Government Shutdown and Obstruction of Justice

Obstruction of justice can include crimes committed by judges, prosecutors, attorneys general, and elected officials in general.

Obstruction of justice is an attempt to interfere with the administration of the courts, the judicial system or law enforcement officers, including threatening witnesses, improper conversations with jurors, hiding evidence, or interfering with an arrest.

This is how Congress is acting. The Affordable Health Care Act was passed into law by the House and Senate and signed by the President. The Supreme Court ruled that the law was constitutional. President Obama was reelected by a large margin in the 2012 election. Those in congress who are trying to block the implementation of the law are obstructing justice and should be treated accordingly. If this is not obstruction of justice what is?

It is time our congress grow up and stop acting like a kid on a school playground. The law was legally passed, the Supreme Court issued an opinion that the law is constitutional and it is time to move on. In our country the government is “of the people, by the people and for the people”. If you don’t like what the government is doing elect a new one. That is how our system works.

Health Care And Free Markets

Nobel laureate George J. Stigler discussed how regulation was “…designed and operated primarily for…” the benefit of the industries being regulated. and as a result could use the regulation for their advantage. Stigler’s conclusion was  “Every industry should be either effectively competitive or socialized.” Health care is one of the industries where free markets do not work.

Health care is an industry where the receiver of services, the patient, does not directly pay the provider, the doctor, for services rendered. A third party, an insurance company,  pays for the service and therefore the consumer is not as vigilant as he normally is when making a buying decision . The patient does not aggressively shop for the best care at the most affordable price in the market place because no money is coming directly from his pocket..

A trickle down affect of the disconnect between who is receiving the service and who is paying for it also negatively affects  the cost of drugs and other goods and services used by the doctor to cure the patient. The drug companies are able to buy business from the health care profession by giving lavish vacations and other benefits to members of the medical profession, raise the price of the good or service provided and neither the patient or doctor cares because it is passed on to the insurance company and added to the cost of the insurance premiums….More

Comments For Tea Party Express

I am not a member of the Tea Party Express. They deserve much credit for getting the nation to address our debt problem and how our government operates. Per their website they profess that “Tea Party Express is considered the largest and most successful political action committee within the Tea Party movement.”

Below is their mission statement. After the mission statement are my comments regarding their objectives. I don’t believe we are far apart except I support Obama.

“We are committed to identifying and supporting conservative candidates and causes that will champion tea party values and return our country to the Constitutional principles that have made America the “shining city on a hill”.

Tea Party Express is proud to stand for six simple principles: 1. No more bailouts, 2. Reduce the size and intrusiveness of government, 3. Stop raising our taxes, 4. Repeal Obamacare, 5. Cease out-of-control spending, 6. Bring back American prosperity.”

Here is my response.

1. No More Bailouts: This is a worthy objective; however, many of our businesses are so big that they would have driven the economy into a depression if they were allowed to fail. An example is the banking industry. Many banks are too big to fail and they should be broken up. The five largest banks in the country control deposits in excess of the GDP of the United States. If these banks failed the depression of the 1930’s would be the second worse depression behind what would have been “The Really Great Depression of 2008”. After they are broken up, let them fail!

Bailing out AIG was deemed necessary because its destruction would have resulted in massive bank failures. The saving of the auto industry is less conclusive. Many believe that the bankruptcy courts should have been left to handle it. This cannot be proved one way or the other. At the time, I felt that the government should error on the side of over reacting versus under reacting. Without government assistance, the bankruptcy process would have taken too long and the supply chain to the industry would have been destroyed. If the auto industry was the only problem at the time, I would have let them fail.

In order to eliminate bailouts in the future, capitalism needs to be fixed. Presently it is broken. Milton Friedman, the economist that many conservatives follow said,

“But we cannot rely on custom or conscious alone to interpret and enforce the rules; we need an umpire. These then are the basic roles of government in a free society; to provide a means where we can modify rules, to mediate differences among us on the meaning of rules, and to enforce compliance with the rules on the part of those few who otherwise would not play the game.”

There are areas where government sticks its nose where it does not belong. Fighting crony capitalism by breaking up oligopolies is one area where government has failed by doing nothing. Early settlers were less concerned about government over-regulating markets then about devious competitors trying to control markets. Today when a conservative complains about the destruction of free markets he is condemning the government saying it is over-regulating the markets and not allowing them to operate effectively. The damage caused by over regulation pales compared to the damage caused by markets taken over by oligopolies and oligarchs.

At the same time, I agree much of the regulations created by government cost more than they are worth  and should be eliminated.
2. Reduce the size and intrusiveness of government: Indeed, government needs to get a grip and get organized. Historically, all elected officials considered was what to do and then implement programs without scrutinizing its cost or how to measure the programs effectiveness. There was no budgeting process. Our government must go through the same process you do on your kitchen table; first estimate the revenue you have coming in and then prioritize how you are going to spend it. Historically our federal government just thought about what it wanted with no consideration where the money was coming from. This must change.

Click on Graphic to Enlarge

3. Stop raising our taxes: I know of no one begging to have their taxes raised. To put things in perspective I extracted the chart to the right from the Tax Foundation. It shows from the period when Ronald Reagon was President until now our tax rates have actually decreased. If your taxable income, adjusted for inflation, was $75,000, your tax rate in 1981 and 2011 respectively was 37% and 25%. Your tax rate decreased. An individual having taxable income of $200,000, adjusted for inflation, had a rate of 54% and 28% respectively. His tax rate was almost cut in half. How low should we go? Further, I am not a tax expert; however, I suspect there are more tax loopholes today than 20 years ago. Tax loopholes are rarely repealed.

4. Repeal Obamacare: I do not agree with everything contained in the plan. However, having been raised in a family having strong Judeo/Christian beliefs, it is a given that this country needs a health system that is affordable to even the most poor and needy among us. Therefore, the plan needs to be amended rather than repealed. The plan, as written into law, does not take advantage of our free market system. There are areas in the country where one or two companies control 80% of the industry. Further, what the health industry charges for its services and how often the services are used are still in the hands of the providers, with the cost covered by the insurance companies. It is my hope, and belief, that Obama will amend the plan after he is reelected.

5. Cease out-of-control spending: One expenditure cannot be looked at in a vacuum. We need to look at total spending and prioritize expenditures. If we look at each line item separably we will never get our budget in balance.

A good example is how we went to war in Iraq. When President Bush led us to war, there was no discussion as to how much it was going to cost and how we were going to pay for it. In fact, our President encouraged the nation not to change the way we were living, including our shopping habits. He made the case if Americans changed their live style as a result of 911 the enemy would have already won. He encouraged Middle America to continue buying ice cream from Cold Stone.

The nation starts to spend before determining how it is going to pay for it.

When a household reviews its budget it first identifies the amount of funds available. It then determines what it needs and wants to spend. It prioritizes the necessities; food, clothing and shelter. It then ascertains the revenue remaining and decides how the rest will be spent and saved.

6. Bring back American prosperity: If items one through five happen, item six is the result.

Results of Ryan Plan

Although unsaid, and not proven, the Ryan plan anticipates that the cost of health care will be less under his voucher plan because the patient will have skin in the game and use his vouchers more wisely.

The flaw under the voucher system is each individual will need to buy the best insurance he can with the voucher and then we are back in the same boat. What the health industry charges for its services and how often the services are used are back in the hands of the providers, with the cost covered by the insurance companies.

The cost of insurance will then rise faster than the value of the voucher and health will decline.

The Declaration of Independence says “… that among these are Life, Liberty and the pursuit of Happiness.” The question is are wealthier Americans deserving of a healthier, longer life than the less wealthy? If we are a nation believing in basic Judeo/Christian values the answer is no.

Update: August 22, 2011: Here is a good comparison of proposed Medicare plans.

Health Insurance And Free Markets

“Why doesn’t the market work here? Ken Arrow explained it all half a century ago. Patients by and large don’t have the information to evaluate medical treatments; in any case, they mainly buy insurance rather than medical care directly; and insurers profit not by providing the most cost-effective care, but by trying to insure people who won’t need care.” Paul Krugman. Ron Wyden, Usefull idiot, New York Times, December 17, 2011

The market does not work because it is not free. In addition, it is not properly regulated. In many states one health insurance company, not always the same one, controls over 80% of the market. This is not a free market. Further, the industry needs better regulating.
Free markets exist to help meet the needs of society. It is not societies responsibility to meet the needs of free markets. Adjust the regulations of the industry to have the same criteria that medicare has to cover their clients. 
Free Markets need to be regulated for the good of society. One regulation not used today is anti-trust laws. This is not happening because the oligopolies controlling some of our markets are buying off our politicians. This must end and here is how to do it.  More: