We’re Coming to Take Back America
“We’re Mad as Hell and we’re Not Going to Take This Anymore!”
You remember that line from the movies? It is being repeated over and over on every Main Street in America these days. It is taking the form of TEA parties, of primary elections that ‘throw the bums out’ and politicians running for cover.
Earmarks are no longer enough to save incumbents from the wrath of voters. To the contrary, earmarks are now a symbol of what’s wrong in Washington and State Capitols across America.
“Americans today do not want to be governed from the left or the right. They want, like the founding fathers, to largely govern themselves with Washington in a supporting—but not dominant role,” pollster Scott Rasmussen told the American Legislative Exchange Council recently. More worrying was his finding that only 23% of Americans believe the Federal government has the consent of the governed.
The political pundits say ‘it’s the economy, stupid’ trying to explain away the voter anger. It is not just the dour economic news that drips out each day has everyone in a pessimistic mood according to the polls. Recessions do that to us, but increasingly Americans are feeling out of control. This is not just that the recession is longer and deeper than anything we have experienced in most of our lifetimes, the perception across America is that our government is taking away our American Dream.
It would be easy to blame President Obama for all our ills and take revenge on him and the Democrats in charge at our upcoming elections in 2010 and 2012. Oh, they deserve plenty of blame for overreach, for outrageous levels of deficit spending, and mostly for failing to rally us to combine our efforts to get through this recession united. But our worry is that the Republicans didn’t do so well on their watch either. This is not a partisan contest between our two political parties according to Rasmussen. This is a contest between our political leadership in both parties versus what he calls Main Street America.
Rasmussen polling finds that while 67% of the ‘political class’ think the country is moving in the right direction, 84% of ‘mainstream America’ believes it is going in the wrong direction.
Incumbents in both parties face a day of reckoning in November and the voters judging their performance find most of them wanting—-wanting more of our money, more of our freedom, more of our American Dream for our children. The TEA party is a reaction to that fear of the loss of the American Dream. A fear that America’s promise is slipping away.
The genius of the founders is in creating a governance structure that has checks and balances. When one branch of government gets too rambunctious the other two can pull it back. When the Federal Governments overreaches, the States and the People have options to restrain it.
We are at one of those tipping points now, and it is a very healthy place for America to be today. Can you imagine the idea of the TEA party in China, or Iran, or Saudi Arabia or even Europe? Can you imagine another country where a majority of the states or provinces can sue their national government in Federal courts to stop a major Federal policy initiative like is happening as we speak to ObamaCare?
We likely would have tolerated some overreach or higher deficit spending as necessary to pull us out of recession, but it is impossible for us to forgive abandoning the American Dream for political expediency.
‘We the People’ are engaged in a deliberate, orderly, lawful, purposeful process of taking back the control of our government at the ballot box. When we elect Senators and Representatives in November we will be giving them instructions to ‘fix this mess’ in ways WE can believe in. Two years from now, we will deliver our job approval rating to President Obama in November 2012. Right now, his performance is not looking good and our message to Congress in November 2010 is we are putting Congress and the President on probation!
We still want President Obama to succeed. We still want to believe in him—but the changes he believes in are not ones we believe in. We don’t need Rasmussen polls to tell us the President is on the wrong track—we feel it deep down where it hurts. He has time to turn around his performance but it is going to take work—hard work. He probably is going to have to throw both Nancy and Harry under the bus and reach across the aisle for some honest bargaining on a new plan.
Think of it as community organizing—–because the community is organizing to fire him otherwise.
Be Afraid–Be Very Afraid!
The Beloit College Mindset List for the Class of 2014 is out and the answers are not good.
Students entering college this fall—the Class of 2014—were born in 1992. Since 1998, Beloit College has published the Beloit College Mindset List designed originally to caution the faculty on the use of dated references. It has since become a symbol of either the ‘cultural touchstones that shape the lives of students entering college this fall’ or a reminder of how much work these faculty have ahead of them to turn these mushy-brained students into productive adults. You decide.
Here is the Beloit College Mindset List for the Class of 2014:
1. “Few in the class know how to write in cursive.
2. Email is just too slow, and they seldom if ever use snail mail.
3. “Go West, Young College Grad” has always implied “and don’t stop until you get to Asia…and learn Chinese along the way.”
4. Al Gore has always been animated.
5. Los Angelenos have always been trying to get along.
6. Buffy has always been meeting her obligations to hunt down Lothos and the other blood-suckers at Hemery High.
7. “Caramel macchiato” and “venti half-caf vanilla latte” have always been street corner lingo.
8. With increasing numbers of ramps, Braille signs, and handicapped parking spaces, the world has always been trying harder to accommodate people with disabilities.
9. Had it remained operational, the villainous computer HAL could be their college classmate this fall, but they have a better chance of running into Miley Cyrus’s folks on Parents’ Weekend.
10. A quarter of the class has at least one immigrant parent, and the immigration debate is not a big priority…unless it involves “real” aliens from another planet.”
The Beloit Minset List goes on—and on at the website link above. I’ve had enough since this depresses me about the quality of education today and its implications for America’s competitive future unless we can teach these kids how to Tweet math or science formulae in TinyURLs.
Go home tonight and read to any of your children who will sit still long enough to listen!
Worried about Deflation? Rising Healthcare Costs will Cure it!
But the cure may be worse than the disease!
Health care costs are out of control. In a time when the economy overall faces pressures from deflation healthcare cost increases threaten to fully offset that risk with continued rapid increases.
To get the votes needed to pass ObamaCare, Congressional Democrats “reduced its cost” by delaying the effective date for parts of the program up to four years even while allowing some provisions to expand coverage to go into effect sooner. One consequence of this staging implementation is that health care costs—already rising faster than inflation—are going into warp speed.
The Hunt Family Story of Health Care Costs
My family is covered under my wife’s health care plan at her school district as we have been for the last fifteen years. Her plan for teachers was always better than the one offered by my employer. As parents of a diabetic child we chose Kaiser coverage because of the comprehensiveness of its diabetic management services—and it was cheaper than other options. It has proven a good choice for us.
As Carolyn prepares for another school year, she got a memo from the School District telling teachers that health care premiums were going up—way up for the coming year. Like most employers, the School District offers a range of options from HMO to PPO services.
The District-Union committee working to manage the costs of this benefit program was asking for advice on changes they can make to reduce the cost impacts like raising copays, deductibles on brand named drugs, higher emergency room visit copays, etc.
The bottom line: Kaiser raised premiums 10% but the BlueCross options for HMO and PPO services raised premiums 25%. This brings the monthly premium for those who elect the BlueCross PPO to a staggering $2867 per month or roughly 50% of the salary cost of the average teacher in California.
This has been the trend for the last several years. The result is that more employees each year switch their coverage to Kaiser from the Blue Cross plans. Blue Cross responds by raising premiums even higher to make up the revenue shortfall.
This year the benefits committee has been negotiating to add a third provider, HealthNet, to introduce more competition. HealthNet has offered premiums that represent as little as a 7.6% increase over this year but requires a substantial number of employees to switch to their plan from BlueCross, presumably, to make it work. It has high copays and more limited coverage to get the costs down. But the State of California specifies minimum coverage levels on many items.
This is Russian roulette since BlueCross responded that if subscribers switched in numbers needed to make HealthNet viable BlueCross would consider pulling out all together. This would simply transfer the non-Kaiser market share to HealthNet which would promptly raise premiums like any good monopolist.
Kaiser’s growth in market share is due to several factors and good strategic positioning. It offers the lowest premiums and the fewest benefit administration hassles for subscribers. By maintaining that relative market price position, Kaiser has grown substantially taking share from others who must then raise premiums to achieve their margins. But as an HMO it is managed assertively and you must learn to manage it right back to get the services you need. This is frustrating for those accustomed to a one-to-one doctor relationship, but the savings are serious money.
Why are health care premiums increasing by 25% per year? And even scarier what will the premium increases be when inflation from the growing Federal deficit kicks in? We could get ObamaCare not because we want it, but because there ends up being no alternatives we can afford.
Health Care Change We Should Believe in!
But it does not have to be that way, but it will require some changes we can believe in not those which benefit our politicians. What changes?
- Aggressively expand competition in the health care market by allowing insurance providers to offer a wide variety of plans across state lines including a basic “no frills” universal plan to serve as a floor for coverage and a basis for comparison of both benefits and costs in other plans.
- Make premiums paid by individuals tax deductible just as they are in group plans effectively since they are paid with pre-tax dollars to encourage aggregating customers and making competition work in the private plan market. Allow all individual plan providers to operate across state lines under Federal rules to enable scale.
- Force competition between group plans and individual plans based upon price by giving individuals in existing group plans the option of taking their current employer contribution with them if they move to a private plan by having it added to their salary base.
- Enable competition among aggregators to go after group plans thus allowing the scalable national market to compete for customers not only on an individual plan basis but offering more cost effective options to acquire entire groups.
- The role of the Government is to define fair rules of competition to assure that information is clearly presented and customers are able to reasonably compare the costs and benefits across plan offerings.
These changes would likely stop the out of control price increases by giving captive health care insurance customers options for coverage on a nondiscriminatory basis and forcing insurance companies to compete for customers. Health insurance would likely work as well as life insurance does today. Forcing each of us as health consumers to see competition as our friend rather than seeing health insurance as an entitlement is the fastest way to cure the health care cost spike disease.
Will the State Bailout Bill Backfire on Congress?
“We can’t stand by and do nothing while pink slips are given to men and women who educate our children or keep our communities safe,” said President Obama.
Congress passed and the President rapidly approved $26 billion in new stimulus funds for Education and Public Safety designed to prevent lay-offs or recall those already axed by State and Local Governments. Speaker Nancy Pelosi called the House back into session to approve the bill which the Senate had approved earlier.
The US Department of Education said the bill could save 160,000 teacher jobs with the $16 billion for education while the remaining $10 billion was pegged to extend increased Medicaid payments to the states for an additional six months to enable them to avoid layoffs of public safety personnel.
The bill was approved largely on a party line vote with Republicans calling the bill a ‘giveaway to teachers unions’ and others complained that the bill forces states that controlled their spending and avoided big deficits to now subsidize other states like California, New York, Illinois and others that did not.
Memo to Speaker Pelosi:
The state bailout stimulus bill may not help and could actually make things worse for the states.
How?
- 30 States Assumed Stimulus Bailouts. The National Governors Association says that 30 of the 50 states have balanced their budgets by “anticipating” that Congress and the President would act to provide this kind of stimulus relief as one of the accounting tricks used when you don’t know what else to do. So the stimulus money received by those states is not “new” money. In California, the expected stimulus grant of $1.3 billion for additional Medicaid funding is $500 million LESS than the amount Governor Schwarzenegger had included in his proposed budget.
- 75% of School Districts Cut Staffing Levels to Match Expected Funding. Because school teacher contracts required advanced notice of pink slips, most school districts have already cut staffing levels, offered early retirements or increased class sizes to avoid a funding crisis during the school year. Adding back money now will not likely restore those jobs because it is one-time money and contracts are set.
- Some State Budgets are Still in the Red even with the Stimulus Aid. California is more than $19 billion in the red with no agreement on balancing the budget. The Federal stimulus money will provide California with a maximum of $2.5 billion in revenue. The new money is not enough to solve the problem.
Local reaction to passage of the state aid stimulus by San Francisco and Oakland public schools was that their budgets were set, the lay-offs made and the stimulus money was one-time. Officials from both big urban school districts in the San Francisco Bay area told the TV news stations that they would use any stimulus money they received to reduce proposed furlough days and reimburse the unions for paybacks given to help balance the budget.
This is not what President Obama wanted to hear, but it appears to be exactly what the opponents of this new stimulus spending were complaining about.
But don’t worry, Congress paid for this stimulus program by cutting food stamps for the poor and closing a tax loophole used by multi-national corporations to allocate revenue between countries.
And there is one more problem, Congress in its wisdom added a requirement that says the States are not eligible to get this stimulus money unless they maintain current levels of spending in education.
DUH!
If the states had been able to sustain current spending levels they would not need help and would not have laid off employees. California officials said this morning that means given the State’s budget shortfall of $19.1 billion that it may not qualify for the $2.5 billion anyway since the reason it laid off teachers and public safety workers was it did not have the money to pay them anymore.
Also this morning the Governor Schwarzenegger appealed a state judge’s ruling blocking his order of 3 additional furlough days per month for state employees. State Labor unions sued arguing the furloughs placed an “undue burden on state employees” and a judge said the Governor lacked authority to order furloughs. This is exactly opposite of a ruling last year upholding the Governor’s authority to furlough employees in a fiscal emergency. The Governor took the action in the face of the failure of the State Legislature to approve a state budget and warnings from State Controller John Chiang that dwindling cash would mean he will have to start issuing IOUs for state payments by September if the budget is not passed.
Separately, the Governor with Legislative approval withdrew $11.1 billion in new state water bond projects from the November 2010 ballot for fear voters will reject them. The measures will be deferred until November 2012.
These days the California’s other state nickname of the “Bear Republic” is sounding pretty much on target.
