The View from Right Field

Big Business. Big Labor. Big Government. Now, Big Regulation.

In December, The Wall Street Journal noted that the presidents of J.P. Morgan and Goldman Sachs have both come out against repeal of Dodd-Frank.  In 2015, Lloyd Blankenship, head of Goldman Sachs, explained that, far from being a problem for Goldman, the huge regulatory costs of Dodd-Frank were actually a plus.  Dodd-Frank set up barriers to entry, making it harder for banks that are not already huge, to compete with the likes of Goldman.   

While it may be counterintuitive, the Journal noted that the Independent Community Bankers of America, which represents small banks all over the country, has also come out against repeal of Dodd-Frank.  Though small banks complain about the burden of regulation, the Journal suggests that small banks see Dodd-Frank regulation as a weapon they can use against finance companies and tech start-ups, to keep them out of their business.

Do They Ever Learn Anything in Washington?

Donald Trump.  Bernie Sanders.  Occupy Everywhere.  The Cubs winning the World Series.  So many things have happened that nobody ever expected that the Tea Party has become a distant memory.  An even more distant memory is what started the Tea Party.  It wasn’t Obamacare or the bailout of the Wall Street bankers, though both of those added to the Tea Party’s fury.  Rather, the Tea Party started on February 19, 2009 on the floor of the Chicago Mercantile Exchange when CNBC reporter Rick Santelli unleashed a rant, on air, against an Obama administration plan to bailout homeowners facing foreclosure and help them refinance their mortgages”:

“Do we really want to subsidize the losers' mortgages?  This is America!  How many of you people want to pay for your neighbor's mortgage that has an extra bathroom and can't pay their bills?” 

Democrats/Progressives Need to Relax. Good Things Can Happen in Spite of the President.

As President-elect Donald Trump fills out his cabinet, and progressives/liberals exhibit signs of mass hysteria, it might be a good idea to sit back and reflect on the extent of the president’s power to actually affect things – and how many things happen that the president has nothing to do with.

Consider a report in last Monday’s Wall Street Journal.  According to the article, in November, the U.S. exported more natural gas than it imported.  It has been almost 60 years since the U.S. exported more natural gas than it imported on an annual basis, but that is where we are headed – and soon.  Further, the Energy Department predicts that, by 2020, the United States will be the third largest exporter of liquefied natural gas, behind Australia and Qatar.  And President Obama has had almost nothing to do with any of this.

The “Freedom Caucus” Is Missing the Point: You Have to Win Elections to Get Stuff Done

According to Daniel Henninger of The Wall Street Journal, John Boehner is resigning as Speaker of the House of Representatives “in large part because of opposition to his leadership from 40 to 50 House members called the Freedom Caucus.”  Rep. Jason Chaffetz (R-UT) says, “[T]he heartland hasn’t seen us fight” for conservative ideas and policies.

It may be true that the so-called “base” hasn’t seen Republicans “fight” President Obama, but that may be as much because they haven’t been paying sufficient attention as for the lack of fighting.  The sequester is limiting government spending.  (It is doing in a terribly inefficient, meat cleaver-like way, but it is doing it.)  We got a decent estate tax law and income tax law passed permanently.  Affirming John Boehner’s idea, courts have said that Congress has standing to sue the Obama administration for the way it is, in the view of House Republicans, spending money without a proper Congressional authorization to do so.

But the main problem is that the kind of “fighting” the Freedom Caucus seems to want to see, i.e., government shutdowns, etc., are actually going to help keep in place the very policies that the Freedom Caucus opposes.

Spending Versus Accomplishing

I don’t know if it’s his liberalness (progressivity-?) or his lack of real world experience, but President Obama, like many (most-?) Democrats (and too many Republicans, unfortunately), confuses what government accomplishes with what it spends.  If the sequester, or whatever, cuts the amount government spends, President Obama, and those who think as he does, seem to assume that government will accomplish less.  The idea that good management might be able to reorganize how things are done in order to accomplish the same things, at a lower cost, isn’t something that would occur to him. 

Just as bad, he assumes that, if the government spends more, then it necessarily accomplishes more, which is not true, either.  In fact, it’s not true in any organization, private or public.  And the bigger the organization, the less likely it is to be true, which is why it is so far from true in government.  Except in the world of those who believe that the measurement of accomplishment is spending and that what counts is not what is actually done but what is spent doing it.

How Did I Do on My SOTU Predictions?

I have not had a chance to read the entire speech carefully, so I can’t tell you how my prediction about Lincoln references did.  (I can’t stand to listen to SOTU speeches.  They are pretty much of a waste of time to listen to, especially when you can read in 15 minutes what it would take an hour or more to listen to.  I never listened to Bush SOTU speeches, either – either of the Bushes, that is.)

But my prediction that the President would talk about long lines at polling places was right on target:

"When any American, no matter where they live or what their party, are denied that right because they can’t afford to wait for five or six or seven hours just to cast their ballot, we are betraying our ideals.

So tonight, I’m announcing a nonpartisan commission to improve the voting experience in America.  And it definitely needs improvement.  I’m asking two long-time experts in the field – who, by the way, recently served as the top attorneys for my campaign and for Governor Romney’s campaign – to lead it.  We can fix this, and we will.  The American people demand it, and so does our democracy."

There is little more I can say about the idea that long lines at polling places are a national issue.  We have a federal system of government for a reason.  Different problems are the responsibility of different levels of government.  If state or local government isn’t doing its job, such as not providing enough polling places or election judges on election day, and therefore there are long lines to vote, then those voters need to elect a more competent state or local government.  It’s not up to the government in Washington to solve every problem in the country, even every governmental problem.  With any degree of luck, this commission’s proposals will go the way of those of the Bowles-Simpson commission (though it was unfortunate in the case of that commission).

With respect to the Lincoln references, I will check the speech more closely in the next couple of days to see how I did.  Maybe President Obama used up his supply of Lincoln references, at least temporarily, in his inaugural address.  I will get back to you.

Will President Obama Really Talk About Long Lines at Polling Places In His State of the Union Speech?

With all of the problems we are facing at home and abroad, indications are that President Obama is going to focus on one of the biggest of them in his upcoming State of the Union address:  long lines at polling places.

You may think I am kidding.  After all, unemployment is almost 8%.  The economy is barely growing.  President Obama says the sequester is a threat.  Iran is getting closer and closer to having nuclear weapons.  But for President Obama, it appears lines at voting booths will be a key issue next Tuesday.

He already mentioned it in his inaugural address, and The New York Times is pushing the issue:

“Several recent polls and studies suggest that long waiting times in some places depressed turnout in 2012 and that lines were longest in cities, where Democrats outnumber Republicans.  In a New York Times/CBS News poll taken shortly after Election Day, 18 percent of Democrats said they waited at least a half-hour to vote, compared with 11 percent of independents and 9 percent of Republicans.

A Massachusetts Institute of Technology analysis determined that blacks and Hispanics waited nearly twice as long in line to vote on average than whites.  Florida had the nation’s longest lines, at 45 minutes, followed by the District of Columbia, Maryland, South Carolina and Virginia, according to Charles Stewart III, the political science professor who conducted the analysis. …

Waiting times are ‘costing America a lot of votes,’ said Senator Kirsten Gillibrand, a New York Democrat who is sponsoring the Senate voting bill and expects to have the full support of the White House.”

After reporting that long lines may have cost Democrats “hundreds of thousands” of votes last November, the Times eventually gets to the real cause of the problem:

“In some other places, including counties and cities run by Democrats, local officials have not spent the money to open as many polling places.”

In other words, this is no conspiracy against Democratic voters (in spite of what some will try to claim).  It’s just incompetent local government.  And where are some of the worst lines and greatest incompetence?  In places run by Democrats.  In Charles Stewart’s list of longest lines, second and third places are occupied by the District of Columbia and Maryland, not what you would call hotbeds of Republicanism.  Also, the Times reports that some states are really doing the job right.  The average wait in California was only six minutes.

Lines at polling places are one of the most local issues we have.  The federal government has lots of things to do.  It does not need to worry about something that competent local officials can handle.  If New York Senator Kirsten Gillibrand is really worried about lines at polling places in New York, instead calling President Barack Obama, she needs to call New York Governor Andrew Cuomo.  He’s a Democrat.  He’ll make sure Democrats get to vote.

The economy.  Iran’s nuclear program.  The deficit.  Al Qaeda.  Tax reform.  These are national issues.  The President and Congress need to deal with these things.  Lines at voting booths are an issue for state and local government.

Taxing the Rich – By Eliminating Tax Credits for Electric Cars

President Obama wants to raise taxes on “the rich,” who he calls “millionaires and billionaires” but who, under most of his proposals, are those who make more than $250,000 a year ($200,000, if they aren’t married).  And I want to get rid of wasteful government tax credits and subsidies, especially those that mainly benefit the middle classes and above.

Here is an idea that meets both criteria.  It taxes the rich (by raising the amount of taxes they pay) and it eliminates a tax credit that really only benefits the upper middle class and above:  Eliminate the subsidies and tax rebates for electric cars.  Think about it.  Who are those subsidies going to?  Are poor people or even working or lower middle class people buying electric cars?  Do regular working people have enough money to buy a “hobby” car that makes a nice political and environmental statement but costs more than cars with internal combustion engines?  To ask the question is to answer it.  These cars are being bought, to the extent that they are being bought at all, by the upper middle class.

The liberal-left buys electric cars to show-off their environmental consciousness.*  And I have no problem with them doing that.  I just don’t see why we have to subsidize this choice of theirs – especially when our deficit is so large and we have so many other needs.

As President Obama said in a different context, I am not telling upper middle class people that they can’t have an electric car.  I’m just saying that, in our present fiscal situation, they just need to pay a little more to for it.**

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* When Toyota came out with its hybrid, Toyota made the Prius look different than its other cars.  When Honda came out with its hybrids, Honda just put a hybrid engine (and battery packs) in its existing cars and put a little nameplate on the back that said it was a hybrid.  Toyota’s Priuses sold; Honda hybrids didn’t – because you couldn’t tell they were hybrids.  After all, what is the purpose of driving a “statement” car if nobody can tell you are doing it?

** Supporters of the electric car subsidies and tax credits (other than those who are just trying to get government money for themselves) will argue that the purpose of the subsidies is to help the environment by encouraging people to buy electric cars (and to help develop the electric car industry).  Well, President Obama talks about how rich people are willing to help America by paying more taxes.  Why doesn’t he also ask his friends (i.e., upper middle class liberals, the target market for electric cars) to help American by buying electric cars without a tax credit?

The Health Totalitarians: Shape Up or …

Ezra Klein writes about the Cleveland Clinic’s efforts to cut its health costs:

“The Cleveland Clinic is best known for providing excellent health care. …

But the clinic has a more interesting – and more consequential – story to tell right now ….

With 40,000 employees, the clinic is the second-largest employer in Ohio. Like most employers, it struggles to contain health-care costs. But according to Michael Roizen, the clinic’s director of wellness, over the past seven years a series of reforms instituted by the clinic’s chief executive officer, Delos Cosgrove, slowed and then arrested the growth in employee health-care costs at the clinic. …

Roizen says the initiative sprang from a single fact. … 70 percent of all medical costs are related to smoking, physical inactivity, food choices and portion size, or stress.

But consider what that actually entails: Changing habits. Breaking addictions. Getting people to the gym. Who wants to hear about any of that from their employer?

The clinic, however, didn’t give employees a choice. … [Roizen said:] ‘Then we banned smoking on campus. You can’t even smoke in the parking lot in your car. … We fired two high-profile physicians who refused to quit.’ …

Food came next. The clinic took out almost every deep-fryer in the building. They removed sugared soda from every beverage case. … 

That left fitness and stress relief. … Usually, you have to pay to hit the gym or attend a yoga class. If you work for the Cleveland Clinic, you have to pay if you don’t.

… The clinic tracks its employees’ blood pressure, lipids, blood sugar, weight and smoking habits. If any of these are what the clinic calls ‘abnormal,’ a doctor must certify that the employee is taking steps to get them under control. Otherwise, no insurance rebate. …

It appears to be working. Not only has the clinic cut its health-care costs, but its employees are also getting healthier in measurable ways. …

In one sense, the clinic has achieved the health policy ideal: cutting health-care costs by making people healthier. But consider how the clinic has done it – tying premiums to personal decisions, firing smokers, tracking employee metrics, eliminating popular sodas and foods from campus. …

The clinic no longer hires smokers. Will the obese eventually face similar hurdles? What about fans of fast food?

The experiment might work at a famed medical center where the CEO plausibly argues that aggressive leadership in health care is central to the institution’s mission. But would it work at General Motors? Caterpillar? Wal-Mart? Medicaid and Medicare?

Roizen thinks it can – and should. He estimates that an aggressive program could cut federal health spending by $300 billion to $600 billion a year. If he’s right, then simply instituting such wellness reforms could cut the federal deficit by far more than the Simpson-Bowles commission or the congressional supercommittee would. …

If we opt for Cleveland Clinic-style wellness programs, we won’t have to gut education, raise taxes or slash Medicare. And we’ll end up healthier. But … are we really ready to let employers – much less the government – tell us to quit smoking, skip the junk food and lose weight?

Megan McArdle, who pointed me to Ezra Klein’s article, is skeptical whether the Cleveland Clinic’s results can be replicated on a nationwide scale:

“One imagines that employees who do not want their employer nannying them about their gym time and alcohol consumption probably decline to work at the Clinic.  

Selection bias will produce good results for the selecting organization, but you cannot replicate its results on a nationwide scale; fat, smoky people have to work somewhere (or go on welfare).”

But, of course (and I think Ms. McArdle might agree with me), the most important question is not whether government can replicate the Cleveland Clinic’s results on a national scale.  The question is whether we want government to replicate the Cleveland Clinic’s methods.

It is one thing for a private employer to tell an employee how to live his or her life.  Maybe it’s okay – though only as long as just a few employers do it and there are places that non-conformists can escape to. 

But for a government?  To tell this to everybody?  I don’t care how much money can be saved.  This is not something government should be doing.  And these are not powers I want government to have. 

But some governments have already raised taxes on cigarettes so high that they are virtually unaffordable.  Other governments have effectively legislated Happy Meals out of existence.  And there are proposals to put extra taxes on fatty foods or on sugared pop (“soda” to those out you who don’t live in the Midwest) because they’re “not good for you”.  Aren’t these ideas precursors to what the Cleveland Clinic is doing – and what some people may soon be proposing that the federal government do to save money on health care?

Random Thoughts on Afghanistan, “Large Armies Overseas,” and “Unleashing Innovation”

In his speech on Afghanistan last Wednesday evening, President Obama said:

“Peace cannot come to a land that has known so much war without a political settlement.”

Actually, a political settlement cannot come just because one side wants it.  A political settlement needs both sides’ consent (or at least grudging acceptance).  If one side would rather fight than negotiate, then they get to decide.  I get more than a little tired of people who say the solution to a problem is to negotiate with the other side, without understanding that the other side has to be willing to negotiate, too.  If the other side thinks that they can achieve their goals better by fighting, they are going to do that.  And if we say that we are leaving (or are significantly reducing our presence), where is the incentive for the other side to negotiate, as opposed to waiting until we leave – unless, of course, they think we will be so desperate to negotiate, that they can get what they want that way.

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David Ignatius said this in The Washington Post:

“This Vietnam history is a caution against premature optimism about diplomatic solutions to deeply embeded conflicts, such as the one in Afghanistan.  But the fact remains, as is so often stated, that there is no military solution to such conflicts.”

Actually, that is not true.  In fact, Vietnam is an example where there was a military solution.   The military solution was simple:  The North Vietnamese attacked South Vietnam in 1975, and they won.  Winning is a military solution.

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In his speech, President Obama also said:

“We must chart a more centered course. Like generations before, we must embrace America's singular role in the course of human events. But we must be as pragmatic as we are passionate; as strategic as we are resolute. When threatened, we must respond with force -- but when that force can be targeted, we need not deploy large armies overseas.”

I’m sorry, President Obama.  Who are you saying wants to “deploy large armies overseas” “when … force can be targeted”?  Instead of saying you are against things that nobody is in favor of, tell us how you would do things differently than what real people either have done or are proposing to do.  Anybody can sound reasonable when they are comparing themselves with silly positions that aren’t held by other people.  What President Obama needs to do is to explain how his positions are different than positions that other people really do hold.

(Perhaps President Obama is trying to make a subtle reference to Iraq here.  Well, that doesn’t work.  To accomplish what President George W. Bush was trying to do in Iraq (and what lots of Democrats voted for when they got a chance to approve our going into Iraq before we went there) required a large army.  In fact, it probably required a larger army that we initially sent.  You may disagree with what we were doing.  But you can’t say that what we were doing did not require a large army.)

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And finally, near the end of his speech Wednesday evening, President Obama said:

“Over the last decade, we have spent a trillion dollars on war, at a time of rising debt and hard economic times. Now, we must invest in America's greatest resource -- our people. We must unleash innovation that creates new jobs and industries ….”

If President Obama really wants to “unleash innovation”, then he needs to get out of the way.  Government is not going to unleash innovation by what it does.  It will unleash innovation by what it doesn’t do.  By the new laws it doesn’t pass.  By the new regulations it doesn’t impose.  Our schools can’t even fire incompetent teachers (or at least very many of them).  Why do we think government can do anything positive to unleash innovation?  Except that President Obama and many of his supporters really do think that.  Which is depressing.