Tuesday, May 31, 2011

Republican Goals and Medicare: NY District 26 is Right

As a former Republican who once thought the GOP had something to offer I felt obligated to personally check on the Medicare treatment in the Republican budget plan. Was it as bad as the voters in New York District 26 decided? Bad enough for a strong Republtican district to go Democratic in protest?

I hate reviewing legislation but decided I could manage to focus just on the Medicare issue. So I downloaded the summary as presented in “A Roadmap for America's Future"

It took discipline to only skim the first one third of the roadmap. This part was dedicated to criticizing all efforts to get out of the financial industry caused recession. Items like saving the millions of jobs related to the American auto industry, the economic stimulus, TARP, and attempt to regulate banks and the financial sector, etc. were all viewed as destroying America. Strangely it didn’t mention the recession, the banks role in it, or what they would do to prevent a reoccurrence. In fact, they seem determined to learn nothing and take no preventive actions. They were strongly against any additional regulation of central banks, saying it would decrease the ability of institutions to raise capital. They were against consumer protection saying it would also reduce the types of credit that would be available.

It continued with quotes on about how Americans have become too dependent on their government and were losing their initiative. They also dwelled on fantasies about the good results that their unproven budget would bring. (But that is not part of this post.)

Finally at about 60% deep into the document I found the following statement as part of the Medicare discussion.

In place of the current Federal tax law creating the market distortion – the individual income tax exclusion for employer-sponsored health insurance – every American (except those enrolled in Medicare or a military health plan) will have the option to receive a refundable tax credit – $2,300 for individuals and $5,700 for families – to pay for health coverage. The tax credit is available solely for the purchase of health care
This is the replacement for Medicare. It is indeed a voucher system via tax credits. You will receive a health care tax credit with which you can, if you wish, directly buy a health insurance policy for yourself or your family. Payment will be made directly from your credit account to the supplier. If health costs are above the stated “voucher” amount or that of the new policy that you “negotiated” with an insurer then you are directly responsible for the difference. It is essentially all you have. There is no other pay or sharing cost with the government above that credit amount. The states are to set up exchanges to provide information to you and help you with enrollment. This is very different from Medicare where the government makes payments directly to the doctor for everyone under Medicare and provides protection against large bills.

The document claims it will reduce costs because the individual patients will negotiate the best policy for themselves rather than be subject to the current Medicare negotiations with suppliers. The patient will have the very doubtful “opportunity” of negotiating directly with the insurance companies and the doctor. Can individual patients negotiate better rates than Medicare does now with its’ millions of patients? This is very doubtful. Remember AIG, the self regulated central banks, and what they brought us.

The benefits to the insurance companies are easily identified. In fact I believe this part is so one sided that it must have been written by the insurance companies themselves. The Medicare infrastructure for processing claims and controlling costs will be destroyed. It will be individual patient against individual insurance company. The insurance companies will gain millions of new applicants with the only controls set by the industry. A standards group composed of a commission of five private commissioners will decide the standards for care (government is strictly forbidden to participate). No government overview is available.

What to conclude? What kind of policy would you get for $2300 annually from a self regulated insurance industry that sets its own rules? That information is just not available.

My conclusion is that this healthcare plan is definitely not to the benefit of the American citizen. The current so called “market distortion”they call Medicare is much better. Thank you voters of New York District 26 for realizing this.

What is both scary and disappointing are the 235 congressmen and the 40 senators who voted for it. Why are they not protecting us? Did they not understand the plan, are they bought out by the industry, or is it party loyally over citizens?

Or all three.

Sunday, May 22, 2011

Deficit Hawks Sound More Like Parrots

It may take some effort but they really should broaden their vision of life and of America. We know we need to control the deficit but they should keep it within perspective of other issues. And while they are at it how about some new clichés?

It is really disappointing to turn on C-Span and see our congressmen standing there, bathed in imagined virtue, repeating the same old empty lines. Very proud of the “new” wisdom being passed on to us. Some examples:

1. The people want the government to balance its’ budget like they do theirs.

2. The United States is “broke” and out of money

3. We must cut taxes on the wealthy so they will create more jobs for us

4. We don’t have a revenue problem, we have a spending problem.

5. A corporations’ only loyalty should be to its’ stockholders
Of course, there is never any legitimate supporting evidence. My personal experience tells me that none of it is true. It is merely part of the scare protocol the elite always seem to use to exert further control over us.

Let’s just take a short look.

1. After countless barbeques and happy hour beer sessions I have yet to meet someone who doesn’t see the difference between managing finances of a three hundred million population country and their home budget. They may be out there but sure don’t deserve the inclusive title of “the people.”

2. What would you expect when the financial sector goes unpunished after stealing trillions from the economy? At the same time you have two unfunded wars, have exported million of manufacturing jobs overseas and caused a major recession. Focus on fixing those problems that you and your “experts” caused! If they were fixed our future cash flows would be more than enough to cut deeply into the deficit.

3. This is so unproven by history that it shouldn’t even be mentioned.

4. Where is the evidence for this? Simple math and history shows that these are linked. We obviously have revenue and spending problems.
What would I like to see on C-Span? How about something like this:

As a member of Congress I would like to confess that I have erroneously worked for the special interests and my political party rather than that of my country and its citizens. During the remainder of my term I will devote myself to correcting this terrible mistake.
As a CEO of a United States corporation I admit that the protection, support and free enterprise environment of my country and its people has been a major factor in our success. We owe loyalty and responsibility to the United States, our stockholders, our employees, and the locations where we have facilities.
 What a day that would be! Wouldn’t we all feel better?

Monday, May 16, 2011

Ethics, Truth and Intelligence: Three Characteristics We Must Have in Those Who Wish to Govern Us

To be specific here are working definitions from the dictionary:

Ethics: the discipline dealing with what is good and bad and with moral duty and obligation.

Truth: the property of being in accord with fact or reality.

Intelligence: the ability to learn or understand or to deal with new or trying situations
That these characteristics in no way describe much of our current governing elite is to our shame. The founding fathers closely fit this representation but over the 250 years we have allowed its’ deterioration. Some pessimists claim that this is the inevitable progression of a democracy.

It is undeniable that ethics, a respect for truth, and a little intelligence would have prevented a majority of the problems that are haunting us now.

The sub prime financial meltdown and associated recession had the lack of ethics in the financial industry and elected government as its very core. Truth was not even present. To say that intelligence was weak would be an understatement.

Uncontrolled export of manufacturing jobs and associated unemployment and trade deficits shows an inability to deal with new situations, a shortage of practical intelligence plus a lack of ethical behavior toward the American worker.

Transfer of undue government power away from the productive sector to the financial sector has been a disaster based on lack of both ethics and intelligence.

An expensive war based on non existing weapons of mass destruction was a massive mistake based on lack of respect for truth.
Unfortunately it is apparent that if ethics, truth, and intelligence are to become a larger part of the governance of the nation it will have to be forced on new governing elite by the citizens. The existing elite benefit too much from the current confusion. The voters have a very dense fog to cut through.

The two party system we now have makes this is a very difficult task The only ethic of either party is to get elected and keep their goodies. They are therefore very loose with the truth. Their intelligence is focused on manipulating the voters and satisfying their financial supporters. Actions that may be good for the citizens but interfere with winning an election or are against the wishes of their financial supporters are given little attention. We are seeing that this is not a formula for the American dream.

We must vote in a leadership that embodies the three critical characteristics. This will require every voter to put in an extra effort before voting.

If there is any concern about ethics, withhold your vote. Do not vote for an unethical candidate who has a record of favoring special interests in opposition to those of the citizen. A candidate or his/her followers who blatantly lie in the campaign should be rejected regardless of the issue. Attend face to face town hall meeting and ask questions to judge the candidates’ intelligence and ability to think past one minute sound bites.

Hopefully, there will still be some candidates standing.

Monday, May 09, 2011

Banks and their Lobbyists Continue Assault Against Consumer Financial Protection Bureau

You would think that when the big banks, their lobbyists and their puppet senators look back on the damage and hardships their greed and incompetence has brought to millions of Americans they would be ashamed to show their faces in public. Not so. Proving once again that lack of ethics is often accompanied by lack of shame they are using every conceivable tool to weaken the financial reform bill passed in July 2010. As we posted on Feb 17 a Business Week article ( “Starving the Regulators”) disclosed that the budgets of the regulatory agencies responsible for enforcement of the already anemic new Dodd Frank bill ( aka the financial reform bill) are being kept impossibly low to ensure that the bill will be ineffective. Business Week noted that the only agency on schedule was the new Consumer Financial Protection Bureau (CFPB).

For background, a major contributing factor to the subprime financial disaster was widespread use of fraudulent and deceptive terms placed on the borrowers by the mortgage originators. This resulted in mortgages that the borrower could not meet, triggering failures across the entire banking community. The CFPB was formed to protect consumers from fraudulent or misleading practices by the financial community. To keep it away from special interest politics it is an independent agency funded out of the Federal Reserve and not subject to a Congressional budget. It is highly favored by private consumer protection organizations. It is hated by the large banks.

The preferred director of the agency is Elisabeth Warren, who became publically well known when she chaired the Congressional overview panel for TARP. She is organizing the agency as a special assistant to the President. MS Warren is independent of the banking industry. The banks want one of their own in that position.

On May 5, the New York Times published the article “Foes Revise Plan to Curb New Agency” that summarizes the current status of the industries attempts to make the agency ineffective. Read it and some of the links to get a good idea of your government in action. The public pressure was too great to have the agency killed. The current plan seems to be to never confirm a director and instead form a commission of five. Forty four of forty seven Republican senators pledge to vote against any director until the bureau is restructured.

If there is anything that makes me pessimistic about our country it is when our elected representatives show their complete disdain for us by openly working for special interests and against the citizens. The discouraging part is the large number of Republican senators involved. The only way the bureau will happen if through continued intense pressure from the public.

If you have a Republican Senator and are not a banking industry lobbyist give him a call for a little independent support of CFPB. He might find it feels good to actually serve us.

Sunday, May 01, 2011

Deficits Being Used by Politicians to Chip Away at Democracy

Our country has many financial meltdown induced problems that are greatly changing our lives. The meltdown was created by mismanagement and greed in the financial private sector and the failure of our elected national government to exert obvious controls. It was not caused by workers, their unions, or our retired citizens. In a sad and cruel action, the elected governments in several states are passing drastic laws that require these innocent people to pay the price. This is an in-your-face violation of the “establish justice, promote the domestic tranquility, promote the general welfare and blessings of liberty” provisions of the preamble to the Constitution.

Wisconsin, Ohio, Indiana, and Michigan are active in this area. In these states large numbers of public workers, such as teachers, firemen, and police are being terminated. Drastic changes to the school system are made. Public owned property is going up for sale. Every issue that binds citizens to their local government is up for destruction.

Michigan goes even further by giving the governor the authority to displace mayors, councilmen, and other elected officials with what can only be described as a finance dictator. Originally discussed in our March 31 post the May 2 issue of Business Week updates the effects of the Michigan law. The governor can force the citizens to trade democracy for the mythical “benevolent dictator”. He has done just that in Benton Harbor. As in all actions against democracy claims are made that it will be more efficient. This is a very dangerous precedent.

It is a strange feeling to see states take such aggressive behavior toward American middle class citizens rather that those who caused the problem. Especially so because many of the actions are directed at goals other than the deficit. For example, taxes are lowered for the wealthy and corporations, creating a larger deficit, while working citizens must absorb these costs also.

There are other ways to handle the financial sector induced shortfall that would place more of the burden on those that caused the problem. This article gives a true cost of the recession and those institutions and people who were major players.

These actions by the new state governments have lead to serious cases of buyers’ remorse by voters. Opponents claim there was no mention of implementing these drastic actions during the campaigns. The sponsoring governments have dropped sharply in the polls. Recall campaigns have been filed against six state senators in Wisconsin. The Wisconsin law is now held up in court. But the fact remains that legislators and governors who are sponsoring these actions were legally elected. The only correction for deceit in a campaign is through a complicated and expensive process ---  recalls that have requirements that vary between states.

This is a real life experience showing how carefully we must protect our votes against power grabs by the governing elite, either in the states or federal systems. The fact that four states came out with similar programs is probably not a coincidence.