Author: bill

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An open letter to America

Here’s what I think one of our “dis-respectful” elderly might say to Stevie about his post,  An open letter to America, in which he says,

Dear Everyone,
Stop debating health care reform. You have no idea what you are talking about. …

Stephen, you need to calm down a bit. The sound you hear from these town hall meetings is just our legislators going through a California legislative moment. Our elderly are taking their Congressman and Congresswoman back to the wood shed for a little Bible study. Stephen, we are old but we are not senile. The TARP bill was supposed to stem the tide of foreclosures. It didn’t. The stimulus bill was supposed to stimulate the economy and stem the rate of unemployment. It didn’t. Now you are trying to ram a Health Care Reform bill through Congress and the bulk of the “savings” is going to come out of Medicare benefits for the elderly and you want us to believe that we won’t notice it! Which part of “Thou shall not lie” do you not understand?

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R-E-S-P-E-C-T

I was actually amused by the whole "You Lie" affair. Like most Americans I was watching "So you Think You Can Dance!" at the time of the speech. When I heard about the interruption I thought the President had said something no one expected like, "No public option". I immediately envisioned the Democratic legislators rising and shouting in anger, "Bush-Hitler!" Oops! My bad! My bad! When I heard that an obscure Republican congressman yelled, "You lie!", I was disappointed. Republicans are notoriously bad at theatrics. Joe should have at least thrown a shoe at the President. Considering the President’s basketball skills I have no doubt he would have avoided the shoe and could then proceed to taunt his opponent with a victory dance. In a moment of political unity both legislators from both parties would then rise and start jiving to "You Bad! You Bad!" Now that’s entertainment!

R-E-S-P-E-C-T

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What we need is a fresh group of plantation owners!

In this piece, The Death of the Middle Class?, Chris Larsen tries to make the argument that the middle class is over with this statement.

Unfortunately this middle class will not recover; the patient died.

For a person who got his first real job during the Carter administration I reject Chris’s reasoning on both a personal experience level and and a pragmatic level. On a personal level I got a degree in Electrical Engineering in 1976 but my interests were in computers and networks. I could of taken a job in the power industry but I pursued jobs in the practically unknown computer industry. Today I am maintaining a web site for an internet retailer. The words "web site" and "internet retailer" did not exist when I graduated and now it is part of my resume. I do not consider myself unique since I have met a lot of people whose career path has been equally diverse. Chris is asking me to believe that the middle class can not adapt to changes in the market place when my experience shouts "Yes, we can adapt because I have done it!".

Then Chris tries to make the following argument .

If you’re part of the rich elite, you’re also much better off.

Legislators from California to Washington D.C. are saddened by the hardships facing the poor and the middle class but the problems facing the "rich elite" is a disaster of biblical proportions. When the top 1% are paying as much taxes as the bottom 95%, the one group you really do not want to get sick is the rich elite. As California voters showed us the average voter would rather cut social programs than raise taxes on the stressed middle class. If the rich elite are so well off, why did Boone Pickens cancel his massive wind farm? A few months ago Boone was confident he would proceed with or without government support.

The plain and simple fact is that the drop in tax revenues at the state and federal level shows that the rich elite got clobbered with the recession. My guess is that the rich elite are also looking at massive unreported losses in their stock portfolio and real estate. The rich do not feel very rich right now! The real tragedy is when you combine the loss of income with huge paper losses on their investments and a Democratic party that is actively pursuing increased taxes, fees, and other penalties targeted at the rich, you have an almost impossible environment to create wealth. Without the lure of wealth you will have a very diminished base of willing entrepreneurs. I do not think I know a single entrepreneur who does not dream of making lots of money. Its not the only motive for an entrepreneur but it is a very important one. Although you may find if difficult to sympathize with the plight of the rich elite, the impact on our future entrepreneurs is a more serious problem. More than ever this country needs the a group of entrepreneurs to take the chance and start working on the "next great idea". Some of these entrepreneurs will fail and lose all of their money. The successful few will create businesses that will create lots of good paying jobs and become the heroes of future businessmen and women. Eventually our admiration and gratefulness for the successful few will fade and we will see them like the plantation owners in our country’s early history.

So what should the country do? A pragmatic Democratic party should be stealing a page from the Republican playbook and embracing policies for a more enticing business climate for investment. History shows that the Reagan and Bush tax cuts when combined with reduced government spending stimulated the economy and lowered unemployment. Since the administration’s plan is widely viewed as a failure at stimulating the economy and creating jobs, it makes sense to try something that has worked in the past. The time for increasing the tax on the rich has come and gone. Redistribution of wealth is so 2007. Now is the time to entice the next of group plantation owners out of their seats and get this country working again.

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Will the Government Option Increase Health Care Competitiveness?

One of the interesting ironies of the government option in the health care reform plan is that it is supposed to increase competitiveness in the health care insurance market. For those of us who have studied markets in a micro-economics class or read the Wall Street Journal, the key to increasing competitiveness has been to make it easier for competitors to enter into the market. When I look at the existing health care insurance market and compare it to the reform plan, I do not find any significant changes that will make it easier for companies to enter into the market. In fact a very good argument could be made that the increased regulations from the proposed Health Care Reform will make it even harder for companies or organizations to enter into the market.

Why Don’t the Health Insurance companies complain more?

When you consider the scenario that a government option could be the end of the health care insurance industry, you would think that the health insurance companies would be gathering up their supporters and flooding the airwaves with “public interest” commercials. The fact that we do not see the commercials tells me something. Although it is difficult to determine the insurance companies strategy, I think the insurance companies look at the government option as a likely failure. If the government option is modeled after Medicare the insurance companies are betting that they will be up against a very weak competitor. Up until this year Medicare was widely thought of as the high cost provider of health insurance and a poor model for state health care plans. The complaints about Medicare are fairly numerous. Unless something miraculous has occurred to Medicare, it is unlikely Medicare will be an adequate model for a new and improved health system. The biggest problem with this option is that it does not provide any incentive to improve efficiency at insurance companies.

If the government option is modeled after the Massachusetts or TennCare system, the insurance companies are betting that it will heavily subsidized and probably fail in a couple of years. TennCare was closed down because it failed at controlling costs.  The Massachusetts system has been effective at enrolling people but has not yet reduced the rate of health care cost increases. This leaves us with a scenario in which the government option fails to reduce health care costs and the people will demand the insurance companies to come and rescue us. It looks like a win-win situation for the insurance companies and an unnecessary detour for the people who desire a health care reform that actually gets us more bang for our buck.

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Health reform: Hit the Reset button | Cincinnati.com | The Cincinnati Enquirer

Here’s a nice article on health care from a local newspaper for those who are frustrated with the current plans. The article highlighted an alternative health care bill proposed by Sen. Ron Wyden, D-Ore., and Sen. Robert Bennett, R-Utah. The key provisions of the bill are:

  • Money that employers pay for coverage would go directly to workers.
  • Workers would use the money to choose their own insurance on the competitive, open market.
  • Everyone would be required to have insurance.

The Congressional Budget Office says this plan will quickly pay for itself and studies indicate it might reduce health care costs.

Health reform: Hit the Reset button | Cincinnati.com | The Cincinnati Enquirer

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RE: housing_projection.jpg | alazycowboy.com

Here is my latest version of the Real Estate Appreciation chart. This chart displays the real estate appreciation as reported by the S&P/Case-Shiller Home Price Indices and the Consumer Price Index from the U.S. Bureau of Labor. I decided to update the chart since my boss at work told me that housing prices had already reached 1996 levels. At least according to the Case-Shiller index the bulk over the metropolitan areas are still well above 2000 levels.

RealEstateAppreciation2009

I did notice some interesting things about this chart.

  1. The twenty city index(SPCS20R) is 25.3% above 2000 levels. Despite the declines this level is still above the CPI(22.8%). If the 2000 level is the projected bottom of the real estate bubble, we still have a lot more pain before the bottom.
  2. Los Angeles appears to have avoided the real estate pain experienced by both San Francisco and San Diego. This is either good news or really bad news for Los Angeles. Considering the problems plaguing the California economy, the Los Angeles results looks really odd.
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A Conservative Viewpoint on How to Reform the Health Care System

Here are some ideas on how to reform the health care system that the average folks would probably support.

Reform Medicare/Medicaid using an independent process similar to the process used to close the military bases

As the Obama administration has found out, the process of reforming Medicare and Medicaid into a more efficient government service is a contentious process that is gradually overwhelming the health care bill. Many people using Medicare are rightly concerned that the benefits they depend on are going to be taken away and given to some other part of society. The supporters of the health care bill can talk till they are blue in the face but the Medicare beneficiaries are scared and are unlikely to change their opinion. The Obama administration has lost this battle.

Create a government sponsored health care insurance plan whose sole source of financing is insurance premiums

If the advocates of government sponsored plans are so sure they can provide better health care at a lower cost, let’s let them play in the insurance game as long as they follow the same rules as the insurance companies. If they can provide better health care at a lower cost than my insurance company and not need a bailout in two years, I am sure a lot of people will sign up. If we have “real competition” for health care customers between insurance companies and a government option, we will probably start to bend the cost curve. The biggest problem conservatives have with government option is that they envision government meddling will create another fiasco like Fannie Mae that is too big to fail. Since the previous experiments with a government sponsored health care option have failed, this experiment needs an exit strategy and a sunset clause.

Create health care insurance vouchers for people on government plans

I am sure this is going to make some liberals gag but health care vouchers can solve some problems and help reform Medicare. School vouchers are popular with voters and it puts a lot of pressure on school systems to improve performance. A similar voucher process in the health care area might be helpful.

  1. Some families are covered by multiple plans and would like to consolidate their health care services.
  2. Some doctors are not taking Medicare patients due to reimbursement rates.
  3. This would put increased pressure on making Medicare and Medicaid a better health insurance provider.
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Is this the Beginning of the Lap Dog Rebellion?

Last week FactCheck wrote a nice article on the Obama’s Health Care News Conference. For a moment I thought that they had finally turned the corner and were now writing about something more substantive than debunking email hoaxes and political ads I had never seen. Then I saw that they were not alone.  The AP published this story, FACT CHECK: Obama’s health care claims adrift?, and the NY Times printed this story, Concerns on Plan Show Clashing Goals. Are the lap dogs rebelling?

So far the health care reform looks like a plan with lots of cost shifting and very few improvements in cost controls. Without significant cost control improvements it sure looks like the proposed health care plans are going to get the same results as Tenncare and Massachusetts.  RealClearPollitics published a nice summary of the TennCare history last week, Lessons For Health Care Reform. I find it amusing seeing the huge cost savings being promoted in the health care plans by removing “overpayments” in the Medicare and Medicaid plans. The details of these savings remain pretty sketchy but the Dynamist Blog does a nice job discussing the subject with this post, Medicare First!. The proposed savings bring up a lot of unanswered questions. Why were these programs not reformed in previous years if the cost savings are so great? Can we trust our legislators and Medicare administrators to implement reforms this time if they chose not to reform the programs in previous years? Can we afford a supersized TennCare-like health care failure in our economy if these savings do not pan out?

This week I started reading Kaiser Health News. I enjoyed reading the article, Checking In With Carol Steckel On Expanding Medicaid. The article did a nice job of explaining why so many governors are having problems with the expanding health coverage in this economy and the sacrifices the states are making to keep present health care coverage in tact. It is interesting to note that many states are unable to expand health coverage to the extent provided by already existing laws due to lack of state funds. Unless there are major changes in the funding for the proposed health care plans, it looks like the expansion of the health care coverage is dependent on a dramatic improvement in state tax income.

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Obama Exacerbates Racial Divide

I am not sure where Mr. Gates grew up but I learned early in life you do not mess with the police. On at least two different occasions I found that treating the police with courtesy and respect helped keep two of my friends from being arrested for public intoxication. I knew that when I talked with a police officer that there was a fine line between respectful and argumentative and I was not going to cross it. From reading the police report it appears that Gates got mad and crossed the line. I am about 99% sure that if I told the officer, "I’ll speak with your mama outside", both my friend and I would be booked for disorderly conduct, public intoxication, or both. I bet there are plenty of Harvard undergraduates who are willing to lecture Mr. Gates on the foolishness of arguing with the police on such a trivial matter. It is better to be thought a fool than to open your mouth are remove all doubt.

You know, I know everybody has a different temperament  and personality.  But I remember being with my father when I’m ten years old and my brother and parents were all in the car. We were driving back home from someplace in Arkansas and it was at night and we got pulled over by state trooper. 

And I remember the way my dad dealt with the guy.  He just sirred the trooper out: "Yes, sir. Yes, sir. Yes, sir." He didn’t argue, was not belligerent. He was totally cooperative.  And whenever I’ve had any encounters like that, and there have been few, but, you know, I just don’t start yelling at people. It just doesn’t occur to me. It’s not in my makeup, especially if everything’s okay. I’m going to do what I can to prove everything’s okay and end the situation.  Let the cops get on their way and let me get back in my house or whatever. This business of Gates continuing to yell as though he had some special privilege because maybe he’s a teacher at Harvard or whatever? This whole thing is just… Especially when you learn that the cop is trained in racial profiling.  None of this makes a whole lot of sense.

Obama Exacerbates Racial Divide

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A Year Without A Summer?

On Friday the woman giving the weather report for the  Cincinnati area said we might need to break out the sweaters. She was predicting that the high temperatures for the day might set new records for the lowest recorded high temperature. It seems like we have had only seven days of summer weather. Last night when we were taking horses out, my son wore a sweatshirt.

Our fly population has been decimated by the cool Spring and Summer. Flies are warm weather insects. The house fly is the most temperature hardy but their population is down considerably over previous years. They were at least a month late in arriving this year because of the cool Spring.  Our deer fly population typically arrives during June and I don’t think I saw more than one or two. Now is the time when the first horse flies should be showing up. They are hot weather insects and diminish rapidly with the cool weather of Fall. It should be interesting to see how many horse files emerge if the temperature remains below average. This year is shaping up to be the coldest summer in ten years for me.