Archive for March, 2011

Live Off The Rich At Your Peril

Wednesday, March 30th, 2011

Not only do states depend too much on the wealthy for revenue, but they increase their dependence at the exact wrong time. Brad Williams warned California leaders about this problem for a decade.  Williams published a paper “California’s Changing Income Distribution.” In the mid-1990s, he noticed employment was barely growing, but income-tax revenue was soaring. According to the Wall Street Journal article

Incomes of the top 20% of Californians jumped by 75% between 1980 and 1998. Incomes for the rest of the state grew by less than 3%. Capital-gains quadrupled between 1994 and 1999, to nearly $80 billion.

And as California became dependent on wealthy tax dollars, the tech bubble popped. Capital gains plunged from $17 billion in 2001 to $5 billion in 2003. Personal income taxes fell 15% over the same period. By 2002, California had a budget gap of more than $20 billion.

Today, New York, New Jersey, Connecticut, and Illinois are most reliant on taxes of the wealthy. They are also among the states in the worst financial condition. Their answer to the fiscal crisis is to ratchet up their dependence on taxes from the wealthy. But as we enter the next market correction, those tax dollars will disappear.

 Lin Coln

Top Ten Things Obama Never Told You About Obamacare

Monday, March 28th, 2011

From Americans For Tax Reform on Wednesday, March 23, 2011 9:26 AM


1. Did you know that . . . since Jan. 1 of this year (2011), you cannot use your flex-account at work (FSA) or health savings account (HSA) to purchase over-the-counter medicines?

2. Did you know that . . . since July 1 of last year (2010), Americans have been paying a 10 percent excise tax on all indoor tanning services?

3. Did you know that . . . starting in 2018, if your health insurance is “too good” or considered a “Cadillac” plan, then you will incur a new 40 percent tax on your health plan?

4. Did you know that . . . Obamacare has 21 new or higher taxes in it, totaling over $500 billion in increased taxes going to the government over 10 years?

5. Did you know that . . . beginning in 2014, individuals and families that do not purchase “qualifying”  — as defined by federal bureaucrats — health insurance will be forced to pay a yearly tax penalty?

6. Did you know that . . . 7 tax hikes in Obamacare directly break President Obama’s “firm pledge” not to raise any form of taxes on individuals making less than $200,000 per year and families making less than $250,000 per year?

7. Did you know that . . . the capital gains tax rate under Obamacare will rise to 23.8 percent starting in 2012? That is a 59 percent increase from its current rate.

8. Did you know that . . . in 2013, those Americans facing the highest medical bills and the least ability to pay for them will find their ability to deduct medical expenses is further limited (medical expenses must be reduced by 10 percent of income under Obamacare, rather than current law’s 7.5 percent)

9. Did you know that . . . beginning in 2014, businesses with over 50 employees will be forced to offer health coverage for everyone, or pay a hefty tax for each employee?

10. Did you know that . . . in 2013, Obamacare caps the amount individuals and families can put in their flexible savings accounts at $2500? Currently there is no cap and these accounts are used for a myriad of health expenses including paying upwards of $14,000 in tuition to special needs schools for some parents?

Read more:

ObamaCare and Carey’s Heart

Monday, March 28th, 2011

By RON JOHNSON , The Wall Street Journal, March 23, 2001

Today is the first anniversary of the greatest single assault on our freedom in my lifetime: the signing of ObamaCare. As we consider what this law may do to our country, I can’t help but reflect on a medical miracle made possible by the American health-care system. It’s one that holds special meaning for me.

Some years ago, a little girl was born with a serious heart defect: Her aorta and pulmonary artery were reversed. Without immediate intervention, she would not have survived.

The infant was rushed to another hospital where a surgeon performed a procedure at 1 a.m. that saved her life. Eight months later, when her heart was the size of a small plum, an incredibly dedicated and skilled team of medical professionals surgically reconstructed it. Twenty-seven years later, the young woman is now a nurse in a neonatal intensive care unit where she is studying to become a nurse practitioner.

She wasn’t saved by a bureaucrat, and no government mandate forced her parents to purchase the coverage that saved her. Instead, her care was provided under a run-of-the-mill plan available to every employee of an Oshkosh, Wis., plastics plant.

If you haven’t guessed, this story touches my heart because the girl is my daughter, Carey. And my wife and I are incredibly thankful that we had the freedom to seek out the most advanced surgical technique. The procedure that saved her, and has given her a chance at a full life, was available because America has a free-market system that has advanced medicine at a phenomenal pace.

I don’t even want to think what might have happened if she had been born at a time and place where government defined the limits for most insurance policies and set precedents on what would be covered. Would the life-saving procedures that saved her have been deemed cost-effective by policy makers deciding where to spend increasingly scarce tax dollars?

Carey’s story sounds like a miracle, but America has always been a place where medical miracles happen. Since 1970, American doctors have won more Nobel Prizes for Medicine than all other countries combined. According to McKinsey and Co., thousands of foreigners come to the United States every year for medical care they cannot get at home—due to rationing or because it is simply not provided. And cutting-edge drugs to treat serious illnesses are more widely available in the U.S. than abroad.

Take cancer as one example. Compared to the U.S., breast cancer mortality is 9% higher in Canada (according to the government statistics of each country), 52% higher in Germany and 88% higher in the United Kingdom (according to studies published in Lancet Oncology). Prostate cancer mortality is 604% higher in Britain.

Those in need of timely care from specialists are better off in the U.S. Drawing on several peer-reviewed studies, Dr. Scott Atlas of the Stanford University Medical Center notes that patients who need knee and hip replacement, cataract surgery, and radiation treatment wait months longer in the United Kingdom and Canada than in the United States.

The plain truth is that the American system is better at rewarding innovation and responding to consumer needs. But the history of government-led care is there for all to see. Are we doomed to repeat it?

For the first time in U.S. history, a personal inaction (not purchasing something, in this case, a health- insurance plan) will be deemed unlawful. The person not committing this act (or is it committing an inaction?) will be subject to a fine. Or is it now, as the government contends, a tax? I’m confused.

This is precisely what Nancy Pelosi, Harry Reid and President Obama wanted. The Patient Protection and Affordable Care Act was sprung on an unsuspecting public with barely enough time for anyone to read it. Remember Speaker Pelosi’s famous line? “We have to pass the bill so that you can find out what is in it.” Unbelievable.

I am convinced that ObamaCare was designed to lead to a government takeover of our entire health-care system, which is one-sixth of our economy. As I traveled around Wisconsin in the last year, I asked thousands of people a simple question: “Do you think the federal government has the capability of running one-sixth of our economy?” Only two people ever raised their hands.

Our health-care system has problems that must be addressed. But ObamaCare will make those problems much worse. Instead of increasing consumer choice, it narrows it. Instead of encouraging innovation, it stifles creativity. Instead of expanding access to care, it will ration it. And instead of allowing competition to help bring down costs, it increases spending and puts our health-care system on a path to ruin.

The defects with the president’s health law are so serious and widespread that the administration has already granted over 1,000 waivers to protect businesses, labor unions and other organizations from its most onerous provisions. We need to recognize that the finest health-care system in the world is at risk—and repeal ObamaCare before it’s too late.

Mr. Johnson, a Republican, is a senator from Wisconsin.


The Bay State shows the risks of ObamaCare.

Monday, March 28th, 2011

By John E. Calfee, The Wall Street Journal, March 1, 2011

The biggest problem with ObamaCare is that it is bereft of proven ways to curtail increases in health-care costs. This has given rise to unending speculation about what will happen to these costs when the law’s main provisions go into effect in 2014.

To get a glimpse of the future, take a look at Massachusetts, whose 2006 health-care overhaul was by all accounts the model for the federal Patient Protection and Affordable Care Act passed last year. It was launched in promising circumstances: The Bay State already had the lowest percentage of uninsured people in the nation, and some of ObamaCare’s provisions such as community rating (everyone can buy insurance at the same price, regardless of health) were already in place.

So, how are things going in Massachusetts? The easy part was getting more people insured. Coverage increased from about 88% to 96%. But the number of emergency room visits, which everyone expected to drop once people had to purchase insurance, is still going up. Surveys show roughly half the visits are unnecessary. Surveys also indicate that finding a primary care physician is becoming more difficult.

There are other troubling signs. Cities and townships were expected to move their employees into cheaper health policies through the new state-sponsored insurance exchange, the Health Care Connector. None have—because unions fear the very tools that keep costs competitive in the private sector, such as co-pays. (Gov. Deval Patrick wants a new law to force the unions into the Connector.) Despite an individual insurance mandate, thousands of consumers wait to purchase coverage until they require costly procedures and then exit after paying a modest penalty. That makes insurance more expensive for everyone else.

Massachusetts reformers deferred cost control to the vague prospect of a “Round 2” of reform—much as congressional Democrats did a year ago when they passed ObamaCare. Meanwhile, economists John Cogan, Glenn Hubbard and Daniel Kessler reported in the Forum for Health Economics & Policy (2010) that insurance premiums for individuals (alone or in employer-sponsored group plans) increased 6% to 7% beyond what they would have without the reform. For small employers, the increases are about 14% beyond those in the rest of the nation. Four years after reform, Massachusetts still has the highest insurance premiums in the nation, and the gap is getting wider.

In 2010, insurance firms announced premium increases of 10% to 30% in the individual and small-group market. Gov. Patrick, on the verge of a tough re-election race, had the state insurance commissioner deny the higher rates.

Insurance firms protested that they increased premiums because they had to deal with entrenched providers, especially hospitals, most notably the academic giants of Boston and Cambridge. Then the state prepared to introduce highly intrusive price controls over those providers—only to discover that this would provoke formidable political opposition while encountering myriad practical difficulties.

Last month Round 2 arrived. Gov. Patrick introduced a bill that will impose de facto price controls on everyone from solo primary care doctors to prestigious academic hospital systems. An 18-member board will decide how and how much providers should be paid, and the bill gives regulators the power to force private insurers to accept these fiats. Some 30 states experimented with such rate-setting in the 1970s and ’80s. Except for Maryland, all of them—including Massachusetts—deregulated in the 1990s because costs rose even as quality and choice declined.

In a mere four years, Massachusetts has demonstrated that the most important effects of its reform arise not from the letter of the law but from the law’s unintended and unpredictable consequences. The state is lurching from one crisis to another as it attempts to construct a system vastly different from any seen before or anything contemplated when reform was first passed. Health care in the state is evolving toward a state-run version of Medicare combined with government reorganization of the delivery of medical care.

The cost problem in Massachusetts is not going to be solved anytime soon. The question to be asked is why we should plunge ahead with a national version of this model before we learn whether Masssachusetts’s brave new world is one in which we want to live?

Mr. Calfee, a fellow at the American Enterprise Institute and frequent contributor to the Journal, died last month. His daughter Jessica Stahl, an economist, helped finalize the piece


Cancer surgery denied: you are too old

Wednesday, March 23rd, 2011    

March 19, 2011  Bad news: Thousands of elderly British patients are being denied life-saving surgery because of age descrimination in the National Health Service (NHS).  NHS is the British socialized medicine program that is the bluprint for Obamacare Socialized Medicine. 

The chances of being operated on start falling in middle-age and plummet for those in their 70s.  Experts blame age discrimination and poor access to specialists.  This may explain why older people in Britain are less likely to survive than in other countries.   

Surgery rates drop for all cancers with age, but in many cancers this started with young patients in their late 40s. 

Women having surgery for cervical cancer: 58% in their 40s – 42% in their 50s – 10% in their 80s.  This is age discrimination.

Some surgical teams say no just by looking at the patients “They sit there like the Roman Coliseum and it’s thumbs up or thumbs down.”  There are places “where I wouldn’t send my cat because they do not offer the same level of surgical skills”.

Just 9% of lung cancer patients had surgery.  

Worrying statistics: The chances of being operated on start falling in middle-age and plummet for those in their 70s and older 

Women over 80 with breast cancer are up to 40 times less likely than young women to get a diagnosis and treatment.  Campaigner Michelle Mitchell, of Age UK, said: ‘It is outrageous that ageist attitudes are condemning older patients to an early, preventable death.

Comment #1   When you’re old and can no longer produce money for the government, and instead consume money, then the Government discards you like trash.                                                 Dee Bris (England)

Thomas Jefferson — Where are such men today

Thursday, March 17th, 2011

Age  Task

 5, began studying under a tutor.
9, studied Latin, Greek and French.
14, studied classical literature and additional languages.
16, entered the College of William and Mary.
19, studied Law for 5 years starting under George Wythe.
23, started his own law practice.

25, was elected to the Virginia House of Burgesses.
31, wrote the widely circulated “Summary View of the Rights of British America ” and retired from law l
aw practice.
 32, was a Delegate to the Second Continental Congress.
 33, wrote the Declaration of Independence ..
33, took three years to revise Virginia ’s legal code and wrote a Public Education bill and a statute 
for Religious Freedom.
36, was elected the second Governor of Virginia succeeding Patrick Henry.
40, served in Congress for two years.
41, was the American minister to France and negotiated commercial treaties with European nations 
along with Ben Franklin and John Adams.
46, served as the first Secretary of State under George Washington.
53, served as Vice President and was elected president of the American Philosophical Society.

55, drafted the Kentucky Resolutions and became the active head of Republican Party.
57, was elected the third president of the United States ..
60, obtained the Louisiana Purchase doubling the nation’s size.
61, was elected to a second term as President.

65, retired to Monticello ..
80, helped President Monroe shape the Monroe Doctrine.
81, almost single-handedly created the University of Virginia and served as its first president.
83, died on the 50th anniversary of the Signing of the Declaration of Independence along with John Adams

Thomas Jefferson knew because he himself studied the previous failed attempts at government.  He understood actual history, the nature of God, his laws and the nature of man.  That happens to be way more than what most understand today.  Jefferson really knew his stuff.  A voice from the past to lead us in the future:

John F. Kennedy held a dinner in the white House for a group of the brightest minds in the nation at that time. He made this statement: “This is perhaps the assembly of the most intelligence ever to gather at one time in the White House with the exception of when Thomas Jefferson dined alone.”

When we get piled upon one another in large cities, as in Europe, we shall become as corrupt as Europe ..      Thomas Jefferson

The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.      Thomas Jefferson

It is incumbent on every generation to pay its own debts as it goes.  A principle which if acted on would save one-half the wars of the world.    Thomas Jefferson

I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.     Thomas Jefferson

My reading of history convinces me that most bad government results from too much government.      Thomas Jefferson

No free man shall ever be debarred the use of arms.      Thomas Jefferson

The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government.    Thomas Jefferson

The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.
    Thomas Jefferson

To compel a man to subsidize with his taxes the propagation of ideas which he disbelieves and abhors is sinful and tyrannical.      Thomas Jefferson

I believe that banking institutions are more dangerous to our liberties than standing armies.  If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive  the people of all property – until their children wake-up homeless on the continent their fathers conquered.  1802 Thomas Jefferson   

Obamacare & Business: Americans pay a steep price

Wednesday, March 2nd, 2011

The High Price of a Naïve America

Having lived outside of the United States for close to two decades, I have run across many stereotypes about Americans. We’re all loud. We’re all dumb. We’re all fat. All of these stereotypes have some element of truth to them, but are harmless enough in the grand scheme of things. But the most troublesome and accurate stereotype is that Americans are naïve. Americans expect the rest of the world to share our values and our basic sense of fairness. And we genuinely are surprised when we find out that a charming Turkish rug merchant took us to the cleaners on our first trip to Istanbul’s Grand Bazaar.

I saw evidence of this uniquely American approach to reality last night at Wharton Business School Professor Stuart Diamond’s presentation of his new book, “Getting More: How You Can Negotiate to Succeed in Work & Life,” at the American Embassy in London. Like the negotiation ninja that he is, Diamond had answers and techniques for every negotiating situation that members of the audience could throw at him.

But like a fish that does not realize it is swimming in water, Diamond’s approach has a fundamental weakness: it is governed by an underlying presumption that everyone at the negotiating table is playing by the same implicit, utterly civilized set of rules. Diamond may be right that when a cop pulls you over, you’re less likely to get a ticket if you thank her for “doing her job.” But that same “emotional payment” is unlikely to work elsewhere in the world. Upon hearing Diamond’s advice, a Russian woman sitting next to me couldn’t help but snicker: “I’d like to see where that tactic gets him in Moscow.”

As useful as Diamond’s work in negotiation may be to U.S. executives, to many foreign members of the audience, it served as a stark example of Americans’ naiveté — a characteristic that applies to Americans whether they are a Tea Party activist or a 1960s bleeding heart liberal. It’s the kind of naiveté that Donald Rumsfeld and Paul Wolfowitz suffered from when they genuinely believed that Iraqis would greet American soldiers as liberators and that a fully functioning democratic society would emerge spontaneously overnight in Baghdad. It’s the kind of naiveté that President Obama demonstrates when he thinks that cerebral speeches showing obsequious respect to violent extremists who chop the heads off Wall Street Journal reporters are the undiscovered elixir to a successful U.S. foreign policy. In Diamond’s own view, the secret to resolving Middle East peace is essentially to have Palestinians and Israelis take his negotiations course. There they would learn to focus on common goals, and make incremental progress to a mutually satisfying solution. After all, as Professor Diamond said, “you can’t live in the past, otherwise you’ll never get anything done.”

The High Price of a Naïve America: Our Achilles’ Heel

And there, of course, is the rub. Historical conflicts like the Middle East peace process are all about “living in the past.” But just because American culture’s enviable historical amnesia makes it difficult for Americans to appreciate the importance of historical wounds, it does not make them disappear. Diamond did concede that he was puzzled that his approach failed to live up to expectations in France — which he attributed to a “low trust” society. Well, if Diamond thinks that France is a “low trust” society, what can he say about the other 185 or so non-Northern European or Anglo-Saxon countries on the planet? Enlightened and flexible approaches may work with 30,000 of your highly educated former students who are scattered in corporations in American industry. They are less successful with a testosterone-filled, AK-47-toting 16-year-old kid in Basra who thinks that blowing himself up is going to get him 72 new girlfriends in Paradise — or even the thousands of Hungarians who in 2010 adorn their cars with bumper stickers that call for the re-establishment of the former Austro-Hungarian empire dismantled in 1918.

The High Price of a Naïve America: Is China the World’s Economic Jiujitsu Champion?

Naiveté is a huge cultural Achilles’ heel for the United States. On the world stage, the United States is like a heavyweight champion boxer meeting a 170-pound black belt in Brazilian jiujitsu for the first time. Within two minutes of strutting out into the ring, the stronger, more powerful U.S. boxer finds himself on his back in a submission hold he has never seen and has no idea how to defend against.

This naiveté has huge repercussions in the relationship between the United States and China. Former London Junto presenter and hedge fund manager Hugh Hendry argues that the United States deserves the endless gratitude of the Chinese people. After all, it was U.S. consumers — with the blessing of the U.S. government doggedly sticking to the rules of free trade after China’s accession to the World Trade Organization (WTO) in 2001 — who allowed China to accelerate its economic expansion and build its $2.5 trillion in U.S. dollar reserves. The United States’ reward? Today, China alone accounts for 75% of the U.S. trade deficit, once oil is excluded.

A quick look at China’s behavior confirms that China is employing a dizzying array of economic jiujitsu tactics that add up to an unfair advantage over the United States. A new book by Glenn Hubbard and Peter Navarro, called “Seeds of Destruction: Why the Path to Economic Ruin Runs Through Washington, and How to Reclaim American Prosperity,” offers a strikingly clear-eyed summary of China’s behavior — what they call China’s “Great Wall of Protectionism.”– Despite WTO membership, China maintains quotas and tariffs on everything from air conditioners to foodstuffs.– “Local content” rules effectively bar foreign imports into many Chinese provinces.– “Pillar industries” like telecom and automotive are compelled to “buy domestic.” Even U.S. government-owned GM has committed to buying $10 billion annually in Chinese auto parts.– Import licenses are routinely denied — or are held hostage — to technology transfer agreements to protect top Chinese companies.– Unique national standards in telecommunications shield Chinese industries from international competition.

The list goes on. Many of China’s export subsidies openly violate WTO regulations. State-owned banks subsidize Chinese companies by tolerating non-performing loans. Chinese special economic zones give exporters an array of subsidies and tax cuts that make it next to impossible for U.S. factories in Ohio and Michigan to compete with their Chinese counterparts. China’s rampant culture of counterfeit goods may be contributing to 10% to 30% of China’s GDP growth. While China does not allow foreign investment in its railways, California Gov. Arnold Schwarzenegger is welcoming the Chinese to bid for construction of California’s railway system. Chinese firms do business with pariah African regimes that are no-go zones for U.S. multi-nationals. Meanwhile, the U.S. Congress (absurdly) refrains from labeling China as a “currency manipulator” — when China’s central bank sets the yuan-dollar exchange rate on a daily basis.

Meanwhile, the U.S. government — implicitly blackmailed by huge Chinese holdings of U.S. Treasuries — all but plays mum. And U.S companies are populated by Wharton-trained negotiators eager to enter “win-win” agreements at almost any cost just to gain access to the Chinese market. No wonder American companies are making a fraction of their expected profits from the “China miracle.”

The bottom line? The United States abroad needs less enlightened negotiation tactics. Instead, it must learn how to fight Chinese-style economic jiujitsu.

The price of a naïve America has gotten just too high.
Nicholas A. Vardy Editor, The Global Guru

Comment #1  Read Sun Tsu “The Art of War” to learn how stupid & deadly it is to project your morals onto the enemy.                          Lee Bido  (College Sophmore)