The Address to Congress

No matter how you slice or dice it, President Obama’s Address to Congress (fka The State of the Union Address) was a homerun. No one can deny his eloquence in delivery, and his ability to articulate the hopes and aspirations of what America should be. He pushed all the populist buttons, such as big, bad bank executives, while assuring the business community that he understands that the root cause of our financial problems is based in the banking system and a credit freeze. And who can be against finding a cure for cancer in our time. It was baseball, hotdogs, apple pie and Chevrolet (literally)!

It all sounds good on paper…but when you get to the details…it is the same old same old. Liberals have a knack for double speak. While extolling the virtues of fiscal prudence, Congress is working on an omnibus spending bill (needed to fund government operations) that is filled with the very “porkie” projects he criticized last night. I saw some of the pork projects today, and they are too numerous to list, as well as disgusting and scary. Watch next week. This is in addition to the stimulus package that was just passed. Of course, this one is in the hundreds of millions instead of billions…so it must be OK.

Health care is certainly an issue…but a single payer socialized system is looming. For those who aren’t watching, Canada is beginning to address the flaws in its single payer system by re-introducing private insurance which heretofore was outlawed. We should be looking north to make sure we don’t end up with health care rationing…which is the stated goal of Tom Daschle, the now disgraced nominee for HHS Secretary, that I mentioned in my article last week (Did You Vote for This?).

I think I heard him say that he wants to provide free education from pre-school through college. Who is going to pay? He certainly didn’t address the bloated salaries of academia which is more disgraceful that some of the Wall Street antics. Of course, academia is one of his core constituencies.

And while he said he is going to increase troop levels in our military, he focused on weapons reductions and withdrawing from Iraq as a source of funds for his domestic programs…and mentioned his plans for ramping up the war in Afghanistan in a single line. That is one of the most dangerous ideas of all. No foreign country has ever run a successful military campaign in Afghanistan. And his statements relating to sanctuaries in Pakistan may lead us to a really ugly war with Mideast nuclear power that can spill over into India and China. And what about Iran? I hope he knows what he is doing.

Nowhere in his speech did he mention personal responsibiltiy. It is apparently the fault of the educational system that more people aren't graduating from high school, let alone college. Must be those bad teachers and not the hip/hop culture that degrades education in the inner city, and the total lack of self control and discipline in the schools resulting from student "rights". As for the economic problem, it was the big, bad bankers who forced people to buy homes they couldn't afford, second homes they couldn't afford, and the government requiring lenders to loan to credit unworthy individuals because it was the fair thing to do. Personal responsibility is irrelevant.

Not that President Obama shouldn’t try to implement his ambitious programs. It appears to me, however, that unless standard liberal idealogy is jettisoned in the process…a new generation will learn about stagflation, and relive the Jimmy Carter days. Looking at Nancy Pelosi jumping up and down like a jack in the box, I don’t think that is going to happen

Barack Obama: It's Your Problem Now

The stimulus package is passed. GM and Chrysler are pounding on the door for more money. The stock market is tanking. Tim Geithner gave us a plan to make a plan to save the banking system. Mortgage foreclosures continue. The country is in hock up to its neck, and the Democratic congress borrows the largest amount of money in the history of world to try to fix it.

The regulators are shutting down the moped business. The self righteous moralists, wagging their fingers at business, are destroying the hospitality business and the corporate jet business causing the loss of tens of thousands of jobs and bankruptcies. All those Vegas hotel union people that voted for Barack Obama…I hope you are happy now as business after business after business cancels their Las Vegas trips and conventions, and layoffs go through the roof as occupancy dwindles.

Barack Obama, it’s your problem now. You own it…and it is a trillion upon trillion upon trillion dollar problem.

And where is Nancy Pelosi? She and her cohorts jammed down the vote on one of the most important pieces of legislation in our history in order to meet a deadline for taxpayer paid junket to Italy. Nobody, outside of the anointed few, know what is in this bill. She would not allow it to be read prior to the vote. It was so important to pass it had to be done NOW. Of course, President Obama could wait 4 days to sign it in a photo op in Colorado. Now we are left to pay the bill and pick up the pieces when we finally figure out what is in the pastiche of legislation.

There were obvious flaws with Bush administration policies, and I have pointed them out continually. But you don’t throw the baby out with the bath water. You are now going to see trickle down poverty. This bill jettisons welfare reform instituted under Bill Clinton. It will give the average American an extra $13.00/paycheck. Even the Mexicans are headed back to Mexico, with a dramatic rise in the application for Mexican citizenship for babies born in the United States.

All those fat cats who we are now vilifying kept the economy humming. Gardeners, nannies, restaurant workers, travel agents, Boeing factory workers, actors and entertainers performing on the road and on Broadway, charitable organizations, ad infinitum, all benefit from those corporate jets, those three martini lunches, those conventions in Vegas, and extravagant spending by those corporate fat cats.

But it was done on borrowed money, you might say. It was a house of cards. What, pray tell, is the difference between what these guys did, and what the government is currently doing? Where are the grownups?

Anything worth owning is built on a firm foundation. What we have done is traded one house of cards for another. When the debt of the United States is equal to the Gross Domestic Product for a year for the entire world, you know we will not be able to service it.

The Chinese stimulus package is working. Its economy is recovering based on a stimulus package 10% the size of the Obama liberal fantasy. It was targeted on big construction projects building things they needed…not beekeeper insurance or sexually transmitted disease education.

Mr. Obama is going to learn a hard lesson in real life economics, and we will be paying the price.

Seniors on Medicare: Did You Vote For This? The Coordinating Council for Comparative Effectiveness

I hate duplicity and being handled by the people in Washington who are elected to serve us. Bloomberg News reported on February 9 that buried in the stimulus package is something that has nothing to do with stimulus in any way, shape or form. It contains a devastating health care provision called the Federal Coordinating Council for Comparative Effectiveness Research. It is an idea that has been proposed by the now disgraced, former nominee for Health and Human Services, Tom Daschle.

One of the reasons Tom Daschle received the appointment for HHS is that he fancied himself to be an expert on health care, and has written extensively about it. His disturbing views are well known by health care protection hawks. One of his controversial proposals involves a different standard to measure what is acceptable medical procedure. The current test for approval of a Medicare covered procedure or treatment is whether it is “safe and effective.” Mr. Daschle wanted to add another criterion: “safe, effective, and cost effective.” And the Democratic minions in the House concurred, and included it in the stimulus package.

The stimulus package now contains provisions for the electronic monitoring of health care administered to every person in the United States. The excuse for this provision is that it will provide instant access to your health information anywhere you go, and any time you need it. But it also contains one more provision. It provides funding for the Federal Coordinating Council on Cost Effectiveness to make sure that your doctor is treating you in a way that the Federal government deems to be proper and cost effective. The goal is reduce costs and “guide” your doctor’s decisions.

If the doctors do not avail themselves of this “service” in a “meaningful way”, they will face penalties, including “stringent measures” to be implemented by the Secretary of Health and Human Services. Folks, this is in the stimulus package. It is scary.

The language is kept intentionally vague, with implementation left to the governing agency. But Daschle clearly described how this system should work in his writings. He states that the goal of this new government bureaucracy is to slow the development of new medications and treatments for various diseases because it is driving up the cost of health care. He complains that Americans expect too much from our health care system, and that seniors in particular, need to understand the ravages of old age, and accept the inevitable. I am not making this up.

How will cost effective treatment be determined? The government will use a formula. Divide the cost of the treatment by the number of years the patient can expect to benefit from it. If it is above a certain level, the treatment will be denied.

While the reporting requirements apply to everyone, the immediate “pain” will be felt by those who are on Medicare who would be directly subject to this new way of thinking.

Hiding these kinds of provisions in a 600 page stimulus package is reprehensible, and portends a scary future for all of us. Is this the hope and change you voted for? Hopefully, by the time you read this, it will have been removed from the bill, but don’t bet the rent. UPDATE: IT'S IN THERE!!!!!

The First Rule Is Do No Harm

I like Barack Obama. He seems like a good man who is sincere, with a wonderful family. He has a great sense of humor. His interviews have shown him to be politically adept at handling the media. Taking responsibility for his horrendous cabinet appointee snafus was the right thing to do. But I think he is being overwhelmed by the job, and he better find a Karl Rove equivalent if he wants to succeed. As a side note, Joe Biden is a buffoon.

Obama’s first two weeks in office have been staggering at the magnitude of the issues this relative political novice is facing. The blow up in Gaza right before his inauguration, Russia making moves to squelch his proposed troop increase in Afghanistan by cutting off the main American base is Kirgizstan, North Korea testing missiles again, and Iran launching a satellite into space, all of these portend bad things coming.

Here at home, the proposed stimulus package is rapidly losing political support as the staggering amount of pork is exposed to public scrutiny. Does San Diego really need a space for a dog run? Less that 10% of the bill is for infra structure projects. America’s matriarch, Nancy Pelosi, has put Obama in the untenable situation of having to look to Republicans for cover. Any effect on the economy, if at all, will only be felt two to four years down the road…and we will feel it with high interest rates and rampant inflation.

None of his economic advisors are doing what actually needs to be done to solve the economic crisis. This isn’t an inventory recession; it is a credit freeze recession. If they don’t stabilize the banks by either changing the mark to market bond rule, or insure the “toxic” bonds, or buy the bonds as originally promised back in September when the Troubled Asset Recovery Program (TARP) was first passed, there WILL be a catastrophe.

Quietly and very slowly, notwithstanding the inflammatory headlines, things are beginning to turn around. Credit is beginning to flow again. Here is a fast money lesson. Banks loan each other money, and take security to insure the loans. The interest rate paid from one bank to another is called the LIBOR rate, and many adjustable rate mortgages are tied to it, including mine. Back in September, with the collapse of Lehman Brothers, the 3 month LIBOR rate reached 4.5%. It usually is around 1%. This indicated a credit freeze. Banks stopped lending to each other because the security offered was worthless under current rules. Over the past 3 months, LIBOR has been slowly falling. For about a day a few weeks ago, it actually went under 1%. Right now it is at about 1.25%. This means that money is beginning to flow again.

Any move by the government to stabilize the questionable bonds will break the ice jam. The problem is, the government, under Bush and now under Obama, won’t do it. Two days ago Senator Charles Schumer from New York said it was too difficult to do because the bonds can’t be valued. Here is a value…50 cents on the dollar, and our government will make money on the deal. All of the money contained in the stimulus package won’t mean a tinker’s damn unless the government moves to stabilize the asset issue. Obama has promised a plan sometime next week, most likely based on bond guarantees. Hopefully, it will be based on pure economics and not political ideology.

What is scary is that Treasury Secretary Tim “ the tax cheat” Geithner was heavily involved with the Lehman collapse, the AIG bailout, and the subsequent mismanagement of the TARP funds spent afterwards. More than a few people in the know have stated his lack of abilities and experience made a difficult situation disastrous, triggering the huge difficulties we find ourselves in now. Now, now he is heading the whole show. He is not up to the task. Sure makes me feel secure.

The first rule of government in these kinds of situations is to do no harm. What do you think?