politicalcivility.com Blog

Sutherland has posted a bunch of video clips from its Why California Matters seminar: http://www.youtube.com/user/sutherlandinstitute

As I’ve listened to both candidates and both parties debate this issue, I think that in order to make any progress in reform we have to start by using correct terms.  This issue is most apparent when referring to “insurance” or the insured.

Let’s be clear…What we call insurance today is really nothing more than a health payment plan.  It isn’t really insurance. 

Insurance is something you buy when you can’t afford to lose or suffer the loss of the thing you insure.  Car insurance for example.  I have liability insurance on my car, but not collision because the insurance costs more than the car is worth.  But this insurance pays for something I cannot afford–a major accident.  It does not provide for gas, oil-changes, safety inspections, minor repairs, alignments, new tires, etc.

The “insurance” issue clouds what we’re really trying to get to the bottom of: affordability, not the affordability of insurance, but the affordability of the routine care of our bodies.  This would leave insurance to become true insurance, by insuring us against those health issues we can’t predict (stuff like my dad’s brain tumor) nor can we afford (the heart surgery and 2-week hospital stay of my mother-in-law).

By differentiating between affordability of care and dumping the insurance idea, I think we start to get a better idea of what the government may need to do to act as a safety net.  I think we also start to better understand what affordable really looks like, affordable care that is. 

On a side note, I think it would be interesting to compare what a family spends on cars as compared to health care and what they get for their dollar.  If we can afford to take care of our cars, we should be able to afford to take care of the general needs of our bodies without insurance.

David, over at Pursuit of Liberty, beat me to it on posting his thoughts on Amendment E.  I started to write a comment on his blog, but found that there was enough going on in my head that I wanted make it a full post.

I am with David on this one, and my wife and I are planning to vote “no” on Amendment E.

A couple of years back, my wife and I began our retirement fund with money we had saved. We sat down with an investment manager and the first bit of paperwork he had us fill out was a series of questions to determine our “risk” tolerance based on a scale of 1 to 10. We came out an 8, meaning that we were willing to risk a lot, given that we were young and that we were hoping for the maximum return (given that max returns don’t come from non-risky invesments, despite what the grease-haired men on late night info-mercials may claim).

The education fund is not in a position to have portions of that fund be invested in a high risk portfolio.  Anyone watching the market over the past month will realize that had the $1Billion fund had a meaningful portion invested in the market, the education fund would have lost some significant value.  The falacy here is that you need to be invested in the stock market to be diversified, which is bunk, especially for a fund that should have minimal or no exposure to high-risk securities.  I realize in saying that that the rate of return will be less; more in the 5-6% range.

The bond issue of Amendment E is separate and I am not opposed to debt investment, because at least my money is tied to an asset and the state would have priority should the investment go bad in getting something out of the investment.  As a shareholder your only “asset” is the company’s profits and if the company goes belly-up you get nothing as a share holder.

Also from the way I read the amendment they would be able to invest in non-publicly traded companies, which are not subject to SOX or other regulatory institutions on disclosure, auditing standards etc.  That is a recipe for disaster.

Vote “NO” on Amendment E.

Today is the first “home” game for the new Real Sandy soccer team, which got me thinking.  Since this nice little white steel structure was paid for by yours truly the utah taxpayer and those kind enough to visit our states as tourists/biz travelers, is Dave Checketts going to offer special taxpayer ticket packages and special seating for those who helped pay for the stadium?  Maybe he could do preferential seating based on income tax bracket level or on how many business trips to sandy you’ve had (for folks like those at Cadence headquarters there in Sandy)? 

I’d take a couple tickets as a thank you especially if i can sit next to the senate president and speaker of the house.

Actually, it’s more like a $60 Billion equity investment.  Take a look at this plan put together by a BYU professor of finance, who demonstrates how the $700B bailout will actually destroy credit and just put the US further in the red.  The report is a bit finance wonkish, but well worth the read, and the implication for benefiting local Utah banks instead of bailing out big banks is, to me, a huge plus.  Especially since it is these local banks that really are the ones investing in local small and medium sized businesses that make the Utah economy hum.  These are banks that have had some exposure to the housing market, but have been diligent in their lending practices and are bringing jobs to Utah.

Take a read: The Stone Plan.

Looks like $60 is the new $700, and that’s a great thing for taxpayers.

PS: here’s a link to a list of banks headquarted in Utah: http://www.us-banks.net/us/utah/index.html

This is a good example of where Democrats blame others for problems they sowed the seed for years before.  Then to make matter worse, they offer up new (code: same ol answer) solutions, which is code for more government intervention/regulation, which in turn gets you more problems. It’s kind of like how all the lawyers and accountants used SOX regulations to get more work after Enron, when those two professions were responsible for the mess in the first place.  Unbelievable.

From IBD Editorials:

There’s a political root cause to this mess that we ignore at our peril. If we blame the wrong culprits, we’ll learn the wrong lessons. And taxpayers will be on the hook for even larger bailouts down the road.

But the government-can-do-no-wrong crowd just doesn’t get it. They won’t acknowledge the law of unintended consequences from well-meaning, if misguided, acts.

Obama and Democrats on the Hill think even more regulation and more interference in the market will solve the problem their policies helped cause. For now, unarmed by the historic record, conventional wisdom is buying into their blame-business-first rhetoric and bigger-government solutions…

Market failure? Hardly. Once again, this crisis has government’s fingerprints all over it.

Sorry Obama your version of economic change, government bailout and interventionalism, is not one I’m willing to pay for, nor one America can afford.

Here’s to Obamanomics becoming a better punch line than a version of economics that actually brought about prosperity to millions of Americans: Reaganomics.

In response to my post on Obama’s PAC pledge, Misty asked a question about what did I mean about “incentives.”  It’s a fair question and one that is best answered by using a recent constituent letter I received from Senator Hatch’s office after I emailed his office asking him to oppose the farm bill. 

In my view, Hatch’s letter perfectly illustrated both the pork spending problem and the incentives issue that drives decision making and $$ flow in DC.  Hatch gave no principled justification as to why this farm bill was the right thing for government to do.  Every rationale he used in his letter pointed to one overriding theme–bring home the bacon or in the case of this farm bill all the benefits, special programs, business perks. 

So how does this answer the incentives question?  Toward the end of his letter, he also mentioned that this bill was supported by “many agricultural groups in our state.”  PACs (or in this case agricultural special interests groups) know that Sen. Hatch needs votes and that he needs money to run a campaign.  PACs offer both to the elected official.  PACs and special interested groups on the other hand need the people with the power of the purse (or the ability to take from one person and redistribute to another which would be illegal if PACs did it on their own) to do their bidding–they need their Sen. Hatch’s who have compromised to the point that all they have left to offer their constituents is BACON versus principled leadership.

So there you have the recipe for the continuation of the DC incentive love fest: [INCENTIVE for the Politician) votes which equal reelection and continued power and [INCENTIVE for the Special Interest] the growth of government programs or contracts or a general redistribution of wealth directly designed to benefit them. Of course all this is paid for by yours truly: you and me the taxpayer.

This lovefest is what Frederic Bastiat eloquently describes as “legal plunder.”  And as it relates to our government today, we see a Bastiat’s Universal Legal Plunder played out over and over again and unfortunately not just by our own Sen. Hatch.

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Bastiat on Legal Plunder:

“See if the law (senators or congressmen/women) takes from some persons what belongs to them, and gives it to other persons to whom it does not belong.  See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime…

“The person (agricultural interest in the above example) who profits from this law will complain bitterly, defending his acquired rights. He will claim that the state is obligated to protect and encourage his particular industry; that this procedure enriches the state [or its citizens]…

“Do not listen to this sophistry by vested interests.”

It’s almost like listening to the news every day.

I have to give props to Obama for his commitment [see Misty Fowler’s blog] to refusing PAC money.  I hope more elected officials will take his lead, but I have my doubts and here’s why (from a Letter to Editor in WSJ–it just says it better than I could):

“The only reason lobbyists [PACs, special interest groups, etc.] appear as influential as they do is because of the power of the bodies they beseech.  In other words, the power of lobbyists is directly proportional to the ability of the Senate and House of Representatives to give favors to the clients of lobbying firms.  Rein in government [bridges to nowhere, boondoggle research projects in WV, a whole list of welfare programs, etc.] and you rein in lobbyists.  Any attempt to weaken lobbyists without reforming government will do nothing more than violate the Constitution and ensure our politicians become less informed than they already are.”

Until we rein in government, I am afraid Obama’s commitment will be short lived because the incentives just don’t line up.

A side note warning to Obama on his commitment is to not pull a Bush Sr. “Read my lips no new taxes.”  If Obama sticks to his commitment, the political shift that could occur could turn him into an FDR, Reagan type president and would be a tremendous legacy even if that was all he accomplished.

I have to admit that my thinking regarding the immigration issue has changed significantly over the past couple of years as I have spent more time reading and listening the to arguments on both sides.  One of the major shifts occured when I began to look at and study the difference between types of law: malum in se and malum prohibitum.

Here’s a quick overview from Cafe Hayek:

A critical distinction in Anglo-American law is that between actions that are malum in se and actions that are malum prohibitum.  Some actions are malum in se — wrong in themselves.  Examples are murder, rape, theft, and fraud.  These actions are now formally prohibited by legislation, but their wrongness — indeed, their very illegality — exists independently [emphasis added] of legislative prohibition.  If, say, the Virginia legislature were to repeal its statutory prohibition on murder, murder would still be wrong and criminal in Virginia.  Murderers would still be wrongdoers and criminals.  If the State government refused to punish such criminals, people would do so privately.

Other actions are malum prohibitum — “wrong” merely because the government proclaims these actions to be wrong.  One example is avoiding taxes.  If Uncle Sam tomorrow abolishes the federal income tax, failure of Americans to send money to Washington would be neither wrong nor criminal, and persons who send no money to Washington would not be regarded by their neighbors and co-workers as despicable louts whose company should be avoided.

Immigration law is clearly a malum prohibitum type law, as such it is a-moral, meaning that if we removed all immigration law people coming here would not be considered immoral.  Thus it follows that the “criminality” aspect of an immigrant not following the law is no different that a legal citizen breaking the speed limit.

Mention the word ExxonMobile and global warming and the response is pretty predictable.  “Oh those guys that are making billions and funding all the global warming deniers.”  The fact is that statement is pretty true.  Exxon has made billions and they have spent several million over the past 15 years making research grants to a few (but hardly all) university professors and think tanks.  Problem is they may have been wasting their money.  Maybe they should change their strategy and just copy “green” GE. 

The WSJ recently released a list of top spenders in Washington DC, and right behind the US Chamber of Commerce and the American Medical Association (makes you wonder about why we are having problems refoming the medical system) was not ExxonMobile but eco-friendly GE rounding out the top 3.  From 1998-2007 GE spent in excess of $160 million in lobbying efforts.  Exxon didn’t even make the top 10.

Why would GE spend so much money?  Answer: they are heavily invested in green technology (wind, solar, and those nice expensive light bulbs that are now mandated by the federal government in 2012).  GE isn’t the only one benefitting from green policy, but they sure haven’t taken any chances on not cashing in on their green investment.

So maybe Exxon should stop trying to fund science and just go straight for the golden goose: the beltway goose that is.  GE is green alright (just check out their website: www.ge.com) but the green might not have anything to do with the environment.