Posts Tagged ‘Obama’

Three Early Failures of Obamacare

October 5, 2010

We have barely seen the Obamacare Healthcare Plan go into effect and so far, there have already been three big failures.  I’m sure we’ll see many more as the plan is more widely implemented.

1.  Since they can’t raise rates for pre-existing conditions, the companies will just raise the rates for everyone.

One of the main points in Obamacare is that insurers cannot deny you coverage because of a pre-existing condition.  However, nothing in the legislation prevents the companies from raising rates on everyone in order to cover the people with pre-existing conditions.

2.  Insurance companies have decided to stop selling children only plans.

Rather than take on sick kids with pre-existing conditions when parents sign them up for child only plans, the insurers will just stop selling the coverage.  Talk about your backfires.

3.   McDonald’s will drop their partial policy for over 30,000 workers.

So, rather than allow McDonald’s to provide partial coverage to their part-time workers that covers doctor visits and basic medical care, Obamacare mandates that the company provides full coverage.  Instead of making this commitment, McDonald’s will just stop providing any coverage at all.  You could argue that McDonald’s is “evil” for choosing to keep their money, but you could also argue that government intervention is ruining a situation that is working.

I’m sure these cases are just the tip of the iceberg.  The healthcare companies and drug companies spent millions lobbying for the healthcare overhaul.  I’m sure there will be more problems like this that arise, and we won’t have any recourse unless we repeal all or portions of the law.

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Obama Will Now Protect Us in Cyberspace, Too

May 29, 2009

President Obama can do it all.  He can fix the nation’s economy, bailout banks, prearrange bankruptcies for the automakers, and now he can protect us all from “cyberattacks” and the “epidemic of cybercrime.”  He is going to create a “cyberspace czar” to make sure we are all safe.  I say this is more needless government intervention that will not help anything at all, and will lead to a huge waste in taxpayer dollars.

All you have to do is look at the FDA and SEC.  These are two government agencies that are supposed to protect us who fail miserably.

The FDA is supposed to “keep our food safe” but they are always reacting too late.  With the last peanut salmonella scare, they forced the company in Georgia to issue a recall.  If they were supposed to be monitoring our food, shouldn’t they have caught that?  Only after people got sick did they react, and then it took a long time for them to track it back to the plant in Georgia.  What did they do to protect us?

The same goes for the SEC, who are supposed to protect investors from fraud and unethical business practices.  They had information on Bernie Madoff, that basically outlined the entire ponzi scheme, but they chose to ignore it.  They also were way behind on the Enron case, and definitely were absent when dot com companies were defrauding investors left and right.  What protecting did they do?  They talk tough about regulation and oversight, but then they miss a $64 billion ponzi scheme right under their nose.

Now the “cybersecurity czar” is supposed to protect us?  What a joke.  The last president didn’t even use email but now the White House is up to being able to monitor cybercrime?

First of all, most “cybercrime” is fraud that just happens to use the internet.  Check cashing scams and the “long lost relative in Nigeria” scams could happen anywhere.  Also, phishing schemes rely on user error, not hackers.  Unless the White House monitors every email and every click we make, they will not be able to protect the victims of these crimes.

Also, wouldn’t it make sense to leave this task up to the professionals?  There are multimillion dollar companies like Symantec, McAfee and Norton that already patrol cyberspace.  They keep our computers safe and secure.  They have the best people and are on the leading edge of the field.  What good is the government going to do competing against or marginalizing these companies?

When the government recruits their staff, they will lure workers away from these companies with high salaries, paid for by taxpayers.  This will lead to an artificial rise in the cost of labor because government is distorting the price.  This will only hurt the private companies who need to make money to survive.  Since the government can just keep printing money, they can be allowed to misallocate resources in this manner.

Instead of a czar, we need education so people know to update their computers and their virus software.  If they did not go to the phishing sites or be duped into a scheme, we’d be better off.  By creating the czar, we are saying the problems are too big to be solved and that they are just a fact of life, so we need to regulate them.  This is band-aid government at it’s best and it will just lead to a bigger waste of taxpayer money, and no benefit to society as a whole.

Bondholders Are Not Villians

May 27, 2009

I’m tired of hearing about the evil bondholders that are preventing GM from avoiding bankruptcy.  Why not call them what they really are?  They are the creditors to GM.  They lent GM money, and now are being villified for wanting to collect as much of that money as possible.

The Obama administration’s “offer” is for the bondholders to trade their $27 billion in debt for 10% of the failing company.  If they go to bankruptcy, the bondholders might get wiped out completely, but in a real bankruptcy, the bondholders usually get paid back first.  The problem is that this is not an ordinary bankruptcy.  It is rigged to give the government and the unions all the power.  The creditors and stockholders are the ones getting screwed.

Also, the “offer” gives the US and Canadian governments a 69% stake in the company.  So the primary debt holders get 10%, but the government gets 69%?  Who in their right mind would accept this rotten deal?

We all know the problem with GM is that their labor costs are too high.  Rather than actually trying to fix the problem, the government is handing the keys to the car over to the unions.  Since they are in a partnership with Uncle Sam, we now will be bailing them out forever.  The current model is unsustainable, but rather than actually fixing the problem we are setting up for permanent transfer of wealth from our pockets to the unions.

So, instead of just saying “it’s the evil bondholders’ fault,” we need to look at the actual offer and realize the only winners are Obama and the UAW, and the losers are every tax paying citizen of the country.

Are We Really Safer?

May 27, 2009

President Obama and his team have been going back and forth with former VP Dick Cheney on whether or not we are safer as a nation now that Guantanamo Bay has closed and we say, at least, that we will no longer torture.

My answer to this whole debate:  Who cares!

Our safety as a country won’t change at all because we close one prison that holds 240 inmates.  And, our enemies have known for a long time that we torture, so this is nothing new.

The bigger debate should be if we are safer now than we were before we put all of these measures in place after 9/11.  Really, it’s been almost 8 years, and we haven’t gotten too far.  That’s the problem with fighting a war with an ideal.  How do you suppose we actually win a war on “terror?”  It’s the same thing with the new war on greed we have going after all the bailouts.  There is absolutely no way you can win a war on idealology.

I would agree with Ron Paul and others that our actions in the Middle East are actually making the situation worse and making us less safe.  Our intentions there were good, but the blowback is creating more and more people who hate us.  If we drop some bombs on civilians, which we have done numerous times, we are giving hundreds or thousands more people a reason to rise up against us.

There is an easy solution to the problem in the Middle East – Bring our troops home, close our military bases, and stop all foreign aid to Arab nations and Israel.  Let the people of the Middle East rule themselves.

If we are gone, they will have no reason to hate us.  Don’t believe the idea either that they hate “freedom and liberty” and the “American way of life.”  If they hated freedom, why wouldn’t they attack the Netherlands or New Zealand?  What they hate is our foreign policy, our bases in some of the holiest parts of the Muslim world, and our unwavering support for Israel.

Instead of actually getting into a real discussion about foreign policy, though, our media focuses on Guantanamo and that’s it.  It is like the extent of our entire foreign policy is one little prison.

It’s time to wake up and start asking bigger questions.  The sooner we do, the safer we all will be.

Obama’s Misguided Fuel Efficiency Policy

May 19, 2009

Today, President Obama announced his goal to increase fuel efficiency standards in our cars to an average of 35.5 gallons by 2016.  What he didn’t say is that he is going to keep using the horrible and unfair CAFE fuel efficiency standards and how this is going to absolutely kill the American automakers.  His policies are straight out of a “Politics 101” textbook.  They are so naive and idealistic and he does not realize that there are unintended consequences of his policies.

I’m not an expert on fuel efficiency and the auto industry, but a quick search on wikipedia for “CAFE Fuel Standards” was all I needed.  A little research showed me how the rules and regulations are broken.  Instead of addressing the root of the problem with our auto industry and efficiency standards, our President just reaches for pie in the sky goals with no regard for the blowback of his actions.

As I wrote before, the problem with the Corporate Average Fuel Efficiency (CAFE) standards is that they measure the harmonic mean of all the cars sold domestically by automakers.  Since the domestic automakers sell mostly trucks, they then have to sell – not just produce – an equal amount of crappy, fuel efficient cars that no one wants to buy in order to meet the standard.  They end up having to sell these at huge discounts or even at a loss to rental car agencies.  The Big Three lose money on every compact car they make because of labor and union costs, but make money on every truck and SUV they sell.  The importers from Asia and Europe sell mostly compact cars, so they are at an advantage.  They build these cars using the same US labor, but they are not burdened with the labor costs the US automakers are strapped with.   They can meet the fuel standards and be profitable at the same time.

On a side note, we know that US labor costs are not going to go down either.   The United Auto Workers are now majority owners in Chrysler, and will probably come out the same with GM.  With a partnership of labor and the government running the company, how can we expect labor costs to decrease?  Instead, they will continue to increase, and the taxpayers will keep giving them more money to prop them up.

But back to fuel efficiency.  I believe that we need more efficient cars, and we are already on our way there.  Hybrids are all the rage, and the automakers can’t keep up with the demand.  But are hybrids really green?  Massive amounts of energy go into producing the electric batteries they use.  I won’t get into that debate here, but the consumer demand for more efficient cars is very, very strong.

Why not just let the consumer and the market dictate fuel efficiency?  Why do we need laws created by bureaucrats to overregulate the industry?  Look at how competitive and innovative trucks have become in the last year or so.  As gas prices skyrocketed, consumers wanted fuel efficiency.  Toyota came out marketing their Tundra aggressively, and Ford, Chevy and Dodge responded.  All of the commercials touting features and miles per gallon were a testament that the market works and if consumers demand something, the automakers will listen.  It was capitalism and the free markets at their finest!

But why punish our auto industry for making the best trucks?  Even if they get a truck that can average 30 MPG by 2016, they will have sell an equal amount of compact cars that average 40 MPG to meet the tougher standard.  Or, if they can only get 25 MPG out of the truck, they will have to sell even more 40 MPG compacts.  The smaller cars are money losers for the US auto makers, so we are forcing them to make an unprofitable product.  What kind of business can succeed with that kind of regulation placed on them?

If we were to measure anything, we should measure how much progress is being made by a manufacturer for that particular make and model.  If the auto makers make a truck 250% more efficient than last year’s model, they should be rewarded.  If they can’t make money producing small compact cars, don’t force them to make them.  Let the imports fill that market and let the US automakers focus on making their breadwinners, the trucks and SUVs better.

The bottom line is that consumers are already demanding more efficient vehicles.  Let that demand drive what is produced and sold in the US.  Don’t regulate for the sake of regulating and sign the death sentence for the US auto industry.  We need real changes in the policies of our country, not more well intentioned but horribly executed Politics 101, pipe-dream nonsense from our leaders in Washington.

Obama’s Healthcare “Overhaul”

May 10, 2009

Update – The more I read about this “savings” plan, the more I realize that it is really a way for the healthcare companies to lock in profits for the next 10 years.  You know that any time an industry as big as healthcare voluntarily offers a deal to the government, it is really to benefit themselves.  So, rather than opening a real healthcare debate, they have preemptively offered a $2 trillion savings.  They say “savings” but it is really a reduction in the rate of growth of healthcare spending.  Since the current rate growth is 7%, they are saying that if it was only 1.5%, the country would save $2 trillion in 10 years.  That’s not savings.

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President Obama has announced an “overhaul” of the healthcare system that he touts will save trillions of dollars.  Big healthcare companies are on board as well, because they promise to only raise costs 1.5% a year.  That sounds great, that costs will be controlled, but why should they go up anyway?  This just guarantees a 1.5% increase in their revenue each year.  We should be making huge cuts that result in decreases, not capped increases.

Also, Obama’s plan basically revolves around digitizing our medical records to make hospitals more efficient.  I guess, over the next 200 years, that could save trillions, but what about the up front costs?  There will have to be an increase in cost to digitize all the records and buying equipment to store them.  Who will pick up the tab?  If the government does, then it falls on the taxpayer.  If the government doesn’t, then it will be passed on through premiums.  It’s a lose-lose for the American public.

The only way we will ever control costs and cut health care costs is going to be to get the government and big healthcare providers out of the game.  Until then, costs will continue to skyrocket, and the quality of care will continue to decline.

Obama Cuts 0.47% from Budget

May 6, 2009

Today, word came out that President Obama has cut $17 billion from the 2010 budget.  While that is a lot of money to you and me, it is a measly 0.47% of the $3.55 trillion budget that has been proposed for this year.  Surely, with the way things are going, the 2010 budget figures to be even bigger, so the $17 billion will become an even smaller percentage.

During his campaign, Obama promised to go through the budget, line by line and cut programs that weren’t working or were not necessary.  Looks like he thinks 99.53% of all the government spending is necessary.  And he’ll probably tout this as the “change” he promised and the media and all of his supporters will eat it up.  They’ll just blame the Republicans and Bush for making all the spending “absolutely necessary.”

Just when I think Obama can’t be more of a hypocrite, he does something like this.  Why even announce you’re “cutting” less than one-half of one percent of the budget?  This country is going off a cliff, and Obama isn’t putting on the brakes, he’s flooring the gas.

Swine Flu Overreaction

April 28, 2009

The world is in hysterics over the “Swine Flu Pandemic.”.  This is a media fueled frenzy that is making a mountain out of a mole hill.  

Just a little bit of research on the internet shows that swine flu is not any worse than the normal flu.  Only 65 cases have been documented in the United States, and only one person that has been hospitalized.  In fact, only TWO people have died from the swine flu in the US since 1976, according to the Center for Disease Control (CDC).

Now, to top it all off, President Obama wants to spend $1.5 billion to prepare for and fight off the swine flu.  That is over $23 million for each confirmed case of the swine flu in the US right now.  

Another, much more potentially deadly disease, tuberculosis had almost 13,000 cases in the US last year.  Why aren’t we all up in arms about that?  People are fighting to get the government to spend $250 million a year to combat TB.

To put that in greater perspective, the ALS Association that is a charity devoted to research for Lou Gerhig’s disease has raised $49 million since 1985.  Every year, 5,600 people are diagnosed with ALS which is always fatal.  Do you think they could have found a cure or at least a treatment by now if they had $1.5 billion?  This is a huge waste of money and a misallocation of funds and resources.

Also, today, the State of California and the City of Los Angeles have declared a state of emergency, which allows for funding for the California Emergency Management Agency and grants them all sorts of special priviledges, and cuts off competitive bids for vaccines.  So, now a state that is already strapped for cash will be gouged by the big drug companies for swine flu treatments.

I cannot believe that we have become so accustomed to hundred billion dollar figures that we don’t even blink when the President wants to spend $1.5 billion on the flu.  Sure, it has a scary name like the “swine flu” but it still is basically the flu – you get sick and you get over it.  We should all be mad that the government is wasting more of our money, but instead, in the frenzy the media has created, we are all thanking Obama for saving our lives.

Credit Cards – Regulation for Regulation’s Sake

April 23, 2009

Today, President Obama is meeting with the CEOs of credit card companies, in an effort to protect consumers from rising rates and high fees.  Both the House and Senate are currently working on versions of such a bill.

I agree that a simple law, stating that credit card companies have to inform you when your rate increases and a chart showing the fees you could incur if you missed a payment or went over your limit, should be welcomed by consumers.  Right now, all you get is a little “average daily rate” table but it doesn’t tell you if your rate went up or down.  

However, the need for the government to enact laws to “protect” us are insane, and another example of the government meddling too much in private affairs.

Really, who’s fault was it that we ran up so much credit card debt?  Part of the blame has to fall on the card companies for giving cards with high limits to just about everyone.  The problem was that they were able to securitize their loans and sell them on Wall Street.  So the card companies were just intermediaries between the consumer and Wall Street.  They bore almost no risk.

A large portion of the blame has to fall on the Federal Reserve as well because their easy money policies allowed the card companies to just keep giving away money.  To stave off a recession after 9/11, the Fed kept rates too low for too long, pumping up a huge spending/debt fueled bubble.

However, to act like consumers were just taken advantage of is absolute nonsense.   Even the most uneducated person knows what credit cards are and how they operate.   The card companies did not take advantage of them and did not force them to spend.  Consumers wanted instant gratification and put items on their credit cards they could not afford, with the intent to pay it off later.  Rather than saving, they took out a loan for all sorts of purchases.

Instead of putting regulations on the credit card companies for the sake of regulation, the government should put simple laws in place to inform consumers, and then back away.  By placing all of these restrictions on the companies, we are not solving the problem, which was too many unqualified people having high limit credit cards.  

Obama needs to let the markets work, and let the companies set limits and interest rates in line with the risk of lending people the money.  Until the government stops propping up the securitized credit card debt and meddling in the credit markets, no one will have a clear picture of who should be able to lend and borrow.  The longer the government distorts the markets and meddles in private business, the longer the recession will last.

Tea Parties or Bank Runs?

April 19, 2009

Last week, there were hundreds of new-age “Tea Parties” all across the country on Tax Day, April 15th.  There is currently a lot of frustration out there, which has led to tremendous momentum for financial reform in our country.  Thousand of people attended the protests.  Some people wanted to protest the role of the Federal Reserve, others were mad about our tax dollars being spent to bail out failing companies.  Others wanted to reduce the size of government and federal spending.

The problem with the Tea Parties, is that the media and Democrats have miscontrued the meaning behind them.  They are saying they are just politcal stunts, organized by Republicans and Fox News, who are against anything President Obama does.  Even though there were both Democrats and Republicans at the Tea Parties, the protests have been marginalized by the mainstream media.  All of the effort that people went through to organize these rallies is essentially being wasted because those in Washington are not taking the protests seriously.

There is another method of protest though, that the government, big corporations, and Wall Street cannot stop.  We can all take our money out of big banks that are getting bailouts and put it in a local, community bank.  Most of these smaller, local banks have been able to withstand the downturn because they were prudent with the money we deposited and did not get involved in all sorts of derivatives, trying to make a quick buck.

If we are so upset about the government using our money to bail out banks, why not show the government that we have no confidence in these institutions?  As a business, banks depend on us, the consumer to lend them (deposit) our money so they can make loans.  If we all pulled our money out of the big, failing banks, they would be forced out of business.  We need to literally, put our money where our mouths are.

Local banks are at a disadvantage because they do not have the resources to devote to technology and security that the big, national banks.  But if we all deposited our money with them, their business would naturally grow and they would be able to make banking as convenient and easy as a Wells Fargo or Bank of America.

The same can be said for our investments.  If we are upset that JP Morgan and other Wall Street investment firms are getting our tax dollars, move your account to another broker.  We can’t protest with our words and then let our actions directly contradict our views.

A lot of talking heads have made fun of people for withdrawing their money from banks so they can have cash (as if this is such a bad thing in the first place).  In fact, MSNBC’s Rachel Maddow called Senator Richard Burr of North Carolina “Bank Run Burr” and Keith Olbermann named him the “Worst Person in the World” because he told his wife to withdraw $500 from an ATM.  They said it showed Republicans do not have a plan and that it was unpatriotic to pull his money out of the bank.  Burr said that he does not have any cash at home, and after a briefing that basically told him that banks would be out of cash, he panicked adn told his wife to take out the money.  Like $500 in his account is going to make a difference, anyway.

My plan is not to just take your money out and put it under your mattress in fear of failure.  It is a protest against the big, national banks that are on life support, sucking up billions of our tax dollars a day.  We should embrace our local banks, that know the local economy and community.  They will make prudent decisions and not take unnecessary risks trying to please Wall Street and investors.  Instead of making clever signs and protesting with our words on Tax Day, we should give the banks a vote of “no confidence.”  Only with our actions and our money will we show the government that we do not support the bailouts, or the banks and institutions they are propping up.