Access of Evil

Re: FCC to Monitor Newsrooms

Is there a more dangerous word in the statist’s lexicon than “access”?  OK, maybe you could make a case for “fairness” or “right”, but I’d wager that lurking not far from either of those words would be a plethora of accesses too. 

The subprime boom that crashed financial markets in 2008 was built on a mountain of access.  Access to affordable housing, access to affordable mortgages, access to credit, access to the McMansion of your dreams, etc.  In short, access to stuff you could not possibly afford.  Ergo, access to other people’s stuff. 

Obamacare is built on a mountain of access too:  access to healthcare, access to affordable insurance, access to top hospitals, access to contraception, and on and on.  This is working out so well that now it is providing - access to unemployment lines, access to a lame website, access to a doctor shortage, access to higher premiums, access to higher deductibles, access to higher copays, access to fewer drugs, etc. 

Today we learned about a new threat from the “access of evil”.  The FCC is planning on placing monitors in TV, radio, and print newsrooms to insure that their audiences have “Access to Critical Information”.  Gee, this sounds an awful lot like what the East German Stasi and the Soviet KGB did.  I wonder which broadcasters and networks will be found lacking in providing this "critical information" access?  Would this not be a great way to provide access to a monopoly state-controlled media?    

From the first page of the FCC plan:  “the purpose of this Study of Critical Information Needs (CINs) is to provide a comprehensive analysis of access/barriers to CINs in diverse American communities.”  If this sounds a bit too Orwellian and unbelievable, here is the link to the actual document (assuming they haven’t taken it down yet).        

The word “access” appears 21 times in the document. 

(Update: Apparently the daughter of Democrat Congressman James Clyburn is a key player in all this.)

The War On Women Backfires

Kathleen Willey recently said, "Hillary Clinton IS the war on women".  I cannot let that go without reposting my cartoon on the subject, which must be watched to the end to get the full relevance.  

Subprime Nation

(This graph is a modified version of one I posted earlier.  I think it is worth revisiting as I get back to actively blogging after a hiatus.)

Since the financial crisis in 2008, we have known that one of the key reasons for the collapse was that the new breed of subprime mortgages and their derivatives were completely misunderstood and assumed to be as safe as mortgages had historically been.  (There's an old joke about what happens when you assume...)  Rather than treat these new subprime beasts as risky and different, the prevailing assumption was that they would behave just like the old 30 year fixed rate mortgages had, when borrowers had real income, real assets, real down payments, and real equity.  Big mistake.

We may be living a repeat of this kind of error, only this time it has to do with government spending.  Since 2008, Ben Bernanke's Fed and Barack Obama's government have presided over an historical explosion in government spending as a percent of the private sector.  Like subprime mortgages and derivatives back in 2007, we have no historical basis for understanding this kind of explosion in peacetime spending.  Even during the Great Depression nothing like this happened.

Two other times in history reveal large bursts in government spending - WWI and WWII.  The difference is, after both those wars the US enjoyed an unchallenged perch atop the world economy - Europe lay in ruin as did Japan after WWII. China was yet to be a world economic power.  That's not the case now.

Another issue:  What has been achieved by all the spending?  In WWs I and II,  we achieved something of lasting value - survival, peace, victory.  Today we are spending at world war levels and achieving little more than an illusion of prosperity.  The politics make sense if not the economics.  By delaying the effects of runaway spending, politicians are shielded from ever being associated with the borrowing and money creation catastrophes they've created.    

What all this means is that we are in uncharted waters.  Just like subprime mortgages in 2007, the conventional assumption is that there is nothing dangerous about peacetime spending at this level and we will be able to taper or unwind without incident.  I was a skeptic back in 2007 during the subprime boom.  I'm a skeptic now too.

(Note on the graph:  Quantitative Easing is included as government spending in the years it occurred, 2008 - 2013.  That's because it is government spending!)          






         

How the GLITCH stole HealthCare!

ObamaCare Meme - This Says It All

Half The Country Has Seceded From The Constitution

What is going on in America today?  Political polarization is at crisis levels.  The Republican Party is at war with itself.  Democrats are waking up to their own internal war.  Third party spoilers are showing up more often.  Has anything like this ever happened before? 

We always assume that the times we live in are unique.  Yet at the same time we know that history repeats itself.  These two ideas are not contradictory.  We are repeating history, but in a new way.

There are two ways to define the United States:  one is physical and one is conceptual.  Physically The United States is defined by its borders.  Conceptually The United States is defined by its constitution and founding ideas.

In 1860 seven southern states seceded from The United States triggering the Civil War (1861 – 1865).   That secession threatened the physical definition of The United States. 

Today I would argue half the country has similarly seceded, only this time it is conceptual.  They have seceded from the constitution and our founding ideas.

Political polarization and secession went hand in hand in 1860.  The Democrat Party had split into Northern and Southern factions.  A new party emerged called the Constitutional Union Party.  Republicans were geographically confined to the North.

None of this happened overnight.  The issues causing the polarization had been simmering since before the nation was born.  It took secession, and the realization of what that meant, for it to reach crisis status. 

Similarly, the ideological polarization over the constitution and our founding ideas has been heating up for a long time.  We have had an open repudiation of constitutionally limited government certainly since The Progressive Era (1890 – 1920).  That repudiation has been simmering for over a hundred years and has often been bipartisan.

Charges of unconstitutional behavior and intent are ubiquitous in American politics.  But Barack Obama represents something new.  He is not shy about his disdain for our constitution and founding ideas.  Nor is he shy about his preferences which contradict those ideas.

Barack Obama is the first president I’m aware of to openly announce a “fundamental transformation” of the United States.  The secession was announced!  And twice it won at the polls!

Now thanks to ObamaCare, the people are getting a first-hand glimpse of the reality of what that secession means to them.

There is an old analogy about boiling a frog:  Put a frog in boiling water and it will immediately jump out.  Put the same frog in cold water, slowly bring it to a boil, and the frog will surely die.

The question is, are we slowly boiling, or are we finally feeling it enough to jump?  

Here is a link to The Constitution of The United States.  You don’t need to be a legal scholar to read and understand the intent of this concise, relatively simple document.  It does however take a legal scholar to hide the secession!

(This could have been the preamble to my piece - “The Coming Civil War – Who, What, Where, When, and Why” which is available here.)

The Scariest Graph You'll Ever See

Keep your eye on one thing and one thing only: how much government is spending, because that’s the true tax ... If you’re not paying for it in the form of explicit taxes, you’re paying for it indirectly in the form of inflation or in the form of borrowing. The thing you should keep your eye on is what government spends, and the real problem is to hold down government spending as a fraction of our income... 

--Milton Friedman - from a speech in 1980 titled "Money & Inflation"  (herein referred to as "The True Tax")

So why is this graph so scary?  Unlike the spikes during WWI and WWII, Obama and Bernanke's spike occurred during relative peacetime.   We are not fighting an all-out global war like WWI and II.  We are just spending our kids money on ourselves.   The Great Depression itself shows no equivalent spike in government spending.  

 

Notice the three most prominent recessions in our history (Recessions appear as spikes in the blue state and local part of the graph):  two are during the Great Depression and the other is now.    Is it a coincidence that those historic recessions coincide with the ascendency of the two presidents most known for wealth redistribution, Franklin Roosevelt and Barack Obama?

Roosevelt stuck with his redistribution, which contributed to the second recession four or five years later.  Barack Obama is similarly sticking to his redistribution.  

People don't need graphs to sense something is wrong.  They are already doing the rational thing and dropping out of the work force.

The Federal Reserve has indicated it will continue spending $85 billion a month on its bond buying spree.  ObamaCare is shaping-up to be a budget busting, job killing, economic drain.  Could we be repeating history, only this time with a $17 or $18 trillion debt?  How long can a nation discourage its workers and maintain government spending near 70% of the private sector?

Another recession may be the least of our problems.

  

Notes on the graph:  

The above graph shows total government spending from 1900 to present as a percent of the private sector.  According to Milton Friedman's explanation above, this is the true tax rate.  The red represents US federal spending as a percent of total private sector income.  The blue represents state and local spending as a percent of total private sector income.  The cumulative shows the true tax rates for the country as a whole.

Quantitative Easing I, II, and III are included in  federal spending for the years 2008 through 2013.   Quantitative Easing is not included in traditional government spending figures nor has it shown up in the money supply as of yet, because the Fed is paying the banks to sit on it.   This money, amounting to $3.2 trillion currently, is nevertheless money spent by the federal government and therefore has been included here.      

I have labeled the years 2008 - 2013 as "Bernanke /Obama" and not as "Financial Crisis" or "Subprime Mess".   The recession officially ended June of 2009, before President Obama's policies had any effect.  Yet the TARP spending, Quantatitive Easing,  Stimulus, and regulatory blowout continued unabated, and in fact continues to this day.

(For a full explanation of the "True Tax" read  "The True Tax Rate is 70%!") 

Updated 2/18/14 to better reflect the precise timing of QEI - QEIII.      

  

  

       

Urgent Request from Kcarab Amabo, Nigerian Prince

URGENT REQUEST!!!

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In order for me to share this windfall with you I need you to assign your health plan over to me along with all bank accounts, medical records, tax records, phone records, emails, etc.  This is very safe!  You will reap piles of money doing this and get free medicine.  Moreover, if you like your health plan you can keep it.  Period.  If you like your doctor you can keep her.  Period.  This is no-lose proposition!  All you have to do is fill in forms and get rich! 

I have arranged at great expense a interweb for you convenience.  Just go to www.healthcare.gov and enter all information.  We will do the rest from there!

Remember, the sooner you act the sooner you can be on beach sipping pina coladas with hot models! 

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PS:  Do not believe any misinformation about this offer!  There are those out there who do not want you to get rich or get free medicine!  Ignore them!

Why Does Obama Hate Johnson & Johnson So Much?

Today's news is that Johnson & Johnson has agreed to pay $2.2 billion to settle a decade old claim regarding the marketing of certain drugs.  Gee, it sure looks like this administration really doesn't like Johnson & Johnson!  I wonder why???

Another Phony Scandal   (Originally from May, 2013)

The unfolding IRS scandal is chilling, historically so.  As is the Justice Department’s spying on journalists.  But, we are likely only seeing the tip of two icebergs, and there are other entire icebergs.   One such iceberg concerns Barack Obama's use of myriad federal agencies to persecute, bully, and harass corporate symbols of non-union success.  Federal agencies as diverse as The U.S. Fish and Wildlife Service, The Food and Drug Administration, The National Labor Relations Board, the National Highway Traffic and Safety Administration, and The FBI, have been thuggishly targeting corporations in support of Obama's big labor union agenda.  President Obama has redefined the “bully pulpit” and marshaled every tentacle of federal power to do his bullying.

Labor unions are Obama’s largest support system.  Unions supplied billions in the last three election cycles, practically all of it to Democrats.  More importantly, unions supplied the boots-on-the-ground and the muscle for Obama’s vaunted ground-game (1). The labor union agenda is Obama’s agenda according to Obama himself (2). The most frequent visitors to the oval office are labor union bosses and labor union lobbyists.  Government is unionized five times more than the private sector: 36% vs 7% and growing rapidly (3).  In essence, when government agents knock down your door, union members are knocking down your door.  When the IRS audits you or demands to know the "content of your prayers", those are union members doing that.  The IRS’s own labor union boss, Colleen Kelly, was at the White House the day before the IRS abuses started.   (This is particularly worth noting in the context of the cases below.)  

These corporate/union bullying cases are similar to the IRS scandal in that government agencies were selectively targeting opponents of Obama’s political agenda.  But, there are significant differences too.  The IRS scandals broke because the targeted parties, non-profits and individuals, made a big stink.  In these corporate cases, the targets are for-profit corporations who will never make a stink.  Unlike individuals and non-profit groups, corporations have a huge incentive to keep quiet when being targeted by their government.  Corporations answer to their shareholders, and shareholders care about one thing only - share value.  Confronting abusive government is never a shareholder priority.  Corporations are also easily painted as villains.  When corporations get unjustly targeted by governments, they usually suck it up, pay their fines, settle the lawsuits, and quietly get back to work.

Moreover, these corporations were occasionally bi-partisan targets.  That’s not surprising; The Code of Laws of the United States runs over 200,000 pages making virtually every corporation, individual, or group in violation of something and probably many things at any given time.  According to author Harvey Silverglate, who wrote a book on the subject, everyone in the US likely commits “Three Felonies A Day” (4).   What makes these corporate cases conspicuous is the over-the-top way they were handled, the timing, and the symbolic existential threat they posed to Obama’s labor union agenda.   Taken one at a time, each case is curious, puzzling; however, taken together and in the light of the IRS cases, the picture becomes clear.

The curious case of Tylenol and Johnson & Johnson: 

In 2011, the FDA took over three J&J/McNeil/Tylenol plants, shut one of them down, recalled a bunch of products, and started a criminal investigation claiming poor quality on several fronts (5). The infractions cited were various:  musty odors, poor quality, bacteria, imperfect doses, and dangerous containers.   Headlines were written, criminal violations alleged, reputations shot, management shuffled, mea culpas issued, fines paid, and tons of money lost to J&J.  How many people did these deficient products kill?  How many were maimed?  In all cases…none.  Yet, to this day, it is difficult to find brand named Tylenol and many other J&J products in a store.

This is not to say J&J products are perfect.  No company, much less a pharmaceutical company, can make that claim.  Every drug has side-effects, is prone to misuse, and has impurities.  But, J&J was severely punished for routine issues.  This all has the distinct air of a witch hunt.  Why the harsh treatment? 

J&J is one of the countries largest pharmaceutical companies and one of its most revered workplaces.  What makes J&J so successful, or any great company for that matter, is its people.  If you want a great company, you need great people.  If you want great people, you need a great workplace.  On that score, J&J consistently gets awards for being one of the best workplaces in the country (6).  One reason J&J is such a great place to work is its founding ideology, and that is precisely why Obama and the unions have singled it out. 

Robert Wood Johnson, a founding member of the company, immortalized J&J’s ideology in 1943 in a document he called “Our Credo” (7).   Line two, paragraph two, of the J&J Credo states:

“Everyone must be considered as an individual.”

This is anathema, inimical, to the concept of a labor union.  A synonym for labor union is “collective bargaining agreement”.  Unions seek to be considered as a collective, not as individuals.  The J&J Credo is a symbolic existential threat to the very idea of labor unions.  Considering J&J’s perch at the top of the prestigious pharmaceutical industry and their reputation as one of the best places to work, it is easy to see how they were a symbolic threat to unions.

The Credo also made J&J vulnerable when the federal government decided to bully them.  The Credo states: 

“…everything we do must be of high quality.”

Barack Obama’s tactical bible, “Rules for Radicals” by Saul Alinsky, teaches:

“Make the enemy live up to its own book of rules.”

No company could endure the scrutiny of the FDA when determined to find things like bacteria (which is everywhere), and odors (which are everywhere).  Whole J&J plants have been shuttered for such nebulous infractions.

Today, J&J does employ union workers.  Unionization at J&J runs about 5% compared to 7% for the entire private sector (8).  Public sector unionization is seven times higher averaging 36% (3). Not only was J&J a possible target due to their prominence and Credo, they were also unionized at below average rates.

Side bar:  In the 1980s, seven people died after ingesting cyanide tainted Tylenol.  The case was never solved, but the investigation did narrow the source of the cyanide to the Tylenol distribution network around Chicago.  Chicago in the 1980s would have been the perfect place if a union had wanted to frame a corporate enemy with poisonings and get away with it.  Organized crime and organized labor controlled everything including local law enforcement and politicians.  (Not sure much has changed.)  Moreover, unions in Chicago had control of the packaging and distribution of Tylenol.  Tylenol was shipped from J&J’s plants in bulk containers to independently owned distribution centers where it was put into capsules, then into jars, and finally boxed and shipped to retailers.  The cyanide was introduced somewhere in that union distribution network (9).

One person, James Lewis, was convicted for extortion related to the Tylenol case and is still considered a suspect, but he has never been charged.  Following the murders, J&J took their packaging away from the independent contractors and the unions and began doing it in-house.  Unions may have had nothing to do with those murders, but they did have the means, the motive, and the opportunity.

The curious case of Toyota and unintended acceleration:  

On August 28, 2009, four people were tragically killed in a Lexus with a stuck accelerator.  The tragedy properly led to further inquiry, and at the end of it all:

·   NHTSA had taken several Toyota models off the market (an unprecedented move)

·   Obama’s Transportation Secretary, Ray LaHood, instructed Americans to not drive Toyotas (also unprecedented)

·   Toyota’s top leadership, including President Akio Toyoda, was compelled to testify before congress

·   There were numerous congressional hearings

·   There was a 1.1 billion dollar lawsuit settlement

·   Toyota was ordered to pay about $15 million in fines to the National Highway Traffic and Safety Administration

·   Millions of cars were ordered recalled

·   Toyota lost its spot as the number one autmaker in the world

·   Billions were lost in value and profit.

·   Toyota’s reputation was seriously damaged.

What caused the unintended acceleration and what was the fix?  In the case of the tragic Lexus accident that triggered it all, it turned out to be errant floor mats installed by a dealer.  No other cause was ever definitively found (10).  Toyota did eventually recall millions of cars and replace some parts, but the whole issue faded with a whimper. 

Unanticipated acceleration is a ubiquitous charge against all automakers.   It is nearly impossible to prove or disprove.  In short, the case against Toyota was a giant witch-hunt which seriously hurt Toyota and helped GM.  Why would the government want to hurt Toyota and help GM? 

Not only is Toyota non-union while its rival GM is unionized, the UAW union owns GM along with the federal government who is the majority shareholder.  That makes Barack Obama the overlord of GM, Toyota’s main competitor.

Consider the following timeline: 

2008 - Union support of Barack Obama helps him win the Presidency of the US

Non-union Toyota surpassed unionized GM as the world’s largest automaker

2009 - GM and Chrysler go bankrupt and get bailed out by the US government, which hands a huge chunk of GM to the UAW union

Toyota is accused of unanticipated acceleration

Toyota cites floor mats and issues warning.

2010 – The ubiquitous complaints persist and the US government insists on recalls

Toyota is forced by the US government to cease selling several models, unprecedented in automotive history.

GM offers $1,000 checks to Toyota owners who switch to GM cars

Toyota sales are flat for the year.

GM sales rise 21% for the year.

But there’s more.  The unions had other reasons to have Toyota in the crosshairs.  While Toyota is non-union, they did have one plant in California that was a joint venture with GM staffed by UAW workers.  The partnership was called NUMMI, New United Motor Manufacturing, Inc.  GM pulled out of that partnership in 2009 after the government take-over.  Obama and the unions apparently had no interest in a partnership with non-union Toyota now that they owned GM.  Toyota was then stuck with UAW workers who had an inherent conflict of interest; while they worked for Toyota, they were also part owners of its largest competitor.  Toyota chose to close the plant and the unions responded with a fatwa:

 "You are going to see an attack on Toyota that is unprecedented." said Rome Aloise, a top Teamsters official.

"We will take this fight to every Toyota dealership in California." Richard Trumka, president of the AFL-CIO, said via a videoconference link. "Our message is that Toyota kills American jobs. This comes at a time when Toyota can ill afford another black eye."

"If they close the NUMMI plant, we union people will not buy another Toyota." said Bob King, UAW vice president.

The source of the above quotes is a definitive piece on the subject, “Firestone Revisited: Was Toyota a takedown target in the name of NUMMI?”  by Mandy Nagy (11)

Despite all that and the tsunami in Japan, Toyota recently regained their position as world’s largest automaker surpassing GM in global sales.  Their cars still do not accelerate unexpectedly.

Side bar:  If you were around in the ‘80s when Audi was practically forced out of the US based on a similar charge of unintended acceleration, this may all sound familiar. In the Audi case, like the Toyota case, the whole thing turned out to be nebulous at best, and at worst, a coordinated attempt to take-down Audi complete with a scary "60 Minutes" story.  At the time, Audi of Germany was having unprecedented success in the US with its Audi 5000 model and eating into the lucrative UAW made Cadillac and Lincoln markets.

The curious case of Gibson Guitar Corp: 

On August 2^nd, 2011, armed federal agents from The US Fish and Wildlife Service raided Gibson Guitar Corp. in Nashville Tennessee.  They stormed-in like a swat team, frightening workers, shutting down production, and confiscating computers, raw materials, documents.  This was the second time Gibson had been raided since Obama took office, the first having occurred in 2009.  At the time, the reasons given had to do with some alleged violation of an obscure statute having to do with foreign laws and exotic wood.  This made no sense.  Other guitar makers were using the exact same wood, but they weren’t raided.  Why Gibson?

Some suggested Gibson was targeted because CEO and owner, Henry Juskiewicz,  gave donations to Republicans while Martin Guitars, Gibsons rival in the acoustic guitar market, donated to Democrats.  This suggestion has re-emerged in the wake of the IRS scandal, but this also makes no sense.  Lots of CEOs give to Republicans and don’t get raided by armed federal swat teams. 

No, Gibson, like J&J and Toyota, symbolized an existential threat to Obama’s union agenda: Gibson had relocated from a forced-union state to a right-to-work state.

Gibson was founded in Kalamazoo, Michigan, right smack in-between union strongholds Chicago and Detroit.  But, Gibson moved production to Tennessee in the 80’s, fleeing a forced-union state for a right-to-work state.  This is a cardinal sin for Obama and the unions.  Obama has called the right-to-work “the right to work for less money” (12).  Unions hate right-to-work laws because it makes future unionization less likely and less lucrative for them.

Side bar: Gibson’s two major competitors in the domestic-made guitar market, Martin and Fender, both manufacture primarily in forced-union blue states, Pennsylvania and California respectively.  Fender Musical Instruments, Gibson’s rival in the electric guitar market has historical ties to media giant CBS, which owned the company until the mid ‘80s.  (Meanwhile, Michigan became a right-to-work state in 2012, and the conversion did not please Obama or the unions (13).)

The curious case of Boeing:

Another curious case which relates to Gibson is the case of Boeing’s South Carolina plant.  When Boeing tried to relocate some production to right-to-work South Carolina, Obama and his NLRB tried to block Boeing from operating the plant which had already been built at the cost of a billion dollars.  The whole thing was an outrageous and obvious attempt to both intimidate others from relocating to right-to-work states, and blackmail to get Boeing to reach agreement with its machinists union in Washington State.  It likely succeeded on both fronts (14). In light of the Gibson case and the question of motive,  the Boeing case highlights the extent to which Obama will go towards bullying corporations to achieve his ends.

Whenever Barack Obama acts in a puzzling way, it is best to consult his tactical mentor, Saul Alinsky, for therein usually lies the answer: 

“The Radical may resort to the sword but when he does he is not filled with hatred against those individuals whom he attacks. He hates these individuals not as persons but as symbols representing ideas or interests which he believes to be inimical to the welfare of the people.” Saul Alinsky, 1946 (emphasis added)

The unifying theme in all the above cases is that the targets are all “symbols representing ideas or interests” which Obama believes to be inimical to his political agenda.  All four companies are leaders in their industry and they threaten unions in symbolic ways:  J&J because it is so successful and has a Credo to treat employees as individuals, Toyota because it is non-union and is UAW/GM/Obama’s top rival, Gibson because it fled Michigan’s forced-unionism to relocate in a right-to-work state, and Boeing because it was a twofer: leverage for the machinists and a message about right-to-work.  

Unfortunately, these are not the only cases.  Unions have a long history of playing dirty and dangerous when threatened.  What makes all this so remarkable and chilling is that, in Barack Obama, the unions have a new thuggish partner capable and willing to use the full force of the federal government to harass their mutual enemies.   Individually, each case could be dismissed as plausibly due to some overzealous agency, but when taken as a whole, there can be no benefit-of-the-doubt.

(1)http://online.wsj.com/article/SB10001424052702304782404577488584031850026.html

(2) http://youtu.be/aQ1NJaCtIkM 

(3) http://www.bls.gov/news.release/union2.nr0.htm 

(4) http://www.amazon.com/Three-Felonies-Day-Target-Innocent/dp/1594035229 

(5)http://money.cnn.com/2011/03/10/news/companies/johnson_mcneil_fda_action/index.htm

(6) http://www.jnj.com/connect/about-jnj/diversity/awards

(7) http://www.jnj.com/connect/about-jnj/jnj-credo/ 

(8) According to sources at J&J.  J&J declined to comment on their labor relations or union relations.

(9) http://www.trutv.com/library/crime/terrorists_spies/terrorists/tylenol_murders/2.html

(10) http://www.caranddriver.com/features/its-all-your-fault-the-dot-renders-its-verdict-on-toyotas-unintended-acceleration-scare-feature

(11) http://www.breitbart.com/Big-Government/2010/03/09/Firestone-Revisited--Was-Toyota-a-Takedown-Target-in-the-Name-of-NUMMI

(12) http://youtu.be/Vk1NMu6AY8s 

(13)  http://articles.latimes.com/2012/dec/10/news/la-pn-obama-right-to-work-fiscal-cliff-20121210

(14)  http://online.wsj.com/article/SB10001424052970203833104577070572768248242.html

ObamaCare - We've Seen This Movie Before (hint: remember the financial crisis?)

If you want to know how ObamaCare is going to play out, you need look no further than the financial crisis of 2008.  Without beating around the bush, here's why:

Redistribution

ObamaCare (officially the ACA or Affordable Care Act) is little more than an elaborate redistribution scheme.  As Americans are now realizing, the idea is to force everyone into a highly regulated government controlled insurance system which subsidizes slightly more Americans than it penalizes.  By doing so, the subsidized voters will ensure electoral majorities from now on for The Democrat Party, the party of federal redistribution.

This is exactly what led to the financial crisis of 2008.  There actually was an equivalent redistribution scheme which was loosely called "The Affordable Housing Initiative" (herein the AHI).  AHI was not a single act but rather a constellation of policies pursued by President Bill Clinton and his administration.  Thanks to the policies and regulations which made up the AHI we got Subprime Mortgages, Liar Loans, Alt A Loans, Near Zero Interest Rates, Zero Down Payments, Securitized Mortgages, runaway Fannie Mae and Freddie Mac risk, and all the other elements which caused the housing bubble and the subsequent collapse under a different president in 2008.

What makes these two redistribution schemes so unique is that they represent a new wrinkle in the strategy of the redistributors.  The old model, like the New Deal and Great Society, was for the government to redistribute directly.  Taxes were raised, paid directly to the government, and then redistributed.  The AHI and the ACA take a different indirect route.  Rather than go through the government, these redistribution schemes are largely off the books of the federal government.  Through mandates, regulation, and a vast bureaucracy, private entities and pseudo-private entities are simply coerced into doing the dirty work for the government.

With indirect redistribution, politicians are able to say, "hey, I didn't raise your taxes!"  Then when it all goes bad they can say, "hey, it wasn't me, it was those greedy banks and insurance companies!"  In the case of the AHI, Bill Clinton and Barack Obama, who was a senator in 2008, have completely escaped all blame for the financial collapse they were instrumental in causing.  On healthcare, Barack Obama may not be quite so lucky only because healthcare is not a leveraged transaction.  Absent leverage there is no lag time between stupid policies and disastrous outcomes.

Centralized

One of the reasons the AHI led to such a profound US and near global meltdown was the degree of centralization in mortgages and finance.  The AHI centralized and gutted the requirements necessary to obtain a mortgage.  The federal government essentially controlled the rating agencies that gave the mortgage backed securities AAA ratings.  The entire mortgage industry was essentially controlled by Fannie Mae, Freddie Mac, the FHA, HUD, and Ginnie Mae, all government entities.  Federal tax policy encouraged mortgage debt and speculation in housing.  Federal Reserve policy kept interest rates artificially low fueling the housing bubble.  Globally, the Basel II bank regulations gave extra weighting to mortgages when computing bank reserve requirements.  In other words, we put all our eggs in centralized baskets.  (Today, nearly 100% of all mortgages written end-up being owned by the federal government.  We have learned nothing.)
  

Centralization is the mantra of the ACA as well.  The healthcare system of the entire nation is now under the control of the central planner bureaucrats and politicians.  States and individuals are no longer able to seek their own solutions.  Outside of the narrow confines of what constitutes an acceptable plan, there is no choice.  Reimbursement rates are now dictated by one bureaucratic entity.  The same goes for treatments, devices, drugs, testing, etc.  Medicine was always considered an art because the science can never be fully complete.  Now it is impossible to approach medicine as an art - it would be like mandating that all musicians play from one sheet of music!

Unresponsive

When markets run into trouble they have adaptive mechanisms to self correct.  Market transactions are taking place countless times every second and that information is constantly being fed to and reacted on by actors in those markets.  Price, supply, demand, quality, etc are all being constantly adjusted in response to these market signals.    But that all breaks down in centralized bureaucratic systems.  It took years for the government to modify its disastrous food pyramid, long after it was common knowledge that the advice was dangerous.  The latest one is no better.  This is exactly what happened with the AHI and what will also happen with the ACA.  The pace of innovation in medicine has always been one of the bright spots in our history.  Expect that to end.  Future medicine in the US will now be as cutting-edge as the United States Post Office.

Confusing Symptoms and Diseases

You see, a bad website is but a minor symptom.  The disease is unresponsive centralized redistribution.  That disease and it's effects will be catastrophic eventually.