I watched the "healthcare summit" for awhile this morning, and boy, did the Republicans fall into a trap.
It didn't take long to figure out the strategy. Get the Republicans to talk about specific things they think should be done, then answer by saying, "That's already in the bill".
Aside from mental midget Harry Reid's over-the-top partisan rants, Obama and his minions have been trying to present a picture of reasonableness and agreeability. The strategy seems to be working wonderfully well. Get a Republican to say something, then respond with agreement with the statement, then emphasize that it's either already in the bill or they'd be happy to find a way to inculde it.
From a purely political perspective, the Republicans were stupid to agree to this meeting. The old law, "never play another man's game" holds especially true here. Obama is in control of the meeting and as such controls the agenda and message, which is obviously designed to make the Repubs look like partisan obstructionists to what is otherwise both a necessary and reasonable healthcare bill.
Thursday, February 25, 2010
Monday, February 22, 2010
Another Interesting Argument - Credit Cards
I was reading stories about the new laws that went into effect stiffening regulations on banks regarding how they treat their credit card customers.
Credit cards have of course long been hugely profitable for banks. If they weren't we wouldn't all be getting "offers" in the mail every day for the latest new card, offering airline miles or "points" or cash back "rewards". (Side note, I stupidly signed up for one of the "cash rewards" cards once. Just before it was time to collect on that cash reward, the bank rescinded the program. Learned my lesson.)
So basically the legislation was a Democrat-backed plan to "protect" consumers from predatory bank practices. Absurdly high interest rates, fees, etc.
But according to the stories, it seems to be hurting more people than it helps. Banks have responded with several actions that have been detrimental to their customers as a whole. Even I got a notice about 6 months ago that my interest rate was getting hiked on my card. The notice was actually pretty honest in letting me know the interest rate hike was being imposed to try to maintain profitability in the credit card business.
But let's get to the basic argument.
The reason Democrats wanted to pass these regulations on the banks was because the banks were unreasonably charging exhorbitant rates and unjustified fees to many of their customers. Who could argue with that, right? It does seem that banks are rather predatory and greedy when it comes to their credit card policies.
On the other side, a conservative would generally suggest that banks hike rates and fees in an attempt to insulate them from default by their higher-risk customers. Charging 23% interest is just protection against the highly possible event that the cardholder will stop making payments altogether, and the bank will lose all of the credit card balance. Otherwise, anyone who is credit-worthy and holding a balance on a 23% interest rate credit card only has himself to blame, because in 5 minutes he or she could find a great deal on another credit card out in the marketplace, cut up the old card, and problem solved.
All arguments basically valid, as far as they go.
I'm personally not opposed to usury laws, and tend to believe it's not in the country's best interest to be laissez-faire on all bank practices. I do happen to believe that a legitimate role of government is protection of citizens from theft. Just because it's legal to charge somebody loan-shark rates on loans doesn't mean it's not theft to do so.
Where my beef lies with the whole topic is more in line with the mega banks. I think the biggest fault of government was in allowing consolidation of banking institutions into a small number of mega banks that were "too big to fail", resulting in the economic disaster we're experiencing now.
It's OK to pass basic usury laws, capping the interest rate banks can charge their customers at some multiple of Prime. That will result in banks basically cutting off lots of marginal customers from access to credit; but don't those folks need the wake-up call anyway? Those who suffer the most from the highest abuse from bankers are, in fact, those who are least responsible in terms of their debts. No laws can change their behavior, so maybe having a change in behavior forced on them by losing their credit lines is a positive thing.
That reminds me, I should shop for a new card to replace this one. If there's another bank out there that wants my business, they'll offer me a more attractive rate. (I just won't mention they'll never collect any interest from me anyway, because I pay off the balance every month.)
Credit cards have of course long been hugely profitable for banks. If they weren't we wouldn't all be getting "offers" in the mail every day for the latest new card, offering airline miles or "points" or cash back "rewards". (Side note, I stupidly signed up for one of the "cash rewards" cards once. Just before it was time to collect on that cash reward, the bank rescinded the program. Learned my lesson.)
So basically the legislation was a Democrat-backed plan to "protect" consumers from predatory bank practices. Absurdly high interest rates, fees, etc.
But according to the stories, it seems to be hurting more people than it helps. Banks have responded with several actions that have been detrimental to their customers as a whole. Even I got a notice about 6 months ago that my interest rate was getting hiked on my card. The notice was actually pretty honest in letting me know the interest rate hike was being imposed to try to maintain profitability in the credit card business.
But let's get to the basic argument.
The reason Democrats wanted to pass these regulations on the banks was because the banks were unreasonably charging exhorbitant rates and unjustified fees to many of their customers. Who could argue with that, right? It does seem that banks are rather predatory and greedy when it comes to their credit card policies.
On the other side, a conservative would generally suggest that banks hike rates and fees in an attempt to insulate them from default by their higher-risk customers. Charging 23% interest is just protection against the highly possible event that the cardholder will stop making payments altogether, and the bank will lose all of the credit card balance. Otherwise, anyone who is credit-worthy and holding a balance on a 23% interest rate credit card only has himself to blame, because in 5 minutes he or she could find a great deal on another credit card out in the marketplace, cut up the old card, and problem solved.
All arguments basically valid, as far as they go.
I'm personally not opposed to usury laws, and tend to believe it's not in the country's best interest to be laissez-faire on all bank practices. I do happen to believe that a legitimate role of government is protection of citizens from theft. Just because it's legal to charge somebody loan-shark rates on loans doesn't mean it's not theft to do so.
Where my beef lies with the whole topic is more in line with the mega banks. I think the biggest fault of government was in allowing consolidation of banking institutions into a small number of mega banks that were "too big to fail", resulting in the economic disaster we're experiencing now.
It's OK to pass basic usury laws, capping the interest rate banks can charge their customers at some multiple of Prime. That will result in banks basically cutting off lots of marginal customers from access to credit; but don't those folks need the wake-up call anyway? Those who suffer the most from the highest abuse from bankers are, in fact, those who are least responsible in terms of their debts. No laws can change their behavior, so maybe having a change in behavior forced on them by losing their credit lines is a positive thing.
That reminds me, I should shop for a new card to replace this one. If there's another bank out there that wants my business, they'll offer me a more attractive rate. (I just won't mention they'll never collect any interest from me anyway, because I pay off the balance every month.)
Thursday, February 18, 2010
Recovery or Disaster?
I haven't posted in awhile, for a couple of reasons: Mainly I've been too busy, but also I haven't had a lot to write about.
Currently we've got two lines of rhetoric coming at us, once again divided by party affiliation.
The Dems are trying to tell us things really are getting better. They're "Stimulus" is really working, really!! And the only reason things aren't getting better faster is because the Republicans are obstructing and stalling their reform agenda.
The GOP tells us things are really bad, and are set to get much worse. The Democrat "Stimulus" was nothing but a boondoggle of historic proportions, and did much more to hurt the recovery than to help. Now we face unsustainable debt levels that are guaranteed to lead to runaway inflation, made even worse by the massive tax increases planned by the Democrat power base.
As for the obstruction charge, the GOP says we'd be much worse off today than we already are if they hadn't done everything in their power to stop the destructive Democrat/Obama agenda. Besides, they point out, Dems have huge majorities in congress that meant nothing they wanted to do could be obstructed by Republicans; it's the American people that spoke loudly to their centrist representative to keep the agenda from passing.
Rather than get into the politics of the argument, I'll try to approach it with a bit of common sense and economics.
The Democrat government is indeed spending almost twice what they're taking in in taxes. They have no desire to cut back any part of their spending, and would rather increase tax rates. The problem is, even if they raised taxes to 100 percent, it won't be enough to satisfy their voracious appetite.
So they sell bonds to China, and print money to pay for what they can't raise any other way. China's already pulling back and expressing frustration with the devaluation of the dollar caused by running the printing presses around the clock. That's going to raise the cost of debt, because the weaker the dollar the higher the interest rate that will be demanded by those who invest in it.
What also happens, as I can directly attest through just listening to the executives in the companies I consult with, is business is running scared right now. Even businesses that are doing well aren't expanding, because they have a well-founded fear that the Democrats will succeed with their agenda.
Whether Healthcare Reform, Cap & Trade, or simply tax increases, executives believe the regulatory and tax burdens either already imposed or on the way next year will hammer their profitability. So they choose not to invest in expansion. They choose not to hire employees, and make do with their existing staff or use temporary and part-time workers to guard against likely future layoffs.
Sounds like a dilemma. We can't spend our way out of the recession with money we don't have. Besides, I'm convinced the very Keynesian ideas the presidents' policies use are a fiction.
The only way out is to reintroduce sanity to government. Unfortunately, I hold little hope of that happening, and am not even sure this fall's elections will truly change the game.
Pick off the "low-hanging fruit" first. These are easy:
No earmarks, period. Cancel the ones passed earlier this year that haven't already been completed.
Close the Department of Education
Close the Endowment for the Arts, or make it solely privately funded
Scale back the Department of Agriculture significantly
Cancel the rest of the "Stimulus" and pull back the funds
Drop Cap & Trade
Drop Healthcare Reform but start incrementally on only those things that will save taxpayers money
Pass a Constitutional Amendment that basically says, Any taxes or tax breaks passed by the government must be open to all. If there's a tax, everybody pays. If there's a credit or reduction, everybody gets it. In other words, no more "targeted" taxes and no more political favors in the tax code.
Make taxes simpler and flatter. Everybody pays something - no more allowing 50% of the population to pay nothing.
Eliminate all non-essential projects, departments, etc. (Boy are there lots of them)
Yes, healthcare has become the government's biggest expense, primarily because of Medicare and Medicaid. Something needs to be done about that problem. But the Democrat solution of just putting everybody in them isn't the answer. There will never be bipartisan agreement on that point, thus the incremental approach of only common-sense tax saving reforms.
I know, pipe dream.
Currently we've got two lines of rhetoric coming at us, once again divided by party affiliation.
The Dems are trying to tell us things really are getting better. They're "Stimulus" is really working, really!! And the only reason things aren't getting better faster is because the Republicans are obstructing and stalling their reform agenda.
The GOP tells us things are really bad, and are set to get much worse. The Democrat "Stimulus" was nothing but a boondoggle of historic proportions, and did much more to hurt the recovery than to help. Now we face unsustainable debt levels that are guaranteed to lead to runaway inflation, made even worse by the massive tax increases planned by the Democrat power base.
As for the obstruction charge, the GOP says we'd be much worse off today than we already are if they hadn't done everything in their power to stop the destructive Democrat/Obama agenda. Besides, they point out, Dems have huge majorities in congress that meant nothing they wanted to do could be obstructed by Republicans; it's the American people that spoke loudly to their centrist representative to keep the agenda from passing.
Rather than get into the politics of the argument, I'll try to approach it with a bit of common sense and economics.
The Democrat government is indeed spending almost twice what they're taking in in taxes. They have no desire to cut back any part of their spending, and would rather increase tax rates. The problem is, even if they raised taxes to 100 percent, it won't be enough to satisfy their voracious appetite.
So they sell bonds to China, and print money to pay for what they can't raise any other way. China's already pulling back and expressing frustration with the devaluation of the dollar caused by running the printing presses around the clock. That's going to raise the cost of debt, because the weaker the dollar the higher the interest rate that will be demanded by those who invest in it.
What also happens, as I can directly attest through just listening to the executives in the companies I consult with, is business is running scared right now. Even businesses that are doing well aren't expanding, because they have a well-founded fear that the Democrats will succeed with their agenda.
Whether Healthcare Reform, Cap & Trade, or simply tax increases, executives believe the regulatory and tax burdens either already imposed or on the way next year will hammer their profitability. So they choose not to invest in expansion. They choose not to hire employees, and make do with their existing staff or use temporary and part-time workers to guard against likely future layoffs.
Sounds like a dilemma. We can't spend our way out of the recession with money we don't have. Besides, I'm convinced the very Keynesian ideas the presidents' policies use are a fiction.
The only way out is to reintroduce sanity to government. Unfortunately, I hold little hope of that happening, and am not even sure this fall's elections will truly change the game.
Pick off the "low-hanging fruit" first. These are easy:
No earmarks, period. Cancel the ones passed earlier this year that haven't already been completed.
Close the Department of Education
Close the Endowment for the Arts, or make it solely privately funded
Scale back the Department of Agriculture significantly
Cancel the rest of the "Stimulus" and pull back the funds
Drop Cap & Trade
Drop Healthcare Reform but start incrementally on only those things that will save taxpayers money
Pass a Constitutional Amendment that basically says, Any taxes or tax breaks passed by the government must be open to all. If there's a tax, everybody pays. If there's a credit or reduction, everybody gets it. In other words, no more "targeted" taxes and no more political favors in the tax code.
Make taxes simpler and flatter. Everybody pays something - no more allowing 50% of the population to pay nothing.
Eliminate all non-essential projects, departments, etc. (Boy are there lots of them)
Yes, healthcare has become the government's biggest expense, primarily because of Medicare and Medicaid. Something needs to be done about that problem. But the Democrat solution of just putting everybody in them isn't the answer. There will never be bipartisan agreement on that point, thus the incremental approach of only common-sense tax saving reforms.
I know, pipe dream.
Tuesday, February 09, 2010
Who's Playing Politics?
Obama or Congressional Republicans?
Interesting how Obama decided on a strategy to triangulate the healthcare issue in what Republicans consider a trap, offering a half-day meeting with Republicans to "listen" to their ideas on healthcare reform. He's apparently trying to build on what he likely considered a big win in his talk with the GOP lawmakers at their retreat, where he had his supporters salivating over his "masterful" rhetoric designed to make them look like partisan obstructionists.
The GOP leaders have set preconditions on his proposed follow-up meeting, namely that the president throw away the bills already created by his fellow democrats and start over. He of course refused.
Which party is playing politics? Mostly Obama, mostly the GOP, or both equally?
Seems rather apparent to me.
It's interesting that the problem is structural. Having created an entitlement mentality among the citizenry, we clearly now have a situation where the largest demographic consumers of expensive healthcare are those already on the government plans - Medicare and Medicaid. That demographic consisting, of course, of the poor and the elderly. Those folks now account for more than half of all heath insurance payments in the country as a whole, and it's only going to get worse.
The argument isn't about whether or not that is a problem. It's about what should be done about it.
Obama and his left wing of the Democrat party believe the answer is to simply put everybody into a universal version of Medicare. The socialist ideal is at play, which says "To each according to his need, from each according to his ability". Simply take much more from the productive segment of the population and give it to the unproductive.
The GOP believe the answer is to drive the best possible economic conditions, which might at least help address the poor part of the demographic by getting them back to work for business where presumably they will get into their employer's health plans. They realize that doesn't address the exploding senior population consuming the rest of those resources, but why should they stick their necks out talking about solutions to that problem and anger one of their most potent constituencies that seems likely to return them to power; perhaps as soon as next year.
It would of course be very nice if somebody, say even the president, would catch wind of the ideas I've developed and began talking about them.
But I don't believe it's ever really been about the actual healthcare problem for many of the political class. It's about getting and holding onto power.
So unless that changes, beginning this coming November with new leaders elected to represent us, nothing good will happen. Something still might happen, but it's pretty much guaranteed to make the problem worse than doing nothing.
Interesting how Obama decided on a strategy to triangulate the healthcare issue in what Republicans consider a trap, offering a half-day meeting with Republicans to "listen" to their ideas on healthcare reform. He's apparently trying to build on what he likely considered a big win in his talk with the GOP lawmakers at their retreat, where he had his supporters salivating over his "masterful" rhetoric designed to make them look like partisan obstructionists.
The GOP leaders have set preconditions on his proposed follow-up meeting, namely that the president throw away the bills already created by his fellow democrats and start over. He of course refused.
Which party is playing politics? Mostly Obama, mostly the GOP, or both equally?
Seems rather apparent to me.
It's interesting that the problem is structural. Having created an entitlement mentality among the citizenry, we clearly now have a situation where the largest demographic consumers of expensive healthcare are those already on the government plans - Medicare and Medicaid. That demographic consisting, of course, of the poor and the elderly. Those folks now account for more than half of all heath insurance payments in the country as a whole, and it's only going to get worse.
The argument isn't about whether or not that is a problem. It's about what should be done about it.
Obama and his left wing of the Democrat party believe the answer is to simply put everybody into a universal version of Medicare. The socialist ideal is at play, which says "To each according to his need, from each according to his ability". Simply take much more from the productive segment of the population and give it to the unproductive.
The GOP believe the answer is to drive the best possible economic conditions, which might at least help address the poor part of the demographic by getting them back to work for business where presumably they will get into their employer's health plans. They realize that doesn't address the exploding senior population consuming the rest of those resources, but why should they stick their necks out talking about solutions to that problem and anger one of their most potent constituencies that seems likely to return them to power; perhaps as soon as next year.
It would of course be very nice if somebody, say even the president, would catch wind of the ideas I've developed and began talking about them.
But I don't believe it's ever really been about the actual healthcare problem for many of the political class. It's about getting and holding onto power.
So unless that changes, beginning this coming November with new leaders elected to represent us, nothing good will happen. Something still might happen, but it's pretty much guaranteed to make the problem worse than doing nothing.
Monday, February 01, 2010
More Evidence Suggesting Climate Change is Politics, not Science
One of my favorite blogs is Powerline, which has this great post about what scientists who don't have a political dog in the fight are saying about the whole Climate Change myth.
I about fell out of my chair when I heard the president call for more drilling and development of American oil, gas, coal, and nuclear resources during the State of the Union speech. Until he got around to the end of that part of the speech, where he strongly suggested an offer of "compromise" with conservatives on those issues if they would only get on board with his Cap & Trade bill. Of course, he gave a not-so-subtle suggestion that conservative resistance to the idea of "climate change" was borne of ignorance or conscious choices to ignore the scientific "consensus".
I found it interesting that the president followed up his SOTU with a visit with Republican legislators, where he harangued them for 90 minutes with a message that they need to stop opposing him and using "divisive" rhetoric to stop progress.
It certainly was a well-crafted message, where he steadfastly refused to engage them on policy details, focusing instead on his pleas that they stop spreading unfair characterizations about his policies. For example, he affably suggested that Republicans were telling their constituents that his healthcare bill was "some kind of Bolshevik plot".
Besides the fact I never heard any GOP lawmaker ever call it "Bolshevik", their characterizations of the healthcare plan was consistently "Socialist". Which of course is accurate.
It seems that he was successful from a PR perspective in presenting himself as a reasonable person who is willing to compromise and meet Republicans halfway for the benefit of the country. Avoiding details was an absolute requirement for this message, because whenever the details of his policies leak out, Americans resoundingly reject them. This is a president who is determined to push through his agenda at all costs, apparently believing that fooling enough of the populace to allow the bills to pass is OK, because in the end it's going to be somehow good for us who oppose them.
This might be an interesting year, in which I think conservatives may be able to recover enough seats in congress to slow down Obama's hard left turn.
I about fell out of my chair when I heard the president call for more drilling and development of American oil, gas, coal, and nuclear resources during the State of the Union speech. Until he got around to the end of that part of the speech, where he strongly suggested an offer of "compromise" with conservatives on those issues if they would only get on board with his Cap & Trade bill. Of course, he gave a not-so-subtle suggestion that conservative resistance to the idea of "climate change" was borne of ignorance or conscious choices to ignore the scientific "consensus".
I found it interesting that the president followed up his SOTU with a visit with Republican legislators, where he harangued them for 90 minutes with a message that they need to stop opposing him and using "divisive" rhetoric to stop progress.
It certainly was a well-crafted message, where he steadfastly refused to engage them on policy details, focusing instead on his pleas that they stop spreading unfair characterizations about his policies. For example, he affably suggested that Republicans were telling their constituents that his healthcare bill was "some kind of Bolshevik plot".
Besides the fact I never heard any GOP lawmaker ever call it "Bolshevik", their characterizations of the healthcare plan was consistently "Socialist". Which of course is accurate.
It seems that he was successful from a PR perspective in presenting himself as a reasonable person who is willing to compromise and meet Republicans halfway for the benefit of the country. Avoiding details was an absolute requirement for this message, because whenever the details of his policies leak out, Americans resoundingly reject them. This is a president who is determined to push through his agenda at all costs, apparently believing that fooling enough of the populace to allow the bills to pass is OK, because in the end it's going to be somehow good for us who oppose them.
This might be an interesting year, in which I think conservatives may be able to recover enough seats in congress to slow down Obama's hard left turn.
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