Constitution Day 2010

This past week, on September 17th, our nation recognized Constitution Day. It is disappointing how little mention there was regarding this day. My sons said that they don’t recall the date being mentioned at school over the years. Not by civics, social studies or history teachers. I recall as a boy back in the 1970s watching “School House Rock” in between cartoons on Saturday mornings. That is where I first learned about the Constitution, how our government works, and the history of the country’s founding. ABC no longer broadcasts the program Saturday mornings. How things have changed.

Many people believe that the Constitution was adopted on July 4, 1776. The truth is that it was adopted September 17, 1787 by 39 delegates from 12 colonies. We have become a nation fixated on wanting “my rights” whether constitutionally based or not. The 39 delegates understood that the Constitutional rights come with a responsibility first. Our liberties are contained in the U.S. Constitution, Bill of Rights, and Declaration of Independence. But these are earned as the leaders of the Revolution committed…”We pledge our lives, fortunes and sacred honor.” “We the People” are called to this responsibility.

The authors, and those in favor of adopting the Constitution, believed that Divine Providence has preserved our liberties and protected our very way of life. They would suggest that most of our problems and failures that trouble our nation today are due to the actions of our civil leadership ignoring or abusing our Constitutional law. Today, there is a growing movement to ensure faithfulness to the Constitution with the hope that this will begin to repair the damage done by this neglect. Could it be that we are re-learning the lessons of history?

It is our responsibility to hold all our elected representatives accountable to his or her oath to the Constitution. The U.S. Constitution is a contract between the people and the civil magistrate. Would it not be responsible that both sides of a contract uphold their end of the commitment? Only by each of us living up to this responsibility will there be the possibility of no longer being subject to a ruling class, party politics, special interests and similar such abuses.

Let us not forget Constitution Day again. Read and learn the Constitution. Not through a modern writer who, may have an interesting “view point”. But rather, the founding documents as written by those who drafted the Constitution. And more importantly, the Constitution itself. And let us be responsible to ourselves, and hold our elected officials to their pledge to "preserve, protect, and defend the Constitution of the United States."

Publius

AUGUST EMPLOYMENT REPORT

President Obama stated to Diane Sawyer in an interview last January, “The purpose of a politician is to get re-elected.” A bothersome statement coming from a president…but insightful. With the campaigning for the mid-term elections in play, it’s foreseeable that the August jobs report could be used politically not economically. Washington and the press suggest the report demonstrates a turn around. A closer look suggests otherwise.

The August unsuccessful numbers were the third month in a row. This would suggest that government spending and control over the credit markets are failing to meet the goal of job creation. From the report: 54,000 job losses this past month. An unemployment rate at 9.5%. The recovery strategies are not creating enough new jobs to decrease the ranks of the 14.9 million unemployed. (Possibly political, the report did not include the involuntary part time workers of 8.9 million.) One in seven people are unable to find a full time job. So how is the private sector doing?

For profit businesses added 67,000 jobs for an overall labor force expansion of 550,000 since May. Average hourly wages increasing .3% in August. Manufacturing jobs receded in August, yet, since January a successful sector. Construction and healthcare continue to expand.

A number of pundits suggest a double dip recession. The August report points to something other than recovery. The August numbers, put into the perspective of an 18 month trend show that continued slow and low growth may continue. With the failure of previous stimulus spending, politicians doing their job “to get re-elected” will pull out a few tricks for votes. Some will divert attention from the economy, some will promote little jolts like cash for clunkers and home buyer tax credits – short term small impacts that the past 12 months show did not help.

It appears government spending does not have the positive impact on unemployment as we would hope. Ten years ago the United States was the top industrialized nation for employment. Now it is the worse. Will the political messaging change this fall to divert attention away from the reality of the economic reports?

PUBLIUS

A Cold Man's Warm Words

Jefferson's tender lament didn't make it

into the Declaration.

By Peggy Noonan

The Wall Street Journal: July 2, 2010

The tenderest words in American political history were cut from the document they were to have graced. It was July 1, 2 ,3 and 4, 1776, in the State House in Philadelphia. America was being born. The Continental Congress was reviewing and editing the language of the proposed Declaration of Independence and Thomas Jefferson, its primary author, was suffering the death of a thousand cuts. The tensions over slavery had been wrenching, terrible, and were resolved by brute calculation: to damn or outlaw it now would break fragile consensus, halt all momentum, and stop the creation of the United States. References to the slave trade were omitted, but the founders were not stupid men, and surely they knew their young nation would have its date with destiny; surely they heard in their silence the guns of Fort Sumter.
Still, in the end, the Congress would not produce only an act of the most enormous human and political significance, the creation of America, it would provide history with one of the few instances in which a work of true literary genius was produced, in essence, by committee. (The writing of the King James Bible is another.)

The beginning of the Declaration had a calm stateliness that signaled, subtly, that something huge is happening: "When in the Course of human events it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to separate."

This gave a tone of moral modesty to an act, revolution, that is not a modest one. And it was an interesting modesty, expressing respect for the opinion of the world while assuming the whole world was watching. In time it would be. But that phrase, "a decent respect to the opinions of mankind" is still a marker, a reminder: We began with respect. America always gets in trouble when we forget that.

The second paragraph will, literally, live forever in the history of man. It still catches the throat:
"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the pursuit of Happiness.—That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed."

What followed was a list of grievances that made the case for separation from the mother country, and this part was fiery. Jefferson was a cold man who wrote with great feeling. He trained his eyes on the depredations of King George III: "He has plundered our seas, ravaged our coasts, burnt our towns. . . . He is at this time transporting large Armies of foreign Mercenaries to compete the work of death, desolation and tyranny . . ."

Members of the Congress read and reread, and the cutting commenced. Sometimes they cooled Jefferson down. He wrote that the king "suffered the administration of justice totally to cease in some of these states." They made it simpler: "He has obstructed the Administration of Justice."
"For Thomas Jefferson it became a painful ordeal, as change after change was called for and approximately a quarter of what he had written was cut entirely." I quote from the historian David McCullough's "John Adams," as I did last year at this time, because everything's there.
Jefferson looked on in silence. Mr. McCullough notes that there is no record that he uttered a word in protest or in defense of what he'd written. Benjamin Franklin, sitting nearby, comforted him: Edits often reduce things to their essence, don't fret. It was similar to the wisdom Scott Fitzgerald shared with the promising young novelist Thomas Wolfe 150 years later: Writers bleed over every cut, but at the end they don't miss what was removed, don't worry.
"Of more than eighty changes in Jefferson's draft during the time Congress deliberated, most were minor and served to improve it," writes Mr. McCullough. But one cut near the end was substantial, and its removal wounded Jefferson, who was right to be wounded, for some of those words should have stayed.

Jefferson had, in his bill of particulars against the king, taken a moment to incriminate the English people themselves—"our British brethren"—for allowing their king and Parliament to send over to America not only "soldiers of our own blood" but "foreign Mercenaries to invade and destroy us." This, he said, was at the heart of the tragedy of separation. "These facts have given the last stab to agonizing affection, and manly spirit bids us renounce forever" our old friends and brothers. "We must endeavor to forget our former love for them."
Well. Talk of love was a little much for the delegates. Love was not on their mind. The entire section was removed.

And so were the words that came next. But they should not have been, for they are the tenderest words. Poignantly, with a plaintive sound, Jefferson addresses and gives voice to the human pain of parting: "We might have been a free and great people together."
What loss there is in those words, what humanity, and what realism, too.
"To write is to think, and to write well is to think well," David McCullough once said in conversation. Jefferson was thinking of the abrupt end of old ties, of self-defining ties, and, I suspect, that the pain of this had to be acknowledged. It is one thing to declare the case for freedom, and to make a fiery denunciation of abusive, autocratic and high-handed governance. But it is another thing, and an equally important one, to acknowledge the human implications of the break. These were our friends, our old relations; we were leaving them, ending the particular facts of our long relationship forever. We would feel it. Seventeen seventy-six was the beginning of a dream. But it was the end of one too. "We might have been a free and great people together."

It hurt Thomas Jefferson to see these words removed from his great document. And we know something about how he viewed his life, his own essence and meaning, from the words he directed that would, a half-century after 1776, be cut onto his tombstone. The first word after his name is "Author."

America and Britain did become great and free peoples together, and apart, bound by a special relationship our political leaders don't often speak of and should never let fade. You can't have enough old friends. There was the strange war of 1812, declared by America and waged here by England, which reinvaded, and burned our White House and Capitol. That was rude of them. But they got their heads handed to them in New Orleans and left, never to return as an army.
Even 1812 gave us something beautiful and tender. There was a bombardment at Fort McHenry. A young lawyer and writer was watching, Francis Scott Key. He knew his country was imperiled. He watched the long night in hopes the fort had not fallen. And he saw it—the rocket's red glare, the bombs bursting in air, gave proof through the night that our flag was still there.
And so to all writers (would-be, occasional and professional) and all editors too, down through our history: Happy 234th Independence Day. And to our British cousins: Nice growing old with you.

Memorial Day Reflection

The other night, while trimming some trees with my two teenage boys, they began a discussion about Vietnam. Both of them happen to have teachers who served in the conflict. We discussed the protests, how the war was managed, Cambodia, stopping the march of communism, the media and political will to win. Then the anticipated question....”What do you think Dad?” I paused some, then intimated that the war itself was tragic; another chapter in the dark side of human history; confusing in many ways. However, I honor the many military men and women who rose to the call of their country and did their duty selflessly. I romantically imagine the bugler calling them; thanking them; mourning them; honoring them.

From the beginning, we saw our founders Washington, Jefferson, Adams, Madison, Hamilton, who framed our nation into what George McGregor Burns called “The Great Experiment”, as pinnacles of America’s long history of heroes. Our Marines, Soldiers, Sailors and Airmen fittingly amoung them. It is good that we have Memorial Day to remember these heroes. To reflect upon the lives and sacrifices of those who put themselves in harm’s way for us. It is right that we remember stories of valor, flags raised upon a hill, and take inspiration from the bravery and brotherhood of these heroes demonstrated to only themselves. There are many amoung us. First Lt. Arthur MacArthur of the Civil War who raised another patriot named Douglas. Alvin York of World War I “turkey shoot” folklore. Audie Murphy, Medal of Honor recipient of World War II who single handedly saved his retreating platoon by providing cover between them and advancing Germans. Air Force general Chuck Boyd who spent 2,488 days as a Vietnam POW, and went on to be the only former POW of the era to become a four-star general.

War is hell. And that truth often makes it difficult for us to accept military heroes. In the 1960s, the commentators and influencers on our culture lead us to believe that to have “warrior heroes” is to celebrate war. I grew up during that time, coming of age believing that soldiers were people not to be respected. However, it seems that over time our nation began to rethink this belief. Without the soldier we loose a connection to our long human history of brave individuals putting themselves in harm’s way for us. These are people like us who stepped up when their country or other nations needed someone to do what no one else would.

The clearest way to understand the meaning of what these service men and women do, and have done, is the observation that freedom of speech was not secured for us by news editors, authors and playwrites, but by soldiers who sacrificed their bodies, souls and lives to get it. And would do it all over again to defend it.

Are there warrior heroes in your family or circle of friends? I grew up with the stories of various Marines, Soldiers and Sailors in our family. So many families share the legends of loved ones serving in the Civil War, World War II, Korea, Vietnam. An uncle on Omaha Beach, Korean penisula, or The Gulf of Tonkon. A family friend who earned a Bronze Star in Iraq.

It’s good that we have this day to reflect on our heroes. To consider again those who over our nation’s history secured our homeland. Unlike my childhood, today’s military is different. Respected. They are thanked when returning home from Iraq and Afghanistan. It is good we once again appreciate them. This is what I told my boys.

And all this expressed in that ubiquitous bugler we seldom consider. James Joyce, author of From Here To Eternity expressed his romantic view of that bugle. “The first note was clear and absolutely certain. There was no question or stumblin in this bugle. It swept across the quadrangle positively, held no place, played by a man who has never had a place, and can therefore play it. Listen to it. You know this song, remember?”

The bugler - calling them; thanking them; mourning them; honoring them.

Publius

ObamaCare vs Fundamental Liberty

Upon reading the 2,400 pages or so of the healthcare reform bill, a few things stuck out as significant. The bill barely, if at all, addresses healthcare. It addresses health insurance and multiple levels of what could be considered a “regulatory takeover.” There’s a government takeover of the college loan industry. The Feds will now determine who gets a loan (i.e. who goes to school) and how that loan will be paid back. “Underserved” communities I believe was the term used. However, no other feature of the bill is more concerning than the blatant contempt for the US Constitution. The legal challenges to ObamaCare will have widespread historical precedence for many generations to come. The very fundamentals of our Liberty will be questioned.

The “individual mandate” is the key issue. Essentially, this requires every US Citizen to buy government-approved health insurance. Failure to comply is punishable with an annual tax penalty of $750. This penalty will rise to 2% of income by 2016 (or which ever is greater). Thirteen states attorneys argue this is an unprecedented exercise of state power by the federal government. Congress has never made law requiring citizens to buy a private product in order to be considered a law-abiding citizen. The only law of equal power is conscription, where the Constitution gives Congress the explicit power to raise an army.

The argument has been made that Commerce Clause of the Constitution allows Congress to exercise such power. But recent Supreme Court cases would suggest otherwise. In Gonzales vs. Raich, (2005) the question of Congress’s ability to regulate economic activities across state lines was challenged. The court stated that the Commerce Clause can not justify any federal regulation Congress chooses. In US vs. Loez (1995) and Morrison (2000) the High Court turned over lower courts on similar grounds.

If Congress can constitutionally force a person to buy a product, what is left of the government’s limited and enumerated powers under Article I? The Bill of Rights will be the sole restraint on federal power. However, The Bill of Rights were designed by the Founders to affirm the rights inherent in the Constitution as a whole. They were never designed as a true restraint on government. Logically then, with this insurance mandate, what’s to say Congress can’t require citizens to purchase GM or Ford products; mandate smokers enroll in cessation programs; or require obese citizens attend Weight Watchers?

The State of Massachusetts has become a “fish bowl” on single payer plans this past year. Similar mandates in Massachusetts did not pose a constitutional problem for the state. Like most state governments, Massachusetts holds police powers and wider plenary authority under the state constitution than at the federal level. The Posse Comitatus Act and Insurection Act both make it illegal for the Federal Government to do the same. In Florida, the constitution spells out the ability to oppose Congresses healthcare mandates. The ObamaCare bill requires the states to spend-billions of dollars to rearrange their health-care markets and expands Medicaid enrollment, regardless of the state’s ability to pay. There are attempts by some states to block the regulations by passing laws which exempt their citizen’s form the mandates. However, federal laws that are constitutional usurp state’s laws under the 10th Amendment. Additionally under the 10th, states can’t nullify a Congressional action. Therefore, only a ruling that the mandate is not constitutional will provide financial relief to the states, and Liberty to their citizens.

The truth is ObamaCare is bad law and a threat to our Liberty. Not only has it proven unconstitutional in word, it also was unconstitutional in birth. Both the House and Senate were derelict in duty by not holding judiciary committee hearings on the constitutionality of the law. The Justice Department did not provide an opinion. Our judges and representatives have a responsibility to ensure our Liberty is protected. The courts are not for advisory opinions. They are for rule on the specific objective arguments of the case. Let’s pray they do their job.

Publius

Finance Bill Power Grab

Ram Emanuel said early in 2009 not to miss the opportunity of taking advantage of a crisis. And so the tidal wave came. It started with the TARP grab of banks and mortgages. Then onto owning GM and an attempt at Ford. Later health insurance companies and student loans. The eyes are on the prizes of national energy through Cap & Trade and Arizona’s boarder. And now a new financial industry crisis.

This newest reform bill provides Obama and his regulators vast control of the financial markets and risk-taking. Essentially, it transfers more ownership over credit allocation and the financial industry to the federal government. Obviously, previous heavy regulation has not stopped the pandemonium, but with this new bill banking will fundamentally become a utility. The free market will tap its breaks to a near stop.

It is uncertain if the new regulations will slow the risk of future financial crisis and bailouts. Regulators will determine those firms that are at risk, set capital and margins, have veto power over executive decisions, and determine compensation. Unelected regulators will determine your pension, not you or the experts who know how to run them.

The distinction between commercial and investment banks as set forth by Glass-Steagall Act of 1932 will be nullified. Now rules will be written by regulators at the Federal Reserve, Treasury, CFTC, FDIC, SEC, etc not elected representatives. During his April 22nd speech, Obama denounced “the furious efforts of industry lobbyists to shape” the bill “to their special interests.” Ironic given he is making speeches to “lobby” the bill to pass. Unless our modern political process radically changes, it is likely lobbying on all fronts will continue.

Passing the bill will bring enormous changes and political influence not seen before. A central regulator will determine which transactions go onto over-the-counter trading. Surely, when trades go bad in the next “crisis” a “too big to fail” solution will occurred and your pension will be “saved” by government ownership. The SEC will have the authority to give shareholders ownership over corporate board elections and compensation. What have been state’s rights to provide over site of corporate law will be federalized. This will provide large and influential activists more leverage to determine agendas on all business. Not “industry lobbyist special interests”, but government’s “special interests”.

Unions will have more influence over corporate decisions, and with cohorts, public pension funds. Easier unionization, energy regulation (cap & trade) and determing which investments go to which businesses and countries. The political class and non-financial organizations will have increasing power over businesses and the economy. The “free markets” that grew the country will no longer be free.

Delaware Democrat Ted Kaufman’s position on the bill sums up what many in Washington and the industry are warning. Recently the Senator stated: “by expanding the (federal) safety net – as we did in response to the last crisis – to cover ever larger and more complex institutions heavily engaged in speculative activities, I fear that we may be sowing the seeds for an even bigger crisis in only a few years or a decade.” The emotional rhetoric missing the facts that is happening now should be abandoned. A serious look at the details and cautious thought on their implications should be made. The opposition should take a lesson from Ram Emanuel and not miss the opportunity of this crisis.

Bigger Government, Less Private Sector

Economic history has demonstrated that when lowering taxes the economy picks up (more money to spend) and ultimately more dollars flow into the Treasury. Roosevelt raised taxes and prolonged the depression. Eisenhower lowered taxes and along with other dynamics, ushered in unprecedented prosperity. Kennedy lowered taxes resulting in a surplus that Johnson used on his War on Poverty. Reagan lowered taxes to bring the country out of a deep economic malaise resulting in “the roaring 80s”. Clinton initially raised taxes, found the recession got worse, and then lowered them to make the 1990’s one of the most successful economic periods. Upon inheriting a normal cyclical recession at the end of the Clinton era, and 9-11 which saw the bond market collapse, Bush lowered taxes and we saw a six year run of a strong economy.

So now, the question for President Obama is… if raising taxes brings less prosperity and dollars for the Treasury, why do it? He is not ignorant of the historical evidence that leveying higher taxes decreases government revenue. AND he does understand that higher taxes diminish the private sector. This is the strategy that he is counting on to make government stronger.

As the private sector strengthens, government weakens. By weakening the economy the Administration and supporters in the Congress and Senate aim to increase government’s relative power. Their enemy is the private sector. The expedient approach to defeating this enemy is to raise taxes.

Ask yourself…would you rather pay more taxes so you have less to spend on groceries, or pay less taxes so you have more to spend on groceries? Who’s your ally? Who’s your enemy?

National Debt Perspective

Click on graph for a full screen picture.













Publius

The Nothing New-New Deal

Ken Duberstein, a former adviser to Ronald Reagan, once stated: “In campaigning, you try to annihilate your opponent. Governing, you try to make love to your opponents, as well as your allies.” Mr. Obama has not learned to turn off the “us versus them” campaign mode. The American Citizens sense Obama is too caught up in the “us”, and engages too much with words, decisions, and deeds engaged in a health-care agenda that is more divisive than the problem he wants to fix. Support grows on Capital Hill while the little backing The People ever gave it continues to diminish.

Speakers Pelosi, Reed and the Administration send the message that if you are against the overhaul, you are insensitive to the plight of fellow human beings, and are in bed with the insurance companies. Does anyone really care about the insurance companies? We know they do public good, and for the most part are there for us when we need them. We need insurance companies while we don’t necessarily like them. Insurance industry history demonstrates that health insurance has been an ad-libbed patchwork of jerry-rigging. And health care reform will just re-shuffle the strengths and weaknesses of the current system. The result being something new, that is nothing really new. Our government has shown us the same re-shuffling of itself during the past 80 years.

The 1930s started with our Founder’s vision…little government and little regulation or interference in daily life. The income tax was new and relatively unimportant. Along comes the depression later to be made into The Great Depression despite “The New Deal” employed to avoid it. Government’s quantum growth was never experienced in America prior. Our Constitution was designed to prevent it. But The New Deal was designed to push the limits on this tradition. Federal programs with corresponding and regulatory initiatives burgeoned. Domestic programs, Medicare and Medicaid brought the dawn of the welfare state like Sputnik ushered in the dawn of the satellite.

Along came The Great Society of the 1960s. A new spin on The New Deal. States, counties, municipalities and towns join in the game. The age of big government. The “Great Experiment” of the Constitution was fading. The demands on The Citizens grow to meet the costs associated with these programs. Some citizens being more secure because of it. All citizens seeing their standard of living decrease to “share the wealth”.

The American people are not excited about another quantum leap the Administration demands. Americans have been there before and don’t want to go there again. And Obama’s continued disappointment with that suggests he either doesn’t get it, or doesn’t really care. The New Deal and The Great Society are his allies.

Representative Paul Ryan, ranking member on the House Budget Committee addressed the consequences of the healthcare direction. The plan is “the absolute height of fiscal irresponsibility” And “the shame of it all is we could actually fix what’s broken in healthcare without breaking what’s working and without creating a huge new entitlement program that will accelerate the bankruptcy of this country". Representative Ryan continues: “Congress has a pattern of passing cuts to pay for bills and then restoring the cuts once the bill has been passed. It’s crystal-clear to me that the ‘pay-fors’ in this bill will not survive and we will have created a huge deficit-funded liability". Old things made new again. The American People seem to get it.

Publius

Economist Hats

Years ago, I had a friend from India who often marveled at our great country. One day I asked him: what are the top three things about the U.S. that are most impressionable from his cultural perspective. He said: 1) The interstate; 2) the supermarket; 3) you can put dog do-do on a hat and people will line up to buy it. I found this to be a fascinating comment on our society. He was suggesting that Americans will buy into just about anything. And so goes our perspective on economic policy.

The past couple years have been described as the worst economy since The Great Depression. President Clinton used that line in 1991 to defeat George Herbert Walker Bush and we bought it. “It’s the economy stupid.” Is it? Did the government create the recession? Or did the markets? Can you honestly show the data as to which? President Obama took Secretary Geithner’s advice and pumped more money into the economy since….since ever. The headlines said the U.S. Government has spent more money than spent by all previous administrations since President Washington. Did you see a figure for that, or just repeat it? Does the General Accounting Office have the balance sheets back to 1780? Tax cuts for small businesses encourage hiring, right? Or do tax cuts hurt the federal government’s ability to stimulate the economy? Will 1990s Japan-like deflation happen, or is inflation on the horizon? Is gold on the rise because of the devaluation of the dollar? Will the stimulus package create jobs? What questions should I be asking anyway?

Well, it depends on the economist and the ideology you follow. Each expert sees things differently. The stimulus package should have been bigger. The stimulus package is why unemployment is so high. Hyperinflation, I’m told on Tuesday, is coming. Thursday I’m told no need to be concerned about it. Unemployment is 10.3% and dropping. Unemployment is around 17%. What are you hearing on CNN, Fox, Patriot Radio, Radio America, etc? Ed Leamer, UCLA economics professor suggests all this is “faith-based econometrics”.

John Maynard Keyes’ theories of government “pumping” money into the economy to stimulate the markets was credited for the success of the country moving out of The Great Depression. Yet, why did the country come out of the depression only after WWII started?. To get out of a recession, President Kennedy followed a new theory and cut marginal taxes resulting in an economic boom during the 1960s. Most economists sidelined Keyes after the 1970s stagflation experience. Then along comes President Obama and we cycle back to the 1930s.

Are we using economic theories and talk show hosts to support our ideological positions and biases? Conservatives loved Ronald Reagan’s faith in the lessons of the Laffer Curve. Progressives support President Obama’s Keynesian approach. Great economists like Adam Smith and Milton Friedman would just nurse a headache listening to all this policy rhetoric.

Have economists moved from philosophical theorists, to empirical scientists, to being members of the political establishment? We should note, there are economic principals that are universally accepted. Certainly economists agree that inflation and money supply are related. This is the primary mission of The Federal Reserve afterall. Even non-economists seem to understand that incentives energize business, trade creates wealth, and middle class tax cuts get you re-elected. Policy makers and their regulations will always be debated. Economic cycles, it seems, are unpredictable, and economists don’t really know for sure how to steer them. When will we accept that economists are working from immature theories, and not just listen to the ones who share our politics without verifying the communiqué? When will we realize that political ideologies exploit the void?

There are thousands of variables to the economy. Any ideology can use these variables to gather followers and loyalists. After 80+ years, economists continue to debate what started and what stopped The Great Depression. Earlier this year, the Obama administration sited a GDP report of 5.2% as evidence that the recession is over. The Wall Street Journal reported that when adjusting the GDP number for post-Christmas shelf restocking, the economy grew 2.5%, not 5.2%. The economy is complex and our ability to apply a universal theory lacking. We need to listen less to the ideological economic viewpoints and gather more perspective from discussion. Or else we’ll find ourselves buying one of those “doggy do-do” hats.

President Reagan summed up economics best when he quipped: “Are you better off today than you were four years ago?” Taking the interstate to the grocery store will help answer that question better than visiting the hat shop. -Publius

One Term President?

February 27, 2010

History teaches that those presidents who are able to move from the extremes of campaign mode, to governing in a more balanced manner early in their first term, have a better chance of being a two term president. In many instances, this required a departure from the previous administration’s path to something more in line with the American mood. During an interview with Diane Sawyer on January 25th, President Obama stated “I’d rather be a really good one-term president than a mediocre two-term president.” Interesting comment. One could interpret that to mean his current ideology’s policies, unpopular as they are, will remain for the next three years. Will he learn from history? Will he learn from members of his party, recent elections, polling results and the popular mid-term candidates giving incumbents some difficulty? Does he understand the American appetite for less extremes and a path towards the center?

Recently, Arkansas Democrat Blanche Lincoln got a sense of how potentially harmful this “really good one-term president” can be for her 2010 re-election. In step with her own epiphany on the mood of the country, she lamented that it would be best if the President, and his administration, distance themselves from “people who want extremes…and seek to find “common ground” with Republicans. Especially if promoting legislation which provides a “certainty” for jobs creation. Obama responded with “the price of certainty is essentially for us to adapt the exact same proposals that were in place leading up to the biggest economic crisis since The Great Depression…the result is going to be the same.” To Obama, moving to the center where the nation would like its leaders to be means emulating George W. Bush. Apparently, to President Obama, politically, good ole’ “W” was a two-term looser. If President Obama is unable, or unwilling to listen to members of his own party, he may end up a one term mediocre president. He seems not to understand that America would prefer a move to the center. Fifteen months ago he had a 70% approval rating. Recent Gallop Polls show him running even with a theoretical “centrist” (i.e. George W) in a 2012 election bid.

President Obama misses all of this and the reasoning behind his drop in popularity. When taking office after President Bush, he did not take a path that “avoids repeating the failed policies of the past.” He joined in with Pelosi’s Congress and continued the spending he so earnestly attacked “W” for. Only the spending has been exponentially more. The spending, as it was presented, was to prop up the economy. However, Congressional Budget Office reports indicate the majority of the money as discretionary and earmark in design. Where is the departure from the past?

History shows that bold moves by presidents towards the prevailing view of the American people often leads to success. FDR made a bold move from Herbert Hoover’s direction and increased government’s presence in America’s daily business. Ronald Reagan moved away from Jimmy Carter. But in 1982 President Reagan’s approval rating was lower than President Obama’s is now. Simultaneously, the Republicans lost significantly in the mid-term elections. However, by 1984 The Great Communicator won a second term with a 49-state landslide. Ten years later President Clinton overcame a similar scenario.

These presidents listened and learned that the mandate given to them was not their extreme ideological desires, but the populist sentiment Of and For The People. They took off the campaign-mode persona and went to work on the fundamentals of governing FOR The People. As President Reagan was fond of saying: “get the government off the backs of the people”. President Clinton charged up the nation by compromising and accepting Republican initiatives that the populist wanted: balanced budget; tax cuts; welfare reform; etc. And today, the populist sentiment continues the tradition of signaling where it would like its leaders to move. Americans have a theme song they’d like to see Obama download to his I-Pod. The simple, clear, catchy, easy to dance to tune of less spending; less government; less taxes; leave the healthcare system alone.

So far, the song has attracted some impressive results. Virginia Democrats giving way to the Republicans in the top offices of Governor, Lt. Governor and Attorney General. In New Jersey, Chris Christie saw the largest victory for a New Jersey Republican in 25 years by his win over Corzine. And recently, the latest Cinderella story of Mr. Brown defeating Ms. Coakley in Massachusetts. A Quinnipiac poll suggesting a 45% disapproval rating of the President’s governing seems to reflect his fallen “American Idol” status. As the mid-term elections begin to organize, some surprising individuals are making a move down a different path. Inexperienced, but they understand what President Obama and the Washington establishment do not seem to grasp. To name a few: Jim Ward of Arizona (former President of LucasArts); Jon Runyan of South Carolina (Offensive tackle for the San Diego Chargers); Todd Yound of Indiana (Attorney); Stephen Fincher of Tennesse (Farmer); Brian Rooney, Michigan (Businessman); Scott Rigell, Virginia (Car Dealership Owner). Six Republicans running in Democrat establishments with notable early results. None of them having held office before.

They’re singing what President Obama’s I-Pod won’t play…Americans seeking distance from his extremes. We await Barack Obama’s mark on Presidential history.

Publius

Healthcare Delivery

February 7, 2010



For roughly the past 15 years, one of the responsibilities I have had in my job has been working with insurance brokers on negotiating healthcare plans. Naturally I’ve stayed in touch with the ObamaCare development. It’s not too hard to get caught up in the drama. Mostly I’ve found folks repeating the latest slogans and talking points from political propaganda: “death panels”; “socialized medicine”; “higher taxes”, etc. To be sure, some of that may well be true. But such a debate misses the fundamentals of the issue.

Recently, my physician and I discussed a procedure that we both agreed was time for me to do. We discussed various options, reasons, risks, etc. One key question I had was “where?” Should I go with the one local specialist? Should I travel an hour to a larger teaching hospital loaded with some of the top specialists in New England. Being a business person, I weighed the costs and benefits. I wonder how many people have such a discussion with their physician. Were similar discussions going on with ObamaCare?

The first group to jump on the ObamaCare bandwagon was the insurance industry. They came because they understand the true fundamental to healthcare costs...the delivery system. When you break the healthcare world down, it’s really a patchwork of cottage industries made up of small provider practices in non-competitive markets. Insurance companies and hospitals on average achieve about 2-3% margins. Yet, of every premium dollar, 85 cents goes to the cost of care, providers, suppliers, medical centers, prescriptions, etc. The 2% margin for 2009 of the entire healthcare insurance industry would cover the costs for two days of the nation’s healthcare expenses. When ObamaCare reached the beginning of its end with Scott Brown’s victory in Massachusetts, President Obama responded predictably by castigating the insurance industry by saying…”I mean, to be fair, the status quo is working for the insurance industry, but it’s not working for the American people.” Not a statement that is helpful to building a relationship with your first ally.

To be honest, its health insurance reform, not healthcare reform. ObamaCare focuses not on healthcare delivery, but standardizing benefits and eliminating the relationship between the amount an insurer is allowed to charge and the true cost of the care. Insurers would be required to offer “guaranteed issue” (accept everyone on the plan) with limited ability to adjust premiums based on actual business / utilization costs. So if actual care of a patient is where 85% of the cost sits, how will ObamaCare impact the overall cost of healthcare?

A number of congressmen (Republicans and Democrats) asked the same question. WellPoint, one of the largest healthcare insurance companies, provided a model based on its’ own actuarial data. They found ObamaCare would nearly triple premiums for most of their customers. The response from the Obama Administration? WellPoint is no better than those evil tobacco companies.

The U.S. healthcare system offers choice and the most advanced treatments and technology in the world. Yet, its’ business practices are outdated. Nearly every sector of the U.S. economy has evolved their managerial and delivery practices resulting in some of the highest productivity and quality available. To be competitive, consumer products, service industries, banking, etc. have to be mindful of costs. The healthcare industry is not structured so that providers have incentives to control costs. And no incentives for insurers, (medicare one of them), to reimburse costs realistically. There is a lack of competition where needed. And a lack of strategic provider-insurer partnerships as well. In this regard, the Obama Administration is missing an opportunity by not seeing that insurers add value if they are part of that delivery system. By having information from my insurer about the cost and quality of that procedure my physician and I agreed on, I was actually making an informed decision within the market.

Healthcare costs are negotiated between providers and health plans. But in a true market costs are driven by competition. But the cost-control provisions of ObamaCare exempt the doctors and hospital, (the 85 cents of every healthcare dollar), from being involved in managing cost. It appears Pennsylvania Avenue is having a hard time hearing this message.

Publius

The Constitution Affirmed

January 30, 2010

These past 12 months have been good for The U.S. Constitution. The Supreme Court has shown its ability to rationally stand above patrician politics, political correctness, and conservative extremes and do their job. Our Founders designed it to work that way. And our current judges are living up to the responsibility.

In the spring of 2009 the Supreme Court handed down the Heller decision regarding the right of citizens to own a handgun in Washington D.C. “A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed” states The Constitution. The high court made a “common sense” decision when interpreting the Second Amendment’s clause on the right to bear arms. You, as a citizen, have the constitutional right to own a handgun. Our constitutional rights upheld.

Recently, the Supreme Court announced another common sense decision regarding the freedom of speech. The court’s decision in Citizens United vs Federal Election Commission strengthens the First Amendment and freedom of speech. On docket was a nonprofit political advocacy group film about Hillary Clinton who at the time was a presidential candidate. The film was not supportive of Mrs. Clinton. Under the 2002 Bipartisan Campaign Finance Act (McCain-Feingold), corporations and unions were band from “electioneering communications” within 30 days of a primary or 60 days of a general election. The foundation of the decision addressed two issues. First, does the First Amendment protect all speech, especially criticism of powerful political figures? Second, who should decide how much Americans can speak during elections?

Our First Amendment states: “Congress shall make no law…abridging the freedom of speech…” The Constitution does protect the freedom of speech of every citizen. However, only from the restrictions set by Congress, and, as interpreted in the 14th Amendment, by state legislatures, too. There are other areas where speech can be abridged or suppressed. For example, in the work place, where employers can restrict your right to speak about politics, religion, legal issues, and just about any other subject. While the government could not prohibit the sale of any newspaper which would abridge the freedom of the press, news stands may or may not carry any papers its owners' wish.

With the Citizens United vs Federal Election Commission decision, the high court rejected limits on corporate spending when expressing their viewpoints as unconstitutional. Corporations and unions have the same rights as individuals to spend money on political speech. Justice Kennedy pointed out that to do so otherwise is akin to censorship which is at odds with the fundamentals of First Amendment principles. “Because speech is an essential mechanism of democracy…it is the means to hold officials accountable to the people…political speech must prevail against laws that would suppress it by design or inadvertence,” he wrote.

The era of the arbitrary exemption of media corporations under McCain-Feingold, is now over. The decision was expressed this way. A corporation that owns its own newspaper retains its First Amendment right to speak freely. “At the same time, some other corporation, with an identical business interest but no media outlet in its ownership structure, would be forbidden to speak or inform the public about the same issue,” wrote Justice Kennedy. “This differential treatment can not be squared with the First Amendment.”

President Obama wasted no time with his latest populist persona by referring the decision “a major victory for big oil, Wall street banks, health insurance companies” and other “special interests.” Any mention of the SCEU and other unions supportive of Obama was absent. The political spending of these unions are also protected by the ruling. It will be difficult to accept that no longer will any one group have a monopoly on free speech.

The 2002 Bipartisan Campaign Finance Act banned corporate contribution under the assumption of preventing corruption. Such corporate spending, the law suggested, would distort elections. It is assumed that the amount of money corporations have available creates inequities in speech, thus unfairly controlling democracy. However, this position was at odds with previous Supreme Court decisions that stated creating a political level playing field could not justify campaign finance restrictions. The reasoning of the court being that in order to create that level playing field, the government would be forced to ensure some people or groups spent less than they desired. The United Citizens decision affirmed that an equality of speech is contrary to protecting government’s intrusion on speech…which is at the essence of The Constitution’s conception of speech.

It’s been proposed that under the new ruling, businesses will have a dominate position in the candidate discussions during elections. Prior to the Bipartisan Campaign Finance Act, corporations could spend freely on advertisements for or against a candidate. However, this made up a rather small part of election-related speech. (After all, being partisan is not good for business). Special interest groups dominated election-related speech.

Vice President Biden argues that a flood of foreign dollars, and thus influence, will corrupt our democracy. But foreign corporations will not be able to determine the outcome of an election. The Citizen’s decision nullifies the blanket band on corporate contributions as outlined in Part 2 US Code 441b. However, Part 2 US Code 441E, which specifically bands foreign interests and nationals from making contributions to a political campaign, is not addressed in Citizens United vs Federal Election Commission. It is left alone. Therefore, this band will continue.

The Supreme Court has supported that the First and Second Amendments do have force. The American people have the right to bear arms and decide how much to spend on political speech. Congress’s endless and misguided gun laws and campaign finance arguments have reached a Constitutional dead-end. And the Constitution has been affirmed.

Publius

One Year Ago

January 20, 2010

Recently, I noticed an interesting pattern with the parents of my son’s friends. When it’s time to pick up their child from our house after a day of hanging out with my son, there’s no honk of the horn or knock on the door. Mysteriously, my son’s friends start putting on their coats and shoes, say goodbye, and head out the door to a waiting car. This has been going on as far as I could remember. But only recently did I take note of why this was happening. Simple reason: a text message from parent to child! Of course I would miss it. We don’t have the cell phones in the palms of our kids.

The dot that was suddenly connected for me was the “disconnect”. Are we that disconnected with one another that we privately text our child from the driveway and no longer knock on the door and visit with the parents of our children’s friends? How many times do I just drive up, push the garage door button, drive in and close the door behind me without a thought to visiting my neighbor who is out mowing his lawn? When was the last time I gave a casual hello in passing at Duncan Donuts to the woman who sits across the pew from me every Sunday? Disconnected we are as a people. Why should our government be any different?

One year ago Barack Obama flipped the political world with a resounding national election victory. Tapping our mood and our concerns was his preoccupation. But what a year makes. Virginia Democrats gave way to the Republicans in the top offices of Governor, Lt. Governor and Attorney General with significant margins. (McDonnell won by 17% margin for one). In New Jersey, Chris Christie saw the largest victory for a New Jersey Republican in 25 years by his win over Corzine. And recently, the latest Cinderella story of Mr. Brown defeating Ms. Coakley in Massachusetts. The Tea Parties this past summer were the tracer shots leading to what the latest Quinnipiac poll discovered: a 45% disapproval rating of the President’s governing. Obama clearly is not in the same room as the American People. He is preoccupied with something else.

For Americans, how the president presents himself, what he says and the flare in which it is communicated, does not matter much. We are a people for whom what a president does is what matters. There in lies his disconnect. For example. Obama’s undying commitment to his health-care plan that has a 35% approval rating. He does not seem to take notice or care. And each day he forces this plan through with stubborn determination. Each day he works with Congress to come up with any way possible to negotiate a bill. Is he so disconnected that he has not noticed how much the people dislike Congress?

The disconnect represents a growing distance between We The People, and our Government sent to serve us. One year ago we began to reap with intensity this gulf of disconnect. It is a metaphor of who we have become. And a symptom of the breaking up of the Republic. My advice to President Obama? Leadership takes listening first and foremost. We aren’t connecting with your speeches. Try hearing us.

Publius

Missed Insult

January 15, 2010


This past week, for a day or two, the sensationalism of comments about President Obama that Senate Leader Harry Reid had made in his recently released book made the media stories. Senator Reid pointed out the obvious about our culture. That part of Obama’s acceptance had to do with the subtleness of his minority side. Light skin, doesn’t speak with an African American intonation.

The media and all of America responded by demanding an apology for insulting Obama. A small attempt on the part of the Republicans to grab some payback for Senator Trent Lott’s innocent comments years ago was made. I suppose with the Tiger Woods story in our distant memory, this was as good as any misguided tabloid to grab a few viewers one evening or two. But the President responded appropriately. He was above it all. He saw it for what it was. He didn’t miss the reality. (Tiger is light skinned too after all).

The statements are a truthful reflection on our culture. How did Jesse Jackson and Alan Sharpton fair during their attempts at the higher office years ago? They had similar messages as President Obama, but we could not get past their “blackness”. If this is prejudice, well, ok. Let’s be honest. It was not the President who should have been offended. It was black Americans in general. And as I said, the President responded appropriately. To go further and point out the fullness of Reid’s comments would only have divided us more. Sometimes it is best to let sleeping dogs lie, as they say.

But again, for a few days, we focused in the wrong direction and made it a political party issue. And missed the truth of the insult.

Publius

Leading The Disheartened

January 3, 2010

This past fall, the “government experts” declared that hard times are ending. Economic numbers showed growth at 3.5% and unemployment dropped 0.2%. (Temporary hiring for the Christmas shopping season). But as talk shows debated the numbers, America was not celebrating. Public confidence in these experts waned.

Media sensationalism and political pundits have us caught up in endless debate with parroted arguments that the biggest threats to America include: spending; deficits; Chinese ownership of our debt; world terrorism; mid-east war; H1N1 pandemics; healthcare; and climate change. Government experts up to the President each drive the crisis in our country. What is the root cause? This threat is the American people’s disheartening attitude towards government leadership. It is growing and deepening, and soon will hit a tipping point.

I’m old enough to remember the recession of the 1970s and 1980s. Interest rates of 20%; unemployment above 10%; stagflation; gas lines; President Carter’s “Misery Index”. By any economic measure, that period was more severe than now. But back then, there was a sense of hope. We believed our leaders would come together and show us a way through. We knew we’d get out of it and we did. Today, people don’t see it that way. Have you heard someone say “hang in there…Obama and the Democrats will make it better”? Or, “just follow the Republicans, they know the way out of this”? Americans are beginning to think the problems won’t be solved.

The problems are overwhelming. And our government leadership proves every day an inability or incompetence to make things better. Where are the new solutions? Tax then spend more; regulate more; borrow more money for a bigger government, have historically proven not to work. Even William Bradford, the first leader of the Pilgrim settlement, early on learned that these methods result in failure, and quickly moved away from them. The American people know they are not the solution.

Borrowing, spending and saddling the engines of the economy via regulatory fiat, are an odd way to lead us out of debt and a slow economy. When your household debt grows beyond your ability to pay, you cut back expenses. To do otherwise worsens the problem. Do our leaders not have a conscious or understanding of the impact of these decisions? Do they believe America is strong enough to handle such abuse?

Did growing up in the post war expansion, roaring 80s and a country of unprecedented wealth and strength spoil our leaders? They’ve grown up with the sayings: “Strongest nation”; “Worlds only superpower”; “Highest standard of living.” Are our leaders that irresponsible to put these phrases and all that they stand for at risk? Or do they believe they could never erode the fundamentals that built the nation? Do the children of abundance believe the party can or should go on no matter what? Maybe being laid off, living paycheck to paycheck, or experiencing a foreclosure should be a requirement for governmental leadership. Maybe then they will not be so callous, and notice when the American people no longer believe in them.

Publius

Uphold Our Liberties

March 22, 2009

An article in the Army Times (9/30/08) stated that the “1st Brigade Combat Team will be under the day-to-day control of U.S. Army North, the Army service component of Northern Command, as an on-call federal response force for natural or manmade emergencies and disasters, including terrorist attacks.” The article goes on to describe its objectives to serve as a military police force. A most high principle of the victorious colonies was that a national standing army never be used for domestic law enforcement. This was reinforced and secured in 1878 by the passage of the Posse Comitatus Act and the Insurrection Act. These substantially limited the powers of the federal government to use the military for law enforcement. Our government has violated its own principles and laws. And “you” did not even know about it.

In the past few months we’ve seen the bailouts and the bailouts of the bailouts. Everyone points the fingers, but the truth is not spoken regarding these payoffs. The vast majority of these dollars are earmarks, pork and payback for election contributions. They also nationalize private industry – the government now owns controlling interest in our banks. These banks can tell you that 95 plus percent of the U.S. economy is based on small businesses of 100 employees or less. Less than 1% of the stimulus package helps these economic drivers. In the first 30 days of 2009, our government has spent more than what was spent in the previous eight years. Why are they selling us out while telling us this is change from the excesses of the past? It appears to be an orchestrated effort to take over the economy.

Recently, we’ve all heard the news about A.I.G. I personally am tired of rehashing the story. But there’s a side to the story that the press either omits or refuses to report. The dollars given A.I.G. included two things. First, the U.S. Government would own 79.9% of the company and oversee its governance. Second, as offered by the Treasury, signed by Gietner and Christopher Dodd, and approved by President Obama, retention bonuses were written into the contract. An interesting side note: Dodd and Obama both took campaign contributions from A.I.G. in excess of $100,000 this year. Dodd denied this at first on CNN, but when the truth came out stated that he “had misspoken”. But what makes this egregious is the movement in the Congress and Senate to break that contract via legislation. The basis of our nation’s legal system is “common law”. One of the principles of that law is to honor contracts and covenants. The government has again, chosen to violate constitutional principles and violate its own contract. If you don’t like the retention bonuses, you have only your own government to blame. They own the company and agreed to the bonuses. But like it or not, the atrocity is the government reneging on its own contract.

Allegiance to our Constitution preserves our liberties and way of life. Most of the problems and frustrations that trouble our republic are due to the tendency of our elected officials and judicial representatives to brush off or abuse constitutional law. Only fidelity to the Constitution will repair the damage done by our corrupted government.

As free people, we are all called to uphold and defend the principles that ensure our liberty. The U.S. Constitution, Bill of Rights, and Declaration of Independence contain and protect that liberty. Thus, it is the responsibility of every American to studiously familiarize himself with these principles. Even more importantly, it is the duty of each American to aggressively hold their elected representatives accountable to his or her oath to the Constitution. The U.S. Constitution is a contract made between the civil magistrates and “We the People”. If this contract can be broken by our elected officials trampling on the Posse Comitatus Act and the Insurrection Act, through the political payoffs of the stimulus and bailouts, and by demonizing executives and reneging on the contract they made with them, how much further will they go with ignoring or limiting your liberties?

Publius