Clear Explanation of the Health Care Bill

This is probably the clearest explanation of the Health Care bill that I have seen. It is long and has several graphs and pictures (Particularly illustrative is the one showing the bureaucratic structure created by the bill) so I didn't copy and paste it here. Instead you'll have to visit this LINK. If you have ever wanted a clear explanation of the actual bill (If you're like me and started to look at the summary of the bill and didn't get it and didn't want to read the hundreds of pages then you too have probably been relying on the various media outlets' highlights) from someone who really gets it, then this is it. For full disclosure the author uses as a main source the Heritage Foundation which is a very conservative group and the author works for fortune 500 companies consulting them on the benefits they offer. So obviously they are very biased, but hey, so am I since my costs went up due to the bill.

One of the criticisms that I heard, which really stuck, during the presidential campaign was that President Obama had pushed as a senator a bill for equal rights for women in the workplace, which would have required all companies to submit to a government agency the number of workers on their payroll, their salaries, and the explanation of differences in pay if there were any (I know there was a consequence if the person monitoring it thought there was an inequality, but I can't remember what it was). The article I was reading referred to it as being the same as using a sledgehammer instead of a flyswatter to kill a fly. Their main point was that if elected President Obama was likely to follow the same pattern and overshoot or miss completely the mark on the major issues of the day.

To me, this Health Care bill was similar to his previous work only, instead of a sledgehammer it's as if they just decided to bulldoze the house the fly was in. Hopefully more of it can continue to be repealed.

President Obama and Foreign Policy

The following article is from Stratfor.

Global Expectations and Obama's Challenge

Having traveled a great deal in the last year and met a number of leaders and individuals with insight into the predominant thinking in their country, I can say with some confidence that the global perception of Obama today is as a leader given to rhetoric that doesn’t live up to its promise. It is not that anyone expected his rhetoric to live up to its promise, since no politician can pull that off, but that they see Obama as someone who thought rhetoric would change things. In that sense, he is seen as naive and, worse, as indecisive and unimaginative.

No one expected him to turn rhetoric into reality. But they did expect some significant shifts in foreign policy and a forceful presence in the world. Whatever the criticisms leveled against the United States, the expectation remains that the United States will remain at the center of events, acting decisively. This may be a contradiction in the global view of things, but it is the reality.

A foreign minister of a small — but not insignificant — country put it this way to me: Obama doesn’t seem to be there. By that he meant that Obama does not seem to occupy the American presidency and that the United States he governs does not seem like a force to be reckoned with. Decisions that other leaders wait for the United States to make don’t get made, the authority of U.S. emissaries is uncertain, the U.S. defense and state departments say different things, and serious issues are left unaddressed.

While it may seem an odd thing to say, it is true: The American president also presides over the world. U.S. power is such that there is an expectation that the president will attend to matters around the globe not out of charity, but because of American interest. The questions I have heard most often on many different issues are simple: What is the American position, what is the American interest, what will the Americans do? (As an American, I frequently find my hosts appointing me to be the representative of the United States.)

I have answered that the United States is off balance trying to place the U.S.-jihadist war in context, that it must be understood that the president is preoccupied but will attend to their region shortly. That is not a bad answer, since it is true. But the issue now is simple: Obama has spent two years on the trajectory in place when he was elected, having made few if any significant shifts. Inertia is not a bad thing in policy, as change for its own sake is dangerous. Yet a range of issues must be attended to, including China, Russia and the countries that border each of them.

Obama comes out of this election severely weakened domestically. If he continues his trajectory, the rest of the world will perceive him as a crippled president, something he needn’t be in foreign policy matters. Obama can no longer control Congress, but he still controls foreign policy. He could emerge from this defeat as a powerful foreign policy president, acting decisively in Afghanistan and beyond. It’s not a question of what he should do, but whether he will choose to act in a significant way at all.

This is Obama’s great test. Reagan accelerated his presence in the world after his defeat in 1982. It is an option, and the most important question is whether he takes it. We will know in a few months. If he doesn’t, global events will begin unfolding without recourse to the United States, and issues held in check will no longer remain quiet. Read more: The World Looks at Obama After the U.S. Midterm Election STRATFOR

CEOs on America

This is a must watch video. I wish we could see the whole thing with all of the interviews.

In particular I want to point out the CEO of American Express and what he said. I couldn't agree more with him. That is the primary problem we face in the U.S., I believe. We need to change our education process (for example reward the good teachers regardless of how hard it is to measure "good" and get rid of the bad ones) and people need to let go of the idea that what worked for their grandfather and father as far as careers go will work for them. There is almost no way we can compete with other countries in areas of manufacturing and still keep up with our own cost of living. We also have to understand that we are very much in competition for the same jobs with those from other countries. That has nothing to do with what the representatives in Washington can or can't do. Honestly all they can really do in my opinion is hurt us in that competition. The competition comes about due to the global nature of the economy and despite what many think it is not a bad thing.

A Republican Win

This is an excerpt from John Mauldin's weekly email. It is definitely something to focus on as you vote. The people we are voting in this week are the ones who are going to be driving local and a few national issues over the course of the next, economically critical, five years.


Be Careful What You Wish For

Everyone by now is predicting the Republicans to take the House and pick up anywhere from 6-8 Senate seats. We'll see. This is going to be a very interesting election, as there is a whole new dynamic in place.

Let's look down the road. I think we will at best be in a Muddle Through Economy for the next two years. Unemployment is going to be above 8%, best-case, in 2012. If the Bush tax cuts are not extended, in my opinion it is almost a lock that we go into recession next year, unemployment goes to 12%, and underemployment gets even worse. That is not a good climate for Obama and the Democrats in 2012. It is especially bad when you look at the number of Democratic Senate seats up for re-election that are in conservative states. The Republicans could take a serious majority in the Senate.

And then what? Right now Republicans are running on promises that they will not cut Medicare and Social Security, but are going to reduce spending and get us closer to a balanced budget. But everyone knows that the only way to get the budget into some reasonable semblance of balance will be to either cut Medicare benefits or increase taxes.

There are only the two options. Yes, you can reform medical care, and I think much of Obamacare should certainly be repealed, but that does not get us anywhere close to dealing with the real issue, and that's a fact. There are tens of trillions of unfunded liabilities in our future, which must be dealt with.

Let me be very clear on this. I am not really worried about the supposed $75 trillion in unfunded Medicare liabilities in our future. That is an impossible number. If something can't happen it won't happen. Long before we get to that apocalypse, we find a bond market that simply refuses to fund US debt at anywhere near an affordable cost. Crisis and chaos will ensue. Remember the quote that led this letter?

People only accept change when they are faced with necessity, and only recognize necessity when a crisis is upon them.
- Jean Monnet

The simple reality is that if We the People of the US want Medicare, in even a reformed and more efficient manner, we must find a way to pay for it. It will not be cheap. Raising income taxes on the "rich" is not enough. You have to go back and raise income taxes on the middle class, too. Oh, wait, that will be a drag on the economy and consumer spending. And in any event it will not be enough.

The only real way to pay for those benefits will be a value-added tax, or VAT. And while it could be introduced gradually, let there be no mistake that it will be a drag on economic growth. Government spending does not have a multiplier effect on the economy. It is at best neutral. What creates growth is private investment, increases in productivity, and increases in population. That's it. Tax increases have a negative multiplier.

A significant VAT along with our current income taxes will give us an economy that looks more like the slow-growth, high-unemployment world of Europe. Can we figure out how to deal with that? Sure. But it is not growth-neutral.

Republicans in 2013 will be like the dog that caught the car. What do you do with it? The last time they (embarrassingly, we) really screwed it up. The defining political question of this decade will not be Iraq or Afghanistan, or the environment or any of a host of other problems. The single most important question will be what do you do with Medicare? Cut it or fund it? Reform it for sure, but reform is not enough to pay for the cost increases that will come from an increasingly aging Boomer generation.

There is no free lunch. At some point, you cannot run on "no cuts in Medicare" and "no new taxes" and be honest. At least not this decade. Maybe when we have cured cancer and Alzheimer's and heart disease and the common cold at some future point, medical costs will go down, but in the meantime we have to deal with reality.

You may be able to fool the voters, but you will not be able to fool the bond market. Not dealing with reality will create a very vicious response. Ask Greece.

And that is the national conversation we must have with ourselves. There is a cost to government. There is a cost to extended Medicare benefits. (I am blithely assuming we deal with all the "easy" stuff like Social Security, and make real cuts in other areas.)