” and “for nothing”? Or, maybe “for effective government” and “for ineffective” government? Or, maybe “for sincere government” and “for insincere government”? Hmmm.

This first revelation was striking. Republicans had passed legislation to repeal Obamacare about 80 times during the past 6 years and had campaigned in 2016 for the complete repeal and replacement of Obamacare. Yet when the opportunity was there, Republicans had no replacement plan.

The GOP had many plans, all disingenuous, but there was no one plan Republicans could agree upon. Hint: do you realize GOP candidates lied about their intentions?

The most popular refrain the GOP used was lowering the premium costs which “Americans” are experiencing. To some degree, in some places, this claim seems justified but Republicans were happy to leave this claim unclear. Americans receiving healthcare coverage from their employer, Medicare, or Medicaid, received no staggering premium price increases. These Americans were shielded from the increases some individuals in certain areas experienced.

So why would Republicans make such a claim? Could it be that most all Americans experience some form of uncontrolled healthcare cost increases (as they did yearly before Obamacare) and don’t understand why hospitals, doctors, and drugs cost so much?

Few, if any of our politicians called out for a universal, single payer system to replace Obamacare. Shamefully, Republicans instead called for changes to Obamacare which were designed to reduce cost increases pressure by insuring less people! How do those politicians sleep at night?

But simply reducing coverage was not good enough for some Republicans. The “Freedom Caucus” members sought to change Medicaid from an entitlement for the most needy to a capped block grant which would become the sole responsibility of States in a few years.

The “Freedom Caucus” wants to deconstruct the Federal Government and healthcare seemed an opportune way to begin the process. “Freedom Caucus” members represent a clear and present danger to modernity.

Most Americans have little skin directly in the healthcare game. Next up on Congress’ docket is likely to be “tax reform” where almost all Americans have an opinion.

While there is much good that can be achieved (like eliminating or vastly reducing the number of tax loopholes, exemptions, and deductions), changes which will lower the overall tax revenue or the progressive nature of the tax code, are sinisterly designed to reward the wealthy and to starve the Federal Government and its ability to function.

With tax reform, even more than with healthcare, it will be critical to study what any proposed changes might accomplish before voting upon any bills. The devil will almost certainly be in the details.

This past week revealed a White House and a Congress whose intentions are hidden.   On one hand, the Republicans seem unfit to govern and on the other hand, seem not a friend to the average American.

I wonder whether this GOP leadership will have learned anything that might restore faith in their intentions? I really wonder whether the White House or the Freedom Caucus care?

Utah Shoots… At Wrong Target

March 24, 2017

Utah Governor, Gary Herbert hailed the Utah Legislature’s passing of a law which would lower the drunk driving blood alcohol level threshold from .08 to .05, making Utah the lowest limit State. The Governor reassured Utah residents that the new limit would save lives. Hmmm.

Deaths due to drunk driving have risen in recent years to 45 in 2014 and then receded to 38 in 2015. In total there were 275 automobile accident deaths in Utah in 2015. Hmmm.

I wonder what Utah is doing about opioid overdose deaths which are running one per day.

There certainly are no good reasons for any traffic deaths but if .05 is better, wouldn’t .04 be even better? Utah appears to be shooting for an ever smaller diminishing marginal return.

Utah, of course, has the right to put its efforts where it thinks best. But why would going from .08 to .05, or from 38 drunk driving deaths to say 25 or 30 (if the lower limits were to work) justify any effort when they have opioid induced deaths piling up at one per day, and no apparent plan to reduce?  Hmmm.

Distraction any one?

Free Market Health Care

March 23, 2017

The Republican sponsored “American Health Care Act” is floundering in Congress. The replace portion (as in repeal and replace Obamacare) is in trouble for curious reasons given that Congress and the Presidency are both in Republican hands. The political farce which is unfolding casts a sharp light on the undeniable fact that there is no Republican Party united around a core set of principles. Rather today’s Republican Party is a party of convenience which unite around not being Democrat or progressive.

The shallowness of this union shows through in the Republican argument over repealing Obamacare and trying to agree upon a replacement. Maintaining “no pre-existing condition” or “no life time benefit limits” exclusions along with keeping children on parent’s policies until age 26 showed the world Republicans were caring and compassionate (or so they said).

But doing away with the individual mandate and dropping certain taxes has brought into focus the difficult task of how to pay for these benefits and keep the same number of Americans on the insured roles. The inescapable GOP conclusion is that insurance costs will not come down unless, Republicans say, the free market kicks in. If this mysterious free market does not bring down the cost of insurance, then individuals and Medicaid will see large increases in cost.

The most conservative Republicans, true believers in everyone should have access to the best healthcare they can afford, are now proposing to eliminate the 10 healthcare benefits mandated in Obamacare. Hmmm.

  1.  Outpatient care—the kind you get without being admitted to a hospital
  2. Trips to the emergency room
  3.  Treatment in the hospital for inpatient care
  4.  Care before and after your baby is born
  5.  Mental health and substance use disorder services: This includes behavioral health treatment, counseling, and psychotherapy
  6.  Your prescription drugs
  7.  Services and devices to help you recover if you are injured, or have a disability or chronic condition. This includes physical and occupational therapy, speech-language pathology, psychiatric rehabilitation, and more.
  8.  Your lab tests
  9.  Preventive services including counseling, screenings, and vaccines to keep you healthy and care for managing a chronic disease.
  10.  Pediatric services: This includes dental care and vision care for kids

It shouldn’t take a genius to realize that without some requirement like these 10, insurance companies can price policies high and steer customers to stripped down version such as  catastrophic coverage. Moderate Republicans, especially those representing poor or inner city districts, see a huge backlash coming in the next election if the ultra conservatives prevail.

Conservatives are quick to counter, “doesn’t everyone have the right to buy only as much insurance as they want? Why would a single young man want to pay for pre and post natal coverage if he is not married?”

That strikes right to the heart of the matter. Healthcare costs, are generated by hospitals, doctors, and drug companies and don’t change simply because of insurance changes. The number of pre- and post natal visits will be the same regardless of whether a young man chooses to carry broad coverage or just a stripped down policy. The implication, however, should not be lost, everyone else will pay more if the young man is allowed to buy stripped down policies. That is the definition of insurance.

Republicans are ringing their hands over this dilemma. Conservatives say they will vote against the American Health Care Act if the bill looks too similar to Obamacare and Moderates say without certain coverage and federal assistance (like tax credits and Medicaid) they will vote against it.

Congress members appear to be living in a make believe world. If somehow Congressional leaders along with President Trump can work out a compromise and pass the American Health Care Act, then just looking at the reduce insured numbers and the fewer services many Americans want (and need), Republicans will lose in 2018.

“Americans” Expect Us To Act

March 22, 2017

How many times have you heard GOP leaders repeat ad nauseam the mantra “the American people elected us to X or Y”, or “the American people want this or that”? The correct terminology  would be “Some American people…” with emphasis on “some”.

This type of honesty and absence of hyperbole would diminish the pomposity and self importance GOP elected officials want to present. (I fear this is a Republican disease today simply because Republicans are in the majority and in truth, Democrat leaders might fall under the same spell if roles were reversed.)

No better example of the misleading nature of “Americans expect” is the current healthcare debate. Republican Congressional leaders are moaning about those Republican Congress members who are threatening to vote against the American Health Care Act (the replace plan for Obamacare). “Americans expect us to pass this bill” leaders cry while all sorts of non-partisan studies point out that the replacement bill will maintain some popular Obamacare benefits but at the end of the day provide less coverage and insure fewer people.  No more appropriate subject does “some Americans” apply than here.  “Most Americans” are not impacted as a benefit recipient by Obamacare

For some Republican Congress members, the AHCA does go far enough in rolling back entitlements and for others, it goes too far. Hmmm, I wonder what Americans really want?

Senator Rand Paul elaborated today on his proposal which could gradually eliminate Medicare expansion and streamline the individual market. Paul has proposed creating a pool of all uninsured and the allowing the “free market” to drive down price through competition amongst insurers.  As lower policy prices emerged,  government supports would decrease until they disappeared. Hmmm.

Paul deserves credit for proposing a clever way out of the box Republicans have created for themselves. His proposal, of course, has it own set of pitfalls, the most obvious of which is whether “for profit” insurance companies will want to offer policies at prices the pool will demand and people can afford. None the less, Paul proposal deserves a careful review.

The irony of the current healthcare repeal and replace drama is that greedy Republicans are far more interested in diving into “tax reform”. We will hear again that “Americans expect us to lower taxes” when in fact “some Americans”, like the top 1 or 2% wealthiest Americans will alone reap huge benefits. Most American will see little impact and no benefit. More insidious will be the knock on effects of such a large tax cut. Where will the Government get revenues to pay its expenses?  Think there will be more cut in government services?

The Republican tax reform odyssey will make “searching for a free lunch” dinner time conversation.