Monday, January 31, 2011
An article appearing in the July-August edition of The American Spectator dramatically changed my views of the current state of American politics. Angelo M. Codevilla’s article entitled America’s Ruling Class and the Perils of Revolutions reminded me that, in the end, we the people need to oversee the “Ruling Class” not the other way around. We need to manage their ambitions and keep them accountable. For far too long we have sat on the sidelines, trusting what they tell us, letting them frame the debate, and believing that it was far too complicated for us to understand.
The result of our negligence is precarious danger. We stand on the edge of a vast chasm filled with chaos and tyranny. We’re not the first to stand here and are currently not alone. The so called socialist democracies of Europe are our companions and stand a little closer to the edge. The bottom of this great crevasse is littered with the bodies of the Weimar Republic, the Soviets, Eastern Europe, ancient Greek city states, and the robed figure of Rome and despite the fact that we inch ever closer we tell ourselves that it will never happen in America. Even as the modern Greek state jumped off before our living eyes, we denied the possibility here.
Don’t get me wrong, our plunge into the dark isn’t fated yet, but we must learn to think differently. We must begin now to pay more attention, not deny the threat of economic collapse, and hold politicians accountable for the results of their policies not their intentions.
For decades (perhaps longer) we have viewed politicians in a left to right circular spectrum with those on the extreme left differentiated from the extreme right only in form. We saw Soviet and German versions of tyranny as polar opposites with similar affects. This paradigm is useful if the danger inherent in government is extremism and the goal a thoughtful pragmatic middle ground that may drift with the needs of the day as long as it evades the precarious extremes. Such a view of politics engenders the sentiment expressed by Candy Crowly as she described Bill Clinton in the heyday of CNN as “post ideological.” That is, he was more concerned with the necessity of the moment than some kind of outdated value system that wouldn’t allow him to meet the challenges of his time.
The nature of the American republic is anathema to such a view of politics and the law. This country was founded on a document that was designed to be inviolate, an immovable bulwark guarding freedom from the seas of government’s ever escalating need for power. The founding fathers set up this country to not evolve, but rather be held to a standard or value system as documented in the Constitution. In other words, you can not be an elected politician that is “post ideological” without becoming a threat to the republic. Just as amoral employees are only held from stealing from a company by the threat of being caught, such a politician is only held from becoming a dictator by the willingness of the populace to vote him out of office or, in the end, rise in revolt.
Thus by definition it is wrong to think of the politics in terms of left to right. We must learn to think of politics as the founding fathers did. That is in terms of complete chaos and no government on one end and complete totalitarianism on the other. The size, scope, authority, power and vigor of government should dictate the location along the spectrum a politician occupies. Under this standard the scale is absolute, doesn’t shift, and isn’t relativistic (as opposed to the accusation “he’s more extreme than I am, therefore vote for me”). It also helps highlight divergence from the Constitution and the Freedoms it protects. In this light, the politician who says we should slide along the spectrum to whatever is most expedient in the moment is easily seen as someone willing to accept tyranny if it suits what they perceive as the needs of the day.
If the purpose of Government is to preserve the freedom of the people (…to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed”), the only way to evaluate it and the men and women that populate it and give movement to it is evaluate their efforts on a spectrum that measures that result. When an employee is hired, the owner of the company does so to further the interests of the company not the employee hired and good employers dispassionately evaluate all employees on the outcome of their work not on, say, the color of their skin. When we hire politicians to run our government, we should therefore evaluate them on how they furthered the main goal of government and thus on where they sit on our authority scale.
It is time we stop thinking in terms of party and where each party sits on a meaningless left and right scale, and start thinking in terms of what policies do in authorizing government to encroach on our freedoms. We are only ever one generation from servitude and tyranny and its time we remembered that.
I’m optimistic that enough of us have seen the chasm for what it is that we’re beginning to change course, but to keep our progress we need to think differently.
Thank you, Angelo Codevilla. You’ve reminded me of exactly how we got into this mess and the remedy, and a new definition of politics is the required starting point.
Saturday, December 4, 2010
Thursday, March 25, 2010
As everyone in America now knows, Congress passed and the President signed the PPACA (Patient Protection and Affordable Care Act) late Sunday afternoon. Commonly known as Health Care Reform, the legislation is far reaching and touches almost every aspect of your life and every aspect of your employer’s business.
This post will consist of two parts: 1. What is in the legislation and 2. What is the most likely outcome of the bill. After the first section, I think you’ll see the second is obvious.
What’s in the Legislation:
The following information is based upon reports by SHRM (Society for Human Resource Managers) and The World at Work (A group that focuses on Human Resource issues especially compensation studies etc).
In full disclosure SHRM lobbied congress not to pass the law. Since the group educates millions of HR professionals around the globe, however, on HR law, I believe you can trust their analysis to be impartial. I have no idea what stance The World at Work took before the passing of the legislation.
1. Technically speaking there is no provision that mandates employers provide health insurance for their employees, but effectively the bill accomplishes that very thing. Employers with 50 or more full time employees will, be assessed an additional “penalty” as part of their taxes for failure to provide health insurance to employees. The company will be required to pay the lesser of $750 per employee for every employee in the company or $3,000 per employee on the public exchange (described below). Waiting periods for new employees can be a maximum of 90 days long and employers must pay a penalty during their waiting period. Companies must disclose the value of each employee’s health plan on their W-2 form.
2. Insurance companies pay an excise tax of up to 40% on high end plans costing more than $8,500 for an individual and $23,000 for families.
3. Employees making more than $200,000 ($250,000 per family), will have their FICA taxes increased by 0.9%. (The employee’s portion is increased by that amount not the employer’s.)
4. All legal US residents will be required to purchase health insurance (exceptions are available for financial hardship and religious reasons). Individuals not purchasing insurance will be penalized up to 2% of their income or $750 multiplied by the number of years (up to three years) they haven’t purchased insurance (whichever is greater) as part of their taxes (adjusted for inflation each year). If their employer doesn’t offer coverage or if the coverage offered is deemed too expensive, the employee may purchase coverage through an exchange. These exchanges are insurance companies that take otherwise uninsured individuals. States may deem which companies “may” participate in the exchange. (As of now my understanding is that individuals eligible for participation in an exchange may purchase that insurance at any time as opposed to waiting for an annual “open enrollment”.)
5. Insurance companies can no longer deny coverage of preexisting conditions. The amount that can put in an FSA (Flex Spending Account – also sometimes called a Cafeteria plan) has been reduced to $2,500. FSA and HSA (Health Savings Account) money can now only be used for prescription medications. The penalty for using HSA money for non-approved items is increased to 20%.
6. Employers must offer “Free Choice Vouchers” to employees to purchase insurance if the insurance offered by the employer amounts to more than 8% of the employee’s income (unless their income is more than 400% of the federal poverty level).
7. Anybody who worked at least 1,000 hours (less than 20 hours a week) for a company during the previous plan year, must be eligible for benefits.
8. Maximum lifetime limit on employee benefits are banned.
Part Two: The Results
Let’s put a scenario together for you. The only reason this scenario wouldn’t be the norm for employers is if they are nice and want to prevent employees from being placed on the public exchanges and are willing to pay dearly for it.
In 2014 when the exchanges begins, your finance and human resources department do an analysis. They find that for the average employee, 10% of their wages are health benefit related (that’s a moderate number, many larger firms’ percentages are higher). Let’s then assume that the average employee at that company makes $50,000 annually. That means, on average, the company is paying $5,000 per employee for benefits. Let’s also assume that the company has 200 employees.
For this employer, that means they are paying $1,000,000 annually in benefits (taxes and other benefits raise the amount). In this company that also means that the average employee is eligible for a voucher and to participate in a public exchange (the federal poverty level is somewhere in the mid twenties so for times that makes it between $80k and $100k annually). Let’s say then that only about half of the employees eligible for the public exchange decide to accept coverage outside the employer’s plan. That would mean that somewhere around 55 to 60 employees would be on the plan. The company’s expenses decrease from $1million to $890,000 (55 employees at $3,000, 145 employees at $5,000). At a very minimum the company has an incentive to not increase its “average” worker’s salary. (The math works just as dramatically if your average benefit expense is below $3,000 per employee.)
At this point the company has the option of not offering any benefits to employees and paying the $750 per person penalty for everyone in the company. This makes their total penalty $150,000. As a business owner in a down economy, which do you choose?
So now that everybody in the company has been turned out to the exchange to buy coverage, they also start to evaluate their costs. Let’s assume at our fictitious company that you’re paying as little as $250 a month. Let’s assume that the exchange price you get is just as cheap as the group coverage you were paying for at your employer. That makes your annual bill for insurance $3,000 a year. The maximum tax penalty you can pay is 2% of your income. That means, unless you make more than $150,000 a year you save money by paying the fee penalty.
Now the obvious objection here is; “What if I get sick?” Don’t worry, you can sign up after you’re sick for coverage under the exchange. The insurer that is next in line to take you can not disqualify you because you’re sick, and there’s no maximum amount where they can stop paying the bill.
But wont the insurance companies dissuade people from doing that by making the premium so high for people that wait until they’re sick to sign up that nobody will be able to afford it? Yes. That’s what they’ll try to do. But there are provisions in the bill which prohibit premium discrimination based on health condition except for a few things like tobacco use etc. That means that their rates will have to be at least in the ball park of group plans around the country. Also remember that somebody has to insure you. In the end, you’ll end up getting insurance. (The people that don’t, become the uninsured for tomorrow’s healthcare reform.)
Now look at the insurance companies (those fat cats living off the back of hardworking people). They just lost guaranteed premium from our company. They no longer have maximums or preexisting condition limitations on the companies still offering insurance to their employees, so they have to raise their premiums to cover the additional risk. This further increases the incentive for more companies to take the tax penalty.
At the same time, they are now being asked to take on some of our employees that waited to get coverage until they were sick. They lose money on at least a large share of these individuals (who again drop their insurance coverage as soon as they are healthy again). So they must raise their rates yet again to cover the additional shortfalls.
If you’re an investor at one of these companies, don’t you eventually sell your stock? Don’t you eventually get out? This means that insurance stock prices plummet. At first companies merge to try and win out by eliminating redundancies. When the loses keep coming they go out of business.
At a minimum this means that our “average employee” now has fewer insurers to choose from even in the exchanges. At the worst it means there are no insurance companies left.
When this is complete, the same people that passed this legislation can say, “See, we told you that this half measure wouldn’t work. We need to nationalize healthcare before it goes away.”
That’s where we’re headed. Any questions?
Wednesday, November 18, 2009
The great question of our time is whether or not a powerful and wealthy republic can maintain itself in perpetuity or if it is doomed to collapse under its own weight. If it is doomed to collapse, whose fault is it?
As I’ve said before, we’re different than the rest of the world. The rest of the western, “democratic” world is moving to a democratic socialism (probably, in actual function, closer to Marx than the Declaration of Independence). These systems are tyrannies of the elite backed by the majority. Individual freedom is dying a slow death in Europe and now maybe in
In a community oriented view, citizens are obligated to pay taxes to government because it is in their common interest. It’s hard, at first glance, to argue with this logic. You want roads? You must pay taxes so government may build them. You want to make sure all children have a good education, you must contribute to public education.
The implication of such logic however is that individual liberties are subservient to the good of the society as a whole. Therefore governments are instituted among men (and women) for the benefit of the community and anything that threatens the supremacy of society should be destroyed.
What is it then that threatens society and its government? Anything that requires an allegiance to something other than the society or its representative government. Think that’s a stretch? Consider this: No one member of a committee (say 535 members of Congress) can be said to represent society, but collectively they form a body that does, by definition, represent the interests of society. They, under oath to serve and protect society, aggregately form a government.
In this case the name, government, is even more significant because it is a clear description of what this body does; it governs society. It disciplines appetites and desires, motivates, directs, and even controls society for its own benefit. It is the only single actor that can because it represents society in the aggregate.
Under such a paradigm, such a government’s power must be infinite. It must have the power to achieve its aims. It must have the coercive ability to herd the many felines of differing interests.
The current American administration holds that view. That is why President Obama admittedly and openly says he’s going to redistribute wealth to those who need it. It is why, he believes anybody making over $250,000 a year has an obligation to pay more than they do now. He’s willing to accept the consequences (higher unemployment, larger welfare bureaucracy, more government intrusion into the lives of every day citizens). I’m not.
This, of course, does not imply that all people born have the same abilities, or even the same opportunity to achieve. The human experience is replete with enough examples to prove that is not the case. But it does mean, given a framework (law) that is open to opportunity, everybody is better off left to succeed or fail based on their own merits.
Here, as with the reverse philosophy (and especially in a republic), government “represents” the people and makes decisions and institutes laws. But here, the goal of the government is not what is best for society, but rather what is best for the individual. If you take care of individual liberties and success, society will be taken care of by weight of all the individuals succeeding. (As opposed to the effort to ensure the success of some over others which is an oligarchy.)
But what of those that can’t you ask? In a highly successful and free society or nation, surplus is almost always available. A free people, successful and flush with the rewards of their hard labor do not feel threatened and therefore are willing to share with those “less fortunate” or less capable. (Hence the origin of the belief in a basic public safety net or a willingness to pay higher taxes to take care of the poor.)
Under such a view, the individual’s freedom is paramount because only when the individual feels free from threat will he be most willing to build or create, take risks and push the boundaries of what is possible. Thus government is limited and restricted (restrained by a list of “negative rights” as some immature critics have called it).
The reverse is also true. When an individual feels that all they have worked for can be taken away, they tend to hide and hoard their individual rewards. Hence they don’t build, they don’t invest, and they don’t create jobs.
Ironically enough, the only way a nation can shift between the two views and the resultant governments, is through an attitude shift of its populace (and, if you believe Thomas Jefferson, the natural elite). That is; the people must be willing to embrace the change a single individual at a time.
Who then is responsible for the shift in government’s focus seen over the last 100 years in
Wednesday, October 21, 2009
Here's evidence (although not proof) that the Obama administration is behind the attack on Rush Limbaugh.
Thursday, October 15, 2009
The American marketplace of ideas is under attack. Glen Beck doesn’t strike me as much more than an entertainer. His predictions of rampant inflation and economic turmoil sound ridiculous as I drive home everyday after working for a company that grew more than 40% last year. His investigations into ACORN and some of the appointed “czars” hired by the Obama administration aside, he just struck me for the past year as Chicken Little.
The national media and the democrat party have attacked him ruthlessly accusing him of fear mongering, lying, and racism. They’ve vilified him, and attacked him personally in fearful, childish ways that are just plain mean.
The one thing his critics haven’t done is critique his facts. They can’t. The truth is, the facts are on his side. At its current pace (not including the debacle of Senator Baucus’ Health Care Reform bill) the government is spending $53,000 a second this year. How can you argue with his facts when the government is borrowing money from the Chinese so quickly that even the Chinese are getting nervous?
The fact is, however they don’t even try. There’s nobody out there in the mainstream media willing to critique his facts. They’re only willing to smear his reputation.
This kind of behavior is running rampant. The current political strategy of the left and elites is to avoid debate in the marketplace by clearing it. That is; they eliminate alternate ideas by smearing the source so as to avoid closer inspection of their own failings.
Clearly Glen Beck is a target of this strategy. So is Rush Limbaugh.
Here’s the timeline in case you missed it: Rush joins Dave Checketts and others as a minority investor in a group looking to buy the St. Louis Rams. Somebody inside Goldman Sach’s leaks the information to the press despite signed confidentiality agreements. A few days later, an unattributed quote appears on an entry in Wikipedia that claims Rush said slavery was a good thing and while it wouldn’t be wise to bring it back “at least the streets were safe at night.” The quote is suddenly repeated by media outlets including the show Pardon the Interruption (PTI) on ESPN.
Rush immediately denies the quote and demands retractions. Research indicates the quote comes from a book attacking Rush published several years ago and doesn’t include a citation. While PTI and others retract their use of the quote, Jesse Jackson and Al Sharpton appear on national media continuing to repeat the quote without challenge by reporters. A day later, Dave Checketts announces Rush has been dropped from the investment team and the NFL commissioner denounces Rush as too divisive to be an owner in the league.
There is no legitimate indication the quotes are genuine and not fabrications. For those who listen to Limbaugh, the quotes are clearly out of character.
Once again, no critique of Rush’s ideas or the arguments he makes on a daily basis, but rather an attempt to eliminate him from the marketplace of ideas.
Conservatives are always open to debate. Why? Because history is on our side. Limited, controlled, government protecting freedom is the only path to prosperity and safety in this world. The marketplace is under attack.
Glen Beck isn’t crazy. His interpretation of current of events is dire but not without a factual basis. He might even be right. If we’re facing sudden and intense inflation next year, you’ll know he was, at a minimum, on the right track.
What will happen to this country when people are scared to speak the truth? Try not to contemplate that question too much. If you give an honest answer, you might end up sounding like Glen Beck.
Tuesday, August 4, 2009
In a recent video posted on Youtube.com Representative (NY) Tim Bishop meets with protesters in his home district. They are protesting government intervention in their life and are quite agitated.
Obviously trying to set a standard of decorum and control in this environment the representative says: “We have an obligation to discuss those issues in a fashion that is civil and respectful. And let me say one other thing, in a fashion that is informed.”
Now let’s state first and foremost that this isn’t the fun part of being a congressman. This sucks. Let’s even suppose these people are a little over the top in their words and actions.
Even with that stipulated, did you catch what the congressman said? He revealed something very enlightening about his view of his constituents: They’re the uninformed proletariat and they don’t know as much as the congressman about the issue of health care reform.
Not sure that’s really what he meant? Why didn’t he just leave it at civil? Certainly his audience was worked up and it was in everyone’s best interest to let cooler heads prevail. But why did he have to add in the “informed” comment? Because he felt anybody who didn’t see the need for a massive overhaul of health care reform must be uninformed.
The arrogance of the modern politician is stunning, but it isn’t new.
One of the great fears of the founding fathers during the American revolution was that an American victory would result in chaos and that, in turn, would lead to a despotic ruler restoring order. It was why the Articles of Confederation were abandoned in favor of the Constitution, and a much stronger central government was created.
The French revolution was however very different. Chaos did reign in Paris after their revolution. With a citizenry more bent on getting revenge for past wrongs than obtaining freedom, the rule of law quickly turned into mob justice. In response to this mob rule an authoritarian board was set up. After long turmoil and bloodshed the country got so tired of the chaos that they abandoned their new won freedom in exchange for security and gave Napoleon power. They did so because they had come to the conclusion that during times of upheaval a true and natural aristocracy arose that was, by virtue of their superior intellect, supposed to lead.
In the Americas, men like Alexander Hamilton decried this notion as elitist and no different than outright mob mentality. To believe the general population to be inferior in some way to ruling elite was no different than hereditary rule, they thought (ok a bit of an over simplification of their views, but essentially accurate).
There was however one of the founders that embraced the notion fully. Thomas Jefferson wrote numerous times of the natural aristocracy that would naturally, by their superior intellect and prowess at government, rise to the top of the barrel and rule. Society was the better for it, because the aristocrats were able to manipulate the world to the betterment of all mankind.
There is a certain logic to it, and anybody that lives in any society has to know that people gifted with talents succeed in this life at a greater rate that people of lesser skill and intelligence. With that in mind, however, what is the consequences of such a belief?
The first and foremost affect is that a republic infected with this belief is dead. How can one represent the will of one’s constituents if one believes they are ignorant and their opinions shallow? If the masses are indeed ignorant, then should a representative listen to their constituents?
The second effect is the destruction of the rule of law. If you are better able to govern yourself and master yourself than the average person, why should you be subject to the same laws as that person? Don’t you have an obligation to protect the masses from themselves and their propensity to fail? If 47 million Americans can’t seem to find a way to get health insurance, under this belief system, aren’t you obligated to provide it for them even if your system is separate from theirs?
The third affect is to change the motivation of serving in Government. Now, because it is essential that you, the superior intellect, stay in power so no less capable person (who is “uninformed”) can damage the progress you’ve made; isn’t it appropriate to manipulate the system in any way necessary to make sure you stay in power? After all, you cannot effect a better world for the “uninformed” masses unless you wield the power to do so. Therefore the accumulation of power is paramount and essential in fulfilling your role. You can not assist the people without it.
Fourth; Any other kind of Elite, is a danger. What sets people apart as this natural aristocracy? Election, of course. The fact that the masses of people, who are generally stupid in all other aspects, votes you in, proves that they look up to you as a person that can do for them what they can’t do for themselves?
Fifth and most dangerously, this belief leads to a natural belief that the good of the masses out weighs the individual rights of the people that make up the masses. Everyone must sacrifice to serve the community (except of course the natural aristocracy because they are above the law).
I don’t think I really need to, but here’s a few examples of what I’m talking about.
Representative Bishop’s response to his constituents.
The fact that even in the mid nineties, although smoking wasn’t allowed in any other federal buildings in the country, it was still legal to smoke in the capital building and adjacent office buildings in Washington DC.
The fact that Congress was not subject to the following laws until 1995:
- The Fair Labor Standards Act of 1938 (Overtime pay for non-exempt workers)
- Title VII of the Civil Rights Act of 1964 (Discrimination)
- The Age Discrimination in Employment act of 1967 (Discrimination)
- The Americans with Disabilities act of 1973 (Wheelchair access, discrimination, etc)
The vilification of corporations and “the rich” as somehow getting their money unfairly and the desire to “spread” that money “around a little.”
And finally as proof I proffer the following comment from a former President:
“For it is very clear, that in fundamental theory socialism and democracy are almost if not quite one and the same. They both rest at bottom upon the absolute right of the community to determine its own destiny and that of its members. Men as communities are supreme over men as individuals… Democracy is bound by no principle of its own nature to say itself nay as to the exercise of any power… the difference between democracy and socialism is not an essential difference, but only a practical difference- is a difference of organization and policy, not a difference of primary motive.” Woodrow Wilson as Quoted by Glen Beck in his new book Glen Beck’s Common Sense (pg. 65)-bolding added.
Yes, I think Representative Bishop meant what he said. He didn’t want to argue with the uninformed and betrayed his view that Americans that disagree with him are of lesser intelligence and inferior to the natural aristocracy. Oh don’t worry he isn’t alone; there are plenty of politicians on both sides of the isle with the view.
I would like to challenge that notion. I challenge any member of Congress (either chamber) that supports the President’s plan for health care reform to a debate. I’m no expert and am certainly not part of the natural aristocracy of this country, but rather am an average American. It’s time that they understand, their job is to keep government out of my way so I can achieve the great things I want to achieve, not the other way around.
Any takers? Cowards! Afraid the “uninformed” know more than you about health care?