Fighting to Preserve Liberty in America
Judging by the two mail pieces I just received from my congressman, Tim Bishop, it looks like he has settled on his reelection strategy. After all, he doesn’t want to run on his record (ObamaCare, bailouts, Stimulus, trillions in deficit spending); with the demise of earmarks he can’t say he’s bringing home the bacon; since he is facing a re-match in his reelection bid, using the same smear tactics this time around will be harder; so let’s scare the bejeezus out of the seniors.
Newt Gingrich may have just killed his presidential bid in less than a week after announcing it. Aside from his support of ethanol subsidies, the old commercial sitting on the couch with Nancy Pelosi, he tops it off by attacking Paul Ryan’s budget that was approved by all but four Republican members of the House of Representatives.
He says the Ryan plan is too radical. Compared to what? ObamaCare?
While Medicare savings under the Democrats’ health care law and pending proposals would come mainly from reduced federal payments to doctors, hospitals and insurance companies, the budget put forth by House Republicans would cut spending by turning Medicare into a system of vouchers for future beneficiaries to buy private insurance, but in amounts that would not keep pace with the projected inflation of health costs.
The Democrats’ plan is to pay doctors, hospitals, and insurance companies less. How does that work in the real world? Doctors will refuse to accept more Medicare patients as will hospitals. So Medicare recipients may have coverage, but won’t have a doctor to serve them. You cannot bring down the cost of medical care by government fiat.
Ryan’s plan actually brings the free market into play by putting the decision making in the hands of the consumer. Of course, the Democrats say that amount Ryan proposes will not keep up with the rising costs of medical care. Aren’t these the same people who said if we did not spend nearly a trillion on the stimulus, unemployment would rise to 9%, wheras if we did, it would go no higher than 8%?
Paul Ryan showed the courage to tackle entitlements and with a credible plan. It may not be perfect, but it is a solid start. The Democrats’ “plan” is just more politbureau control from Washington dictating to the rest of us their failed solutions. It’s time for a change.
As for Newt, he can go back to the think tank, and re-think some of his positions.
That’s my opinion; I’d like to know yours. Please comment below.
(This is the last of a series of articles focusing on topics presented at the Cato Policy Perspectives 2011 conference held at New York’s Waldorf Astoria hotel on Friday, April 8, 2011)
“What a difference a year makes” is short assessment of ObamaCare presented by Michael Cannon of the Cato Institute. “It cannot be fixed, it has to be repealed,” was his blunt conclusion.
As long as you are not Rip Van Winkle you should know by now that as Nancy Pelosi famously said, “We have to pass the bill, to find out what is in it.” Well, we’re finding out. We found out that it was true ObamaCare does double count $500 billion in savings, there are thousands of organizations asking for waivers from the program, and the individual mandate has been struck down by several courts.
When President Obama and his team stood before their supporters and introduced ObamaCare you could almost hear them sing in unison the Carly Simon song, “Nobody does it better…”. They were going to bring us the health care we had been waiting for. Magically covering every soul in America whether they wanted it or not. If they did not, the government would be just like granny used to be, “Open wide, this won’t hurt a bit.” Come to think of it, was that granny or… never mind.
httpvh://www.youtube.com/watch?v=3DB-hJVLVh0&hd=1
Kirsten Gillibrand and Joe DioGuardi battle it out in a televised debate. Here are some of the highlights.
Kirsten Gillibrand was elected to Congress as a relatively conservative Democrat. She received a grade of “A” from the National Rifle Association and she was counted among the Blue Dog Democrats. After Hillary Clinton became Secretary of State, Gillibrand was appointed to Clinton’s vacant senate seat. Since joining the senate she has changed her positions 180 degrees. The National Rifle Association now gives her a grade of “F”. She now votes lockstep with Harry Reid.
Joe DioGuardi is a Certified Public Accountant who has previously served in Congress. His position is focused on the fiscal issues we currently face and his objective is to go to Washington and approach it like an accountant to get their fiscal house in order.
Here are their key positions:
Senator Gillibrand is running from her record as fast as her legs will carry her. Although she does deserve credit for admitting she supported ObamaCare although she would be hard pressed to deny it. She thinks that ObamaCare is just swell, though, and the only thing to continue working on is those big, bad, insurance companies that have the temerity to raise premiums, something that conservatives said would happen from the beginning.
An in depth article in the New York Times titled, “Lapses Found in Oversight of Failsafe Device on Oil Rig,” covers at length the problems surrounding the technology and methods employed to prevent the disaster that we see every day on our television screens, newspapers, and the Internet. It also points to the nearly complete lack of oversight and enforcement by the federal government to protect us. Politicians like to write legislation and put flowery titles on the same and gather for the cameras for signing ceremonies, but when it comes to the heavy lifting of enforcing the laws put in place they often fall down on the job.
When disaster strikes the typical Washington reaction is to add more regulations that eventually become so complex and contradictory that compliance becomes nearly impossible (e.g., Internal Revenue Code). In the case of the oil spill in the Gulf the article points out that studies were conducted in 2003, seven years ago, on failure points to prevent the situation we are living with today, but no requirements to put them in place or test them were instituted.
The article focuses on a device called a blind shear, whose purpose is, in the event of an accident like what happened on the Deepwater Horizon, to activate a pair of shear blades to cut the pipe that rises from the well and seal the well shut. The reliability of single blind shears has only proved to be about 46%. With this empirical data, new wells are installing two such devices for redundancy and backup. Such a recommendation was made to the Materials Management Service (the government agency regulating drilling) in 2001, nine years ago, but the MMS took no actions on the recommendation. In 2003, the MMS received a recommendation that would require the necessary underwater robots and testing of emergency backup systems, but again the MMS, demurred. The practice has been that the MMS simply took the drilling industries word that they were taking steps to prevent problems.
In 2003, the Deepwater Horizon rig has a problem in a storm that caused the rig to break away from the well it was drilling, the blind shear worked perfectly in that case giving the company a false sense of confidence in the technology. What happened next is revealing:
The following year, BP opted to remove a layer of redundancy from the blowout preventer. It asked Transocean to replace one of the blowout preventer’s secondary rams with a “test ram” — a device that would save BP money by reducing the time it took to conduct certain well tests. In a joint letter, BP and Transocean executives confirmed that BP was aware that the change “will reduce the built-in redundancy” and raise Transocean’s “risk profile.” – New York Times, 20 June 2010, pA1
Since the MMS did not require two blowout preventers, BP was in the clear to remove one. Also, consider the term “risk profile,” and think of this in terms of a free market where insurance companies played a role. If you increased the risk profile and didn’t want to have your policy canceled in its entirety for hiding that fact, the insurance company would no doubt increase BP premiums for the increased “risk profile.” Since this effort was a cost saving measure, having to pay more in insurance might have changed the equation such that BP would leave things as they were with two blowout preventers. But the government encouraged deep water drilling, the government put a cap on the amount of damages that a drilling company would have to pay that created a moral hazard, the government ignored recommendations to required greater safety measures and the government was lax in enforcing those regulations it had in place, instead relying on taking the industry’s word that all was well.
On a separate issue regarding the cleanup, in an article in the Wall Street Journal titled, “The President Does a Jones Act,” it states that in the two weeks following the disaster, thirteen countries contacted our government offering assistance with the clean up. Our government turned the offers down. As the State Department put it:
“While there is no need right now that the U.S. cannot meet, the U.S. Coast Guard is assessing these offers of assistance to see if there will be something which we will need in the near future.” One month later, many of these offers are still outstanding. – Wall Street Journal, 19 June 2010
The Belgians reportedly have the ships and technology that could clean up the mess in the Gulf in one-third the time than is currently estimated. All it requires is suspending the Jones Act of 1920. Bush did it almost immediately in the wake of Hurricane Katrina so that foreign ships could come in and provide temporary housing for the hurricane victims. Officials in the Obama Administration weakly respond that “no one has asked them yet,” to suspend the Jones Act. What are they waiting for? Doesn’t Obama and everyone in his administration to hit the Sunday talk shows tell us that they has been on top of this since day one? One plausible reason for the hesitation is that it might offend the maritime unions.
We are continually told by this administration that we need more government expertise telling us how to run our lives. Surrender your liberties, we’ll take care of you. I don’t think so. What do you think?
As President Obama used his first Oval Office address to push for another massive government takeover of our economy in the energy sector, it is time to debunk the myth regarding regulation versus free markets. The Statists like to claim that the financial crisis, the lack of health care, and the disaster in the Gulf are all proof that free markets are evil and we need the benevolent care of our federal government to keep us safe and warm.
Regulation
Let’s focus on the current crisis, the oil spill in the Gulf of Mexico. Here is the government’s role in this mess:
Free Markets
Let’s look at what would happen in a truly free market:
The end result would be more cautious companies because they could be wiped out if they cut corners. Insurance companies would have a second set of eyes making sure that things were done properly, because they make money when nothing goes wrong and are indifferent to whether any oil is recovered or not as long as the premiums are paid. The government would be out of the business of micromanaging the industry; providing incentives and penalties under the same agency; having key personal asking “mother, may I” before taking any steps, and we wouldn’t need a dozen agencies with overlapping responsibility trying to take control.
Free markets have incentives that do work. What is often complained about is the myth of a free market where the government has placed perverse incentives on companies and then act surprised when said companies follow the incentives. Their response is always more regulation with more perverse incentives and the cycle repeats. More government is not the answer, it is the problem.
This is from today’s New York Times:
“Fearing that health insurance premiums may shoot up in the next few years, Senate Democrats laid a foundation on Tuesday for federal regulation of rates, four weeks after President Obama signed a law intended to rein in soaring health costs.”
With the ink barely dry on ObamaCare, Democrats in Congress are scrambling to keep their masterpiece from unraveling. As I have pointed out repeatedly, there is nothing in the ObamaCare plan that helps reduce the cost of delivering health care. It is all about controlling what doctors, medical service providers, and insurance companies are paid. All the underlying pressures on health costs (tort reform, 3rd party payer, etc.) are still in place.
“We Have to Pass the Bill to Know What’s In It”
Nancy Pelosi’s stunning but famous words are coming into play. Let’s see what has the senators panicked.
So here’s the scenario. If you compare the cost of the penalty of $2,085 for a family vs. the cost of insurance for a family of $10,000, coupled with the inability of insurance companies to deny coverage for pre-existing conditions, healthy people will start dropping insurance coverage left and right. Why not? On the way to the hospital, you can call an insurance company and say you want to be covered for the pains in your chest and you cannot be denied. So insurance companies will only have sick people as clients. With only sick people that they constantly have to pay claims on, their only course of action if they want to stay in business is to raise premiums on all those sick people. If they start doing it now, they may be able to raise them less than if they wait until 2016.
So the insurance companies are acting rationally to this mess the Democrats dragged across the finish line and now they are shocked, SHOCKED, that they should do this.
Grace-Marie Turner, president of the Galen Institute, a research center that advocates free-market health policies, said the Democrats’ proposal was unlikely to succeed in lowering insurance costs.
“Capping premiums without recognizing the forces that are driving up costs would be like tightening the lid on a pressure cooker while the heat is being turned up,” Mrs. Turner said.
The Democratic fix is to have a new bureaucracy that will provide a check on unjustified premiums. I think you can look at this in one of two ways, both plausible. The Democrats were stupid enough to believe, as they typically do, that Americans don’t act rationally to their government policies. It’s also why they don’t understand that when they raise taxes they never collect as much money as they thought, and when taxes are cut they can’t believe how much money flows into the Treasury due to economic growth. The second scenario is this new commission will cap premiums to the point of driving private insurance companies out of business and then the Democrats will say, “Geez, we didn’t want to do this, but I guess we have to put in place a public option that, by the way, will be the only option.”
Senator Lamar Alexander of Tennessee, the No. 3 Republican in the Senate, said: “Health insurance companies’ profits for one year equal about two days of health care spending in the United States. So even if we were to take away all the profits of the so-called greedy insurance companies, that would still leave 363 days a year when health care costs are expanding at a rate our country cannot afford.”
Now that I think about it, it is probably the second scenario that is more likely, that is, force the public option. Your government is about to swallow up another big chunk of the economy if we don’t turn them out in November.
The Democrats are currently trying to roll out that old war horse, “class warfare” in a desperate attempt to arrest their freefall in the polls. The myth is that they are for the little guy when they are the party of big government. Businesses, once they get big, are hardly fans of the free market as they would much prefer to settle into a profitable market niche and not have to keep battling against upstarts.
Show Me the Money
An organization known as OpenSecrets.org, has a website that has information on contributions to the 2008 presidential campaign. The list of top contributors is not a list of contributions by corporations but by contributions from those company’s Political Action Committees, its individual members or employees or owners, and those individuals’ immediate families, but it does give you a sense of where the people who make up these companies see their bread buttered.
If you look at the top 20 donors to Obama compared to the top 20 donors to McCain, the 20th donor on Obama’s list gave 32% more to Obama than the top donor to McCain. As with any large organization there will be individuals who support Republicans and individuals who support Democrats, as well as their PACs wanting hedge bets by giving to both. But the amounts are telling.
What is particularly illuminating is with regard to Wall Street and the Banks. The Democrats are latching onto the sound bite that they want more regulation to protect the little guy, while the Republicans want less regulation so that Wall Street and the banks can get rich at the expense of the little guy.
Who’s Dumber Wall Street or the Democrats?
Does anyone believe that the leaders of Wall Street would give money to a candidate or party without expecting their point of view to be heard? Does anyone believe that the Democrats would take contributions and then turn around and burn those who contributed so generously, particularly before a very tough election? Okay, now that we have that settled let’s look at the numbers.
The top Wall Street and Bank Contributors to Obama’s election were as follows:
The top Wall Street and Bank Contributors to McCain’s election were as follows:
It looks like four of the companies with people who gave to McCain didn’t survive the meltdown and either disappeared or were swallowed up by the winners. If you look as people from companies that gave to both candidates, the amounts are significantly different:
I am not suggesting any quid pro quo for the contributions, but people do things for a reason. Who do you think will be more sensitive to the needs of Wall Street, Obama or the Republicans?
So look for a Financial Reform package that is a lot of smoke and mirrors that actually does nothing constructive. Republicans will oppose it, and Democrats will try to flog them as being for Wall Street and the Banks and against the little guy, but facts are facts. Remember, after passing ObamaCare Democrats tried to paint the picture that they stood up to the insurance companies, when they passed a law that will compel millions of Americans to become customers of those same insurance companies. Do you think that is why the opposition from the insurance companies was muted?
It’s time to drive home the point that this Administration is allied with Wall Street, GE, health insurance companies against us. It should not be hard to do. People are listening closely like never before.
After receiving one too many e-mails, post cards and other marketing pitches to extoll the virtues of ObamaCare, I felt compelled to send the following letter to Congressman Tim Bishop.
Dear Congressman Bishop,
Judging by the e-mails and mail pieces the marketing program now begins. To tell the 50%-60% of Americans who adamantly opposed ObamaCare, now that it has been signed into law, what good medicine it really is. Before I point out the areas on which we disagree, I would first like to call for a sense of honesty in the debate on healthcare. I applaud you for such honesty where you say on your glossy postcard that it was prepared, published and mailed at taxpayer expense. I challenge you, however, on your opening sentence.
You begin your piece by stating, “On March 21st, we stood up to big insurance companies and passed health care reform.” Really? How is using the full coercive power of the federal government to unconstitutionally force millions of Americans to buy the products of these big insurance companies, whether they want to or not, standing up to them? I’ll bet Wal-Mart wishes you would get tough with them and require all Americans to shop there on Thursdays. Are you next going to get tough with GM and Chrysler by passing legislation forcing us to buy a Malibu or a Ram pickup truck? Of course you will probably smack them around and make them comply with tougher CAFE standards, but hey, that’s what big government is for, no?
I am still waiting to find out how spending $1-$2 trillion dollars results in reducing the deficit by $143 billion in the first decade. This may be presumptuous but I have a suggestion on how to lower the deficit by $1-$2 trillion. Repeal ObamaCare and start over.
Nothing in this legislation actually goes to the root cause of reducing the cost of delivering health care. It’s all giant shell game about hiding whose pocket the money is coming from to really pay for the same old broken system. Here are some of the “benefits” you point out in your mail piece:
- Free Preventive Care Under Medicare – this eliminates co-pays and deductibles under Medicare. This doesn’t reduce what it costs medical professionals to deliver preventive medicine, it just lowers the price to consumers. Economics 101 says when you decreases the price the demand goes up. By eliminating co-pays and deductibles, someone has to make up this modest difference. It is either the medical professional who has to eat the cost, driving up rather than reducing the cost of preventive care, or it will be subsidized by the rest of us through taxes. You are betting that if every senior gets preventive care, more expensive treatments will be avoided later. The real question is: how many seniors are not getting preventive care because they don’t have a $20 co-pay and of that group, how many turn out to have a serious disease that could have been prevented? This is a much smaller group than all seniors. You cannot make seniors go to the doctor for preventive care if they don’t want to, whether it is free or not.
- Free Preventive Care Under New Private Plans– When I had my own small business, I provided our employees with healthcare. I chose a plan that provided free preventive health care. When I left that business and went out on my own, I tried to buy the same plan privately. It had a high deductible, HSA account, and free preventive care. Such plans are available, but not in New York unless you have poverty level income. The marketplace has these plans available. Government regulations prevent me from buying them. Why do we need to spend $1-$2 trillion to give me a plan that the marketplace already provides if government will just get out of the way?
- Ensuring Value for Premium Payments – This is where you require plans to spend a certain percentage of premium dollars on medical services. How does this control costs? If the underlying costs increase 100%, does it make us feel warm inside that the 100% increase in premiums that will follow will go 80% toward medical expenses? It’s still an increase in premiums of 100%.
Let me stop analyzing your mail piece here. Doctors are threatening to leave the medical practice because of this legislation which will lead to rationing. This plan does not address the underlying problem.
There is a simple way to reform health care by controlling the underlying cost of delivering medical care, rather than mandating more and more coverage and expense paid for by someone else. We all pay in the end. Here is a simpler way that does not cost $1-$2 trillion dollars but may take some of that courage you boasted about in your opening sentence.
- Eliminate 3rdparty payer. If you invite me to dinner and you tell me that you’re picking up the tab and I am handed a menu with no prices on it, look out! It’s gonna hurt. Americans are smart consumers. They will spend hours researching a car or flat screen TV before buying, because it’s coming directly out of their pocket. They play a role in how much they pay. That’s how markets work. We do not have a free market in health care. The way to do this is with high deductable insurance plans and Health Savings Accounts (HSA). If you take the lower cost of the premium for the insurance piece and add the amount to fund the HSA, the costs are about the same as the premium alone on a traditional plan. I went from a $10,000 annual premium for a traditional plan to a $5,000 premium cost for a high deductible with a $5,000 contribution to the HSA account. If you want to help people with deal with the high deductable, help them fund the HSA accounts, but keep the buying decision in their hands. Trust me, they will ask questions, they will shop around, because it’s their money and the less they spend, the more they keep. Many HSA accounts have a provision to roll money over into an IRA if the account grows large. This will take guts to implement because the public will have to be educated that they will come out ahead when they have the liberty to make their own choices. You seem tough enough to ignore the will of the people to implement what you feel is good for them, why not implement something that will actually work?
- Implement tort reform. Not an experiment here or there. If you want to show how tough you really are, stand up to the trial lawyers who fill Democratic coffers. Implement the system they have in Britain. No contingency fees and loser pays. Maybe I’ll stop seeing commercials on my TV that promote a new drug, followed by a come on from a law firm to call them if you actually took the drug because, “you may be entitled to compensation.” I have no problem with a person getting compensated when they have been harmed through the fault or negligence of a company. Human life is not perfection. We are all different. Some of us can eat three eggs a day and never have a heart problem, others may look at a pat of butter and feel pains in their chest. Lawyers shouldn’t get rich because humans are not perfect and companies can be bluffed into paying these extortionists rather than defending the case on the merits. Lawyers should get paid for the time they put into a case. OB/GYN doctors are leaving the practice in droves because they cannot afford the malpractice insurance premiums. Doctors are practicing defensive medicine ordering every possible test for fear they will be asked later, if a patient gets worse, why they didn’t order that other test. When you add the cost of malpractice insurance on top of the cost of additional tests and procedures, it doesn’t get cheaper to deliver health care and you are not necessarily delivering better health care. Let the doctors practice medicine, tell the lawyers to stop running a lottery.
- Buy insurance across state lines. As indicated previously, the plan I want to buy is available, but not in New York. The market sees a need for such a product, I want to buy such a product, the government says no. You want me to believe that now if we spend $1-$2 trillion the government will solve my problems. Get the government out of my way, thank you very much.
- Have more tailored insurance policies. Why, as I approach the golden years, do I have to buy a health insurance policy that covers pre-natal care? In vitro fertilization? Sex change operations? When I buy automobile insurance, I have about a dozen choices in every category about the kind of coverage I want. How much deductible? Do I want rental car reimbursement? Roadside assistance? Yet when choosing a health care policy, if I have a choice at all, it is a total package, take it or leave it. Who decides what has to be included? Is it me or the government regulators? If I want to have free preventive care, fine let me choose that and adjust the premium accordingly. If I want to pay the co-pay for free preventive care, give me that choice. If we had more choices, as in a free market, costs will go down. If the government says, everyone must take this, there is no competition and costs climb.
- Control illegal immigration – If emergency room costs are driving up health care costs for all, and illegal immigrants use the emergency room as their primary care provider then it would follow if you controlled illegal immigration you would drive down health care costs. Milton Friedman, the great economist, believed in open borders. However, he also said you can’t have open borders and a welfare state. It doesn’t work.
- We need to have Medicare reform. When Medicare passed the government projected that hospital coverage would grow to $9 billion by the early 1990s. It actually grew to $66 billion a 700% error in their projection. We hear again that we are going to crack down on Medicare and Medicaid fraud and this time we really, really mean it. Estimated at nearly $100 billion per year in waste and fraud, why can’t this be done without spending $1-$2 trillion?
What you and this Congress passed is a disaster. If the projections on this monstrosity “miss” by 700% like they did on Medicare, where do we go for a bail out? Who is going to bankroll that one? Your children? Your grandchildren? The six items I laid out cost next to nothing, why not try them first? You can always go back later and say we need to do more. But with ObamaCare, it could be a runaway train that no one can stop. It is a giant shell game. It doesn’t address the underlying cost of providing medical care, it only hides whose pocket is getting picked to pay the bill.
Sincerely yours,
The marketing juggernaut is just getting warmed up, but instead of standing fascinated while your Congressman plays 3-card Monty, ask him or her the tough questions. Ask them calmly, respectfully, and don’t let them dance. If they dodge your question, ask it again. If they don’t… fire them in November.
