Margaret Thatcher On The Income Gap

Since the Canadian Broadcast Corp has blocked our prior video clip of Maggie Thatcher, herein we enclose another great Maggie video:

Obama: "I Do Think At A Certain Point You've Made Enough Money"

When Mr. President leaves the teleprompter, his alter ego The Redistributor often comes out. Here he tells people he doesn't begrudge making an honest buck, but that at a certain point you've made enough money.

We look forward to discovering what our overlords believes that limit is. His campaign promise was $250,000 and below would be safe. So we're guessing "enough" is somewhere in the neighborhood of just north of twofity.

We eagerly await learning about our next social engineering experiment, oh Great Obamanation, ruler of The Borg.

To those of us without Obamanation's all seeing, all knowing vision, prepare to be assimilated.



HT: RG

Keynesianism Is So Nuanced

[This will be a multi-part series that discusses inflation, what money is and why it has value. We begin with some basics through the lens of Keynesianism's "attractiveness".]

I was on an email string recently about The Carnegie Endowment for International Peace's Uri Dadush. I made the statement that Dadush is simply a Keynesian, albeit one that is well connected and understands there are many difficult challenges that need to be addressed. In response to my email, a long-time friend of TILB and fellow liberty loving free marketer - though he is still finding his legs with regards to understanding the implications of his beliefs - responded to me that he has spoken at length with Dadush and that he's more nuanced and "complex" than being simply called a Keynsian. Here's a quote from Dadush's recent FT OpEd:

There are ways to mitigate the pain. For example, Germany and other countries could adopt more expansionary fiscal policies for a while. Or, more powerfully, the wider euro area could adopt more expansionary monetary policies for several years. Today, this second option is anathema as the “inflation fundamentalists” will have none of it.

Nuanced? I guess.

Here's what my friend said (mind you, he's an avowed libertarian - though he's still figuring himself out so to speak) - light editing for privacy reasons or clarification:

I met with the guy for 2 hours, and I would not classify him as such [a "strong Keynesian with fairly mainstream opinions"]. If anything, he is complex – and clearly what he says on CNBC and in NY Times oped is not what he can say behind closed doors. While Keynesian, he is not a classically academic Keynesian, sitting in a library dealing with only theory. He counsels governments facing massive social unrest and high unemployment, and he approaches his work with a much deeper appreciation for the human situation than we can. So while espousing money creation below, he was also very pragmatic with me about the moral hazard of this choice, the continued low interest rates, our over-reliance on debt, etc.

I am sympathetic with his situation. We often throw around our ideas without considering the reality of what will inevitably happen – at least in the short term – if our ideas were implemented. I know you will vehemently disagree with me on this, but the fact is that – again, in the short term – what you and I want ideally is economically wishful thinking and politically impossible. Yes, the opposite will bankrupt the world, and we are largely already insolvent. There’s no argument there. Should we suddenly balance our budget, shrink government dramatically, stop stimulus, war, and over-regulation, the result could be 50-60-70% unemployment rates – in the short run. I do believe the LT benefits of Austrian economics are obviously far superior to the Keynsian ponzi scheme.

However, no one talks about the transition, and what it would really mean for us. If you take a heroin addict, and suddenly “reform” him with complete withdrawal and going cold turkey, he will often die from this. His body cannot handle the shock.

Uri had just met with the Italian Finance Minister prior to seeing me – I can imagine that conversation. How do you convince someone like that that what he really needs is to leave the EU, get on the gold standard, balance his budget, cut taxes – and face assassination b/c 100 million are thrown into convulsions?

My point is that Uri deals with the reality of our current situation, while we do not. We read letters and books, then pontificate and rant without a good understanding of what it really means. It will kills us eventually, yes. But it will be a long, slow death probably instead of a quick one.

Lastly, I’ve read Ron Paul, Murry [sic] Rothbard, etc. They all talk about how wrong things are – and I agree with them. I have yet to see a transition plan, so if you know of anything they have written on how to get off the system we are currently addicted to, I’d love to read it.

I decided not to send him a reply by email. Instead, I decided to bring the discussion to TILB, as it's a more productive forum for this sort of thing. To be direct, I disagree with a number of his assertions.

In my opinion, what you described is in fact classic Keynesianism. No self respecting Keynesian would claim that running large deficits and printing money is a long-term viable solution or economically healthy approach. That is simply the tag line non-Keynsians use to belittle the Keynsian approach. It's the politicization the word "Keynesian" but not the reality. Dadush is a classic, behind-the-desk academic Keynesian. He provides advice based in theory as does every other economist, Austrian or otherwise.

The Keynesian argument is always more nuanced or "complex". The argument is generally that goverment needs to implement aggressive and targeted public spending policies during difficult economic periods because taking the hard medicine in the middle of a recession would (they believe) be too painful and counterproductive. By putting it into human terms it becomes very powerful (for obvious reasons) even if - in my opinion - the Keynsian trade is to attempt to avoid some human pain today in exchange for accepting much more human pain in the future.

What's here is tangible and it matters more to voters than tomorrow's pain.

So if we can just take a few easy money bong hits and confuse our body into thinking it's healthy, we can take the hard medicine then. We'll do what needs to be done, but just not yet. Tomorrow. Always some day in the future.

As you know, the issue is that the recession is not the problem, the recession is the cure. It's the cure to profligacy; a recession is simply a period of excess savings that offsets periods of excess spending and consumption.

Switching from a societal bias toward spending to one of savings is painful because society was confused by the profligacy into setting up a structure that serves society's apparent "needs" as if the profligate period is normal. The profligacy is full of false/unsustainable demand signals that trick people into creating/investing in the wrong kinds of businesses or in the wrong amount. The longer the cure is postponed by inflicting more easy money and socialist disease (e.g., Dadush's prescription), the more painful the necessary recession will be because the imbalances are greater and become more depended on.

It's not just imbalances as defined as switching from spending/borrowing to saving/investing. It's that entire industries were created to serve an unsustainable consumptive demand rather than productive advancement. It requires more than just saving new capital, but shifting existing capital from entire industries and possibly geographies to others. A human toll is left in the wreckage of these corrections. It is, however, unavoidable.

What is avoidable is compounding the problem through continued interference with the needed correction.

Bernanke/Bush/Obama's current postponement means the next recession (assuming we are - in fact - past "this one") will feel worse than this one. Their fight of postponement is really an attempt to induce even more capital to become malinvested toward less productive industries and to have us become even more dependant on unsustainable behaviors. So there will never be a period in which the hard medicine can be comfortably consumed because the hard medicine IS the recession and the imbalances it wants and needs to address continue to grow in the meantime. So avoiding taking the hard medicine means avoiding curing the disease; allowing it to metasticize, take root, grow and spread.

You know me well and you are correct: I do vehemently disagree with your statement. Short of a major North American landwar, there is virtually no scenario in which a society as productive as ours would experience anything like "50-60-70%" unemployment rates, even if one mistakenly changes the whole system in one yank.

Ron Paul and others have addressed transition plans. They logically begin with the easiest part: balancing the budget while cutting taxes. By taxing less and borrowing less, capital remains in private (productive) hands and out of public (unproductive) hands. Sounds hard, but if you are of the opinion that most of government is value-destructive, it's actually easy. First, bring the troops home and end the American military empire abroad (foreign military bases). Those two actions are somewhere in the $500 billion to $750 billion annually of savings (1/3 to half of our expected deficit this year and 100% of our deficit from three years ago). Other than for providing a platform for safe living and investment, military is a non-productive expense, by definition. Then end most of the "Department ofs", as I call them. Dept of Education, Dept of Interior, Dept of Energy, Dept of Homeland Security, etc. and slash the size of those you keep, emphasizing of course a strong defense (not offense - defense). This is key, bringing home the military does not mean having a weaker defense. It means changing the nature of it and allowing us to invest in true defense rather than wasting investment on overseas bases.

These cuts are - importantly - phased in but transparent and forecast so that the change is digestible.

That's the easy part. The harder part (though made much, much easier by having already shifted to a smaller government that runs a balanced budget) is moving to a harder currency. This involves ending the Fed and installing free banking, which means a banking system that doesn't "create" money with customer deposits. My personal view is the only way to do that is a slow, planned, well understood phase-in. It might take two decades to let happen so that the adjustment is manageable. I believe the huge benefits reaped from freeing capital from government hands would unleash such a lollapalooza of positives on society that shrinking the banking system would actually shift from an economic headwind to a tailwind by the latter years of the process.

As a final aside, in contrast to your assertion, I am not actually a government-installed-gold-standard man, because it relies on government to be well behaved. I am for market-based money, but that's a discussion for another day.

Jim Bunting Gives The Finger To...Well, To Everyone

...and we here at TILB fucking love it.

Before reading the below article, I didn't know jack about Jim Bunting save for one thing: he is retiring and his resignation has paved the way for the very real possibility that Ron Paul's son Rand Paul is elected to the U.S. Senate as Bunning's replacement.

That fact alone makes Bunning a hero in our eyes: even accidentally paving the way for potentially putting a Paul in the Senate is deserving of hero's praise.

But now we've learned one additional piecce of information about Senator Jim Bunning: he is single handedly holding up the extension (yet again!) of socialized unemployment and healthcare benefits. Workers already have had them extended from 26 weeks of state provided benefits to 26 weeks of state benefits plus 73 weeks from the Federal government! WTF!

Now without this extension, everyone is getting cut off once their current tier of benefits expires. While obviously it sucks tremendously for needy unemployed people, it is principled. All Bunting is saying is, (paraphrasing) "we need to cut an equal amount from somewhere else in the budget. I'm not going to be responsible for increasing the deficit any further given we already can't pay for what we have."

It's literally 99 to 1 in the Senate but it takes unanimity to extend an existing law without going through the traditional legislative process of actually passing a new law. As The Great Jim Bunning said on the Senate floor:

"If we can't find $10 billion to pay for something that we all support, we will never pay for anything on the floor of the U.S. Senate."

Amen Saint Bunning. Amen.

Oh, and because he's retiring and is basically untouchable as a result, he's literally flouting his opposition, including flicking off the media. Further, he actually told the Honorable Gentleman from Oregon, "Tough shit" when Senator Jeff Merkley criticized Bunning's stance.

I don't want to know anything else about the guy. Don't ruin this image of perfection.

I'm sure learning additional information would sully him in my eyes. But for now, he's perfect. On the one hand, he's going Mantan Moreland on them and putting his dick in the Senate's proverbial mashed potatoes while providing space for Rand Paul on the other.

Genius.

I'm gonna stick my dick in the mashed potatoes sound bite  Beastie Boys sound bites

Stay strong, Jim. Stay strong.

Here's the Yahoo! article.

[HT: TD]

The Fabian Socialists Are Winning

The Fabian Socialist movement, first begun over one hundred years ago, is moving faster today than ever before. The success of their slow evolutionary drive toward central planning was highlighted a few days ago when we presented our Depressing Chart of the Day, shown to the right. It shows that the total of federal, state and local government spending as a percent of GDP has skyrocketed over the past few years, approaching 50% of all GDP.

By coincidence, your intrepid author is in the midst of Hayek's "The Road to Serfdom". In the excellent book is the excerpt that follows. TILB highlighted several points below [all emphasis added], but most important is the emphasis on Germany in 1928 (immediately prior to Nazi rule).

Of additional note is the description on how socialism is most effective in a republic or democracy - by taking the power away from elected leaders and handing it to non-elected bureaucrats (a modern day example would be the Federal Reserve's central planning role in determining the amount and price of money).

The words that follow are from Hayek published in 1944.

We can rely on voluntary agreement to guide the action of the state only so long as it is confined to spheres where agreement exists. But not only when the state undertakes direct control in fields where there is no such agreement is it bound to suppress individual freedom. We can unfortunately not indefinitely extend the sphere of common action and still leave the individual free in his own sphere. Once the communal sector in which the state controls all the means, exceeds a certain proportion of the whole, the effect of its actions dominate the whole system. Although the state controls directly the use of only a large part of the available resources, the effects of its decisions on the remaining part of the economic system become so great that indirectly it controls almost everything. Where, as was, for example, true in Germany as early as 1928, the central and local government authorities directly control the use of more than half of national income (according to an official German estimate then, 53 per cent), the control indirectly almost the whole economic life of the nation. There is, then, scarcely an individual end which is not dependent for its achievement on the action of the state, and the "social scale of values" which guides the state's action must embrace practically all individual ends.

It is not difficult to see what must be the consequences when democracy embarks upon a course of planning which in its execution requires more agreement than in fact exists. The people may have agreed on adopting a system of directed economy because they have been convinced that it will produce great prosperity.

In the discussions leading to the decision, the goal of planning will have been described by some such term as "common welfare," which only conceals the absence of real agreement on the ends of planning. Agreement will in fact exist only on the mechanism to be used.

But it is a mechanism which can be used only for a common end; and the question of the precise goal toward which all activity is to be directed will arise as soon as the executive power has to translate the demand for a single plan into a particular plan. Then it will appear that the agreement on the desirability of planning is not supported by agreement on the ends the plan is to serve.

The effect of the people's agreeing that there must be central planning, without agreeing on the ends, will be rather as if a group of people were to commit themselves to take a journey together without agreeing where they want to go: with the result that they may all have to make a journey which most of them do not want at all.

That planning creates a situation in which it is necessary for us to agree on a much larger number of topics than we have been used to, and that in a planned system we cannot confine collective action to the tasks on which we can agree but are forced to produce agreement on everything in order that any action can be taken at all, is one of the features which contributes more than most to determining the character of a planned system.

It may be the unanimously expressed will of the people that its parliament should prepare a comprehensive economic plan, yet neither the people nor its representatives need therefore be able to agree on any particular plan. The inability of democratic assemblies to carry out what seems to be a clear mandate of the people will inevitably cause dissatisfaction with democratic institutions.

Parliaments come to be regarded as ineffective "talking shops," unable or incompetent to carry out the tasks for which they have been chosen. The conviction grows that if efficient planning is to be done, the direction must be "taken out of politics" and placed in the hands of experts-permanent officials or independent autonomous bodies [TILB - see the Federal Reserve for a modern day socialist example].

The difficulty is well known to socialists. It will soon be half a century since the Webbs began to complain of "the increased incapacity of the House of Commons to cope with its work."' More recently, Professor Laski has elaborated the argument:

"It is common ground that the present parliamentary machine is quite unsuited to pass rapidly a great body of complicated legislation. The National Government, indeed, has in substance admitted this by implementing its economy and tariff measures not by detailed debate in the House of Commons but by a wholesale system of delegated legislation. A Labour Government would, I presume, build upon the amplitude of this precedent. It would confine the House of Commons to the two functions it can properly perform: the ventilation of grievances and the discussion of general principles of its measures. Its Bills would take the form of general formulae conferring wide powers on the appropriate government departments; and those powers would be exercised by Order in Council which could, if desired, be attacked in the House by means of a vote of no confidence. The necessity and value of delegated legislation has recently been strongly reaffirmed by the Donoughmore Committee; and its extension is inevitable if the process of socialisation is not to be wrecked by the normal methods of obstruction which existing parliamentary procedure sanctions."

And to make it quite clear that a socialist government must not allow itself to be too much fettered by democratic procedure, Professor Laski at the end of the same article raised the question "whether in a period of transition to Socialism, a Labour Government can risk the overthrow of its measures as a result of the next general election"-and left it significantly unanswered.

It is important clearly to see the causes of this admitted ineffectiveness of parliaments when it comes to a detailed administration of the economic affairs of a nation. The fault is neither with the individual representatives nor with parliamentary institutions as such but with the contradictions inherent in the task with which they are charged.

They are not asked to act where they can agree, but to produce agreement on everything--the whole direction of the resources of the nation. For such a task the system of majority decision is, however, not suited. Majorities will be found where it is a choice between limited alternatives; but it is a superstition to believe that there must be a majority view on everything.

We are fast approaching a tipping point. In the course of a decade, we have gone from the government representing an already egregious one third of economic outpoint to one that represents 44% of our economy. It seems likely not to shrink as the current administration clearly believes in its just and beneficent wisdom and will impose that wisdom upon us, whether we want it or not.

To be fair, the trend of the graph at the top of this page is party neutral - both donkeys and elephants share the blame - having built over the course of 80 years. The acceleration, though, is perhaps most frightening of all. TILB is not sure what will cause a secular shift back toward freedom and away from centrally planned oppression. We suspect that, in the end, the will of the people must exert itself and reclaim lost liberty.

Lord hear our prayers...

FDIC's Booty From Failed Banks Includes "Marijuana-Reeking Tour Bus"

TILB is so pleased the FDIC has socialized the capitalist function that depositors should play: it enables banks to make such unusually wonderful loans. We wish that instead of selling or auctioning properties off, the FDIC undertook a lottery system. Even better, a "dibs" system. Dibs on the eight foot palm tree!

Marijuana-Reeking Tour Bus, Red Ferrari Are FDIC’s Crisis Booty
2009-12-22 05:01:01.0 GMT

By James Sterngold
Dec. 22 (Bloomberg) -- The financial crisis that popped the
real estate bubble and pushed U.S. bank failures to a 17-year
high landed the Federal Deposit Insurance Corp. a rapper’s tour
bus that reeked of marijuana.

“It smelled so bad of pot after one tour that they had to
completely pull out most of the interior and replace it,” said
Jerry Jenkins, who sold the bus at Penny Worley Auctioneers
after the FDIC acquired it in the collapse of an Atlanta bank.
“By the time we got it, it was almost brand-new.”

Worley Auctioneers, based in Maineville, Ohio, has the FDIC
to thank for the bus, not to mention a red 2001 Ferrari, an
eight-foot palm tree and stacks of unwanted office furniture --
the detritus of 140 banks closed by the agency this year. Worley
Auctioneers, Rick Levin & Associates and Tranzon Asset
Strategies, the three firms hired by the FDIC to sell
furnishings from shuttered branches and warehouses stuffed with
repossessed collateral, are having a banner year.

The FDIC has reaped $6.2 million from the sale of so-called
other assets in 2009, six times the total last year, according
to the agency. While that’s a sliver of the $38.3 billion of
failed bank assets that the FDIC held as of Sept. 30, any cash
is useful after the surge in crippled lenders sent the FDIC’s
deposit insurance fund into the red.

“Business has been good,” said Penny Worley, who opened
her firm in 1993. “This can be a daunting task, because there
are so much and so many different things. There’s an occasional
Dali. There are rare gold coins.”

ATM Machine, Microwaves

Worley’s Web site offers a snapshot:
-Laptops, desk chairs and an ashtray, complete with
stubbed-out cigarettes, from First Priority Bank of Bradenton,
Florida, which failed in August 2008, and Freedom Bank, also in
Bradenton, shut three months later.
-A Diebold ATM machine -- empty, presumably -- courtesy of
Cooperative Bank of Wilmington, North Carolina, shuttered in
June 2009.
-Ten refrigerators, plus assorted toasters and microwave
ovens, from Vineyard Bank, the Rancho Cucamonga, California-
based lender that lost more than $100 million last year as
builders defaulted on construction loans. It was shut in July [TILB readers should be quite familiar with Vineyard].

Then there was the tour bus, acquired by Omni National Bank
in repossession from a leasing company before the Atlanta-based
lender went bust in March, Jenkins said. The vehicle, which
sported 12 coffin-like bunks, each with flat-panel televisions,
sold for $310,000 to a company in Nashville, Tennessee, that
leases buses to touring musicians.

Drive-Away Purchase

Financial assets such as real-estate loans are sold
separately through auctions that can involve complex financing
and profit-sharing arrangements. “Other assets” sales are as
straightforward as old-fashioned live auctions.

When the electronic hammer comes down, a process conducted
online, the deal is done and the auctioneers try to get the
merchandise, and the customers, out the door as swiftly as
possible. “PLEASE DO NOT BID if you are unable to remove your
items during the scheduled removal times,” the auction company
warns bidders.

“People get what we call auction frenzy,” Jenkins said.
“We don’t want to give them a week to think about it
afterwards, so items usually have to be picked up within one
day.”

Most come prepared. That was the case with the Ferrari, a
360 Spider F1 with 27,363 miles that sold earlier this year. The
buyer paid $61,000 for a car that New Frontier Bank of Greeley,
Colorado, had repossessed from an auto dealer that had defaulted
on a loan. The buyer arrived on a red-eye flight, paid cash, and
drove away, Jenkins said.

Drag-Racing Truck

New Frontier, which cost the insurance fund $670 million,
also left the FDIC with a 1,000-horsepower drag-racing Chevrolet
pickup truck, and almost 1,000 milking cows. Sales from assets
of other failed banks have included armored trucks, industrial
equipment and Thomas H. Benton lithographs. The palm tree
fetched $105.

The savings-and-loan and banking crisis of the 1980s
produced even more unusual auctions, said Tom Moran, the FDIC’s
resolutions and closing manager, based in Dallas. Back then, the
FDIC ended up with items that ranged from yachts, antiques and
luxury homes to paintings and sculptures, he said.

“I personally went in and found safety deposit boxes with
things like collector-type guns,” Moran said.

Some of the one-of-a-kind items can provide special
challenges. The FDIC is trying to unload a framed 10-by-70-foot
watercolor mural by California artist Millard Sheets, Moran
said, a sort of graphic history of California. It was seized
when PFF Bank and Trust, a $3.7 billion bank in Pomona,
California, failed in November 2008, leaving the insurance fund
with $700 million in losses.

“It’s framed right to the wall, and we’re not sure how to
get it off and protect it,” Moran said. “This is going to take
a unique-type buyer.”

*T
For Related News and Information:
Stories on FDIC: NI FDIC
Stories on bank failures: NI BANKFAIL
On the credit crisis: NI CRUNCH BN
Rescue programs: RESQ
Stories on banks: NI BNK
Today’s top financial stories: FTOP
*T

--Editors: Alec McCabe, William Ahearn.

To contact the reporter on this story:
James Sterngold in New York at +1-212-617-4946 or
jsterngold2@bloomberg.net

To contact the editor responsible for this story:
Alec D.B. McCabe at +1-212-617-4175 or
amccabe@bloomberg.net.

[HT: TW]

What Side Of History Do You Want To Be On?

Representative Paul Ryan gives an impassioned plea to vote for liberty, to vote for freedom, and to vote against statism and creeping dependancy. It's a solid use of two minutes of your time - sadly, his fellow Congressmen and women failed to fulfill their duty and protect citizens from their government.

The Public Option; TILB Debates Government Spending And Socialized Health Care With The Left: Part I

A long Time TILB friend and hard leaning leftist that we will refer to as Batfish took up the baton for socialized health care and made an argument for why government spending is not, in fact, simply taking money from your neighbor (TILB blogged our original argument here for government spending and here for health care).

Below we present a back and forth between TILB and Batfish (and a few brief interludes by OB).

We edited down some of the volume of the content, but we believe the main discussion points remain intact. Without getting too defensive before the main course is served, we feel it's necessary to point out that Batfish often tries to lump TILB in with the GOP, which is not at all an accurate representation of our views. We just want that out there before folks read on and think Batfish's characterization of our views is accurate (it is often not). That said, his points still merit attention as they are deeply considered and indicative the way many well intentioned folks think.

Part I of our debate is below, with an initial focus on the health care debate. Part II to follow in the not too distant future. Let us know where you stand!

Batfish email to TILB and OB:

It's fun to watch the conservative movement kill itself. Please don't stop. And by all means keep on trying to say taxation is theft and there's no such thing as government spending. (Among other things...)

Planet Wingnuttia is getting more and more entertaining every day from here on Earth.

Demagoguing end-of-life counseling issues??? How repugnant. Health reform is unconstitutional? Riiiiight. Death panels? "Im losing my country?" My GOD you people deserve to lose this one. Your strategies pretty much guarantee it at this point. There will be a health care reform law. Mark my words. There has to be. The current system is broken, no serious person disputes that.

WTF is wrong with people? You guys cant possibly support all this right-wing populist anti-government nonsense, even if you have what you perceive to be a self-interest in doing so. There is no evidentiary support for hard core libertarian economics. NONE. You two are much, much smarter than that. There would be no "free market" that is actually also FAIR without a government as the trustee and participant - much more than just referee. You damn well know that. Cmon, you can do better. And yet .....

Whatever. Here's an investment tip: lots of people are buying popcorn right now. Keith and Rachel and John Stewart and Steven Colbert are delivering big time, not to mention Kos and Crooksandliars and the rest of the blogosphere. Butter and salt would make good investments at this moment too come to think of it. It will expand your property base which you can then defend through your novel constitutional interpretations, and then we'll buy MORE popcorn and win MORE seats in legislatures. The wingnuts will keep blowing their gaskets, we'll relish the entertainment value of it, then you can invest more in popcorn. See how it works?

-Batfish

[here TILB cuts down on some cut and pasted text and instead just provides the headline and links to a series of articles Batfish included in his email]

The 'Tea Party' nexus: Mainstream conservatives empowering far-right extremists who want a new civil war
By David Neiwert Tuesday Aug 11, 2009 12:00pm
http://crooksandliars.com/david-neiwert/tea-party-nexus-mainstream-conservat
---
NH Teabagger on illegal immigrants: 'Send them home with a bullet in the head'
By David Neiwert Tuesday Aug 11, 2009 5:00pm
http://crooksandliars.com/david-neiwert/nh-teabagger-illegal-immigrants-send
---
"Death Panels" - How Rovian
August 11, 2009
by Dave Johnson
http://www.seeingtheforest.com/archives/2009/08/death_panels_ho.htm
---
'Concerned father' on Fox: Obama's health-care reforms 'sentencing our families to death'
By David Neiwert Monday Aug 10, 2009 1:00pm
http://crooksandliars.com/david-neiwert/concerned-father-fox-obamas-health-c
---
The Lies Never Cease To Astonish
August 8, 2009
By Dave Johnson
http://www.seeingtheforest.com/archives/2009/08/the_lies_never.htm
---
Whistleblower: Insurance firms ‘very much’ behind town hall disruptions
By David Edwards and Daniel Tencer
Published: August 11, 2009
http://rawstory.com/08/news/2009/08/11/whistleblower-insurers-put-profits-before-care/

Batfish sent a quick follow-up email with these two links and the text "Just getting started."

http://www.huffingtonpost.com/2009/08/12/jonathan-cohn-tells-colbe_n_257336.html
http://crooksandliars.com/john-amato/jon-stewart-crazed-town-hall-protesters

[there are many more articles Batfish sent us, but for the sake of space, we stop adding them here. If you'd like to see the rest of the links, let us know and we'll forward them to you. The sample we included is indicative in that it basically is left-leaning bloggers saying that right leaning folks are a) misframing the health care issue; b) ginning up false anger; and c) profit driven and/or corporate slaves]

OB brief interlude back to Batfish

Interesting. I have not heard most of those "lies" and probably agree that they are false, but have some truth behind them as government healthcare always ends up in some form of rationing, see Canada and France.

The biggest lie pushed by Obama is that his plan is "reform." It is not reform, but change. Reform would be a very different plan and a good thing, but he has to pander to many special interests, both corporate and union. While his plan has some reforms in it, it is not in whole reform, but a move towards a government run plan.

Batfish replied to OB with the following (this is what finally set TILB off):

A "government run plan" ........ so you want to do away with Medicare and the VA? Make our veterans duke it out on the private markets such as exist right now? Do you think they would have a problem with pre-existing conditions? Not pretty.

Personally Id support single payer. Much of the scare stories about rationing in Canada are false. Most Canadians like their system and think we are "off our meds" so to speak. ... The much-dreaded Michael Moore has covered all this but he's been censored out of the whole discussion, as has single-payer. That would be change as opposed to reform.

Anyhoo there is no easy answer to all of this, and no system is perfect but it's good to see some rationality here. Id just like to see the perfect not made the enemy of the good, and I think there is something to be said for noblesse oblige. The commons really does benefit all. The reforms currently under proposal take us in the right direction. There is a way to do this right and if we can have a functional conversation about it and dispense with all the hissy fits and pearl-clutching and fainting couches, we might just get somewhere.

TILB Loses their ability to stay above the fray and responds with the following:

There’s no such thing as a private insurance market, so who knows? Insurance, other financial companies, education, and defense are the four most regulated industries in America. Utilities are in the argument as well. I’d say three of those are amongst the top five most broken industries in our nation. Probably not a coincidence. [After sending that, we thought to come up with another industry that constantly comes up short for its customers. We came up with air travel, also an incredibly heavily regulated industry...pattern continues]

Batfish replied with a cut and paste article that we basically have to show in its entirety, because he later references it several times. We believe it frames the context of Batfish's beliefs fairly well:

Well if you are partaking in all the profit-making festivities, I can certainly see why you dont want the government involved. After all, what's wrong with lining up in the rain for volunteer care in animal stalls? Is this a great country or what?

http://videocafe.crooksandliars.com/heather/rachel-maddow-show-wendell-potter-health-c

Rachel Maddow Show: Wendell Potter on the Health Care Industry Putting Soaring Profits Before People
By Heather Wednesday Aug 12, 2009 11:00am

Rachel Maddow talks to whistleblower Wendell Potter about the health care industry's rising profits while more and more Americans lose their health care insurance.

MADDOW: Are you by any chance a health insurance company executive? No? Me neither. And you and I, therefore, even though I know nothing else about you, you and I have one thing in common for sure. We are both in the wrong line of work.

SEC filings show that between the year 2000 and the year 2007, profit of the country‘s 10 largest health insurance companies rose 428 percent. In 2000, they had $2.4 billion in profit. By 2007, it was $12.9 billion.

Now, of course, this is America, we are capital C “Capitalists,” nobody begrudges anyone a ginormous profit, particularly if they‘re serving an important national need, like providing health insurance to the American people.

So, while the 10 biggest health insurance companies were seeing their profits rise over 400 percent between 2000 and 2007, how were they doing at serving that important national need? How were they doing at the whole providing health insurance to the American people thing? Eww! Apparently, while they quadrupled their profits between 2000 and 2007, the number of Americans without health insurance grew by 19 percent.

That seems bad. But not for everyone - also by 2007, the CEOs of the 10 largest health insurance companies were taking home an average compensation of $11.9 million each every year, while the number of Americans without health insurance for whom a burst appendix can mean bankruptcy has gone through the roof.

It was the insurance industry that bankrolled efforts to kill the last effort of health care reform in Bill Clinton‘s first term. And now, the industry says they‘re OK with reform of a sort. They just want to make sure that they don‘t get any competition from a non-profit government-run insurance plan that patients could opt into if they didn‘t like what the private sector was dishing out. You know, if I was a health insurance company executive, I‘m sure I would want that, too.

Joining us now is a former health insurance executive-turned-whistle blower, his name is Wendell Potter, and he was the head of public relations for CIGNA, one of the nation‘s largest insurers. He‘s now a senior fellow on health care at the Center for Media and Democracy.

Mr. Potter, thank you very much for joining us.

WENDELL POTTER, CIGNA FRM. HEAD OF PUBLIC RELATIONS: Thank you for the invitation.

MADDOW: The leader of America‘s Health Insurance Plans, the industry association, says that the health insurance industry is being unfairly blamed as the president and Congress try to reform the health care system.

Do you think it is unfair to single them out for blame?

POTTER: I think that she‘s doing what she‘s paid to do. I think that the health insurance industry deserves a great deal of the blame because they‘re very much behind the town hall disruptions that you see and a lot of the deception that‘s going on in terms of disinformation that many Americans apparently are believing.

MADDOW: Why do you think it is that profits for health insurance companies have ballooned so dramatically over the past seven years or so? We‘ve seen since 2000 to 2007, we‘ve seen such a dramatic increase in profits. Why is that?

POTTER: Well, for one thing, since 1993, in particular, the amount of money that the insurance companies take in on premiums, less and less of that is going—they‘re using it to pay medical claims—in 1993, it‘s about 95 percent. In a couple years ago, it was down to just around 80 percent. So, that‘s one way.

Another is that they kick sick people off the rolls when they do get sick or when people get injured—either through, whether they have bought their insurance through the individual market or through small employers.

It‘s—and also, they‘re paying fewer claims.

MADDOW: Well, if the government were to provide a health insurance option to the public, for example, like a widening of Medicare so that anybody could opt into it if they wanted to do—could private insurance companies compete alongside a government-run non-profit plan like that?

POTTER: Well, they could, absolutely. I‘ve seen the health insurance industry change its business models many, many times. The insurance companies who operate now are very different from the companies that operated a few years ago. They adapt very quickly. And the one thing they know how to do is make money.

MADDOW: You worked for CIGNA for 15 years, you left last year.

What caused you to change your mind about what you were doing and to leave?

POTTER: Well, two things. One, it was kind of gradually. One instance or in one regard because I was becoming increasingly skeptical of the kinds of insurance policies that the big insurance companies are promoting and marketing these days. And they‘re really pushing more people into the so-called consumer-directed plans that feature high deductibles, and that is a leading reason why so many more people are in the category of the underinsured.

The other thing that really made me make this final decision to leave the industry occurred when I was visiting family in Tennessee a couple of summers ago, and I picked up the local newspaper and saw a story about the health care expedition that was being held across the state line in Virginia, in the coal mining area in southwest of Virginia. So, out of curiosity, I just went up there to check it out and was absolutely dumbstruck when I went through the fairground gates. This is being held at the Wise County fairground.

And what I saw when I went inside the fairground‘s gates were hundreds and hundreds of people who were lined up, waiting in the rain, to get care that was being provided to them by volunteer doctors throughout the state of Virginia in animal stalls. Other volunteers had come previously to scrub down the animal stalls to make sure that they were sanitary enough for these doctors to treat people who otherwise couldn‘t get any care.

MADDOW: And this is the system that the health industry has been able to construct and lead us into over the past—over the past generation and that they‘re fighting so hard to preserve now.

POTTER: That‘s right.

MADDOW: Wendell Potter, senior fellow on health care at the Center for Media and Democracy, a man who‘s been through a very big change in his life in recent years—thanks very much for joining us, sir.

POTTER: Thank you, Rachel

Batfish followed up that email with this one, which we've edited down to take out another cut and paste article (leaving in the subject line, link, and last paragraph since it gives context to Batfish's final statements):

Even I am pretty gobsmacked by all this ... Wow.

http://www.dailykos.com/storyonly/2009/8/12/765379/-Who-are-the-Shouters

Who are the Shouters?
by Hunter
Wed Aug 12, 2009 at 07:46:03 AM PDT

Standing two feet from the senator, Craig Anthony Miller, 59, shouted into his face, “You are trampling on our Constitution!”

You might ask yourself why, of all possibilities, reforming America's healthcare system is the thing that "tramples on the Constitution" or "leaves the existence of the Republic at risk." You might ask this, because you're probably not insane. But again, this matches what we've been seeing in every "deather" protest so far --people angrily denouncing government intervention and "socialized medicine" -- but they all love Medicare. They don't want government to supposedly decide who's too expensive to keep alive, with visions of "death panels" and the like -- but insurance companies are doing that now, all the time, and there's nary a peep about that. The opposition, in other words, doesn't know the first damn thing about the thing they're supposedly protesting.

The hostility goes back to what I was pondering in my Sunday essay: that the aggressive, furious attempts to even shut down the possibility of a political discussion is reminiscent of the anti-desegregation movement, a point that becomes noteworthy when you aggregate the motives of the "birthers", who loudly deny Obama's citizenship, the "teabaggers", who loudly declare that the same taxes they paid under Bush are tyrannical under Obama, the "deathers", who loudly assert that healthcare reform is secret plot to euthanize seniors and others that the government deems unproductive. None of these positions makes a lick of sense or has any evidence to back it up, but in large part it is the same group of hard-right, almost entirely white conservatives that believes all three at once. If you believe the shouters themselves, in their own words, the healthcare debate isn't about healthcare but about a conspiratorial government and the end of the Republic.

This is, by definition, a far-right position, and less charitably a batshit insane one, and that it has managed to make it so far and be featured so prominently is testament to just how completely the farthest of the far right has captured the Republican party.

At this point, as you might imagine having perhaps followed TILB for some time, we could no longer sit by idly and not respond. Finally the debate began to rage. We will save the bulk of it for Part II, but here are a few appetizers:

It’s kind of disappointing that the argument that the pro socialized health care crowd wants to address is not the argument of why putting the government in total control of something they already have shown an utter lack of ability at is a good idea. Everyone already knows the answer to that, so instead, they want to convince people that are reasonably upset that they shouldn’t be upset because some other portion of upset people are “organized”. I’m a little surprised that organized protest is something the left frowns upon, given that’s their bread and butter.

In any case, this has nothing to do with the core argument: the portion of health care that government is already in charge of is an abject failure so giving them the rest of the system is literally insane (per Ben Franklin, the definition of insanity is doing the same thing over and over again and expecting it to come out different). If Franklin's right, then this is insanity magnified: we’re not just doing it again, we're doing it bigger; we're giving the government more responsibility! I also think the argument that Obama made that health care is a “right” is an immoral argument. Goods and services cannot be a “right”. They are not inalienable. The only way to provide for that “right” is to take liberty from someone else to pay for it. It may be something we choose to provide, but it is anything but a “right.” This is the discussion that should be taking place, but both sides prefer distraction from it, especially the left given it will undress the reality that this is simply another (although on giant scale) unfunded mandate that will result in taking enormous gobs of earnings and savings from some people and granting it to others.

Batfish back at TILB

Well you argument is logically coherent but I maintain rests on unfounded assumptions. If Medicare and the VA are such abject failures why do people like them so much? Admittedly they are costly and I'll admit that nothing is free. But I have tried to address the redistribution problem by pointing out what is sometimes referred to as "mutual reciprocal advantage" esp. in the context of zoning laws. By your argument, all zoning laws are unconstitutional takings of private property. The Supreme Court long ago dispensed with that claim in the line of cases starting with Pa. Coal v. Mahon and its progeny, where the doctrine of mutual reciprocity of advantage supersedes the idea that anyone's property rights are being violated by zoning laws. All property owners benefit from an ordered system of managing real property. Similarly, all benefit from a system of health care that prioritizes services over profits. It doesnt eliminate profits, and what is being proposed is not total government control.

The "rights" debate is the subject of another conversation - for now it's well to ask why property rights should be more fundamental than other rights. If a corporation claims the right to prevent you from drinking water out of a public waterway because they have staked some private claim to it, have your rights been violated? If you then sue and get a court to enjoin a corporation against preventing you from drinking that water, have the corporation's rights been violated? Who owns that water in the first place, and are those ownership rights transferable? Does anyone own the oxygen in the air? How about the genetic information contained within agricultural crops that have taken millenia for indegenous farmers to develop? It's onething to speak in general principles and it's comforting to try to deduct universal principles from them, but it gets alot more complicated when you hit the -road with your rubber.

TILB, diving at the keyboard, began the responding volley with the following paragraph. The balance of the debate will be in Part II...

I don't think it's as complicated as you want it to sound. The air - a shared property - is not owned by any single person and thus can be reasonably regulated, though I have certain rights within the airspace above my property. Health care is not a shared property. If, as I believe you are saying, health care is subject to the same concepts as eminent domain, then I guess you advocate forfeiting your right to your own being if the government sees fit to take your being for public use. Not my cup of tea, personally.

Stay tuned for more in Part II. We are just heating up, I assure you.

Let us know where you stand.

Obama Compares Public Health Care Option To The Success Of The US Postal Service

In the below clip, answering a Town Hall questioner who worries about the public health care "option" suffocating out private insurance, President Obama replies with an analogy to the package and letter shipping industry, "UPS and FedEx are doing just fine. Right? It's the post office that's always having problems."

We saw this live and quickly thought to ourselves three things:

1) Shock Phase: "wha, wha, what?! Did you just make the argument that government insurance would be akin to and inherently flawed like the US Postal Service? I'm sure someone in your office vetted this analogy ahead of time; how did you let this happen?"

2) Practical Phase: "I don't often wait in lines at FedEx (actually, they create all sorts of convenient innovative alternatives to waiting in lines) but I sure do at the post office. Extrapolating that to health care..."

3) Realization Phase: "In fact, UPS and FedEx are not able to compete with the USPS in the USPS's core business of regular mail because the USPS operates in a manner that creates value destructive returns on capital; so is your point that public health care will similarly crowd out private health care in core functions?"

Eek.

This whole debate frightens us on a number of levels, not least of which is that the proponents of public health care seem to want the debate not to be about public health care itself, but to be about their perception of fake anger at the Town Hall meetings. As if to convince the majority of America, which is legitimately worried about the creeping death of socialism, that their worries are illegitimate because the Town Hall protests are too angry and too organized.

Who cares about Town Hall meetings? These distraction arguments have nothing to do with the actual merits of health care reform or socialized health care. TILB will address the actual merits tomorrow (though the Whole Foods founder and CEO did a great job elucidating the dangers of public health care already).

For now, we leave you with the source clip for President Obama's frightening analogy of public health care to the US Postal Service:




Hat Tip: Ernie.

Whole Foods CEO John Mackey Comes Out Swinging Against "Obamacare"

John Mackey, purveyor of organic food to hippies everywhere, comes out guns blazing in a WSJ OpEd taking on public health insurance. He begins by making the point that socialism's inevitable end is failure. He goes on to note that the more government involvement we have, the lower quality service we receive per dollar. In fact, he argues the solution is less government, more freedom, more personal accountability, and more personal responsibility.

As we occasionally do with OpEds only, we show it below in its entirety. We strongly encourage you to pay homage to the WSJ as they continue to be, by far, the best provider of business news coverage in America. They are quickly closing the NY Times' lead on mainstream geopolitical coverage as well.

AUGUST 11, 2009, 7:30 P.M. ET
The Whole Foods Alternative to ObamaCare;
Eight things we can do to improve health care without adding to the deficit.

By JOHN MACKEY

"The problem with socialism is that eventually you run out
of other people's money."

—Margaret Thatcher

With a projected $1.8 trillion deficit for 2009, several trillions more in deficits projected over the next decade, and with both Medicare and Social Security entitlement spending about to ratchet up several notches over the next 15 years as Baby Boomers become eligible for both, we are rapidly running out of other people's money. These deficits are simply not sustainable. They are either going to result in unprecedented new taxes and inflation, or they will bankrupt us.

While we clearly need health-care reform, the last thing our country needs is a massive new health-care entitlement that will create hundreds of billions of dollars of new unfunded deficits and move us much closer to a government takeover of our health-care system. Instead, we should be trying to achieve reforms by moving in the opposite direction—toward less government control and more individual empowerment. Here are eight reforms that would greatly lower the cost of health care for everyone:

• Remove the legal obstacles that slow the creation of high-deductible health insurance plans and health savings accounts (HSAs). The combination of high-deductible health insurance and HSAs is one solution that could solve many of our health-care problems. For example, Whole Foods Market pays 100% of the premiums for all our team members who work 30 hours or more per week (about 89% of all team members) for our high-deductible health-insurance plan. We also provide up to $1,800 per year in additional health-care dollars through deposits into employees' Personal Wellness Accounts to spend as they choose on their own health and wellness.

Money not spent in one year rolls over to the next and grows over time. Our team members therefore spend their own health-care dollars until the annual deductible is covered (about $2,500) and the insurance plan kicks in. This creates incentives to spend the first $2,500 more carefully. Our plan's costs are much lower than typical health insurance, while providing a very high degree of worker satisfaction.

• Equalize the tax laws so that employer-provided health insurance and individually owned health insurance have the same tax benefits. Now employer health insurance benefits are fully tax deductible, but individual health insurance is not. This is unfair.

• Repeal all state laws which prevent insurance companies from competing across state lines. We should all have the legal right to purchase health insurance from any insurance company in any state and we should be able use that insurance wherever we live. Health insurance should be portable.

• Repeal government mandates regarding what insurance companies must cover. These mandates have increased the cost of health insurance by billions of dollars. What is insured and what is not insured should be determined by individual customer preferences and not through special-interest lobbying.

• Enact tort reform to end the ruinous lawsuits that force doctors to pay insurance costs of hundreds of thousands of dollars per year. These costs are passed back to us through much higher prices for health care.

• Make costs transparent so that consumers understand what health-care treatments cost. How many people know the total cost of their last doctor's visit and how that total breaks down? What other goods or services do we buy without knowing how much they will cost us?

• Enact Medicare reform. We need to face up to the actuarial fact that Medicare is heading towards bankruptcy and enact reforms that create greater patient empowerment, choice and responsibility.

• Finally, revise tax forms to make it easier for individuals to make a voluntary, tax-deductible donation to help the millions of people who have no insurance and aren't covered by Medicare, Medicaid or the State Children's Health Insurance Program.

Many promoters of health-care reform believe that people have an intrinsic ethical right to health care—to equal access to doctors, medicines and hospitals. While all of us empathize with those who are sick, how can we say that all people have more of an intrinsic right to health care than they have to food or shelter?

Health care is a service that we all need, but just like food and shelter it is best provided through voluntary and mutually beneficial market exchanges. A careful reading of both the Declaration of Independence and the Constitution will not reveal any intrinsic right to health care, food or shelter. That's because there isn't any. This "right" has never existed in America

Even in countries like Canada and the U.K., there is no intrinsic right to health care. Rather, citizens in these countries are told by government bureaucrats what health-care treatments they are eligible to receive and when they can receive them. All countries with socialized medicine ration health care by forcing their citizens to wait in lines to receive scarce treatments.

Although Canada has a population smaller than California, 830,000 Canadians are currently waiting to be admitted to a hospital or to get treatment, according to a report last month in Investor's Business Daily. In England, the waiting list is 1.8 million.

At Whole Foods we allow our team members to vote on what benefits they most want the company to fund. Our Canadian and British employees express their benefit preferences very clearly—they want supplemental health-care dollars that they can control and spend themselves without permission from their governments. Why would they want such additional health-care benefit dollars if they already have an "intrinsic right to health care"? The answer is clear—no such right truly exists in either Canada or the U.K.—or in any other country.

Rather than increase government spending and control, we need to address the root causes of poor health. This begins with the realization that every American adult is responsible for his or her own health.

Unfortunately many of our health-care problems are self-inflicted: two-thirds of Americans are now overweight and one-third are obese. Most of the diseases that kill us and account for about 70% of all health-care spending—heart disease, cancer, stroke, diabetes and obesity—are mostly preventable through proper diet, exercise, not smoking, minimal alcohol consumption and other healthy lifestyle choices.

Recent scientific and medical evidence shows that a diet consisting of foods that are plant-based, nutrient dense and low-fat will help prevent and often reverse most degenerative diseases that kill us and are expensive to treat. We should be able to live largely disease-free lives until we are well into our 90s and even past 100 years of age.

Health-care reform is very important. Whatever reforms are enacted it is essential that they be financially responsible, and that we have the freedom to choose doctors and the health-care services that best suit our own unique set of lifestyle choices. We are all responsible for our own lives and our own health. We should take that responsibility very seriously and use our freedom to make wise lifestyle choices that will protect our health. Doing so will enrich our lives and will help create a vibrant and sustainable American society.

Mr. Mackey is co-founder and CEO of Whole Foods Market Inc.