Tag Archives: President Obama

A Bits and Pieces Approach to Healthcare Legislation

#1: Pre-Existing Conditions
Wednesday, August 19, 2009

President Obama and Congress are trying to accomplish comprehensive healthcare reform in a single piece of sweeping, historic legislation. Good for them, but it’s making my head hurt and doing nothing to instill confidence in the outcome.

Why not address the myriad of component issues in separate pieces of legislation? For example, the issue of pre-existing conditions.

Medical insurance underwriters give extra value to large businesses who subscribe to their programs. It’s a form of volume discounting which is supposed to reflect the administrative savings the underwriters enjoy by virtue of the centralized management of so many individual accounts.

In and of itself, there’s nothing inherently wrong with at the least the concept of volume discounting. The problem here is the extent to which the price of coverage is being discounted, and in the non-pecuniary, high value benefits that the underwriters are allowing.

What’s really happening is that the underwriters are competing for large clients in a way they don’t feel the need to compete for small company and individual family business. It is discriminatory pricing which has too little to do with the actual costs of medical care. As a rule, small business employees and unaffiliated Americans who would buy individual and family coverage are no more likely to become ill, and no more costly to treat than the employees of large companies. The underwriters are discriminating, not because it makes good economic sense, but because they can get away it. Existing law and new healthcare legislation can stop that.

There are two issues here. One is whether or not the underwriters are over-discounting to large clients at the expense of smaller companies and individual families? More to the point, is there anything truly non-competitive about their behavior – not just undesirable, but non-competitive – that existing law, aggressively applied, may be able to regulate? If there’s a problem, and if we need new legislation, okay, let’s do it.

The other issue is that underwriters waive pre-existing condition rules to attract large account business. That practice has no real economic basis and can be discontinued in a single piece of highly specific legislation not much longer than this posting – and upon which almost everyone in Congress, on both sides of the isles, can agree. Americans will love the initiative for its clarity and the sense of progress this single piece of legislation represents. The President’s polls on the issue of his management of healthcare reform will improve – as will Congress’ which have nowhere to go but up. And we can all focus our attention on the next very specific healthcare issue on our agenda, whatever that might be — one problem at a time.

There. That was easy. (Thunderous applause, followed by feigned modesty and, “Thank you. Thank you very much.”)

-wf


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Obamination: The Fallacy of the Public Option

Monday, August 17, 2009

The purpose of the “Public Option” in President Obama’s healthcare reform initiative is to keep the costs of medical care down.

One of two things is true: Either prices in the healthcare industry are currently determined by competitive market forces, in which case they are what they are and the government needs to stay out of it, or the prices we pay for medical services and pharmaceutical products are too high as a result of non-competitive forces ranging from benign market anomalies to outright monopoly.

Let’s assume it’s the latter. The solution then is NOT to have the government go into competition with the private sector, but to attack and regulate out the non-competitive influences which are keeping prices higher than a competitive market would dictate.

If, for example, the auto manufacturers were to collude to fix new car prices above competitive levels, would the Obama or any other Administration start a government owned and operated automaker to give the people a competitive, lower priced alternative? Of course not. Existing government institutions would use laws already on the books, and some new ones if necessary, to break up that monopoly. Don’t like my example? Make up one of your own, but the point will be the same.

What we have here is a President and a large segment of Democrats in Congress which President Obama’s election has emboldened who believe in the power of government through direct involvement in the economy to an extent which is neither supported by experience or consistent with the fundamentals of capitalism – and it’s making a lot of elected officials, businessmen and women in large and small companies, and a whole lot of us regular citizens justifiably uncomfortable.

-wf


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The Not So Transparent Presidency of Barack Obama

Tuesday, August 11, 2009

Is it my imagination, or is President Obama getting smaller and smaller? Of course not. It must just be that the illusion of his grandeur is fading in the harsh light of his politics-as-usual Administration.

On Friday, January 23, 2009, just 3 days after his inauguration, President Obama issued a “Memorandum for the Heads of Executive Departments and Agencies” on the subject of “Transparency and Open Government.” It was touted to be an historic document, and began with these words… (The use of italics is in the original.)

“My Administration is committed to creating an unprecedented level of openness in Government. We will work together to ensure the public trust and establish a system of transparency, public participation, and collaboration. Openness will strengthen our democracy and promote efficiency and effectiveness in Government.

Government should be transparent. Transparency promotes accountability and provides information for citizens about what their Government is doing.”

Impressive, but not, as it turns out, in a good way. What’s impressive about it, we now know, is how meaningless it has turned out to be. Words without substance. Intent without execution.

Yesterday, as reported by several sources including, for example, the New York Times, the Administration admitted to having made a deal with representatives of the pharmaceutical manufacturers to get behind the Obama plan for healthcare reform. Not incidentally, this deal was struck an industry trade group, aka “lobbyists” of the sort Candidate Obama promised to rid Washington once and for all. What President Obama got was the promise of $80 billion of costs reductions over 10 years – which isn’t all that much, by the way – but in return for what? In return for concessions related to our government negotiating prices and encouraging the import of medicines from Canada.

The value of this deal to Americans is a matter for debate, but not here. One thing is pretty much certain. Whatever The Pharmaceutical Research and Manufacturers of America – which is the name of the industry trade group with which the Administration struck this backroom deal without the knowledge or participation of Congress or the American People… that whatever they gave up, they got back, and then some from a President desperate to succeed, but without the maturity and experience to do it right. Well spoken, to be sure, he’s a politician nonetheless.

This piece isn’t about healthcare reform per se. It’s about promises and bullshit. (My apologies for the vulgarity, but sometimes a good 8 letter word says it best.) It’s about a President who doesn’t believe in what he writes and says. As it turns out, the only transparent government he was talking about is the government he wants us to see.

-wf


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The Nutball Economics of President Barack Obama

Monday, August 3, 2009

First things first. I know that “nutball” is not one word, but it should be. Now, what was my point? Oh, yeah…

We are a consumer driven economy in the midst of one of the most serious recessions in our history. Reported unemployment is approaching 10% and that doesn’t take into account the extent of underemployment and its devastating impact on family income.

Even in the best of times, there will be some minimum level of unemployment, somewhere around 3%, associated with people who are, let’s say, temporarily between jobs. Subtracting this 3% leaves us with approximately 7% of our workforce which has been a casualty of the recession – plus the underemployed who are still working, but not making enough.

Candidate Obama promised us he would not raise taxes paid by regular people, that he would increase taxes for only the wealthiest of Americans. Now President Obama has apparently been transported into a different reality. Faced with budget deficits of biblical proportions, his closest advisors are test-marketing the potential of increasing taxes on the “Middle Class,” broadly defined to include almost all of us. (See, for example, “Geithner Won’t Rule Out New Taxes for Middle Class” by George Stephanopoulos, August 2, 2009.)

So, let me get this straight, which is what I usually say when there’s a long sentence coming… We’re a consumer driven economy in a severe recession in reaction to which the President and Congress (mostly Democrats) have spent kuh-billions of dollars we don’t have to help certain financial and automotive sector companies – which the economy would have handled just fine without our help – leaving most of the economy to fend for itself. (Break.) But now, concerned that he’s going to be presiding over the Obankrutcy of America, and that the effect of his reckless spending will have adverse consequences far beyond his one term Presidency, he’s considering raising taxes which will further curtail consumer spending and actually impede our recovery. It’s perverse Robin Hood economics, “Robin” from the many for the benefit of the relatively few.

That’s right, he’s considering raising taxes which will reduce consumer spending to help pay for programs, many of which were/are intended to slow the downturn and protect consumer spending. Hmmm?

Here’s an alternative. Stop spending so much money!! Put every dollar you’ve got directly into the pockets of the consumers who have been most affected by the recession and who will put those dollars into the economy, immediately.* Otherwise, stay out of the economy, and put major programs on hold until we can afford them. Just because you can print money, doesn’t mean you can spend it.

The impression I keep having is that of a President who talks well, but has no idea what he’s doing, who is overwhelmed by circumstances beyond his control, moving way too fast and whose naïve, overconfident intellectualism hasn’t prepared him to contend with real problems of this severity.

*If you have time, you might also want to take a look at Occam’s Economics: A simple, back-of-the-envelope plan to regenerate consumer spending – immediately, posted Thursday, July 9, 2009 on the WordFeeder.

-wf


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President Obama: The Presumption of Prejudice

Thursday, July 23, 2009

Without question, there is still racism and other ethnic discrimination in the United States, and there will be for some time to come. Prejudice dies hard.

Black Americans have certainly done their part, heroically, to make their case and for that effort deserve, at the very least, the respect of those for whom a belief in equality isn’t second nature.

For the most part, equality has become a technical reality. Having accomplished those objectives, we’re now in that awkward, unfortunately long-term endgame for when people need to go beyond accepting the fact of equality, to not recognizing the differences between our people which some once thought made discrimination appropriate, even necessary.

It’s a process that takes time, understanding and patience, and that often requires subtle, but nonetheless exceptional efforts by both sides of the problem.

Unfortunately, in a press conference yesterday that was supposed to be about healthcare reform and the economy, President Obama chose to enter the fray over the arrest of noted scholar Louis Gates, Jr. in Boston. While admittedly not knowing all the facts of the situation, he nevertheless expressed his opinion that Boston Police – including the one of three officers on the scene who is also black – behaved stupidly when they arrested his friend and, let’s say it, fellow black person.

That the President would even comment on a local police matter is odd. That he would risk diverting the attention of the media from the primary objectives of his press conference is bad politics and frankly disrespectful to those major issues he was there, in prime time, to argue. More to the point, that he would express a critical opinion about police behavior without knowing all the facts is, almost by definition, discriminatory in and of itself, and sets a bad example for Americans of all persuasions who are doing their best, in their everyday behavior, to put an end to inequality.

Had a passerby seen two white men apparently breaking into a house, would he or she have called the police? Had Professor Gates been white, would the President have commented about the event at a prime time press conference? No. What President Obama did was act on the presumption of prejudice, which may be understandable, but is also unfortunate and tells us something interesting about how he sees the world.

-wf


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The Obankruptcy of America

Tuesday, July 21, 2009

Our government has a worst-case scenario estimate of the total, long-term cost of federal government support of troubled firms and markets. It’s $23.7 trillion, with a “t.” This is not to say that the economy will need this level of support, but only that we’ve made commitments which could, conceivably, end up costing us this much. (See Politico’s piece by Eamon Javers, July 20, 2009, “Bailouts could cost US $23 trillion”, which will help put this number in perspective.)

Breathtaking, isn’t it? Overstated? Maybe. The Treasury Department says we’ve spent less than $2 trillion so far. Chump change by Obama standards.

In case anyone doubted that we’re in a financial crisis, we are and its name is “President Barack Obama.”

Maybe it’s his naïveté, his almost complete lack of fiscal and administrative management experience. Maybe he’s blinded by the light of a liberalism so profoundly simpleminded, it gives Liberals a bad name. That he has a sincere commitment to making America better, to fixing the multitude of our problems is not an excuse for the mess his level of spending and government interference with the economy will eventually cause.

We elected Barack Obama President of the United States government. He’s been hired, by “We, the People,” to manage our government for us. He is not the President of the Economy, if there were such a position, and he needs to get it out of his head that he can run it, the economy that is.

They say that the greatest mistake any salesman can make, even the very best, is to believe his own hype. “Yes we can!” was a good, very effective campaign slogan, but it’s time for a reality check. The election’s over. It’s time for Barack Obama to stop campaigning and start managing the government.

Whatever the precise causes of his fiscal recklessness, it’s got to stop. Either he comes to his senses and gets it out of his head that “money is no object” government isn’t tenable or, simply put, it’s up to the Republicans and some Democrats in Congress to provide the checks and balances which are their Constitutional responsibility.

If they’re not up to it or need our help, the good news is that there’s another election just 15 months from now.

-wf


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President Obama’s Brain: Panic, Inexperience and Overly Complicated

Tuesday, July 21, 2009

I’ll be really brief. (My Corn Flakes are getting soggy.) I believe in the intelligence of my readers. Most of you will fill in the blanks. Others, well, won’t realize there are any blanks, so it won’t make any difference.

First example: President Obama’s program for healthcare reform is a mess. Grotesquely too complicated and way too costly, as far as we can tell, in ways we can’t fully calculate yet. Interferes with established markets with who knows what impact. Difficult to impossible to administer. Yada, yada, yada.

Alternative, much simpler solution: (1) Ask the medical profession to define the minimum coverage Americans should have. (2) Ask the medical profession and insurance underwriters to define the cost of that coverage – provided exclusively by the private sector. No profiteering, please. (3) Give the money for that coverage to people who can’t afford it. (“Honey, would you put my English muffin down again? …Thanks.” I make a kissing noise with my mouth without looking up so as not to interrupt my typing.)

Second example: The economy is in trouble due, in part, to the irresponsible behavior of many of our nation’s leading financial institutions. “Oh my God!!” our new President says to himself, giving out k-billions of dollars in bailout money to solve problems the economy would have resolved more effectively and far less expensively on its own. To paraphrase Admiral Farragut, “Damn the budget deficit, full speed ahead! Who wants bailout money?” (Personally, I get a kick out of imagining President Obama wearing one of those old horizontal Admiral’s hats.)

Flash forward just 6 months… Many of the same companies are showing huge multi-billion dollar profits and are returning to their pre-bailout ways. “Way to go, President Obama!”

Oh, and did I forget to mention that he’s only managed to spend $90 billion – some of it still in “the pipeline” which, for the government, is a lot like having a fur ball – of the $787 billion he insisted he needed on an emergency basis to save the economy?

Okay, my English muffin is getting cold, and the fake, high-in-Omega-3s butter my wife buys me won’t be melting in the nooks and crannies anytime soon. And that’s where I draw the line. You’re on your own. Good luck.

-wf


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President Obama’s Ulterior Motive

Monday, July 20, 2009

In the vernacular of magic it’s called “prestidigitation,” literally “sleight of hand.” It’s all about distraction. Look here, not there.

Six months into his Presidency, someone needs to tell President Obama that he can stop running for office. He needs to stop campaigning and start managing the government. The problem is, campaigning is what he does best, and may be all he knows how to do.

Lately, President Obama has been all over the place campaigning for Congress to pass healthcare reform legislation by the August break – almost without regard for the effectiveness of that legislation or its costs. Not that healthcare reform – and universal healthcare, in particular – isn’t way overdue. It is. The problem is his obsessive concern about the timing of the legislation, as if getting it done according to his frankly arbitrary schedule is more important than the quality and affordability of the program Congress passes.

So why is he pressing so hard? Without a doubt, it’s because he sincerely believes that it’s important legislation and that he’s doing his best, however ineptly, to make it happen. But why be in such a hurry and so persistently high profile in his appeals to Congress and the American people? One explanation is that his campaign for healthcare reform has the benefit of distracting us from his Administration’s embarrassingly incompetent handling of the economy and the $787 billion of stimulus money Congress approved at his request. Five months since he demanded these funds on an emergency basis, only $90 billion has been spent, much of which is still in what they call “the pipeline,” and we all know what that means.

And then there are the billions and billions of dollars he’s wasted bailing out some of our major financial companies and buying General Motors.

Clearly, these are things he doesn’t want to talk about. The economy’s a mess and he’s done precious little about it while putting us even deeper into debt in the process.

Fiscal and program management are not something he’s good at. Talking, yes. He’s an exceptionally good speaker delivering very well written material. Unfortunately, his performance as President has been disappointing, to say the least, although entirely consistent with what you would expect from someone with his minimal management experience. It took the head of the Congressional Budget Office to point out that his Administration’s healthcare proposal doesn’t make financial sense, a conclusion which he does not dispute. Shouldn’t his advisors have worked through the economics of their own program more carefully first, before submitting it for Congressional review and approval? Why hasn’t he been able to spend $697 billion of the $787 billion of stimulus money Congress approved? Shouldn’t the latter be his highest priority?

Well, let’s see… He can’t talk about his performance over his first 6 months office because he hasn’t accomplished anything, and he doesn’t know what to do about the economy except wait for it to recover on its own and then take credit for it. And he doesn’t want to talk about the additional troops he’s pouring into Afghanistan. So what does that leave, but to distract us by scolding Congress and campaigning directly to the American people to prove he’s on top of healthcare reform? (On top of a badly flawed program that needs more work than anyone should reasonably expect Congress to accomplish in the next 10 days?)

The question is, given the record of his Presidency to date, why should we believe his emergency healthcare legislation will be any better conceived, cost effective and well managed than his program for economic recovery?

Let’s hope he’s learning from his mistakes. In the meantime, when President Obama talks about this, maybe we should be taking a closer look at that.

-wf


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Quote of the Day: 1,000+ pages and counting.*

Friday, July 17, 2009

Excerpted from the Wall Street Journal’s article by Greg Hitt, “Budget Blow for Health Plan”, July 17, 2009.

“We do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount,” Douglas Elmendorf, director of the Congressional Budget Office, told the Senate Budget Committee. “On the contrary, the legislation significantly expands the federal responsibility for health-care costs,” he added.

Who do the President and Congressional Democrats think they’re kidding? Apparently, not Mr. Elmendorf.

By the way, regarding the President’s resistance to the notion that employer-paid healthcare insurance benefits should be taxed to help pay for the costs of universal health insurance… None of us needs additional taxes, to be sure, but fair is fair and we need to be practical. We need to keep mind that people who purchase their own healthcare insurance are paying for that coverage with after-tax dollars. Medical insurance isn’t tax free for them. Why should it be for people with employer-provided coverage?

*See also “Occam’s Law of Program Uselessness: The effectiveness of any government program varies inversely with the number of pages on which it is written” which was posted on the WordFeeder on Wednesday, July 15, 2009.

-wf


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President Obama’s Hurricane Katrina

Friday, July 17, 2009

Running for President is one thing. President Obama is a superb campaigner with an exceptional campaign management team. Managing the government is something else altogether.

Rightly so, President Bush was lambasted for his slow and horribly inept response to the devastation caused by hurricane Katrina on New Orleans and in other communities throughout the region. What’s stunning is that President Obama – clearly President Bush’s intellectual superior – has proven himself no better, and perhaps worse at delivering government support in a crisis of much greater magnitude.

Despite his popularity and majority ownership of Congress, despite his stated need for a stimulus package on an emergency basis, here we are, 154 days since the stimulus package was passed by Congress on February 13, 2009, 5 months later and the Obama Administration has so far managed to spend only $90 billion of the total $787 billion approved – and much of that $90 billion has yet to hit the street, is still categorized as being “in the pipeline.”

The stimulus package was never necessary or appropriate. The way the money would have been spent wasn’t the most effective use of those funds to blunt a serious downturn and facilitate recovery. We didn’t have the money, and the economy is recovering on its own without it. That having been said, there’s just no excuse for President Obama’s not having spent the money Congress approved. He’s in charge. It’s his fault.

Please, save me from one more speech where a politician accepts responsibility for his or her failures. I don’t want an apology. It’s the last thing the American people and the economy need. What I want is for him to step up to his teleprompters, tell us they’ve missed the window of opportunity they had when the bill was first passed and cancel the stimulus package. “That’s it. It’s too late. We’re not going to spend the remaining $687 billion as originally planned. I’m sure we can find something else to do with it. Sorry, I blew it.” (That last sentence is optional.)

Better yet, let’s deliver the $697 billion directly to those consumers who have been hurt the most by the recession and who will put these dollars out there in the economy where they need to be, immediately.

Suggested reading… “Occam’s Economics: A simple, back-of-the envelope plan to regenerate consumer spending – immediately.” which I posted Thursday morning, July 8.

-wf


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