Lindsey Graham's Finest Moment

I have always considered Lindsey Graham to be a decent human being and a hard working Senator, though I don't often find myself agreeing with him.  That said, I am proud to say his 11th hour attempt to thwart disaster in healthcare is worthy of greatness.  I have almost no confidence in the Senate's ability to pass something of quality, but at least Mr. Graham and Dr. Cassidy are trying. 

Watch here as Mr. Graham and Dr. Cassidy address being attacked by comedian Jimmy Kimmel: 



For a full discussion of why the states, not the federal government, ought to be the ones providing the safety net in healthcare, please read "The Thelma and Louise Healthcare Bill".  Then send it to your Senator. 

Cliff's Notes for Today's Headlines

Some shortcuts to understanding today’s headlines:

• Obamacare was passed on lies ("Premiums will go down by $2500", "If you like your ____, you can keep your ____", "It's not a tax", etc.) 
• The AHCA failed on truths ("It's not a repeal", "It keeps the Feds in-charge", "It's not what the people wanted", etc.) 
• Bill Clinton also failed to bring healthcare to a vote, and his presidency moved on (his impeachment was unrelated)
• Bill Clinton cut taxes AFTER losing on healthcare
• Barack Obama had much bigger majorities to pass Obamacare
• Obamacare took 15 months to get to a vote
• Barack Obama’s first priority was closing Guantanamo Bay, and it is still open
• No entitlement has ever been repealed without a Civil War
• Legislation begins in the House, then goes to the Senate, and ends on the President’s desk
• The AHCA was conceived and largely written by House leadership before Donald Trump’s election
• The GOP is NOT a monolith, unlike the DEMs, so when they run things it's a coalition type government (in other words, "This is what Democracy looks like!")

• The entire federal government and opposition media has been investigating Russia/Trump collusion for almost a year and yielded nothing
• The Clinton team had far more involvement with Russia than Trump
• No agency has publicly announced they are investigating whether or not Trump was improperly surveilled by the Obama administration
• We already know the Obama administration improperly used several federal agencies to prosecute, harass, and impede his opponents (IRS, DOJ, FBI, NHTSA, FDA, NLRB, and Fish and Wildlife, to name a few) 
• How can anyone doubt Obama could improperly handle surveillance on Team Trump?

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The Thelma and Louise Healthcare Bill

A 1966 Ford Thunderbird convertible is an awesome ride (…or so I’m told), but if you drive one off a cliff you’ll quickly find it makes a horrible airplane.  Similarly, our government was designed to do a few things well, but when we ask it to do other things, it’s like asking a car to fly.

That’s what happened with Obamacare.  Democrats duct-taped some wings on a car, and then drove it off a cliff with all of us onboard.  Republicans will ultimately fail if their fix is merely an improvement on that flying-car model.  That seems to be where they're headed.  

Instead, Republicans and Democrats should scrap the flying-car model entirely and perform a complete separation of car stuff from airplane stuff.  Then they should allow the people who design and build the best cars to do their job, and allow their counterparts in the airplane business to do theirs. 

Of course, I’m not suggesting Boeing or GM be involved in replacing Obamacare.  The point is, there are some things the public sector must do, and everything else should be left to the private sector. Any healthcare bill that continues blending those two dissimilar functions will be as successful as Thelma and Louise.  

Healthcare, being a dynamic, complex, service-oriented market is precisely the kind of thing governments are ill equipped to micro-manage.  Like an airplane, healthcare markets are moving at breakneck speed, must be able to change course instantaneously, and are operating in turbulent three-dimensional space.

On the other hand, providing a safety net, which is essential in healthcare, is precisely the kind of thing the public sector must do.  But like a car designed by bureaucratic committees, the public sector is perennially underpowered, overweight, low on fuel, and operates on a one-way dirt road that only allows direction changes every four years.  Public sectors work best if they keep things simple, realistic, and have a clearly defined mission.

Obamacare was nowhere near our first foray into the flying-car model.   We've been moving in that direction since WWII when Democrats under Franklin Roosevelt allowed the tax code to subsidize employer paid insurance while allowing no such subsidy for individuals.  Democrats under Lyndon Johnson in the 1960s made the next big misstep by creating socialized healthcare for seniors and the poor known as Medicare and Medicaid.  The only thing Obamacare did was to take those not covered by the existing socialized healthcare system, and put them under a new poorly designed government micro-managed system.     

The reason these socialized healthcare systems are unsustainable, especially in the U.S., is the same reason Thelma and Louise couldn't fly: our form of federal government was designed for other things. 

For any airplane to fly safely, there must be an instantaneous response from the controls to the flight surfaces.  Similarly, for markets to function there must be an instantaneous response from buyers to sellers.  Nothing like that can happen within our federal system of checks and balances and constitutional limitations.  

Since Obamacare, every single American covered by health insurance has at least two thick layers of bureaucracy between them, the buyers (patients), and the sellers (doctors, hospitals, providers).  All told, about 95% of Americans get their health insurance from either the government (federal, state, and local) or their employer.   That leaves only about 5% of the population that actually buys their own health insurance.  Thanks to Obamacare, even those in the individual market are now smothered in thick bureaucratic layers.    

Unless and until health care and health insurance become primarily consumer markets, something the vast majority of Americans pay for on their own, there will never be a true functioning market.  As long as there are a minimum of two levels of bureaucracy between buyers and sellers, price, quality, speed, access, and satisfaction will all suffer.

But that doesn't mean government cannot provide a proper safety net while allowing a functioning individual free market.  In fact, it points to the solution.   

You see, the idea of direct linkage applies to cars as well.  Like airplanes, cars must have instantaneous response to steering, brakes, and power, or they too will crash.   

When the federal government provides a safety net there is a critical break in the linkage between buyers and sellers.  The reason is, the federal government has access to what appears to be free money.  Having access to the world’s reserve currency makes borrowing and printing dollars deceptively easy.  Politicians can over-promise and under-fund without negative short-term consequences. This is an illusion that eventually backfires on every society that's ever tried it long term.

To avoid this problem states must be the safety net providers.  States are forced to be more realistic, more practical, and more skilled when providing safety nets.  They are closer to the facts on the ground and cannot access money without repercussions. If states want to provide a high-cost safety net, they must be willing to tax their citizens accordingly.  That forces a discipline that the feds can too easily cheat their way around.

In its current form, the AHCA slated to be voted on tomorrow, is a capitulation to the flying-car model. GOP leadership claims this is necessary because Senate rules place certain provisions of Obamacare out of reach due to the threat of Democrat filibuster.  Ted Cruz has put that excuse to rest by pointing out that VP Mike Pence, who is the President of the Senate, can overrule the parliamentarian.  Repeal and replace can be done through reconciliation in one fell swoop based on existing law.  

The real reason the GOP won't do this is that they do not have enough members who believe in the efficacy of free markets!  The GOP is NOT a majority free market party.  Despite that sad reality, here is the way to once-and-for-all end the Thelma and Louise approach to healthcare.  

As Ronald Reagan used to say, “There are simple solutions - just not easy ones.”  The following specific proposals are not meant to be what’s easy, just what’s simple: 

• Repeal Obamacare entirely.     
• Repeal Medicaid entirely.   
• Repeal Medicare entirely.  
• Give states a year to come up with their own solutions to provide coverage to those unable or unwilling to obtain care in the private market.  Until then, provide fully funded closed-end block grants. Give insurers a year to establish new plans.

These changes will place the safety net at the state level where it belongs, while at the same time allowing for the transition.  Federal taxes will go down and state taxes will necessarily go up, but overall, costs will go down because there will be less waste, fraud, and abuse when states are in- charge.  

• Make the playing field between employer paid and individual paid insurance tilt towards the individual.  

This can be done by providing refundable federal tax credits to individuals as the AHCA does, and/or, change the tax law so that employees must declare the value of their health insurance as income for tax purposes, and/or, disallow companies from deducting healthcare costs and lower payroll taxes by a commensurate amount.  These changes will establish a competitive, individual, free market for health insurance and health care.  Costs will go down, people will be able to buy what they want, providers will be free to practice as they wish,  innovation will flourish, drug prices will go down, medical care will improve.  

• Repeal The McCarran Ferguson Act.  

This will allow insurance to be sold across state lines.

• Provide private insurance to replace the VA system.
• Convert the vast VA system into a "caregiver of last resort" during the transition for anyone who falls through the cracks of the state safety nets.  After the transition, the states can use and fund their VA facilities in any way they wish.        

This will establish a "safety net for the safety net" during the transition and give the states valuable real estate and medical facilities. 

Those are the simple things we can do.  The problem is that we have two parties and two incompatible visions for the future of healthcare. 

Democrats have been dreaming of a federal government healthcare takeover for over a century.  Republicans tend to prefer a free market with a safety net, but they have capitulated to the idea that healthcare is a "right".  That impasse is how we’ve ended-up with the worst of both worlds - the flying-car healthcare system.

It’s time to be honest and separate the two functions.  Let the free market function in healthcare, and let state governments transparently tax and spend to provide a proper safety net.  Let planes be planes, and let cars be cars.

I never said it would be easy, but it really is quite simple.

Why Not a Healthcare Debate on TV?

The Obamacare bill, plus regulations, amounts to a stack of paper taller than a man.  When government takes over and tries to micro-manage a fifth of the economy, it becomes an unknowable tangle of interrelated moving parts that is a case study in complexity and Murphy's Law.  Unravelling it can be just as impossible.

Paul Ryan loves the new bill, Rand Paul hates it, Chuck Schumer hates anything Republican, and the president says it's great, but probably hasn't read it.  (Can't blame him though. I tried to read it, and it is literally unreadable by a mortal.  It's like trying to read hexadecimal computer code.)  

Now that the bill is out there, and the critics have come out, I say have a broadcast debate among the experts.  Pick two critics and two fans from both parties, politicians and experts alike, and have them debate the bill and the options.  Have some prepared questions and some unprepared ones.  Maybe have a series of them with various people on various platforms.

This is big.  Let's get it right.  Obamacare was rammed through and there was never a televised debate until Bernie Sanders and Ted Cruz squared off last month, in February of 2017!    

Remember when Ross Perot debated Al Gore over Nafta?  It was memorable and enlightening.  We got that great line about "that big sucking sound"!  Let's repeat that sort of thing for healthcare.      

Obamacare Replacement: How to Succeed in Three Simple Steps

A Ferrari is a superb automobile (…or so I’m told!), but if you drive one off a cliff you’ll quickly find it makes a horrible airplane.  Similarly, our government is designed to do a few public sector things well, but when we ask it to do private sector things it’s like asking a car to fly.

That’s what happened with Obamacare.  Democrats strapped some wings on a car, and then drove it off a cliff with all of us onboard.  Republicans will ultimately fail if their fix is merely an improvement on that flying-car model.

Instead, Republicans and Democrats should scrap the flying-car model entirely and perform a complete separation of car stuff from airplane stuff.  Then they should allow the people who design and build the best cars to do their job and allow their counterparts in the airplane business to do theirs. 

I’m not suggesting Boeing or GM be involved in replacing Obamacare.  The point is there are some things the public sector should do, and there are others the private sector should do.

Healthcare, being a dynamic, complex, service-oriented market, is precisely the kind of thing governments are ill equipped to micro-manage.  Like an airplane, healthcare markets are moving at breakneck speed, must be able to change course instantaneously, and are operating in turbulent three-dimensional space.

Conversely, providing a safety net, which is essential in healthcare, is precisely the kind of thing the public sector must do.  But like a car designed by committee, the public sector is perennially underpowered, overweight, low on fuel, and operates on a one-way dirt road that only allows direction changes every four years.  Public sectors work best if they keep things simple, realistic, and have a clearly defined mission.

For a long time, even preceding Obamacare, we were using the flying-car model and our designs were poor for both functions.

For an airplane to fly well there must be an instantaneous response from the controls to the flight surfaces.  Similarly, for free markets to function there must be an instantaneous response from buyers to sellers.  In both cases a direct linkage is essential.  Nothing like that has existed in healthcare for decades. 

Since WWII there has been a huge tax advantage for employers to provide health insurance to their employees.  As a result, for the vast majority of Americans covered by private health insurance, there are two thick layers of bureaucracy between buyers (patients) and sellers (doctors, hospitals, etc.).  

All told about 95% of Americans get their health insurance from either government (federal, state, or local) or their employer.  Obamacare has only made it worse.  That leaves only about 5% of the population that actually buys their own health insurance.

Unless and until health care and health insurance become consumer products, something the vast majority of Americans pay for on their own, there will never be a true functioning free market.  As long as there are two levels of bureaucracy between buyers and sellers, price, quality, speed, access, and satisfaction will all suffer.

The idea of direct linkage applies to cars as well. 

When the federal government provides a safety net there is a critical break in the linkage between buyers and sellers.  The reason is, the federal government has access to what appears to be free money.  Having access to the world’s reserve currency makes borrowing and printing dollars deceptively easy.  Politicians can over-promise and under-fund without negative short-term consequences. This is an illusion that will inevitably backfire on our descendants.

To avoid this problem states must be the safety net providers.  By definition states are forced to be more realistic, more practical, and more skilled when providing safety nets.  They are closer to the facts on the ground and cannot access money without repercussions. If states want to provide a high-cost safety net, they must be willing to tax their citizens a commensurate amount.  That forces a discipline that the feds can too easily cheat their way around. 

Ronald Reagan used to say, “There are simple solutions - just not easy ones.” By that he meant that the solutions to seemingly complex government problems can often be quite simple, but implementing them is another matter in a divided government with checks and balances.

The following three specific proposals are not meant to be what’s easy, just what’s simple: 

1.  Separation of public and private functions

·      Government should not be in the business of providing healthcare or insurance, but instead must be there to provide a safety net in the form of vouchers or cash.

·      This should be how Medicaid, Medicare, subsidies, insurance for pre-existing conditions, etc. all should be handled.

·      The private sector free market should provide all healthcare and health insurance.

·      Thus, the private sector handles all the services and products, and the public sector provides money for the safety net. 

2.  Linkage of buyers and sellers

·      All Individuals, whether self-sufficient or in the safety net, should be the buyers of their own healthcare and health insurance.

·      Tax policy should change to favor individuals over employers.

·      One possible tax change would be to dis-allow health insurance deductions for employers, and at the same time increase wages and lower payroll taxes by a commensurate amount to transfer the tax advantage and premium dollars to individuals. This would result in no net changes to anyone, but it would shift the market to individuals.  

·      Individuals should be free to form groups (marathon runners, vegans, non-smokers, etc.) to help them save on premiums. 

·      Individuals should be able to take their plans with them wherever they go.  (see below regarding McCarran Ferguson)

·      Medical providers and insurers should be free to advertise, disclose prices, and compete openly.

·      The government safety net should be voucher or cash based so that recipient individuals can make their own choices. 

3. Safety net by the States

·      There should be a transition to state funding of the safety net by starting with closed-end block grants, as some current GOP proposals seek to do with Medicaid. (Medicaid is currently managed by the states but funded in large measure by the feds with an open-ended commitment.  This creates a situation whereby states have no incentive to eliminate waste, fraud, and abuse because the feds will always kick in the necessary cash.  This has made Medicaid a runaway train-wreck of inefficiency.  If the states fund and run their own safety nets, it will eliminate this problem.)

·      Federal taxes would plummet and state taxes would rise commensurately, but there would be a net savings in improved efficiency since states are better run overall than the federal government. 

·      The safety nets should provide for the essential needs of the poor, the sick (pre-existing conditions), and the incompetent.

·      Each state should be free do what’s best for their population in terms of how they structure their safety net.

4. (optional)

·      Overturn McCarran Ferguson. 

(One of the issues we hear a lot about is the inability of health insurance companies to sell policies across state lines.  This is because of an old law called McCarran Ferguson that exempts insurance from federal regulation and the commerce clause.  As a result, insurers cannot sell across state lines, must maintain separate corporations in every state, and must answer to fifty state regulators. 

Without McCarran Ferguson insurance would be portable, national, and cheaper.  

But McCarran Ferguson is not a deal-breaker. That law also covers auto insurers who appear to compete just fine.  The reason is, unlike health insurance, 95% of the auto insurance market is individual.  That’s why you cannot go a day without seeing a GEICO or Progressive ad.  So yes, it would help to get rid of this outdated law, but the individual market is the real key.) 

Those are the simple things we can do.  The problem is that we have two parties and two incompatible visions for the future of healthcare. 

Democrats have been dreaming of a federal government healthcare takeover for over a century.  Republicans tend to prefer a free market with a safety net. That impasse is how we’ve ended-up with the worst of both worlds - the flying-car healthcare system.

It’s time to be honest and separate the two functions.  Let the free market function in healthcare, and let state governments transparently tax and spend to provide a proper safety net.  Let planes be planes, and let cars be cars.

I never said it would be easy, but it really is quite simple.

SCOTUS Schmotus

If you are scratching your head trying to figure out why The Supreme Court consistently defies the language of the Constitution, you are in good company.  If you are further scratching your head trying to figure out how the same court can defy the language of statutory law, you are also not alone. But don't despair, help is on the way.

In a case of perfect timing, Charles Murray's new book "By the People" is a great read for the head scratchers.  The book explains why the "Madisonian" structures that got us here are in ruins and how we can use new tools to counterbalance the metastatic government those structures were designed to thwart.  It's important to know that those structures are long gone and that looking to their remnants for salvation is a fools errand.  Railing against a President, a Legislature, or even the Court is a waste of energy.  Nothing within government can reverse the growth of government no matter who's in charge.  But that doesn't mean there's nothing that can be done.  Murray offers some hopeful solutions for a possible counter-insurgency strategy.

On the subject of gay marriage, I'm one of a rare breed who actually supports gay marriage while at the same time deplore that it was enacted by the SCOTUS.  On the ObamaCare decision, I oppose both the law and the decision.  Ditto on the disparate impact decision.  It was a rough week made a bit easier thanks to Murray's book.

   
Footnotes:

Here's what I wrote a couple of years ago (2013) about gay marriage:

I'm sorry, I find the marriage equality symbol particularly annoying.  Personally, I don't give a whit who marries who as long as it's consensual and between adults.  But I can't abide hypocrisy.   Gay and straight proponents of this new "right" are almost uniformly opposed to plural marriage.  These sanctimonious hypocrites are the same folks who just spent the last year dragging Mormonism through the mud behind their Priuses ridiculing the faith and its plural marriage history.  These are the tolerant ones who want equality?  I call bullshit.  Why not a right for all marriages?  With that in mind, I offer the plural marriage equality symbol above.  (or more accurately, the any marriage congruence symbol.)

Also this from 2013:

Gay marriage is usually thought of as a cultural issue or a human rights issue and of course it is on some level.  But there is not a single state in the union in which it is not possible for gay couples to legally and openly live together as a couple.  Moreover, turn on a TV today and gay characters are everywhere, attesting to their complete acceptance and ordinariness in pop culture. 

Yet there is still a huge issue separating gay and straight couples and in most cases it boils down to money.   Here is a partial list of the legal and financial entitlements which currently are not available to gay couples:

• Social Security Survivor Benefits

• Estate Tax Exemptions

• Inheritance Exemptions

• Tax Free Transfers To Spouses

• Joint Filing (which can lower taxes)

• Health Insurance Rates

• Government Employee Spousal Benefits

• Workman's Compensation

• Preferential Standing in Wrongful Death

• Miscellaneous Federal and State Benefits

• Approx. 1,138 Legal Rights (according to GLAD)

Most of the above list are areas which the Federal Government was not intended by the founders to be involved in in the first place.  But now it is in an ever expanding role, and the financial fate of gay and straight couples alike relies on it's laws and re-distributional largesse.   Despite losing consistently at the polls, big money is flowing the other way because even bigger money is at stake in the gay marriage debate.  It is for this reason that a federal law endorsing gay marriage is inevitable.   Just follow the money.   

And here's what I wrote about a possible counter insurgency strategy also in 2013:

Impeach Obama?  Ain't gonna happen.  I don't care how bad these scandals are, and they are really bad, we are stuck with Obama for the duration.  Practically everyone in media, entertainment, and academia voted for Obama.  If you voted for Obama you most likely: a) don't know about the scandals, b) would never admit you screwed-up,  c) say, "what difference does it make?", d) think it's all Bush's fault, or e) all the above.  This makes impeachment and removal impossible. 

There is another way to act decisively; just avoid paying taxes!  If you are among the informed and intelligent minority who believe Obama should be removed, if you believe he used the IRS like a Gestapo to kill dissent, if you believe he abused his power, if you believe he used the DOJ like a KGB to spy on his detractors, if you believe he lied when he knowingly blamed the Benghazi attack on an innocent videographer who still sits in jail to this day, then you should defund him.  Go Galt, invest in tax free municipal bonds, barter, live off your assets, go off the grid, start a non-profit (you may want to think about that last one), tell your Congressman to defund him.  Do everything you can to legally avoid federal taxes and defund Obama.  That's the only way. 

BTW, break no laws!  We can defund Obama legally if we work together.  You will never eliminate all your taxes, but you can certainly avoid a bunch if you make changes.    Remember, GE pays no taxes and breaks no laws.  Of course, you will never have the advantages of government access and legal advice that Obama's friend GE has, but you can probably cut your tax liability with some effort.  Make the effort.  Defund Obama.  It's all you can do, unless you're content with just fuming.             

Another Day, Another Entitlement

The Supreme Court rulings on Obamacare and gay marriage are interesting and controversial on many levels.  But what many are missing is the fact that these rulings are essentially about the same thing: entitlements.  And once that is understood, it helps predict future court rulings and the direction of our country.

Entitlements are like the universe - always expanding.  There's physics behind this.  The beneficiaries of entitlements have an acute interest in them, while the benefactors (those paying) have a diffuse interest.  The math is simple.  For a beneficiary to get $1, each benefactor (every inhabitant) must provide only $.00000000033.    

The Obamacare case was obviously about entitlements.  The issue was should the federal government provide entitlement subsidies to people who purchased insurance on a federal exchange, despite the law explicitly stating the opposite.  The court ruled in favor of those getting $1.  

The gay marriage case was not as obvious. Gay marriage is usually thought of as a cultural or human rights issue.  But there is not a single state or city in the US in which it is not possible for gay couples to legally and openly live together. Moreover, turn on a TV or watch a movie and gay characters are everywhere attesting to their complete acceptance in our culture.  

Yet there is still a huge issue separating gay and straight couples, and it boils down to entitlements.  Here is a partial list of the financial and legal entitlements which currently are not available to gay couples:

• Social Security survivor benefits
• Estate tax exemptions
• Inheritance exemptions
• Tax free transfers to spouses
• Joint filing (which can lower taxes)
• Health insurance rates for spouses
• Government employee spousal benefits
• Workman's compensation
• Preferential standing in wrongful death
• Miscellaneous federal and state benefits
• Approx. 1,138 legal rights (according to GLAD) which mostly boil down to money

We didn't start out as an entitlement state. But we are one now, and the financial fate of gay and straight couples alike relies on government redistribution largess.   Despite losing consistently at the polls, big money was at stake in the gay marriage debate.  It is for this reason that a federal law endorsing gay marriage was inevitable.  It was not about love.  It was about money.  

And so it will go in the future with SCOTUS rulings and presidential elections.  Mitt Romney got into trouble when he said 47% were automatic votes for the Democrat party because they are dependent on entitlements.  I'd say we are now closer to 57%.