Filed under: Capitalism, Domestic Policy, Economy, Law, Regulation, The United States | Tags: Emergency Manager Kevyn Orr, Following Bankruptcy Law, Things Looking Up in Detroit
We’ve all seen pictures of Detroit’s abandoned buildings, and read of the seemingly never-ending political disaster. Now there are growing signs of possibility.
Detroit boasted the nation’s highest homicide rate. Police response times were five times the national average. A heart attack was usually fatal because medical care barely existed. 78,000 blighted buildings were labeled “dangerous.” And about 40% of the city’s 88,000 street lights were broken. The city’s deficit was $700 million on $1.2 billion in revenue. Retirement liabilities came to $9.2 billion, and coincidentally several pension-fund trustees and money managers had been indicted for accepting kickbacks.
When Governor Rick Snyder appointed Kevyn Orr as emergency city manager, Detroit’s unions, politicians and black leaders warned that it would mean civil war. Jesse Jackson charged that Governor Snyder was creating a “plantocracy, a plantation-oracracy,” apparently failing to notice that Mr. Orr is black. Allowing the city to continue to crumble in its political failures would have been the real crime. But what courage to take on that job!
Mr. Orr filed for bankruptcy last July. He proposed slashing unfunded retirement liabilities and general-obligation bonds by up to 90%. Unions sued.
Federal bankruptcy judge Steven Rhodes set a precedent by affirming that federal bankruptcy law trumps state laws protecting pensions and contracts.
Mr. Orr has negotiated smaller haircuts which still demand tough discipline, but will put the city on a sustainable post-bankruptcy course. A new police chief has instituted new IT systems that have contributed to a 14% decline in homicides. 3,200 streetlights have been replaced, with 50,000 planned by the end of 2015. Mr. Orr’s plan will free up more than $100 million annually for revitalization. New mayor Mike Duggan and the city council have formed a land bank to clear blight and plan to cut property tax bills.
Real Bankruptcy is renewing public confidence and spurring business investment. Racial tensions are receding. The White House has offered $320 million in “repurposed federal funds,” and has offered an additional $100 million from the bank bailout. Treasury Secretary Lew is heading for Detroit to take credit for the federal contribution. Federal welfare of $700 million between 2010 and 2012 has been propping up the sick political culture.
But Mr. Orr and Governor Snyder deserve real credit for having the guts to put the city into bankruptcy. Real bankruptcy, not the auto-industry semi-demi version.
Filed under: Capitalism, Democrat Corruption, Domestic Policy, Economy, Health Care, Law, Progressivism, Regulation
The debate over ObamaCare, the president declared, is over, and he won! ObamaCare is here to stay, and the debate is over. He claimed a grand total of 8 million subscribers, diagnosed Republicans as fear-mongering, spiteful, obstinate, petulant and obstructive., and added that he “would much prefer a constructive conversation with the Republicans about how we get some stuff done.” Which is a bit of an odd position to take since for the most part, ObamaCare hasn’t even really taken effect yet.
A new Fox News poll says that sixty-one percent of respondents in the poll released Thursday said Obama lies at least some of the time on important issues. Only 15 percent believe the president is completely truthful. Only 31 percent of Democrats said the president is always truthful. It seemed a useful poll in this context.
For the first time in the history of our country, one political party has forced the American people to buy a product devised by that party for their own benefit, that the American people have shown no indication that they wanted. The Democrats defied public opinion, rammed ObamaCare into law using the Cornhusker Kickback, Gator Aid, the Louisiana Purchase and all sorts of unseemly gimmicks to force unwilling Democrats to vote to pass it.
It funnels unprecedented amounts of power and money to Washington D.C. and out of the pockets of everyday Americans. It incentivises employers to refrain from hiring people and to cut hours for millions of their employees. It bans millions of people’s health insurance policies because they don’t conform to the rules designed in the backrooms of Congress. Obama crows over insurance policies, but doctors are so disgusted with the program that they are leaving medicine in droves. Since July 4, 2009, according to Real Clear Politics, 458 polls have been taken on ObamaCare. Twenty have shown Americans liking it, five have shown ties, and 433 (95%) have shown them disliking it. The five most recent polls have shown Americans opposing ObamaCare by double digits. And it hasn’t really started yet!
The president proclaims the debate is over and ObamaCare is here to stay.
Charles Blahous, the director of spending and budget initiative at the Mercatus Center at George Mason University, and a public trustee for Social Security and Medicare, said :
It is quite possible that the ACA is shaping up as the greatest act of fiscal irresponsibility ever committed by federal legislators. Nothing immediately comes to mind as comparable to it. Certainly no tax legislation is, because tax rates rise and fall frequently, such that one Congress’s tax cut can be (and often is) undone by a later tax increase. The same is true for legislation affecting appropriated spending programs. But the ACA is a commitment to permanently subsidize comprehensive health insurance for millions who could not otherwise afford it, which the federal government has no viable plan to finance. Moreover, experience shows that it is very difficult to scale back such spending once large numbers of Americans have been made dependent on it.
This is an expansion of spending commitments that is comparable to enacting Social Security, Medicare or Medicaid. Our biggest financial problems today come from Medicare, Medicaid and Social Security costs rising well beyond original projections. Nobody planned on the Baby Boom generation. The Congressional Budget Office now estimates that the gross costs of the ACA’s coverage expansion will be $92 billion in FY2015, or about 0.5% of our total GDP of roughly $18 trillion. This far exceeds the initial costs associated with the entirety of Social Security and Medicaid and is comparable to the startup costs for all original parts of Medicare combined. Only five years after enactment, the ACA will absorb more of our total economic output than Social Security did fully sixteen years after it was enacted. And government programs always, always, cost more than the estimates.
The ACA was enacted when legislators knew, or should have known, that they were living in a fiscal environment in which such extravagance was unaffordable. Deficits and Debt are far higher today than when other major entitlement programs were created. Baby Boomers are just beginning to turn 65, and their numbers swell exponentially until 2029. The sheer irresponsibility is breathtaking.
The ACA’s “CLASS” long-term care provisions were originally projected to generate $37 billion in net premiums through 2015. CLASS was suspended due to its long-term financial unworkability. That money is not coming in.
The employer/individual mandate penalties were expected to have brought in $12 billion through 2015, $101 billion over the first ten years. Obama has delayed enforcement repeatedly, and they haven’t brought in much of anything. Some ACA advocates are suggesting ditching those mandates altogether, though they were essential to the financing scheme.
The ACA was supposed to be financed in part by cuts to Medicare Advantage, the extremely popular program for seniors. This is typical of government programs. Establish the program, get everybody signed up, then start taking funding out of it to support something else. That was supposed to be $31 billion through FY2015, $128 billion over the first ten years. The White House recently announced that planned cuts will not go into effect after all —probably not till after the election.
We still have the “cost-saving” decisions of the Independent Payment Advisory Board— the 15 unelected bureaucrats who will decide what Medicare will pay for, and what it won’t. The ObamaCare people have always pointed out that most of the costs of health care come in the final years of seniors’ lives, and old people just don’t need such expensive treatment when they have so little time left. And they are sure that they can reduce costs by just paying providers less—which means good luck finding a doctor.
The great goal of getting those who can’t afford insurance signed up for Medicaid is confronted by recent studies showing that people who do without insurance actually do better than those who are insured by Medicaid.
Charles Blahouse concludes:
When new enrollment figures were released last week, the national discussion focused on whether the ACA is fulfilling its coverage expansion goals. The largely unwritten and more important story, however, is that the ACA is rapidly becoming a colossal fiscal disaster as enrollment proceeds heedless of the concurrent collapse of the law’s financing structure.
Filed under: Democrat Corruption, Domestic Policy, Education, Law, Politics, Regulation | Tags: Equal Employment Opportunity Commission, Federal Court Slapdowns, Racial Bias
One of the big stories about the Obama administration is how often federal courts are overturning executive overreach. But last week’s slapdown of the Equal Employment Opportunity Commission by the Sixth Circuit Court of Appeals was something special.
The EEOC had sued Kaplan, the for-profit education company, for using the same kind of background check that the EEOC itself uses. The EEOC has made a practice of suing private companies because it claims that credit and criminal background checks discriminate against minorities. In 2012 the agency issued “guidance” to get companies to take special care before using checks for criminal records, but stopped short for checking credit records.
The EEOC sued Kaplan for using credit checks, which the EEOC said had no business necessity and resulted in a “disparate impact” on blacks. A federal judge rejected the case, but the EEOC was so convinced of their virtue that it appealed. Mistake.
Judge Kethledge eviscerated the EEOC, writing that Kaplan had good reason to conduct credit checks on “applicants for positions that provide access to students’ financial-loan information because employees had “stolen payments” and “engaged in self-dealing.” As far as disparate racial impact was concerned, the Judge noted that the credit-check process is racially blind, the company does not report the applicant’s race with her other information.
The EEOC’s methodology left something to be desired. Raters were to look at drivers’ license pictures of applicants and if 4 out of 5 raters agreed on the race of the person, the applicant was classified by that race — and that was how you determined discrimination. As Judge Kethledge put it in closing”
We need not belabor the issue further. The EEOC brought this case on the basis of a homemade methodology, crafted by a witness with no particular expertise to craft it, administered by persons with no particular expertise to administer it, tested by no one, and accepted only by the witness himself.
And thus the bureaucracy grinds on, altering and illuminating the affairs of man. Isn’t it somewhat racist to assume that blacks would have more trouble with credit and criminal background checks, and thus checking such records is racist?
Filed under: Capitalism, Economy, Health Care, Law, Regulation, Taxes, The United States | Tags: Cause and Effect, The Great Regulation, The Weakest Recovery Ever
President Obama has liked to emphasize the depth and general awfulness of what he calls “the Great Recession”— a term that pleases him because it associates his recession with Franklin Roosevelt’s Great Depression. Roosevelt cheerfully tried to tackle the Great Depression with constant experimentation. Obama has confronted his recession with regulation without end, in the unfortunate delusion that more control would fix things.
Washington set a new record in 2013 by issuing final rules taking up 26,417 pages in the Federal Register. The rules came from various agencies, but Obama remains at the helm and leadership matters. By sheer numbers, President Obama stands at the pinnacle for numbers of rules. The federal Register contained 3,659 “final” rules (which mean you have to obey them), and 2,594 proposed rules on their way to join the others.
Neither politicians nor the media regard this effort to control as anything out of the ordinary, nor important. Yet if you wonder why the recovery has been so far below average —there it is. The bulk of this year’s regulation comes from ObamaCare—a 2,700 page law that has metastasized into a 7 foot tall stack of documents, and Dodd-Frank. Things don’t get done because nobody has the authority to make them happen.
I wrote about the pressing need to protect and update our electrical grid, vital and essential to all life in America, but there is no active plan to rebuild the grid, because the government cannot make the decisions needed to approve it. The average length of environmental review for highway projects, according to a study by the Regional Plan Association, is over eight years. Eight years!
The results and costs of the legal system are not just monetary, everything is too complicated. There are rules in the workplace, rights in the classroom, and government is bogged down in bureaucracy. Responsible people do not feel free to make sensible decisions. We are pushed around by lawsuits, and unable to move for fear of punishment for barely understood regulation.
The point of regulation is to try to make things run smoothly, make sure things work in a crowded society, but rules have consequences, and not always those intended. We now have a court system where even referendums voted on by the public have been taken over by the court system in which judges now feel free to decide these matters. The objections to “judicial activism” are richly deserved, and now even judges are mistrusted.
Consider the case of a fictional Pasquale’s Pizza chain. The typical restaurant has their pizza menu on a large lighted sign behind the counter where you place your order. The federal government has decided that nutritional values for each ingredient must be listed on the menu. Impossible on the customary lighted sign. What to do? How much will it cost? The profit margin is already slim. Pizza chains have dozens of ingredients, and changing featured recipes to entice customers. ObamaCare requires a restaurant to provide health insurance for full-time workers. The cost of policies has gone up sharply. Cut back all employees to 30 hours? Female employees and male employees must work the same number of hours for the same wage.
The requirement for ethanol in gasoline has raised the cost of pizza ingredients. It has also raised the cost of transporting supplies. Requiring a portion of power to come from wind and solar has raised the cost of electricity. Fuel-efficiency regulations have raised the cost of trucking. And all that is before regulations and taxes at the local, state and national levels.
You end up with schools that make fools of themselves over zero-tolerance regulations that do nothing to prevent violence, school lunches that kids won’t eat. You have armed federal agents raiding the Gibson Guitar Company and confiscating their guitars and their materials ostensibly because the wood used for guitar frets violated and environmental law. The wood was legally imported, meeting all the standards of the country of origin, but the costs to Gibson were huge. You not only cannot fight city hall, but you must surrender even though you are in the right, just to avoid further financial damage. There is case after case of people subjected to an armed SWAT raid, accused of violating a regulation they’ve never heard of, and ruined financially.
What business is going to take a big risk, invest a lot of money in a new venture, expanding, hiring new workers in such a climate? There is risk in everything we do. Trying to legislate risk out of our lives just leaves us with rules that keep people hunkered down, trying to avoid bureaucratic attention. In this climate, politicians cannot even get the big things done, let alone attempting to undo the web of regulation that is crippling society.
Filed under: Capitalism, Democrat Corruption, Domestic Policy, Economy, Health Care, Politics, Progressivism, Regulation, Statism | Tags: The Cost of Bad Ideas, The Democrats' Mistakes, Unicorns and Rainbows
When the Democrats started digging old plans out of dusty drawers, they decided, since they controlled both houses of Congress and the presidency, to go for government sponsored health care; they were absolutely sure that the American people were going to love it. Big mistake.
The cost of American health care had been climbing significantly, and Democrats were sure that they could significantly cut the costs of medicine by making the medical profession more efficient and insisting that they learn from the best practices of industry stars. Another mistake.
Democrats believed that the uninsured were a huge problem because people with no insurance were flooding emergency rooms and driving up costs. Turned out that most of those who used emergency rooms had insurance, they just couldn’t make appointments with their doctor for immediate help. Turned out that a large percentage of the uninsured did not have insurance because they could not afford it, but because they didn’t want to pay for insurance. They were healthy and unconcerned. Oops!
Democrats believed that if they added some nice benefits that people had never had before on their insurance like therapeutic massage, birth control and pediatric dentistry, the government insurance would be even more popular. They would just spread the costs of the new benefits across the board so the expense would not be noticed. They didn’t have an insurance actuary figure out the costs of including those benefits on a policy for 55 and 60 year-old folks who had no need for birth control or pediatric dentistry.
The CBO has issued a report that appears to show that ObamaCare will cost less and cover more people than expected. But their projections seldom turn out. There are just too many variables. The latest report says that ObamaCare will cost $104 billion less over the next 10 years than it thought just two months ago. The numbers rest on the CBO belief that premiums will be flat next year, but the industry has already warned of double-digit rate increases— a sharp rise that will drive costs up far beyond the CBO’s estimates.
Out of the blue, the Census Bureau has changed how it counts health insurance, just at the moment when ObamaCare is roiling the insurance markets. The effect will muddy comparisons between pre-ObamaCare and post-ObamaCare numbers. A lot of things we would like to know, like how many people gained or lost insurance under ObamaCare? Did government crowd out individual insurance? It will apparently take several years before we have answers to those questions.
The one thing that is increasing dramatically is unhappiness among physicians. Nine out of ten doctors discourage others from entering the profession. 300 doctors commit suicide every year. Depression among doctors is not new, but the level of unhappiness is on the rise. Being a doctor has become a miserable and humiliating undertaking, and many doctors feel that America has declared war on physicians and doctors and patients are the losers.
Many doctors just want out. More are running for Congress. Medical students opt for high-paying specialties so they can retire as soon as possible. MBA plans for physicians are flourishing, they promise doctors a way into management. The website called the Drop-Out-Club hooks doctors up with jobs at hedge funds and venture capital firms.
Some, including President Obama, seem to believe that doctors are paid way too much and if the government needs to save costs, they can just pay doctors less. This is the mindset that reduced Medicaid to such a point that those who go without health care may do better than Medicaid patients. Same goes for Medicare and the other government controlled health care systems.
More doctors refuse to accept health insurance. Some have gone into concierge medicine, where for an annual fee, the doctor is at your service for the year. The federal government is hoping to go after that escape from ObamaCare, and they are still intending to end Medicare Advantage plans.
Just processing insurance forms costs $58 for each patient encounter, according to Dr. Stephen Schimpff, an internist and CEO of the University of Maryland Medical Center. Physicians have had to increase the number of patients they see. The end result is that the average face-to-face clinic visit lasts about 12 minutes, in which the doctor probably spends most of the time interacting with his computer.
Under ObamaCare the incentives are all wrong. The government adds ill-considered benefits to insurance policies in the hope of getting people signed up. This makes the insurance too costly for most people. The push from the government will be a constant effort to cut costs. Hospitals will push for doctors to see more patients in less time, so they can be adequately reimbursed. Doctors will be encouraged to pay less attention to the Hippocratic Oath and more effort to try to get adequately paid, or to get out of the profession—which will encourage the best and brightest to aim for other careers. Watch for a push for increased immigration of physicians from third world countries. Other than that…
Filed under: Domestic Policy, Environment, Freedom, Law, Politics, Regulation | Tags: Misplaced Militarization, Snipers and Attack Dogs, The Bundy Ranch
The Standoff at the
O.K. Corral Bundy Ranch is standing off. The overarmed and overaggressive Bureau of Land Management has announced that because of the risk of violence, it is withdrawing its forces, some 200 armed agents, including snipers and guard dogs. The county sheriff negotiated the settlement.
It’s not at all clear what this was all about. The family settled in the area in the late 1800s and has ranched in the area ever since. The federal government has allowed Nevada ranchers to graze their cattle on tracts of adjacent public lands for generations. The federal government later created the Bureau of Land Management (BLM) to administer and “protect” the vast “federal lands”* including the land the Bundy family’s livelihood is and was dependent upon.
*These lands are frequently called “federal land.” This is inaccurate. They are public lands, owned by the people, and the government supposedly “manages” them for the American people. I don’t think anyone has challenged this frequently used terminology in court, but they should.
I don’t know about you, but I have a real objection to all these armed forces, SWAT teams, and snipers attached to agencies of the government. The Coast Guard, Border Patrol (we read that they were reduced to firing beanbags), and ICE,need to be armed, but this is really going too far. The federal agency did quite a few dumb things. It tasered Cliven Bundy’s son Ammon, rounded up a bunch of the Bundy cattle, and then fenced off a “First Amendment Area” in the middle of nowhere to demonstrate the protection of an “endangered” desert tortoise.
The federal government told the Bundy family that a tortoise existed on the land and therefore the land’s usage for cattle would have to decrease — attacking the Bundy family livelihood, which has led to a 20-year legal battle.The legal battle would seem to have gone against the Bundy family, but the Bundy family can in fact claim to have enjoyed generations of grazing rights on public land — with an arrangement originating in the 1870s when ranchers were offered those rights an enticement for settling the West.
I have no knowledge of the legal aspects of the case, and I suspect that you can’t fight city hall or the federal government. I am deeply suspicious of any claim of “endangered species,” because those so designated usually aren’t actually endangered, and are only used as a tool to accomplish some other purpose. I don’t believe that the Endangered Species Act has ever “saved” a species. The problem is often a simple increase in the number of predators.
Breitbart has done a fine job of outlining the case, the rumors, the law, and the problems involved. I would suggest that the American people are troubled by our imperialistic government and the increased militarization of so many federal agencies who have no business with SWAT teams and armed attacks on ordinary citizens. The Bureau of Land Management brought the angry resistance on themselves, with overreaction.
Filed under: Capitalism, Democrat Corruption, Domestic Policy, Economy, Freedom, Regulation | Tags: Big Bloated Government, Exposing Layers of Excess, Spotlighting Duplication
How many bureaucrats does it take to screw in a lightbulb? According to USA today, It takes 10 different offices at the HHS to tun programs addressing AIDS in minority communities. Autism research is spread out over 11 separate agencies. Eight agencies at the DOD are looking for prisoners of war and those missing in action. Schriever Air Force Base in Colorado has 8 different satellite control centers to control 10 satellite programs.
These are simply 26 new areas pointed out by the Government Accountability Office, where federal government programs are overlapping, duplicative, fragmented or just inefficient. There are 162 areas so identified in part reports. This gives Congress a clear map for saving tens of billion of dollars a year.
We owe this list to Senator Tom Coburn (R-OK), who wrote the legislation requiring this annual report, which is now in its fourth year. “Turning this ready-made list of cuts into savings is one of the best ways Congress can regain the trust and confidence of the American people”, he said. “At the end of the day there are no short cuts around the hard work of oversight and identifying and eliminating waste.” The prepared testimony said:
It is impossible to account for how much money is wasted through duplication, in part because the government doesn’t keep track of which programs each agency is responsible for.
“One of the most troubling things in GAO’s report is the number of agencies that have no idea just how much taxpayer money they are spending on their programs,” said House Oversight Committee Chairman Darrell Issa (R-CA). He has sponsored legislation , the Digital Accountability and Transparency Act, that would require the government to better track spending data from Congress to an agency to its ultimate recipient. The bill has passed the House 388-1 last year and waiting for a vote from the Senate.
The agencies in question will object. Every agency in question will feel their slice of the pie is more important, and losing budget and personnel diminishes the agency. Bureaucracies always have empire-builders in their ranks. They just are not often recognized, because they have been good at telling their superiors how necessary that budget and that staff are to the good of the nation.
Many of GAO’s recommendations deal with some of the most complex and challenging areas across the federal government,” said Beth Cobert, the deputy director for management at the Office of Management and Budget, in a statement. “Fully addressing them is a long-term process that in many cases will take years to implement.”
Uh huh. Shine a spotlight on them and see what happens to the dark corners. Last year, the GAO reported that the two main groups responsible for POW/MIA issues were “unable to resolve disputes” about who was responsible for what. When last month, National Public Radio detailed how bureaucratic and slow the search for remains was, DOD Sec. Chuck Hagel ordered that POW/MIA efforts be streamlined into a single office.
This is what transparency and sunlight are all about. A media that is too lazy, uninterested, or partisan to do their traditional job as governmental watchdog, actually costs taxpayers money. A bloated, expansive government that is more interested in being important and powerful than in freedom and thrift harms everyone.
Filed under: Democrat Corruption, Law, Politics, Progressivism, Regulation, Taxes, The United States | Tags: Lois Lerner To Be Charged, Partisan Political Treatment, The IRS Scandals
The IRS scandal is heating up again. Darrell Issa’s committee has released emails that show Democratic staffers from the House’s Government Oversight and Reform Committee communicating with the IRS about True the Vote, an anti-voter fraud organization that the Democrats wanted to suppress. It appears that Elijah Cummings, the ranking Democrat on the committee, to whom these staffers reported, may have lied during a committee hearing when he denied that his staffers had put the IRS on the trail of True the Vote.
The emails show the Democrats calling True the Vote to the IRS’s attention and requesting records about that organization. Lois Lerner was anxious to provide for them. The staffers do consistently refer to “publicly available” information, so there is no evidence that the IRS shared confidential taxpayer information with the Democrats.
House Republicans are closing in on Lois Lerner. The Department of Justice under Eric Holder has failed to do anything about the IRS scandal, or any other scandal involving the Obama administration. It is clear that Lois Lerner has broken the law. The House is threatening to hold her in contempt. If Eric Holder refuses to act, they can, if necessary, arrest and imprison her.
There is no evidence that the IRS pursued any progressive group at any time. Documents show that Ms. Lerner actively corresponded with liberal campaign-finance groups Democracy 21 and the Campaign Legal Center which had asked the IRS to investigate if conservative groups including Crossroads GPS were violating their tax-exempt status. After personally meeting with those groups, Ms. Lerner contacted the director of the Exempt Organizations Examinations Unit in Dallas to ask why Crossroads had not been audited. “You should know that we are working on a denial of the application,: Ms. Lerner wrote in an email.
The Ways and Means Committee disclosed that in January 2013, Ms. Lerner asked her staff to examine five conservative groups that the website ProPublica had called “controversial dark money groups,” including Americans for Responsible Leadership, Freedom Path, Rightchange.com, America is Not Stupid, and A Better America. Four of those groups eventually got the full IRS super-scrutiny treatment and three were audited.
It is particularly interesting that the groups that had to undergo extra examination from the IRS were those who wanted to prevent voter fraud, and those who expected to donate to Republican candidates. Democrats have been aggressive in trying to block any attempt to require photo ID to assure voters are who they say they are and entitled to vote. Kinda’ makes you thing that Democrats depend heavily on voter fraud to win elections, doesn’t it?