As I’ve mentioned before – President Obama is moving us toward the European economic model – on many fronts.

The last few sentences of the article below sum it up nicely.

The late economist Mancur Olson explained the phenomenon. Starting with "The Logic of Collective Action" (1965), he showed how democracies are vulnerable to proliferating parochial interests that use government to claim an ever larger share of private wealth. Slow but clear decline follows once narrow interests take the wider polity hostage. Look at France -- or California.

"[Economic] success doesn't depend on natural resources and location as much as on the degree of stupidity of the policies and institutions of the country," Olson wrote. The 2009 debate over Big Labor's agenda is about whether we want to continue to be a dynamic, entrepreneurial nation, or slip into unionized decline.

MARCH 16, 2009, 5:51 A.M. ET

Wall Street Journal

Labor's European Model

First came the huge stimulus, then the huger budget, then the Obama universal health-care plan. But Big Labor, cheering each, was really waiting for this: The "card check" bill introduced last week and considered the missing link in the revival of unions in America.

The so-called Employee Free Choice Act would let unions organize a worksite once 50% of employees sign a card saying they support a union. No secret-ballot election would be needed. Supporters claim this is necessary because workers are intimidated by companies to cast a vote against the union in secret, but are only too happy to express their true feelings to a union steward. Right.

Welfare State

The bill also gives the government power to influence wages and benefits under its binding arbitration provision. The exact terms of a first contract between an employer and a new union would be set by a state-appointed mediator if parties fail to reach a deal by a state-appointed deadline. Unions would have every incentive to make maximum demands, knowing that an arbitrator would more often than not split the difference.

We think workers have every right to form a union, and companies that get them often deserve their fate. (See: auto and steel makers, failure of.) But the goal of "card check" is to use federal power to tilt the playing field in favor of union organizers. Union rolls hit a peak of 32.5% of the labor force in 1952, then fell fast. As of last year, 12.4% of American workers belonged to a union. The share of unionized government employees has held steady for decades, but a mere 7.6% of the private workforce chooses to join a union. Unable to reverse the trend in the marketplace, unions have focused on electing Democrats who will rewrite national labor law.

And now they see their big chance. The House is almost certain to pass "card check," so the real battle is in the Senate. Six Senators who previously backed the measure, including Democrats from right-to-work states like Arkansas and Louisiana, are expressing new skepticism. But Big Labor's lobbying has only begun, and business needs to be wary of false compromises.

* * *

The larger union economic model here is Europe, where organized labor first led the charge to build welfare states. Then it concentrated on fighting back attempts to roll back costly entitlements and regulations once the bill of chronic debt, stagnant growth and stubbornly high unemployment came due. Margaret Thatcher defeated them in Britain, but successive German, Italian and French leaders have failed.

American political traditions are different, and Ronald Reagan stopped an earlier slide toward Europe. But complacency is misplaced. The Democratic Party sketched out plans for a Continental-like welfare model before Barack Obama burst into the White House.

In the last session of Congress, Democrats tried to: Raise the notice period required for certain layoffs at private companies to 90 days, extend health benefits for laid-off workers for up to a decade, and increase penalties for noncompliance (the expanded WARN Act); reclassify certain managers as employees who can be unionized, forcibly in non-right-to-work states (the Respect Act); facilitate class action suits for alleged gender-based pay discrimination (Paycheck Fairness Act); and much more. None passed, but now they might.

In the Obama revolution, unions are the vanguard force. Contrary to promises of moderation, the Administration has so far sided firmly with the union left. On the day after the Inauguration, the Department of Labor stopped the implementation of new union financial disclosure rules that provide greater transparency about union finances. A fortnight on the job, President Obama issued four executive orders, on federal contracting and political spending, demanded by Big Labor. Mr. Obama this month endorsed card check and vowed that it "will pass."

In Euro-terms, a "social market economy" offers state-provided health care, generous unemployment benefits, long holidays, various job protections and a prominent role for unions. Sounds good, you might say. But consider that the Europeans have spent the past two decades struggling to wean themselves off entitlements that are a huge drain on the overall economy. These welfare states leech off the productive parts of the economy through onerous taxes, debt and regulations.

Everyone ends up paying. Consider just one measure: the tax wedge, the share of labor costs that never reaches an employee's wallet but goes straight to state coffers. In Belgium, Germany and France, the tax wedge is around 50%; in America, it was 30% in 2007. (See the nearby table.) Not coincidentally, salaries and job opportunities are better here, especially for the least-skilled. The Obama budget, universal health care and now the union-revival effort known as the Employee Free Choice Act would steer America toward the Continent. That's good for the unions, but not for the public good.

* * *

The late economist Mancur Olson explained the phenomenon. Starting with "The Logic of Collective Action" (1965), he showed how democracies are vulnerable to proliferating parochial interests that use government to claim an ever larger share of private wealth. Slow but clear decline follows once narrow interests take the wider polity hostage. Look at France -- or California.

"[Economic] success doesn't depend on natural resources and location as much as on the degree of stupidity of the policies and institutions of the country," Olson wrote. The 2009 debate over Big Labor's agenda is about whether we want to continue to be a dynamic, entrepreneurial nation, or slip into unionized decline.

In recent days, President Obama has proposed sweeping regulatory changes over the banking and financial system.  Under this new proposal, the Federal Reserve’s power will expand across the entire system.  Remember – what is the Federal Reserve?  It is a private corporation owned by a cartel of international bankers.  What is causing this crisis?  Is it caused by lax regulatory oversight?  As we’ve discussed – while there are many problems accelerating the crisis (oversight, greed, derivatives, sub-prime mortgages, etc.) – none of these things caused the crisis.  This crisis is a direct result of our debt-based monetary system.  Who created this system?  The Federal Reserve.  You can see how deceptive these people truly are – they create a problem and then propose a solution – a solution that expands their power.  Their tentacles are now spreading into the entire system.

Here is a summary of the proposed changes:

·         The Federal Reserve will be able to ‘monitor’ risks across the entire financial system (this is a very broad statement – and essentially means that the Fed will oversee everything)

·         The Federal Reserve will be able to ‘examine’ any firm that could threaten ‘financial stability’ (again – broad powers over all banking/financial firms)

·         Our nations largest banks and financial firms would be subject to ‘heightened oversight’ by the Fed (Sounds like big brother will be watching closely)

·         Our government would be given power to seize large financial companies (just what we need – more government intervention)

My personal belief is that our President is being told what to say and do – to implement these changes.  The following excerpt from the article below says it all.

 “President Obama said the plan would ensure "that lines of responsibility and accountability are clear" by placing authority in the Fed's hands.”

 It shouldn’t surprise anyone that Tim Geithner supports the plan – he’s been nothing more than a mouthpiece for supporting the Fed since moving to Treasury Secretary – from the New York Fed.  Mr. Geithner – there are always alternatives.  There are alternatives that would remove this ridiculous, unsustainable system – but we certainly won’t hear these alternatives from you, our President or from most of our leaders in Congress (Ron Paul is an exception).

"Treasury Secretary Timothy Geithner reiterated the administration's determination to make the Fed the systemic regulator. "I do not believe there is a plausible alternative," he told reporters.”

Does anyone really believe that our President and leaders of Congress are so blind (or ignorant) that they do not understand what the Fed is – or is trying to do?  I don’t.  If this follows their standard operating procedure – then we’ll see some minor opposition to this plan – and then the changes will be passed – and the Fed will gain greater control over – everything.  The only way this will ever be stopped - is if the American people wake up to what is really happening – and decide to do something about it.  Currently – we’re a lot like lemmings being led off a cliff.  I sincerely hope this changes.

jg – June 18, 2009

JUNE 18, 2009

Not Everyone Is Cheering Fed's New Role

By SUDEEP REDDY

Wall St. Journal

WASHINGTON -- The Federal Reserve would become the nation's most powerful financial overseer, an approach that is becoming a flashpoint as lawmakers and consumer groups attack the central bank for its role in creating and handling the financial crisis.

WSJ's Damian Paletta discusses President Barack Obama's new plan to overhaul supervision of financial markets.

The proposal, if passed into law, would represent one of the biggest changes ever in the Fed's role. The central bank would win power to monitor risks across the financial system, and sweeping authority to examine any firm that could threaten financial stability, even if the Fed wouldn't normally supervise the institution. The nation's biggest and most interconnected firms would be subject to heightened oversight by the central bank.

President Obama said the plan would ensure "that lines of responsibility and accountability are clear" by placing authority in the Fed's hands.

Critics who wonder about the wisdom of the move say the Fed failed to use its authority to address loose lending practices and the housing bubble that pushed the U.S. into a recession. The Fed responded aggressively after the crisis began, but some argue those actions were overly secretive.

A movement is spreading in Congress to force the Fed to disclose the identity of institutions that borrow from the bank, a move officials say would discourage firms from seeking needed emergency funds. A large group of House members is pushing to audit the Fed.

"I don't have a lot of faith in the Fed being able to handle that big a universe," said John Taylor, president of the National Community Reinvestment Coalition, a group of 600 community organizations.

Senate Banking Chairman Christopher Dodd (D., Conn.) and House Financial Services Chairman Barney Frank (D., Mass.) both said Wednesday the Fed's role is the biggest potential source of friction in the plan.

Mr. Dodd said there is well-founded concern the Fed's responsibility for monetary policy, including setting interest rates, could conflict with its role monitoring systemic risk. Fed officials have said they can handle multiple responsibilities. "There's not a lot of confidence in the Fed at this point, and I'm stating the obvious," Mr. Dodd said.

Mr. Frank said most of Mr. Obama's proposals reflect a broad consensus on Capitol Hill. But "the interplay between the Fed and the rest of the regulators on systemic risk" will be a thorny issue.

Some lawmakers want an interagency council, another feature of the plan, to have greater responsibility for systemic risk, and the authority to act. Obama administration officials believe a committee approach would allow problems at financial institutions to fester without a clear regulator responsible for addressing them.

Listening to President Barack Obama's speech on Wednesday at the White House, from left, were Rep. Barney Frank, Sens. Dick Durbin and Christopher Dodd, HUD Secretary Shaun Donovan, Treasury Secretary Timothy Geithner and administration economic adviser Lawrence Summers.

"How much power the Fed is going to have is going to be probably one of the most controversial issues about this plan," said Robert Litan, a senior fellow at the Brookings Institution. He said he thinks the Fed's role in the new regulatory framework is likely to be changed by lawmakers.

Treasury Secretary Timothy Geithner reiterated the administration's determination to make the Fed the systemic regulator. "I do not believe there is a plausible alternative," he told reporters.

Fed officials said they took action throughout the financial crisis because the central bank was often the only institution with the power to prevent turmoil. The regulatory overhaul would provide a mechanism for the government to unwind failing nonbank financial institutions, freeing the Fed of the need to act. The central bank has also taken steps to release details about its lending programs.

Despite a major conceptual change in the Fed's role, central bank officials believe perhaps only a handful of additional firms would fall under their supervision. They are also expected to make a case to keep the Fed's consumer-protection responsibility -- with some tweaks -- instead of giving up that role entirely, as envisioned under the plan.

The regulatory overhaul proposed by the Bush administration last year also would have given the Fed responsibility for financial stability. But that plan would have removed its role of supervising banks. Fed officials quietly objected, saying it would be hard to guard against systemic risks without also performing routine bank examinations. The proposal gained little traction amid an escalating financial crisis.

The Obama proposal would require the central bank to seek approval from the Treasury secretary before invoking emergency lending powers. It also calls for the Fed to work with the Treasury and outside experts to review the Fed's structure and governance, including the role of the regional Fed banks. A report due by Oct. 1 would be used to propose changes to the Fed's structure "to improve its accountability and its capacity to achieve its statutory responsibilities."

Regulatory Restructuring

—Jonathan Weisman and Damian Paletta contributed to this article.

Write to Sudeep Reddy at sudeep.reddy@wsj.com

Based on the speed at which these regulatory changes are being made – I have a feeling we’re on the verge of some major economic shocks.  Things appear to be somewhat calm – but there are serious storms approaching.

This is a long article – so I’ll list the important info here:

·        One proposal being pushed by the White House takes aim at industrial loan companies, which are allowed under their state-issued charters to collect federally insured deposits, offer credit cards, make loans and process financial transactions without facing as much scrutiny as traditional banks regulated by the U.S. government.

·        President Barack Obama wants companies with ILC charters to register as bank-holding companies with the Federal Reserve. That would put them in the same regulatory category as Bank of America Corp. and J.P. Morgan Chase & Co., subjecting the non-banks to much greater government oversight.

·        If that happens, most companies with ILC charters likely would close them down, potentially shutting off another source of credit for consumers, industry experts predict. That's because the companies might not be able to satisfy the Fed's capital and other requirements, and thus would be ineligible to become bank-holding companies, or they would balk at heavier regulation.

I’ll keep this short – because it’s obvious what is happening here.  Who would gain regulatory authority over these firms under this proposal?  The Federal Reserve.  Are you beginning to see where these new regulatory proposals are leading? 

Our entire financial system is being consolidated under one authority. This alone should cause us concern. A private bank (a small group of powerful interests) should never be given absolute economic power over the people of the United States.  This is why our founders wrote the Constitution – to prevent this very thing from happening.

The even bigger issue is that this authority is controlled by people who have one, overriding objective – a one world socialist government.   

JUNE 19, 2009

Corporate Lenders Get Hit

Financial-Oversight Bill Snags Loan Arms of Harley, Target; Girding for Battle

By DAVID ENRICH and ROBIN SIDEL

Wall St. Journal

Target Corp., Harley-Davidson Inc., Pitney Bowes Inc. and dozens of other companies that aren't banks but pitch loans and other financial products are being squeezed by the Obama administration's financial-overhaul plan.

One proposal being pushed by the White House takes aim at industrial loan companies, which are allowed under their state-issued charters to collect federally insured deposits, offer credit cards, make loans and process financial transactions without facing as much scrutiny as traditional banks regulated by the U.S. government.

President Barack Obama wants companies with ILC charters to register as bank-holding companies with the Federal Reserve. That would put them in the same regulatory category as Bank of America Corp. and J.P. Morgan Chase & Co., subjecting the non-banks to much greater government oversight.

Under Scrutiny

If that happens, most companies with ILC charters likely would close them down, potentially shutting off another source of credit for consumers, industry experts predict. That's because the companies might not be able to satisfy the Fed's capital and other requirements, and thus would be ineligible to become bank-holding companies, or they would balk at heavier regulation.

As of last month, there were 45 ILCs with combined assets of $232.3 billion, according to the Federal Deposit Insurance Corp. That is equivalent in size to the 11th-largest U.S. bank, or slightly smaller than regional bank U.S. Bancorp.

Though relatively small players in the financial system, ILCs provide a wide variety of products and services to businesses and consumers. The offerings range from financing purchases of Harley motorcycles to loans that cover corporate medical payments to insurers. Eliminating or sharply curtailing those operations could make it harder or costlier for customers to get credit.

In its "white paper" outlining the reform package, the administration said the existence of ILCs and other non-bank charters have allowed certain institutions "to obtain access to the federal safety net," namely through insured deposits, while avoiding oversight by the Fed. The administration argues that in order for a regulator to be sufficiently powerful, it has to be able to see all the risks, and thus oversee all companies that provide financial services.

ILCs provide a wide variety of products and services, from financing purchases of Harley motorcycles to loans for corporate medical payments

That's setting the stage for a showdown on Capitol Hill. Some lawmakers and banking groups are vowing to fight the ILC provision, which they see as an overzealous attempt to create a level regulatory playing field at the expense of companies that didn't play major roles in the financial crisis.

"There is not a single ILC that contributed to the crisis," said Sen. Robert Bennett, a Utah Republican, at a hearing Thursday with Treasury Secretary Timothy Geithner. "You're going to wipe them out as a source of credit, take them out of the marketplace where they're providing niche credit for people that don't otherwise get it."

Mr. Geithner responded that the change is meant to eliminate "gaps and loopholes" in financial regulation. But he said the administration is open to negotiating the plank with lawmakers. "We're going to have to work to try to persuade you of the merits of these proposals and take your concerns into consideration," Mr. Geithner said.

The brewing fight over the ILC proposal, tucked into a single paragraph in an 88-page document released Wednesday, is an early indicator of the intense scrutiny that the Obama administration's reform plan will encounter as lawmakers and industry groups pore over its details. In addition to policy disputes, lawmakers are looking to protect local industries. Utah, for example, is home to most of the nation's ILCs, although California, Nevada and other states also are popular destinations for the charters. Only a handful of states offer ILC charters, and for those that do, they can be a source of tax revenue.

Howard Headlee, president of the Utah Bankers Association, called the Obama administration proposal "extremely misguided" and said it would force many ILCs to shut down. But he said he's optimistic that lawmakers will kill the provision. "I'm confident that congressmen will see how foolish it is to be destroying sources of credit in this economy."

If the provision becomes law, the implications could be far-reaching. A diverse array of companies -- including Target, Pitney Bowes, UnitedHealth Group Inc., WellPoint Inc. and CMS Energy Corp. -- have Utah-based financing arms with ILC charters.

The companies use the charters to provide financial services that complement their main businesses and can be a source of profits. For example, Target, the Minneapolis-based retailer, uses its Target Bank subsidiary to extend credit to shoppers. UnitedHealth's OptumHealth Bank Inc. administers health-savings accounts and offers loans to cover medical payments, as does WellPoint's Arcus Financial Bank. EnerBank USA, a unit of Jackson, Mich.-based CMS Energy, finances home-improvement and energy loans nationwide. Pitney Bowes Bank Inc. allows businesses to prepay or borrow funds for postage costs.

Most of those companies said they were studying the administration's proposal and that it would be premature to comment. Pitney Bowes, which established its ILC in 1998, said it "will work to educate Congress about their role in providing credit for commercial activity -- something that is even more important during the current recession. We think it is important that these services continue."

The obscure banking charters, originally created in the early 1900s to provide loans to industrial workers, have been a sporadic source of controversy for years.

Federal Reserve officials, including ex-Chairman Alan Greenspan, have warned about the perils of allowing traditional commercial businesses to have banking operations. One concern is that the banking portion of the business could be at risk if, say, the retailing side went under. There are also competitive issues if giant companies use their existing customer base to crowd out traditional banks.

In 2006, ILCs were thrust into an especially bright spotlight after Wal-Mart Stores Inc. applied for a charter to process credit-card transactions. Banks waged an aggressive lobbying campaign to derail the retailing behemoth's application, arguing that it was laying the groundwork for a foray into retail banking.

Amid the mounting furor, the FDIC imposed a moratorium on new applications for ILC charters, to allow Congress time to debate whether to change the law. Wal-Mart withdrew its application.

In May 2007, the U.S. House passed a bill that would subject ILCs to greater federal oversight and bar the charters from being granted to nonfinancial firms. The bill died in the Senate.

—Damian Paletta and Ann Zimmerman contributed to this article.

Write to David Enrich at david.enrich@wsj.com and Robin Sidel at robin.sidel@wsj.com

Printed in The Wall Street Journal, page A1

President Obama campaigned on a platform of ‘change’.  The only change I see relates to our record budget deficits – but I don’t think this is what the American people had in mind.  Here’s another example of how nothing has changed. 

jg – July 8, 2009

Failing Upwards: The Wall Street White House

By Barry Ritholtz - July 6th, 2009, 9:00AM

We are seeing belated glimmers of understanding of the credit crisis from the White House. Still nothing on the Ratings Agencies, and Glass Steagall, and too little on Derivatives and leverage, but at least there seems to be some recognition on TBTF (see The End of Too Big to Fail ?).

However, where there is real despair has been in the cult of the sacred cow appointments.

The latest ugly data points: The number of Wall Street (versus business or academic) appointments. To wit: “How Goldman Sachs and Citi Run the Show“ via Andrew Cockburn.

Cockburn details the following recent Wall Street transplants who are running things in the Adminstiration:

• Robert Hormats, Vice Chairman of Goldman Sachs, is to be installed as Under Secretary of Economics, Business, and Agricultural Affairs.

• Jacob Lew, Chief Financial Officer of Citigroup Alternative Investments Group, as Deputy Secretary of State
(Lew’s dept. lost $509 million in the Q1 2008)

• Michael Froman, Citigroup, Deputy National Security Adviser for International Economic Affairs. Froman was formerly Chief of Staff to Robert Rubin at Treasury, before following him to Citi.

• Froman’s deputy, David Lipton, ran Citi’s global country risk management effort.

• Lewis Alexander, Citigroup’s chief economist and now Counselor to Treasury Secretary Timothy Geithner

• Neal Wolin, President and COO, Hartford Insurance Company, Property and Casualty Group now Deputy Treasury Secretary (Hartford received $3.4 billion in TARP funds).

• Gary Gensler, Goldman Sachs partner, now Chairman of the Commodity Futures Trading Commission Note: It was Gensler who was a key proponent (as Clinton’s Assistant Secretary of Treasury) in pushing the Commodity Futures Modernization Act of 2000.

• Mark Patterson, Goldman Sach’s lobbyist, now Treasury Chief of Staff

• Linda Robertson, Enron lobbyist, Chief PR Federal Reserve

Defenders of the Status Quo!

Source:
The Wall Street White House
ANDREW COCKBURN
Counterpunch, July 2, 2009
http://www.counterpunch.org/andrew07022009.html

During his campaign, President Obama repeatedly criticized George Bush’s use of Presidential signing statements.  Now we see Obama doing the same thing.  Another example of how nothing has ‘changed’.  We have checks and balances within our Constitution to prevent someone from abusing executive power – this type of behavior removes the checks and shifts the balance of power.  It’s much easier to push your agenda if you don’t have to worry about that pesky congress.

jg – July 15, 2009

JULY 15, 2009

Obama's Fiats Anger Lawmakers

Wall St. Journal

By JONATHAN WEISMAN

WASHINGTON -- With $108 billion in International Monetary Fund loan guarantees in jeopardy last month, White House economic officials begged, cajoled and cut deals with Democrats to secure passage of legislation boosting the fund's power. Days later, President Barack Obama announced he wasn't bound by any of the agreements.

The ensuing flap over the president's June 24 signing statement is the latest in a series of clashes between the White House and Congress over an issue Mr. Obama once fought against himself: presidential fiat.

As a candidate, Mr. Obama pledged that he wouldn't abuse the presidential signing statement, a declaration issued by the president when he signs a bill to give his interpretation of that law. President George W. Bush used so many signing statements -- more than 750 -- that the American Bar Association criticized it as an abuse of power.

After Mr. Obama's issuance of his second signing statement last month, even some Democrats say he isn't keeping his word on reining in unilateral presidential actions.

"Of course there's a broader issue here," said House Financial Services Chairman Barney Frank (D., Mass.), referring to the brewing battles with Mr. Obama over presidential prerogative. "It's outrageous. It's exactly what the Bush people did."

A White House official said the signing statement was issued "out of an abundance of caution" to preserve "core presidential prerogatives" in the area of foreign policy. "The administration negotiated in good faith on this bill and has every intention of living up to our commitments undertaken in the legislation," said White House deputy press secretary Jen Psaki.

The House last week reinstated the restrictions on the IMF that were undone by the president's June signing statement, by a vote of 429-2, in a foreign-operations appropriations bill.

In a letter slated for delivery on Wednesday, Mr. Frank, House Appropriations Committee Chairman David Obey (D., Wis.), and New York Democratic Reps. Nita Lowey and Gregory Meeks will inform the president that if he issues another signing statement on IMF and World Bank funding, Congress will cut off the funds he wants.

Mr. Obama needs good relations with congressional Democrats to help pass his agenda on health care, energy and financial-markets regulation.

At the London summit of the Group of 20 largest economic powers in April, Mr. Obama had promised to secure large increases in loan guarantees for the IMF. With the Group of Eight summit kicking off soon, failure to make good on that promise would have been an embarrassment.

Many Republicans opposed the IMF loan-guarantee language, which had been inserted in a war-spending bill making its way through Congress last month, calling it a bailout for international bankers.

The White House needed to win over balking Democrats. Rep. Brad Sherman (D., Calif.), negotiating for some Jewish lawmakers, said he told White House National Economic Council Director Lawrence Summers they needed stronger guarantees that IMF loans wouldn't go to Iran.

Senate Foreign Relations Committee Chairman John Kerry (D., Mass.) and ranking committee Republican Richard Lugar of Indiana said they wanted more transparency from, and oversight over, the World Bank and IMF. Mr. Frank, bargaining for a group of House liberals, wanted assurances that the lenders wouldn't demand that poor governments cut education, environmental and other social programs as a prerequisite to getting emergency loans.

Mr. Frank said his talks with Treasury Secretary Timothy Geithner couldn't be described as negotiations. Mr. Geithner, he said, was begging. He said Treasury assurances that it would accept these restrictions persuaded him to switch his vote, and that he, in turn, won over several other Democrats.

Mr. Kerry's account was similar, saying for the past several months, he had worked with the Senate and Treasury "to encourage financial institutions such as the IMF to become more transparent and accountable."

Mr. Obama's signing statement said the IMF and World Bank provisions "would interfere with my constitutional authority to conduct foreign relations."

Ted Truman, an international economist who recently left the Treasury, said some of the lawmakers' requirements weren't feasible. The U.S. doesn't have the power to block a particular country from obtaining IMF loans, he said. "You either allocate them to everyone or no one. You can't pick and choose."

Mr. Frank has long been angered by the World Bank's "Doing Business" report, which ranks countries according to such measures as the ease of starting businesses and enforcing contracts there. The report ranks Saudi Arabia ahead of Sweden.

Mr. Frank, whose support would be critical if the White House is to win passage of its plan to impose stronger regulation on financial markets, wanted language explicitly saying assistance shouldn't be based on the report's findings. He got it. Mr. Obama negated it.

Write to Jonathan Weisman at jonathan.weisman@wsj.com

Over the past few months – I’ve been reading that commercial real estate is poised for a significant ‘correction’ – similar to housing.  Looks like we’ve arrived (see chart at end of post) – more write-downs and bank failures ahead.  If you’ve paid attention over the past couple of months, you’ll notice that everything seems to be dropping in value 15-30% - corporate revenue (2nd qtr earnings reports), local/state/federal government tax revenue (charts below), real estate, etc.  You have to wonder what will happen to stock markets once people stop focusing on Wall St. earnings 'estimates' (which have been extremely low) and start focusing on year over year revenue declines.

Federal Tax Withholding

State Tax Revenues

If you’re the President and have made promises regarding your ‘stimulus’ plan – what do you do if economic data does not support your overly optimistic budget/economic projections?  You delay the report. It appears the White House will delay the midsummer budget update until September.  Regardless of when they report - you can bet that Federal revenues will be down, spending up - and the deficit growing much faster than anticipated.

WASHINGTON (AP) - The White House is being forced to acknowledge the wide gap between its once-upbeat predictions about the economy and today's bleak landscape.

The administration's annual midsummer budget update is sure to show higher deficits and unemployment and slower growth than projected in President Barack Obama's budget in February and update in May, and that could complicate his efforts to get his signature health care and global-warming proposals through Congress.

_____________________________________________

Monday, July 20, 2009

CRE: I Think the Shoe Just Dropped

www.econompicdata.blogspot.com

The worry that commercial real estate was the "next shoe to drop" goes back a long time, but after this additional data point, I think we're here. How banks and other financial institutions are hiding this level of damage has me scratching my head. Calculated Risk with the details:

From Dow Jones: Moody's: Commercial Real-Estate Prices Fall 7.6% In May

Commercial real-estate prices fell 7.6% in May ... The indexes are down 29% from a year ago and 35% from their October 2007 peak.

According to Moody's, CRE prices fell in 8.6% in April (about 16% in two months).

Talk about cliff diving!

Commercial Real Estate

 

As I have mentioned before – President Obama is moving us toward the European economic model.  This article details some of the taxes that are being planned to pay for our ever-increasing deficits.  We are going to tax and spend ourselves into oblivion.

Our current President is no different than his predecessors.  Promises (lies) to get elected – then do whatever you want once elected. 

We see, once again, that nothing has ‘changed’.

jg – August 4, 2009

AUGUST 4, 2009

Teeing Up the Middle Class

Wall St. Journal

Few of President Obama’s 2008 campaign pledges were more definitive than his vow that anyone making less than $250,000 a year “will not see their taxes increase by a single dime” if he was elected. And he was right, very strictly speaking: It’s going to be many, many, many billions of dimes.

Asked about raising taxes on the middle class on Sunday on CBS’s “Face the Nation,” White House economist Larry Summers wouldn’t repeat Mr. Obama’s pre-election promise. “It is never a good idea to absolutely rule things out no matter what,” Mr. Summers said—except, apparently, when his boss is running for office. Meanwhile, on ABC’s “This Week,” Treasury Secretary Timothy Geithner also slid around Mr. Obama’s vow and said, “We have to bring these deficits down very dramatically. And that’s going to require some very hard choices.”

These aren’t even nondenial denials. The Obama advisers are laying the groundwork for taxing the middle class while claiming the deficit made them do it.

The liberal establishment is even further along in finally admitting that Mr. Obama wasn’t, er, telling the truth. A piece in the New York Times over the weekend declared in a headline that “the Rich Can’t Pay for Everything, Analysts Say.” And it quoted Leonard Burman, a veteran of the Clinton Treasury who now runs the Brookings Tax Policy Center, as saying that “This idea that everything new that government provides ought to be paid for by the top 5%, that’s a basically unstable way of governing.” They’re right, but where were they during the campaign?

In an editorial on February 26, “The 2% Illusion,” we wrote that the feds could take 100% of the taxable income of everyone in America earning more than $500,000 and still have raised only $1.3 trillion even in the boom year of 2006. The rich are fewer and less rich now, while the Obama budget is nearly $4 trillion.

Democrats already plan to repeal the Bush tax cuts, but that won’t raise enough money. So they’re proposing an income tax surcharge on “the wealthy,” but that won’t raise enough either. Democrats have no choice but to soak the middle class because only they have enough money to finance the liberal dream of yoking the middle class to cradle-to-grave government entitlements.

Democrats have already taxed the middle class by raising cigarette taxes to pay for the children’s health-care expansion. They’re also teeing up average earners with their cap-and-tax energy bill. Mr. Obama had hoped that cap-and-tax would raise some $646 billion over a decade, but Democrats in the House had to give most of that away in bribes to business to pass their bill. To finance ObamaCare, they’re also proposing another 10-percentage-point increase in the payroll tax on firms and individuals that don’t purchase health insurance. But this won’t raise enough money either.

So waiting in the wings is the biggest middle-class tax increase of them all: a European-style value added tax, or VAT. This tax would apply to every level of production or service, and it is beloved by politicians in Europe because it raises so much money so easily without voters noticing. Ezekiel Emanuel, a White House aide and brother of Chief of Staff Rahm Emanuel, has advocated a 10% VAT to finance national health care. Look for a VAT to be one of the prominent options when Mr. Obama’s tax reform commission issues its report later this year.

The undeniable reality is that you can’t run a European-style welfare-entitlement state without European-style levels of taxation on the middle class (and eventually without low European-style growth and high jobless rates). It’s looking more and more like Mr. Obama’s no-middle-class-tax pledge was one of the greatest confidence tricks in American political history.

Printed in The Wall Street Journal, page A12

The American people did not want socialized health care in the 90’s (promoted by Hillary Clinton) and they don’t want it now (promoted by President Obama).  As you now know – this isn’t just about healthcare – there is a bigger agenda at work here.  Everyone is beginning to realize this.  People in America are waking up.

This quote from the article below says it all:

One woman prompted a standing ovation by telling Specter: "I don't believe this is just health care. This is about the systematic dismantling of this country. … I don't want this country turning into Russia, turning into a socialized country. What are you going to do to restore this country back to what our founders created, according to the Constitution?"

A standing ovation.  Americans want what we’ve always wanted – freedom to choose our own way – and it does not matter what the issue is.  We do not want anyone (including our Government) making our decisions for us. 

The problem is that we no longer resemble our nation when it was founded.  Most of our current leaders have no idea what our founding fathers created (a Republic where we all have inalienable rights) – so they don’t understand when we say we want to return to the nation that our founders created. 

Instead, we get answers like this:

However, Specter also noted that overhauling the health-care system is about America taking care of all its people.

"In our social contract, we have provisions that see to it that you take care of people who need some help," he said.

Mr. Specter – the U.S. Constitution is not a ‘social contract’ – nor does it contain provisions that the U.S. Government should take care of everyone. Actually – it was created to do the opposite – to give us freedom to take care of ourselves.  I admit – providing healthcare to everyone sounds good on paper (as many things do) – but in reality – it fails (as many things do once they face the harsh test of reality).  It fails because you would force us to pay a bloated, wasteful, incompetent government to manage yet one more facet of our lives.  You are, once again, taking away my right to choose based on a free market.  Can a private enterprise that must play by the rules of finance (private healthcare) – compete with a massive entity that does not (our government)?  Over time – government healthcare will become our only healthcare (regardless of what you tell us) - a healthcare system where decisions are made for us - a healthcare system that we do not want.

Do we think the government does a good job with what it already manages?  No.  Do we think a government that has repeatedly shown us that it cannot balance a budget and has driven us to the edge of financial ruin can somehow manage another bloated bureaucracy?  No. 

Should we help people Mr. Specter?  Yes – we should.  But that is my personal decision.  I choose whether to give to my Church and charities, whether to help my family and my friends – whether to help someone who needs assistance.  I choose what to do with my money.  I do not want to give it to a huge bureaucracy and watch it vanish without any knowledge of how it is really being spent. Contrary to what you believe – my money is not yours to do with as you please. With all of the local, state and federal taxes I pay – I don’t want to give you any more of my money to mismanage.  Not one dime.

I believe that most Americans feel the same way I do – which is why people are angry about this universal healthcare proposal. As Americans, we do not like to have anything shoved down our throats – and this is exactly what you are doing. I have read that most of the town hall meetings have been highly tense affairs – with lots of shouting and accusations.  This may be a surprise to the people in Washington D.C. – but it’s not a surprise to me.  You are slowly taking away our freedoms – and we’re now noticing.  This isn’t just about healthcare Mr. Specter – it’s about the American people getting fed up with our incompetent leadership losing touch with the people who elected them. 

The American people have been lied to – about many things over the past few years.  We have been told repeatedly that all of these stimulus and bailout packages will revive our economy – but our economy continues to deteriorate.  Many of us are now realizing that most of the ‘stimulus’ is going to big banks and corporations – not us.  We see our government mismanaging our finances at the local, state and federal level – leading to massive deficits and budget cuts – which is accelerating our decline. 

We have been lied to about the events of September 11, 2001.  Many people have demanded an independent investigation of 9/11 (family members of those killed, many architects and engineers who view the events with a trained eye, many American citizens – thousands upon thousands of people).  To date – we have received no response.

The majority of Americans opposed the wars in Iraq and Afghanistan – yet off we go to fight two wars.  These wars are killing and injuring our sons, daughters, fathers and mothers.  These wars are separating us from our families – straining our marriages, keeping us from our children.  We don’t know when they will end.  We hear lots of talk of pulling out of these countries – but we see no action.

Mr. Specter – we are beginning to understand that our government is no longer by the people – for the people.  It now does what it wants – whenever it wants.  It is now for those special interests that have money and power.  It is no longer for us – it is for you – to do with as you please.  Many of us are losing our jobs – we are being forced out of our homes – we are struggling to afford food to eat – and while we continue to struggle, we see you giving more money to failing banks and financial institutions.  We see you approving $500 million for private jets so that our Congressional ‘leadership’ can travel the world.  I’m sure traveling to the South Pole or Mongolia is nice – I’m just not sure why I’m paying for it.

Mr. Specter, we do not care if Bank of America or Goldman Sachs fails.  These are large institutions that took huge risks in order to chase after profits.  They made horrible business decisions.  In a truly free market – if you make colossal mistakes – it is quite possible that you will fail. If you fail – others step in to pick up the pieces. If the entire system fails – then maybe it’s time for a new system that doesn’t favor a small group of powerful interests. We understand this – why don’t you?  You are taking my tax money and giving it to wealthy people who failed.  It surprises you that I’m angry about this?

Mr. Specter, small businesses support approximately 70-80% of the jobs in America – yet everything you are doing (proposed healthcare taxes, healthcare requirements, access to loans/capital, etc.) is hurting small business.  Based on your actions – it would appear that you are attempting to destroy small businesses while supporting large financial institutions and corporations.  It surprises you that I’m angry about this?

Mr. Specter, I will warn you and our President that the American people are waking up.  We are now realizing what you are trying to do – and we don’t like it.  We will tolerate some things – but we will not tolerate the destruction of our freedom.  We want less government – not more. We do not want you managing our businesses or our healthcare plans.  We want you out of our lives as much as possible. We want a Republic where our rights are honored above all else and our government actually listens to us.

Mr. Specter, if you insist on taking away more of our freedoms - then you will force us to act.  These town hall meetings are just the beginning. Maybe you think we’re soft and easily manipulated?  Maybe we have been – but no longer. Do I need to remind you what has happened in the past to those who have threatened our freedom in America?  This nation was founded because England tried to do – exactly what you are trying to do to us. We have never accepted oppressive government – and we won’t now.  Continue to threaten our freedom as you are doing now – and we will unite - and stand against you.  Make no mistake – we are not like you.  We will not give in easily to socialism and global government.  You are waking a sleeping giant.

Mr. Specter, if we allow you and our leaders in Washington D.C. to destroy this country – then everyone who fought and died to protect our freedom – will have died in vain.  We can’t let that happen.  We won’t let that happen. 

We will truly unite under God.  We will seek our creator and ask Him to forgive us for what we have become.  We will seek knowledge and wisdom from Him – not you.  We will ask for strength and courage from the Creator of the heavens and earth.  We will put away our prejudices and our differences and we will stand - against you and the global elite. 

Mr. Specter, we do not want healthcare reform – we want our freedom.  We don’t want the government running our lives – we want to remain free to choose. We want to be free of this international banking cartel that is destroying our economy and our nation.  We want strong leaders who will stare into the face of evil and not flinch – but stand for us.  We want leaders who are honorable and listen to us – and act in our best interests – not in the interests of a small minority. 

We want true leadership – and we’re not getting it.

Specter faces angry crowd at town hall meeting

CNN.com

Posted: August 11th, 2009 12:02 PM ET

LEBANON, Pennsylvania (CNN) — A hostile crowd shouted questions and made angry statements Tuesday at a town hall meeting on health care led by Democratic Sen. Arlen Specter.

At one point, Specter shouted into his microphone that demonstrators disrupting the proceedings would be thrown out.

"We're not going to tolerate any demonstrations or any booing," he said after one audience member shoved another making an unsolicited speech. "So it's up to you."

Many in the crowd identified themselves as conservative Republicans, with one man noting they had voted Specter to Congress before the senator changed parties earlier this year.

One woman prompted a standing ovation by telling Specter: "I don't believe this is just health care. This is about the systematic dismantling of this country. … I don't want this country turning into Russia, turning into a socialized country. What are you going to do to restore this country back to what our founders created, according to the Constitution?"

Specter responded by noting his support for the Constitution as a past chairman of the Senate Judiciary Committee on issues such as warrantless wiretaps.

"When you ask me to defend the Constitution, that's what I've been doing," Specter said.

However, Specter also noted that overhauling the health-care system is about America taking care of all its people.

"In our social contract, we have provisions that see to it that you take care of people who need some help," he said.

Several people asked if a health-care bill would mean taxpayer dollars would pay for others to get abortions. Specter responded that any measure passed by Congress would allow people to choose a plan that didn't cover abortions.

The shoving incident occurred early in the 90-minute session, when a man started shouting that he had been told by Specter's staff that he could speak, but he didn't get one of the 30 cards distributed to people allowing them to ask questions. Another man stood up and shoved the protester, and Specter approached the men shouting for calm.

AUGUST 11, 2009

Obama’s Tone-Deaf Health Campaign

Wall St. Journal

By DOROTHY RABINOWITZ

It didn’t take chaotic town-hall meetings, raging demonstrators and consequent brooding in various sectors of the media to bring home the truth that the campaign for a health-care bill is, to put it mildly, not going awfully well. It’s not hard now to envision the state of this crusade with just a month or two more of diligent management by the Obama team—think train wreck. It may one day be otherwise in the more perfect world of universal coverage, but for now disabilities like the tone deafness that afflicts this administration from the top down are uninsurable.

Consider former ABC reporter Linda Douglass—now the president’s communications director for health reform—who set about unmasking all the forces out there “always trying to scare people when you try to bring them health insurance reform.” People, she charged, are taking sentences out of context and otherwise working to present a misleading picture of the president’s proposals. One of her key solutions to this problem—her justly famed message encouraging citizens to contact the office at flag@whitehouse.gov if they got an email or other information about health reform “that seems fishy”—set off a riotous flow of online responses. (The word “fishy,” with its police detective tone, would have done the trick all by itself.)

These commentaries, packed with allusions to the secret police, the East German Stasi and Orwell, were mostly furious. Others quite simply hilarious. Ms. Douglass, who now has, in her public appearances, the air of a person consigned to service in a holy order, was not amused.

Neither has she seemed to entertain any second thoughts about the tenor of a message enlisting the public in a program reeking of a White House effort to set Americans against one another—the good Americans protecting the president’s health-care program from the bad Americans fighting it and undermining truth and goodness.

She intended no such outcome, doubtless. That this former journalist, now a communications director, failed to notice anything amiss in the details of that communiqué is a bit odd but not altogether surprising.

Crusades are busy endeavors, the enlistees in this one, like those in every undertaking of this White House, concerned with just one message. Which is that the Obama administration is in possession of vital answers to ills and inequities that have long afflicted American society (whether Americans know it or not), and that those opposed to those answers and that vision are cynics, or operatives of the powerful vested interests responsible for the plight Americans find themselves in (whether they know it or not), or political enemies bent on destroying the Obama administration.

It shouldn’t have been surprising, either, that the tone of much of the commentary on the town-hall protests was what it was. There was Mark Halperin for one, senior political editor for Time, bouncing off his chair, Sunday, in agitation over all the media coverage of this rowdiness—“a horrible breakdown of our political culture, our media culture” and so “bad for America,” as he told CNN’s Howard Kurtz. “I’m embarrassed about what’s going on, as an American.” The disruptions and coverage thereof distorted serious discussion, he explained. Mark Shields said much the same on Friday’s PBS NewsHour, if with less excitation, pointing out that these events were “not good for the democratic process,” and were a breakdown of civil debate.

There was no such hand-wringing over the decline of civil debate, during, say, election 2004, when cadres of organized demonstrators carrying swastika-adorned pictures of George W. Bush routinely swarmed about, and packed rallies. There was also that other “breakdown of our media culture,” that will dwarf all else as a cause for embarrassment, the town-hall coverage included, for the foreseeable future. That would be, of course, the undisguised worshipful reporting of the candidacy of Barack Obama.

That treatment, or rather its memory—like the adulation of his great mass of voters—has had its effect on this president, and not all to the good. The election over, the warming glow of those armies of supporters gone, his capacity to tolerate criticism and dissent from his policies grows thinner apace. His lectures, explaining his health-care proposals, and why they’ll be good for everybody, are clearly not going down well with his national audience.

This would have to do with the fact that the real Barack Obama—product of the academic left, social reformer with a program, is now before that audience, and what they hear in this lecture about one of the central concerns in their lives—his message freighted with generalities—they are not prepared to buy. They are not prepared to believe that our first most important concern now is health-care reform or all will go under.

The president has a problem. For, despite a great election victory, Mr. Obama, it becomes ever clearer, knows little about Americans. He knows the crowds—he is at home with those. He is a stranger to the country’s heart and character.

He seems unable to grasp what runs counter to its nature. That Americans don’t take well, for instance, to bullying, especially of the moralizing kind, implicit in those speeches on health care for everybody. Neither do they wish to be taken where they don’t know they want to go and being told it’s good for them.

Who would have believed that this politician celebrated, above all, for his eloquence and capacity to connect with voters would end up as president proving so profoundly tone deaf? A great many people is the answer—the same who listened to those speeches of his during the campaign, searching for their meaning.

It took this battle over health care to reveal the bloom coming off this rose, but that was coming. It began with the spectacle of the president, impelled to go abroad to apologize for his nation—repeatedly. It is not, in the end, the demonstrators in those town-hall meetings or the agitations of his political enemies that Mr. Obama should fear. It is the judgment of those Americans who have been sitting quietly in their homes, listening to him.

—Ms. Rabinowitz is a member of the Journal’s editorial board.

The following is an article on Dr. Ezekiel Emanuel - health adviser to President Obama.  Anytime I see someone in our government who believes something like this – I immediately think – the socialism train continues to move forward.

“Dr. Emanuel is part of a school of thought that redefines a physician’s duty, insisting that it includes working for the greater good of society instead of focusing only on a patient’s needs”

Wouldn’t it be in the best interests of society to help individual patients?  Isn’t this why the Hippocratic Oath was created?  What, exactly, does Dr. Emanuel mean when he says ‘the greater good of society’?  The rest of the article gives us a few clues.

“In numerous writings, Dr. Emanuel chastises physicians for thinking only about their own patient's needs.”

Wow.  I don’t know about you – but when I go to the Doctor – I prefer that the Doctor is focused on me – not ‘the greater good of society’. I don’t want anything that isn’t required – and I would hope that the Doctor would only do what was necessary (using his/her knowledge and expertise to determine the best course of action). I don’t want to go to the Doctor and wonder if I’m getting the care I need because the best course of action for me isn’t best for ‘society’.

‘But Dr. Emanuel believes doctors should serve two masters, the patient and society, and that medical students should be trained "to provide socially sustainable, cost-effective care."’

I don’t believe Americans want Doctors ‘serving’ anyone or anything – least of all ‘society’ – and I feel reasonably confident when I say that I’m sure Doctors don’t want to ‘serve’ society.  Let me translate - by ‘society’, Dr. Emanuel means our government.  All of this socialism rhetoric is the same.  We need to serve ‘society’, the ‘state’, the ‘greater good’, etc. 

What we want is for our Doctor to give us an open and honest evaluation – and recommend a best course of action based on their expertise and some common sense.  What we don’t want to hear is – ‘I can’t perform that procedure or administer that treatment because – in the long term – it’s not socially sustainable’.  I don’t even know what that means.  What nonsense.

‘Dr. Emanuel argues that to make such decisions, the focus cannot be only on the worth of the individual. He proposes adding the communitarian perspective to ensure that medical resources will be allocated in a way that keeps society going:’

I’ll translate again – Dr. Emanuel proposes that our government will dictate to our medical professionals how to treat individuals ‘in a way that keeps society going’. What does ‘keep society going’ mean?  Let’s find out.

“Dr. Emanuel concedes that his plan appears to discriminate against older people, but he explains: "Unlike allocation by sex or race, allocation by age is not invidious discrimination. . . . Treating 65 year olds differently because of stereotypes or falsehoods would be ageist; treating them differently because they have already had more life-years is not."

The youngest are also put at the back of the line: "Adolescents have received substantial education and parental care, investments that will be wasted without a complete life. Infants, by contrast, have not yet received these investments. . . . As the legal philosopher Ronald Dworkin argues, 'It is terrible when an infant dies, but worse, most people think, when a three-year-old dies and worse still when an adolescent does,' this argument is supported by empirical surveys." (thelancet.com, Jan. 31, 2009).”

So, the health advisor to the President of the United States advocates a healthcare system that discriminates against the oldest and the youngest of us.  It doesn’t matter what the condition is – or what may be required – if you are older or younger than the general population – you are at the end of the healthcare line.  I imagine that the people who share Dr. Emanuel’s view must look at this issue with a coldness I do not possess.  The question I would ask Dr. Emanuel is this – if his infant son or daughter needed an immediate heart operation to save their life – but couldn’t get it because of this system – what would he do?  If his father or mother couldn’t get a needed operation to save their life because of this system – how would he feel then?  Would that same cold intellect remain or would feelings interfere? 

It’s easier to talk about healthcare discrimination from a 30,000 foot level – it’s much harder if we consider the real world consequences.  If my son or daughter’s life was threatened, I’m afraid that the ‘greater good of society’ would take a backseat to my child’s health.  In fact, my own life would take a backseat to the health of my child.  We need to value everyone’s life – regardless of age, race, etc. 

Knowing how the global elite operate and how they are pushing a socialist agenda forward around the globe – this type of healthcare discrimination rhetoric is only the start.  If we allow this – it won’t stop there.  Once you allow discrimination based on age – it’s a very small step to enact laws that prevent healthcare altogether to certain people - people who do not adhere to your unbiblical laws – who do not go along with your evil plans.  Remember – those who do not have the ‘mark’ of this political beast – will not be able to buy or sell – or be part of the world system.  A socialist healthcare system is going to be a piece of that system.  I assure you – the global elite at the top of this socialist hierarchy will not have a problem getting healthcare.  Once again – this isn’t simply about healthcare – it’s about control of the world’s population.

Once again we see that lies are trumpeted as the truth (below) to push an agenda.  Standard operating procedure.

“Dr. Emanuel's assessment of American medical care is summed up in a Nov. 23, 2008, Washington Post op-ed he co-authored: "The United States is No. 1 in only one sense: the amount we shell out for health care. We have the most expensive system in the world per capita, but we lag behind many developed nations on virtually every health statistic you can name."

This is untrue, though sadly it’s parroted at town-hall meetings across the country. Moreover, it’s an odd factual error coming from an oncologist. According to an August 2009 report from the National Bureau of Economic Research, patients diagnosed with cancer in the U.S. have a better chance of surviving the disease than anywhere else. The World Health Organization also rates the U.S. No. 1 out of 191 countries for responsiveness to the needs and choices of the individual patient. That attention to the individual is imperiled by Dr. Emanuel’s views.”

Before I decided to overhaul our healthcare system – I would start by researching the following things completely:

1. What is actually driving healthcare costs to astronomical levels?  I would like to see how a hospital charges patients and their cost basis for the products and services they provide.  A child of a friend of mine recently had outpatient oral surgery – no overnight stay.  The price was over $10,000.  Is it the products (anesthesia) or services (surgeon’s time) or both that are causing a bill this high?  Are bills being excessively padded due to other people who cannot pay?  How do pharmaceutical companies price drugs? Do they give any pricing consideration to high volume drugs or drugs that are crucial for some people – or do they exploit the system? I don’t know the answers – but if you want to really understand what’s happening – this is the place to start.

2. How much power and influence do healthcare insurance companies wield?  Based on my own experiences – I would say – a lot.  Are these companies actually trying to reduce costs and provide a needed service or are they using their power and influence to increase profits at the expense of the healthcare system?  Why should we be at the mercy of a huge corporation when determining whether or not we should undergo a certain procedure or whether or not we should receive a certain type of care?  Shouldn’t we have enough trust in our Doctors to let them make the decision based on our health and the most cost effective way to treat our problem?  Do I trust a huge bureaucracy or my Doctor? Do these companies have certain lucrative contracts that funnel products and services to certain providers, suppliers, hospitals, etc. – that may be more expensive to us and provide substandard care?  Why do we even need insurance for everything?  I don’t have the answers – but someone who is really trying to solve this problem – should.

3. From what I read, malpractice insurance rates seem to be increasing by ridiculous amounts – which I’m sure is driving up costs for everyone in the system.  How many malpractice lawsuits are filed each year?  What are the reasons?  Are the reasons valid?  How much of the money from lawsuits goes to the plaintiffs versus the lawyers? Are there lawyers who specialize in this (That would tell us something – either the lawyers are simply profiting from the healthcare system or we have a tremendous amount of incompetent Doctors in the system)? The overriding question is – are we filing lawsuits because someone intentionally caused us harm – or are we simply chasing after money?  If a doctor made an honest mistake – did the mistake cause significant harm requiring additional care and monetary assistance – or are we simply using the mistake to make some money?

5.  What is the relationship between Doctors, hospitals and medical (pharmaceutical, medical equipment, etc.) companies?  Are we prescribing more expensive medicine simply because we all make more money?  What types of incentives are being offered to Doctors and hospitals by these companies?  Are there monopolies in this business that are driving costs/prices much higher than necessary?  Are the pursuit of profits driving up prices unnecessarily?

You get the idea.  Instead of hearing knowledgeable debate on these issues – all we ever hear is – the system needs to ‘change’, many Americans don’t have insurance, healthcare expenses are out of control, we are some of the most unhealthy people in the world, etc. etc.

What we should be asking is – why does the system need to change?  Why do we need insurance for everything? Why are healthcare expenses out of control?  Why, as a nation, are we unhealthy?  Why don’t the people in Washington D.C. pushing for universal healthcare have the answers to these questions?  No one seems to want to dig into the details and find out the real reasons for these things.  No, that would require intelligence and hard work – we’d rather just change the system.

It seems to me that we all want better healthcare – but we’re not willing to do the things to be healthier (eat better, exercise) and we’re not willing to do our homework and find out the real reasons the current system is so expensive. 

Nothing in this world is easy.  If we want to really solve this problem – we need to work hard to solve it – and not simply give political speeches about it laced with sound bites that may or may not be true. 

What we don’t need – is a government ‘solution’ that will lead to even more bureaucracy.

AUGUST 27, 2009

Obama's Health Rationer-in-Chief

Wall St. Journal

By BETSY MCCAUGHEY

Dr. Ezekiel Emanuel, health adviser to President Barack Obama, is under scrutiny. As a bioethicist, he has written extensively about who should get medical care, who should decide, and whose life is worth saving. Dr. Emanuel is part of a school of thought that redefines a physician’s duty, insisting that it includes working for the greater good of society instead of focusing only on a patient’s needs. Many physicians find that view dangerous, and most Americans are likely to agree.

The health bills being pushed through Congress put important decisions in the hands of presidential appointees like Dr. Emanuel. They will decide what insurance plans cover, how much leeway your doctor will have, and what seniors get under Medicare. Dr. Emanuel, brother of White House Chief of Staff Rahm Emanuel, has already been appointed to two key positions: health-policy adviser at the Office of Management and Budget and a member of the Federal Council on Comparative Effectiveness Research. He clearly will play a role guiding the White House's health initiative.

Dr. Emanuel says that health reform will not be pain free, and that the usual recommendations for cutting medical spending (often urged by the president) are mere window dressing. As he wrote in the Feb. 27, 2008, issue of the Journal of the American Medical Association (JAMA): "Vague promises of savings from cutting waste, enhancing prevention and wellness, installing electronic medical records and improving quality of care are merely 'lipstick' cost control, more for show and public relations than for true change."

True reform, he argues, must include redefining doctors' ethical obligations. In the June 18, 2008, issue of JAMA, Dr. Emanuel blames the Hippocratic Oath for the "overuse" of medical care: "Medical school education and post graduate education emphasize thoroughness," he writes. "This culture is further reinforced by a unique understanding of professional obligations, specifically the Hippocratic Oath's admonition to 'use my power to help the sick to the best of my ability and judgment' as an imperative to do everything for the patient regardless of cost or effect on others."

In numerous writings, Dr. Emanuel chastises physicians for thinking only about their own patient's needs. He describes it as an intractable problem: "Patients were to receive whatever services they needed, regardless of its cost. Reasoning based on cost has been strenuously resisted; it violated the Hippocratic Oath, was associated with rationing, and derided as putting a price on life. . . . Indeed, many physicians were willing to lie to get patients what they needed from insurance companies that were trying to hold down costs." (JAMA, May 16, 2007).

Of course, patients hope their doctors will have that single-minded devotion. But Dr. Emanuel believes doctors should serve two masters, the patient and society, and that medical students should be trained "to provide socially sustainable, cost-effective care." One sign of progress he sees: "the progression in end-of-life care mentality from 'do everything' to more palliative care shows that change in physician norms and practices is possible." (JAMA, June 18, 2008).

"In the next decade every country will face very hard choices about how to allocate scarce medical resources. There is no consensus about what substantive principles should be used to establish priorities for allocations," he wrote in the New England Journal of Medicine, Sept. 19, 2002. Yet Dr. Emanuel writes at length about who should set the rules, who should get care, and who should be at the back of the line.

"You can't avoid these questions," Dr. Emanuel said in an Aug. 16 Washington Post interview. "We had a big controversy in the United States when there was a limited number of dialysis machines. In Seattle, they appointed what they called a 'God committee' to choose who should get it, and that committee was eventually abandoned. Society ended up paying the whole bill for dialysis instead of having people make those decisions."

Dr. Emanuel argues that to make such decisions, the focus cannot be only on the worth of the individual. He proposes adding the communitarian perspective to ensure that medical resources will be allocated in a way that keeps society going: "Substantively, it suggests services that promote the continuation of the polity—those that ensure healthy future generations, ensure development of practical reasoning skills, and ensure full and active participation by citizens in public deliberations—are to be socially guaranteed as basic. Covering services provided to individuals who are irreversibly prevented from being or becoming participating citizens are not basic, and should not be guaranteed. An obvious example is not guaranteeing health services to patients with dementia." (Hastings Center Report, November-December, 1996)

In the Lancet, Jan. 31, 2009, Dr. Emanuel and co-authors presented a "complete lives system" for the allocation of very scarce resources, such as kidneys, vaccines, dialysis machines, intensive care beds, and others. "One maximizing strategy involves saving the most individual lives, and it has motivated policies on allocation of influenza vaccines and responses to bioterrorism. . . . Other things being equal, we should always save five lives rather than one.

"However, other things are rarely equal—whether to save one 20-year-old, who might live another 60 years, if saved, or three 70-year-olds, who could only live for another 10 years each—is unclear." In fact, Dr. Emanuel makes a clear choice: "When implemented, the complete lives system produces a priority curve on which individuals aged roughly 15 and 40 years get the most substantial chance, whereas the youngest and oldest people get changes that are attenuated (see Dr. Emanuel's chart nearby).

Dr. Emanuel concedes that his plan appears to discriminate against older people, but he explains: "Unlike allocation by sex or race, allocation by age is not invidious discrimination. . . . Treating 65 year olds differently because of stereotypes or falsehoods would be ageist; treating them differently because they have already had more life-years is not."

The youngest are also put at the back of the line: "Adolescents have received substantial education and parental care, investments that will be wasted without a complete life. Infants, by contrast, have not yet received these investments. . . . As the legal philosopher Ronald Dworkin argues, 'It is terrible when an infant dies, but worse, most people think, when a three-year-old dies and worse still when an adolescent does,' this argument is supported by empirical surveys." (thelancet.com, Jan. 31, 2009).

To reduce health-insurance costs, Dr. Emanuel argues that insurance companies should pay for new treatments only when the evidence demonstrates that the drug will work for most patients. He says the "major contributor" to rapid increases in health spending is "the constant introduction of new medical technologies, including new drugs, devices, and procedures. . . . With very few exceptions, both public and private insurers in the United States cover and pay for any beneficial new technology without considering its cost. . . ." He writes that one drug "used to treat metastatic colon cancer, extends medial survival for an additional two to five months, at a cost of approximately $50,000 for an average course of therapy." (JAMA, June 13, 2007).

Medians, of course, obscure the individual cases where the drug significantly extended or saved a life. Dr. Emanuel says the United States should erect a decision-making body similar to the United Kingdom's rationing body—the National Institute for Health and Clinical Excellence (NICE)—to slow the adoption of new medications and set limits on how much will be paid to lengthen a life.

Dr. Emanuel's assessment of American medical care is summed up in a Nov. 23, 2008, Washington Post op-ed he co-authored: "The United States is No. 1 in only one sense: the amount we shell out for health care. We have the most expensive system in the world per capita, but we lag behind many developed nations on virtually every health statistic you can name."

This is untrue, though sadly it’s parroted at town-hall meetings across the country. Moreover, it’s an odd factual error coming from an oncologist. According to an August 2009 report from the National Bureau of Economic Research, patients diagnosed with cancer in the U.S. have a better chance of surviving the disease than anywhere else. The World Health Organization also rates the U.S. No. 1 out of 191 countries for responsiveness to the needs and choices of the individual patient. That attention to the individual is imperiled by Dr. Emanuel’s views.

Dr. Emanuel has fought for a government takeover of health care for over a decade. In 1993, he urged that President Bill Clinton impose a wage and price freeze on health care to force parties to the table. "The desire to be rid of the freeze will do much to concentrate the mind," he wrote with another author in a Feb. 8, 1993, Washington Post op-ed. Now he recommends arm-twisting Chicago style. "Every favor to a constituency should be linked to support for the health-care reform agenda," he wrote last Nov. 16 in the Health Care Watch Blog. "If the automakers want a bailout, then they and their suppliers have to agree to support and lobby for the administration's health-reform effort."

Is this what Americans want?

—Ms. McCaughey is chairman of the Committee to Reduce Infection Deaths and a former lieutenant governor of New York state.

Obama’s healthcare ‘reform’ is just one more way we are deceptively being moved to a socialist system of wealth distribution.   We continue to pay more and more money to the government to redistribute as they see fit.  Income taxes, social security, Medicare, all of the recent ‘stimulus’ and bailout packages, this proposed healthcare reform, etc.

This deception is always presented as something that must be done to ‘help’ us.  The banking system is failing – so the government must now decide who gets help from our taxes.  People can’t afford health insurance – so the government must somehow provide for them.  Our auto industry is failing – so the government must take over. As government provides more and more ‘services’ – it continues to grow – taking more and more money out of the hands of private individuals and corporations. It will function for awhile – but eventually – the government will take such a large percentage of our income – the system will collapse on itself (couple this with the eventual collapse of our monetary system and you’ve got some catastrophic problems brewing).  Government doesn’t create wealth and inspire us to take risks and work hard.  Government destroys wealth (through taxes, waste, etc.) and kills innovation. Why work hard when I’m just going to give it away?

As I’ve said before – socialism fails because the government eventually sucks the life out of private enterprise and individuals.  As we are taxed at higher and higher percentages over time – people eventually give up trying to earn a decent living (starting new businesses, creating jobs, taking risks, working hard to provide a better life, etc.) because no one wants to give away their hard earned income to a bloated bureaucracy that will waste a large percentage of it and then re-distribute what remains to others.  People eventually say ‘enough’ and give up trying to do the right things – which is exactly what world leaders want.  Slowly, over time, they are killing our rights as individuals.  They are trying to ensure that we are eventually dependent on the government for everything.  Once we are totally dependent on the world’s government – the people of the world will be led like sheep – and we already know how this ends.

Since none of us want to pay a large percentage of our income to the government – these programs must come with all kinds of stipulations.  Take a look at what will be required for this healthcare system to work:

“Like the homeowner who waits until his house is on fire to buy insurance, younger, poorer, healthier workers will rationally choose to avoid paying high premiums now to subsidize insurance for someone else. After all, they can always get a policy if they get sick.

To avoid this outcome, most congressional Democrats and some Republicans would combine guaranteed issue and community rating with the requirement that all workers buy health insurance—that is, an "individual mandate." This solves the incentive problem, and guarantees that both the healthy poor 25-year-old and the sick higher-income 55-year-old have heath insurance.

But the combination of a guaranteed issue, community rating and an individual mandate means that younger, healthier, lower-income earners would be forced to subsidize older, sicker, higher-income earners. And because these subsidies are buried within health-insurance premiums, the massive income redistribution is hidden from public view and not debated. “

This is typical of most government programs.  The program cannot stand on its own in the market – so the government must enact all kinds of mandates to try and make it work. 

I believe I can do a much better job of deciding how to spend my money than our wasteful government – and I think most Americans would agree.

As I’ve said before – we don’t need socialized healthcare.  We need to look closely at the current system and determine the real causes of our problems.  Regardless of how we decide to improve our healthcare system – it needs to stay private.

If we truly want to remain free – we need to significantly reduce taxes – not increase them.  We need to live within our means – not continue to spend money we don’t have (on healthcare or anything else).  We need significantly less government – not more. 

We need to give power back to the people of the United States to run our nation.

jg – September 28, 2009

Health 'Reform' Is Income Redistribution

September 28, 2009

Wall St. Journal

By MICHAEL O. LEAVITT, AL HUBBARD
AND KEITH HENNESSEY

While many Americans are upset by ObamaCare’s $1 trillion price tag, Congress is contemplating other changes with little analysis or debate. These changes would create a massively unfair form of income redistribution and create incentives for many not to buy health insurance at all.

Let's start with basics: Insurance protects against the risk of something bad happening. When your house is on fire you no longer need protection against risk. You need a fireman and cash to rebuild your home. But suppose the government requires insurers to sell you fire "insurance" while your house is on fire and says you can pay the same premium as people whose houses are not on fire. The result would be that few homeowners would buy insurance until their houses were on fire.

The same could happen under health insurance reform. Here's how: President Obama proposes to require insurers to sell policies to everyone no matter what their health status. By itself this requirement, called "guaranteed issue," would just mean that insurers would charge predictably sick people the extremely high insurance premiums that reflect their future expected costs. But if Congress adds another requirement, called "community rating," insurers' ability to charge higher premiums for higher risks will be sharply limited.

Thus a healthy 25-year-old and a 55-year-old with cancer would pay nearly the same premium for a health policy. Mr. Obama and his allies emphasize the benefits for the 55-year old. But the 25-year-old, who may also have a lower income, would pay significantly more than needed to cover his expected costs.

Like the homeowner who waits until his house is on fire to buy insurance, younger, poorer, healthier workers will rationally choose to avoid paying high premiums now to subsidize insurance for someone else. After all, they can always get a policy if they get sick.

To avoid this outcome, most congressional Democrats and some Republicans would combine guaranteed issue and community rating with the requirement that all workers buy health insurance—that is, an "individual mandate." This solves the incentive problem, and guarantees that both the healthy poor 25-year-old and the sick higher-income 55-year-old have heath insurance.

But the combination of a guaranteed issue, community rating and an individual mandate means that younger, healthier, lower-income earners would be forced to subsidize older, sicker, higher-income earners. And because these subsidies are buried within health-insurance premiums, the massive income redistribution is hidden from public view and not debated.

If Congress goes down this road, health insurance premiums will increase dramatically for the overwhelming majority of people. Even if Congress mandates that everyone have health insurance, many will choose to go without and pay the tax penalty. If you think people are dissatisfied with health care now, wait until they understand that Congress voted to mandate hidden premium increases and lower wages.

There are wiser and more equitable ways to ensure that every American has access to affordable health insurance. Policy experts and state policy makers have experimented with different solutions, including high risk pools and taxpayer-funded vouchers subsidized for those who are both poor and sick. Medicaid, charity care, and uncompensated care provided by hospitals cover some of these costs today.

These solutions are imperfect, but so are the reforms being proposed in Congress. Congress should be explicit about who will pay more under its plans.

—Mr. Leavitt, former secretary of Health and Human Services (2005-2009), has served as the administrator of the Environmental Protection Agency and a governor of Utah (1993-2003). Mr. Hubbard (2005-2007) and Mr. Hennessey (2008) served as directors of the White House National Economic Council.