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.

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?

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.

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.

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.

Deficit Reduction Panic Follows the Traditional Government Fear Protocol

Have you noticed that the politicians have a specific protocol for inducing worry about the country to the citizens? It is something like this:

Create or discover a potential problem for the country (new or ancient).

With the help of the media create the impression that if the problem is not solved immediately the US is doomed.

Then create the impression that you (and only you) have the solution to this extremely difficult problem.

Use the fear created to move the problem to the top of the nations’ worry list.

Take advantage of the power you gain to further your position, wealth, and control over the citizens

This protocol is one of the most powerful tools the elected government uses. It is used time and time again to start wars, destroy our economy, take actions that favor special interests, and divert attention from other problems. We seem to fall for it every time.

Pardon me, elected government, but you have fooled me too many times. This time I have a few questions about panic mode deficit reduction that I would like you to address before I panic

We are in a recession. Why does it have to be done in immediate panic mode where we wildly slash services without thought of the consequences for the citizens? How about a 20 year program of accelerated reduction in strong economies and less in downturns.

It appears that the deficit discussions have completely blanked out action on the economy and serious financial reform. Is panic mode deficit reduction really a diversion to take attention away from the terrible job the government is doing in these areas?

Many of the actions being taken under the deficit cloak are really special interests oriented. Examples are cutting corporate taxes, killing safety net actions, and favoring the wealthy. There seems to be no action in helping the middle class through the crisis or improving our planning for the future. Why is this?

I have heard many politicians assert that the US is “broke” financially. Considering our total resources and the position as #1 economy and military in the world this is of course ridiculous. Who is going to close down on a country with our military? But I do agree that we are “broke” ethically as long as the financial sector and special interests run the country.

The media has made a lot of noise about Standard & Poors saying they may downgrade our credit from AAA if we don’t take action on our deficit in two years. This is the same S&P that gave AAA ratings to thousands of subprime securities and played a major role in the financial meltdown. Why are they even in business, let alone making credit threats to the US?

There is a strong effort to create a fear that China will soon not grant us any credit. Therefore we won’t be able to buy anything from them. Excuse me, but China would not have a decent economy without selling to the US. But even if they would stop selling we could gladly manufacture more ourselves. Although Wal-Mart would need a new supplier this does not sound like something we couldn’t gladly handle.

We do need to get our debt under control but it shouldn’t be used as a reason to destroy the American Dream. If you fix the economy and use common sense rather than special interests as a guide in spending I have a strong feeling we will have it under control. Please shut down your fear machine.

Beware of Unbending Ideologues

Merriam- Webster has two definitions under Ideologue

An impractical idealist
An often blindly partisan advocate or adherent of a particular ideology

The dictionary has three definitions of ideology, The one most appropriate to us is:

The integrated assertions, theories and aims that constitute a sociopolitical program

For our purposes an ideologue is a citizen who has bought into a concept of how American society should work and is relentless in efforts to make the concept real. Our Constitution was formulated to encourage people of different opinions to work together. Unfortunately we are currently in the midst of a bitter no - compromise battle between right wing and left wing ideologues. Because of our two party system we are forced to pick only one package. There is no middle road offered. There is little compromise.

Ideologues are not friends of democracy. In the US, because of our Constitution, they are forced to compete in elections. They will use any deception that gains votes. Once elected, they try to enforce their ideology in the most extreme form upon the citizens.

History has shown that ideologues are not good leaders. We desperately need flexible leadership that uses every possible tool to help all citizens. Here are reasons why we should be very careful about giving ideologues power over us.

The dedication to their ideology causes them to only consider supporting information. They ignore essential contradictory facts. This leaves them vulnerable to believing half truths and lies. A trait often used by experts in manipulation to control them. This leads to delusional decision making and disastrous results. The invasion of Iraq is an example of such a decision.

Their problem solving ability is limited to solutions found within their ideology. This leads them to support programs of no logical or moral element in application. Cutting important services to the middle class while lowering taxes on the wealthy is an example. Another is the insistence that further gun control on lawful citizens will deter criminals.

They spend more time trying to gain power for their specific ideology than serving the United States. This been almost no recent congressional action toward improving the economy.

Many elements of their ideologies are speculative and untested, and risk causing great damage. Destroying unions as some advocate would leave the working person with no options for protection against large institutions. Major cuts in government spending in the midst of a recession are another example.

The appalling failure of our elected government to serve the citizens has created a situation where support for major changes is definitely needed. Ideologues with a sincere interest in the good of the country can make major contributions, but should not be given control. That is the responsibility of the citizens. Above all, we must retain our rights. We must make changes that address failures, not create new ones.

Are You As Discouraged As I Am?

Five months have passed since the election and I can’t think of a single job creation action by the elected government. I am discouraged by the complete inattention to the “promote the general Welfare, and secure the Blessing of Liberty to ourselves” portion of the Constitution.


It is discouraging to find that the newly elected government is more ideologically bound and less analytical in thought than the previous one. It is now apparently under deep control of the bean counting ideologues. My experiences have firmly convinced me that rule by such people is not a path to success. They are uninspired leaders whose one trick pony of cuts regardless of the consequences leads downward into ruin. We need driven leadership that will use every tool that we have to bring our country back.

The 2011 budget negotiations which came within a hairs’ breadth of shutting down the federal government is a prime example of an ideologue engagement. Their scope of vision is so limited that they are willing to risk the recovery, cause financial problems for millions of citizens, damage the morale of 800,000 government workers, close all national parks and stop all other services and actions over comparatively small issues in a budget which only has a few months left to run.

Our two party system continues to pathetically underperform. Where is our comprehensive plan that the parties should have been developing. We desperately need some mutually agreed positive actions for action while negotiating the controversial ideology issues.

What is happening with creating jobs and fixing infrastructure? Budget arguments are stopping job creation actions In fact bean counter arguments are stopping almost everything.

Reform of the financial sector seems to be off the media radar. Speculation on critical commodities continues as usual, bringing us ridiculously high prices on oil and agriculture products. Any effort to help the citizens through their problems is followed by a media blitz blaming the citizens for thinking like “socialists”. The special interests of the financial sector certainly seem to be prevailing.

We continue to pay several billion dollars in subsidies to the oil industry while they lobby hard against any help for alternate forms of energy.

A skyrocketing income disparity combined with a policy of absolutely no sharing of new burdens by the upper bracket portends a tragic conclusion to the American Dream unless fixed.

I could go on and on. You know the litany of problems where we require real action.

We need bean counters to crunch the numbers for comparing alternatives but determining the nature of our country must be reserved for the citizens. We had better begin to exert that right immediately

Media Reporting on International Science and Math Test Gives Wrong Impression

The media periodically hits us will damning reports on how low American students are in international rankings of science and math skills. You are given the impression that there is some global super bowl exam taking place where an accurate sample of our best students is pitted against those from other countries. The media is then filled with quotes from “experts” with vested interests blaming some facet of US life for the poor showing. Recent headlines shouted that “China students were number one”. Previous years had placed Finland as first.


Sweeping conclusions such as this certainly deserve the next level of examination. Especially since there were 258,950 foreign college science students enrolled in the US in 2009 and the number has grown consistently.

They must know something that the test doesn’t show. What criteria were used to establish the number one position? How did other western countries do? What criteria were used to select the students being tested? These are important criteria if we are to understand the meaning of these rankings. To gain a better understanding we went to the web site the *Programme for International Student Assessment (PISA). PISA is the organization that is responsible for the studies. This site explains the basics of the testing with some comments.

The methodology is complex and only covered at a very high level at the site. PISA has examined the results and provides an overview of the selection of the population taking the tests and expresses concerns that the results are being reported uncritically.

Each country submits 5000 participants to take tests in reading, math and science in a two hour written exam. The questions are said to test the use of a science education to solve problems rather than a rote memory of formula. The completed tests are subject to detailed and complicated analysis. Countries can also submit other national tests they have conducted for inclusion in the analysis. Only a band of ages around 15 year old students in schools are considered. Home schooled students are not eligible.

The mystery was solved when an analysis showed that demographics of the area within the country from which the sample of students is taken can greatly influence the test results. The actual sampling methodology for the US is not explained on the site. To explain the surprising low results for the US PISA made the following important statements.

”Critics say that low performance in the United States is closely related to American Poverty. It's also shown that when adjusted for poverty, the richest areas in the US outperform every other country's average scores, especially areas with less than 10% poverty (and even areas with 10% to 25% poverty outperform countries with similar rates)”.

PSIA is also critical about those that selectively and uncritically demagogue the results of the studies for their own special interest. They comment further:

“In essence, the criticism isn't so much directly against the Programme for International Student Assessment itself, but against people who use PISA data uncritically to justify measures such as Charter Schools.”


The powerful demographic effect occurs because high poverty areas as a group have low average scores. If the US students chosen are selected to be a representative sample of the entire country of 15 year olds there will be low achievers from the poverty area pulling down the results of the high achievers. Conversely, if the US students are chosen from a low poverty area the resulting group will have a much higher score. Apparently the US contestants had significant representative from low achieving areas and the US results were not representative of the future pool of US engineers and scientists. To be dominant a country only needs a portion of its population to be outstanding in science and engineering. `.

Each country’s published results will be similarly highly influenced by the area from which they pick their participating students. This was apparently left up to the country. In 2009 the headlines shouted that China was now number one in science and math. But the students tested were only from China-Shanghai which is a select group.

The studies that were publicized by the media were not valid as a comparison between countries. Without a consistency of the domains chosen for sampling by each country no conclusions regarding competitive positions can be made.

This is not to say that the studies are not informative. Studies of this type could be valuable for measuring progress of a specific domain over time. However, these specific studies have not yet been conducted long enough to reach conclusions. Determining where we currently stand globally in educating the15 year old students that will eventually make up our pool of active mathematicians and scientists is a more complex problem. With the right selection of exam takers we are likely to be judged number one.

Our problems are not with our advanced education in science and mathematics. It is with the standards of our finance sector

Why Does Our Supposedly Great Economic System Tolerate High Unemployment While There is Work to be Done?

The country has trillions of dollars of infrastructure and other development work desperately needed. There are millions of willing workers unemployed, and the factories which make the materials are running at low capacity. You would think that a country of 300 million people working under an economic system that claims to be innovative would be able to develop a financing scheme that matches up these needs. Our banking leaders can come up with a scam that causes a global recession but seem helpless when given the chance to finance something innovative that would help get the country out of reverse.


One example of innovative financing for a targeted problem was War Bonds. You can read about them here. They raised $185.7 billion for WWII. Another gift of “can do” to us from the Greatest Generation. Their desirable characteristics were:

           They were voluntary investments by the citizens, not a tax or contribution.

 Backed by the US Government

Aimed at the general public (half of total population participated)

From $25 dollars to $10,000. (They had a card for spare quarters until $18.75 was reached and they could be traded for a $25 bond)

Ten years to maternity at face value.

Simple and straightforward, everyone could understand

Lets call a modern version “Recovery Bonds”. They would be targeted at specific national goals (i.e. highway/ bridge/rail/ air control upgrades etc.)The national government would certify the prospectus and participate under same terms as citizens.

The citizens will have an energized attitude toward projects and government. They are voting with their investments.

I am convinced that the only way we will fix the cozy government/special financial interest relationship is to have more direct citizen participation in national projects. This is just an example of one approach. How about some others from our "innovative” financial sector?