GOP/CNN/TEA PARTY DEBATE...FLYING IN THE FACE OF REALITY

I watched the Tea Party/CNN sponsored debate of the GOP presidential hopefuls last night and something profound may have happened.  Political theory and Tea Party character came face to face with real life.  Wolfe Blitzer posed a question to Ron Paul, the libertarian, in the context of the “obamacare” mandate requiring all to carry health insurance. “What should be the policy if a 30 year old male, who thought he was healthy and would not need insurance, and was allowed to opt out of insurance, had a serious health problem and was in a coma for 6 months in a hospital”? Paul, true to the libertarian view, said that individuals should take responsibility for their own health care and have insurance. The follow up question: what then should we do, let him die?
The most telling response from many more than a few in the audience was a shouted chorus of “let him die”.
Even Paul, a physician, was taken back and he responded,” no, when he practiced medicine back in the 60’s at a faith based hospital, the church took care of the expenses.” 
Aside from Paul’s living in the wrong century, where hospital stays cost far more than it did in the 1960’s and most charitable care hospitals have been bought out  by for profit large administration systems because they could not afford to provide charity care or raise enough money to do so, everyone there missed the most important point:
30 million people are left out of the system now and area unable to take responsibility for their own care if they wanted to because  they cannot afford the cost of insurance on their own that is as more as $12,000 per year for a family of 4.
There is indeed charity care.  That young man is not left to die today. However, his cost of care is passed on to consumers who already get health insurance and take responsibility and the expense  is then reflected in health insurance costs which are estimated to cost that family $1000 per year.  This is ER medicine and charity care which now provides everything from treatment of the flu to the long term hospitalization of the lingering coma patients for those who either do not have insurance or now have the ability to opt out of the responsibility of carrying it. We do not feel the cost if we have insurance, because of the matching from our employers or the deductions from pay checks or we have Medicare.  We just pay the deductible and assume that is the cost.  The result is a very inefficient system that costs two and a half times per person more than anyone else in the industrialized world and gives us outcome that ranks us near the bottom when the average is taken between those fortunately to have insurance and those who do not. The cost is buried where we do not feel the cost and we are fooling ourselves.
The universal litany, parroted by all of the GOP candidates is” kill Obamacare”.  Only they do not provide any other solution than, let the private sector be free to deal with it.  What? Isn’t that is the system we have had for the past one hundred years?  Let the private sector compete?  There is no competition in the private sector. Two or three for profit insurance companies control costs across all states and they are exempted by law from antitrust action, free to set prices and divvy up markets.  That is the reality.
Or the old and oft repeated myth that tort reform, which means keeping patients from making a frivolous lawsuits for mal practice (one person’s frivolity may be someone else’s dire situation) has been scored by the Congressional Budget Office as having a minor effect on the entire cost of health care and almost 2/3 of the states have already enacted caps on pain and suffering so bringing along the other one third would not do much.
What was astounding about the “let the patient die” folks in the audience, is that this is coming from the same group of Tea Party seniors who waived their signs in 2009 chanting,” do not let Obama take my Medicare away from me (before they realized it was a government program)” and railed in fear that death panels would decide their care. It is a description of their values that as long as they get their Medicare, others can die if they do not have insurance.  I am speaking as a person on Medicare and I find that view morally abhorrent.
The other oft parroted GOP slogan is that Obama care has stolen billions from Medicare to fund “obamacare”.  That is mostly Michele Bachmann’s shtick.  However, the $500 billion was taken from the useless subsidy of private insurers to administer a program called Advantage that provided an advantage to no one in improving their health outcome.  Instead, the measures taken by “obamacare” extend the life of Medicare by another 8 years, according to CBO.  Perhaps if Bachmann keeps repeating that mantra of hers enough, it will take on a truth that soars above the reality, or perhaps that has already happened.
Two other exchanges reached the level of repeating something when it is false until some take it as truth: Gov. Perry’s assertion that the original 2009 stimulus created no jobs.  CNN’s post reporting “fact check” again cited the CBO which it stated a range of over a million to nearly three million jobs were saved or created by the stimulus, which by the way, contained the GOP preferred many, many tax breaks. 
The other mantra, if repeated enough, could take on the aura of truth, even though reality is quite something else. It was couched is terms that only Tea Party members would catch and the general public would not.  The reform of Wall Street, to help us avoid another bubble crash based upon fraud and banks too big to fail, and obscure and false representation of investments passed on to other institutions, was called by all on the stage:  the Dodd Frank legislation. That piece of legislation is Wall Street Reform passed by Congress.   Just unleash Wall Street to do their thing was the agreement on stage.  What? To do again what brought on the first crash?

Charting a course back to confidence in the economy

my column published in the online version of  the Sky Hi News 8/17/2011; Another, edited version appeared in the print edition

 

The United States has a confidence problem ... a big one. It lost it two weeks ago when the debt ceiling debate came to an end, and the thorniest issues are still hanging fire since they were tossed to a committee.

There is a way out of the loss of confidence, but it will take some guts to do it.

The first step of any recovery is to admit the problem. The world has lost faith we can govern ourselves to solve the economic mess. Consumers have lost confidence that the economy will ever improve enough that they can stop planning for possible job losses and be able to spend for more than the bare necessities.

Corporations sitting on $1.3 trillion in cash will not invest until consumers start buying again. Investors are deer caught in the headlights, not knowing which way to jump so they freeze in place.

Voters have no faith that Congress can come up with a plan to reduce the deficit. Both the far left and the far right have lost confidence that President Obama is leader enough to give them the solutions they demand and absorb the political blows that result on their behalf.

We can thank the Tea Party for the largest contribution to causing the problem. This minority within a party fabricated a crisis by threatening to prevent the U.S. from being able to pay its debts. For them it was simply a strategy to force their hard line views on the majority. Their taking the threat to the brink caused a moderate earthquake as the stock market ran amok and fears of a double dip recession were revived as economists here and abroad trembled in the aftershocks.

Imagine if the Michele Bachmanns of the world had their way and the U.S. had defaulted. The markets and investors would have reacted as if it were a 9 on the Richter scale.

The left has also contributed to the loss of confidence. Its reaction to the crash was to blame President Obama for not making rousing speeches in defense of keeping the status quo on entitlements or tying up decisions while the conservative leaning Supreme court ironed out the intent of the 14th Amendment. They joined their brethren's litany on the right in condemning Obama for failed leadership. That is the most self-defeating strategy possible.

Someday the left will realize that they do not have enough votes in Congress to leverage their proposals and that joining the GOP in a feeding frenzy of attacking a Democratic president will not be the path to changing the balance in Congress or keeping the White House.

What can restore confidence? For one: Let's stop equating compromise with failure and let's cut the president some slack so he can make some grand bargain that will make the economy better. The left should stop cutting him off at the knees even if it tweaks entitlements a little.

The right may have to suck up some revenue increases. So be it; what we need is a credible plan that investors, business, and especially consumers feel will give them confidence that the future will be better .

The Simpson-Bowles plan to reduce the deficit has gotten the most votes of confidence from economists. Yes, it proposes raising some revenue and reforming some entitlements, but so what. It has the best chance of working.

Let us also reform the tax structure, simplify it, eliminate loopholes, reduce the top rates and make it fairer to small business and the middle class. Some incentives to encourage companies to hire the unemployed and more breaks for those willing to invest in infrastructure may help in the short term.

If the Democrats and President Obama were to take the lead in advocating a plan along these lines, my guess is 2012 will look a lot better for them.

Comments on comments from the right, left and middle

My head is spinning watching Republicans on TV recently.  The first Republican candidate debate was memorable for many reasons, mostly watching a very skilled Michele Bachmann in action. I disagree profoundly with her viewpoints, but she was impressive as a candidate, making news, slipping in her resume, and soundbiting her political points. Bye Bye Palin; Bachmann is Palin with an education.

Howard Cain backing down on some anti Muslim comments, said that he would hire a Muslim on staff if he/she swore allegiance to the constitution.  That was still a backhanded anti Muslim comment that he does not trust  Muslims to be loyal Americans.  Rick Perry of Texas did not appear at the debate because he is still mulling over announcements.  However, one of his most famous recent remarks was made at a Tea Party rally this Spring in which he threatened Texas secession from the United States if the Obama administration would  not quit  trampling states rights.  Perhaps Cain should have Perry swear allegiance to the Constitution as a condition of being a candidate for President since secession would be unconstitutional.  Didn't we fight a civil war over that?
This morning on Fareed Zakaris' CNN GPS program featured a debate between two extremes:  Robert Reich, former Clinton Labor Secretary on the left vs.David Stockman , former Reagan Budget Director  on the right.  Reich was attempting to make a case that we needed a FDR style WPA or CCC works program    to pay the unemployed to work on publicly needed projects to deal with the unemployment problem even though the US would have to borrow money to afford it.  Stockman, countering it,  made the case  for austerity...severe cuts in defense and entitlements such as social security and medicare though
it would lead to 15% unemployment over the next decade.  His solution to unemployment: something we will
justg have to get used to....meaning solving the debt problem in the long term was far more important. I doubt theRepublicans would adopt his platform; they are too busy claiming 9.1% unemployment means Obama has failed the American people.
 Republicans are fond of saying that the US situation is worse than Greece.  . That the US is worse off than Greece is very debatable. Both of us lack the will to pay for what services we demand from government, but at least the US has the means within its economy to afford it and can print money and the US does a better job of tax collection.   As Reich pointed out our debt load in the past has been 125% of GDP but we had the capacity to get out of it and actually flourish.  However...living with 15% unemployment is better than some  debt? As a Financial Times columnist wrote (and I cited in previous blog postings), even the GOP Ryan plan is a political fantasy. At least it  would not be as unsettling to civil order as ten years of 15% unemployment  would be. Ye gads, Stockman. Get a grip on yourself.

The most calming bit Sunday was Defense Secretary Roberts Gates on Candy Crowley's CNN interview. Not  only did he make news confirming negotiations  were underway with the Taliban, but he made a very good case for the Obama policy of responsible withdrawal from Afghanistan vs. an immediate draw down. He also supported the Libyan action, acknowledging that the conflict did not affect the US's interest so much as it did our NATO  allies.  We owed one to NATO allies for helping us out in Afghanistan.