The Great Math Allergy

Auto sales analysts at Edmunds.com recently released the revelation that the Cash for Clunkers program, which offered consumers $4,500 for trading in less fuel-efficient vehicles for new more fuel-efficient vehicles, actually cost the government $24,000 per stimulated transaction.

A total of $3 billion was allotted for those rebates. Of the 690,000 new vehicles were sold under the Cash for Clunkers program last summer, only 125,000 of those were vehicles that would not have been sold anyway. Thus, $24,000 is the real cost per stimulated transaction, not $4,500.

Our government spent $3 billion to stimulate $562,500,000 in new economic activity. That’s less than 19 cents on the dollar. These are same people who want to reduce the cost of healthcare? If Cash for Clunkers is an example how the Federal Government manage programs, a public healthcare option will be very inefficient and destructive to our national economy and health.

Are Congress and the President really that bad with math? Or, are they simply allergic to it because it gets in the way special interest driven agendas? One only needs to look at the exploding multi-trillion dollar National Debt to get how allergic our politicians are to mathematical realities.

What can we expect when the decisions are being made by the senators and congressional representatives whose campaigns are financed by the pharmaceutical industry, Trial Lawyers Association, insurance industry, labor unions, and Wall Street? This legalized bribery is the underlying problem.

While some members of both parties have spoken up against fiscal irresponsibility, they are quickly shouted down by their own party’s power structures. As institutions, both the Republican and Democratic parties have failed us with dysfunctional fiscal methodologies which may become be our national downfall.

As citizens, we must loudly demand that our government represent us, not simply moneyed special interest groups. We must demand an end to campaign donations by special interest PACs. Unfortunately, the only people likely to support such a country-saving move are independents and centrists.

NJ Governor’s Race: Horserace or Aspirations for Real Change?

I was recently having a business breakfast with several colleagues. Of course, the conversation turned to the imminent New Jersey Governor’s race. I mentioned that I supported Chris Daggett, the independent candidate for governor. Bob, one of my colleagues, replied that he liked Daggett, but wouldn’t vote for him because simply because “Daggett can’t win.” However, he then proceeded to rant and rave about the corruption in the state.

I needed to remind Bob that voting is about indicating your preference, not about picking winners in a horserace. People say they want change, yet seem unwilling to abandon the very corrupt institutions that they complain about.

John Corzine is clearly in the pocket of the unions. And while I don’t have any particular quarrel with the unions per se, a governor should not be tied to such a special interest. Mr. Christie, the Republican challenger, has reverted to the “promise them everything” approach, He has promised to improve almost everything in the state, while lowering taxes. This means more borrowing and fiscal irresponsibility. Neither candidate offers change. An independent such as Chris Daggett will not be tied to the same moneyed special interests as candidates from the major parties. What an amazing signal electing Daggett would send to the two major parties.

If people want change, they must indicate the desire for real change, not just the lesser of two evils. By the way, I spoke to Bob the other day. He says he’s now voting for Chris Daggett. Maybe there is hope for real change.

On November 3rd, I would encourage everyone to send a message to our state and country that we want real changes, not slogans and empty promises.

Healthcare Costs Beyond Reckoning

According to a Thomson Reuters report just released, the U.S. health care system wastes between $505 billion and $850 billion every year, according to a report from Robert Kelley, vice president of health care analytics at Thomson Reuters.

Specific findings include the overuse of antibiotics and lab tests to protect against malpractice exposure, which makes up 37 percent of healthcare waste or $200 to $300 billion a year. Yet, the Democrats refuse to consider caps on malpractice awards. Why is that the one solution that is considered off the table? As a note, the overuse of antibiotics also fosters the creation antibiotic-resistant bugs, thus raising our healthcare costs even further.

In addition, insurance fraud makes up 22 percent of healthcare waste, or up to $200 billion a year in fraudulent Medicare claims, kickbacks for referrals for unnecessary services and other scams. On 60 Minutes this past Sunday night, there was a report on how Medicare fraud detection has been underfunded. They showed examples of empty storefronts listed as active pharmacies receiving Medicare payments for prescriptions.

These and other items create an estimated $700 billion in waste annually. “That’s one-third of the nation’s health care bill,” said Robert Kelley. Honestly, how much more fraud will there be if the U.S. Government manages all healthcare, not just Medicare? A public option will only exacerbate this sorry situation.

With the healthcare costs and our National Debt shooting out of sight like a rocket, we need to bring our politicians back to Earth. Our major political parties, bought and paid for by moneyed special interests, have failed this country. It is time for REAL reform, not just reform slogans.

The Era of Unending Rudeness

Sorry for the hiatus. I have been dealing with several personal distractions. But I’m back in the saddle now, just in time to announce…

The end of civilization is near.

No, the Earth isn’t spinning into the sun. It’s just there is little “civil”-ization going on. At the risk of sounding cranky, we are now passing into the Era of Unending Rudeness. Following months of Tea Party shout-downs, and poor behavior by others, Representative Joe Wilson heckles the President of the United States in a joint session of Congress. Not to be outdone, Kanye West interrupts Taylor Swift’s VMA award acceptance to declare that someone else (Beyonce Knowles) really deserved the award. When does it end?

Of course, Kanye West is not new to putting his foot in his mouth. Back in the aftermath of Katrina, one of the worst hurricanes ever, Mr. West accused President George Bush of racism in the recovery efforts. I have frequently criticized President Bush for his decisions, ideology and even competence. However, I have never thought of him as a racist. Under the Bush Administration unprecedented humanitarian aid was given to African countries and people, not exactly the actions of a racist.

Had Beyonce won that VMA award and a white artist interrupted her to declare that Taylor Swift should have won, I expect West would have immediately made accusations of racism. Do his comments make Kanye West a racist? I have no idea of what is in his heart. And based on the impulsivity of his actions, I suspect he may not either.

The traditional apology tour began almost immediately. On the premiere of his new show, Jay Leno asked Kanye West, “What would your mother think?” Perhaps, more people should ask themselves this question before acting.

In the coming months, this particular incident will be mostly forgotten. We will be talking about someone else’s inappropriate or boorish behavior. What else should we expect from a Jerry Springer society? These outrageous performances, while not explicitly condoned, are laughed at, and then uploaded on YouTube, to be modeled by the next generation. And the cycle continues.

Does anyone remember respect or manners? Of course not. It’s far too Old School. But maybe, Old School is our only hope.

Welcome to the Era of Unending Rudeness.

Show Horses, Work Horses & Trojan Horses

Unfortunately, the healthcare debate has degenerated into accusations of “death panels” and comparisons to Hitler. (Rarely does any good come from comparisons to Hitler.) All this distracts from rational dialog. However, many don’t want rational dialog; they want distractions from the issues. There is a need for reform, but it should be reform that insures more people, without adding to the exploding National Debt. (That requires work not speeches.) Perhaps there are smaller but more potent actions that can be taken.

Portability
The economy has moved from a paradigm of steady decades-long employment to one of increased job changing and use of contingent workers. If done right, insurance portability is important idea that could benefit employees, employers and insurance companies,. I never understood why COBRA was limited to 18 months. Why couldn’t COBRA or some other program allow for carrying insurance from one employer to another, or to no employer at all for the self-employed or contingent worker?

Incentivizing Good Health Behaviors
Preventing disease is more economically efficient than treatment. It is a basic truth of health insurance that the healthy pay for the sick. We do this willingly because we never know when we might move from one category to the other. Some young people play the odds. I did this myself. Between the ages of 21 and 28, I went without health insurance, because like most people that age, I felt immortal. However, many of the bad health habits are formed in this time period, although they rarely manifest themselves until later. What if the government incentivized younger people to buy health insurance? Insurance companies love insuring young healthy people. It’s a bet they generally win. This would put more money in the insurance pool, lowering costs for everyone. It is also an opportunity to train people to take better care of themselves, including incentives for losing weight, improving diet, and quitting smoking.

Efficient Medical Record Systems
Much of the time, effort and money in healthcare go into the management of records, prescriptions, and billing. Efficiency standards are set in other areas, why not healthcare? President Obama has correctly targeted this as an area to be improved.

Malpractice Insurance Reform
If the government really wanted to reduce costs, they’d put caps on malpractice awards. This would not prevent people from suing their doctors, just limit the gigantic sizes of the awards. Malpractice insurance is a cost that does nothing to improve healthcare, reduce costs, or extend coverage. But President Obama has sworn to not cap awards. Why? Trial lawyers are big Democratic campaign contributors.

The Public Option
Some words and concepts can be very misleading. In the current healthcare debate, there is discussion of a “public option”. The word “option” implies something completely voluntary. It is, just as the Trojans voluntarily brought the wooden horse inside their gates.

House Speaker Nancy Pelosi has insisted on the need for a public option, but said “it would be just like private insurance”. If that is so, what is the point? The point is to lure the nation away from private insurance, as a way to move to a single-payer plan.
Many will swear that is not the intention. However, Representative Barney Frank has explicitly said that “public option is a way to move to a single payer system”. [Video clip below] If a public option is offered, it will no doubt be structured to be more attractive than private insurance. Thus, the public option is a Trojan horse, to achieve a single payer system similar to Canada. (The only Canadians who really like the system are the ones who aren’t sick.)

Rumors of “death panels” aside, the U.S. Government has never run anything efficiently. There is no incentive for them to do so. It would be better to carefully create regulation that would harness the power of industry work horses, where efficiency is incentivized. This would still allow our show-horse politicians to claim they’ve done something significant without creating the chaos and pain that a public option or single-payer system would bring.

Beware of Greeks (and politicians) bearing gifts.

Barney Frank Video Clip

Daggett: Time for Game Changer

Despite being “NJ” Centrist, I have never posted commentary that was only for citizens of New Jersey. It is simply the state where I live. However, there is something happening in New Jersey that is very exciting for all of us. There is an Independent candidate, named Chris Daggett running for Governor of New Jersey in this off-off year 2009 election. What is special is that he actually has a chance to win.

Daggett has cleared two significant hurdles. He has surpassed the fundraising threshold of $340,000 to earn matching funds, worth over $700,000 as of today. And, he has earned a place at the debates. This is extremely rare for an Independent or third-party candidate.

The states have been called the laboratories of democracy. What if an Independent actually became the governor of a state? Wouldn’t it be a valuable experiment? I believe that’s something many of us would like to see. It would be an incredible shot in the arm for democracy and those of us with Independent leanings.

When Democrats and Republicans are snarling at each other, it’s refreshing to find a candidate who wants to serve and not attack. Daggett is running against the incumbent Democratic Governor and former Wall Streeter Jon Corzine, as well as Chris Christie, a Republican with a mixed reputation. So, Daggett still has a tough battle ahead. How many times have we yearned for an alternative to the two-party partisan games? Daggett can be a game changer.

This is a unique moment in time. The only major elections occurring in 2009 are the governor races in New Jersey and Virginia. So the country will take notice if an Independent is elected. Whether in New Jersey or beyond, I encourage you support to Mr. Daggett’s efforts to take us beyond the two-party system.

You can learn more about Chris Daggett at http://daggettforgovernor.com.

Literally, a Sign of the Times

Several weeks ago, I drove into the Adirondack Mountains for a yearly camping trip. As usual, I drove the isolated Route 2 just off the New York State Northway. It is a well maintained road which takes approximately half an hour to drive its entire length. If you see five cars during the journey, it’s probably rush hour.

Imagine my surprise when a sign sprang up that work on this road was being paid for by the American Recovery and Reinvestment Act, the $787 billion stimulus bill passed by Congress in February 2009. My immediate question was, “What work?” The road was already in good repair. There was no evidence of any work being done on Route 2, except for signs erected at either end of the road. The government paid for the sign.

The knowledge that roads offer high visibility is nothing new. Years ago, I drove another road, Route 70 from Kansas City to Kansas State University in Manhattan. There was a fair amount of repaving that day on Route 70. My traveling companion, a Kansas native commented that locals called it the Bob Dole Freeway. He claimed it was repaved every two years, whether it was needed or not, thanks to pork-barrel spending bills pushed by the powerful Republican senator.

It is all about politicians getting credit, rather than doing what is best for the country. Why are bills being passed without people reading them? So they can get credit. Adding amendments at 3 AM, containing more spending as political payoffs does not improve our country; it weakens it. Obama wants credit for passing big bills. Whether these bills are well crafted seems to not be so important to him or the Congress. And there seems to be little real concern of the mounting National Debt.

I’m sure some work will be done on Route 2 someday, whether it needs it or not. The real payoff was the sign, “stimulating” publicity to help politicians in the next election.

It is time for serious men and women to provide adult supervision in Washington. We must rid ourselves of these self-interested, self-righteous, and corrupt charlatans on both sides. The only way I can think of is to vote for Centrist or moderate independent candidates in 2010. At least, send a message to Washington that you want more than false signs.

The Doublespeak of Healthcare Legislation

The healthcare insurance bill is being rushed irrationally, except for political reasons. So what else is new? It is yet another bill that few legislators have been able to read. However, that hasn’t prevented the airwaves from being filled with doublespeak. I watched Nancy Pelosi interviewed on CNN this Sunday morning. She defends the House bill saying it will create savings, despite what the Congressional Budget Office says to the contrary. However, later in the interview she said the bill is also a form of stimulus. Which is it? Savings or stimulus? This is classic doublespeak, but rarely has the contradiction been so apparent in a single interview.

Pelosi also insisted on the need for a public option “that would be just like private insurance”. Then why do we need a public option, if it would be just like private insurance? Does she mean with thousands of insurance companies, there isn’t enough competition?

Let’s compare this to the auto industry bailout. Unlike GM and Chrysler, Ford did not take any federal bailout money, an action for which it should be applauded. Considering the economy, Ford is doing OK. People like Ford cars and are buying them. However, Ford is having difficulty with competing on auto financing because the government is backing the loans for the other two car companies. So Ford, a company that acted responsibly and did not take money from the public, is being punished. How can they compete with an entity that can mint its own money?

So, how do you think private health insurance companies will do when they have to compete against a government-backed insurance entity?

Let’s be clear, there is a great need for improvement. Factors contributing to healthcare costs include:

• An aging population, requiring increasing amount of health services
• An increased standard of care, utilizing more expensive technologies
• A population which engages in poor health behaviors (obesity, smoking, poor diet, lack of exercise and preventative check-ups)
• Inefficient medical record management
• Skyrocketing malpractice insurance premiums
• Serving an illegal immigrant population without financial compensation
• Increased use of contingent workers by businesses to avoid providing health insurance

This bill has nothing to do with improving healthcare, as it addresses very few of the issues above. And despite the doublespeak rhetoric, it has little to do with lowering costs. If they really wanted to reduce costs, they’d put caps on malpractice awards. Malpractice insurance is a cost that does nothing to improve healthcare, reduce costs, or extend coverage. But President Obama has promised to not cap awards. Why? Trial lawyers are big Democratic campaign contributors.

The only constant in Washington is hypocrisy.

Sorry, I Feel No Empathy

We have yet another day of judicial hearings on the nomination of Judge Sonia Sotomayor, complete with partisan sniping over judicial activism and other legal nuances. Admittedly, there is a fine line between making law and interpreting it. It is a matter of semantics. Usually cases are accepted (granted cert) by the Supreme Court because the facts or principles of a case reveal an ambiguity or conflict in the applicable law. Clarifying that ambiguity could be characterized as making law or interpreting it, again a matter of semantics.

The highest virtue of a Supreme Court Justice is objectivity, not empathy. If President Obama wants empathy, how would the nominee decide who to be empathetic toward? If not objectivity, wouldn’t it be bias? But truthfully, Obama’s empathy comment was more about his own ongoing campaign than about Judge Sotomayor.

To be fair, no one expects justices to be robots. They all have feelings, biases, and yes, empathies. Even strict constructionists have them. However, there are nine justices, not one, so any biases or empathies have built-in counterweights. The true question is “Is she qualified?” There seems to be no doubt of her credentials.

However, it is an opportunity for the both parties to bloviate. So I feel no empathy toward either side. And so, we have yet another skirmish in the Democrat-Republican tribal war that will ultimately change nothing, (no more than any other reality TV show).

Second Stimulus: Another Example of the Slingshot Effect?

There’s a lot of talk in Washington about creating yet another stimulus package. Back in February, President Obama signed a behemoth $787 billion stimulus package. Since then, more than two million jobs have been lost and unemployment has hit its highest rate in a quarter century, 9.5 percent. Without the stimulus, would it have been higher? Nobody really knows for sure, despite what the Republican and Democratic pundits are yelling.

But we do know this: the February stimulus bill produced more pork-barrel spending than any previous bill. It was an abomination, born of political shysterism. The Democrats cried the stimulus couldn’t wait. So much so, they passed a bill so quickly that no member of Congress could possibly have read the entire document. But as White Chief of Staff Rahm Emanuel said, “You don’t want to waste a crisis.” The bill included a plethora of pork, from $650,000 for blueberry research to funds for a pistol museum to grants to ACORN, and so much more. And now, they want to do it again.

In the past, I’ve spoken of the Slingshot Effect, where one action can create the opposite of the intended result. Here is another example. To truly stimulate the economy, people need confidence, confidence that the economy can recover and stabilize on its own. Another stimulus bill tells everyone that the government, with access to top economists and the best data, has no confidence in the economy. Then why should consumers (the true engine of our economy) have confidence either? Or, is it just time for another round campaign-contributor payoffs?

According to the OMB’s own figures, the 2009 deficit is $1.8 TRILLION! That brings the National Debt to over $12 trillion. Many people, including some congressional Democrats, are seriously concerned about our exploding debt. They should be.

On the White House website, the budget section bears the slogan, “New Era of Responsibility.” Talk about political doublespeak!