Monthly Archives: September 2013

DC Theater

9/22/13

Sometimes I almost feel sorry for the Republicans.  The Democrats are about to beat ‘em like a drum, and it seems like everybody knows it, even a few Republicans.

The occasion is the annual raise-the-debt-ceiling charade, in which the party not holding the presidency threatens  to block the debt-ceiling increase unless some demand is met.  This year the House of Representatives, controlled by the Republicans, just voted to defund ObamaCare. There is no chance this will get through the Democrat controlled Senate. Even if it did, the President would veto it. Furthermore, any attempt to tie defunding ObamaCare to raising the debt ceiling is guaranteed to backfire.

The President, more than once, has demanded Congress pass a debt ceiling increase without any conditions. None. Nada. The man is not for compromising.  In fact, he is daring the Republicans to not raise the debt ceiling.  He will then shut down the government and we‘ll see pictures of starving babies, uncollected garbage, shuttered hospitals, old people in overturned wheelchairs and military personnel selling pencils on street corners. All the fault of the uncaring, obstructionist Republicans.

It’s like watching Lucy and the football, only it’s not Lucy holding the ball, it’s President Obama, and it’s not Charlie Brown, but the Republicans who are about to land on their butt.

Advice to the Republicans: (1) Pick fights you can win.  (2) When picking a fight with a president, remember the president has what Teddy Roosevelt called a “Bully Pulpit“ and a Democrat president has the slavish backing of the mainstream media to amplify and endlessly repeat his “Bully Pulpit” sermons.

There is no question that ObamaCare is going to be a disaster. The operative words are “going to be.”  Let it rot on the vine for a couple of years, get nice and  foul, and then prune it off.  In the meantime, why not go after government programs that have a proven record of failure?

If the Republicans want to use the debt ceiling to put the spotlight on some much needed budget cuts, they could start by demanding the elimination of the Department of Housing and Urban Development, HUD.  No government agency in the history of America has caused more damage, with the possible exception of the Federal Reserve.  This is a story the American public needs to know.

HUD was at the heart of the 2008 recession, one of our worst ever.  For over two decades, HUD not only encouraged but REQUIRED irresponsible home mortgage lending, unchecked by either Republican or Democrat administrations, but especially encouraged by Democrats, a few of whom became multimillionaires in their GOVERNMENT jobs.

The concept of “claw back”, in which profits from illegitimate enterprises are recovered by the courts, even from innocent participants, is something that the Republicans should explore. This happened to innocent investors in Bernie Madoff’s Ponzi scheme, some of whom got out with profits only to have those profits confiscated years later by the courts.

Why not the same for those who received millions from Fannie Mae and its sister GSE, Freddie Mac?  Ever heard of Franklin Raines?  Jamie Gorelick?  James Johnson?  There are probably many others, but those three Democrats come to mind as people who walked away from government jobs with many millions of dollars in their pockets, dollars from the illusory profits of their employer, Federal National Mortgage Corporation, a.k.a. Fannie Mae, the GSE run by HUD.

The best summary I’ve seen of this sorry situation was an editorial in the Wall Street Journal September 17, 2013, by Peter Wallison: “Five Years Later, Don’t Mention the Feds. Washington and the media are peddling a narrative that discounts the government’s role in the financial crisis.”  I would say it’s more like hiding the government’s role.

For a more thorough analysis, read “Reckless Endangerment” by Gretchen Morgenson, (Times Books, 2011.)  Morgenson is assistant business and financial editor for The New York Times, which should give her credibility with the “Government is God” crowd.

The bottom line is that HUD, 2012 budget of $37 billion, should be abolished. In fact, all of the federal government’s housing support activities should be abolished. The Constitutional justification for such activity is weak to nonexistent. In addition, some people should go to jail, including former and current members of the House and Senate. (See page 187 of Reckless Endangerment.)

It will never happen because the Republicans don’t want to rock the government boat.  And they wonder why there’s a TEA Party.

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The Myth of White Paranoia

The Myth of White Paranoia 9/15/13 elburropete@gmail.com

Expect to frequently hear the phrase “voter suppression” between now and the elections in 2014, and probably thereafter if the Democrats don’t do well.  Democrats have been using the phrase to fire up the minority voters they so depend on, specifically Blacks and Hispanics, but the recent recall elections in Colorado, which resulted in two gun-control Democrats being ousted, was also quickly blamed on “voter suppression” by DNC Chair Debbie Wasserman-Schultz.

She cited Colorado’s new restrictions on mail-in ballots and not voter ID laws as the source of “suppression,” and not once did she mention how this disproportionately effected minorities, so I guess even white folks can be  “victims” of “voter suppression.”   Obviously, the Democrats think “voter suppression“ is a good marketing tool, and they’re probably right.

They don’t have to worry about the mainstream media challenging the charge, which falls apart under even the most cursory examination of the numbers.  Here’s what Jason Riley of the Wall Street Journal said on Fox News,  8/13/13, about voter ID laws: “There is simply no evidence that these laws suppress black voter turnout.  States like Indiana, Georgia, Tennessee, have some of the strictest voter ID laws in the country.  In those states last year, black voter turnout exceeded white voter turnout.  If Republicans are trying to suppress the black vote, they are doing a spectacularly bad job of it.”

Of course, true believers and useful idiots don’t let facts get in the way of deeply satisfying righteous indignations over such injustices as “voter suppression.”   In fact, the suppression charge is just one of many that form a tapestry of “racism” leveled at befuddled Republicans.  Immigration reform is another, as is stop-and-frisk, even when the practice is supported by a big lib such as Mayor Bloomberg of NYC.

Republicans who think these tactics appeal only to the relatively uninformed minority voter are making a BIG mistake. This was brought home to me when I attended a university forum last month in which two distinguished professors of Mexican heritage made the remarkable statements that voter ID laws, immigration reform, and racial profiling, specifically stop-and-frisk, were a manifestation of desperate white racists who were acting out of FEAR, fear that whites will soon be in the minority.

Since I know and respect both of these gentlemen, I have no doubt they actually believe this.  The older of the two said he had experienced racial profiling “many times.”

I have never experienced racial profiling. I have never been in a room in which I was the only, or one of only a few, white people.  I have never experienced the fear or apprehension of a “minority” person.   Consequently, I have no idea what the professor was talking about when he said “fear” was at the root of things like voter ID laws.  Both professors are guilty of projecting their personal feelings and experiences, and coming up with a profoundly distorted view of reality.

To illustrate, let me list a few people whom I would like to see prosper, multiply, and rule the world.  I flatter myself that these are my kind of folks, but in reality they’re all far more accomplished and far more courageous than I’ll ever be: Deneen Borelli, Rev. C.L. Bryant, Herman Cain, Ben Carson, Larry Elder, Mia Love, Lloyd Marcus,  Delroy Murdock, Star Parker, Charles Payne, Condi Rice, Jason Riley, Tim Scott, Thomas Sowell, Michael Steele, Clarence Thomas, David Webb, Allen West, Walter Williams, Crystal Wright and many more.

OOPS! I left out a few people I would be happy to have in charge of immigration reform, or, for that matter, in charge of the world: Linda Chavez, Ted Cruz, Humberto Fontova, Michelle Malkin, Susanna Martinez, Marco Rubio.

Every one of the people in the above two paragraphs would be most welcome at any TEA Party meeting anywhere in America, and at least a couple are active TEA Party members.  This shouldn’t surprise anybody.  The TEA Party is interested in the content of a person’s character, not the color of their skin.

ObamaCare and the 1%, Part Three

In ObamaCare Part Two, I pointed out that we are still paying for a Supreme Court decision during WW II that exempted employer benefits from wage and price controls.  Seventy years later, we suffer the distortions and inequities in health care markets this decision caused.

However, that example of long-term effects from short-term stupidities pales in comparison to the great-great granddaddy of all legacy follies, one that also needlessly increases our medical costs today, and one that could easily be corrected by Congress.  This is the legacy that gives trial lawyers a free shot at the defendant’s pocketbook, no penalty for misses.

This is called the American Rule, in which each side in a lawsuit bears its own court costs, win or lose.  This contrasts to what’s called the English System, really “The Everywhere But America System,” where the loser pays the court costs of both sides.  Under the American Rule, frivolous law suits are common, and out-of-court settlements typical.  After all, it’s frequently cheaper to pay off the plaintiff rather than incur the expense of a trial, even one where winning is certain. This wouldn’t be the case under the English System.

As an example, years ago I was riding in a car that was slowly winding through an industrial area when a five or six year old boy ran out into the street and bounced off the REAR fender of the car. There was no way the driver of the car was at fault.  His insurance company settled out of court for about $750. It was cheaper than taking the frivolous charge of driver negligence into court where the case would have been easily won.

The American Rule came about in the aftermath of the American Revolutionary War, which officially concluded with The Treaty of Paris in 1783.  That agreement required British creditors to sue American debtors in American courts.  Seeing a chance to stick it to the Brits, state legislations passed The American Rule. Naturally, many British creditors viewed long distance law suits as suddenly too big a gamble to take.

Two hundred and thirty years later, we pay for that nonsense throughout our society, but especially in our medical bills. Perhaps it’s just a coincidence, but medical malpractice lawsuits really took off about the time Medicare was passed in 1966.  For every malpractice suit in 1960, there are 300 today.

The contingency fee system, where lawyers get about 30% of the settlement, plus juries that want to beat up insurance companies, means this is a great business for trial lawyers. Throw in a little “junk science”, and lawyers have gotten rich suing hospitals and doctors, amongst many others.

The despicable John Edwards (remember him?) was a trial lawyer who became a multi-multimillionaire in part by suing obstetricians for the “malpractice” of not performing C-sections in certain pregnancies, which if done would have allegedly prevented cerebral palsy.  The result has been a big increase in C-sections and NO decrease in cerebral palsy, probably because there is no connection. (http://healthewoman.org/2009/03/06/why-cesarean-section-has-not-reduced-the-incidence-of-cerebral-palsy/)

The bottom line is that medical malpractice is a big, risk free business for American lawyers. Malpractice awards run about $3.5 billion annually, all of which is passed through to patients and taxpayers via higher malpractice insurance fees paid by doctors and hospitals.  This is not much relative to overall medical spending of almost $3 trillion, but there is the hidden cost of defensive medicine, when physicians over prescribe treatments as a defense not against the patient’s illness, but a defensive against the doctor’s potential liability.

ObamaCare doesn’t lay a glove on this racket run by the trial lawyer one percenters.   In part, that’s because the American Association for Justice, formerly the Association of Trial Lawyers of America, has give 85% of their $42 million in political donations since 1989 to the Democratic Party.  From opensecrets.org, Center for Responsive Politics: “The association favors Democrats, who oppose most attempts to initiate tort reform.”

In fairness, neither major political party has done anything to put a stop to the lawyers’ gravy train, probably because so many of our elected officials in both parties are lawyers.  There have been some efforts at the state level, but all of the “loser pays” state laws have been complex and riddled with exemptions and procedural difficulties. In Texas, for example, the much ballyhooed law Governor Perry signed in 2011 doesn’t apply to people who represent themselves. Have to hire a lawyer. What a surprise.

Tort reform is an area where Federalism doesn’t work. A national law is needed, one that would standardize “loser pays” across the nation and also put a stop to “forum shopping” by lawyers, which is the practice of filling a lawsuit in the state with the most amenable courts.  Not only is this the right thing to do, it would save the nation many billions of dollars.

The most thorough proposal I’ve come across is a study by Marie Gryphon, an attorney, published by the Manhattan Institute for Policy Research, December of 2008.  Google “Gryphon loser pays.”  She notes our litigation costs as a percent of gross domestic product are twice those of Germany and over three times the cost in France or the United Kingdom.

How much longer must we put up with the tort system one percenters?