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Monday, December 28, 2009

Wither the Public Option

House Democrats are already conceding that the public option will have to die to get the Senate to pass a final version of health care reform.
1-The public option had two purposes, the first was the (supposedly) create more competition for insurance companies, because the 1200 or so already selling health insurance don't have enough.
2-The more covert purpose, was to get enough people enrolled to make it a quasi universal plan. That was Joe Lieberman's objection to it.
So if number 1 is off the table, how does the government get to number 2? That's actually pretty easy. The choke hold of regulation. The Senate version of health care reform puts so many new regulations, from administrative overhead restrictions to documentation and litigation that they hope to drive insurance companies out of business.
Maine has already driven the vast majority of insurers out of the state with their Dirigo plan. Regulation on "for profit" insurers has left the state with it's own insurance (who's cost has gone up about 175% faster than anticipated) and a few not for profits selling policies.
My guess (educated, but without insider info) is that the conference bill that comes to the House and Senate will be designed to drive for profit insurers and the"non-protected" (see Longshoremen) classes out of the insurance business by making it nearly impossible to sell insurance without losing the proverbial shirt.
After a few years of States seeing their medicaid rolls (except Nebraska, the feds will pay for theirs) swell with those who's private insurers stop writing policies, the States will scream for DC to fix a new "national health care crisis" that is of Washington's own making.
Keep in mind, most of the legislation that's supposed to help the consumer doesn't go into effect until the law is on the books for 3 years. The taxes and regulations start immediately. This gives Congress the ability to say that insurers aren't doing their part before they are actually required to do anything, and insurers will most certainly have to look for ways to save money in that three year period.
There is a problem with the waiting period, though. The Democrats have to hope they hold onto enough seats, preferably majorities, in both Houses to make it possible to bring up the public option down the road as the "savior of the masses".
The GOP regaining control of either house would probably kill that idea in it's track, and require (gasp!) meaningful reform to be negotiated between both parties. Who knows, maybe then the President would have to hold true on his promise to televise the negotiations on C-SPAN so everyone could see what's going on.

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Tuesday, December 22, 2009

Dear Senator Burris

I've sent the following to Senator Burris.

Mr. Burris,
A month or so ago you informed your senate collegues that you'd vote no on any health care reform legislation that didn't contain a public option.

This week you've gone back on that promise. Which isn't a surprise to most of us.

What I'd like to know is what was the pay off for Illinois? The Senate is tossing around $100 million dollar bribes left and right for yes votes on this bill, so I'd like to know what Illinois got that was good enough for you to go back on your principles.

I'm going to be very disappointed if you didn't hold your vote for some kings ransom for our state, too.


I'm pretty sure he got nothing for his vote. He has no principles, and doesn't seem smart enough to get one of the $100 million dollar bribes that Harry Reid was giving out.

He'll probably claim Gitmo North is our gift from the Senate for his vote.

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Sunday, December 06, 2009

CTA Rides Cost Taxpayers $6-$9 Per Rider

CTA: Rides cost $7-$9.90, but agency makes about 98 cents for each -- chicagotribune.com

Above is the headline from the Tribune. My headline is the taxpayer cost to subsidize the CTA riders. While there is a regional taxing authority for the CTA, that money doesn't just come from there. As we've seen repeatedly over the last few years, Springfield is kicking more and more money each year into the CTA coffers to keep drastic route cuts and fare increases from happening.

That means if you live downstate and the state highway in your area is full of potholes, it's possible the money to fix it is instead being used to subsidize the CTA service.

Where does all the money to CTA go? According to the Tribune article and CTA 65% goes to wages. The white collar workers at CTA are getting ready for their fourth consectutive year without a pay raise, and will get 18 unpaid furlough days this year; again. The union workers on the other hand gets 3-4% per year in raises, and refuses any furlough days.

In fairness, the union workers in their last contract did have to increase their own pension contributions and insurance payments. My guess is it comes no where close to what their white collar co-workers are enduring. It should.

If the union cries poverty, please laugh heartily at them. The average wage for a bus driver come out to $57,000 a year before benefits, $55,000 for a train operator, don't forget, it goes up next year by 3.5 percent.

Governor Quinn just got CTA enough cash to forestall some serious fare hikes over the next couple of years, but not enough to stop the service cuts planned for January. Maybe some layoffs are necessary for the CTA's union members to realize that they are part of the problem and need to help with the solution.

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Saturday, December 05, 2009

Unemployment Smoke and Mirrors

I got my laugh this week over the President crowing about the unemployment rate dropping to 10% for November. First, he sold us a $787 billion 'economic stimulus package' that said unemployment wouldn't go over 8% if we spent that money.

The second reason I laugh is that November and December unemployment numbers are generally lower than any two months of the year, as retailers hire seasonal help for their holiday sales.

If you want a truer reflection of unemployment, check the numbers released the first week of February, when the seasonal workers are gone. My guess is you'll see 10.5% for January.
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Thursday, December 03, 2009


Jonah Goldberg of National Review Online has an excellent editorial in today's Chicago Tribune on the intellectual hypocrisy of the folks currently in charge.

His idea of the intellectual hypocrisy of the government is based on a JP Morgan chart, which shows the private sector experience of the President's appointees.

As you can see from the chart, Obama's cabinet doesn't fall a little short of others in "real world" experience, but about 2/3 short of previous least experienced cabinet (Kennedy).

His cabinet isn't made up of folks who've run things, and done things that they had to worry about the cost of. It's made up of people who've never managed an actual enterprise.

Goldberg's point is that folks who've never run everything are proposing to run basically everything from your health care to auto emissions to banks and auto makers.

Their record, by the way, isn't so good so far. They took over banks with TARP, and set rules for how they can pay people, and now the banks can't find experienced bankers to run them under the new rules.

And, since the banks are finding ways to meet the TARP repayment requirements early, and get out from under the government, the Fed now wants to change to rules so it can take over healthy banks it thinks might be a threat to financial stability. That change is sure to make it easier to get folks to work in the industry.

They took over GM, fired the old CEO, ousted his replacement, and now worry about finding anyone else who wants to run Government Motors. My guess is they won't find a senior level executive with experience in that industry to take the job.

I'll refer our friends in D.C. back to a book I read some 20 years ago, that explained exactly why the government was bad at running things. Command of the Seas by John Lehman; Regan's Secretary of the Navy; who wanted to get the government out of the shipyard business because they did a poor job of running them. Government regulations on compensation made it impossible to get anyone above the mid-manager level in the civilian sector to take on the job of managing any of the Navy's shipyards. Lack of experience led regularly to decisions that caused huge cost overruns, poor performance, and a lack of competitiveness with the civilian sector on nearly every job the government managed yards performed.

Lehman found those problems not only at the yards, but in every part of the Department of the Navy that was run by career civil servants. He also found the one thing that could stop any government reform from working as designed; Congress. As hard as anyone would try to fix something, someone in one chamber or the other would find it a threat to a constituency and get a rider passed in a bill that undid the reform.

Anyone that thinks health care reform or cap and trade is going to work any different doesn't understand the culture of government, and the hypocrisy of their intellect.

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