Saturday, March 29, 2014

Hitting Russia where it hurts; decreasing EU dependency on Russian gas

The press conference held in the Hague after a meeting on nuclear issues       last week was both clarifying and revealing.  Much can be deduced about our relationship with Russia, the Ukraine situation, and the world’s view of America’s leadership, its limit of power, and in particular, Pres. Obama’s role.  The President came in for high praise from the hosting  Dutch foreign minister for his leadership.
 The goal, per the President, is to give those in Ukraine the chance to decide on their own relationship wit h the West and Russia  in May elections. Looming is the fear  Russia will  attempt to carve out a land bridge from Russia  to Crimea through Eastern Ukraine. .
 Ukraine has a Russian gun pointed at its head.. The fear is Russia will try the same tactics used  in Crimea…outside provocateurs,  gangs of irregulars, and infiltration of unmarked military personnel. . Currently massed on Ukraine’s borders are Russian troops.  Putin initiated a call to Pres. Obama, but at this writing it is unknown if Russian troops were pulled back and Russia accepted the deal to have international observers protect Russian speaking Ukrainians from the new Ukraine  government in Kiev.
A measure   to kick Russia out of the G8 and  isolate Russia  got   unanimous approval in the Netherlands . This follows Russia’s veto in the UN of a resolution upheld by 13  other  members of  the Security Council declaring Russia’s takeover of Crimea invalid.  Only China abstained.  
The original group of  Western  economic super  powers was once called the G7.  The first time Russia was  invited  to participate was when the summit was held in Denver in  1997  .  Those of us living in Colorado were eye witnesses to quite a  spectacle and the first ladies  were treated to a train ride to Winter Park and lunch.
A very important outcome in the Hague  was unanimous reaffirmation that NATO military  treaty obligations would be honored if Russia tried to expand to the Baltic states, which, like Crimea and  parts of the Ukraine  also have large populations of Russians. There are many Lithuanian immigrants in Grand  County who must be taking comfort from that.
The delicate question is how can Western Europe up the ante to  modify Russia’s  behavior  short of military action without shooting themselves or the US in ours or their  own economic  feet. The most effective way would be for Europe stop being dependent on  oil and gas from Russia. This would get Russia where it hurts since their  economy has been pumped up by sales to the West.. The EU is presenting a plan in June to wean themselves from Russian energy.
Russia is already feeling the pressure.   Rana Foroohar, writing in Time, March 24, 2014, believes “Putin’s petro state will eventually implode all by itself”,  pointing out the US that has the fastest growth in the world.   She predicted  that there would be a foreign capital flight to the US “as investors seek safety in US Treasury bills and blue-chip stocks. In economic terms, the war over Ukraine has already been won – and not by Putin.” Russian government sources confirm the flight of capita out of Russia,  $70 billion in the first quarter (as much as in all 2013); stagnation instead of forecasted growth, and inflation of 7% due to the ruble devaluation.
For more on" EU to take measures against dependency on Russian gas",
The Southeast European Times is sponsored by the US European Command, the joint military command responsible for US operations in 52 countries.
A version of this also appeared in print:
From the New York Times, April 17, 2014
"While the annexation of Crimea has rocketed President Vladimir V. Putin’s approval rating to more than 80 percent, it has also contributed to a sobering downturn in Russia’s economy, which was in trouble even before the West imposed sanctions. With inflation rising, growth stagnating, the ruble and stock market plunging, and billions in capital fleeing the country for safety, the economy is teetering on the edge of recession, as the country’s minister of economic development acknowledged on Wednesday."

Saturday, March 15, 2014

Will Obama hurt Medicare? No. It may even strengthen it

Just posted a series of links to fact checkers and analyses of the issue.  Key is the one from the Congressional Budget Office which concludes Obamacare will extend the life of Medicare for an decade.
See: CBO March 20, 2010; Joint Committee on Taxation Revenue Estimates, JCX-17-10 (March 20, 2010).
CMA ||  Medicare Facts & Fiction   Benefits are not cut; CBO says the ACA extends the life of Medicare
Simpson-Bowles Return to the Medicare | Medicare News Group   Worth reading: By using the ACA as a foundation, Simpson-Bowles gives a nod to the fundamental approach of President Obama's strategy: reform the program internally, pass along more costs, and restructure payments and treatment modes.

Essential reading for those who believe Obamacare will weaken Medicare.  From a letter to Sen. Jeff Sessions:

Budgetary Impact of the Legislation

On the basis of the economic forecast and technical assumptions in CBO’s March

2009 baseline, CBO projected that, under current law, the HI trust fund would be

exhausted—that is, the balance of the trust fund would decline to zero—during

fiscal year 2017. Enacting PPACA, including the manager’s amendment, would

reduce net outlays for Part A of Medicare by $245 billion over the 2010–2019

period relative to that baseline, CBO estimates. Enacting that legislation would

also increase HI payroll tax receipts by about $113 billion over that period,

according to estimates by CBO and the staff of the Joint Committee on Taxation

(JCT). Together, those changes in outlays and revenues would diminish budget

deficits and add to trust fund balances by $358 billion over that 10-year period.

Given those changes in the financial flows of the trust fund, CBO estimates that

the HI trust fund would have a positive balance of about $170 billion at the end of

fiscal year 2019.

Will Obamacare hurt Medicare Advantage? | PolitiFact An analysis of interest

Thursday, March 13, 2014

Crimea: The Revenge of Geography?

Crimea: The Revenge of Geography? A great discussion about geo politics and some sobering thoughts about our concerns regarding Russia and our ability to influence what goes on in the Ukraine.

Wednesday, March 12, 2014

How the Democrats could beat the GOP at the Mediscare game

What the Florida special election this week shows is that if last minute ads flood the screens that scare the dickens of an important segment of the electorate with distortions and innuendos, or outright lies, it is possible to beat an opponent, especially when last minute timing gives an opponent  no chance to refute.        It is a political technique as old as democracy and made possible by
 unbridled millions able to be poured into a district by outside groups in these days of permissive election laws. Here is how the Democrats could beat the GOP at the Mediscare game.

Democrat Alex Sink lost by 2% to  David Jolly the Republican  protoge of the  member of the House of Representatives whose death left the seat open in a district around Clearwater, Florida.  The district had voted for the GOP in House races  over the past 40 years, though Pres. Obama had carried it in 2008 and 2012. It is  a district that is heavily populated by seniors.

There are some lessons for Democrats and it was considered a test case for how Democrats in swing states could win.  It turned out to be  more of an example of how Democrats could be beaten. Especially vulnerable in Louisiana  is Sen. Mary Landrieu. The more the GOP can tie her to Obamacare and Medicare, the more successful they will be....especially if they wait until  the last minute of the campaign.

The GOP  message used in the final days of the Sink-Jolly campaign was credited for turning the election from a possible win by Swink to a squeaker win by  Jolly. $5 million dollars flooded from outside money to convey the message.  The ad hit an issue hard: "To pay for Obamacare, Washington is forcing seniors to endure deep cuts to Medicare Advantage".

 The term "deep cuts" is the frightening term.  If 1.9% cut in the program is deep, then your definition is different than mine.
For a senior (and I am one of them on Medicare Advantage), this gets your attention. If you are not listening closely and think this will cause "deep cuts" to Medicare, it would turn your hair whiter. If you do not realize you are one of  the majority not on Medicare Advantage, then you might think Obamacare is going to hurt you deeply. The New Orleans Times Picayune estimates that only 26 % of those on Medicare have Medicare Advantage in Mississipi..

Not everyone is on Medicare Advantage, a program that combines Medicare and Medigap insurance with some gym memberships and is a little cheaper than Medigap supplementals because it limits a person's choice of providers.  (Mine is an employer retiree provided plan and I have a choice of three providers and, yes, my Medicare advantage program premium rose by $30 per month as the change kicked in in 2014; its still a good deal)..

Here is the reality:  About $250 billion of the cuts  is ending the subsidy to private insurers for Medicare Advantage which, strangely enough, is continuing without the subsidy. The private insurers were being paid 17% more to administer Medicare than what the government could do itself….and it resulted in no advantage to improving senior health  outcome  and only  the insurers got the  advantage in bloated federal subsidies. The rest is in cuts to hospitals and providers, but it results in NO, repeat "no", cuts to to Medicare benefits.  In short, money was being wasted on private insurers' overhead and other wastes in benefits provided by the health care industry.

Furthermore, the life of Medicare is extended 12 years by the Obamacare  savings .   For the deficit hawks, Simpson/Bowles Debt Reduction Commission says the cuts are essential to reducing the deficit. Even the Ryan budget proposed a couple of years ago proposed keeping the cuts...only the savings did not go into the health care system as Obamacare requires.

What Landrieu and again Sink must do (the Florida election will be rerun in November) well as other Democrats in purple states... is to be ready to anticipate and call out such scare tactics before the last minute barrage  and keep a last minute war chest ready for a quick response. 

The direction Landrieu and other Democrats facing elections in purple states are taking is to just ask for a fix:  i.e. sign a letter asking for Medicare Advantage to be exempted...or delay the individual mandate or other such exemptions affecting certain voter groups..  The problem is much of these cut rollbacks would seriously harm the affordability of the program. i.e. Cuts to Medicare account for a third of the Obamacare savings that would have to be offset by something.  Depending upon how long the individual mandate would be rolled back could destroy the creation of the pool making the entire program a financial disaster and passing on the costs on to everyone else.  The extent of the impact must be weighed; to do otherwise is irresponsible.

Here is how a Democrat could position  the next campaign in anticipation the  GOP might link  Medicare  to Obamacare:.  "While I do not like everything about Obamacare (or do), what it does right is add 12 years to Medicare's life..  What it does is stop wasteful overpayments to insurance companies for Medicare Advantage.  What it does right is not touch Medicare benefits. My opponent wants to restore the abuses to a program we treasure, cut 12 years off its life,  (and where appropriate)...he/ she wants to privatize it, give you a voucher that is not guaranteed to cover your costs in the future."   

That same litany could be used to refute other issues pertaining to Obamacare.  For example:" While I do not like everything Obamacare does, and I am happy to see the web site up and running, what it does right is makes sure pre-existing conditions are covered, that you can get no-copay cancer screenings, allow my 19 year old child to stay on my insurance...etc.  What my opponents want is to make you give up all of this because that is what "repeal" means.  For those of you who have gotten affordable insurance (5-6 million), my opponent wants you to turn in your insurance and trade it  for nothing, zippo, but to risk bankruptcy and to fear again  to get treated for what ever ails you because of the cost." 

Some resources I drew on :        "GOP targeting Medicare Advantage cuts in 2014 campaign it hopes will be referndum on Obaamacare: Bruce Alpert, Times-Picayune at NOLA .com  March 12, 2014

Sunday, March 9, 2014

Ukraine crisis puts energy independence on the front burner

The Ukraine crisis points to the importance of energy independence.  Much of the world’s strife can be attributed to the distribution of natural resources.  The givers control; the receivers are at their mercy, chained to them by supply line tethers.

 Oil has always driven much if not all  of US military and foreign policy. US’s entanglement in the middle east; its devastating invasion of Iraq; the first Gulf War  are just a few examples.  We are already approaching energy independence in this country with our ability to tap onto our vast natural gas reserves and our increase in oil production.  The Ukraine crisis points to the need for Europe to get itself independent of imports from Russia.

Columnist Thomas Friedman, writing in  the New York Times March 4, opined  Russian  Pres. Vadimir Putin  “ prefers to turn Russia into a mafia-run petro-state…all the better to steal from” and contends we should hit him where he hurts, forcing down energy prices with our own exports of liquefied natural gas (LNG) ,  crashing the Russian economy which is pumped up  now on oil revenues..Undermining Putin’s petro revenues is better than going to war.

 The threat of Russia shutting off their energy supply is a powerful reason for allies like Germany  that gets 30% of its gas from Russia and other  European friends in a similar pickle  to resist joining us fully  in modifying Russia’s behavior. . Russia controls their shutoff valves .
Russian pipelines supply petro resources from one end of Western Europe to the Balkans (including as far south as Croatia). Their pipelines  crisscross the Ukraine, making control of it strategic to both Russia and Western Europe.

A couple of years ago I was traveling through Romania, a former Soviet satellite, and now a member of NATO and the EU.  Rusting  oil storage tanks and refineries dotted the landscape to remind us of its former importance as an oil producer.  However, we saw  a huge pipeline propped up above ground. I asked our guide where the oil was coming from now.  He said Russia. Why, I asked? Is the oil field dried up? No, he said, it is cheaper to get it from Russia than to drill it ourselves. Romania and the rest of Europe are addicted to Russian energy ..

Supplying western Europe with another source of natural gas from the US  is not a short term solution and it is controversial. Friedman contends just  to threaten and begin that process would have an  effect on Putin’s calculations immediately.

 To make good on the threat, we  need to change our laws that now  limit the amount of natural gas exports.  Terminals and certain processes  need to be built to handle LNG exports. Government approval needs to be streamlined .  Rep. Cory Gardner (R-CO)) and Sen. Mark Udall (D-CO)support reforming the process; other senators oppose(.

 Some fear our energy costs would rise.. . Exporting oil  and natural gas means more fracking and the Keystone pipeline completion. Both are  fought by environmentalists. Friedman suggests  imposing  carbon taxes and raising our own gas tax  would  force world petro prices down.  My thought:  This trade off could  encourage alternative energy development   in the longer run. If anything, the Ukraine crisis will serve to put this public policy debate on the front burner.

A version of this blog ran as a column in the Sky Hi Daily 28, 2014

Tuesday, March 4, 2014

Considering the alternatives to feckless and toothless in foreign and domestic and Colorado senate race politics

John McCain’s bluster and attacks at President Obama for not being hawkish enough and call him “feckless”  has me yelling back at the TV when he appears…”ok; what would you have done?”   Send troops into Syria just to show we are not wimps? Bring Georgia into NATO when 20% of it is already occupied by Russian troops? Surround Russia with nuclear missiles we never intend to use?  Start a natural  gas war that would only hurt western Europe that relies on Russian oil and gas?  (It wouldn’t do much to us but raise our  fossil fuel prices through the roof since world markets determine such prices).  Threaten NATO military intervention  in the Ukraine when even he has taken that off the table?  Give me a break.
 At least McCain deserves credit for coming up with some alternatives, but the alternatives he presents are those that we have no intention of following through….they are just toothless wonders, worse than even Obama’s drawing red line in Syria which had no realistic bite to them, especially as our allies there were hijacked by Al Qaeda affiliates. McCain’s alternatives are so full of potential backlashes, to swallow them without  chewing on them  is enough to make rational people choke.
This follows the pattern of other blustering critics of the Obama administration.  Whatever he is for, they are against even though they have no alternatives.  It is nearly always “repeal” but don’t replace. When some more moderates who agree there are indeed problems that need to be addressed  do present alternatives, their proposals  are so full of measures most cannot swallow or  they believe they will not work.
At the suggestion of a leader of the Tea Party Express, a  reader of my columns, I visited the Winston Group’s site which he claimed proved some points he was making…that the Tea Party still had the oomph and public support to be a power because it was a power in 2010.  In examining the reasons the conservative Winston Group, a beltway lobbying and political consulting outfit, tried to explain away Gov. Romney’s loss to Obama in 2012, they concluded it was because the public did not buy the alternatives he put forth, even though most Americans were in tune with conservative objectives on budget, deficit, jobs and the economy. 
The GOP may again be committing the same mistake in 2014.  Sen Mark Udall in Colorado may be low enough  in the polls to appear  beatable now, or in danger of losing in the 2014 midterms, but the GOP is falling into the  2012 trap.  Voters may not be happy campers with the Democrats, but they also are rational and they do consider alternatives when they learn about them.   Nihilism is not a plan. Elections are not won on just anger.  The question voters ask is “as compared to what or whom”.
 Damning Obamacare may be the only  GOP handle that unites their party and which, therefore they are putting forth their only  strategy in the midterms, but either presenting an empty sack full of hot air or one that does not address the problems polls show voters understand  begins to appear as a cure that is worse than the disease.
The only “replace” even getting honorable mention is the one put forth by three Republican Senators, which would either cost as much as Obamacare  and tax those already insured  by their employers to pay for it. At the recent retreat of the GOP congressional caucus, they could not even agree if they should advocate a replacement, much less what a replacement would be. Therefore, in unison, they are stuck in “repeal”mode.   

It will become even more evident in the Colorado Senate race when voters outside GOP’s gerrymandered  conservative bastions of north  east Colorado and Colorado Springs look at the GOP’s candidates who are right of the right, supporting the personhood amendments (a sure fire turnoff of women voters) and still stuck calling Hispanic’s desire for eventual citizenship “amnesty”, or failing to support dream acts (another turnoff of potential Hispanic votes).  Outside the very conservative Congressional districts, Colorado is a different, more liberal, demographically different state where the decisions will be based on “as compared with whom or what”.

Monday, March 3, 2014

Russia's invasion of the Ukraine revives Cold War emotions, but situations are different now. Russia and Putin have more at stake

In the afterglow of Sochi, Pres. Vladimir Putin’s drive to get respect from the world shifted into  reverse as he  invaded Ukraine’s attempt to leave his self defined orbit.  Putin  answered  Western allies’ and Pres. Obama’s offering of a  velvet hand with  a spiked club, invading the Crimea. The US may not consider this reviving the Cold War, but I could not personally suppress  some familiar emotions.
I remember vividly tanks rolling into Hungary in 1956 to crush a revolt.  Dwight Eisenhower was president then and the US did not answer with force.   They recognized  the USSR ‘s sphere; the world had been divided up by negotiation at the end of World War II in Yalta.  While the US had the military power, we did not act because we feared  unleashing   a nuclear World War III.  I was angry with our government’s inaction .   It took years for me to accept  that President Eisenhower was   correct.  
 If  Russia invades the rest of the Ukraine, then we are  in a somewhat similar  kind of  a dilemma with some differences.    The US has made it clear military action  is not on the  West’s table (and nuclear war is certainly not), but  there is understanding of   Russia’s strategic interest in the Crimea. The Ukraine military is in no shape to take on Russia.   In short, Russia is technically  able to invade all of the Ukraine, but it would have to oversee  a very oppressively brutal crackdown after a civil war  and suffer repercussions unlike those  in  the USSR era.
Domestic politics are different than in 1956, too.  Pres. Putin miscalculated in his attempt to bring  the Ukraine further  into his orbit and the revolution handed him a major defeat.  He has supporters  swelling with renewed national pride, his power depends on public support,  and being aggressive offsets this loss .  Pres. Obama  would look like  another Chamberlain or repeating a muddled Syria policy if he did not take off the gloves, though as a lame duck he has much less  politically at stake.
Russia’s economic and diplomatic position in the world is different, too.  Russia is much more entwined with  the West economically .   The West could  threaten  economic sanctions against trade , freeze assets deposited in Western banks, give economic aid to the new Ukraine government, and isolate  Russia diplomatically,  denying their ability to  play a role in international leadership. Whether these measures outweigh  Putin’s need to control the Ukraine is yet to be seen.  NATO ministers Sunday  proposed international monitors to ensure ethnic rights to allow all sides to cool off.
 The new Ukraine  government  overplayed its hand. It   overturned a law giving official recognition to Russian as a second language,  a signal they were not going to respect the rights of the large number of Russian speakers .   The Russian ethnics   felt that their rights and security were endangered, giving  the Russian military a reason to sneak into the Crimea.  This should be a lesson for future “spring” movements anywhere else in the world where there are ethnic or religious  divisions, such as Bosnia. Protection of minority and ethnic rights must be an enforceable and stated goal  of any group aspiring to change a regime  by force or by  the ballot,  or they  lay the groundwork for a shaky future and meddling by outside forces.