Why We Don't Trust Congress

Georgia's 4th Congressional District must be so proud of him! I admire the admiral's forbearance. The really scary thing is that Johnson is a major improvement over the previous member to hold that seat. Even scarier, while he's not the sharpest knife in the drawer, the odds are excellent that he's not the dullest either.

"Unforeseen" Consequences

The Law of Unintended Consequences never sleeps, but to call the following real-world consequences "unintended" or "unforeseen" when those of us who live in the REAL WORLD have spent the best part of a decade pointing them out as inevitable results of certain actions ... well, there's good reason those words are in quotation marks. I TOLD YOU SO. Repeatedly.

Let's start off with what happens when you impose new overhead costs on industry ...

The ObamaCare Writedowns
The corporate damage rolls in, and Democrats are shocked!

Turning over every couch cushion to make their new entitlement look affordable under Beltway accounting rules, Democrats decided to raise taxes on companies that do the public service of offering prescription drug benefits to their retirees instead of dumping them into Medicare. We and others warned this would lead to AT&T-like results, but like so many other ObamaCare objections Democrats waved them off as self-serving or "political."

...On top of AT&T's $1 billion, the writedown wave so far includes Deere & Co., $150 million; Caterpillar, $100 million; AK Steel, $31 million; 3M, $90 million; and Valero Energy, up to $20 million. Verizon has also warned its employees about its new higher health-care costs, and there will be many more in the coming days and weeks.

This is just the beginning of the damage done to American businesses by the massive cost mandates imposed by Obamacare. The sad thing is that we could have accomplished a LOT more in the way of real reform by simply extending full health insurance deductibility to individuals and reporting premiums paid by their employers as income to be netted against said deductions, while IMPROVING corporate viability. Naturally, Obamacare minions in Congress are doing their best to blame business for doing exactly what Congress has just ordered them to do:

Meanwhile, Henry Waxman and House Democrats announced yesterday that they will haul these companies in for an April 21 hearing because their judgment "appears to conflict with independent analyses, which show that the new law will expand coverage and bring down costs."

In other words, shoot the messenger. Black-letter financial accounting rules require that corporations immediately restate their earnings to reflect the present value of their long-term health liabilities, including a higher tax burden. Should these companies have played chicken with the Securities and Exchange Commission to avoid this politically inconvenient reality? Democrats don't like what their bill is doing in the real world, so they now want to intimidate CEOs into keeping quiet.

Even if they succeed in further demonizing and silencing corporate America, it won't stop the economic damage in the slightest. Reality 1, Fairy Dust 0.

Then, of course, there's the obvious real-world response to legislation doomed to explode government deficit spending at a time when our finances are already strained:

Sell-off in US Treasuries raises sovereign debt fears

The yield on 10-year Treasuries – the benchmark price of global capital – surged 30 basis points in just two days last week to over 3.9pc, the highest level since the Lehman crisis. Alan Greenspan, ex-head of the US Federal Reserve, said the abrupt move may be "the canary in the coal mine", a warning to Washington that it can no longer borrow with impunity. He said there is a "huge overhang of federal debt, which we have never seen before".

This is a considerable worsening of Treasury-sale prospects since the already-alarming December report. Gee, I wonder what happened between now and then to boost fears of unmanageable US sovereign debt? Oh yeah. Reality 2, Magic Wand 0.

Lastly, some further inevitability that I have pointed out over and over and over again over the last several years:

Health overhaul likely to strain doctor shortage

Primary care physicians already are in short supply in parts of the country, and the landmark health overhaul that will bring them millions more newly insured patients in the next few years promises extra strain.

The new law goes beyond offering coverage to the uninsured, with steps to improve the quality of care for the average person and help keep us well instead of today's seek-care-after-you're-sick culture. To benefit, you'll need a regular health provider.

Yet recently published reports predict a shortfall of roughly 40,000 primary care doctors over the next decade, a field losing out to the better pay, better hours and higher profile of many other specialties.

Well, DUH! Ya think? When you start out with a shortage, one largely caused by major structural disincentives such as doctors leaving medical school with six-figure student loan debt and having to choose between low-paying primary-care and high-paying specialties, it's gonna take more to fix than a few tossed scraps and boiled-out bones. But that's all that's offered as primary-care inducements, a few scraps, such as a 10% boost to PCP's in Medicare reimbursements. Reimbursement rates that are already largely "non-profit." We've seen this show before, in Massachussets:

Massachusetts offers a snapshot of how giving more people insurance naturally drives demand. The Massachusetts Medical Society last fall reported just over half of internists and 40 percent of family and general practitioners weren't accepting new patients, an increase in recent years as the state implemented nearly universal coverage.

That's for new patients period. Acceptance rates for Medicare/Medicaid patients are far lower. Reality 3, Flying Unicorn Sparkly Rainbow Farts 0.

Watching this predictable and predicted train wreck of authoritarian central planning is like watching someone on the short stack in the SCOOP poker tournament play increasingly lousy hands in a desparate attempt to Win the Big One. A miracle salvation is possible, but the odds are so long against that "miracle salvation" is the precisely appropriate phrase. Far more likely is a bust-out, and sooner rather than later, long before the final table.

This is just Week One of Obamacare. Hang on, it's gonna be a long ride.

An Honest Politician?

It is said that an honest politician is one who keeps his promises, and who stays bought.

After health care vote, Stupak 11 request billions in earmarks

A day after Rep. Bart Stupak, D-Mich., and ten other House members compromised on their pro-life position to deliver the necessary yes-votes to pass health care reform, the "Stupak 11" released their fiscal year 2011 earmark requests, which total more than $4.7 billion--an average of $429 million worth of earmark requests for each lawmaker.

Sounds like someone made some promises, and bought on credit.

More Transparency!

Federal Reserve Must Disclose Bank Bailout Records

The Federal Reserve Board must disclose documents identifying financial firms that might have collapsed without the largest U.S. government bailout ever, a federal appeals court said.

The U.S. Court of Appeals in Manhattan ruled today that the Fed must release records of the unprecedented $2 trillion U.S. loan program launched primarily after the 2008 collapse of Lehman Brothers Holdings Inc. The ruling upholds a decision of a lower-court judge, who in August ordered that the information be released.

Because the Obamites naturally assume we have no right to know exactly what they did with $2 TRILLION of our money.

Know When To Fold 'Em

Many have likened politics to a high-stakes poker game. The analogy pervades the popular culture, as do many poker analogies.

Politics and Poker, Politics and Poker
shuffle up the cards and find the joker
Neither game's for children
Either game is rough
Decisions, decisions, like:
who to pick
how to play
what to bet
when to call a bluff!*

The ability to properly read the cards, the board, and the other players is what makes or breaks a poker player in the long run. A poor player can have amazing streaks of good luck in the flop/draw in the short run, the best player can be out-flopped and outdrawn by "chasers" in the short run, but in the long run a player who knows the odds, knows how to play the pot odds, and can "read" the betting patterns of the other players will be a consistent winner. Which is why playing poker is clearly a game of skill.**

But those aren't the only skills required to be a good poker player. Also important is the ability to alter one's play, to recognize the context of the game you're playing in, and to vary your tactics and play accordingly. This is the long-run goal-oriented game, the ability to adjust one's play to changing circumstances in varied conditions. The mindset needed to show a consistent profit in a "friendly" low-limit game is not the same as that required to consistently place well in multi-table no-limit tournaments ... as President Obama is discovering. They involve different goals, and require different strategies.

As a state senator, Obama was a regular at the local low-limit "friendly" statehouse game. Reports are that he was pretty good at it, playing what sounds like a classic tight-passive game, showing a consistent if modest profit. And in a low-limit "friendly" game with players rotating in and out, tight-passive can indeed be a good money-making strategy. And that tight-passive strategy was echoed in his legislative record, which showed no real risk-taking, just consistent cashing of "gimme" opportunities. He carried that same pattern of play with him into the U.S. Senate.

Then he reached the White House, and his playing style changed. Apparently convinced of his invulnerability by his own press and emboldened by an early victory with the stimulus bill, being the chipleader and holding the legislative equivalent of Big Slick with both House and Senate overwhelmingly in Dem hands, he changed up from tight-passive to loose-aggressive. He decided to bet big pre-flop on health care, got called, and discovered post-flop that he didn't have the nuts after all.

This is the point where a tourney player has to think twice and very carefully read the board -- and the other players -- before making their next move. Obama bet big again, and got called again, and the turn brought him nothing while improving the board. So Obama is thinking about going all-in, chasing a weak draw in hopes of sucking out on the river.

Long-time tourney players have seen this pattern of behavior many times. The neophyte player who steps 'way up in level and goes into the finals with the Big Stack and a sense of destiny, starts playing loose-agressive rather than tight-passive or tight-aggressive, and discovers in a crucial big-money hand that the other players can also read the board, know the odds better than he does, and don't bluff that easily. Especially when they're already pot-committed.

Obama has the remaining advantage -- for the moment -- of the Big Stack considering an all-in bet. His going all-in will not wipe him out. If he loses the hand on the river from chasing the suckout, he'll still have some chips left. But he'll definitely be on the shortstack, and he should remember that before betting big into the river.

But even if he hits the suckout and wins, he will have damaged himself. Every player in town will know of his tendency to bluff and chase, rather than playing tight. And it's still a LONG way to the final table. A top-level player knows that even if you've invested heavily in the pot there are times the smart thing to do is to give up the chase and fold 'em, not push in against a made hand. Maybe Obama should try listening to some of that redneck Bitter Clinger music, because Kenny Rogers has some advice for him. As does Sheldon Harnick.

Poker
and politics
Brother,
you've gotta have
That slippery
hap-hazardous
commodity
You've gotta have
the cards!*

* -- Politics and Poker, from the immensely underappreciated Pulitzer-winning 1959 Broadway musical Fiorello!, lyrics by Sheldon Harnick.

** -- Linkage to the PokerStars web site does not constitute an endorsement of same, and I am NOT responsible for any losses incurred should you go there and choose to play in real-money games. PokerStars has numerous non-money freeroll tournaments and play-money games where you can enjoy yourself immensely and learn the fundamentals without risking a dime. WARNING: The Sturgeon General has determined that playing real-money poker without a sound grasp of the fundamentals is hazardous to your finances, though those so doing are extremely welcome in real-money play by players who DO grasp said fundamentals.

More or Less

To hear the panicked left tell it in their best Alinskyite echoes, the Tea Party Movement (TPM) is just the latest lemming-rush of evil crazed Republican right-wingers, driven into a frenzied angst by the ascendancy of the One True Faith in Washington.

Certainly the GOP would love to rope the TPM in and harness them to the party wheel, but the leftist view just ain't so. With very few exceptions, the TPM people are keeping a notable distance from the GOP establishment. Nor is there any true central organization of the TPM to be co-opted, despite some concerted efforts on the part of the GOP to create and insert one for roping/branding purposes. The TPM remains a decentralized conglomeration of independent organizations.

A good starting place is Glenn Reynolds' recent article in the Wall Street Journal. Ever to the point, Reynolds opens with:

There were promises of transparency and of a new kind of collaborative politics where establishment figures listened to ordinary Americans. We were going to see net spending cuts, tax cuts for nearly all Americans, an end to earmarks, legislation posted online for the public to review before it is signed into law, and a line-by-line review of the federal budget to remove wasteful programs.

These weren't the tea-party platforms I heard discussed in Nashville last weekend. They were the campaign promises of Barack Obama in 2008.

Mr. Obama made those promises because the ideas they represented were popular with average Americans. So popular, it turns out, that average Americans are organizing themselves in pursuit of the kind of good government Mr. Obama promised, but has not delivered. And that, in a nutshell, was the feel of the National Tea Party Convention. The political elites have failed, and citizens are stepping in to pick up the slack.

Indeed. Being naturaly curious, I have over the last year attended a few TPM events. What I found did not fit neatly into stereotypes. The attendees ranged from disillusioned Democrats who felt they got "took" in 2008 to dedicated Libertarians, with the usual presence of fringe nutburgers always found in large gatherings. Birthers and Truthers were both to be found, but not in quantity, and they were oft-scoffed at and avoided by most of the crowd.

So what do the Tea Partiers really want? That was my focus. What I found can be summed up in a single word. Less.

Less borrowing. Less spending. Less taxes. Less regulation. Less corruption. Less extreme partisanship. Less "social engineering" -- from EITHER side of the aisle. Less power-grabbing for special interests. And, most especially, less government intrusion into every single aspect of our lives.

LESS.

It seems that despite the generational de-emphasis of civics in American education, once you leave the extremes of the American polity, those in between still grasp the basics of the American system as expressed in the Constitution. And they want it back from the Frankensteinian behemoth that it has become. They want less.

Signs of Intelligent Life?

Obama Said to Seek $54 Billion in Nuclear-Power Loans

President Barack Obama, acting on a pledge to support nuclear power, will propose tripling U.S. loan guarantees for new reactors to more than $54 billion, an administration official said.

I'll believe it when I see it. But it would be a start.

LESS

Lamar Alexander has an intelligent take on the problems of biting off more than you can chew:

Step by Step
Incremental improvements are better than comprehensive reforms

The Democrats’ comprehensive immigration, climate-change, and health-care bills have been well-intended, but the first two collapsed under their own weight, and health care, if it doesn’t do the same, will be a historic mistake for the country and a political kamikaze mission for Democrats.

What has united most Republicans against these three bills has been not only ideology, but also that they were comprehensive. As George Will might write: The. Congress. Does. Not. Do. Comprehensive. Well.

That's not a surprise, as almost no one does comprehensive well. Lamar traces the over-reach urge to the fact that "... the president and most of his advisers have been trained at elite universities to govern by launching “a host of enormous initiatives all at once . . . formulating comprehensive policies aimed at giving large social systems — and indeed society itself — more rational and coherent forms and functions."

In other words, they're so self-assuredly brilliant that they already have all the answers, if only they can just dictate the forms and shapes of society itself! The problem there being, of course, that such thinking totally ignores two things: That citizens in a free nation resist such social engineering even when done "for their own good," and that the bigger the changes, the more subject they are to the Law of Unintended Consequences.

As Alexander elucidates, the incremental approach is not only less likely to produce catastrophic unintended consequences, but is more amenable to being reversed if found destructive. Comprehensive "reforms" tend to be very difficult to reverse, even when they go spectacularly wrong.

There is much more to fear in the hubris of the self-proclaimed elites than there is in the intentionally-hobbled structure of our system, and collectively we seem to grasp that. Maybe the backlash to the most recent attempts to absorb our fortunes, liberties, and even our lives into the statist visions of those elites will give them pause. It should, and not just on the Democratic side of the aisle. The Tea Party movement, that the GOP would so dearly love to harness exclusively for themselves, is not one that will fit well into the social agendas of the religious right. It is instead a populist outcry that can be summed up in one word: LESS. Not just less spending and less taxes, but less interference in our lives in ALL areas.

LESS is the new Big Tent, and pols should pay heed.

Ross Douthat has some related thoughts in today's New York Times.

Excuse me?

Obama endorses deficit commission plan

Trying to win the votes of fiscal moderates, President Barack Obama formally endorsed legislation Saturday creating an independent commission with the power to force Congress to vote on major deficit reduction steps this year, after the November elections.

Excuse me? Can anyone point me to that section of the Constitution that permits Presidents to issue executive orders to force Congress to do anything? I can understand why some Congresscritters might be in favor of abdicating to such a dictatorial politburo -- they don't want to do THEIR JOBS. But that doesn't make it legal.

DUH! Also, water is wet....

Given the apparently unlimited reality-denial capacity of wingers on both ends of the political spectrum, it's refreshing to see some common sense in the political blogosphere. (Not that Megan McArdle is a winger!) I've been pointing this out for years, and getting the predictable responses from True Believers.

Taking the Ball and Going Home

Here's the thing that Democrats just learned in Massachusetts: the base can't save you. In the bluest of blue states, if you run with a progressive agenda and alienate moderates, those alienated moderates will join with the conservatives to kick you out of office. Catering to the base is a losing strategy.

...You might also consider that the voters you're asking them to ignore are their constituents. You know, the majority of the people in their district. The people they ostensibly represent. The people who consistently poll against the various health care plans on the table.

Megan gets it. Pols are supposed to be working on behalf of ALL their constituents, not just the national party base. Those who forget that little detail show a much-enhanced tendency to become ex-pols.

In some safe districts pols have a lot more leeway, but as the Massachussets election shows, it's not unlimited. And in swing districts the candidate who best reflects the majority views of the overall electorate tend to kick ass on wingers who ignore same. This is how Scott Brown reached the Senate, and how Mitt Romney and Kathleen Sebelius became governors.