The Freedom Minute

Lessons from the Massachusetts Special Election

To a large extent, the special election to fill Ted Kennedy’s Senate seat was a referendum on the Democrats’ legislative ambitions in general and the current health care reform bill in particular. There are lessons to be learned from Scott Brown’s defeat of Martha Coakley to become the 41st Republican in the Senate, and one hopes the President and Congress are a quick study.

Contrary to what some liberals (oops, I mean “progressives”) like Michael Moore would wish to believe, the Democratic base did not desert those in power because they weren’t liberal enough. On the contrary, Brown won because independents and many moderate Democrats are unhappy with what appears to be this administration’s preference for big government solutions and the resulting increases in taxes and debt.

The health care bill is a good case in point. The President and the Democratically controlled Congress are attempting to foist upon the American people a trillion dollar health care plan, bought and paid for with backroom deals, and loaded with giveaways to the health care and health insurance industries. The President campaigned on “change”. But if this health care bill doesn’t prove that it’s still business as usual in Washington, nothing does.

So what should the President do? First, he should abandon the health care reform bill in its current form. Make no mistake, neither the House nor Senate bills address the real reasons for out of control heath care costs and would do little more than force everyone to purchase the health insurance industry’s flawed product; most likely at a higher cost. Pushing this catastrophically flawed bill through Congress, especially if the effort appears to involve any appearance of political gamesmanship, would be political suicide for the Democrats. Instead, the President and Congress should concentrate on only those reforms upon which most everyone can agree. It’s likely that with a scaled back, targeted approach to health care reform a few Republicans could be brought on board. (I’ll provide details in another post.) Not only would this be a huge win for the American people, but politically it would show that Obama is not only interested in bringing about change, he’s capable of change himself.

Second, the President should recognize that you can’t win elections without the backing of moderate and independent voters, and in Massachusetts they voted for a course correction. In his first year in office, Obama made the same mistake Bill Clinton made in 1992. Clinton beat Bush by appealing to independents and the so called “Reagan democrats”. But once in office, he pushed a classically liberal democratic agenda, the centerpiece of which was a big government health care reform bill. His approval ratings tanked and in the 1994 mid-term elections the Democrats lost control of both Houses of Congress. But Clinton learned his lesson, and for the rest of that term he chose to govern from the center, rather than the liberal left. He handily won re-election and by all accounts left office a popular and successful president. (Except, perhaps, for that impeachment thing.)

President Obama is actually lucky in that he’s had some early warning signs of the impending political disaster headed his way. If last November’s Republican gubernatorial wins in Virginia and New Jersey didn’t wake him up, certainly what happened in Massachusetts should do the trick. If he’s smart, he’ll make it clear that he’s heard the will of the people. He’ll become more fiscally conservative and dial back on his ambitious agenda. He’ll try to truly usher in an era of bipartisanship by repudiating ideas that would lead to bigger government intrusion in our lives and he’ll take a more market oriented approach to the reforms he wants to implement. He’ll steer clear of job killing legislation like Cap and Trade and he’ll consider options for reducing the deficit, not increasing it.

Hopefully, President Obama has gotten the message sent by the voters of Massachusetts. If not, in the 2010 midterm elections, it will be, as Yogi Berra used to say, deja vu all over again.

January 20th, 2010 Posted by freedomminute | Election, Federal Government, Health Care | 4 comments

The Problem with Health Insurance

In part one of this series, we looked at the underlying reasons why healthcare is so expensive. We now focus on health insurance and the role it plays in causing our health care system to be more dysfunctional than it need be. We’ll see that the health insurance system which has evolved here in the United States both contributes to the high cost of medical care and creates additional impediments to providing health care to the population as a whole.

An Historical Perspective

In order to understand health insurance in the United States, it’s necessary to know a little about how the system evolved into what we have today. An excellent history can be found here and I encourage you to read it.

To summarize, the modern health insurance system has its roots in the 1920’s. Around this time, costs for medical care began to rise due to advances in technology and a subsequent increase in demand. In addition, increased requirements for physician licensure, education and the accreditation of medical schools restricted physician supply, putting upward pressure on the costs of physicians’ services. Continue reading “The Problem with Health Insurance”

November 2nd, 2009 Posted by freedomminute | Federal Government, Health Care | 4 comments

Why is Health Care So Expensive?

This is a multipart series on health care reform. You may find it easier follow the discussion from the beginning. If you haven’t already read the introduction, you can find it here.

First, we need to define what we mean when we say that health care is too expensive. Do we mean that it costs too much to visit the doctor for a checkup, or an x-ray, or a flu vaccine? Do we mean that the average person can’t afford any type of health insurance? Do we mean that if you get cancer or some other major disease or need major surgery you can’t possibly afford to pay for all the medical bills you will incur? Or are we talking about the fact that the percentage of the nation’s Gross Domestic Product (GDP) spent on heath care continues to increase every year and is much greater than what is spent in other Western countries?

When we break it down this way, we can see that in some cases, heath care is not “too expensive” for the average American. Most people, even those without health insurance, can afford to visit the doctor for minor or routine medical care. Sure, it might cost more than we’d like, but then again it cost me more than I’d have liked to replace the clutch in my Toyota, but I accept that as the normal cost of owning a car. If you take on the responsibility for anything, be it a car, or a house, a child, or your body, eventually you will have maintenance costs and you just have to plan for such things. Although the price of a doctor’s visit is actually more expensive in real dollars today by about a factor of two than it was in the early sixties (later we’ll discuss the reasons for that and the fact that it’s not an apples to apples comparison) the cost is still not out of reach for the average person. Likewise, while the cost of what we call health insurance (I’ll explain later why it isn’t really “insurance”) continues to increase, almost 85% of the U.S. population is able to obtain health insurance either on their own or through their employer. True, there are huge problems with health insurance that need to be addressed, but generally health insurance is still somewhat affordable for most people. Of course there is a small percentage of the population, the very poor, who can’t afford any health care or health insurance, though many of them can obtain some basic health care through existing Federal and State programs.
Continue reading “Why is Health Care So Expensive?”

September 30th, 2009 Posted by freedomminute | Federal Government, Health Care | 11 comments

Health Care Reform – Introduction

I considered avoiding this topic since there’s so many others writing and talking about it, but with all the misinformation on all sides of this issue, I feel I need to bring some sanity to the conversation. Health care reform is a complicated issue and there’s no way I can cover everything that needs to be said about it here at the Freedom Minute. Countless books, research papers, college courses and articles provide volumes of information for anyone who wants to look for it. Yet most people don’t look for it. They continue with their pre-conceived ideas, certain in the correctness of their “facts”. I’ll attempt to distill down the vast amount of information available and present it in a clear and concise manner, free as much as possible from ideology and rhetoric.

I’m going to divide this up into a bunch of different posts, partly because I don’t want to have to write it all at once and partly because dividing it up will make it easier to follow. Much of what follows is not simply my opinion, but rather the result of countless hours of research and investigation. I use mostly verifiable, independent, peer-reviewed sources and if I make an assertion, I’ll attempt to cite those sources so you can check them out yourself. Mostly I’ll be paraphrasing the relevant data, but when I quote another source directly, I’ll use italics so you know when that’s happening.
Continue reading “Health Care Reform – Introduction”

September 30th, 2009 Posted by freedomminute | Federal Government, Health Care, Libertarian Philosophy | no comments

Cash for Clunkers: Success or Failure?

As the “cash for clunkers” program came to a close this past week, government officials fell all over themselves declaring what a huge success the program has been. “This is one of the best economic news stories we’ve seen, and I’m proud we were able to give consumers a helping hand,” gushed Transportation Secretary Ray LaHood. The positive spin is certainly not surprising considering the federal government just spent $3 billion of your tax dollars (or more correctly, added $3 billion to the national debt which will have to be paid back, with interest, from future tax revenues). And when they pony up that kind of coin, we’re certainly not going to hear anything coming from Washington other than the sound of our elected officials patting themselves on the back. True, if you’re one of the roughly 700,000 who were able to take advantage of the government’s largess, it’s likely you consider the program a success as well. And who’s to blame you. It’s not often you can get the government to reallocate $4500 of someone else’s money to you so you can buy a new car.

But those of us who understand that there is no free lunch realize that when the government engages in this kind of economic sleight of hand, there is always something on the other side of the equation, hidden from view, which balances out all the “benefits”. Plus, we’ll have to deal with all those pesky unintended consequences which always occur. So let’s take a look at the entirety of the cash for clunkers program and see whether or not it really was a good deal for America.
Continue reading “Cash for Clunkers: Success or Failure?”

August 29th, 2009 Posted by freedomminute | Federal Government, Libertarian Philosophy | 6 comments

What Should I Ask the President?

Just got word from the White House that The Freedom Minute will be attending the Obama townhall meeting in Los Angeles on Thursday. I’m hoping to get a chance to ask a question, but either way, you can be sure I’ll be posting about my experiences and candid impressions. Stay tuned…

March 17th, 2009 Posted by freedomminute | Federal Government | no comments

What You Really Learn in Math 101

In a recent opinion piece on the Sacramento Bee’s web site, Dan Walters criticizes those who oppose the recent budget deal as panderers, suggesting that they’re somehow dishonest in their opposition. Read the piece here:

California budget’s foes pander on the numbers

I’m reposting my response here because comments on the Bee’s website only allows 1000 characters and I had to cut it up into five different posts:

Dan,

If you’re going to write an opinion piece on the state budget, it might be helpful for you to provide at least one fact or piece of evidence to support your claims. Basically you are claiming that the budget couldn’t be balanced unless taxes were raised. Then you go on to criticize two potential gubernatorial candidates for not giving specifics as to how they would have balanced the budget. But what’s sauce for the goose, is sauce for the gander. It’s intellectually dishonest for you to make the claims you do without backing them up. You simply proclaim that the governor is right but then offer no proof or at least a counter argument to those who claim the tax increase wasn’t necessary.

So let me provide a few examples of how to back up an assertion:

You claim that Steve Poizner is pandering when he called the budget “a financial fiasco”. It isn’t pandering to say that raising taxes in a recession would be extremely harmful to the economy when virtually every economist would agree that it’s the likely outcome. Furthermore, we have historical evidence that this budget will worsen our financial problems. In 1994, Republican Governor Pete Wilson went along with the Democratic Legislature’s attempt to eliminate the (at that time) historic $14 billion deficit with $7 billion in tax hikes and $7 billion in spending cuts. This resulted in a deeper and more sustained recession and the deficit quickly re-appeared because revenues shrank further due to the tax increases. Prosperity only returned when the tax increases expired. There’s certainly every reason to believe that the basic laws of economics will apply this time as well. And we’ll likely have “a financial fiasco” on our hands as we did before.

You further take Poizner to task for saying, “When politicians who were elected to oppose more taxes end up supporting them, this is not a hard choice – it’s a broken promise.” Well, every Republican in the State legislature signed a pledge not to raise taxes and then six of them voted for a budget that included over $12 billion in tax increases. The Governor unequivocally made that same pledge verbally numerous times as well and then approved the largest single tax increase by any State in U.S. history. I’m not sure what you’d call it, but in my book that’s pretty much the definition of breaking your promise.

Now let’s turn to your claim that the budget couldn’t be balanced without tax increases. This is false and I’ll give you and our esteemed Governor a much needed math lesson. The final budget raised taxes by about $12.5 billion. Here’s how you find that much without the taxes:

As reported in the SacBee on Dec. 15th, the Republicans proposed the following:

Redirect Proposition 10 unspent funds – $2.1 billion
Redirect Proposition 63 unspent funds – $3.9 billion
Transfer from trial court improvement fund – $61 million
Fund transfers from Department of Parks and Recreation – $27 million
Delay loan repayment to Integrated Waste Management Board – $21 million
Delay loan repayment to Public Utilities Commission – $5 million
Motor Vehicle Account Fund Transfer – $170 million
Redirect tribal gaming payments for transportation loans – $200 million

This comes to about $7 billion. Now add Senator Chuck DeVore’s plan to permit oil slant drilling which would allow us to borrow up to $5 billion against future revenues. That’s $12 billion right there. Now that’s not the only way to get the needed funds. Preferably, the legislature could just cut $12 billion of the $40 billion increase in state spending that occurred over the last 5 years. Or cut some of the 175,000 new state workers who were added to the state payroll over the last decade. (I’ll do the math for you – That’s 48 jobs added per day.)

My point is that it’s disingenuous to say the budget couldn’t be balanced without raising taxes. The truth is that it would have been politically difficult, not mathematically impossible. Of course, maybe in Gov. Schwarzenegger’s Math 101 class they only teach you how to balance the budget by raising taxes. Keeping your word and making politically difficult decisions must be taught in one of the advanced courses.

February 24th, 2009 Posted by freedomminute | Federal Government | no comments

Get Mad as Hell and Don’t Take it Anymore

In case you haven’t heard, another AIG subsidiary, International Lease Finance Corp., threw a lavish party at the Smithsonian just 4 days after US taxpayers bailed out parent AIG to the tune of $85 billion.

Read the story here.

This is in addition to the now infamous $443,344 spa retreat at the exclusive St. Regis Monarch Beach Resort for executives of AIG subsidiary, AIG American General, which prompted Barack Obama to suggest during Tuesday’s debate that the Treasury should demand the money back and fire the executives.

And this week the feds agreed to loan AIG another $37.8 billion. If you want to make your voice heard on how your tax dollars are being wasted, go to this link to look up the contact information for your congressional representatives.

Make a phone call if you can. It’s much more effective than an email.

October 10th, 2008 Posted by freedomminute | Federal Government | 2 comments

It’s Bizzaro World on the Campaign Trail

I guess if you live long enough, you see everything. This week, John McCain proffered a multi-billion dollar plan to have the federal government buy up all the home mortgages in the country that have fallen into default and then revalue them to current home values. A plan that would put us billions more into debt and reward the lenders who made bad loans and the homeowners that got themselves into mortgages they knew they couldn’t afford.

Did I mention that the plan was put forward by John McCain, the REPUBLICAN candidate for president? And guess who’s opposed to the government intervening in this way. Yeah, “that one”, the Democratic contender. If I’m not mistaken, aren’t the Republicans supposed to be in favor of smaller government and less intervention in the free market? And isn’t it the Democrats who have traditionally been accused of being the “tax and spend” party? And isn’t this the same John McCain who pretty much made his career on being a fiscal conservative, the watchdog for your tax dollars?

Apparently not. Apparently we’re living in some kind of election year Bizzaro World in which up is down, left is right, and Republicans are Democrats. Except, of course, when it comes to keeping the government out of your bedroom and other personal business. Then they’re still Republicans.

October 10th, 2008 Posted by freedomminute | Federal Government | no comments

Do the Facts Matter?

Beth Fouhy of the Associated Press is also making the erroneous claim that Palin and Biden “Both said they supported partnership rights for gays and lesbians”. This is an especially egregious error since AP articles are quoted in many other news stories. In fact, earlier in the exchange on that subject, Palin said she didn’t even support the same kind of rights afforded to gay couples by her home state of Alaska. Palin: “not if it goes closer and closer towards redefining the traditional definition of marriage between one man and one woman. And unfortunately that’s sometimes where those steps lead”. That’s significantly different than Joe Biden’s answer to the question. Biden: “Do I support granting same-sex benefits? Absolutely positively. Look, in an Obama-Biden administration, there will be absolutely no distinction from a constitutional standpoint or a legal standpoint between a same-sex and a heterosexual couple.” and “We…support making sure that committed couples in a same-sex marriage are guaranteed the same constitutional benefits as it relates to their property rights, their rights of visitation, their rights to insurance, their rights of ownership as heterosexual couples do”. Again, that response is a far cry from Palin’s (non) answer.

Fouhy’s AP article also gets it wrong in stating, “Biden reaffirmed his position that it was “patriotic” for people who earn more than $250,000 to pay additional taxes”. What Biden actually said in the debate was that he felt it was unpatriotic for “people to take their post office box off-shore (to) avoid taxes”. It may be too subtle a difference for a reporter of a major news organization to get, but it is an important distinction and not the same as saying it is patriotic for people to pay more taxes.

If our professional journalists can’t get it right, how can we expect the general public to decipher fact from fiction? I guess what I’m asking is, who fact checks the fact checkers?

October 3rd, 2008 Posted by freedomminute | Election, Federal Government | one comment