text:
Heartland Daily Podcast: Victor Davis Hanson- Educating for a Self-Governing Republic
Victor Davis Hanson is a well-known historian, commentator, and senior fellow at Stanford University's Hoover Institution. He is collaborating with Pajamas Media on a project called Freedom Academy- an online resource that allows the average reader to delve into a brief survey of western civilization and values. Freedom Academy is an online interactive experience designed to differentiate itself from traditional classrooms and other online learning resources.
Why did Hanson choose this particular project? Over the years, he's witnessed the degradation of the university system, and also the increasing historical illiteracy among us. Freedom Academy is an attempt to interest people in history, particularly western civilization, and defend it using historical facts. He wants to apply an abstract standard to history and culture.
Freedom Academy's model is different from the traditional university or online lecture; it's conversational, and they use a sophisticated animation technique to represent images behind the speaker as he is talking. All of Hanson's efforts are in pursuit of re-developing our society's ability to self-govern and to learn how to do that through learning history.
Listen to this interesting and fruitful podcast in the player above.
[Subscribe to the Heartland Daily Podcast for free at this link.]
Obama's Shallow Inequality Speech And The Presidency That Might Have Been
President Obama's speech yesterday on inequality is being lauded as one of the best of his life, by people who paid attention to it. It's a sad speech to read, in some sense, since it contains within it the promise of a presidency that we never saw come to fruition – the sort of policy effort that might have been launched to bipartisan success in the first year of his presidency, instead of his effort on Obamacare.
In context today, it comes after the point where most Americans have begun to tune him out, just as they do with nearly all second term presidencies. For the first time, Obama is now below 40 percent approval on every issue polled. As the Washington Post notes, even on issues where Obama looks to be in agreement with the American people, he's now lagging terribly. Even Millennials are now down on Obama. Whether this is because Americans have lost faith in Obama personally, or just reached a threshold where they are tired of his presence on the screen, his call for an effort to combat inequality is falling on deaf ears.
And that's just as well, since the president has things all backwards. Consider this passage of his remarks:
"A new study shows that disparities in education, mental health, obesity, absent fathers, isolation from church, isolation from community groups – these gaps are now as much about growing up rich or poor as they are about anything else. The gap in test scores between poor kids and wealthy kids is now nearly twice what it is between white kids and black kids. Kids with working-class parents are 10 times likelier than kids with middle- or upper-class parents to go through a time when their parents have no income. So the fact is this: The opportunity gap in America is now as much about class as it is about race, and that gap is growing."
Does the president really not realize that he has the causation here completely backwards? He's spoken eloquently in the past about the dangerous decline of fatherhood among the working class. It's not that being poor means you'll have absentee parents, it's that absentee parents – particularly absentee breadwinners – means you end up poor. Where the middle class and upper class are better insulated from the consequences of the economic pain that comes from family breakups, the poor are not.
What does that mean? Well, it means you can't afford to live in a place with a good school, and government policy prevents you from learning elsewhere; it means mom has to work two jobs and can't take time off to take you to the dentist, which can't be scheduled because you're on Medicaid; it means you're likelier to drop out and end up permanently ensconced on assistance programs because you never had the intact family pressure to stay in school and learn a skill.
The greatest elevator of people from lower class to middle class life is an intact household. Robert Rector has done plenty of digging on this, and the ramifications are staggering:
Income inequality is not primarily an economic problem. It is a problem of societal decline and the breakdown of family structures, accelerated by government but not solely by government. Barack Obama the family man could've made a difference in this regard, but decided not to. Instead, he embarked on an agenda which has been great for corporate America, Big Banks, and Wall Street, and generally terrible for wage growth and working families. Evan Soltas has a little piece here, frustrated that people are looking to get rich off Obamacare, wringing his hands about how "the expected increase in health-care profits has a whiff of rent about it." What do you expect to happen when you make it illegal not to buy a corporation's product which drives these profits? That's who this presidency has been for all along. As Jeffrey Anderson notes:
The utter failure of Obama's trickle-down-government approach is perhaps best captured by two contrasting stats. When he took office, we were a full year into a major recession. Economically, there was almost nowhere to go but up. And, indeed, that's what the Dow Jones Industrial Average, which tracks the stock prices of 30 very large companies, has done: gone up. In January 2009, the Dow was at about 8,000. It's now at about 16,000. It has essentially doubled on Obama's watch.
Meanwhile, according to Census Bureau figures compiled by Sentier Research, the median American household income when the Obama household took up residence at 1600 Pennsylvania Avenue in January 2009 was $55,972 (in 2013 dollars). Now, nearly five years later, the median American household income is just $52,529. That's a decrease of $3,443 – or more than 6 percent. And that's during a "recovery"! If Americans' median income were now merely the same (in real dollars) as during the recession, that would mark Obama's tenure as a miserable economic failure. Instead, Americans' median income has noticeably dropped. It's important to note that these median-income figures include government payments, such as unemployment.
Today, Obama is describing inequality as "the defining challenge of our time". But his agenda for the second term has been about everything but that. His second term has seen payroll taxes go up for all working Americans and a prioritization of immigration reform, gun control, climate change and a host of environmental issues which – while they might appeal to his allies on Wall Street and in Hollywood – have nothing to do with income inequality. In many cases, these policies are actually negatives for the working class, driving up the costs of goods and negatively impacting wages and working hours.
If this was the defining challenge of our time, why did he spend so much time on policies unrelated to it? Why did he go down a policy path which led in the opposite direction? And why, even today, is he bypassing any possibility of brokering a bipartisan effort to combat "the defining challenge" and instead prioritizing a clumsy, tired, politically dead-end solution – minimum wage hikes – which without question has a negative effect on low-skill job creation while aiding his powerful union allies?
It's unclear why someone as uniquely positioned as Obama to speak to the challenges of being raised by a single mom – of having to rely on the support of relatives and family, and of the importance of such supports in determining success – put this issue on the backburner. Maybe Obama never really focused on the issue of inequality of opportunity before because he really doesn't have a solution to the harder challenge of what's really going on in the working class. The vacuity of his answers to the problems of inequality is illustrated in this line: "Kids with working-class parents are 10 times likelier than kids with middle- or upper-class parents to go through a time when their parents have no income." You mean to tell me families with lower incomes are more likely to have lower incomes than families with higher incomes? How insightful. Tell me more about why we need another industry bailout.
[Originally published on The Federalist]
Heartland Daily Podcast: Seton Motley – Healthcare.gov Technical Problems
The government spent about $634 million on creating healthcare.gov; what did they do with all that money? Well, they created a huge mess. They contracted five different people who apparently built their portions while "hiding in silos" and never communicating with each other and they built it on 10+ year-old software.
Seton Motley, founder and president of Less Government joins The Heartland Institute to discuss the horrific technical problems of the Obamacare rollout.
Facebook is 9 years old! The first Pirates of the Caribbean came out around the same time that the software for healthcare.gov came out… Come on! So, how did they spend so much money and still not deliver? Well, Motley offers up the "wallet rule" as explanation — if you went out on a Friday night with your own wallet, but went out on a Saturday night with someone else's wallet, which night do you think you'd have more fun on?
The point is, when you spend other people's money, you are less frugal, and you care less about the results. And that is what happened to healthcare.gov, and what government almost always does!
When asked if the website would ever catch up and work how it's supposed to work- Motley is not optimistic. He predicts that if the British government can't pull it off in 9 years and $15 billion, then neither can we.
Listen to the podcast in the player above.
[Subscribe to the Heartland Daily Podcast for free at this link.]
Here's The One Crazy Thing Barack Obama Can Do To Save Obamacare
We've passed the administration's deadline, and Obamacare still isn't fixed.
Yes, it's better than it was two months ago. But by their own measures and by the measures of other retail sites, the administration has failed to fix their bungled website and achieve the easier lift of success on the front end, let alone the as-yet-unconstructed back end of the federal exchange.
Every week brings another announcement of delays in the law – delays that are in some cases more than even Republicans had requested to begin with – from the White House. The small business exchange delay dropped right before Thanksgiving, the decision to kick the can on open enrollment until after the 2014 elections, and the latest decision to scrap the payment system for insurers and rely on manual submissions for at least the first month illustrates how extreme the back end problems are.
Healthcare.gov is even having trouble signing people up for Medicaid, which should be as easy as can be. And we're just three weeks away from the December 23rd deadline to buy insurance, and the December 31st deadline to pay their premium, before people start getting hit by the mandate penalty.
Taking the president's public relations campaign rollout claiming "everything's fixed!" at face value, Democrats are now reportedly demanding that someone be held accountable for the mismanaged launch of Obamacare.
White House officials, asserting that the HealthCare.gov website is largely fixed, are under mounting pressure from Democrats and close allies to hold senior-level people accountable for the botched rollout of President Obama's signature domestic achievement and to determine who should be fired. For weeks, the president and his aides have said they are not interested in conducting a witch hunt in the middle of the effort to rescue the website. But in the West Wing, the desire for an explanation about how an administration that prides itself on competence bungled so badly remains an urgent mission… Close aides said that Mr. Obama was unlikely to give in to the demands for a public flogging, but White House officials also said that Mr. Obama had demonstrated a calculated willingness to push people out.
So they claim. To this point, there's every indication that the president is too soft to fire anyone who was actually responsible for this. Kathleen Sebelius should feel safe as ever.
But if you set aside the talking points and look at the real, enduring problems of the federal exchange, the real question Democrats should be asking isn't who should be pushed out – it's who should be brought in.
[S]uccessful businesses have a good management structure. People in charge are familiar with the problems and able to focus effort, and operational employees are empowered to identify and solve problems. The Obama Administration failed in this last task. The team lacked a "CEO" who could focus the efforts, and line employees were stifled or ignored. As a result, deadlines were missed, minority opinions were ignored, and possible problems were not considered. The universal opposition of Republicans to the ACA made the administration's task more difficult, but it does not excuse the failure. Fixing the administration's implementation efforts will require more than just fixing the website. It will mean changing the entire organization of the government's ACA efforts. Undoubtedly, some people need to leave or move on to other positions. More important is who needs to come on board, and that's people with management skills and experience in startup businesses. There is no successful organization without good senior leadership.Going forward, this kind of CEO-style leadership is essential for fixing Obamacare. Back up a moment: one of the lessons about the failure of Obamacare's launch is that it's an indication of how the impression of Obama himself was out of sync with his actual approach to leadership. Obama delegates, and he trusts his people. While he ran as a cool under pressure technocrat, the reality is that he's an ambitious ideologue and a political animal. He left the framing of his namesake legislation to Hill veterans, quickly backing off the promises he'd made while running for the presidency in 2008. The implementation was delegated, too – to a group of self-styled elite bureaucrats at HHS and CMS who, lacking experience in anything approaching a project of this size, turned out to be terrible project managers.
So What's The Answer?We're only beginning to deal with the ramifications of this, politically. But when it comes to the implementation side, there's one simple step Obama could take to rescue his signature project. It'd be bold. It'd be out of the box. It'd be the sort of thing that the Hope and Change era Obama might've done, even if today's Obama would never think of it.
What Obama needs right now more than ever is a turnaround artist. Ideally, he would find someone with executive experience and bipartisan bona fides, someone experienced in the health policy space, who understands how these complicated exchanges are supposed to work. He needs someone with serious management experience and corporate consulting acumen, who's dealt with a prominent national project while in the public eye, who's completed a significant Olympic-sized undertaking under the pressure of a hard timeline. He needs someone with no future ambitions or plans to run for office again, a true non-ideological technocrat, someone who won't manipulate a bureaucratic undertaking toward personal or political ends, but is just interested in solutions, in making things work.
It might even help if this person was a bit cutthroat, a tad robotic, with that special type of smiling harshness – someone who can slash the deadwood from a project, prioritize what needs doing and who can do it, and who won't hesitate for one second to fire people who deserve it. If you're talking about the perfect candidate, it'd be someone who actuallyliked firing people, who relishes it, and didn't really give a damn who didn't like him for it.
Thankfully, as Ann Althouse has noted, there is exactly one person in America who has all these qualities. And he's got time on his hands.
All Barack Obama has to do is pick up the phone and say the magic words: "Help me, Mitt Romney. You're my only hope."
[Originally published in The Federalist]
Heartland Daily Podcast: Dan Goldhaber- Teachers' Academic Qualifications Improve
A new study shows that academic qualifications for prospective teachers are on the rise. Dan Goldhaber- director of the Center for Education Data & Research and a professor at the University of Washington- joins The Heartland Institute to discuss the aforementioned study.
In the past, teachers tended to be in the bottom half of the SAT distribution, while the top half chose other occupations. Recently, around 2009, there was a slight shift where more people in the upper half of the distribution were choosing to pursue careers in teaching. This is obviously a good thing, and Goldhaber discusses what the implications could mean.
Listen to the podcast in the player above.
[Subscribe to the Heartland Daily Podcast for free at this link.]
Americans Don't Trust The Government, And That Could Be Great For America
The American people don't trust the government. This could be a great thing for America. It could also be a dangerous opportunity for an enduring and desperate factionalism, of the kind largely unfamiliar to the American experience — and lead to more, and more dangerous, government in the future. But I don't think it will.
There are all sorts of polls you can cite about the decline in trust in government, but after the disastrous rollout of Obamacare, this trendline isn't going up. And Ezra Klein is worried about it. He runs through a litany of recent failures of federal government – considering that Millennials alone have witnessed 9/11, Afghanistan, Iraq, Katrina, the financial crisis, the failed stimulus, and now Obamacare, young voters have every reason to be cynical. But Klein notes that this may not stop voters from trusting government to do more, and implement more big programs, in the future:
[B]ecause voters don't entrust tasks to "the government." They entrust them to particular administrations, and, righty or wrongly, they tend to extend their faith in the president to the entire federal government. Obamacare's failures aren't likely to undermine confidence in Chris Christie or Hillary Clinton's ability to manage the machinery of the federal government. They might perversely, enhance it, as a country that's purposefully looking for more effective management is likely to be more desperate to believe they've found it. But the fact that the public will trust the government to do big things again doesn't mean they should.Government's inability to get even basic things right may become just another attribute of partisan measures – Democrats trusting Democrats, Republicans trusting Republicans – but a system with a healthy level of distrust for both parties to manage "good government" is a more honest one, one which understands that markets and individuals do best when government doesn't try to micromanage them. We should welcome an America with more skepticism that our political leaders know best, or know anything at all. They certainly haven't proven otherwise recently.
If the American people see the lesson of the failures of government in foreign and domestic policy as a sign that the federal government should focus more on the handful of things it can do and set aside the things it keeps screwing up, most conservatives and libertarians would rejoice. There is a danger here, though, of swinging the pendulum back in the other direction. Nick Gillespie outlined this well in a piece earlier this summer, citing this 2010 paper on "Regulation and Distrust," written by Philippe Aghion, Yann Algan, Pierre Cahuc, and Andrei Shleifer. Gillespie writes:
Drawing on World Values Survey data from the past several decades for over 50 countries, the authors help explain what they call "one of the central puzzles in research on political beliefs: Why do people in countries with bad governments want more government intervention?" The authors make a distinction between "high-trust" and "low-trust" countries. In the former, most people have positive feelings about business and government and the general level of regulation is relatively low. In "low-trust countries," the opposite is true and citizens "support government regulation, fully recognizing that such regulation leads to corruption." As an example, they point to differing attitudes toward government-mandated wages in former socialist countries that transitioned to market economies. "Approximately 92 percent of Russians and 82 percent of East Germans favor wage control," they write, naming two low-trust populations. In Scandinavia, Great Britain, and North American countries, where there are higher levels of trust in the public and private sectors, less than half the population does. As a final kicker, Aghion et al. suggest that increased regulation sows yet more distrust, which in turn engenders more regulation.
This type of experience is echoed by Jorge Castañeda in his book, Mañana Forever. According to Castañeda, to understand Mexicans and their history you have to understand that Mexicans have nothing between the masses and the government, with almost nothing like the "little platoons" of Edmund Burke, nor the network of associations that Tocqueville saw as key to America's thriving democratic-republic. Castañeda writes:
In the United States, there are approximately 2 million civil society organizations, or one for every 150 inhabitants; in Chile there are 35,000, or one for every 428 Chileans; in Mexico there are only 8,500, or one for every 12,000, according to Mexican public intellectual Federico Reyes Heroles. Eighty-five percent of all Americans belong to five or more organizations; in Mexico 85% belong to no organization and, according to Reyes Heroles, the largest type, by far, is religious. In the United States, one out of every ten jobs is located in the so-called third sector (or civil society); in Mexico the equivalent figure is one out of every 210 jobs. In polls taken in 2001, 2003, and 2005 on political culture in Mexico, a constant 82% of those surveyed stated they had never worked formally or informally with others to address their community's problems. In another series of polls already quoted concerning Mexican and world values, a robust and inverse correlation was detected between Mexicans' happiness (which grew remarkably between 1990 and 2003) and their belonging to any type of organizations. In the words of the survey in question, "the more a Mexican joins an organization or belongs to any type of association, the lower the probability of his or her feeling happy.… Studies regarding values have constantly concluded that Mexican society is extremely difficult to organize."
In place of lateral social bonds, Castañeda maintains Mexicans form bonds upward and downward, creating a patronage society where unhealthy levels of corruption, cartels, and tribal loyalties are a substitute for freedom of association and true community. This creates a cycle of desperation, where people put their faith in charismatic leaders who promise to solve their problems, only to have their hopes dashed. Castañeda writes:
[I]t should not be altogether surprising that today, after nearly five hundred years of a strong state, civil society should be weak. From this perspective, Mexicans are disorganized, except during exceptional circumstances (rescuing victims after an earthquake, for instance), because, tautologically, they are not organized, and they are not organized because a perennial, all-powerful, overwhelming state has crowded them out. This Hobbesian behemoth (unmistakable in colonial times, at least after the Bourbon Reforms of the late eighteenth century) has simply never allowed civil society to flourish, and absent an organized civil society, people fend for themselves. When they do that for centuries, they get used to it, and persist in their customs indefinitely, until something occurs that makes them change their mind. It hasn't in Mexico, and so the ways of the past continue. As we shall see further on, those ways — corruption, cronyism, disregard for the laws — persist and date back to those times. Today, according to polls, nine out of every ten Mexicans believe that "if one does not take care of oneself, people will take advantage of you." Some sought solutions by joining the state; others by leaving the country; still others, by retrenching into the past and the ways of that past.So could the United States be on a path to becoming, like Mexico, a state where a hollowed out civil society leaves people with nowhere else to turn than the government they don't trust? I just don't think that's going to happen. It didn't happen after the Bay of Pigs, the JFK assassination, the quagmire of Vietnam, and Watergate. It won't happen now. (The Millennials may turn out worse than the Boomers because of it, but that's a different matter – and no one generation is all bad).
I'm more optimistic in part because America has bucked the trend of other nations and retained its inherent generosity, with more than 70% of charitable giving offered by individuals and families, and a healthier appreciation of civic involvement and volunteerism. The Mexican historical experience is a very different one from ours, and the character of the American people still has some strength in it yet. Even as the nature of our associations have changed, and the level of trust in government, institutions, and others has decreased, there's still a large segment of the American people who have faith in each other and work to help each other. Rather than throwing up their hands, people should not view the failure or success of government, particularly presidential level policies, as the be all and end all of the nation's future. Far from it.
There is a path for the country out of the wreck of distrust and disaster we've seen at the federal level over the past decade, if the American people choose to take it. The truth is staring them in the face. If the American people reject the false promise of one more politician promising a governmental answer to their problems – "trust me, this time, I'm not like the other guys" – we could see a resurgence of bottom-up trust. This has happened before in American history (the 1830s, for instance): when the failure of large institutions leaves power decentralized, people can give in to hopelessness… or they can realize the sun will still rise the next morning, and that they are better off living as individuals and families, trusting their neighbors rather than trusting in factional political tribes or far off powers which will always fail to live up to their promises.
The failure of government to live up to its promise is an opportunity for honesty and clarity and for the American people to reexamine the role of the citizen and the state – not a moment for despair. There's more to life, and more to a country, than government.
[Originally published on The Federalist]
Is It Time to Let Adults Play Online Poker Again?
Two and a half years ago Eric Holder and the U.S. Justice Department applied dubious legal logic to shut down one of America's quintessential pastimes – poker games among consenting adults. The Justice Department not only put a freeze on one of America's fastest-growing forms of entertainment, it made the Land of the Free one of the few democratic nations in the world to ban consenting adults from playing online poker. Is it time for over-intrusive government to allow consenting adults in a free country to play online poker again?
A Poker RenaissanceFrom 2003 through 2010, poker caught America's fancy in a way not seen since Doc Holiday dominated the poker tables at the Alhambra and Oriental saloons in Tombstone, Arizona, infuriating the outlaw Cowboys gang by relieving them of much of their ill-gotten fortune. In 2003, a full-time accountant who avidly played small-stakes online poker turned, through a remarkable string of events, a $40 entry in an online poker tournament into the world championship at the World Series of Poker (WSOP) in Las Vegas. Chris Moneymaker's Cinderella championship run coincided with ESPN for the first time devoting major resources to producing several hour-long episodes chronicling that year's WSOP. This was the poker equivalent of Rocky Balboa beating a stadium full of 838 Apollo Creeds – except this was a true story and the world's premier sports network captured the story from start to finish.
Buoyed by the "Moneymaker Effect" and a dramatic increase in the popularity of online poker, 2,576 people entered the 2004 WSOP Main Event, fully triple the number of players who entered in 2003. Now, rather than a tournament numerically dominated by professional poker players and extremely wealthy businessmen, the tournament had a large contingent of amateur poker players and small-stakes pros living out a dream and telling themselves that if Chris Moneymaker could take down all those Apollo Creeds, so could they. In a sequel every bit as fascinating as the 2003 WSOP (and every bit as inspirational as the Rocky II sequel), full-time tax lawyer Greg Raymer gave amateur poker players a second consecutive victory over the legendary pros. Raymer's run to the title gave the cameras everything a viewing audience could ask for, as the large, good-natured man appealed to every-day viewers while simultaneously intimidating even seasoned poker pros with his size, imposing stare, and unnerving lizard-eye sunglasses.
In 2005, the number of entrants jumped again, to 5,619. Again, a relatively unknown poker player won the championship in memorable fashion. With a large, rowdy cheering section reminiscent of a World Cup soccer match, telegenic Australian Joe Hachem seized his dream and won the title. Prior to 2005, poker spectators at the World Series of Poker could easily be mistaken for the nearly silent spectators at a golf tournament. In 2005, Hachem's large contingent of boisterous friends and family waved Australian flags and chanted, "Aussie, Aussie, Aussie! Oi, oi, oi!"
In 2006, a record 8,773 people entered the WSOP. Hollywood talent agent Jamie Gold captured the title and a staggering $12 million payday. Between 2007 and 2010, at least 6,300 people entered each year. Many of the entrants won their seats by entering small-stakes online tournaments like Moneymaker. Others fronted their own entrance fees, but honed their skills and built up their WSOP bankrolls on the online poker sites.
ESPN devoted more and more air time to the WSOP each year. Lesser tournaments and even simple poker cash games began popping up on the Game Show Network, NBC, and seemingly every channel in between. Top poker players began signing lucrative endorsement deals similar to NFL and NBA stars. Poker was hip, poker was lucrative, and poker was mainstream.
Just as importantly, poker was egalitarian. Everyday people mired in dead-end jobs and with little excitement in their lives could dream of becoming the next Chris Moneymaker or Greg Raymer. Jerry Yang, a religious, soft-spoken social worker who professional poker shark Scotty Nguyen described as the nicest guy you can ever meet, won the Main Event in 2007. In 2008 through 2010, a series of young 20-somethings seemingly fresh out of college took home the title.
In the absence of extraordinary God-given skills refined by a lifetime of practice, nobody can realistically dream of homering off David Price in the seventh game of the World Series, tackling Adrien Peterson in the open field to clinch a Super Bowl victory, schooling LeBron James in the NBA Finals, or taking down Tiger Woods at the Masters. But a skilled amateur poker player – if he or she is playing at the absolute top of his or her game and catching a few breaks along the way – can plausibly dream of entering a small-stakes online poker tournament culminating with sticking it to cocky, irascible poker legend Phil Hellmuth while capturing fame and fortune at the World Series of Poker.
Feds Shut It DownThat all changed on April 15, 2011 – Tax Day, by design or not – when Eric Holder and the U.S. Department of Justice shocked the poker world by shutting down poker websites, freezing poker accounts, and filing major criminal charges against operators of online poker sites and the financial companies that processed poker deposits and cash payouts. The Justice Department justified its actions by claiming the companies violated the Wire Act of 1961, a mafia-focused statute that outlaws the use of wire communications to accept sports wagers or process payments relating to sports bets.
By December 2011 the Justice Department, chastened by court rulings indicating it had overzealously applied the Wire Act, indicated it was backing off on its targeting of poker sites. Nevertheless, the damage was already done. The online poker sites had already shut down, and nobody was eager to start back up again without express assurance that the Justice Department wouldn't change its mind again and resume prosecutions.
The federal government recently told the individual states it would not interfere with state-specific laws authorizing and regulating online poker. However, only a few states have begun to seriously consider this option. Those that do will have differing regulations and standards, meaning gaming companies will have to navigate a patchwork of often contradictory legal requirements. Moreover, each state that authorizes online poker must ensure that nobody can access that state's poker sites from outside the state. For all intents and purposes, online poker remains dead thanks to the U.S. Justice Department, even though few seriously argue that it is illegal.
The best and perhaps only way for government to reliably assure the online poker community that it can operate without fear of a new round of overzealous criminal prosecutions is for Congress to formally affirm that online poker remains legal.The best and perhaps only way for government to reliably assure the online poker community that it can operate without fear of a new round of overzealous criminal prosecutions is for Congress to formally affirm that online poker remains legal. But not many Congressmen appear eager to stir a potential hornet's nest of anti-gaming sentiment when the political rewards appear minimal. Nevertheless, is it time to restore legality to this quintessential American game?
Ingrained in the American SpiritHistory records the first poker games springing up in New Orleans during the 1820s. Large-wheeled riverboats delivered the game and its first professional players up and down the Mississippi River in America's antebellum period. Poker became synonymous with Mississippi River folklore, and as the frontier stretched west, so did poker.
Poker provided river travelers with entertainment to relieve the boredom of long days confined on a boat deck. Poker offered a sanity-preserving diversion for Union and Confederate soldiers experiencing the long, drawn-out misery of fighting the Civil War. Poker gave gold prospectors and fur trappers an entertainment commodity thousands of miles from the bustling cities of the East. Poker became the preferred form of competition among outlaws and gunslingers in the Wild West, allowing them to blow off steam in a manner that did not involve bullets. Poker sustained thousands of Navy servicemen devoting years of service patrolling the Atlantic and Pacific Oceans during World War II. Poker, as much as baseball, steam boats, covered wagons, and manifest destiny, is part of the very fabric of America.
The Strange Politics of PokerStrange bedfellows have joined forces to vigorously oppose legal online poker. Two political factions that are usually in sharp disagreement on almost every political issue form the strongest opposition to online poker.
One faction consists of so-called nanny state liberals who believe government must step in to protect ourselves from our own personal choices and our own unregulated activities. These are the folks who often support laws against Big Gulps, laws requiring kids to obtain a permit to set up a lemonade stand or sell Girl Scout cookies, and laws requiring McDonald's to serve apple wedges rather than French fries as the default side item in a Happy Meal. These folks believe some people will recklessly lose their rent money playing online poker, so therefore nobody should have the opportunity to play.
The other faction consists of social conservatives who believe playing poker is inherently immoral or sinful and therefore government must step in to preserve public morality. These are the folks who usually raise the most strenuous objections to the liberal nanny state, but find common ground with such liberals on this particular issue.
The result of this strange political coalition is legalized poker is neither a Democratic nor Republican issue. Support for legal poker spans the bipartisan middle ground between the usually bifurcated poker opponents.
Misguided OppositionThe irony is the two factions opposing poker reveal a certain degree of self-contradiction.
For liberals concerned about people being victimized by their own choices, poker offers opportunities that for many people do not exist anywhere else. People without advanced education or highly developed job skills can master a game that allows them to pluck money from wealthy executives who play poker merely for ego and fun. The house commission for online poker tournaments is typically merely 10 percent, with 90 percent of the money returning to the players. This is a far more generous return than legally sanctioned lotteries, which are disproportionately played by low-income Americans, and a more generous return than brick-and-mortar casinos that typically return only about 75 percent of players' entry fees.
There is no Bible verse that condemns gambling, though gambling has occurred throughout human history.Social conservatives concerned about the morality issue should take several points into consideration.
There is no Bible verse that condemns gambling, though gambling has occurred throughout human history. Gambling is more akin to drinking wine or engaging in other activities that are not immoral in themselves but can be problematic if a person does not behave ethically or exercise self-control. Indeed, some religious customs such as spinning the Hanukkah dreidel involve gambling.
For certain people, gambling can be an activity associated with self-destructive or immoral activity, but for many other people it is not. For 2012 Main Even champion Greg Merson, his love of poker and his need to stay sober in order to play well gave him the strength and inspiration to kick a serious drug habit. If you attend any WSOP tournaments you will observe that 99 percent of the players are sober, well-rested, and drinking nothing stronger than bottled water throughout the competition. Neither smoking, nor profanity, nor hostile behavior is allowed. The WSOP taking place in the inescapably wild atmosphere of the Las Vegas Strip has the feel of a convention of designated drivers taking place in Rio de Janeiro during Mardi Gras.
Also, poker has more in common with contests of skill than with gambling. In true gambling, there is little skill involved in choosing a particular wager and participants have little or no control over the outcome of the contest. Playing the lottery or slot machines is gambling. If you buy a lottery ticket, you theoretically have no better or worse chance of winning than anybody else who buys a ticket. The only person or entity with an advantage in the lottery is government, which unavoidably turns a profit on every lottery it promotes, administers, and thereafter taxes. In poker, by contrast, skill is a far greater factor than luck. Sure, the luck of the draw will impact the results in any given tournament, but in the longer term the best players are regular winners and the unskilled players are regular losers.
A good analogy is looking at the day-by-day results of a full baseball season. Even the best teams will lose plenty of games and have significant losing streaks. Even the worst teams will occasionally beat the best teams and string together several wins in a row. By the end of the season, however, the luck largely evens out and skill is rewarded in the standings. The best teams make the playoffs and the worst teams try to improve for next year.
There is little logic to opposing poker on morality grounds while allowing individuals the freedom to drink heavily, smoke, eat unhealthy foods, climb Mt. McKinley, or play golf with lightning nearby. Each of these activities is more dangerous or self-destructive than consenting adults deciding to spend a little of their hard-earned money playing in an online poker game. Yet each of these other activities is rightfully legal and few poker opponents argue these other activities should be against the law.
This brings us back to empowering the Big Government nanny state that most social conservatives oppose. Doesn't government have more important things to do than tell people what card games they can play?
Overlooked VirtueFor those who still believe poker is inherently immoral, the personal stories of virtue among poker players are too many for this column. However, here are a quick few:
2007 WSOP champion Jerry Yang, a childhood refugee from war-torn Laos, donated more than $2 million of his winnings to the Make-A-Wish Foundation and other charities. Yang's unabashed Christian faith shone throughout the WSOP, as he frequently talked about his Lord and gave thanks for his tournament run.
Legendary poker pro Barry Greenstein is known as the Robin Hood of poker, donating all his tournament winnings to charity. Those donations have totaled millions of dollars.
Hedge fund manager David Einhorn gave all of his $4.3 million in winnings at the 2012 WSOP to the One Drop charity, which provides clean drinking water to people in Third World nations.
Without poker, none of this charity takes place.
Time to Affirm the Freedom to Play Online PokerIn a free society, government should be very careful about taking away people's freedoms. While some justifications and necessities will exist, it is hard to make a compelling, internally consistent case for the Land of the Free taking away the right of consenting adults to play online poker. With its de facto ban on online poker, America is an outlier among the world's democratic nations that largely respect and protect such a right. Congress can and should affirm that online poker remains legal, and in the process demonstrate that America remains the Land of the Free.
[Originally published on The Federalist]
Greenpeace to Kids: Christmas is Canceled
Radical left-wing organizations have long-enjoyed stenographic coverage in the mainstream media. So it certainly came as a shock to Greenpeace to see CNN rip into the organization for employing a decrepit Santa to advance lies that scare kids and adults alike about the climate.
CNN's Jeanne Moos has for many years specialized in quirky human interest stories at the venerable cable channel. This week she ripped Greenpeace for its latest video featuring a disheveled and depressing Santa that makes Billy Bob Thornton's iconic "Bad Santa" look as warm as the one from "Miracle on 34th Street."
You see, says Greenpeace's Apocalyptic Santa, if the ice doesn't stop melting at the North Pole, "there may be no alternative but to cancel Christmas." Worry not, kids. Arctic ice has actually increased this year by 533,000 square miles (and total polar ice is at highest point in about a decade), which Moos notes in her report.
That's a good thing. Yet here's proof the MSM still can't just report the facts about the climate: Moos couldn't bring herself to simply declare the truth of increasing polar ice, which is proven by scientific observation. She had to couch it with the qualifier of "critics say" polar ice has increased.
But why quibble? Moos was nice enough to cite our friends at the International Climate Science Coalition who told CNN: "Santa should be celebrating the return of the ice!"
Moos also cast the alarmists at Greenpeace and elsewhere as folks who "believe in global warming." Exactly right. Their adherence to human-caused climate calamity is akin to religious belief, unaffected by the reality of scientific proof. It was a nice touch by Moos that I'm amazed got past CNN's editors.
Moos also cited a commenter at the YouTube post of the Greenpeace video who wrote:
Hope that you are proud of yourselves green piece (sic) for scaring innocent children with your bully boy tactics as usual.
That's right. CNN cited a critic of Greenpeace in its story. That represents amazing progress for truth (if not grammar) in MSM coverage of the climate.
Here's another taste of Moos' CNN-approved mockery of Greenpeace and what she said was a "sorry excuse for a Santa":
It looks like a hostage video, but instead of Al Qaida, it's Santa.
Let it be said forever more: CNN compared Santa to terrorists! (Sorry. I channeled the mindset of the left for a second. Now I'm back to normal.)
Moos closes by asking: "Who would you trust to save the icecaps?" She makes it clear that it is not Greenpeace. Perhaps the public and the MSM would do better to trust an organization (ahem!) that recently published a 1,000-page report containing the latest climate research, and has hosted eight international conferences on climate change with some of the most-esteemed climate scientists in the world.
This much is true: CNN is not trusting Greenpeace and its Doomsday-Cult Santa.
Watch Moos' CNN spot below, and the whole Greenpeace video below that. If watching these videos do not make you merry, Heat Miser might be your Christmas hero.
UPDATE, Dec. 6: The folks at Sun News in Canada liked my post, asked me on the air to talk about it today. Watch it here.
Taxes Out of Control and Out of Bounds
CNS News reported in October of this year that according to the U.S. Treasury the government's federal debt had jumped by $409 billion. This equals approximately $3,546 for each of the Census Bureau's estimated 114,663,000 U.S. households, and makes October's spending the largest one-month jump in debt in this nation's history.
What is troubling is that Congress is not currently restrained by a debt limit. Since October 17 when Congress enacted the Continuing Resolution (CR) with a deal that ended the government shutdown and pushed the debt ceiling level to February 7, 2014, no set dollar amount exists to restrict spending.
With nothing to stop legislators from piling even more spending and debt on taxpayers before February 7, 2014, it is folly to believe that legislators will restrain their spending, nor have they done so. Noted was how an additional $409 billion of debt was accrued through the end of October. While on October 17 the debt subjected to limit stood at $16,699,396,000,000, just $25 million shy of the legal limit of $16,699,421,095,673.60, by October 31 the debt now subject to limit had grown to $17,108,378,000,000.
Troubling is that even with this nation's credit card maxed out (along with taxpayers' wallets), Washington aims to continue its spending spree. Instead of addressing future debt by controlling the growth in entitlement spending and enforcing lower levels of spending, the budget conference committee is considering an option that could increase spending by up to an additional $100 billion; that is, if a compromise deal can be fashioned to bust the sequestration spending caps by up to $100 billion.
An increase in user fees (really a disguised tax increase) would be employed to offset mandatory spending with necessary revenue. Although gimmicks are nothing new in Washington, D.C., raising user fees to pay for more spending is what has helped fuel our now $17.2 trillion national debt.
State Government:
Not only is the federal government at a tipping point financially, but Illinois has already reached its tipping point. Consider this Statement of Position from Illinois Treasurer Dan Rutherford:
Troubling numbers:
- Illinois taxpayers' debt from borrowing = $44.3 billion
- Illinois taxpayers' unpaid bills = $8 billion
- Illinois' unfunded pension and retiree health care liabilities = $140
Each Illinois family shoulders this debt = over $40,000 per household Moody's rates Illinois as the worst credit risk of all the states in the nation, which raises the cost of borrowing money, which, in turn, adds billions of dollar in the repayment of bond issuances.
The following dreary picture of Illinois was painted by Reboot Illinois on November 18:
All of Illinois' neighboring states were in the top half of Chief Executive Magazine's 2012 list of best states for business. Illinois was rated third worst. The state's unemployment rate, consistently the highest in the region, is evidence of that ranking's accuracy [Since 2008, Illinois has lost the third most jobs by state in the country]. Businesses in Illinois suffer under some of the highest workers compensation insurance rates in the country, and in 2011 they saw their income tax rate jump from 4.8 percent to 7 percent — a 46 percent increase [IIllinois' Corporate tax rank is now 45th in the nation].
On Tuesday, Illinois legislators addressed in a one-day special session a pension reform deal crafted by the Illinois House and the Senate. Numerous reports about the bill before the vote left much to be desired, making Tuesday's exercise seemingly geared to convince the pubic that legislators are finally taking the state's $100 billion pension shortfall seriously.
According to a report by Ted Dabrowski, Vice President of Policy at the Illinois Policy Institute, House speaker Mike Madigan's solution is just the next in a long line of disastrous pension maneuvers and does nothing more than delay real reform and keep Illinois in a chronic state of crisis.
In typical Illinois fashion, little advance information was shared with the media, the public, and legislators about a bill so critical to the financial well-being of this state. Just what might be the language of a bill that is being kept under wraps until only hours before legislators cast their votes?
Local Government:
In addition to federal and state tax obligations, there are also local taxing bodies that make financial demands. Significant is that Illinois has more "local" governments than any other state in the country, 6,963, which is one-thousand more than any other state when factoring in state population. As it is, Illinois residents pay the second-highest-owner-occupied property tax rates in the country, and their state is the third most corrupt.
Having so many units of government at the local level put taxpayers on the hook for unnecessary layers of government that duplicate services and cause taxes to soar. It is not uncommon for Illinois residents (61% of them do) to live under the burden of three levels of local government (municipal, township or county government), resulting in a huge outlay of funds allocated for salaries.
Lake County in northern Illinois, Thorner's home county, ranks No. 1 for the Midwest region on Forbes' list of U.S. counties with the highest property taxes, the average being $6,052.
Thorner also lives under a township government, that of Shields, in addition to her Village of Lake Bluff. In Shields Township a whole department exists to handle the scattered township roads and bridges whose trucks criss-cross the same area when snow plowing far fewer mile, than do municipal trucks.
Also adding to the tax burden at the local level are the high number of school districts in Illinois, 911 in all. Two hundred of them are single school districts. These single districts (Lake Bluff Elementary School District 65 is a single district) cost more per student to educate than do multi-school districts.
Federal, state, and local tax liability has become a burden to many. Often asked is how much is too much to pay in taxes? Although little can be done to fight taxation at the state and federal levels, citizens have more of a say at the local level. Unfortunately many officials are opposed to doing away with the positions they hold, either elected or appointed, even if they hold positions that duplicate work done by others.
And so our tax burden continues to grow to keep the hungry beast that is government fed, with many legislators indifferent about the way taxpayers' money is wasted and spent as long as it suits their own political interests to be re-elected, thereby ensuring that they will continue to enjoy all the attractive perks they have grown so accustomed to receiving over the years.
The Great Depression Was Ended by the End of World War II, Not the Start of It
A common fallacy is that the Great Depression was ended by the explosive spending of World War II. But World War II actually institutionalized the sharp decline in the standard of living caused by the Depression. The Depression was actually ended, and prosperity restored, by the sharp reductions in spending, taxes and regulation at the end of World War II, exactly contrary to the analysis of Keynesian so-called economists.
True, unemployment did decline at the start of World War II. But that was a statistical residue of sending millions of young American men to fight and die in the war. There are better ways to reduce unemployment, as was shown after the war.
Statistics showed a rise in GDP during the war. But that just reflects misdefined statistical analysis. The military guns, tanks, ships, and planes produced and counted as showing rising GDP did not reflect improved standards of living for working people, or anyone else. Yes, they did win the war, and that victory was a social good, just as removing Saddam Hussein from power was a social good. But these were not economic goods and services, and should not be counted as such.
The sale prices of goods and services sold in voluntary market transactions reflects the true value of the goods and services produced, because they reflect what consumers are willing to pay for them, and so reflect the benefit that consumers see in them. But the same voluntary market transactions where consumers are spending their own hard earned money were not involved in the government's acquisition of the military guns, tanks, ships and planes produced during World War II. The cost of all that military materiel was simply added to GDP, as if it reflected increased production. But would not a better measure of the economic value of that military materiel, and of any coerced government transaction, be to subtract the cost of that production from GDP, rather than adding it?
Perhaps this economic reality can be seen better in other military conflicts. Did the American Civil War reflect a time of soaring economic prosperity for America, when both the South and the North were producing weapons of as much mass destruction for Americans as was feasible at the time? What about the cost of the Mexican-American War in the 1840s? Did the cost of the Vietnam War represent a net addition to, or a net subtraction from, American GDP? Or the cost of the most recent wars in Iraq and Afghanistan?
I am not a pacifist who thinks defense spending has no value. But that value cannot be measured the same as consumer or productive goods and services that do increase the standard of living for working people and their families, and are purchased through voluntary market transactions.
World War II institutionalized the falling standards of living of the Depression through wage and price controls, and extensive rationing of consumer goods and services. The economic deprivation, and reduced standards of living, continued, although people perceived it was now for a good cause.
But increased government spending does nothing to create economic recovery, growth and prosperity. That is because the money to finance that increased government spending is drained from the private sector, either through increased taxes, or increased borrowing. That entire transaction involves a net drag on the economy. Increased taxes to finance the increased spending involve counterproductive incentives that reduce production and growth. Increased government borrowing drains investment capital from productive activities in the private sector and reallocates it to non-productive government consumption.
There can never be inadequate demand for any good or service in a free market economy, which is the problem Keynesian witch doctors think they are solving. If demand for any good or service is insufficient to buy up all the available supply, the price for the good or service will decline, increasing demand and reducing supply, until they are equal.
This was all further demonstrated by the end of World War II. As George Gilder explains in his brilliant, recent, ground breaking book, Knowledge and Power: The Information Theory of Capitalism and How It Is Revolutionizing Our World,
"After World War II, when ten million demobilized servicemen returned to an economy that had to be converted from a garrison state to civilian needs, economists steeled themselves for a renewed depression. A sweeping Republican victory in the Congressional election of 1946, however, brought an end to the wartime government-planning regime [overregulation]. Dropping from 42 percent of GDP to 14 percent, government spending plummeted by a total of 61 percent between 1945 and 1947. One hundred fifty thousand government regulators were laid off, along with perhaps a million other civilian employees of government. The War Production Board, the War Labor Board, and the Office of Price Administration were dismantled [deregulation]."
Gilder explains the great debate at the time,
"Every Keynesian economist confidently predicted doom. Sounding exactly like his future student Paul Krugman, who would beg Obama for trillions in additional 'stimulus' spending, Paul Samuelson in 1945 prophesied 'the greatest period of unemployment and dislocation any economy has ever faced.' Arnold Kling of the Cato Institute has observed that 'as a percentage of GDP the decrease in government purchases was larger than would result from the total elimination of government today.' As Paul Krugman points out, nominal GDP, as measured by economists, did drop a record 20.6 percent in 1946 when government spending plummeted."
But that drop was just an artifact of the government's definition of GDP to include its own spending. Gilder, however, explained what actually happened,
"But a drop in government spending after a war does not depress creativity; it unleashes it. Judging the public sector contribution by its cost is the great error of Keynesian economics….the Great Depression, which had continued through the war disguised by price controls and necessary defense spending, at last came to an end. Economic growth surged by 10 percent over two years and the civilian labor force expanded by seven million workers….[T]he private sector…launch[ed] a ten-year boom despite self-defeating tax rates on investors as high as 91 percent. The Republican Congress compensated for the high rates by introducing joint returns, effectively cutting taxes in half for intact families. Corporate taxes dropped drastically, and the tax burden, measured by government spending, fell more dramatically than at any other time in American history. Low inflation and privatization led to a resurgence of large manufacturing corporations….[Emphasis added for low logic voters].
By 1948, the unemployment rate was 4.0% or less every month for the entire year. For most of 1952 and 1953, unemployment was 3.0% or less. Today, rabid leftists bloodthirsty to suck on other people's money worship the economic glory days of the 1950s, with its 91% top income tax rate, the boom actually ushered in by the greatest reduction in government spending in world history. But still Krugman sings daily from his same frayed Keynesian hymnal, with the broken spine and yellowed pages falling out, grinning with what he thinks is his transparent genius in repeating over and over the long proven wrong, cutting edge ideas of almost a century ago.
It was the last great Democrat President, John F. Kennedy, who put an end to the socialist tax policy, campaigning on cutting income tax rates across the board by nearly 25%, which reduced the top income tax rate from 91% to 70%. His tax cut was enacted in 1964, after his tragic assassination. The next year, economic growth soared by 50%, and income tax revenues increased by 41%! Starting in December, 1965, the unemployment rate stayed at or below 4.0% for the next 4 years! U.S. News and World Report exclaimed, "The unusual budget spectacle of sharply rising revenues following the biggest tax cut in history is beginning to astonish even those who pushed hardest for tax cuts in the first place."
The bipartisan troika of Nixon, Ford and Carter trashed the American economy in the 1970s, with stagflation automatically increasing effective tax rates every year. Reagan tracked in Kennedy's footsteps with the most sweeping tax rate cuts in world history, following another 25% rate cut for everyone with the 1986 bipartisan tax reform, together reducing the top income tax rate from 70% all way down to 28%. That combined with his (domestic discretionary) spending cuts, deregulation, and strong dollar monetary policy produced the greatest economic boom in world history.
The boom lasted for 25 years, from 1982 to 2007, what Art Laffer and Steve Moore rightly called in their 2008 book, The End of Prosperity, "the greatest period of wealth creation in the history of the planet." In the first 7 years alone, the real economy grew by one third, which was the equivalent of adding the entire economy of West Germany, the third largest in the world at the time, to the U.S. economy. Newt Gingrich and his Republican Congress added further to the tax cuts, restrained spending, and deregulation in the 1990s to keep the boom going. That was followed by the further Bush tax cuts in 2001 and 2003, which brought the unemployment rate back down to 4.4% in December, 2006, March, 2007, and May, 2007. Those unemployment rates will never be seen again, until some time after Air Force One departs to return Obama to his previous career as a street agitator. Steve Forbes reports that even in the last 5 years of the Reagan boom, from year-end 2002 to year-end 2007, American economic growth was equivalent to adding the entire economy of China to the American economy.
Unfortunately, Bush's Republicans lost sight of Reagan's domestic spending restraint and strong dollar monetary policies, and even maintained the overregulation of housing finance, so that by 2008, the Reagan Long Boom was over. Today, Obama's Democrat Progressives argue that every pro-growth economic policy – tax rate cuts, spending cuts, deregulation, and strong dollar monetary policy – is contractionary. Your average illegal alien understands America better than that. I say keep the illegal aliens, and deport the Progressives.
Peter Ferrara is the Director of Entitlement and Budget Policy at the Heartland Institute. Ferrara is also a Senior Advisor for Entitlement Reform and Budget Policy at the National Tax Limitation Foundation, General Counsel for the American Civil Rights Union, and Senior Fellow at the National Center for Policy Analysis. He served in the White House Office of Policy Development under President Reagan, and as Associate Deputy Attorney General of the United States under President George H.W. Bush. He contributes to a weekly Forbes column, as well as frequently writing for the American Spectator.
[Article originally posted on Forbes.com]From Prohibition to Obamacare
"Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience." – C. S. Lewis, author of The Chronicles of Narnia and many other works of literature.
It is one of the great mysteries that, for progressives, also called liberals, the past provides no lessons, no warnings that would prevent them from repeating their errors. Progressives are always focused on a magical future in which there will be no wars, no hunger, no poverty. Their belief in the redistribution of wealth—communism—is, in Winston Churchill's words, "the equal sharing of misery."
Obamacare is a perfect example of the progressive inability to accept that socialism and/or communism simply does not work. It depends on coercion and in the case of communism it left hundreds of millions dead in its wake over the course of the last century. Obamacare depends on (1) the belief that human nature will change—which it will not—and (2) the lies to implement it.
The news is filled with the failure of the government, despite the expenditure of hundreds of millions of dollars, to provide a working website. Even assuming that the technical problems are solved, the failure of Obamacare is built-in because Americans have always enjoyed a culture of independence, despite the creep of government programs that occurred over the last half century.
The trust in the federal government, of Congress, is at an all-time low.
Social Security is insolvent or soon will be. Medicare was rendered even more insolvent when billions were transferred to Obamacare. Medicaid will bankrupt states as thousands more sign up for this program of minimal medical service.
As I listened to and read about the Obamacare roll-out, I was reminded of an earlier program that was adopted, Prohibition. It involved a nationwide ban on the sale, production, importation, and transportation of alcoholic beverages. It was the law of the land from 1920 until 1933. When it went into effect it was hailed as a victory for public morals and health. By the time it was repealed with the 18th Amendment to the Constitution, Americans had seen the growth of organized crime, the corruption that permitted ordinary citizens to ignore it, and the loss of the taxes to fund other aspects of governance.
Wikipedia notes that "By 1925, in New York City alone, there were anywhere from 30,000 to 100,000 speakeasy clubs" where liquor was sold. Prohibition proved nearly impossible to implement and enforce."
Barack Obama represents the high-water mark of progressives to impose communism on America. A totalitarian form of government, we have witnessed how his administration has turned the Internal Revenue Service into a political instrument to suppress its opponents and has expanded the National Security Agency into a means to spy on all Americans, accessing every piece of communication between them. Obamacare enables the government to know every bit of information about individual's health records.
It is, as C.S. Lewis said, "tyranny exercised for the good of its victims." Even so, the progressives ignore the failure of communism in the former Soviet Union and the decision of China to move to a capitalist economy while endeavoring to retain a single party government that is encountering increasing protests and resistance from its population.
Obamacare is being imposed at the same time that socialist healthcare programs are in retreat in Europe. In Britain, the government led by Prime Minister David Cameron has introduced a bill seeking to partially privatize the National Health Service (NHS) in an effort to avoid the Greek-style financial meltdown that threatens the European Union member states. Cameron's argument for the bill is that there is too much bureaucracy in the NHS system and that it interferes will patient care. NHS is based on the rationing of medical care as opposed to the free market system where costs are determined by supply.
As reported in a recent article by Arnold Ahlert on Front Page Magazine.com, "Last November, such rationing reached a scandalous level. A study by the Co-operation and Competition Panel revealed that Primary Care Trust heads were imposing arbitrary spending caps, denying patients procedures such as hip replacements and cataract removals—and that waiting times for services were seen" to be deliberately extended 'so patients would go private or die before they were seen,' to slash costs."
Obamacare, as has been widely reported, has increased the costs of healthcare insurance, particularly for the young on whom the system relies to pay for the costs of caring for the elderly. It has led to the cancellation of millions of healthcare insurance plans and millions more will lose their plans.
In a November 30 Washington Times article by Jennifer Oliver O'Connell, it is reported that the inherent unconstitutionality of Obamacare will bring about its end. Cases making their way through the judicial system such as Sebelius v. Hobby Lobby and Conestoga Wood Specialties Corp v. Sebelius, Indiana v. IRS, Pruitt v. Sebelius, "may be the final nails in the coffin of Obamacare." The first two cases cited will likely be heard in March with a final ruling in the summer of 2014. There are others such as Halbig v. Sebelius, King v. Sebelius, the Independent Payment Advisory Board, as well as the HHS employer mandate and origination clause challenges are among the many cases challenging the basis of Obamacare.
Finally, in the November 2014 midterm elections, political pundits are virtually unanimous in the prediction that Democrats will be driven from their control of the Senate and Republicans will increase their control of the House.
Obamacare is the ultimate expression of the progressive and/or liberal approach to government and it is, just as was the case of Prohibition, the increasing resistance of the American public and will be, at some point, repealed.
Duke Energy Fine for Bird Kills is All Show, No Substance
Last week's punishment/settlement between the Department of Justice and Duke Energy over bird deaths caused by its wind turbines gives evidence that the Obama administration needed a scapegoat, to defuse accusations that it applies a double-standard in enforcement of wildlife laws.
The Friday before Thanksgiving both parties announced that Duke would pay $1 million for the deaths of more than 160 birds that are protected by the Migratory Bird Treaty Act. The incidents occurred over the last four years at two Wyoming sites operated by the utility's Duke Energy Renewables subsidiary.
"This case represents the first criminal conviction under the Migratory Bird Treaty Act for unlawful avian takings at wind projects," said Robert Dreher, acting assistant attorney general for the Justice Department's Environment and Natural Resources Division, in a statement.
That's nice. The problem is the timing of the action coincided with aresponse by the Justice Department to Republican Sens. David Vitter (La.) and Lamar Alexander (Tenn.). The delayed reaction came ten months after they challenged Attorney General Eric Holder over an obvious double standard, in which fossil-fueled energy producers have been penalized for killing birds, while wind energy was allowed to apply for permits to kill bald eagles and other protected birds.
"It appears the Justice Department is hand-picking which migratory bird mortality cases to pursue with an obvious preference of going after oil and gas producers," said Vitter in a January 30 statement. "For example, while three oil and gas companies are facing fines for killing birds, a wind energy company is applying for permits to kill up to fifteen bald eagles. We obviously don't want to see any indiscriminate killing of birds from any sort of energy production, yet the Justice Department's ridiculous inconsistencies begs questioning and clarity."
The senators waited, and waited, and waited for an answer. By mid-May they had still not received one, but again publicly questioned the administration's policy as the U.S. Fish and Wildlife Service informed wind operator Terra-Gen Power that they would not be subject to prosecution for killing California condors, another protected species.
"Basically, the federal government has issued a condor hunting permit to big wind companies," said Sen. Alexander in May. "Federal law designed to protect a species from extinction doesn't distinguish between oil and gas companies and wind farms. Equal protection of the law means laws should be enforced evenly, and it's wrong for the Department of Justice to enforce the law against oil and gas companies but not against wind companies."
Two days after the Senator's joint criticism, House Committee on Natural Resources Chairman Doc Hastings (R-Wash.) requested extensive documentation from the Fish and Wildlife Service about its decision-making regarding the enforcement of the Migratory Bird law and the Bald and Golden Eagle Protection Act, and asked for a response by May 30. After five months the agency had not responded with the information and Hastings accordingly slammed Director Daniel Ashe in a follow-up letteron November 4.
Finally, two days before the settlement with Duke Energy was announced, the Justice Department answered Sens. Vitter and Alexander about their January inquiry. Deputy Assistant Attorney General Elliot Williams told the senators there has been no double standard in enforcement of the wildlife laws.
"Violations of the (Migratory Bird Treaty Act) are referred to the Department only when companies fail to make good-faith efforts to avoid, minimize, and mitigate avian take," Williams wrote.
Nevertheless the delay – and then the sudden confluence of Justice's answer to the senators and the announcement of the Duke settlement – gives the strong impression that Fish & Wildlife and the government lawyers wanted a "scalp" to show the senators that they are evenhanded in their pursuit of the law. But Vitter, for one, wasn't buying it.
"It looks like DOJ is making an example out of this particular case to shift the focus away from the Administration's bias of using the Migratory Bird Treaty Act to go after oil, gas and other businesses," he said in a statement on Monday. "The instances of wind energy's favoritism have been so egregious under this Administration, and DOJ's settlement and response still don't explain the Administration's obvious bias."
How biased? An independent study published by the Wildlife Society Bulletin, cited by the Daily Caller, found that 573,000 birds and 888,000 bats are killed by wind projects in the U.S. every year. And according to the Fish and Wildlife Service's own analysis, the number of birds killed is 440,000 per year, National Review reported. With those kinds of numbers it's hard for Justice Department to make a serious case for no prosecutions under the migratory bird law.
So Duke Energy, the nation's largest publicly owned utility and a close friend of the administration, was an obvious "offender" that could afford to step forward and take a hit for the overall cause of wind energy – after all, $1 million is pocket change for the company that lives and breathes regulatory favoritism.
As NLPC has reported, Duke has been on a wind (and solar) project-buying spree for years. The utility, which sells its "retail" power to customers in the Carolinas, Ohio, Indiana, Kentucky and Florida, has been building up its renewable resources for its wholesale energy delivery as well. The company, in part, benefits from the existence of renewable energy mandates in about 30 states, and lobbyists helped form North Carolina's standard which requires Duke to generate 12.5 percent of its power from renewables by the year 2021.
The stimulus also provided handsome subsidies for Duke Energy renewable projects, with the Department of Energy providing a $22 million grant for Duke's Notrees Windpower Project in Texas, more than half the estimated $43.6 million cost for the 20-megawatt energy storage experiment. And DOE also came through with $204 million under the Recovery Act for Duke's smart grid projects in the Midwest and in the Carolinas.
Duke followed with solar and wind energy projects that it has either purchased or launched, after announcements in 2007 in Ohio ("Duke Energy Ohio to 'Go Green'"), Indiana and the Carolinas that the company was seeking bids from providers of renewable power. "Duke Energy is interested in talking with potential suppliers about purchased power agreements, purchasing a generating facility, or purchased power agreements with the option to buy the facility," a company press release said.
The buying bender of wind and solar projects immediately followed: 100 wind turbines from GE and 1,000 megawatts of wind assets in Texas (Dec. '07); a 20-year commitment to buy solar power from SunEdison (May '08); the purchase of wind company Catamount Energy (June '08); and so on. Hardly a month has gone by since where Duke doesn't announce some new purchase of solar or wind resources, including this past week.
Mandates and subsidies aren't the only things that make the economics of wind energy extremely profitable for Duke. As Glenn Schleede, a former Atomic Energy Commission official, has detailed in the past, utilities invested in wind and solar reap an array of financial breaks including "Five-Year Double Declining Balance Accelerated Depreciation," which frees up massive amounts of tax-free cash from capital investments, and also reduces corporate income taxes. Duke also has benefited from the Federal Production Tax Credit, Investment Tax Credits or Production Tax Credits, additional state subsidies for utilities, and other Department of Energy subsidies such as research and development grants and contracts. As Schleede said, this transfers "hundreds of millions of dollars annually from the pockets of ordinary taxpayers and electric customers to a few large corporations that own wind farms…."
If there is any doubt left about Duke's cash flow thanks to renewables, recently departed CEO James Rogers told energy expert Robert Bryce in mid 2011 that wind subsidies enabled the utility to earn returns on equity of 17 to 22 percent.
So clearly, with wind energy bringing in so much money, a $1 million token fine over less than 200 bird deaths is not going to affect Duke Energy. The Charlotte-based utility frittered away at least ten times that much as a host of the Democratic National Convention last year.
Last week, writing for the Wall Street Journal, Bryce suggested the action by the Justice Department might mean the "green bubble" is about to burst with possibly more actions coming. But it's hard to imagine the Obama administration doing much more of significance on that front after it has poured billions of dollars into the expansion of renewables via grants, loans and subsidies.
[Originally published on the National and Legal Policy Center]
Heartland Daily Podcast: Mike Stenhouse: Rhode Island Moving Toward Ending Sales Tax
End the sales tax? Are you crazy?
No, says Mike Stenhouse, CEO of the Rhode Island Center for Freedom and Prosperity. In fact, Rhode Island might be the first state ever to end a sales tax.
Stenhouse and his team used a state tax modeling tool to determine what kind of tax reforms would best suit their state. They concluded that ending the sales tax would make their state more friendly to businesses and residents, creat 20,000-25,000 more jobs and eliminate 30% of their unemployed. Nationally, it makes more sense to lower the income tax, but due to Rhode Island's geographical location, the sales tax is a better option for them.
Their proposal has bipartisan support and is gaining more traction in the legislature than they ever thought possible. The bottom line is that no one in the state has proposed a tax reform measure that is outside the box and would institute real change. People know that this it.
Stenhouse doesn't believe that they will get the sales tax to zero, but he thinks they can make a significant reduction and is excited to see what happens in the future.
Listen to the podcast in the player above.
[Subscribe to the Heartland Daily Podcast for free at this link.]
Et tu, Cardinal Dolan? "Less Eligibility" as justification for Obamacare
The media is giving mixed reports of Cardinal Dolan's interview on Meet the Press with David Gregory. According to Fox News, the Catholics oppose Obamacare and, according to NBC News, the Catholics embrace it.
FOX NEWS link:
NBC NEWS link:
The reports merely focus on two different parts of the Cardinal's discussion. The Catholics (A) support universal health insurance and (B) oppose the parts of Obamacare that mandate Catholic institutions provide coverage for contraception, abortion and other procedures prohibited by the Catholic Church.
Giving the recent dramatic shift in the teachings of the Catholic Church regarding free market-oriented economics, I'm going to say a few words on behalf of the Cardinal Dolan:
The Catholics generally support a government that is medium-size. They cannot support big government. The opposition to big government is very clear. They generally do not support a government that is small. From time to time, they have attacked small government, but not in ways that are as clear as their attacks on big government. It may be possible for the Catholics to encompass both the small and the medium-sized government-types; but, the Catholic Church has generally not been a comfortable place for small government-types.
Pope John Paul II was kind of an exception to the rule among the leaders of the Catholic Church with regard to small government, at least with regard to the focus and tenor of his teachings. I may be exaggerating a bit, but when John Paul II was Pope, atheistic communism was the Great Satan in the world. Today, according to Pope Francis, it is free market economics. In his words, the "trickle down theory" of economics is the "new tyranny" in the world.
Thus, Cardinal Dolan, in defending universal health insurance, is in keeping with the mainstream of Catholic political economy. My defense of Cardinal Dolan will be based, however, on a different principle. instead of supporting medium-sized government, I will say that it is unjust to condition charity on not working. This principle is called "less eligibility." A person should not be made less eligible for benefits because he works. This principle was developed by the private charity movement of the 19th Century, which was mostly a Protestant initiative, but was embraced at the time by some Catholics. I am not aware, however, that the Catholics have ever spoken on this principle.
According to the principle of less eligibility, denying charity to poor people because they work is evil. It not only undermines the incentive to work, it robs the poor of the dignity that comes with work, and it replaces "agape" or friendly love with sympathy. Instead of seeing the poor as like ourselves, in that they, too, work, it sees the poor as objects of pity, and replaces brotherhood as the basis of charity with victimhood.
According to the principle of less eligibility, once the government starts to get into the charity business, and starts to dispense goodies like cash benefits, food stamps, health insurance, housing vouchers, Pell Grants, and so forth, the discrimination among the poor based on working becomes an issue. If those on welfare who do not work have health insurance, why is health insurance denied to those who are poor who work.
My mother, who was one of the working poor of this country, in her old age put it this way: Why do prisoners have health care, and she did not? It was no use for me to remind her that she had health insurance through Medicare, as she had problems with her memory. I told her, Mom, if you need an operation, you can rob a bank. If you're successful, you'll have the money for your operation. And, if you're not successful, you'll wind up in prison where you'll get the operation for free.
In theory, we could have a tax and welfare system consisting of (A) a package of benefits, mostly non-cash, and including health insurance, for those at the very bottom, and (B) a tax rate – let's say 20 percent – where you start losing the benefits as you start to have income, eventually come to a break-even point, and then start paying taxes. With this kind of system, we would have a floor but no ceiling to income, and at every point along the income distribution people would have a good incentive to work. I think the system I have just described would be o.k. with most people who support small to medium-sized government, although maybe it would not be o.k. to all at either end of this range.
But, here's the problem for the Catholic Church: church leaders cannot pretend to know what is the right amount of the basic grant or what is the right mix of cash and non-cash benefits in that basic grant, and what is the right tax rate to make this tax and welfare system work. That would be for government leaders to decide, relying on economic advisors and their own good judgment.
My judgment, as an economist, is that the dollar value of Obamacare is way too high for it to be affordable by the taxpayer for those who are subsidized, or to be affordable by those at the lower end of the income distribution who are not subsidized. Also, that the dollar value of the total package of welfare benefits – cash and non-cash benefits – is too high (mostly because of the health insurance part of the package). And, that the effective tax rate on those at the low end of the income distribution is way too high, approximately 100 percent, so that there is little incentive to work.
So, speaking as an economist, the particulars of Obamacare and of the tax system have to be addressed. But, the principle that nobody should be treated more shabbily because they work implies that if welfare recipients get health insurance so too should poor working people.
I would to conclude by returning to the insight into brotherhood developed by the 19th century private charity movement. As described by Joseph Tuckerman, the first leader of this movement in this country, we are all called to be our brother's keeper, both the rich and the poor, each of us expected to work and be self-responsible to the extent that we are able. To this teaching, I would like to append the remarkable insight into brotherhood developed by Pope John Paul II. He said that by developing a sense of self in the context of a private property-based, market-oriented economy, a person might fall in love with himself; and, by entering into relations with others on the basis of free association, he might come to love others as he loves himself.
Heartland Daily Podcast: Victor Skinner- Wisconsin Officials Harass Voucher Schools
Victor Skinner, the author of the report for the Education Action Group News, joins The Heartland Institute to talk about his findings regarding Wisconsin's oddly balanced school voucher system.
The Wisconsin Department of Public Instruction (DPI) has the power of interpreting laws regarding the voucher system and has increased and changed its reporting procedures that end up placing burdens on participating voucher schools and limit eligibility for students. Apparently, DPI makes complicated rules, like requiring parents to actually staple their income tax return to their voucher application. Although the state legislature has rectified some of these issues, DPI seems to come up with more and more.
Voucher school officials are bogged down by the never ending rules placed on them; they just want to run their schools efficiently and help the kids the best they can, but they just keep running into road block after road block. They keep participating in the voucher system because their communities have a demand for better education options.
It doesn't help that the elected State Superintendent, Tony Evers, does not think voucher systems should exist. It's a giant conflict of interest for the state of Wisconsin.
Listen to the podcast in the player above.
[Subscribe to the Heartland Daily Podcast for free at this link.]
Illinois' So-called Pension Reform Is Not Real Reform
DefSemiHidden="true" DefQFormat="false" DefPriority="99"
UnhideWhenUsed="false" QFormat="true" Name="Normal"/>
UnhideWhenUsed="false" QFormat="true" Name="heading 1"/>
UnhideWhenUsed="false" QFormat="true" Name="Title"/>
UnhideWhenUsed="false" QFormat="true" Name="Subtitle"/>
UnhideWhenUsed="false" QFormat="true" Name="Strong"/>
UnhideWhenUsed="false" QFormat="true" Name="Emphasis"/>
UnhideWhenUsed="false" Name="Table Grid"/>
UnhideWhenUsed="false" QFormat="true" Name="No Spacing"/>
UnhideWhenUsed="false" Name="Light Shading"/>
UnhideWhenUsed="false" Name="Light List"/>
UnhideWhenUsed="false" Name="Light Grid"/>
UnhideWhenUsed="false" Name="Medium Shading 1"/>
UnhideWhenUsed="false" Name="Medium Shading 2"/>
UnhideWhenUsed="false" Name="Medium List 1"/>
UnhideWhenUsed="false" Name="Medium List 2"/>
UnhideWhenUsed="false" Name="Medium Grid 1"/>
UnhideWhenUsed="false" Name="Medium Grid 2"/>
UnhideWhenUsed="false" Name="Medium Grid 3"/>
UnhideWhenUsed="false" Name="Dark List"/>
UnhideWhenUsed="false" Name="Colorful Shading"/>
UnhideWhenUsed="false" Name="Colorful List"/>
UnhideWhenUsed="false" Name="Colorful Grid"/>
UnhideWhenUsed="false" Name="Light Shading Accent 1"/>
UnhideWhenUsed="false" Name="Light List Accent 1"/>
UnhideWhenUsed="false" Name="Light Grid Accent 1"/>
UnhideWhenUsed="false" Name="Medium Shading 1 Accent 1"/>
UnhideWhenUsed="false" Name="Medium Shading 2 Accent 1"/>
UnhideWhenUsed="false" Name="Medium List 1 Accent 1"/>
UnhideWhenUsed="false" QFormat="true" Name="List Paragraph"/>
UnhideWhenUsed="false" QFormat="true" Name="Quote"/>
UnhideWhenUsed="false" QFormat="true" Name="Intense Quote"/>
UnhideWhenUsed="false" Name="Medium List 2 Accent 1"/>
UnhideWhenUsed="false" Name="Medium Grid 1 Accent 1"/>
UnhideWhenUsed="false" Name="Medium Grid 2 Accent 1"/>
UnhideWhenUsed="false" Name="Medium Grid 3 Accent 1"/>
UnhideWhenUsed="false" Name="Dark List Accent 1"/>
UnhideWhenUsed="false" Name="Colorful Shading Accent 1"/>
UnhideWhenUsed="false" Name="Colorful List Accent 1"/>
UnhideWhenUsed="false" Name="Colorful Grid Accent 1"/>
UnhideWhenUsed="false" Name="Light Shading Accent 2"/>
UnhideWhenUsed="false" Name="Light List Accent 2"/>
UnhideWhenUsed="false" Name="Light Grid Accent 2"/>
UnhideWhenUsed="false" Name="Medium Shading 1 Accent 2"/>
UnhideWhenUsed="false" Name="Medium Shading 2 Accent 2"/>
UnhideWhenUsed="false" Name="Medium List 1 Accent 2"/>
UnhideWhenUsed="false" Name="Medium List 2 Accent 2"/>
UnhideWhenUsed="false" Name="Medium Grid 1 Accent 2"/>
UnhideWhenUsed="false" Name="Medium Grid 2 Accent 2"/>
UnhideWhenUsed="false" Name="Medium Grid 3 Accent 2"/>
UnhideWhenUsed="false" Name="Dark List Accent 2"/>
UnhideWhenUsed="false" Name="Colorful Shading Accent 2"/>
UnhideWhenUsed="false" Name="Colorful List Accent 2"/>
UnhideWhenUsed="false" Name="Colorful Grid Accent 2"/>
UnhideWhenUsed="false" Name="Light Shading Accent 3"/>
UnhideWhenUsed="false" Name="Light List Accent 3"/>
UnhideWhenUsed="false" Name="Light Grid Accent 3"/>
UnhideWhenUsed="false" Name="Medium Shading 1 Accent 3"/>
UnhideWhenUsed="false" Name="Medium Shading 2 Accent 3"/>
UnhideWhenUsed="false" Name="Medium List 1 Accent 3"/>
UnhideWhenUsed="false" Name="Medium List 2 Accent 3"/>
UnhideWhenUsed="false" Name="Medium Grid 1 Accent 3"/>
UnhideWhenUsed="false" Name="Medium Grid 2 Accent 3"/>
UnhideWhenUsed="false" Name="Medium Grid 3 Accent 3"/>
UnhideWhenUsed="false" Name="Dark List Accent 3"/>
UnhideWhenUsed="false" Name="Colorful Shading Accent 3"/>
UnhideWhenUsed="false" Name="Colorful List Accent 3"/>
UnhideWhenUsed="false" Name="Colorful Grid Accent 3"/>
UnhideWhenUsed="false" Name="Light Shading Accent 4"/>
UnhideWhenUsed="false" Name="Light List Accent 4"/>
UnhideWhenUsed="false" Name="Light Grid Accent 4"/>
UnhideWhenUsed="false" Name="Medium Shading 1 Accent 4"/>
UnhideWhenUsed="false" Name="Medium Shading 2 Accent 4"/>
UnhideWhenUsed="false" Name="Medium List 1 Accent 4"/>
UnhideWhenUsed="false" Name="Medium List 2 Accent 4"/>
UnhideWhenUsed="false" Name="Medium Grid 1 Accent 4"/>
UnhideWhenUsed="false" Name="Medium Grid 2 Accent 4"/>
UnhideWhenUsed="false" Name="Medium Grid 3 Accent 4"/>
UnhideWhenUsed="false" Name="Dark List Accent 4"/>
UnhideWhenUsed="false" Name="Colorful Shading Accent 4"/>
UnhideWhenUsed="false" Name="Colorful List Accent 4"/>
UnhideWhenUsed="false" Name="Colorful Grid Accent 4"/>
UnhideWhenUsed="false" Name="Light Shading Accent 5"/>
UnhideWhenUsed="false" Name="Light List Accent 5"/>
UnhideWhenUsed="false" Name="Light Grid Accent 5"/>
UnhideWhenUsed="false" Name="Medium Shading 1 Accent 5"/>
UnhideWhenUsed="false" Name="Medium Shading 2 Accent 5"/>
UnhideWhenUsed="false" Name="Medium List 1 Accent 5"/>
UnhideWhenUsed="false" Name="Medium List 2 Accent 5"/>
UnhideWhenUsed="false" Name="Medium Grid 1 Accent 5"/>
UnhideWhenUsed="false" Name="Medium Grid 2 Accent 5"/>
UnhideWhenUsed="false" Name="Medium Grid 3 Accent 5"/>
UnhideWhenUsed="false" Name="Dark List Accent 5"/>
UnhideWhenUsed="false" Name="Colorful Shading Accent 5"/>
UnhideWhenUsed="false" Name="Colorful List Accent 5"/>
UnhideWhenUsed="false" Name="Colorful Grid Accent 5"/>
UnhideWhenUsed="false" Name="Light Shading Accent 6"/>
UnhideWhenUsed="false" Name="Light List Accent 6"/>
UnhideWhenUsed="false" Name="Light Grid Accent 6"/>
UnhideWhenUsed="false" Name="Medium Shading 1 Accent 6"/>
UnhideWhenUsed="false" Name="Medium Shading 2 Accent 6"/>
UnhideWhenUsed="false" Name="Medium List 1 Accent 6"/>
UnhideWhenUsed="false" Name="Medium List 2 Accent 6"/>
UnhideWhenUsed="false" Name="Medium Grid 1 Accent 6"/>
UnhideWhenUsed="false" Name="Medium Grid 2 Accent 6"/>
UnhideWhenUsed="false" Name="Medium Grid 3 Accent 6"/>
UnhideWhenUsed="false" Name="Dark List Accent 6"/>
UnhideWhenUsed="false" Name="Colorful Shading Accent 6"/>
UnhideWhenUsed="false" Name="Colorful List Accent 6"/>
UnhideWhenUsed="false" Name="Colorful Grid Accent 6"/>
UnhideWhenUsed="false" QFormat="true" Name="Subtle Emphasis"/>
UnhideWhenUsed="false" QFormat="true" Name="Intense Emphasis"/>
UnhideWhenUsed="false" QFormat="true" Name="Subtle Reference"/>
UnhideWhenUsed="false" QFormat="true" Name="Intense Reference"/>
UnhideWhenUsed="false" QFormat="true" Name="Book Title"/>
Today the Illinois Legislature is expected to take up a faux pension reform bill that is being heralded by many business groups, lawmakers, and the media as real "fundamental reform." The financial problems facing Illinois' pension system are massive and obvious, and yet the minor changes being proposed are being heralded by various advocates and some opponents as being significant or even "extreme."
That couldn't be further from the truth. The reforms being proposed won't lead to a fully funded system for another 30 years, assuming the overly optimistic estimates and rate of return assumptions are correct. Benjamin VanMetre of the Illinois Policy Institute points out the "plan is really no different than the ramp Illinois has today, which is expected to have the systems 90 percent funded by 2045. The truth is there is no difference between the old plan and the new one."
While compromise is a basic element of politics and policy-making, compromise also can give the public the illusion that the problem has been solved, when in fact such compromises purposely avoid the root of the problem.
The fundamental source of the pension problem in Illinois is the "defined-benefit" pension plan system, which goes practically untouched by the proposal except for a few minor tweaks to retirement age and COLAs. Public employees will continue to receive a pre-set benefit amount upon retirement for an indeterminate amount of time. This type of system is financially unsustainable and will crowd out spending for other programs such as education.
Here are the three biggest problems with the pension proposal:
1. The optional defined-contribution plan included is capped at 5 percent enrollment. One could assume this is out of fear that too many public employees will want to take control of their own retirement and be given the flexibility to change jobs, thereby undercutting the current Ponzi scheme. Cunningly, the proposal includes language that would allow government to cancel these defined-contribution plans and seize the money in them. The combination of the enrollment cap and the provision allowing the state to seize these plans makes this aspect of the proposal nothing more than window-dressing for what is truly needed as part of any fundamental pension reform. At minimum, the state should have stopped the bleeding by enrolling all new employees in a true, employee-owned 401k-style pension plan.
2. Changes to cost-drivers are minor or are actually harmful. The changes to the COLA formula and a pension cap of nearly $110,000 do little to curb costs and change the financial trajectory of the system. Phasing in a five-year increase in the retirement age is a step in the right direction but one that will still allow pensioners to retire much earlier than private-sector employees and collect millions of dollars' worth of pension benefits for an indeterminately lengthy amount of time.
3. Prioritizing and guaranteeing pensions payments above other government expenditures, such as education and public safety, is a guarantee for higher taxes and higher spending. The guarantee written into the proposal is somewhat vague, but that doesn't mean it won't be applied at the expense of other core functions of government or taxpayers.
Illinois politicians are refusing to acknowledge they are guilty of promising overly generous benefits while pushing the costs onto future generations of taxpayers by failing to fully fund the pensions. Those who say this plan is the best one that is politically viable in Illinois are being disingenuous or haven't been paying attention. Rhode Island – a very blue state with a similar per-capita proportion of state and local public employees – passed fundamental pension reforms that go much further than Illinois' proposal does.
Illinois may have only one opportunity to get pension reform right, and this proposal is not it. More than likely, this proposal will set back the true fundamental pension reform that is required to protect taxpayers from further tax hikes, give public employees more job flexibility, and put Illinois on a sustainable fiscal path.
U.N. Climate Change Talks: It's Really All About the Money
"Rich countries are still not pledging enough money to begin financing a shift to a cleaner global economy," reports the Financial Times (FT) in its coverage of the United Nations climate talks in Warsaw that ended with little more than a "vague road map on how to prepare for a global climate pact they're supposed to adopt in two years."
Leading into what has now been called an "unsatisfactory summit," predictions suggested the "talks could collapse because of a lack of financial support from rich nations." Delegates from developing countries, such as Ecuador's lead negotiator Daniel Ortega, believe "an effective 2015 emissions reduction agreement has to be based on a clear financial package."
Ortega stated: "I'm not personally expecting any commitment by Warsaw. What we need to have is a clear roadmap of how the discussions of financing will allow us to have a clear idea of commitments by 2015."
Even low expectations like Ortega's were dashed when, on the opening day of the climate talks, November 11, Australia's Prime Minister Tony Abbott's government produced a document, outlining its position at the Warsaw conference, which boldly stated: "Federal cabinet has ruled that Australia will not sign up to any new contributions, taxes or charges at this week's global summit on climate change." The Australian points out: "This rules out Australia playing any role in a wealth transfer from rich countries to developing nations to pay them to decrease their carbon emissions." But, perhaps, the most dramatic line in the government document is: Australia "will not support any measures which are socialism masquerading as environmentalism."
A few days later, November 15, Japan announced that "its emissions would increase slightly rather than fall 25 per cent as promised in 2009." Japan was struggling to meet its previous emissions promises—which were the most aggressive of any big developed country—even before the Fukushima accident prompted the shutdown of its 50 still-operable nuclear reactors and its corresponding rise in the supplemental use of fossil fuels.
Then on November 20, news came out of England stating that Prime Minister Cameron is telling everyone: "We've got to get rid of all this green crap."
All of this is on the foundation of Todd Stern, the Obama Administration's chief climate diplomat, dialing back expectations when, during an October 22 speech in London, he addressed U.S. involvement: "an international agreement is by no means the whole answer." He pointed out "the need to be creative and flexible" and acknowledged the "hard reality" that "no step change in overall levels of public funding from developed countries is likely to come anytime soon." Stern added: "The fiscal reality of the United States and other developed countries is not going to allow it."
Toward the end of the conference, "six environment and development groups walked out, saying the annual round of talks had delivered little more than hot air." A statement from Greenpeace, World Wildlife Fund (WWF), Oxfam, ActionAid, the International Trade Union Confederation and Friends of the Earth said: "The Warsaw climate conference, which should have been an important step in the just transition to a sustainable future, is on track to deliver virtually nothing." Samantha Smith, leader of the WWF's climate and energy initiative called the meeting a "farce." She told the FT: "Finance is one of the big reasons we walked out. Expectations were that developed countries were going to put money on the table, but what happened when we got here was exactly the opposite."
In a statement, Smith blamed: "Japan's announcement that it would not reduce emissions as promised, Australia's decision to end its carbon tax and Canada's congratulating the latter on its new climate policy."
Just as it looked like predictions of collapse would come true, a last-minute compromise came through in overtime: the Warsaw international mechanism for loss and damage (IMLD). Stern led the 36 straight hours of "bad-tempered negotiations"—including a standoff between the US and developing nations—in which "countries of the South … finally won."
Addressing the IMLD, the Associated Press (AP) reports: "agreements were watered down to a point where no country was promising anything concrete." While the IMLD was agreed upon, according to The Hindu, "deciding how this mechanism would get the funds in future" remained unresolved. And, BusinessGreen.com bemoans: "the vague wording fell short of the kind of detailed commitments on additional funding and avoided a commitment to compensation that many developing nations had been seeking."
So, while a deal was reached that allows "just enough to keep things moving," little is really expected. The AP states: "In two-decades, the U.N. talks have failed to provide a cure to the world's fever." Even Connie Hedegaard, European climate commissioner, acknowledges: "the process needs to provide a 'substantive answer' to global warming in two years to remain relevant."
Fortunately, Mother Nature can't be bought. Despite the billions the world's wealthy nations have provided to poorer countries, global CO2 emissions have continued to rise. As the Washington Post reports, from 2010-2012 only about $5 billion of the $35 billion actually went toward helping poor countries prepare for actual climate change impacts. $100 billion per year is expected by 2020 but "most developed countries are failing to demonstrate promised increases."
Britain was one of the "wealthier nations" to promise billions in aid, but it is balking, too. Ed Davey, energy and climate secretary, believes that paying additional compensation to poorer nations is "not fair or sensible." The Telegraph states: "Growing numbers of Tory backbenchers are now calling for the government to withdraw from expensive climate change and carbon commitments."
Douglas Carswell, Tory MP, sums up the so-called climate compensations: "We're spending money that we don't have to solve a problem that doesn't exist at the behest of people we didn't elect."
Canada, Australia, Britain, and even Japan—home of the landmark Kyoto climate talks two decades ago—are coming to their senses. The US held out until the very last minute—and then capitulated by agreeing to the IMLD.
It really is all about the money. The Abbott Administration has stated: Australia's efforts on greenhouse gases will be conditioned by "fiscal circumstances." Japan, acknowledges its need for energy: "Although Japan's economy is one of the world's most energy efficient, the country is still the fifth-biggest CO2 emitter, owing to its large-scale concentration of manufacturing industries." Britain's Carswell says: "The rethinks that have happened in Japan and Australia and elsewhere desperately need to happen here as well." Ditto for America. After all, they've had their way for twenty years—CO2 emissions have gone up, the economy has gone down, and global warming has stalled.
[Originally published on Townhall.com]
Ten Obamacare Talking Points To Ruin Your Thanksgiving
We probably all know at least one: the person who comes to a family gathering primed to talk about politics – particularly, to let you know why their view is right, and yours is dead, dead wrong. These are the worst kind of guests. They have no interest in catching up and spending a brief moment in time out of the precious few we get on this earth avoiding politics. Insufferable in their insistence in turning the conversation into Crossfire, they can't even take a holiday from partisanship and just be happy to ask someone to pass the gravy.
Thanks to the White House and Organizing for Action, there may be a marked increase in such guests this holiday season, thanks to this push to have you come to Thanksgiving dinner – and the other holidays too! – with your administration-approved talking points in hand. Oh frabjous day indeed.
President Obama has done a lot of things I dislike, but ruining Thanksgiving and Christmas dinner is a bit much. And to let him be clear: that's exactly what he's doing. Instead of letting families argue about perfectly reasonable things to discuss over holiday dinners – such as when Mike Shanahan should be fired, which Bound 2 parody is the best, and whether Miley Cyrus should be launched into the sun for the good of humanity – the president wants to insist on inserting his priorities into family gatherings across the country. "I understand you worked hard to brine this bird, but let's refocus on what matters: why you haven't signed up at healthcare.gov yet. Did you hear it's getting much better? Don't talk about the Iron Bowl or Aunt Jenny's wedding, let's turn this conversation back to what really matters: avoiding a death spiral and ensuring stability in the insurance market!"
We've certainly come very far from an era when people of different political mind were urged to set aside their differences and come together for a meal and football and gather round the hearth in peace. Instead we're in the era of "argue with your neighbors, get in their face". Maybe it's that social media sparring fuels these political grudge matches, or that political allegiances are worn less as choosing between the lessers of evils and more as teams of red and blue. But if you want to talk about death spirals, this is one I wish we'd get out of, and soon. Talking points beget talking points and before you know it the Thanksgiving table has turned into the McLaughlin group, except with the added challenge of your uncle having had six Cranberry Old Fashioneds and a carving knife within handy reach.
What's more, now that these insufferable partisans in the administration have distributed their talkers, you're a lot more likely to hear any one of these ten statements at tomorrow's dinner, to which I am now obligated to offer a prebuttal. And yes, Mr. President, I hate you for making me write this.
1) Healthcare.gov may suck, but state exchanges are performing really well.
No, most of them aren't. They're way behind, too. Exchanges such as those in Oregon, Colorado, Maryland, Vermont, Hawaii, and other states which have led the charge in implementation have fallen flat on their faces. Oregon, which had total buy-in at all levels of the state and no political opposition to speak of, has signed up exactly zero people. And while states like California, Connecticut, and Kentucky have had better success, the vast majority of signups in the state exchanges are within Medicaid, not private insurance – in part because the eligibility is easier to determine. But that has negative outcomes as well, as those with private insurance are now required to go on Medicaid – such as this woman in Washington state.
2) The website's problem is demand and once the front-end problems are fixed, it'll work great.
No, it's not – in fact, the website couldn't even handle 500 visitors without problems according to internal documents from the Centers for Medicare and Medicaid Services, released in hearings last week (the all-caps emails are the best ones). The real problem with the website at this point isn't capacity at all: it's the extremely delayed back-end – major portions of which apparently haven't even been built yet – which are supposed to hand off people to the actual insurers they select, and handle the payments for plans (the point at which people are actually "enrolled"). Collecting these premiums and making sure insurers get them has always been the heaviest lift under Obamacare, and the lack of these systems is far more problematic than just the front-end frustrations of delays and glitches. It's along the lines of having an Expedia-like site that "works" because you can select your flight, but doesn't actually have the capability for sellers to charge you, or reserve your ticket. Which is, let's face it, kind of key. There is no public deadline for these remaining critical fixes, and they've already missed their first deadline for the front-end.
3) Only a few young and healthy people will pay more – for most people, they will keep their plans or have something better.
No, actually, premiums are going up just about everywhere, and for most people. In 41 states, premiums in the individual market are going up by an average of 41%. Only eight states – generally those with the most heavily regulated markets – will see premium reductions ranging between 3% and 40%. But according to The Manhattan Institute's analysis, for those who have it bad, it's really bad: the eight worst states are seeing huge premium hikes, including Nevada (+179%), New Mexico (+142%), Arkansas (+138%), North Carolina (+136%), Vermont (+117%), Georgia (+92%), South Dakota (+77%), and Nebraska (+74%). While the young and healthy get the brunt of these increases, the older folks aren't exempt, either – and even if their premiums don't increase that much, it's likely they'll see larger deductibles and narrower networks.
4) The pre-Obamacare health insurance market was a "free market" full of "junk" insurance plans, which screwed people over and dropped their insurance when they got sick.
No, this simply isn't true. The American health insurance system prior to Obamacare was in some senses the worst of both worlds: one torn between single payer and third party payer, where while most of the care offered was superior to the rest of the world, the chief problem was explosive growth in costs… because no one cares what something costs when someone else is paying for it (in this case, your employer or the government). No one in their right mind would describe a reality in which the government holds so much market sway, and in which consumers have near-zero price transparency, as a free market system. And as for screwing over people who got sick: it's been illegal for insurers in the employer market to drop people who get sick since 1997 (thanks, HIPAA!). This means the problem only applies to the individual market (10% of private health insurance), where people were dropped less than 4/10ths of 1% of the time, typically after an appeals process. You really want to argue we needed to disrupt the entire marketplace to solve a problem which impacted such a small portion of the population? It would've been cheaper to just hand them all a check for higher-subsidized coverage… such as those offered through high risk pools, the type states like Maryland and New Hampshire are trying to keep open since their exchanges are broken. Oh, and if you're in the employer market and feel left out by all this disruption, don't worry – you're next.
5) Obamacare is already controlling health care costs and it'll eventually control premium costs.
No, it isn't. Health care spending has actually been on the decline for some time, when measured per capita, in large part because of the economic decline. It's also possible the dramatic growth of high deductible plans with health savings accounts, which have exploded in popularity since they came into being in 2003, (HSA enrollment has quintupled just since 2006), have factored into the slowdown. These plans behave more like real insurance and less like an overpriced payment plan, and so people behave more like consumers. National health spending per capita rose just 3.7 percent in 2008… two years before Obamacare was enacted. And keep in mind, we're talking about all health care spending here – not the price of insurance premiums, which Obama promised would be down $2,500 for a family of four. But even analysis by the Congressional Budget Office found in 2009, well before the law passed, that premiums would go up because of Obamacare's regulatory requirements. Obama didn't promise premiums would go up by less than estimated, but that they would go down. Since Obamacare has passed, they've gone up, and they're probably going to continue doing so for the foreseeable future… in part because of Obamacare's faulty exchange design.
6) Once you're able to get onto the website, you'll have plenty of cheaper/better choices and be able to qualify for a subsidy.
No, you probably won't. While the subsidies are generous for people on the lowest income end, many people – even low-income people – will be surprised to find how little the subsidy hides the aforementioned growth in premiums or how expensive the new plans are. And the rate shock they perceive for those premiums will likely be deceptive as well, as ProPublica notes here, because of the increases in deductibles and out-of-pocket co-pays associated with the new policies. Polling data thus far shows one of the major reasons people are coming to the website but not selecting a plan is because they're surprised by the costs. For many people, $190 a month is absolutely affordable – but for those who weren't buying insurance when it was $160 a month, they're balking.
7) When people get covered under Obamacare, they'll start liking the new system because they'll get the same health care, but cheaper.
No, they probably won't get what they expect. While I am amazed by how much the administration has bungled the rollout of the law, the real Achilles' heel from my perspective has always been the second round of hits: the doc shock as people learn about the newly restricted networks under the plans offered via the exchanges. Many states have one insurer with dominant, near-monopoly market share, and in these states not having a critical hospital in the network can be a major problem for the ill. The best hospitals in the country – the Mayo Clinic, Cedars-Sinai, and other such household names – are typically also the most expensive hospitals in an insurer's network. This means that the quickest way to be able to make a plan that is solvent under Obamacare's regulatory model is to drop some of these expensive hospitals and systems from your plans. This is going to hit the sickest Americans hardest, as stories like this one show. In Washington State, Seattle's Children's Hospital is actually suing the state's insurance commissioner after being dropped by so many insurers, disrupting the care of sick children. The Cleveland Clinic, which accepts dozens of plans, is included in just one insurer's network through Obamacare. Get ready for a lot of stories about other children's hospitals and cancer-focused clinics in January.
8) The Obamacare Medicaid expansion, which only neo-Confederates oppose, is giving millions of people access to affordable health care.
No, it won't – it will give them a card promising access, which isn't the same thing. Medicaid really is a well-intentioned ghetto of lousy health care, with terrible outcomes and access problems galore in many states, particularly for kids and for those with serious illnesses. We have hard evidence from the experience in Oregon that Medicaid doesn't lead to better health outcomes. And for those Medicaid recipients who do need help, they already refer to their cards as a "useless piece of plastic" because they can't actually find a doctor or dentist to accept them in a timely manner. To combat this, politicians in states like Massachusetts and Virginia have proposed making it mandatory for doctors licensed in the state to accept Medicaid patients, even as doctors accepting such patients continue to experience payment cutbacks, just as they're seeing in California today. Cramming hundreds of thousands of new enrollees into systems which already can't handle the people on the program? That seems like a great idea.
9) This whole thing would have worked just fine except for the Republican commitment to kill it.
No, it wouldn't have. The Democrats in Congress wrote the bill with the federal/state exchange choice in it: they have only themselves to blame for the fact that many state legislators in both parties realized early on that making a state exchange meant owning its performance. Distrusting Obamacare's feasibility, most states took the path of least resistance, and left it to the feds to do the work. But the administration dawdled and delayed in moving forward on key regulations because they didn't want them to factor into the 2012 election – that was their decision alone, significantly delaying rules and red tape which was key to the implementation process. It was the Obama administration's decision alone to put the gun to the head of lawmakers and offer only a full expansion of Medicaid, not a partial one, or no Medicaid dollars at all — meaning that negotiating was basically out of the question except as window dressing, until seven Supreme Court Justices (including two Democratically appointed ones – including one appointed by Obama!) said no dice. And finally, it was their decision alone to plunge forward with the website, when they absolutely could've offered delay as an olive branch to Republicans earlier this year and come away seeming both magnanimous and responsible, even as the bureaucrats in the know breathed a sigh of relief. Republicans have certainly stirred up a lot of political opposition to the law in Congress and across the country, but other than killing a few aspects of Obamacare unrelated to the core issue (things like the CLASS Act and the 1099 requirements), they've just been Statler and Waldorf providing color commentary at the movies. This was a monopartisan bill, and that decision has consequences… but the fundamentals of the law are failing to match up with the promises the president made to the American people, and none of those fundamentals were altered by Republicans.
10) We're just trying to help poor people get health care! How can that be wrong? Why do you hate poor people?
Okay, you've got me there. Most Republicans hate poor people because they worry that their poor germs will prove contagious, and next thing you know you're standing in a Walmart at 1 AM sorting through a bin of DVDs looking desperately for cheap Christmas presents and wondering why they ever made so many movies where Matthew McConaughey is leaning on things in a totally natural fashion. (I have it on good info that this is a recurring nightmare in the Romney household.)
The big distinction between the Left and the Right on health care policy is their different aims: the Left pushes getting people "covered" – via insurance, private and governmental. But what the Right pushes generally is greater access to quality, affordable care. This latter approach is generally the more popular one – which is why Obama sounded so much like he was echoing it during the 2008 election, where he focused on cost, not on coverage! The truth is that health insurance – particularly in the form of programs like Medicaid – does not guarantee quality health care any more than car insurance guarantees you a mechanic who fixes what's actually wrong with your car without overcharging you. They want people getting insured because insurance is more affordable, competing in a marketplace to provide people with what they want – and thus Republicans are focused on cost, while Democrats are focused on coverage. The point is that we can subsidize the poor inefficiently (and create all sorts of access problems) through the existing broken programs, or we can subsidize them more efficiently through funded HSAs or direct delivery of services – treating low-income Americans as consumers, not as wards of the state. The Obamacare Medicaid expansion actually goes against this line of thought: it crams large numbers of healthy able-bodied childless adults into a program originally meant to serve the poorest of the poor and sickest of the sick… which is what a true safety net should do, after all.
I can't believe President Obama made me write this, or made you have to read it. Come on, people, it's the holidays – if you really can't take a few days off from partisan politics, maybe it's time to admit you have a problem. So please, do us all a favor, and ignore The Man's push to spend Thanksgiving dinner talking about entitlement programs as our eyes glaze over. These administration folks don't respect you – they lied to you in their talking points for years, and even now apparently think you're too dumb to even talk to your family without their help. So if you find that as you ask for the gravy that you're talking more about your BFFs Chait, Cohn, and Pollack than you do about friends you know in real life, may I respectfully suggest you consider making a New Year's resolution to get a life outside of politics. Trust me: it'll give everyone else something to be thankful about.
[Originally published on The Federalist]
NHTSA to Investigate Tesla Fires as Battery Facts Remain Elusive
After three recent fires, Tesla Motors CEO Elon Musk said he asked the National Highway Transportation Safety Administration to investigate its Model S.
NHTSA said no he didn't.
Tesla has been saying it received the highest safety rating in the U.S., a "new combined record of 5.4 stars."
NHTSA says there's no such thing.
Musk said he expects the investigation will clear Tesla after incidents in which metal objects struck the underside where the Model S battery is located.
NHTSA says we'll see, and a decision whether there should be a recall will likely take months. Maybe a lie detector test needs to be part of the study.
Musk thought he had averted scrutiny after the first fire in Washington state last month, when NHTSA declined to investigate the cause. Then another fire followed a collision in Mexico, and another blaze ignited in Tennessee a couple weeks ago after a Model S struck debris in the road (allegedly).
Musk doesn't think it's fair that Tesla has received so much negative media attention when there are hundreds of fires every year in gasoline-powered vehicles.
"Musk described the weeks since the fires as 'torture,'" the Associated Press reported Friday. "He said the crashes have received an unreasonable amount of media attention given that no one was injured and the passenger compartments remained intact. He understands that a new technology such as electric cars will get more scrutiny, 'but not to the insane degree that we're receiving.'"
The reason for the insanity – or, at least the reason there should be insanity – is the fact that Tesla is trying to build its business on the backs of taxpayers and government distortion of free markets, rather than on the merits of its automotive product. Sure, Musk had the company repay its $465 million loan from the Department of Energy's stimulus stash, but as NLPC has reported Tesla has vacuumed up millions of dollars in California zero-emissions credits it has sold to other vehicle manufacturers. The company also enjoys advantages such as the buyer's federal tax credit for each vehicle, state tax credits and incentives, subsidies for battery manufacturers, and perks to offer buyers (who aremostly rich Californians) such as the use of high-occupancy highway lanes.
So for a company so dependent on a government that mandates your product and taxpayers who subsidize it, you can expect "insane" scrutiny when you hit some glitches. After all, Americans are coerced "investors." In addition, President Obama's new Energy Secretary Ernest Moniz has held up Tesla as a successful product of DOE's Advanced Technology Vehicle Manufacturing loan program, and thus plans to revive the program that had received horrible publicity thanks to the failures of Vehicle Production Group and Fisker. The future of DOE's electric vehicle "investments" has a lot to do with whether Tesla is viable or not.
But for all the brilliance and innovation that Musk has accumulated to his credit – leading tech pioneers such as Paypal and SpaceX – he obviously doesn't get that with public money comes extra accountability. He enjoyed the attention earlier this year when the accolades came one after another, such as "safest car of all time" and Consumer Reports' label as(almost) "the best car ever." Wall Street pumped up the stock price near $200 with its two (alleged) profitable quarters in a row and $20 billion market capitalization. A seemingly lone voice – John Petersen of SeekingAlpha.com – sought to bring some sanity to the overwrought hype about Tesla's value that even Musk has said was unjustified, and was promptly hammered by critics for his negativity.
A little over a month later came the first fire. It's been downhill since. The share price fell to $121.38 upon Friday's closing, and whereas Musk was happy to feed the positivity pump, he is dismayed at the attention now. Even when he tried to put a happy spin on the NHTSA investigation by saying Tesla asked for it, he was quickly refuted by the agency.
"The swift rebuttal of Mr. Musk underscores how Tesla's relentless promotional campaign is wearing thin on regulators charged with making the nation's vehicles and roadways safe," the New York Times reported.
Another reason to doubt Musk is the claim that the two Model S fires in the U.S. were caused by running over debris in the road. In Washington a "large metallic object" allegedly triggered the event, and in Tennessee the culprit was said to be a trailer hitch. The only problem is, while there have been plenty of photos distributed of the charred Model S's in the media and online, no pictures have been revealed of the alleged "perpetrators" (or "penetrators"): the "debris."
"If that incident had occurred exactly as Tesla has theorized (near-instantaneous impalement of the battery pack by a 3" diameter sharp metallic object), in my opinion the car would have been instantly disabled (no chance to keep driving for another 2 – 3 minutes to get off the main highway, park, and exit the vehicle without injury) and might even have detonated the battery pack…," wrote Lattice Energy's Lewis Larsen, a physicist who has been a frequent critic of companies that depend on the viability of lithium ion batteries, in an email.
"Why hasn't Tesla held a news conference and Elon Musk conducted a public 'perp walk' with the guilty piece of highway debris that they initially claimed had been recovered by a Washington Dept. of Transportation road crew that had been working in the area at the time of the incident?" he added.
In both incidents Tesla released statements that emphasized the battery fires were not "spontaneous," which speaks to the company's concern about the reputation for lithium ion technology's "thermal runaway." Larsen said if Musk really wanted to debunk that suspicion, then he would have employed his massive resources to hold up the offending debris for the world to see. That didn't happen.
Unusual behavior and circumstances have surrounded fires that have occurred with electric vehicles and Boeing's lithium-ion battery-dependent Dreamliner. In the case of two Chevy Volt residential garage fires in Connecticut and North Carolina, General Motors (as well as local officials and insurance companies) deployed teams that took over a year to investigate, only to determine the cause of the fires were "inconclusive."In fires that involved the Fisker Karma, the company quickly emphasized their battery was not the cause and in the case of a Houston-area fire,suggested the vehicle owner might be to blame.
And with the case of the broadly publicized Boeing 787 fires, which shut down production of the newfangled airliner for months earlier this year, a company official concluded that it "almost doesn't matter" what caused the fires as it announced a new "fix" for the undetermined problem.
Transparency, honesty and conclusive findings have been mostly absent from lithium ion battery incidents that affect the transportation sector. Taxpayers have been forced to heavily "invest" in this stuff and they deserve the truth.
[Originally published on the National Legal and Policy Center]
Violence is Very Human
The "knockout game" is in the news these days along with much discussion of bullying. Football is a game of violence with rules in which players frequently sustain injuries. Terrorism has been adopted to advance the Islamic goal of global domination. And the administration just announced an agreement with Iran in a vain effort to slow their intention to join the nuclear club of nations with the capacity to kill thousands, if not millions.
It is impossible not to conclude that violence is not built into the DNA of mankind.In his 2007 book, "The Most Dangerous Animal: Human Nature and the Origins of War", David Livingston Smith, a professor of philosophy at the University of New England, wrote: "The track record of our species shows, beyond a shadow of a doubt, that we are extremely dangerous animals, and the balance of evidence suggests that our taste for killing is not some sort of cultural artifact, but was bred into us over millions of years by natural and sexual selections."
On the plus side, he wrote "But we have also seen that there is something in human nature that recoils from killing and pulls us in the opposite direction."
It's worthwhile to take a moment to contemplate violence. A statistical analysis, Smith noted, reveals the constancy of war. "Looking at forty-one modern nation-states between 1800 and 1945, we find that they average 1.4 wars per generation and 18.5 years of war per generation."
"Almost 200 million human beings, mostly civilians, have died in wars over the last century, and there is no end of slaughter in sight," wrote Smith. "The threat hangs over all of us, constant and unrelenting."
The brief notice of the slaughter occurring in Syria when poison gas was used is instructive. A wider war was avoided when Russia stepped in to negotiate the destruction of this weapon and was occasioned only when President Obama contemplated military strikes. At this writing, 100,000 Syrians and combatants have died. It is no longer an on-going news story.
"The Value of Violence" is a new book by Benjamin Ginsberg. "Honesty would be so frequently damaging that virtually all politicians and public officials become practiced liars," notes Ginsberg, suggesting that "cynicism should be understood as a reasonable, if mainly intuitive, popular response to the realities of politics."
The deal with Iran, albeit for only six months, was conducted in such secrecy that none of the members of Congress, including its leadership, were aware of it. The killing of a U.S. ambassador in 2012 on the anniversary of 9/11 was immediately surrounded in lies when Americans were told it was initiated by a video no one had seen, rather than one more episode in the war that Islamic fascists have engaged in since the 1980s. The nation is trying to extract itself from Afghanistan after the 2001 act of war we call 9/11 and has left Iraq after a war whose justification is subject to question. Long wars of attrition sap the strength and will of even a superpower.
The reason the deal with Iran is so suspect is the fact that it is the nexus for much of the terrorism in the world, sponsoring organizations like Hezbollah and Hamas. It has engaged in every manner of violence from assassination to kidnapping and hostage-taking.
Ginsberg notes that "In recent decades, for example, armed insurgents have employed violence or the threat of violence to overthrow a number of established regimes. The African continent alone has experienced some eighty-five successful military coups during the past sixty years." It is Africa that mankind evolved, standing upright, and walking to inhabit all the other continents.
Much is made of violence in America. It is the daily content of news. "In the United States alone, nearly one and a half million individuals become the victims of violence every year—pushed, kicked, pummeled, stabbed, and shot—while tens of thousands of others are the perpetrators of these same acts."
Indeed, America was born in violence as citizens took up arms against the British to establish the nation. Not that long after, it fought a bloody civil war to retain the union. The right to bear arms, as much to hold the government in check as any other, is part of our Constitution. An estimated eighty million Americans own a gun or rifle or both.
One can argue that violence on the individual, national, and international level is the price that humanity pays for its own inherent, even genetic, inclination to use violence for a wide variety of purposes. It has been used by the great religions and by nations alike.
It will not end. Our best efforts can only restrain it within ourselves, but weakness, too, is an ancient invitation to violence. Appeasement is a trap.
[Originally published on Warning Signs]