Greetings from the Left Coast, where we here at Left Coast Blues do the heavy thinking for those who just can't be bothered.
Today, Washington State Attorney General Rob McKenna announced that he would be joining a law suit against the Democrat's health care reform bill. Governor Christine Gregoire wasted no time attacking him for that decision. Fortunately, it is his decision to make, not hers. The Attorney General represents the State of Washington and its citizens, not the governor.
In fact, he has a sworn duty to defend the interests of the State of Washington when, in his judgment, its rights have been infringed. And only blind partisanship could claim that they have not been infringed by the health care bill.
We have this annoying document called the Bill of Rights. Some of you may remember it. It consists of the first ten amendments to the Constitution. The tenth amendment states quite clearly that any powers not explicitly granted to the federal government by the Constitution are reserved to the states and to the people.
Nowhere in the Constitution is the federal government given the power to mandate that the citizens of the United States must purchase a specific product. Yet the health care bill attempts just such a mandate by requiring that everyone must purchase a health insurance policy, or be punished for not doing so.
This is, as we stated back in early November, the first step on a very slippery slope. This is a very dangerous precedent to set. There is no telling where this will end. Why, you might end up being told that you had to buy florescent bulbs for your lights instead of incandescent ones! (Oh, wait - I guess we started down this slippery slope quite some time ago, didn't we?)
The loss of individual freedom has been likened to the "frog in the pot" phenomenon: if you try to drop a frog into boiling water, he'll fight like the dickens to get out of it. But if you put him into cool water and gradually turn up the heat, he'll sit there and die before he realizes that he's in danger.
Maybe people are finally waking up and deciding it's gone too far. I just hope that Rob McKenna and the other state attorneys general can get us out of the pot before it's too late.
Thanks for listening.
Monday, March 22, 2010
Why the Party Is Important
Greetings from the Left Coast, where we here at Left Coast Blues do the heavy thinking for those who just can’t be bothered.
If the last several months have taught us anything, it should have taught us about the importance of political parties, and laid to rest the old fallacy that “voting for the candidate, not the party” is somehow a noble or virtuous approach to elections.
My father, God rest his soul, was proud of the fact that he didn’t belong to any political party, and was a firm believer in voting for the person he believed was the best candidate, regardless of party affiliation. Since that’s the way I was raised, that was the philosophy I took with me into the voting booth, starting way back in 1970 when I voted for the first time, and for a long time after that.
No more. I can state unequivocally that there are no circumstances that I can imagine that would ever cause me to vote for a Democrat again. It has become painfully obvious that when it comes down to crunch time, in the majority of cases, politicians vote their party affiliation regardless of whether it’s in the best interests of the American people in general or their constituents in particular. Nowhere has this been more obvious than in the debate over the health insurance legislation, which has now been rammed down the throats of the American people despite the fact that a large majority of the people didn’t want it.
When a particular party holds a majority in either the House or the Senate (and, of course, the Democrats currently hold majorities in both), that means that all of the committees are chaired by that party. It also means that the majority party will compose a majority of the members of each committee (with the sole exception of the Senate Ethics Committee, which was explicitly created as a committee with equal party representation). Since Congressional committees ultimately control what legislation does and does not make it to the floor of the House or Senate for a vote, the majority party pretty much controls the legislative process, if they can hold their members together.
The only real check on this kind of power is the fact that, in most cases, it takes a “supermajority” in the Senate to agree to end debate on a bill and call for an up or down vote. If that supermajority doesn’t exist, then debate can theoretically continue indefinitely, with the bill never coming to a vote. That’s called a filibuster.
For the past two years, we’ve been living with a “perfect storm” that gave the Democrats nearly absolute power: they held a majority in the House, they held a supermajority in the Senate, and they held the White House. We’ve now seen the abuse of power that results when the traditional checks and balances of government aren’t functioning.
Thanks to Scott Brown’s victory in Massachusetts, the Democrats no longer hold a supermajority in the Senate. That’s why it was crucially important to the party leaders that the Senate version of the legislation should be passed unaltered by the House – because any changes they House made would have to go back to the Senate for approval, and approval could no longer be guaranteed.
Don’t be misled. The “House Reconciliation Bill” that was passed at the same time the House passed the Senate bill is a long ways from being law – and the Representatives that voted for it are well aware that they may never see any actual changes in the Senate bill. The reconciliation bill must now go to the Senate. It’s debatable, by they way, whether it even falls under the Senate’s “reconciliation” rules. The Democrats are going to try to shove it through that way, because it would therefore be exempt from the supermajority requirement. But the Senate’s own rules state that the substance of any provisions in a reconciliation bill must be substantially weighted to the budget, and not to policy.
Violating this rule will set a precedent that is sure to lead to more and greater abuse in the future. Senator Barak Obama was strongly opposed to this sort of thing back when the Republicans were considering it. Funny how things change, isn’t it?
By the way, if the Senate makes any changes to the reconciliation bill, it has to go back to the House again. So we could see a protracted game of ping-pong with this reconciliation bill, while the original bill the Senate passed gets signed into law by President Obama. And you’ve got to ask yourself what motivation exists for the Senate to approve a bunch of changes that the House wants to make to their bill, when at this point all they need to do is to do nothing, and their own version becomes law. But, amazingly, Nancy Pelosi said, “Trust me,” and apparently 218 of her fellow Democrats did. Which brings me back to my original assertion: it’s stupid to vote for the person and not for the party – because when the chips are down, odds are that the person you elected is going to vote for the party and not for you.
So what can we do? Not much between now and November other than to give our money to the opponents of the people who voted for this monstrosity. Then, when November rolls around, vote them out of office. Every single one, if possible. And I sincerely hope that the voters in Louisiana’s 2nd Congressional District have a better Republican candidate this fall than Representative Anh Cao, who was the single Republican to vote in favor of this bill.
And what of the 39 Democrats that voted against it? Well, I appreciate their courage in breaking from their leadership. But please go back and re-read the section above where I discuss the implications of a given party holding a majority in the House or the Senate. The fact is that as long as there is a “D” after their names, they affect that balance of power and, in my opinion, must be targeted for defeat.
Thanks for listening.
If the last several months have taught us anything, it should have taught us about the importance of political parties, and laid to rest the old fallacy that “voting for the candidate, not the party” is somehow a noble or virtuous approach to elections.
My father, God rest his soul, was proud of the fact that he didn’t belong to any political party, and was a firm believer in voting for the person he believed was the best candidate, regardless of party affiliation. Since that’s the way I was raised, that was the philosophy I took with me into the voting booth, starting way back in 1970 when I voted for the first time, and for a long time after that.
No more. I can state unequivocally that there are no circumstances that I can imagine that would ever cause me to vote for a Democrat again. It has become painfully obvious that when it comes down to crunch time, in the majority of cases, politicians vote their party affiliation regardless of whether it’s in the best interests of the American people in general or their constituents in particular. Nowhere has this been more obvious than in the debate over the health insurance legislation, which has now been rammed down the throats of the American people despite the fact that a large majority of the people didn’t want it.
When a particular party holds a majority in either the House or the Senate (and, of course, the Democrats currently hold majorities in both), that means that all of the committees are chaired by that party. It also means that the majority party will compose a majority of the members of each committee (with the sole exception of the Senate Ethics Committee, which was explicitly created as a committee with equal party representation). Since Congressional committees ultimately control what legislation does and does not make it to the floor of the House or Senate for a vote, the majority party pretty much controls the legislative process, if they can hold their members together.
The only real check on this kind of power is the fact that, in most cases, it takes a “supermajority” in the Senate to agree to end debate on a bill and call for an up or down vote. If that supermajority doesn’t exist, then debate can theoretically continue indefinitely, with the bill never coming to a vote. That’s called a filibuster.
For the past two years, we’ve been living with a “perfect storm” that gave the Democrats nearly absolute power: they held a majority in the House, they held a supermajority in the Senate, and they held the White House. We’ve now seen the abuse of power that results when the traditional checks and balances of government aren’t functioning.
Thanks to Scott Brown’s victory in Massachusetts, the Democrats no longer hold a supermajority in the Senate. That’s why it was crucially important to the party leaders that the Senate version of the legislation should be passed unaltered by the House – because any changes they House made would have to go back to the Senate for approval, and approval could no longer be guaranteed.
Don’t be misled. The “House Reconciliation Bill” that was passed at the same time the House passed the Senate bill is a long ways from being law – and the Representatives that voted for it are well aware that they may never see any actual changes in the Senate bill. The reconciliation bill must now go to the Senate. It’s debatable, by they way, whether it even falls under the Senate’s “reconciliation” rules. The Democrats are going to try to shove it through that way, because it would therefore be exempt from the supermajority requirement. But the Senate’s own rules state that the substance of any provisions in a reconciliation bill must be substantially weighted to the budget, and not to policy.
Violating this rule will set a precedent that is sure to lead to more and greater abuse in the future. Senator Barak Obama was strongly opposed to this sort of thing back when the Republicans were considering it. Funny how things change, isn’t it?
By the way, if the Senate makes any changes to the reconciliation bill, it has to go back to the House again. So we could see a protracted game of ping-pong with this reconciliation bill, while the original bill the Senate passed gets signed into law by President Obama. And you’ve got to ask yourself what motivation exists for the Senate to approve a bunch of changes that the House wants to make to their bill, when at this point all they need to do is to do nothing, and their own version becomes law. But, amazingly, Nancy Pelosi said, “Trust me,” and apparently 218 of her fellow Democrats did. Which brings me back to my original assertion: it’s stupid to vote for the person and not for the party – because when the chips are down, odds are that the person you elected is going to vote for the party and not for you.
So what can we do? Not much between now and November other than to give our money to the opponents of the people who voted for this monstrosity. Then, when November rolls around, vote them out of office. Every single one, if possible. And I sincerely hope that the voters in Louisiana’s 2nd Congressional District have a better Republican candidate this fall than Representative Anh Cao, who was the single Republican to vote in favor of this bill.
And what of the 39 Democrats that voted against it? Well, I appreciate their courage in breaking from their leadership. But please go back and re-read the section above where I discuss the implications of a given party holding a majority in the House or the Senate. The fact is that as long as there is a “D” after their names, they affect that balance of power and, in my opinion, must be targeted for defeat.
Thanks for listening.
Thursday, March 4, 2010
Giving Credit Where Credit Is Due
Greetings from the Left Coast, where we here at Left Coast Blues do the heavy thinking for those who just can't be bothered.
On Wednesday, I was pleased to see an editorial in my morning Everett Herald that brought some much needed honesty and perspective to the coverage of Sen. Jim Bunning. Sen. Bunning, you may recall, was the Senator who was allegedly blocking the $10 Billion package that would extend unemployment benefits, health insurance subsidies for the jobless, highway programs, and Medicare payments to doctors.
Most of the news coverage portrayed Sen. Bunning as the callous, heartless guy who, indifferent to the suffering he was inflicting on countless fellow Americans, was unreasonably standing in the way of a compassionate piece of legislation just because he could. In fact, what he was saying was that, instead of just continuing to give lip service to how concerned we all are about our unsustainable deficit spending, maybe we should tap into the more than $500 Billion in unspent stimulus money to pay for the legislation instead of going another $10 Billion into debt.
That, as the Herald editorial pointed out, hardly seemed unreasonable. But it was rejected by Senate Majority Leader Harry Reid.
Moreover, Sen. Reid could have moved the legislation forward at any time by simply holding a "roll call" vote. But, no, Senate Democrats wanted a "voice vote," where the "ayes" and "nays" are said as a group, and the presiding leader gets to decide which was the largest group. One can only conclude that this was because a roll call vote would have involved having each individual Senator go on the record with his or her vote, which might have led to some actual accountability to the public for how they voted. Why risk that - especially when they saw an opportunity to further demonize the evil, obstructionist Republicans with the all-too-willing help of their friends in the media?
So, kudos to the Herald editorial staff for having the courage to break with the accepted media template. And to all the others who collaborated in this charade, including Washington's own Sen. Patty Murray: Shame on you!
Thanks for listening.
On Wednesday, I was pleased to see an editorial in my morning Everett Herald that brought some much needed honesty and perspective to the coverage of Sen. Jim Bunning. Sen. Bunning, you may recall, was the Senator who was allegedly blocking the $10 Billion package that would extend unemployment benefits, health insurance subsidies for the jobless, highway programs, and Medicare payments to doctors.
Most of the news coverage portrayed Sen. Bunning as the callous, heartless guy who, indifferent to the suffering he was inflicting on countless fellow Americans, was unreasonably standing in the way of a compassionate piece of legislation just because he could. In fact, what he was saying was that, instead of just continuing to give lip service to how concerned we all are about our unsustainable deficit spending, maybe we should tap into the more than $500 Billion in unspent stimulus money to pay for the legislation instead of going another $10 Billion into debt.
That, as the Herald editorial pointed out, hardly seemed unreasonable. But it was rejected by Senate Majority Leader Harry Reid.
Moreover, Sen. Reid could have moved the legislation forward at any time by simply holding a "roll call" vote. But, no, Senate Democrats wanted a "voice vote," where the "ayes" and "nays" are said as a group, and the presiding leader gets to decide which was the largest group. One can only conclude that this was because a roll call vote would have involved having each individual Senator go on the record with his or her vote, which might have led to some actual accountability to the public for how they voted. Why risk that - especially when they saw an opportunity to further demonize the evil, obstructionist Republicans with the all-too-willing help of their friends in the media?
So, kudos to the Herald editorial staff for having the courage to break with the accepted media template. And to all the others who collaborated in this charade, including Washington's own Sen. Patty Murray: Shame on you!
Thanks for listening.
Thursday, January 28, 2010
Three Important Axioms
Greetings from the Left Coast, where we here at Left Coast Blues do the heavy thinking for those who just can't be bothered.
As you think about what you heard in last night's State of the Union Speech - or read about what you didn't hear if you're among those who had more important things to do than listen to another campaign speech - please keep three important things in mind. In fact, we would do well to remember these three things any time we're listening to a politician, and any time we're about to step into a voting booth. (Or sit down at the kitchen table to fill out that mail-in ballot if you're like us Washington voters who don't have voting booths anymore.)
If you stop and think about these axioms, you will find that they logically lead to several other conclusions, one of which is: The government cannot create jobs - unless they're government jobs, which then increase the tax burden on the private sector, thus reducing wealth creation and the ability of the private sector to create jobs. The best that the government can do is to try to create an environment in which the private sector can flourish.
Who does create jobs? Well, it's well known that most jobs in this country are created by small businesses - a fact that's at least given lip service by the current administration. Who are the people who start small businesses? They are people who have managed to accumulate enough wealth that they're willing to take a financial risk in order to try to create more. It takes capital to start a small business. It takes more capital to run it for the first few years and (hopefully) nurse it into sustained profitability. That capital typically comes out of the savings of the person who started the business - who typically works extremely long hours for little or no pay in the hope that the business will pay off before the savings run out.
These are the "rich" people that the Democrats want to pile even more of the tax burden on. Problem is, when you take their wealth away, fewer businesses - thus fewer jobs - get created. Plus the incentive to work those long hours is reduced when you know that a bigger chunk of what you're working for is just going to be taken away from you anyway.
So keep those things in mind - particularly when you hear the wild claims about how many jobs were "created or saved" by the stimulus package, and the calls, which will become louder and more numerous as we approach the mid-term election, for a "jobs package" that will spend even more money that we don't have in an attempt to create jobs.
Print out the three axioms above. Tape them to your bathroom mirror. Read them out loud several times a day. If enough people really came to understand the truth in them, we would really start to see some change we could believe in.
Thanks for listening.
As you think about what you heard in last night's State of the Union Speech - or read about what you didn't hear if you're among those who had more important things to do than listen to another campaign speech - please keep three important things in mind. In fact, we would do well to remember these three things any time we're listening to a politician, and any time we're about to step into a voting booth. (Or sit down at the kitchen table to fill out that mail-in ballot if you're like us Washington voters who don't have voting booths anymore.)
- The government cannot give anything to anybody without first taking it from somebody else.
- When someone receives from the government something they did not work for, it means that somebody else worked for it without receiving it.
- The government cannot create wealth. It can only redistribute it.
If you stop and think about these axioms, you will find that they logically lead to several other conclusions, one of which is: The government cannot create jobs - unless they're government jobs, which then increase the tax burden on the private sector, thus reducing wealth creation and the ability of the private sector to create jobs. The best that the government can do is to try to create an environment in which the private sector can flourish.
Who does create jobs? Well, it's well known that most jobs in this country are created by small businesses - a fact that's at least given lip service by the current administration. Who are the people who start small businesses? They are people who have managed to accumulate enough wealth that they're willing to take a financial risk in order to try to create more. It takes capital to start a small business. It takes more capital to run it for the first few years and (hopefully) nurse it into sustained profitability. That capital typically comes out of the savings of the person who started the business - who typically works extremely long hours for little or no pay in the hope that the business will pay off before the savings run out.
These are the "rich" people that the Democrats want to pile even more of the tax burden on. Problem is, when you take their wealth away, fewer businesses - thus fewer jobs - get created. Plus the incentive to work those long hours is reduced when you know that a bigger chunk of what you're working for is just going to be taken away from you anyway.
So keep those things in mind - particularly when you hear the wild claims about how many jobs were "created or saved" by the stimulus package, and the calls, which will become louder and more numerous as we approach the mid-term election, for a "jobs package" that will spend even more money that we don't have in an attempt to create jobs.
Print out the three axioms above. Tape them to your bathroom mirror. Read them out loud several times a day. If enough people really came to understand the truth in them, we would really start to see some change we could believe in.
Thanks for listening.
Monday, January 11, 2010
How Did We Come to This?
Greetings from the Left Coast, where we here at Left Coast Blues do the heavy thinking for those who just can’t be bothered.
Today we set our sights a little closer to home. We here in the great State of Washington are facing some pretty serious budget shortfalls. We’ve been hearing that budget cuts alone can’t address all of it – there will simply have to be some tax increases. In fact, Governor Christine Gregoire told us in December that she “can’t live” with the level of cuts that would be necessary to deal with a $2.6 billion budget deficit – “…That’s not my values, and I don’t believe it’s the values of the people of the State of Washington,” she told us.
She may be right – after all, the handwriting was already on the wall when the people of the State of Washington re-elected her in 2008. The Seattle Times (not exactly a bastion of conservative thought) reported in July, 2008, that state spending had increased by $8 Billion during her first term of office – a 31% increase in the two-year general-fund budget. At the time the article was written, the Senate Ways and Means Committee was already predicting a $2.7 Billion shortfall when the time came in January 2009 to write a new two-year budget…and at that time, the recession was just beginning to be felt here in Washington.
We managed to skate by for the last year with some creative accounting and Federal "stimulus" money, but we're now halfway through the budget period, and it's becoming clear that we're in serious trouble for 2010.
During the 2008 campaign, things were still going pretty well here in Washington... and Gov. Gregoire was quick to jump on the “blame Bush” bandwagon: if Washington State should happen to sink into recession, she told us, we should blame Bush, not her. ("Pay no attention to those Democrats behind the curtain!") Of course, according to the U.S. Constitution, Congress controls the purse strings of the federal government, and the Democrats have held majorities in both houses of Congress since 2006…but I digress.
Let’s take a closer look look at the math. The Times article cited above only dealt with the General Fund portion of the budget. If we look at all three components of the budget - the General Budget, the Capital Budget, and the Transportation Budget - you'll find that the budget grew from $52.2 Billion in the 2003 - 2005 biennium to $69.2 Billion in the 2007 - 2009 biennium. (The biennium runs from July 1 of an odd-numbered year through June 30 of the next odd numbered year, which is why the dates look a little funny.) That's a $17 Billion increase - almost 33%. Population growth from mid-2003 to mid-2007 was only about 6.5% (from a little over 6.1 million to about 6.5 million). That means that the state budget grew at almost five times the rate of population growth!
By the state’s own figures, since the beginning of the recession, nearly 13% of manufacturing jobs and nearly 27% of all construction jobs in the state have been eliminated. The seasonally-adjusted unemployment rate hit 9.3% in October – up a full 3 percentage points from the year before. Have a similar percentage of State government jobs been eliminated? Um…no. In November, 2008, The Seattle Times reported that there were roughly 66,000 state employees. That was down about 1,200 from early August, 2008, as a result of a hiring freeze, but much of that decrease was in seasonal jobs with parks or the Department of Natural Resources. The State’s 2009 State Workforce Report reported total employment at 65, 290 as of June 30, 2009. That’s a drop of only about 1%.
But that’s the pattern we’ve seen over and over again from Democrat-controlled governments: during good times, government spending increases way out of proportion to any other measure of population or economic growth – then when the bad times hit, gosh, we simply can’t reduce spending by that much! It would require cuts to vital services and too much hardship for people who have become dependent on that government spending. And I will guarantee you that any cuts that are proposed this year will be the most visible and painful that the legislature can find – because maximum visible pain means maximum odds that voters will accept tax increases instead of insisting on budget cuts.
If you want to see where that pattern ultimately leads, just look two states to the south. California’s plight was highlighted by The Guardian in the U.K. last October in an article entitled “Will California become America’s first failed state?” Unfortunately, The Guardian fails to answer its own question of “where did it all go wrong?” other than to highlight the effects of the crash of the housing market.
American Thinker does a better job of identifying the causes of California’s demise: “California is facing economic failure resulting from years of a liberal legislature pursuing a liberal version of utopia.” After years of tax-and-spend policies, the voters finally revolted and insisted on lower taxes. Unfortunately, that same liberal legislature refused to rein in spending, ultimately bringing the state to the crisis it faces today, with unemployment over 12%, its government bonds rated barely above “junk,” and so many people leaving the state that it could lose a Congressman when the 2010 census is tabulated.
Want to end up like California? Then let Gov. Gregoire and the rest of the Democrats in Olympia keep on running things, and I guarantee you that’s where we’ll end up. It’s past time for Washingtonians – and all Americans – to start holding our politicians accountable for their actions. That means insisting on fiscal responsibility from them, and voting out the people who don’t get the message. That also means paying sufficiently close attention to politics that you know who’s fiscally responsible and who isn’t.
Thanks for listening.
Today we set our sights a little closer to home. We here in the great State of Washington are facing some pretty serious budget shortfalls. We’ve been hearing that budget cuts alone can’t address all of it – there will simply have to be some tax increases. In fact, Governor Christine Gregoire told us in December that she “can’t live” with the level of cuts that would be necessary to deal with a $2.6 billion budget deficit – “…That’s not my values, and I don’t believe it’s the values of the people of the State of Washington,” she told us.
She may be right – after all, the handwriting was already on the wall when the people of the State of Washington re-elected her in 2008. The Seattle Times (not exactly a bastion of conservative thought) reported in July, 2008, that state spending had increased by $8 Billion during her first term of office – a 31% increase in the two-year general-fund budget. At the time the article was written, the Senate Ways and Means Committee was already predicting a $2.7 Billion shortfall when the time came in January 2009 to write a new two-year budget…and at that time, the recession was just beginning to be felt here in Washington.
We managed to skate by for the last year with some creative accounting and Federal "stimulus" money, but we're now halfway through the budget period, and it's becoming clear that we're in serious trouble for 2010.
During the 2008 campaign, things were still going pretty well here in Washington... and Gov. Gregoire was quick to jump on the “blame Bush” bandwagon: if Washington State should happen to sink into recession, she told us, we should blame Bush, not her. ("Pay no attention to those Democrats behind the curtain!") Of course, according to the U.S. Constitution, Congress controls the purse strings of the federal government, and the Democrats have held majorities in both houses of Congress since 2006…but I digress.
Let’s take a closer look look at the math. The Times article cited above only dealt with the General Fund portion of the budget. If we look at all three components of the budget - the General Budget, the Capital Budget, and the Transportation Budget - you'll find that the budget grew from $52.2 Billion in the 2003 - 2005 biennium to $69.2 Billion in the 2007 - 2009 biennium. (The biennium runs from July 1 of an odd-numbered year through June 30 of the next odd numbered year, which is why the dates look a little funny.) That's a $17 Billion increase - almost 33%. Population growth from mid-2003 to mid-2007 was only about 6.5% (from a little over 6.1 million to about 6.5 million). That means that the state budget grew at almost five times the rate of population growth!
By the state’s own figures, since the beginning of the recession, nearly 13% of manufacturing jobs and nearly 27% of all construction jobs in the state have been eliminated. The seasonally-adjusted unemployment rate hit 9.3% in October – up a full 3 percentage points from the year before. Have a similar percentage of State government jobs been eliminated? Um…no. In November, 2008, The Seattle Times reported that there were roughly 66,000 state employees. That was down about 1,200 from early August, 2008, as a result of a hiring freeze, but much of that decrease was in seasonal jobs with parks or the Department of Natural Resources. The State’s 2009 State Workforce Report reported total employment at 65, 290 as of June 30, 2009. That’s a drop of only about 1%.
But that’s the pattern we’ve seen over and over again from Democrat-controlled governments: during good times, government spending increases way out of proportion to any other measure of population or economic growth – then when the bad times hit, gosh, we simply can’t reduce spending by that much! It would require cuts to vital services and too much hardship for people who have become dependent on that government spending. And I will guarantee you that any cuts that are proposed this year will be the most visible and painful that the legislature can find – because maximum visible pain means maximum odds that voters will accept tax increases instead of insisting on budget cuts.
If you want to see where that pattern ultimately leads, just look two states to the south. California’s plight was highlighted by The Guardian in the U.K. last October in an article entitled “Will California become America’s first failed state?” Unfortunately, The Guardian fails to answer its own question of “where did it all go wrong?” other than to highlight the effects of the crash of the housing market.
American Thinker does a better job of identifying the causes of California’s demise: “California is facing economic failure resulting from years of a liberal legislature pursuing a liberal version of utopia.” After years of tax-and-spend policies, the voters finally revolted and insisted on lower taxes. Unfortunately, that same liberal legislature refused to rein in spending, ultimately bringing the state to the crisis it faces today, with unemployment over 12%, its government bonds rated barely above “junk,” and so many people leaving the state that it could lose a Congressman when the 2010 census is tabulated.
Want to end up like California? Then let Gov. Gregoire and the rest of the Democrats in Olympia keep on running things, and I guarantee you that’s where we’ll end up. It’s past time for Washingtonians – and all Americans – to start holding our politicians accountable for their actions. That means insisting on fiscal responsibility from them, and voting out the people who don’t get the message. That also means paying sufficiently close attention to politics that you know who’s fiscally responsible and who isn’t.
Thanks for listening.
Sunday, November 8, 2009
The First Step On a Very Slippery Slope
Greetings from the Left Coast, where we here at Left Coast Blues do the heavy thinking for those who just can’t be bothered.
Well, the House of Representatives has managed to scrape together enough Democratic votes to pass a Health Insurance Reform bill. Note that Congress has pretty much given up trying to clam that it’s “Health Care Reform,” because there’s nothing in the bill that will actually address the high cost of health care itself. Here’s some of what it will do if it actually passes into law (keeping in mind that the Senate also has to pass a bill, which will undoubtedly be different from the House bill, and then a joint committee will have to try to come up with a compromise that both bodies will accept – so we’re a long way from done yet):
It will force everyone to purchase health insurance, and fine anyone who doesn’t comply. I’d love to see a Constitutional challenge to this provision, because I don’t believe that the federal government can constitutionally force me to buy anything I don’t want to buy. And don’t start with the analogy of having to buy auto insurance. There are two big differences: First, the states, not the federal government, are the ones who pass laws requiring auto insurance. Second, you have an alternative – you don’t have to drive a car. If you don’t drive a car, you don’t have to worry about buying auto insurance. But force someone to buy health insurance? I don’t think so.
It will prevent insurance companies from denying coverage because of pre-existing conditions, and also prohibit them from charging higher premiums because of sex, age, or medical history. Sounds good, right? Think about it for a minute: The fact is that insurance rates are driven more by statistics than anything else.
Consider the auto insurance industry. The reason young, single males pay more for auto insurance is because it is an undeniable fact that young, single males have the most traffic accidents of any demographic group. And if you get in too many accidents, guess what? Your insurance is probably going to be cancelled, and you’ll have to pay through the nose to get insurance from a company that specializes in high-risk policies. Why? Because another undeniable fact is that people who get in multiple traffic accidents are statistically more likely to continue to get in traffic accidents. Your premium is determined primarily by the risk of loss that you represent. The same is true of health insurance.
Requiring health insurance companies to write policies on people with pre-existing conditions has been likened to forcing property insurance companies to write fire insurance policies after the house is already on fire. That’s a good analogy. You are literally forcing them to underwrite policies on which they are almost guaranteed to lose money. And if you’re going to also tell them that they can’t charge those people a higher premium for their coverage, what do you think is going to happen?
There is only one possible outcome: everyone’s premiums will be going up. You young, healthy people out there, who would normally be able to get coverage for a pretty reasonable rate, should be royally p!$$ed, because you are going to end up paying more money to subsidize the rates of the folks who have already had two double-coronary-bypass operations. And all those morbidly obese folks out there who are walking coronaries looking for a place to happen? They’ll be subsidized by the premiums paid by the granola- and carrot-stick-eating marathon runners whose weight is twice their height in inches and who have resting heart rates below 45 beats per minute.
A few decades ago, when maternity coverage was optional (before it became a standard feature of most employer-provided plans), it cost about as much to purchase maternity coverage as it did to just pay for the delivery. Why? Because the insurance companies knew that they only reason you would buy maternity coverage is if you were planning to have a baby – so there was a nearly 100% chance that they would have to pay out a claim against the policy.
Today, most employer-provided plans cover maternity benefits. This means that people who have already had their families, people who do not plan to have any children, people who are medically unable to have children, and single people who are not ready to start a family are all subsidizing the premiums of the people who will actually have children and use the maternity benefits of the policies.
Congress knows what will happen. That’s why they want to force everyone to buy health insurance – because the only possible way to partially mitigate the effects of all these new requirements is to vastly increase the pool of insured individuals. But it won’t be enough. Rates will still have to go up. Congress knows this too, and doesn’t care, because when the rates go up, it will just give Congress more ammunition to further demonize the evil, evil insurance companies for continuing to raise their rates. It will be another example of why the country needs a “single-payer” (read “government-run”) health care system.
Oh, and you folks out there who are willing to take care of the little things out of your own pockets, and just want a “major medical” policy to protect you against a major loss in the event of a catastrophic illness – forget it. That used to be a pretty good option if you were relatively young, relatively healthy, and wanted to keep your insurance premiums as low as possible. But now the government also wants to dictate what things your policy must cover. They really want you buying the full-meal deal so you can help subsidize those high-risk people out there.
Finally, I would like to go on record as saying that I am absolutely sick (pardon the pun) of Obama’s line that if you’re happy with your current health insurance policy, the government is not going to force you to change it. Businesses are struggling to stay alive, and providing health insurance coverage to employees is an increasingly difficult benefit to pay. I know, because I’m a partner in a small business. If there is a “public option” that is less expensive than private insurance (and let’s be honest with ourselves – if the government-run insurance plan isn’t less expensive, then what’s the point of having it?) the financial pressure will be immense for businesses to move their employees from more expensive private policies to the less expensive public option. Thousands of them will do just that – and it won’t matter a whit how happy their employees were with their current plans.
So, no, the government may not force you to change your plan. The government is just going to create a financial incentive that makes it nearly impossible for your employer not to change your plan. But the end result is the same.
The rhetoric rings as hollow as the promises not to raise my income taxes. Great. Thank you. But if runaway deficit spending brings back the days of double-digit inflation, or if the dollar becomes so unattractive that the rest of the world decides that oil markets should be denominated in some other currency than the U.S. dollar, causing the price of oil to fluctuate wildly as the dollar rises and falls against that other currency, that’s going to erode my purchasing power, isn’t it? What’s the difference between eroding my purchasing power directly by increasing my taxes and eroding my purchasing power indirectly through irresponsible fiscal policies?
The difference is that the Democrats think that in the latter case we’re too stupid to make the cause/effect connection. Just like they think we’re too stupid to figure out what will happen if they succeed in taking over health care. And maybe we are. We’ll find out a year from now at the mid-term election.
Thanks for listening.
Well, the House of Representatives has managed to scrape together enough Democratic votes to pass a Health Insurance Reform bill. Note that Congress has pretty much given up trying to clam that it’s “Health Care Reform,” because there’s nothing in the bill that will actually address the high cost of health care itself. Here’s some of what it will do if it actually passes into law (keeping in mind that the Senate also has to pass a bill, which will undoubtedly be different from the House bill, and then a joint committee will have to try to come up with a compromise that both bodies will accept – so we’re a long way from done yet):
It will force everyone to purchase health insurance, and fine anyone who doesn’t comply. I’d love to see a Constitutional challenge to this provision, because I don’t believe that the federal government can constitutionally force me to buy anything I don’t want to buy. And don’t start with the analogy of having to buy auto insurance. There are two big differences: First, the states, not the federal government, are the ones who pass laws requiring auto insurance. Second, you have an alternative – you don’t have to drive a car. If you don’t drive a car, you don’t have to worry about buying auto insurance. But force someone to buy health insurance? I don’t think so.
It will prevent insurance companies from denying coverage because of pre-existing conditions, and also prohibit them from charging higher premiums because of sex, age, or medical history. Sounds good, right? Think about it for a minute: The fact is that insurance rates are driven more by statistics than anything else.
Consider the auto insurance industry. The reason young, single males pay more for auto insurance is because it is an undeniable fact that young, single males have the most traffic accidents of any demographic group. And if you get in too many accidents, guess what? Your insurance is probably going to be cancelled, and you’ll have to pay through the nose to get insurance from a company that specializes in high-risk policies. Why? Because another undeniable fact is that people who get in multiple traffic accidents are statistically more likely to continue to get in traffic accidents. Your premium is determined primarily by the risk of loss that you represent. The same is true of health insurance.
Requiring health insurance companies to write policies on people with pre-existing conditions has been likened to forcing property insurance companies to write fire insurance policies after the house is already on fire. That’s a good analogy. You are literally forcing them to underwrite policies on which they are almost guaranteed to lose money. And if you’re going to also tell them that they can’t charge those people a higher premium for their coverage, what do you think is going to happen?
There is only one possible outcome: everyone’s premiums will be going up. You young, healthy people out there, who would normally be able to get coverage for a pretty reasonable rate, should be royally p!$$ed, because you are going to end up paying more money to subsidize the rates of the folks who have already had two double-coronary-bypass operations. And all those morbidly obese folks out there who are walking coronaries looking for a place to happen? They’ll be subsidized by the premiums paid by the granola- and carrot-stick-eating marathon runners whose weight is twice their height in inches and who have resting heart rates below 45 beats per minute.
A few decades ago, when maternity coverage was optional (before it became a standard feature of most employer-provided plans), it cost about as much to purchase maternity coverage as it did to just pay for the delivery. Why? Because the insurance companies knew that they only reason you would buy maternity coverage is if you were planning to have a baby – so there was a nearly 100% chance that they would have to pay out a claim against the policy.
Today, most employer-provided plans cover maternity benefits. This means that people who have already had their families, people who do not plan to have any children, people who are medically unable to have children, and single people who are not ready to start a family are all subsidizing the premiums of the people who will actually have children and use the maternity benefits of the policies.
Congress knows what will happen. That’s why they want to force everyone to buy health insurance – because the only possible way to partially mitigate the effects of all these new requirements is to vastly increase the pool of insured individuals. But it won’t be enough. Rates will still have to go up. Congress knows this too, and doesn’t care, because when the rates go up, it will just give Congress more ammunition to further demonize the evil, evil insurance companies for continuing to raise their rates. It will be another example of why the country needs a “single-payer” (read “government-run”) health care system.
Oh, and you folks out there who are willing to take care of the little things out of your own pockets, and just want a “major medical” policy to protect you against a major loss in the event of a catastrophic illness – forget it. That used to be a pretty good option if you were relatively young, relatively healthy, and wanted to keep your insurance premiums as low as possible. But now the government also wants to dictate what things your policy must cover. They really want you buying the full-meal deal so you can help subsidize those high-risk people out there.
Finally, I would like to go on record as saying that I am absolutely sick (pardon the pun) of Obama’s line that if you’re happy with your current health insurance policy, the government is not going to force you to change it. Businesses are struggling to stay alive, and providing health insurance coverage to employees is an increasingly difficult benefit to pay. I know, because I’m a partner in a small business. If there is a “public option” that is less expensive than private insurance (and let’s be honest with ourselves – if the government-run insurance plan isn’t less expensive, then what’s the point of having it?) the financial pressure will be immense for businesses to move their employees from more expensive private policies to the less expensive public option. Thousands of them will do just that – and it won’t matter a whit how happy their employees were with their current plans.
So, no, the government may not force you to change your plan. The government is just going to create a financial incentive that makes it nearly impossible for your employer not to change your plan. But the end result is the same.
The rhetoric rings as hollow as the promises not to raise my income taxes. Great. Thank you. But if runaway deficit spending brings back the days of double-digit inflation, or if the dollar becomes so unattractive that the rest of the world decides that oil markets should be denominated in some other currency than the U.S. dollar, causing the price of oil to fluctuate wildly as the dollar rises and falls against that other currency, that’s going to erode my purchasing power, isn’t it? What’s the difference between eroding my purchasing power directly by increasing my taxes and eroding my purchasing power indirectly through irresponsible fiscal policies?
The difference is that the Democrats think that in the latter case we’re too stupid to make the cause/effect connection. Just like they think we’re too stupid to figure out what will happen if they succeed in taking over health care. And maybe we are. We’ll find out a year from now at the mid-term election.
Thanks for listening.
Wednesday, October 28, 2009
What's That Price Tag Again?
Greetings from the Left Coast, where we here at Left Coast Blues do the heavy thinking for those who just can’t be bothered.
A couple of weeks ago, a fellow named Douglas Holtz-Eakin wrote a very interesting column in the Wall Street Journal. His column is about the true cost of the bill that’s been put forward by the Senate Finance Committee, and the tax burden that’s about to land on the middle class if it passes. Now Douglas is a pretty smart guy. He’s a former director of the Congressional Budget Office, and a Fellow at the Manhattan Institute. And that’s just for starters – here’s a link to his full bio. So we should probably pay attention to what he has to say.
To begin with, he points to the myth that Congress is actually going to cut Medicare reimbursements. According to the Balanced Budget Act of 1997, they should already have been cut – but year after year, Congress has voted to reinstate the money. In his words, “It is beyond fantastic to promise that future Congresses, for 10 straight years, will allow planned cuts in reimbursements to hospitals, other providers, and Medicare Advantage (thereby reducing the benefits of 25% of seniors in Medicare)…The very fact that this Congress is pursuing an expensive new entitlement belies the notion that members would be willing to cut existing ones.” (Or, as Nanny Ogg, one of my favorite characters in Terry Pratchett’s Discworld novels would say, “Pull the other one, it’s got bells on.”)
The problem is, if Congress admits to that rather obvious truth, it pushes the total cost of the legislation to well over $1 trillion.
Then there’s the $400 billion in new taxes and fees that the bill plans to raise by imposing a 40% tax on “Cadillac” policies (which several Democrats are already scrambling to insure that the union members in their districts won’t have to pay), and a variety of fees on health insurers, drug companies, and device manufacturers. Excuse me, but where do you think the insurers, drug companies, and device manufacturers are going to get the money? There’s only one way – by passing their increased costs along to consumers. Holtz-Eakin points to the Senate-House Joint Committee on Taxation, which indicated that “87% of the burden would fall on Americans making less than $200,000, and more than half on those earning under $100,000.”
Complicating matters even further, he points out that Democrats chose to make many of the industry fees nondeductible. Typically, a business would be able to count these kinds of fees as a business expense, which is subtracted from the revenue of the business before the tax obligation is calculated, just as the business would subtract rent on their facilities, their monthly power bill, etc. But every dollar that is taken from a business the way the Democrats are proposing to do it is a dollar that comes directly off the bottom line, and the business must increase revenue by more than a dollar to get it back. Holtz-Eakin estimates that this will result in an increase of as much as $200 billion in insurance premiums over the next 10 years, with 90% of that increase being borne by the middle class.
Why would Congress do such a thing? I can answer that one: Because it will then give Congress an excuse to even further demonize the health insurance industry for making such awful, terrible, greedy, unconscionable increases in premiums, and use the situation they created to further justify a government-run health care system. Cynical? Yep, but do you doubt it for a minute? I’ve still got that beach property for sale…
Thanks for listening.
A couple of weeks ago, a fellow named Douglas Holtz-Eakin wrote a very interesting column in the Wall Street Journal. His column is about the true cost of the bill that’s been put forward by the Senate Finance Committee, and the tax burden that’s about to land on the middle class if it passes. Now Douglas is a pretty smart guy. He’s a former director of the Congressional Budget Office, and a Fellow at the Manhattan Institute. And that’s just for starters – here’s a link to his full bio. So we should probably pay attention to what he has to say.
To begin with, he points to the myth that Congress is actually going to cut Medicare reimbursements. According to the Balanced Budget Act of 1997, they should already have been cut – but year after year, Congress has voted to reinstate the money. In his words, “It is beyond fantastic to promise that future Congresses, for 10 straight years, will allow planned cuts in reimbursements to hospitals, other providers, and Medicare Advantage (thereby reducing the benefits of 25% of seniors in Medicare)…The very fact that this Congress is pursuing an expensive new entitlement belies the notion that members would be willing to cut existing ones.” (Or, as Nanny Ogg, one of my favorite characters in Terry Pratchett’s Discworld novels would say, “Pull the other one, it’s got bells on.”)
The problem is, if Congress admits to that rather obvious truth, it pushes the total cost of the legislation to well over $1 trillion.
Then there’s the $400 billion in new taxes and fees that the bill plans to raise by imposing a 40% tax on “Cadillac” policies (which several Democrats are already scrambling to insure that the union members in their districts won’t have to pay), and a variety of fees on health insurers, drug companies, and device manufacturers. Excuse me, but where do you think the insurers, drug companies, and device manufacturers are going to get the money? There’s only one way – by passing their increased costs along to consumers. Holtz-Eakin points to the Senate-House Joint Committee on Taxation, which indicated that “87% of the burden would fall on Americans making less than $200,000, and more than half on those earning under $100,000.”
Complicating matters even further, he points out that Democrats chose to make many of the industry fees nondeductible. Typically, a business would be able to count these kinds of fees as a business expense, which is subtracted from the revenue of the business before the tax obligation is calculated, just as the business would subtract rent on their facilities, their monthly power bill, etc. But every dollar that is taken from a business the way the Democrats are proposing to do it is a dollar that comes directly off the bottom line, and the business must increase revenue by more than a dollar to get it back. Holtz-Eakin estimates that this will result in an increase of as much as $200 billion in insurance premiums over the next 10 years, with 90% of that increase being borne by the middle class.
Why would Congress do such a thing? I can answer that one: Because it will then give Congress an excuse to even further demonize the health insurance industry for making such awful, terrible, greedy, unconscionable increases in premiums, and use the situation they created to further justify a government-run health care system. Cynical? Yep, but do you doubt it for a minute? I’ve still got that beach property for sale…
Thanks for listening.
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