The Debt Ceiling, Republicans and Obamacare

The current efforts of House and Senate Republicans to tie the Patient Protection and Affordable Care Act (ACA) to the debt ceiling vote (and any other budget bill they can think of), is the worst sort of political gamesmanship and frankly, amounts to extortion. The ACA was developed over a period of years, with health industry lobbyists influencing the outcome, and is a law, not a policy. No, it was not a bipartisan effort (and we would be much better off if it were), but now is not the time to discuss how that came about.

If Obamacare needs adjustment (or even replacement), the discussion should be handled through a thoughtful legislative process that gives the topic the attention that it requires. After all, if it is as bad as Republicans claim (it isn’t – a similar system was designed and implemented by Republicans in Massachusetts), it will take a major effort to come up with a replacement.

The Republicans don’t mention it, but the private sector has already invested billions in developing solutions that comply with the provisions of Obamacare – and plan to make a profit on it. Check the discussions taking place in professional organizations such as HiMSS (www.himss.org) and ATA (www.americantelemed.org).

The Republicans also are slow to acknowledge that healthcare costs were increasing at an alarming rate before Obamacare was conceived, and this cost escalation was seen as a threat to the U.S. economy. A stated purpose of the Act was to slow the growth of healthcare costs in the United States, while expanding healthcare coverage to most citizens. To be sure, the initial claims of savings for families were over-promised. A recent Forbes article quotes MIT economist Jonathan Gruber as saying, “. . . Obamacare will raise national health spending by 1 to 2 percent.” And “This is a small fraction of the typical 5 to 7 percent annual growth rate in health care – and is a small price to pay for insuring 30 million or more Americans.”

The one-year delay in implementation of the ACA being proposed is blatantly transparent: get through 2014 and the Republicans hope to gain enough legislative seats to engineer a total repeal of the law. However, there are 30 million or so voters out there who may not take kindly to having their health coverage taken away.

Let’s do the right thing: vote on the debt ceiling increase without the ACA conditions. Then, set up a Congressional Conference Committee to look at the ACA and propose changes that will fix its problems. I optimistically assume here that both parties are participating in good faith. If this opportunistic effort to defund Obamacare is simply an attempt by Republicans to deny President Obama an achievement, then they will have no interest in a Conference Committee or any other mechanism that might yield a real solution to the problem of healthcare costs and availability.

To My Brave Senators On Your Vote Against Expanded Background Checks for Firearm Purchases

This is a summary of an email I sent to Senators Johnny Isakson and Saxby Chambliss of Georgia, venting on their decision to vote against the expanded background check measure in the Firearms Bill.

I cannot tell you how disappointed I am that you saw fit to vote “Nay” on the Expanded Background Check measure in the Firearms Bill.

I suggest that you review some of the comments attached to reports in the news media about the Boston Marathon terrorist attack. Many pay lip service or less to the suffering in Boston while launching into incendiary diatribes on why we cannot have any form of gun control. You think that these are your constituents. These are the people you are catering to by your vote today. Think again. I am your constituent.

The existence of a uniform, national background check system for all gun purchases in the United States is the most reasonable of measures that can be taken to reduce the incidence of gun violence. Why bother to require storefront gun retailers to obtain background checks when an individual can go to gun shows and to the Internet and buy weapons with no background check? Why don’t you just forget about the whole thing and let anyone buy a gun whenever and wherever they choose?

And what kind of statement is this, from your colleague Bob Corker, that the bipartisan plan “overly burdens a law-abiding citizen’s ability to exercise his or her Second Amendment rights and creates uncertainty about what is and is not a criminal offense.” In Georgia, my driver’s license is coming up for renewal in June, and I have to provide multiple forms of ID to renew it – original birth certificate, social security card, and so on, even though I have been continuously licensed to drive since 1961. I am clearly “overly burdened.”

The tragic mass shootings that we have seen recently – Newtown, Aurora, Tucson, Fort Hood, Virginia Tech, Columbine – are the most visible of the gun deaths in this country. The CDC reports that in 2010 there were 31,672 deaths by firearm in the United States. Of these, the largest category was suicides, at 19,392.

The Newtown incident, with 28 deaths, was the second largest number of fatalities, after 33 in the Virginia Tech massacre in April, 2007. If one of these events could have been prevented, up to 33 lives could have been saved, all at once. On the other hand, if 1% of the total number of firearm deaths could have been prevented, 316 lives could have been saved.

So we really have two categories of gun violence that could be mitigated by closing loopholes in the national background check program: mass-murder by a mentally unstable individual, and multiple instances of suicide, homicide and accidental death.

Your weak, irresponsible action on enhanced national background checks for firearm purchases is an embarrassment. I have a mixed voting record, and consider myself an independent. However, unless someone steps up and shows some courage pretty soon, I will never vote Republican again.

Arming teachers and students: a bad idea

I have one word for those who think that arming the average teacher or college student – or other law-abiding citizen – would lead to a safer society: Zimmerman.

As a volunteer neighborhood security patrol, George Zimmerman did not have professional law enforcement training. He may have been knowledgeable about the mechanics and safety aspects of gun usage. He may have been a good marksman. But what about the emotion and stress of encountering a stranger at night, one who appears or acts in a threatening manner? George Zimmerman was scared. Trayvon Martin, in Zimmerman’s view, acted as a threat. Martin is now dead. I have no doubt that Zimmerman strongly regrets his actions.

Background checks and instruction in safe gun handling should be required elements of a rational gun licensing program. But law-enforcement-level training in unexpected situational behavior is not practical on a wide scale, but is just as critical if increased gun ownership is expected to increase the safety of the public. Without that training, the opposite will be true, with many more “accidental” shootings of people who were in the wrong place at the wrong time, facing a scared citizen with a legal weapon and acting in some “official” capacity.

Fiona Apple cancels concerts to be with her dying dog

In a hand-written, very personal and heart-wrenching letter to fans last month, singer-songwriter Fiona Apple canceled the South American portion of her current tour, a total of 12 concerts. Her 13-year-old dog, Janet, has Addison’s disease and a chest tumor.

Many times in life, in business, in politics, we have to make difficult decisions. Many times the issue involves money, and we have been imbued with the idea that almost anything can be put aside for its pursuit. As this case of Ms. Apple and her dog Janet illustrates, some folks have that clear-headed drive to do the right thing, financial consideration be damned. Now, Fiona Apple has a lucrative – although not by any means prolific – career as a singer-songwriter, and the option to forgo income would be easier for her than for someone who would be at risk of losing a job – not an option in the current economy.

My wife and I are on our third generation of dogs now, and can fully attest that each dog has been a family member and best friend. They are missed as family members when they are gone, and their pictures are displayed in our home along with their human counterparts. Like Ms. Apple baking Tilapia for Janet, my wife made scrambled eggs for our first dog, August, who had developed a large abdominal tumor.

But returning to politics and reason: the current debate over the so-called “Fiscal cliff” requires difficult decisions, but no one is willing to make them. Some people are going to pay more in taxes, and some are going to have to wait longer to enroll in Medicare. Each party accuses the other of not bargaining in good faith. But the National Commission on Fiscal Responsibility and Reform (Simpson-Bowles commission) and the Gang of Six (now Eight) have approached the problem in a bipartisan manner. We have seen some encouraging signs of reason: Republicans Saxby Chambliss, Lindsey Graham, and Eric Cantor have showed a willingness to consider revenues. Perhaps these legislators will, like Fiona Apple, risk their future viability for the good of the country.

You can read excellent accounts of Fiona Apple’s story here:

From The Atlantic: http://bit.ly/S7MXYW

From the Daily Mail Online: http://bit.ly/WjY9Bx

 

Tragedy in Libya

A dedicated career U.S. foreign service officer dies at the hands of continuing unrest in Libya, and violent demonstrations are staged outside the U.S. embassy in Cairo. Although we can’t be certain yet, these attacks, occurring on September 11, 2012, may have been purposely staged to coincide with that terrible day in American history. Back then, at least for a short time, we came together as a country, people of all stripes pitching in to help on the crash sites and in countless other ways. Today, in the middle of an intense political season, we engage in political gamesmanship when we should be mourning the loss of those who served and conducting a systematic search for those who perpetrated this act.

Instant flailing action is not leadership – swashbuckling warriors may be heroic in animated cartoons and video games, but not in real life. In 2003, some said we would be welcomed into Iraq as liberators. Instead, in retaliation for 3,000 of our citizens murdered by al Qaeda on 9/11, we sent another 4,400 to their deaths in Iraq – a war that never should have happened in the first place.

Governor Romney’s foreign policy instincts are just plain scary. This episode further establishes the idea that he is unfit to lead on foreign policy alone. If he should be elected, God help us when he inevitably is faced with a problem on the international stage.

But today, let’s remember Ambassador Chris Stevens and the others who were killed or injured in this cowardly act.

Are we better off today than when President Obama took office?

Yes, absolutely. Over 4.2 million jobs have been added since the official end of the recession in February, 2010, following a loss of 8.8 million jobs between 2007 and 2010. While this fact is positive news, it does not warrant rejoicing because many people are still out of work and suffering extreme hardship. Others are working at jobs paying less than they were making before the recession. Nonetheless, this is noteworthy progress, especially given the widespread economic troubles in Europe and slowdown in China that have depressed economies worldwide. And it’s easy to forget the financial precipice that America was on that could have led to a full-blown depression. Yes, the ARRA did prevent that fall, say what you will that it was too small or too large.

The administration should clearly delineate its commitment to accelerate this growth with a focus on the middle class, which has been under pressure for many years. A large, financially secure middle class generates the output of the economy, and in turn represents a huge market for the products and services that are produced. If there is no demand, giving extra money to the top one percent will only cause them to either save the money, or invest it in other parts of the world where the returns may be better. And by the way, this is not an indictment of the one percent – they are simply making prudent investment decisions, just as you and I would do.

As we have seen all too clearly in recent days, a hurricane or tornado can destroy a town in minutes. But it takes weeks, months or years to rebuild, even with extraordinary assistance from governments, relief organizations, regional utility companies and community organizations. Most Americans realize that this recession was the most severe since the Great Depression, and most understand that recovery is not a magical, instantaneous event.

One more thing: Democrats should not mention George Bush again during this campaign. The policies of the past eight years that contributed to the Great Recession can be best described as “Republican” policies; George Bush was not the only contributor to the current economic conditions. The Republican platform for 2012 represents a more extreme version of the same vision. Public beware.

Job Creators

As the presidential campaign has revved up over the past year, the term “Job creator” has been widely used in reference to business operators who must hire employees if the U.S. economy is to experience an accelerated recovery, and sometimes in reference to the “One percent,” those who are in a position to invest a significant portion of their incomes. In fact, the phrase “Small business job creators” has become a marketing phrase that Republicans have used to cement the relationship between small business and job creation. However, the idea that there is a direct and certain relationship between small business and job creation has come into question, as has been cited in numerous articles this year, including USA Today (http://usat.ly/zmH5Dz) and The Wall Street Journal Online (http://on.wsj.com/yZh5Bn).

I have heard small business owners connected with the Tea Party movement refer to themselves as “job creators,” stating that they “would hire people” but they refuse to do so because regulations are too confusing and future costs of employees are not certain. In my experience, though, any business person who, when faced with demand for their product or service, would hire the correct number of people needed to meet the demand, whether the business be an advertising agency or a McDonald’s.

Investors  are free to invest their money globally, and as responsible money managers, favor locations where the return on investment is greatest. So yes, it is true that these business owners and investors provide the jobs. However, it is also true that they do not hire people just because they happen to have money in their pockets, presumably from tax cuts provided by Republican policies. They hire people because they see increasing demand for their product or service. No demand, no hiring. Decreasing demand, layoffs.

A few thoughts on Bain Capital

I don’t have a problem with Bain Capital. Like other private equity and venture capital firms, Bain is in business to provide returns for their investors – they invest in companies for financial gain: to improve an existing company’s performance, increase its value, and sell it at a profit, or shut it down as efficiently as possible if it is not viable. The company also invests in startups, and private investor funding of startup enterprises, many introducing new technologies and other innovations, is a major advantage of American capitalism.

Clearly, Bain’s investors have the most to gain if the investments are successful. As Bain’s website states on its home page, “Our principals are the largest single investor in each of Bain Capital’s funds, which aligns the interests of the firm with our investors and the long-term objectives of the management teams.” One can assume that principals like Mitt Romney, as an investor in companies under Bain’s umbrella, made much more from these investments than any salary he may have drawn as a Bain employee. Bain’s employees, not the investors, earn their salaries regardless, but the big money is in the investments. Still, this is all normal operation, nothing out of the ordinary.

The real negative about the whole Bain Capital issue is that the operation of a private equity or venture capital firm is not a parallel to running the country, nor does the experience qualify one to know how to “fix” the economy. In fact, such experience may lead one to be overconfident in the ability of the financial sector to function as a “self-righting ship” and to solve all of the problems that we face.

Running the country does not afford one the life or death economic decision-making latitude expected by private enterprise. Government is responsible not only to the “investor class,” but to all citizens. When Henry Ford was asked why he paid his workers so much, he responded that he wanted them to be able buy his products, and that would cause his business to grow. When citizens cannot buy products and services, enterprises lay off workers, government is downsized, and the downward spiral begins. As we have seen, the entire economy is affected, and recovery takes far longer than the crash. “Job creators” create jobs only when there is demand for products and services – not just because they have money in their pockets.

Government cannot be a proxy for private enterprise, but should encourage it by policy. Regulations are necessary. To say that regulations are universally bad is a simplistic – and dangerous – attitude. The danger comes when the regulations do not match the conditions – regulations from an earlier time are no longer appropriate, or there has been a failure to anticipate new regulations for new financial behaviors.

Clearly, given the national debt and the overall economic climate, hard choices must be made to get the country on a sustainable track, but a much more modulated and compassionate view must prevail.