Doctors as Theater........for Obamacare

Spin Doctors For Obamacare

By Michelle Malkin October 7, 2009
Lights, camera, agitprop! The curtains opened on yet another artfully staged performance of Obamacare Theater this week. One hundred and fifty doctors took their places on the plush lawn outside the West Wing -- many acting like "Twilight" groupies with cameras instead of credible medical professionals. The president approved the scenery: "I am thrilled to have all of you here today, and you look very spiffy in your coats."
White House wardrobe assistants guaranteed the "spiffy." As the New York Post's Charles Hurt reported, the physicians "were told to bring their white lab coats to make sure that TV cameras captured the image." President Obama's aides hastily handed out costumes to those who came in suits or dresses before the doc-and-pony show began.
But while Halloween came early to the Potomac, these partisan single-payer activists in White House-supplied clothing aren't fooling anyone.
Obama's spin doctors belong to a group called Doctors for America (DFA), which reportedly supplied the white lab coats. The White House event was organized in conjunction with DFA and Organizing for America, Obama's campaign outfit.
OFA and DFA are behind a massive new Obamacare ad campaign, letter-writing campaign and doctor-recruitment campaign. The supposedly "grassroots" nonprofit DFA is a spin-off of Doctors for Obama, a 2008 campaign arm that aggressively pushed the Democrats' government health care takeover. DFA claims to have thousands of members with a "variety of backgrounds." But there's little diversity in their views on socialized medicine (98 percent want a taxpayer-funded public insurance option) -- or in their political contributions.
DFA president and co-founder Dr. Vivek Murthy, an internal medicine physician at Brigham and Women's Hospital and an instructor at Harvard Medical School, served as a member of Obama's Health Policy Advisory Committee and the New England Steering Committee during the 2008 presidential campaign.
DFA vice president Dr. Alice Chen of Los Angeles is an Obama donor and avowed supporter of Organizing for America, Obama's campaign shop run by the Democratic National Committee. On Monday, she posted on the OFA website with an appeal to Democratic activists for letters to the editor in support of Obama's "health care reform."
DFA "senior adviser" Jacob Hacker is an Obamacare architect who laughed at criticism of the plan being a Trojan horse for single-payer coverage. "It's not a Trojan horse, right?" he retorted at a far-left Tides Foundation conference on health care. "It's just right there! I'm telling you. We're going to get there."
And here's a brief political donation history of other top DFA docs compiled by Brian Faughnan at theconservatives.com:
Dr. Hershey Garner (who stood on stage with Obama at the White House event): more than $10,000 in donations to Democratic candidates since 2001.
Dr. Winfred Parnell: More than $5,700 in donations to Democrats since 2001.
Dr. Michael Newman: $4,550 in donations to Democrats since 2001.
Dr. Boyd Shook: $3,500 in donations to Democrats since 2002.
Dr. Jan Sarnecki: $3,400 in donations to Democrats since 2004.
Dr. Amanda McKinney (who also flanked Obama at the White House event): $2,750 in donations to Democratic candidates since 2001.
Dr. Tracy Nelson: $1,500 in donations to Obama.
Dr. Stanton McKenna: $1,000 in donations to Democrats since 2001.
Dr. Jason Schneider: $600 in donations to Democrats since 2001.
Dr. Biron Baker: $500 donated to Obama last year.
Dr. Nick Perencevich: $500 in donations to Democrats since 2008.
Dr. Elaine Bradshaw: $500 in donations to Obama last year.
Who unveiled Doctors for America earlier this spring? No, not ordinary citizens outside the Beltway. The decidedly un-grassroots sponsors of the Doctors for America launch were Democratic Sen. Max Baucus, chair of the Senate Finance Committee, and the left-wing Center for American Progress, which is run by liberal operative John Podesta and underwritten by far-left billionaire George Soros.
CAP is a lead organization in the Health Care for America Now coalition, the so-called "grassroots" lobbying group for Obama's health care takeover legislation run out of 1825 K Street in Washington, D.C., with a $40 million budget. CAP is also the parent group of Think Progress, the far-left website leading the smear campaign against fiscally conservative activists who protested at congressional town halls this summer. And several CAP alumni are now leading the Obamacare push at the Department of Health and Human Services, including special HHS assistant Michael Halle and HHS Director Jeanne Lambrew, a former senior fellow at the Center for American Progress who worked on health policy in the Clinton administration.
CAP/HCAN's most recent initiative? Bussing protesters to the private homes of health care executives last week to bully them over the public option -- even as many health care executives line the pockets of Obama administration officials and allies lobbying on their behalf.
It's all in keeping with the elaborate Kabuki productions that have marked Team Obama's efforts to manufacture support for government-run health care. They've been doctoring it up from Day One.

Why? Because He Hates America.........

Europe Prefers A Presidency That Fails America

By Christopher G. AdamoOctober 8, 2009
Last January, Rush Limbaugh shocked the liberal establishment, and much of the world, when he flatly assessed America's prospects under the Obama Administration with the words "I hope he fails." In the minds of myopic leftists who cannot comprehend the possibility of anything succeeding outside of taxpayer funded government programs, Limbaugh was expressing his desire for America itself to fail.
Surely, America could only succeed if Obama succeeds. This is the heart and soul of liberalism. But, like the rest of the liberal philosophy, it is fundamentally wrong. From the welfare state to the public school system to the various "family service" agencies that consistently peddle their poisonous anti-family agenda, it is liberalism itself that fails America on every occasion that it gains any new toehold in society.
In short, Limbaugh's assertion was that he hoped Obama's far-left radicalism would not succeed in doing still more damage to the country than has already been done by past liberal endeavors at state sponsored "compassion." Nor does he, or any other sincere American patriot, want to see a continuation of the international disasters that ensue as predictable repercussions of naive, morally and spiritually rudderless leftist dabbling in international affairs.
Unfortunately for the radio talk-show giant, as well as the rest of heartland America, that is precisely what Barack Obama, with his twisted philosophies and his ineptitude, has in store for this nation. The Olympic sight selection fiasco at Copenhagen was only the beginning.
To the hopelessly dull-witted, it may seem contradictory that European nations, who loudly claim to be so much happier with Barack Obama than they ever were with George W. Bush, would nonetheless rule against Obama's wishes on an issue in which he invested so much of his credibility. The "slap in the face" that they delivered to him on the world stage will not soon be forgotten. Yet to expect otherwise, based on the presumption of universal international adulation for the Obamas, is to ascribe to a worldview that is completely devoid of the realities of modern international relations.
When dealing with the America of George W. Bush, foreign leaders were compelled to respect the intentions and desires of America, whether they liked it or not. In the wake of 9-11, Bush's assessment of the world as "either with us or against us," imputed a requirement on all countries to take a side in the Terror War, and expect to be held accountable to it.
Of course this generated much backlash against President Bush, since so many of America's "allies," had frittered away the decade of the 1990s, when they should have been shoring up their defenses against the dangerous rise of militant Islam. But while the Islamist threat grew and metastasized, several European nations were making underhanded deals with middle-eastern leaders. The infamous "oil for food" program, by which Saddam Hussein exploited the corruption of so many prominent Europeans, was the most egregious example. That sort of international game playing, which lined the pockets of crooked officials while yielding the insidious side effect of empowering terrorist states, could not continue unchecked without eventually reaching a day of reckoning.
President Bush was indeed despised for standing firm and effectively shutting down the scam. So of course the countries that had benefited from the laxities of Clinton-era international relations were not happy that their lucrative game was ending. Now they once again see increased opportunities to wheel and deal as they had done, unhampered by an American executive branch that is too weak and ideologically disjointed to call them to account.
The problem for Barack Obama is that, prior to the Copenhagen decision, he had perceived the international reaction to him as supportive and sincere. Only under such a muddled premise could he or his wife have hoped, by their sophomoric and self-absorbed lobbying, to garner victory in their bid to have Chicago host the 2016 Olympics. Make no mistake about it, this was no mere decision on the location of a sporting event. By his presence in Copenhagen, Obama had elevated its significance to that of a major international accord. In the end, the other participating nations viewed it as no less significant.
Now, the brutal reality of his real international standing is hitting him directly in the face, though he may still be too self-aggrandizing and shallow to comprehend it. The other nations of the world do not "like" him personally, but they like the detrimental effect he is having on a nation that they have long viewed as too powerful and too competitive with their own interests.
America, in their view, needs to be cut down to size. And Barack Obama, with his abhorrent and counterproductive economic and domestic policies, is just the person to do it. If the American economic engine can be sufficiently weakened, then the rest of the world can move past it. Ditto on the diplomatic front. As the sole world "superpower," America has historically been the defining force in the direction of international affairs in which it became involved. But if it can be mired down in failed social and diplomatic policy, its international role can likewise be significantly reduced.
This is the America that Europe, and much of the rest of the world wants to see. This is the "change" for which America's competitors on the world scene had so fervently hoped. And if the "useful idiot" leading the country eventually becomes a victim of the collapsing international standing that he has so diligently championed, such "collateral damage" is of little or no consequence to them.

Wise Words Of Warning

Autumn’s Inflation Time Bomb

It’s not only the energy markets that threaten the ‘low inflation’ data now encouraging bondholders to keep buying...The published inflation data are surprisingly unsophisticated in so far as they compare current prices with a snapshot a year earlier.

Just over a year ago, oil was every hedge fund manager’s favorite speculation. In summer 2008 a barrel got to well over $140, before falling sharply back.That summer’s high oil price had the effect of canceling out the deflation which was occurring elsewhere in the economy, as the first phase of the credit crunch started to bite. It helped keep inflation up. But by summer 2009, after hitting a trough of $30, the price was back down around $65 representing an annual fall in the oil price of over 50%. Now it was keeping the inflation figures down. Oil would continue to be below the price of 12 month previous throughout the period from January ‘09 to September ‘09.Now — in the fall of 2009 — prices are more or less where they were a year ago, but 12 months ago they were falling fast, while now they are rising. So for the first time in over a year the effect of oil prices in the inflation figures, in October/November 2009, will be up again. And by January, even if prices don’t continue to rise from here, the low prices of winter 2008/9 will form the base. Oil will again be at twice the price it was a year earlier. This will have a marked impact on inflation data.It’s not only the energy markets that threaten the “low inflation” data currently encouraging bondholders to continue buying government debt paying little more than 3.0% per year. There are well over two billion Chinese and Indians who used to make the unwelcome but necessary market adjustments on the demand side when world grain prices rose:Some 30% of the world’s population went hungry.Until the current decade, that was an important part of how world demand came into line with dips in world food production, before big price rises would cause Westerners to feel the sharp pain of a world food shortage. But this has now changed, and permanently.The wealth and dollar reserves of the Asian countries are now large, and their people are not going to go hungry in future (and quite right, too). Instead they will be competing on world markets, and the price of grains will start to show the very sharp spikes associated with unreliable supply and a newly inelastic demand in critical commodities.You may remember the food riots of early 2008, and how they seem to have disappeared. Well, that occurred after a small dip in world grain production in 2007. Fortunately, by its end, 2008 had turned into a bumper year for the global food harvest and a serious crisis was averted. That bumper harvest brought global food prices down again — but for how long?Rice gives us a hint of the nature of price movements we should learn to expect. From a stable base it spiked viciously upwards (by 300% and more) as it sucked in speculative money during the 2008 panic. But when it fell back as panic subsided, it still remained twice the original base level. It is from here that the next upwards spike seems to be starting.In a similar pattern sugar has already started to cool off a bit, but pepper is in the earlier stages. At the end of August ‘09 it rose 17% in a week on news of a poor crop arising from adverse weather in South East Asia./

Unlike camcorders, food is not a discretionary purchase and under the harsh law of marginal utility — together with the new inelasticity of Asian demand — even modest food shortages will cause sharp price spikes, and maybe more riots, which indeed started to appear in Asia in September 2009, with tragic consequences.When necessities are in short supply people behave in the opposite way to normal. Instead of reducing demand they tend to panic and stockpile food for safety, perversely increasing demand on those higher prices...

81% Of Any Group Is A Big Group Of Idiots....

Back in the States, 81% of economists say the U.S. recession is over, says a National Association for Business Economics survey. The majority of respondents are signing the new status quo -- that the economy grew 3% in the third quarter. Interestingly, 54% said the economy won’t regain the jobs it’s lost during this downturn until 2012, and about a third say the worst is yet to come for home prices.
So outside of your job (your biggest source of income) and your house (biggest investment), everything should be just fine.
“We don't care what they said,” says Bill Bonner in The Daily Reckoning. “These are the same seers who missed the biggest single event in financial history. There are many banking crises, recessions, panics and defaults in the record books. But none were as great as the one that hit September a year ago. Most economists didn't see it coming; why should we trust them to tell us when it is going?
“Besides, they've got the whole thing wrong. It isn't a recession; it's a depression. There is no recovery from a depression; instead, the economy has to reinvent itself in another form. Things aren't going ‘back to normal,’ in other words. Because the period leading up to the crisis was not ‘normal’; it was a bubble. After a bubble explodes, you have a lot of debris to clean up. The bigger the bubble, the more damage it does when it blows up…
“Today, we are officially running our ‘Crash Alert’ flag up the pole here at the London headquarters of The Daily Reckoning. Cross Blackfriars Bridge and you might see if flapping in the wind, between the two huge gold balls on the roof.
“Our Crash Alert flag is out because stocks have become too expensive...and because this bounce should be reaching its apogee by now. Already, central banks are talking about cutting back on their efforts to sustain the bounce with easy credit. Australia led the way last week with a rate hike.
“It is also becoming clearer and clearer that the feds' efforts aren't really working. They can give money to their friends in the banking industry. They can give money to speculators who then make bets on the stock market, among other things. They can bail out major companies. But they can't really get much money into the real economy.”

Nicely Said...........

The dollar is a scrap of paper, or an electronic impulse, the value of which is anchored by the analytical acuity of the monetary bureaucracy that failed to predict the greatest financial crackup since the 1930s. - James Grant,

Very Scary Post....When Our Currency Becomes Worthless........

When Money Becomes Worthless
by Martin Hutchinson
October 12, 2009
The Financial Times last Tuesday noted a disturbing new trend – hedge fund and other investors are increasingly seeking to invest in physical commodities themselves, rather than in futures. Given the excess of global liquidity, this is not entirely surprising. It does, however, raise an ominous possibility of a supply shortage in one or more commodities, caused by investor demand that exceeds available mine output and inventory. That could potentially produce a collapse in economic activity similar to that from the 1837-41 and 1929-33 liquidity busts, but with the opposite cause.
The problem arises because of the size of the world's capital pools in relation to its volume of trade. The total assets of U.S. hedge funds in September 2009 were $1.95 trillion (down from almost $3 trillion a year earlier). That compares with total U.S. imports of goods and services in 2008 of $2.1 trillion. However, in addition to the hedge funds, there are other huge pools of money available for deployment in commodities markets. For example China and Japan each have around $2 trillion of foreign exchange reserves, while Saudi Arabia and the Gulf states have comparable sized pools of liquid assets available for investment. Since the available inventory of commodities is a fraction of their annual production, we could potentially end up with an extreme case of too much money chasing too few goods.
This would not matter much if investment were concentrated in futures markets. The open interest in such markets is controlled by the traders, who arbitrage to close positions as the settlement date nears. Thus when huge speculative money flows pour into futures markets, they drive up the price of the commodity concerned, but do not significantly interfere with the production of that commodity, nor with the flow of the commodity from producer to consumer.
Normally, commodity investment is confined to futures markets because it is much more convenient. The cost to a hedge fund or other financial investor of holding stocks of a commodity is quite high, normally sufficient to deter investors from attempting to buy commodities directly. They will only buy commodities directly if they are afraid that the normal arbitrage mechanisms between the futures markets and the commodity markets will be overwhelmed by the volume of demand, so that investment in futures will prove less profitable than it "should."
When investment moves to physical commodities, as it may now be doing, it potentially disrupts trade flows. A ship laden with copper ore that would normally have sailed from Chile to a smelter on the U.S. West Coast is instead parked in a holding area in order that investors can profit from the rise in value of that copper. That reduces the amount of ore available to smelters. Since the balance between supply and demand of most commodities is quite delicate, and supply cannot be ramped up by more than a modest percentage at short notice, that could result in a physical shortage of the commodity at the smelter, shutting down the smelter for a period and depriving its customers of the copper products they need for their own operations.
Disruptions of commodity flows of this kind can potentially cause both hyperinflation and a major recession. The value of copper to the smelter and its customers is much higher in a shortage than if it is available normally, because the cost of closing their own operations is large – hence the price of any spare copper that might be available locally zooms upwards. Equally, the economic cost of shutting down the smelter and its customers far exceeds the value of the copper ore shipment. Products containing copper are suddenly in short supply, while workers lose their paychecks and so are forced to stop consuming at the same level.
The effect of a gross liquidity surplus is thus quite similar to that of a sudden shortage. In the shortage case, as in 1837-41 and 1929-33, prices decline sharply – in those two cases by as much as 20-25% – economic activity is hugely reduced as businesses are unable to obtain financing and workers are laid off. The resultant decrease in demand causes producers to lose money, eventually closing their doors, as well as bankrupting the financial system.
In a gross liquidity surplus, in which investment capital disrupts commodity trade flows, inflation rather than deflation results, probably very rapid inflation rather than the moderate 5% to 10% inflation we became used to in the 1970s. That inflation still further increases demand for commodities, worsening the problem. Businesses unable to obtain raw materials close their doors, workers' real incomes decline sharply (even when they keep their jobs) and Gross Domestic Product declines similarly to the deflationary case.
We have never experienced a global hyperinflation, in which money is unable to purchase goods, so it becomes worthless. In particular countries, wars have produced this effect, notably in the Revolutionary wars in both the United States and France, when the "continentals" and "assignats" became of no value. Similar effects have been produced by excess money printing in Latin America; in hyperinflationary periods citizens of Argentina have starved, even though the country is one of the world's greatest food producers. However, globally we have experienced nothing worse than the moderate worldwide inflation of the 1970s, in which trade flows were disrupted and incomes and assets affected, but commodities generally remained available in the market and output weakened but did not decline sharply.
The fascination of adding another chapter to economic historians' textbooks is not sufficient to make global hyperinflation anything other than an event to be avoided at all costs. It might help the Ben Bernanke of 2080 to make better monetary policy decisions than the current incumbent, since he would have the chance to be the world's greatest expert on the hyperinflationary crash of 2011. However, as far as this column is concerned, future generations can take their chances – we need to avoid hyperinflation happening to this generation.
The cost of avoiding this disaster appears to be steadily increasing. Once articles start appearing in the Financial Times about investors choosing to buy physical commodities rather than futures, many more such investors will be drawn into this activity. A moderate tightening of monetary policy that might well have deflected the forces of hyperinflation if it had been instituted several months ago may well prove ineffectual at this stage.
In determining the necessary monetary policy, the gold price provides a very useful signaling device (and its definitive breakout through previous highs last week provides a stern warning.) It does not matter one whit whether investors demand physical gold rather than futures, because gold has only insignificant industrial uses and the stocks of gold available in "inventories" such as Fort Knox are far more than sufficient to supply those uses for a decade if necessary. However, the commodity investment impulse is closely tied to the gold investment impulse; both reflect a well warranted distrust of fiat money and a desire to hold items of secure long-term value. Hence the gold price is available to show policymakers whether their monetary policy is appropriate.
If, following last week's breakthrough, the gold price continues to increase, heading for $2,400 per ounce, the equivalent in today's money of the 1980 high, that will be an excellent signal that monetary policy urgently needs tightening.
If, after a first monetary tightening, the gold price retreats for a few weeks and then breaks through its recent highs, that development will be a signal that monetary policy must be tightened further, as the flight to commodities has not halted.
Only when the gold price breaks definitively downwards, dropping 25% or more from its high, will policymakers know that they have succeeded in breaking the commodity investment mania. Such a development is however likely to occur only after a definitive crack in government bond markets, forcing policymakers to address their gigantic budget deficits as a matter of urgency.
Given the predilections of today's policymakers, it is unfortunately unlikely that they will tighten monetary policy sufficiently to break the commodity flight, whatever the gold price does. Instead, led by the determined Keynesians of the International Monetary Fund, they are much more likely to attempt to control the gold price itself, either surreptitiously by selling off massive quantities of the world's gold reserves, or openly by imposing limits on gold futures trading and possibly, like Franklin Roosevelt in 1933, making it illegal for ordinary individuals to own gold or to buy gold futures.
That will of course only make matters worse; it would be equivalent to trying to avoid a speeding ticket by smashing the car's speedometer. Manipulating the gold price to pretend that liquidity is not excessive does not stop liquidity from being excessive. Nor does it lead any but the stupidest institutional investor to believe that his urge to invest in physical commodities is misguided. Rather, it will cause commodities investment to be carried out through shell companies in tax havens, away from regulators' radar screens. The effect on global supply chains will be equally damaging, but policymakers will no longer have a straightforward way of determining how to avoid the resulting economic depression.
I wrote last week that tightening liquidity directly by entering into a central bank "exit strategy" is dangerous. However , the Financial Time's story itself and the gold price breakthrough have significantly increased the size of the hike in interest rates necessary to halt the flight to commodities.
Time is short, and the probability of disaster is rising.

Carter Redux

The question, “Is Barack Obama the next Jimmy Carter?”

The question is not meant as political bait. To Democrats and Republicans alike we say, “A pox on both your houses.”
The question matters because if the answer is yes – if President Obama is, in fact, channeling President Carter – then the inflationary malaise of the 1970s looks set to repeat. The darker aspects of the disco era could become as much a part of the future as the mostly forgotten past. And that, in turn, leads to some pretty clear investing and trading implications for the years ahead.

Norway’s Exploding Cigar
As if you hadn’t heard, a committee of Norwegians has bestowed upon Barack Obama the Nobel Peace Prize. They might as well have given him an exploding cigar.
(As The Onion put it, "Oh, to be honored among such towering presidents as Woodrow Wilson and Jimmy Carter.")
The sentiment behind the prize was silly and unserious. Given how far in advance these things are decided, the POTUS was in office for a scant 12 days before the committee deemed him worthy. He barely had time to find the Oval Office bathroom, let alone do anything peace-worthy.
This matters because many of President Obama’s tasks will be harder now. One could argue that countries like Russia and Iran will take the White House less seriously, knowing that the U.S. Commander in Chief has a dovish reputation to live up to. On the other side of the coin, if the president makes a distinctly “non-peaceful” military decision – of the sort that looms large, re, Iran and Afghanistan – the subject of the prize could surface again as an object of mockery.
It’s almost as if the Norwegian committee wanted to hog-tie Mr. Obama – to mold him into the vessel of hope and salvation they craved, subtly seeking to limit his options with a deliberate preemptive gesture. “If we give him the prize, he’ll be that much less tempted,” they may have reasoned. Or maybe they were thinking something else entirely.
Either way, an attempt on the part of Europe to influence American foreign policy simply looks bad. The act in itself feels mildly insulting. It comes off as unfortunate no matter how you slice it.
Of course, it is not the president’s fault he got nominated. But he could have said no.
North Vietnam’s Le Duc Tho was awarded the Nobel Peace Prize jointly with U.S. Foreign Secretary Henry Kissinger in 1973. But Tho declined to accept it, on the grounds that a true Vietnam peace agreement had not yet been secured.
Le Duc Tho, in other words, recognized the importance of being a worthy recipient. President Obama could have graciously declined too, making the point that no shortage of compelling nominees existed.
This would have been a wise thing to do sheerly on political grounds. It might have even bolstered Mr. Obama’s standing as a leader, distancing him from the baggage of utopian expectations and starry-eyed rhetoric.
Instead, the POTUS accepted the award... and let the cigar explode in his face. Why?
Tennis Courts and Swimming Pools
Perhaps because, like President Carter before him, our current president is just too damn distracted.
Jimmy Carter was known for being a micro-manager, caught up in such a vast array of little things that the truly big things were left untended. For example: Legend has it that, in his first six months in office, President Carter personally reviewed all requests to use the White House tennis court. (Carter later denied this, but various insiders confirmed it. As James Fallows writes in The Atlantic, “I always provided spaces where he could check Yes or No; Carter would make his decision and send the note back...”)
Your editor was reminded of this anecdote on reading a recent Washington Post piece, “A Vigorous Push From Federal Regulators.” According to the Post, “The Obama administration is taking on Cheerios. And popular cold remedies and swimming pool drains and rhinestones on children's clothing.”
In a move designed as much for symbolism as effect, the new chairman of the Consumer Product Safety Commission dispatched all 100 agency inspectors across the country last month to enforce a law that requires special drains on swimming pools to prevent children from entrapment. The agency shut down more than 200 pools.
“Symbolism” indeed. The frightening message we are getting is that swimming pools, Nobel Prizes and Olympic bids (witness the recent mad dash to Copenhagen on behalf of the city of Chicago) have more mindshare in the president’s head than things like the rapidly deteriorating job situation, the unfinished business in Iraq and Afghanistan, and the quiet coup that has taken place on Wall Street.
And then there is healthcare...
Neither the Time nor the Place
Whether you stand adamantly in favor of universal healthcare coverage or adamantly against it, at least one thing has become clear. Efforts at healthcare “reform” have become a giant boondoggle.
According to fund manager Jeff Matthews, who took a keen look at the Senate Finance Committee’s efforts, the bill as it stands would still leave 25 million Americans uninsured in the year 2019. (So much for “universal.” What was the point again?) An additional 29 million “nonelderly” Americans would be insured under the bill at a theoretical cost of $829 billion.
The word “theoretical” deserves strong emphasis there because the present bill 1) assumes large Medicare cuts that will never happen, 2) anticipates heavy taxation of “Cadillac” private insurance plans, and 3) surely underestimates the added fraud, abuse and gaming of the system that would take place under an expanded government mandate.
As if all this weren’t headache enough, the massively powerful health insurance lobby known as America’s Health Insurance Plans, or AHP, appears to have thrown a spanner into the works at the last minute. AHP has released a study saying premiums could rise sharply for all privately insured Americans were the present bill to pass. The White House angrily cried “sabotage.”
All of this leads your editor to ask in strident tone: Why the heck are we getting so caught up in this now?
Healthcare reform is the political equivalent of cleaning out the Augean Stables. Hercules had to reroute two rivers to wash the mountain of horse crap away. Given the intense emotional stakes, the deeply entrenched corporate interests, and the sheer degree of complexity involved, tackling healthcare head-on might rank as one of the most ambitious political endeavors of all time.
In other words, draining the healthcare swamp would be a challenging enough task during flush economic times with nothing but blue skies on the horizon – let alone in the midst of an epic financial crisis/jobs crisis/energy crisis punctuated by wars past, present and future!
It’s the Economy, Stupid
In your editor’s humble opinion, the president should have a Clinton-era campaign phrase affixed to his desk: “IT’S THE ECONOMY, STUPID.” (The prez is far from stupid, of course. He may well be a genius. But then, so was Carter.)
Even the most vocal and loyal Obama supporters, like columnist Bob Herbert of The New York Times, are wondering if the president “gets it” when it comes to jobs. As Herbert wrote on Oct. 6,
The Obama administration seems hamstrung by the unemployment crisis. No big ideas have emerged. No dramatically creative initiatives. While devoting enormous amounts of energy to health care, and trying now to decide what to do about Afghanistan, the president has not even conveyed the sense of urgency that the crisis in employment warrants.
...The word now, in the wake of last week’s demoralizing jobless numbers, is that the administration is looking more closely at its job creation options. Whether anything dramatic emerges remains to be seen.
We’re being set up for something “dramatic” all right – just not the type of drama that Herbert is hoping for.

On the home economic front, the news keeps going from bad to worse. Wall Street is throwing a stimulus party while “Main Street” America – i.e. regional banks, small business, and U.S. taxpayers – is headed to Davy Jones’ locker. As a certified news junkie, your humble editor reads the equivalent of five or six newspapers most every day. Here is just a smattering of recent headlines:
Foreclosures grow in housing market’s top tiers (WSJ)
Credit Vise Tightens for Small and Midsize Businesses (NYT)
Steep Losses Pose Crisis for Pensions (WPost)
Failures of Small Banks Grow, Straining FDIC (NYT)
Small firms face credit squeeze as crisis drags (Reuters)
Banks cutting back on loans to businesses (MarketWatch)
What the White House refuses to acknowledge is that the jobs crisis ties directly back to Wall Street. The trillions of dollars pumped into the U.S. economy by way of various alphabet soup programs and government guarantees have directly enriched the megabanks and top Wall Street firms, while potentially making things even worse for the average man in the street.
The way this game is played, if you have the U.S. Treasury Secretary on speed dial, you win. Virtually everyone else loses. The list of Wall Street players banking huge profits off the crisis looks uncannily similar to a “who’s who” list of Paulson and Geithner telephone contacts over the past 12 months.
It’s a losing game for America because Wall Street has become a one-way thoroughfare. Huge sums of taxpayer-funded bailout money get poured in, but nothing comes back out. The taxpayer ponies up vast sums to bail out the megabanks... the megabanks use the free funds to make fat profits on guaranteed government securities while bidding up paper assets... and the real economy continues to suffer as small banks go under and small businesses find no one willing to lend.
As Spengler (aka David P. Goldman) puts it in the Asia Times,
The parallels between America in 2009 and Japan in 1989 are uncanny. An asset price bubble has collapsed, just before a tsunami of prospective retirements that the asset bubble was supposed to fund. Demand for savings is bottomless, and the government satisfies demands for savings by running a huge deficit and issuing debt. The crippled banking system borrows at an interest rate of zero and buys government securities. And the economy shrivels up and dies.
The frustrating thing about our Carteresque president is that he shows no visible sign of giving a damn about any of this. (Perhaps he doesn’t see it happening? How could that be possible?)
As the economy contracts, a combination of rising unemployment and explosive government debt expenditure threatens to ignite a period of “inflationary malaise” like we haven’t seen in decades... maybe even surpassing the ‘70s this time around.
Unless the situation is somehow rectified – and the window seems to be closing fast – our president risks being remembered much like Carter: For a raft of lofty promises unfulfilled, crafted against a legacy of deep financial incompetence and a damning roster of big problems left unaddressed.

{The above article is well founded and excellently written. But it ignores a more obvious fact: What if this is all being done on purpose? No better way to bankrupt a country than government run healthcare. Mussolini knew that you tax the rich to destroy the economy so the government can take that over. A VAT would decimate the middle-class and make us all European-style serfs. I'm thinking rational thought is irrelevant in this current political scenario. Ed.SOC}